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Research studies

The Role of Corporate Social Responsibility CSR in the Promotion of Entrepreneurship Projects’ Sustainability

 

Prepared by the researcher – – GUERINI Fares  – Alger3 university

Democratic Arab Center

Journal of Afro-Asian Studies : Seventh Issue – November 2020

A Periodical International Journal published by the “Democratic Arab Center” Germany – Berlin. The journal deals with the field of Afro-Asian strategic, political and economic studies

Nationales ISSN-Zentrum für Deutschland
ISSN 2628-6475
Journal of Afro-Asian Studies
 :To download the pdf version of the research papers, please visit the following link

Abstract

The aim of this paper is to highlight the role of Corporate Social Responsibility CSR in the promotion of entrepreneurship projects’ sustainability and this after the increase of the need of entrepreneurship’ social aspects regarding the importance of entrepreneurship in the creation of small and medium entreprisesSMEs which constitute the predominant proportion of corporations constituent of the economic fabric and the seedbed of entrepreneurship development. So these SMEs must contribute to this development by integrating Corporate Social Responsibility in their activities in order to ensure the survival of these corporations, and thus to guarantee the sustainability of these entrepreneurship’ projects.

The result of the study revealed that there is a need to apply corporate social responsibility in the activities of corporations in order to ensure their survival as we have seen through the case study that it has a significant impact on the promotion of entrepreneurship’ projects.

Introduction

Researches consider entrepreneurship to be a key plank of economic recovery, the engine of technological and social growth, also it is considered as a key actor in the economic activity for being responsible on the establishment and the development of
Small and MediumEntreprises.SMEswhich constitute the predominant proportion of entreprises constituent of the economic fabric and which play a key role in the economic and social development.And regarding the current shifts in societal expectationsgiven the growing interest insocial aspectsand given the growing reality that business needs the approval of society to prospect, these SMEs must be involved in this global trend by its responsible and sustainable commitment towards society without abandoning its primary objective which is achieving profitability and this through the integration of corporate social responsibility. In Algeria, like any other country in the world, SMES represent an important part of the economic system and the pillar on which the State is founded in the promotion of the economy because they are the seedbed for entrepreneurship development, so it is upon them to contribute to this development by integrating the social responsibility in its activities and this through the adherence of entrepreneurs to these practices in order to ensure and support the survival of these enterprises. So according to the importance of entrepreneurship in the economy, we need to redefine the social value added of entrepreneurial activities to the society in order to guarantee the sustainability of those entrepreneurship’ projects, but this requires the integration of the corporate social responsibility, bottom of the pyramid and social entrepreneurship perspective.

Of the above, we will ask the following question:

How can Corporate Social Responsibility CSR contribute to the promotion of entrepreneurship projects’ sustainability?

To deepen our problematic we will use the following questions:

– What is corporate social responsibility and what are its benefits?

– What does sustainable entrepreneurship means and what are its economic and social effects?

– Does corporate social responsibility have an impact on HODNA Milk corporation’sustainability?

The importance of the study

– Know the benefits of applying corporate social responsibility within corporations.

– To see the economic and social effects of entrepreneurship.

– Knowledge of the impact of the application of corporate social responsibility on entrepreneurship projects’ sustainability.

The structure of the study

To answer our problematic, we have divided this paper into three themes as follows:

Chapter 01: The theoretical framework of the Corporate Social Responsibility.

Chapter 02: Basics about sustainable entrepreneurship.

Chapter 03: The impact of Corporate Social Responsibility on the sustainability of HODNA Milk.

Chapter 01: The theoretical framework of the Corporate Social Responsibility.

For an entrepreneur, sustainable enterprise means going one step further than law requires, inspired by a future vision of society (MVO Nederland)[i], so Corporate Social Responsibility CSR is the benchmark for doing business in the 21st century.CSR means that a company is taking responsibility for the effects of its business on people, the environment and business operations in general. In other words the company makes conscious choices to ­find a balance between the three P’s: People, Planet and Profi­t, and thus contributing to society’s long-term prosperityand since the activities of CSR vary according to the company, the sector and the country, the Corporate Social Responsibility is a process and not a fi­nal destination because the objectives pursued change over time and with every business decision. It’s all about looking for achievable steps to give shape to social responsibility[ii].

1- Definition of Corporate Social Responsibility.

