chapter 4

Series Title: Social Responsibility Beyond Neoliberalism and Charity Volume 4: Social Responsibility - Range of Perspectives Per Topics and Countries Edited By

Matjaž Mulej University of Maribor Faculty of Economics and Business and IRDO Institute for Development of Social Responsibility Maribor Slovenia &

Robert G. Dyck Virginia Tech Blacksburg, VA, USA

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CONTENTS Foreword

i

Preface

v

List of Contributors

viii

CHAPTERS 1.

Responsible Corporate Management and Community Involvement Štefka Gorenak

2.

Social Responsibility and the Rule of Law Breda Mulec

33

3.

Well-Being as the Basic Aim of Social Responsibility Simona Šarotar Žižek

49

4.

First Responders in Regional Disasters: A Case of Social Responsibility Gerhard Chroust, Günther Ossimitz, Markus Roth, Nadine Sturm and Peter Ziehesberger

77

5.

Requisite Holism of Behavior When Facing Complexity of Pandemic Diseases – New Trends in Healthcare Information System (HIS) 105 Teodora Ivanuša, Matjaž Mulej, Iztok Podbregar and Bojan Rosi

6.

Innovation of Managerial Attributes to Incorporate a More Systemic World-View 163 Matjaž Mulej, Tatiana A. Medvedeva, Vojko Potočan, Zdenka Ženko, Simona Šarotar Žižek, Anita Hrast and Tjaša Štrukelj

7.

The Economic and Environmental Decline of Atenquique, Mexico, Associated with Socially Irresponsible Corporate Ownership 197 José G. Vargas-Hernández

8.

Socially Responsible Business in the “BRICS” Economies: The Way to a Sustainable Future 221 Zhanna S. Belyaeva and Alberto G. Canen Index

3

241

i

FOREWORD SOCIAL RESPONSIBILITY

Social transformation is unpredictable. New technologies and modes of production indicate that social innovation is necessary, but they say little about the exact nature of the ensuing social change. The pressures for change often originate from different and unconnected sources and only after the necessary passage of time it may become clear which among them -technological, economic, ideological, political or cultural - has made the critically important contribution and how they eventually gel into a new social reality. Calls for a generalized change of paradigm can be useful as a means of pressure yet they usually do not contribute much in real terms. A careful analysis of praxis is necessary to discern the elements of change and to propose the desired direction. The present volume tries to do precisely that. It explores a wide array of evolving practices which tend to strengthen social responsibility in various areas of economy and social services with the objective to help developing them into a coherent system of thought on the social responsibility needed today. The analytical work done by the authors of the chapters in this book has to be considered in a wider context. In addition to the focus on specific aspects of social responsibility the authors express a strong link with some of the most important phenomena of social and economic development in our era. The first and perhaps the foremost among them is the growing awareness of the need to develop a proper understanding of social responsibility as a vital requirement to overcome the current economic crisis and to open new horizons of development. This need is expressed by a wide variety of social and international actors. The voices of activists of the "Occupy Wall Street" and the "Indignados" on one hand, and the analysts of the World Economic Forum on the other warn about the same problems, although not always in exactly the same language. For example, the World Economic Forum identified, in its global risks report 2013, "a severe and growing income disparity" as one of the two main risks threatening the global economy and international community, the other being environmental degradation. This clear indication of a fundamentally dangerous social problem today calls for serious search of credible responses. The fact that the World Economic Forum, hardly an organization known for social sensitivity and care for the poor and the excluded, put the problem of dramatic and growing income disparity among the main threats to the world, suggests that the problem has become obvious. However, its extent and corrosive nature have yet to be fully understood. Oxfam, probably one of the most experienced organizations in this field, has recently explained that the existing levels of inequality between the poor and the extremely wealthy have already become economically inefficient, politically corrosive,