Although the concept of CSR is widely discussed in theory and practice, there is no general agreement about its definition. CSR is seen here according to the definition of the European Commission as ‘‘a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment’’, or  “is a process by which companies manage their relationships with a variety of stakeholders who can have a real influence on their license to operate, the business case becomes apparent”. This responsibility is expressed towards employees and more generally towards all the stakeholders affected by business and which in turn can influence its success[iii]. So for the European commission: “Being socially responsible means not only fulfilling legal expectations,but also going beyond compliance and investing more into human capital,the environment and relations with stakeholders”[iv].

         Also, the World Business Council for Sustainable Development defines CSR as:”The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large”[v]. As for the Business for Social Responsibility, the Corporate Social Responsibility is defined as: “Operating a business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business”[vi].While the World Bank defines Corporate Social Responsibility as “the voluntary commitment by company managers to integrate social and environmental considerations in their business operations. This commitment goes beyond normal compliance with the legal, regulatory, and contractual obligations, which companies are expected to meet[vii].

 For Manuela Weber, the Corporate Social can be interpreted as an extra investment into human capital, the environment, and stakeholder relations[viii]. And finally, for Zahra & Wright, CSR refers to a company’s efforts, investment and activities aimed to improve relations with stakeholders such as customers, investors and communities. These activities center on building the company’s reputation and relationships with stakeholders[ix].

         So most definitions of corporate social responsibility describe it as a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis[x].

Although definitions abound, we can say that two main directions can be highlighted, these being the contribution of own resources or voluntarily attracted ones to social development (community) and the networking with targeted groups important for business and key factors for the company (employees, customers, suppliers, nonprofit organizations, public authorities, the media). All CSR approaches have in common the idea that organizations have responsibilities regarding the social well-being[xi].

2- The reasons of the emergence of Corporate Social Responsibility CSR.

There are many factors that are driving this move towards corporate social responsibility and which has contributed to the emergence of this concept, and among them we find:

  • New concerns and expectations from citizens, consumers, public authorities and investors in the context of globalization and large scale industrial change;
  • Social criteria are increasingly influencing the investment decisions of individuals and institutions both as consumers and as investors;
  • Increased concern about the damage caused by economic activity to the environment;
  • Transparency of business activities brought about by the media and modern information and communication technologies[xii];
  • Increasing government and public pressures: through legislations calling for the protection of consumers, environment and workers;
  • Rapid technological developments: technological developments have produced a revolution in materials technology areas and the dynamics of operating, which was reflected in providing a suitable environment which will pay attention of the quality of products, processes and the development of workers’ skills;
  • International competition: competition has widened because of the breadth of the market and its borders, causing the transmission of local and regional competition to a global competition, and the most prominent example of this is the multinational companies;
  • Disasters and moral scandals: the most prominent examples of this disaster, Paul Indian factories, Nuclear Chernobyl in the former Soviet Union, and the bribery scandals of many global companies, including the American company Lockheed and others. These disasters and scandals were a sufficient reason to enact a law which regulates dealing with bribery cases and the causes of disasters[xiii].

3-  The historical development ofCorporate Social Responsibility.

Since the early twentieth century, economic philosophies have appeared and evolvedcoinciding with the growing separation between ownership and management in modern companies. In the beginning, the economic philosophy, that were existing, was the classical philosophy which assume that the primary duty of companies, if not the only one, is to maximize profitability without undertaking any duty towards society. This will enable companies to grow, and thus, to provide a wider range of goods and services to consumers, and will assure paying a better wages to employees.And among the pioneers of this traditional and classical view, we find Milton Friedman, in the seventies of the last century, who believes that the company’s responsibility is achieved through the payment of wages to workers in exchange for the work they do, and the provision of goods and services to consumers in exchange for the money they pay, and the payment of taxes to governments that provide public services to citizens and the respect for the rule of law by respecting contracts. Also, for them, the adoption of the social responsibility by the company would reduce profits and increase labor costs, and would give a social force to work much more than necessary[xiv].And unlike this theory, executives have started to pay attention to other objectives as well as maximizing profits, such as the interests of consumers, employees, creditors and communities’ interests. And this development was linked with the rise of interest groups,particularly labor unions, and at the same time the business environment legislation was developing. Also, the governments in industrialized countries beganto grant tax exemptions for the contributions made by companies and associations to charity, which encouraged these companies to allocate a portion of the profits to social work, taking advantage of such exemptions and material incentives[xv]. After this,the talk about the importance of corporate social responsibility and the social performance indicators has received increasing importance. After that “Sheldon” made clear that the responsibility of each organization is determined through its social performance and the benefits achieved for the community, then the conference held at the University of California in 1972,recommended the necessity of obliging organizations to pay attention to the social aspects of environment and to contribute to the social development, and finally, to abandon the philosophy of profit maximization as an only objective[xvi].With the growing emergence of social movements, such as civil rights groups and consumer protection associations, whichhave an increasingrolein corporate behavior by monitoring the environmental effects of large-scale industries and the level of product quality. This has obliged corporations to develop its policies in the field of employment and to undo the discriminatory policies toward people with special needs as well as the development of control systems and the protection against pollution and finally, reducing energy waste.

Given the important role played by these companies in the economies of countries, the need to develop regulations and standards to make sure that the response of these companies is in the public interestwas increasing. Then, economic and administration’ scientists have developed concrete rules for measuring corporate social responsibility[xvii], including the World Charter for Social Responsibility (2000)  where  the United Nations launched a strategic policy  called the UN Global Compact. The UN Global Compact askscompanies to embrace, support and enact a set of core values in human rights, labour standards, the environment and anti-corruption, called the ten principles of the Global Compact. Those principles are:

  • Businesses should support and respect the protection of internationally human rights.
  • And make sure that they are not complicit in human rights abuses.
  • Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.
  • The elimination of all forms of forces and compulsory labour.
  • The effective abolition of child labour.
  • And the elimination of discrimination in respect of employment and occupation.
  • Businesses should support a precautionary approach to environmental challenges.
  • Undertake initiatives to promote greater environmental responsibility.
  • And encourage the development and diffusion of environmentally friendly technologies.
  • Business should work against corruption in all its forms, including extortion and bribery.

Also, the events of 11 September 2001, which encouraged the material and moral support given by a large number of large companies to the affected people of these events,as well as the financial scandals of a number of international companies and the increased attention to issues related to poverty, low level of living and unemployment have led to an increased interest in the subject of corporate social responsibility.

Forecasts indicate that this importance will witness more developments in the future and this is because of the attention paid by consumers to the ethical behavior of companies. And perhaps one of its most prominent supporters is the economist “Paul Samuelson”, who indicatesthat the concept of social responsibility should integrate economic and social dimensions together and that companies nowadays must not be just connected with the social responsibility but they must sink into its depths, and seek some creativity in its adoption.

Then the concept of social responsibility has been evolved and integrated into corporate strategies and its daily performance which shows the good understanding of the changing demands of society in the present and the future[xviii].

4- The dimensions of Corporate Social Responsibility.

We can clarify the dimensions of the corporate social responsibility and its main and sub components through the following table[xix]:

Table n° 01:The dimensions of Corporate Social Responsibility and its key and sub elements

Dimension  Key elements Sub-elements
 

 

Economic

 

Fair competition

– Prevent monopoly and prevent harming consumers

-Respecting competition rules and prevent harming competitors

 

Technology

– Society should benefit from the technological advances

– The use of technology in repairing the damages caused to society and the environment

 

 

Legal

Consumer protection laws –  Consumer protection from harmful substances

– Health and cultural protection of children

Environment protection – prohibit all the types of pollution

– Conservation and resources development

– Disposal of products after its consumption

 

Safety and justice

– Reducing work-related injuries

– Improve working conditions and prohibit the work of elderly people and children

– Prevent discrimination on the basis of sex or religion

-The employment of people with special needs

 

 

 

 

Social

 

Ethical standards and social values

– Taking into account the principle of equal opportunities in employment

– Observance of human rights

– Respect of habits, traditions and the observance of ethical aspects in consumption.

Quality of life -Quality of products and services offered

– providing the basic needs to the society.

Source: TaherMohssen Mansour ELGHALBI, Saleh Mahdi Mohssen El AMRI, (in Arabic), “Social responsibility and business ethics”, Wael publishing, Amman, 2005, p 82.

5-Economic, commercial and social benefits of Corporate Social Responsibility.

          Taking CSR into consideration makes a company more receptive to adapt itself to the changing business environment. Companies that have embedded CSR tend tooutperform their competitors. Building a reputation as a responsible company sets you apart. A strong reputation through greater distinctiveness and trust among its clients, in the labor market and in the community, will provide a better market position. A better market position is also accomplished through cost reduction, increaseinnovation. Implementing CSR will also result in new sales and partnership opportunities, which also can lead to new businesses. And last but not least,research has shown that CSR creates a strong business culture: employees are more motivated, more productive and healthier if they can make a positive contributionto society through their work. Also, energy-saving measures or increasing sustainability will save the company energy and money in the long run.These benefits can be summarized in the following figure[xx]:

– Improved access to capital;

– Secured license to operate;

– Revenue increases and cost decreases;

– Risk reduction;

– Increase in brand value and improved

Reputation;

– Improved costumer attraction, retention;

– Improved employee recruitment, motivation and retention.

Figure n° 01: The benefits of Corporate Social Responsibility CSR.

Corporate

Social   Responsability CSR

Competitiveness
Economicsuccess

Source: Brochure o­ffered by the Embassy of the Kingdom of the Netherlands in Jordan, in cooperation with the Amman Chamber of Commerce and the Talal Abu-Gazaleh Organization, “CSR brochure”, February 2016, p 05.

Chapter 02: Basics about sustainable entrepreneurship.

In this chapter we will first define the concept of sustainable entrepreneurship, and then we will discuss its dimensions. After that we will talk about the five pillars of the social role of entrepreneurship and finally we will discuss the economic and social effects of entrepreneurship.

1-Definition of sustainable entrepreneurship

Table n° 02: Definition of sustainable entrepreneurship.

Authors Sustainable Entrepreneurship Definition
Gerlach (2003, p. 3) “Innovative behavior of single or organizations operating in the private business sector who are seeing environmental or social issues as a core objective and competitive advantage”.
Crals and Vereeck (2005, p. 1) “The continuing commitment by business to behave ethically and contribute to economic development, while improving the quality of life of the workforce, their families, local communities, the society and the world at large, as well as future generations. Sustainable Entrepreneurs are for-profit entrepreneurs that commit business operations towards the objective goal of achieving sustainability”.
Dean, &McMullen (2007, p. 58) “The process of discovering, evaluating, and exploiting economic opportunities that are present in market failures which detract from sustainability, including those that are environmentally relevant”.
Cohen and Winn (2007, p. 35) “The examination of how opportunities to bring into existence future goods and services are discovered, created, and exploited, by whom, and with what economic, psychological, social, and environmental consequences”.
Choi and Gray(2008, p. 559) “Create profitable enterprises and achieve certain environmental and/or socialobjectives, pursue and achieve what is often referred to as the double bottom-line or triple bottom-line”.
Hockerts&Wüstenhagen (2010, pp 482) The discovery and exploitation of economic opportunities through the generation of market disequilibria that initiate the transformation of a sector towards an environmentally and socially more sustainable state”.
Schaltegger& Wagner (2011, pp. 224) “An innovative, market-oriented and personality driven form of creating economic and societal value by means of break-through environmentally or socially beneficial market or institutional innovations”.

Source: Bell, J. F., &Stellingwerf, J. J, “Sustainable Entrepreneurship: The Motivations & Challenges of Sustainable Entrepreneurs in the Renewable EnergyIndustry”, Jönköping International Business School,sthokholme, sweden, p06.

   Deriving from these definitions, we can conclude that Sustainable Entrepreneurship has a considerable conceptual overlap of other streams of research – namely Ecopreneurship and Social Entrepreneurship. Sustainable Entrepreneurship is a balancing act of strategically managing and orienting environmental and social objectives and considerations, with entity specific financial goals steering the business objective. No business, company or venture operates on a desert island; it is embedded in an economic, social, cultural and ecological environment [xxi]

2-The Five Pillars of the Social Role of Entrepreneurship

 Entrepreneurship research can be viewed as largely being concerned with five broad themes. First, who does entrepreneurship involve? This question is especially important given the growing variety of stakeholders involved in an entrepreneurial ecosystem, not just the individual entrepreneur. Institutions and other companies, both new and established, are important to birthing and growing entrepreneurship. For example, new companies in energy-related industries have to deal with many established institutions and emerging ones, host of other companies and multiple stakeholders with competing interests and claims. The diversity of these groups and their multiple needs affect these new ventures’ behavior and also shape the evolution of their ecosystems.

  Second, what does entrepreneurial behavior involve? This question concerns the activities of entrepreneurs[xxii], which may be productive, unproductive or dysfunctional a large portion of entrepreneurial activities takes the form of ‘petty self-employment’ that is limited in productivity or economic benefits. Even though these activities may serve the needs of those individuals who otherwise may be unable to gain employment, they raise a legitimate question about the overall value added of entrepreneurship. This suggests a need to reflect on the significance of entrepreneurial activities and what actions are needed to make them happen.

 Third, what format does entrepreneurship take? To date, research has largely focused on formal dimensions, notably independent start-ups or spin-offs, and various forms of corporate entrepreneurship, but entrepreneurship may also be informal. These informal activities occur in advanced as well as emerging and underdeveloped economies. They provide legitimate employment and fulfill specific social and economic needs. But sometimes informal entrepreneurs engage in illicit trade in prohibited items such as rare and exotic animals, sex trade, and drug trafficking [xxiii]

  Fourth, where is the impact of entrepreneurship felt? This is a concern that goes beyond individual and firm wealth creation to encompass macro-economic effects such as growth in GDP. Entrepreneurship affects communities, societies and humanity. The work of entrepreneurs addressing issues from food and water shortages, environmental pollution and decay and sustainability through innovative and affordable technologies covers and crosses these levels.

   Fifth and finally, how is the impact of entrepreneurship measured? This question has traditionally concerned issues relating to the measurement of growth and financial performance, but may also need to encompass measures of social impact , such as community development, happiness and social cohesion.[xxiv]

3-Dimensions of sustainable entrepreneurship.

We can resume the dimensions of sustainable entrepreneurship in the next figure.

Figure n° 02: Dimension of sustainable entrepreunrship

Entrepreneurial ventures literally generate new wealth. Existing businesses may remain confined to the scope of existing markets and may hit the glass ceiling in terms of income. New and improved offerings, products or technologies from entrepreneurs enable new markets to be developed and new wealth created.

Additionally, the cascading effect of increased employment and higher earnings contribute to better national income in form of higher tax revenue and higher government spending. This revenue can be used by the government to invest in other, struggling sectors and human capital.

Although it may make a few existing players redundant, the government can soften the blow by redirecting surplus wealth to retrain workers.

In addition there isanother dimension of sustainable entrepreneurship which is blending a balance between profit people and planet and this are very important because if we talk about sustainability we must think about the right atmosphere so that the corporations can maintain its existence.

         We can conclude that Sustainable Entrepreneurship has a considerable conceptual overlap of other streams of research – namely Ecopreneurship and Social Entrepreneurship. Sustainable Entrepreneurship is a balancing act of strategically managing and orienting environmental and social objectives and considerations, with entity specific financial goals steering the business objective. No business, company or venture operates on a desert island; it is embedded in an economic, social, cultural and ecological environment

Sustainable Entrepreneurship encompasses Social Entrepreneurships core objectives, creating social impact, solving societal problems and enhancing social wealth. Our above conceptualization of Social Entrepreneurship illustrates that these entrepreneurs are creative individuals, driven by questioning the 15 status quo, that refuse to give up, with the objective to exploit new opportunities and to make the world a better place .

4-The Economic and Social Effects of Entrepreneurship.

4-1Entrepreneurs Create New Businesses

Path breaking offerings by entrepreneurs, in the form of new goods & services, result in new employment, which can produce a cascading effect or virtuous circle in the economy. The stimulation of related businesses or sectors that support the new venture adds to further economic development.

For example, a few IT companies founded the Indian IT industry in the 1990s as a backend programmers’ hub. Soon the industry gathered pace in its own programmers’ domain. But more importantly, millions from other sectors benefited from it

Businesses in associated industries, like call center operations, network maintenance companies and hardware providers, flourished, education and training institutes nurtured a new class of IT workers offering better, high-paying jobs. Infrastructure development organizations and even real estate companies capitalized on this growth as workers migrated to employment hubs seeking new improved lives.

   Similarly, future development efforts in underdeveloped countries will require robust logistics support, capital investment from buildings to paper clips and a qualified workforce. From the highly qualified programmer to the construction worker, the entrepreneur enables benefits across a broad spectrum of the economy.

4-2Entrepreneurs Add to National Income

 Entrepreneurial ventures literally generate new wealth. Existing businesses may remain confined to the scope of existing markets and may hit the glass ceiling in terms of income. New and improved offerings, products or technologies from entrepreneurs enable new markets to be developed and new wealth created.

 Additionally, the cascading effect of increased employment and higher earnings contribute to better national income in form of higher tax revenue and higher government spending. This revenue can be used by the government to invest in other, struggling sectors and human capital.

Although it may make a few existing players redundant, the government can soften the blow by redirecting surplus wealth to retrain workers.[xxv]

4-3Entrepreneurs Also Create Social Change

Through their unique offerings of new goods and services, entrepreneurs break away from tradition and indirectly support freedom by reducing dependence on obsolete systems and technologies. Overall, this results in an improved quality of life, greater morale and economic freedom.

For example, the water supply in a water-scarce region will, at times, force people to stop working to collect water. This will impact their business, productivity and income. Imagine an innovative, automatic, low-cost, flow-based pump that can fill in people’s home water containers automatically. Such an installation will ensure people are able to focus on their core jobs without worrying about a basic necessity like carrying water. More time to devote to work means economic growth.

For a more contemporary example, smartphones and their smart apps have revolutionized work and play across the globe. Smartphones are not exclusive to rich countries or rich people either. As the growth of China’s smartphone market and its smartphone industry show, technological entrepreneurship will have profound, long lasting impacts on the entire human race.

Moreover, the globalization of tech means entrepreneurs in lesser-developed countries have access to the same tools as their counterparts in richer countries. They also have the advantage of a lower cost of living, so a young individual entrepreneur from an underdeveloped country can take on the might of the multi-million dollar existing product from a developed country.

4-4Community Development

Entrepreneurs regularly nurture entrepreneurial ventures by other like-minded individuals. They also invest in community projects and provide financial support to local charities. This enables further development beyond their own ventures.

Some famous entrepreneurs, like Bill Gates, have used their money to finance good causes, from education to public health. The qualities that make someone an entrepreneur are the same qualities that motivate entrepreneurs to pay it forward.

Chapter 03: The impact of Corporate Social Responsibility on the sustainability of HODNA    Milk

1-Presentation of HODNA Milk Corporation.

HODNA Milk is a corporation is createdin 1999 by M. DILMI Ismailin partnership with two other shareholders (SARL), in the industrial zone of M’sila, and by advantages of government in the projects of (APSI/ANDI).This corporation sits on an area of 6 hectares,with 04 units of production and storage warehouses, and administration department.

We can resume the historical evolution in this points

-Creation on30/01/1999 with a unit of milk

– On22/08/2000new two products are added to the milk which areleben and raib

– The second unit is created on 16/08/2003 with a new product which is yogurt

– On 06/03/2005 was the creation of the third unit with two new products which are flavored and fruity yogurt.

– On 09/12/2007 was the creation of the fourth unit with two new productslight and bio yogurt.

2-The financial evolution of HODNA Milk Corporation.

We can resume the evolution of HODNA Milk corporation in terms of turnover and employment in the next table.

Table n 03: The evolution of HODNA Milk in terms of turnover and employment.

Exercise Turnover

 

 

employment
Salary Mass Effective
2004

2005

2006

2007

2008

2009

2010

705.371.249    DA

1.221.594.000 DA

2.213.551.771 DA

2.939.428.562 DA

3.801.328.162 DA

4.300.324.201 DA

4.954.434.000 DA

 10.363.434

 27.235.563

 42.105.373

59.451.508

90.407.000

103.338.900

125.004.360

 74

142

197

282

310

350

390

Source: Hodna MILK

In this table we resume the evolution of HODNA Milk in its turnover and itsemployment which give us an impression that HODNA Milk is a sustainable corporationbecause it began witha small amount of turnover 705.731.249 DAwith a workforce of 74 workers in 2004 to reach 4.954.434.000DA and a workforce of 390 at 2010, this means that there is an evolution of HODNA Milk which was a small corporationsand become a medium corporation after 6 years of production and this due to innovation and development of its production, also we observe that it has a technologies that could help it to concur with more 17 corporations  in this field. And we can confirm this bythe evolution of production units in this corporation.

Unit One

It- began its production in October 1999 with a capacity of 200.000 liters of milk and 80 workers.

Unit Two

It starts in September 2004 with a capacity of 200.000 liters of milk, and 6 types of yogurt   and 200workers

Unit Three

It began in February, 2010with a capacity of 95000 liters/ day, of milk and 60 workers with three other types of products (Lacto fermented product, fresh cheeses, .

Unit Four

It began in august 2010, with a capacity of 25000 liters/ day, of milk with five types of products (flavored and fruity yogurt, Lben, Raib and finally milk in bottle) and a workforce of 30 workers[xxvi].

3- Measuring the impact of corporate social responsibility variables on HODNA Milk sustainability

In this point we will see the impact of some selected corporate social’ variables on HODNA Milk’sustainability. Those variables are manifested by three dimensions which are the economic, the legal and the social dimension.

3-1The first dimension: the economic dimension.   

The social responsibility is applied by HODNA Milk in terms of the economic dimension which is manifested by the element of fair competition because we find that HODNA Milk exists in a competitive environment regarding milk and yogurt products. For the milk production, HODNA Milk has been able to achieve a market share estimated at 15% of the national market with four competitors at the local market level[xxvii].  But regarding yogurt product, the number of existing corporations in the market amounted to 15 competitors leaded by DANONE corporation, which is classified as a leader in the market, followed by SOMMAM corporation and in third place we find TREFLE corporation. But regarding HODNA Milk, it occupies the fourth place. And the following table shows the market share of the largest corporations of yogurt industry[xxviii].

Table n° 02: Market share of the largest corporations of yogurt industry.

Marketshare The corporation
40% DANONE
23% SOMMAM
15% TREFLE
10% HODNA Milk
12% Other corporations
100% Total

Source: ZAWSH Reda, (in Arabic), “Marketing strategy and its impact on the effectiveness of the organization’s performance- case study: HODNA Milk”, Magister degree, university of Mohamed BODIAF in m’sila, economic science-management and commerce science faculty, 2005-2006, p 91.

 3-2The second dimension: the legal dimension.  

The legal dimension is manifested by the protection of environment and also the safety and justice.

3-2-1 Protection of environment

HODNA Milk corporation sought through the application of Law 03-10 on 19 July 2003 that the protection of theenvironment in the context of sustainable development[xxix]. And in this way HODNA milk will introduce a plan to achieve ISO 9000 and ISO 26000.

For the remains, HODNA milk is very advanced in its dealing with wastes and in a manner that permit the separation of wastes according to their quality and then destroying what to destroy and recycle the rest.

3-2-2 Safety and Justice

Table n° 03: the development of socio-professional categories between 2004and2010

Socioprofessional Categories 2004 2005 2006 2007 2008 2009 2010
Frames 8 14 18 27 32 35 39
Agent-control 15 28 40 59 61 74 79
Enforcement Officer 51 100 139 196 217 241 272
Total 74 142 197 282 310 350 390

Source :Hodna Milk

In this table which expresses the development of the workforce of workers between 2004 and 2010, we note that there is a balancebetween categories that means thatthe corporation of HODNAmilk realize its strategies in a way that satisfy their needs of different categories of workers which give impression that this corporationrecruit its workers with a professional ways and by a fair manner.

         Also, depending on a study conducted by the researcher HADJI, by using a questionnaire which was distributed to a sample of 64 individual of HODNA Milk workers, we concluded from the results that she obtained that the workers loyalty, which is represented by the extent of   its positioning in the mind of its workers, has reached 90% which indicate that HODNA Milk has succeeded in creating some feelings towards it from the part of its employees. This is confirmed by the proportion of HODNA Milk’ promotion by its workers and which amounted to 84.28%, and this means that those workers convey a positive image about HODNA Milk to the external environment and this represents an opportunity to be exploited by transforming those workers into marketers [xxx].

3-2-3Worker Safety

HODNA milk gives a big importance to the safety of workers especially in its eagerness to controlif its workers followthe safety procedures,and we have seen that in laboratory and production’ units.

3-3 The Third Dimension: the Social Dimension.

In terms of the social dimension, and which is represented by the contribution of HODNA Milk in the coverage of the essential needs of the society, we find that HODNA Milk cover all the local market needs in terms of milk production. This market includes M’sila and go beyond it to include: BordjBouArreridj, El Oued, Biskra and Djelfa. While the yogurt product is distributed at the level of national territory (HODNA Milk has succeeded in covering 33 cities). Also its diversified products line has helped it to take its place in the local and international market and this when yogurt products were exported to Libya in 2004-2005.

As for the quality of the products and services provided, HODNA Milk has relied on the brand “HODNA Lait” at the beginning of its activity and as a sufficient brand for milk products, whether in bags or in bottles, and this to distinguish milk because it is marketed heavily at the local level so consumers will know HODNA Milk corporation through the milk brand and thus this will make HODNA Milk corporation known among a lot of consumers. But regarding yogurt products, HODNA Milk corporation has four brands: DEY for flavored yogurt in a bowl, FURY for creamy dessert, YORTY for flavored yogurt in a bottle, and lastly Oh FRUIT for all that is mixed with fruits.

And finally we can say that the diversity of HODNA Milk products which cover all consumer tastes and which are distributed in several cities of the country, so HODNA Milk occupies a significant place in the mind of the consumers. And thus, HODNA Milk cares about the quality of its products and contributes significantly in satisfying all the tastes of consumers and meets the different needs of the society[xxxi].

Also after a study conducted among consumers to know their needs concerning HODNA Milk products, it was found that the HODNA Milk must focus its attention on the launch of products of different sizes: 100 g, 110 g, 125 g, 1 L, and in different forms, whether in cans or bottles, and this to reach the largest possible level of satisfaction of the needs and desires of consumers. It is also noted that consumer preferences vary by age and by gender because there is a category of children, adult and elder category and patient’s category. So HODNA Milk, has taking into account these informationsduring the design of its products in order to meet all the tastes of consumers[xxxii]. And this is shown by the following table.

Table n°03: The various tastes of HODNA Milk products.

Tastes The type of Product Number
Strawberry, pear, apricot, apple, banana, raspberry, cherry, pineapple, Forest fruits Flavoredyogurt 100 g (Yorty) 1
Peach, cherry, raspberry, strawberry, banana, apricot Flavoredyogurt 125 g (Yorty) 2
Lemon, cherry, apple, fruit woods, pears, bananas, apricots, pineapple, raspberry, vanilla, strawberry. Flavoredyogurt (El Dey) 3
Forest fruits, apricot, pear, banana, peach, cherry, raspberry, pineapple, strawberry, lemon. Flavoredyogurt 110 g (Yog) 4
Banana, apricot, strawberry, peach with pear, grapefruit, orange and lemon. Flavoredyogurt 1L (Yorty) 5
Strawberry, peach, apricot, forest fruits. The Fruit Gourmand 100 g 6
Vanilla, apricot, peach, strawberry. Flavored mixed yogurt (100 g) 7
Lemon, peach, apricot, forest fruits, strawberry. Light without added sugar (110 g) 8
Peaches, lemons, apricots, Forest fruits, pineapple. Bifidus Flavored(110 g) 9
Apricot, strawberry Cœur Fruity (125 g) 10
Apricot, strawberry, peach, pears, bananas, apricots. Yogurt with fruits 1L (Oh FRUIT) 11
Pasteurized skimmedmilk PURLAIT 1L 12
Pasteurized partially skimmed milk in bags or bottles LABEN (FERMENTED Milk) 1L 13
Pasteurized partially skimmed milk RAIB (Curdled milk) Bottled 1L 14
Caramel, chocolate Creamy dessert 125 g (HODNY) 15
Caramel, chocolate Creamy dessert 100 g (HODNY) 16
/ Caramel flan (FLANIA) 100g 17
/ FERMENTED Milk bag 18
/ PASTEURIZED cow Milk 19
/ PASTEURIZED Milk 20

Source: Mourad CHERIF, (in Arabic), “the use of marketing researches as a tool for planning and preparation for marketing strategy- case study: HODNA Milk corporation in m’sila”, management and economic sciences review, n° 12, 2012, p 191.

Conclusion

In conclusion, we can say that the application of corporate social responsibility and its integration in the activities of corporations has a great impact on the survival of these corporations and its development which will guarantee its sustainability. And this given the growing reality that business needs the approval of society to prospect, and given the growing interest in entrepreneurship’ social aspects. So, in order to guarantee the sustainability of entrepreneurship’ projects, corporations must redefine the social value added of entrepreneurial activities to the society and this by the integration of the corporate social responsibility, bottom of social entrepreneurshipperspective.

If we talk aboutentrepreneurship in Algeria we observe that the most of SMEs in Algeria can’t survive and this due to the lack of its development, and this because they can’t get out of being a family corporationand thus they can’t be developed to be a big corporation and this of course threat its survival giving that they can’t concur with other corporations. And this led us  to ask about how we can promote the development of small corporations in light of economic openness and technological development

Through our case study, we conclude that HODNA Milk Corporation has resisted from this environment’ changes by innovation, the use of new technologies and finally by the integration of some dimensions of corporate social responsibility, despite it suffers from some problems. But, it strives to get the ISO certificate (especially ISO 9000, ISO 26000).

Bibliographie

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المركز الديمقراطي العربي مؤسسة مستقلة تعمل فى اطار البحث العلمى والتحليلى فى القضايا الاستراتيجية والسياسية والاقتصادية، ويهدف بشكل اساسى الى دراسة القضايا العربية وانماط التفاعل بين الدول العربية حكومات وشعوبا ومنظمات غير حكومية.

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