ii

socially divisive and environmentally destructive. This realization is gaining ground not only among the humanitarians such as Oxfam, but also among the hard-nosed economists. *Former President of the Republic of Slovenia (2007 - 2012), Former UN Assistant Secretary-General (2000 - 2005). The above diagnoses are not coming as a surprise. The problem of extreme income disparity is a result of the type of development which has been prevailing over the past three decades. Profit making has been considered not only as the key to economic progress, but also as the only economically relevant form of social responsibility. Social responsibility has for a generation gone out of fashion as a value per se: it was considered, mainly, as a by-product of profit and growth. Globalization, that object of admiration of economic optimists, was welcomed as a tide that will lift all boats. Social progress was expected to come as an automatic consequence of growth. Rarely in recent history has "trickle down theory" enjoyed such an unquestioned support of the dominant economic commentators as well as of policy makers. The financial and economic crisis in the West which started in 2007 has brought the era of unbridled economic optimism to an end. Economic tasks are increasingly seen in a conjunction with the tasks of social transformation and the question of social responsibility of business and of economic policy makers in general is becoming central in this context. However, two notes of caution are necessary here. First, the basic function of profit in economic development remains. At present, market economy represents the only viable model of economic development. The question is how to modify its functioning so as to ensure that profit making serves the society and not vice versa. Second, the idea of social responsibility, while unfashionable, has never been entirely absent. Even at the time of the domination of the free market ideology there have been projects which gave specific expression to the idea of social responsibility of business leaders and policy makers. A good example was set by the "Global Compact" initiated by Kofi Annan, then UN Secretary- General, at the meeting of business leaders in Davos in January 1999. The participants were invited to introduce, on their own volition, good practices in the areas of labour standards, human rights, anti-corruption and environmental protection and engage with the UN for that purpose. Obviously, accepting such an approach means a certain burden on the competitiveness of the companies in the short run. However, it brings dividends over time. It strengthens the sense of social responsibility of the business sector and helps putting global markets on a fairer and more sustainable footing. Since 1999 more than 10.000 businesses and other stakeholders from 145 countries have joined in this initiative and it is hoped that the experience gained will help changing business culture worldwide. The initiative also stimulates creativity with regard to social

iii

responsibility of business and helps directing it into the mainstream of business thinking and, hopefully, in the broader public opinion. The example of the UN Global Compact shows that a general aspiration for higher levels of social responsibility exists. However, the debate still leaves much to be desired. The present book is a contribution to this much needed debate. It reflects the relevant experience from the recent past. It addresses the nature of the current crisis and the key conditions for the needed change: the need for new economic paradigms, the relevance of the rule of law, as well as the various theoretical aspects necessary for addressing the issues of social responsibility comprehensively. Moreover, it delves into the experience of socially responsible management in various areas, including in social services provided by the state. It is particularly valuable that the authors discussed the relevant issues on the basis of specific experience and history of transition from the former socialist selfmanagement model of development to the existing market economies. Nothing was perfect in this history. But good knowledge of the actual experience of transition is a necessary condition for the identification of new solutions. The analysis offered in this volume provides a good platform for discussion which needs to address the question of social responsibility in a holistic manner: The critique has to include all aspects of transition, while the proposals for the future have to embrace both the business sector and the system of social services provided by the state and by other actors. When the full picture is presented it might become possible to offer convincing answers to the questions raised by the civil society, which is protesting against severe income disparity and demanding social justice today, as well as to propose directions to guide the policy makers in the future. Danilo Türk Professor of Interntional Law University of Ljubljana Ljubljana, Slovenia Former President of the Republic of Slovenia Former Top Official of United Nations Organization

v

PREFACE Editorial introduction to Volume 4: SOCIAL RESPONSIBILITY - RANGE OF PERSPECTIVES PER TOPICS AND COUNTRIES. This volume differs from the other three volumes by exposing the differences that tend to show up in consideration of ‘Social responsibility beyond neoliberalism and charity’. Responsible corporate management and community involvement – Štefka Gorenak: sees the future of economy and society in totally responsible management. Social responsibility and the rule of law- Breda Mulec: supports this view for necessary future legal measures. Well-being as the basic aim of social responsibility- Simona Šarotar Žižek: makes readers aware that the basic criterion of success is human well-being rather than profit alone. First responders in regional disasters: a case of social responsibility- Gerhard Chroust et al.: provide a case of providing well-being and social responsibility in urgencies. Requisite holism of behavior when facing complexity of pandemic diseases – new trends in Healthcare information system (HIS)- Teodora Ivanuša et al. expand the issue of urgencies to pandemic diseasies and suggest innovation in healthcare information systems. Innovation of managerial attributes to incorporate a more systemic world-view- Tatiana A. Medvedeva et al.: analyze Russia and Slovenia as latecomers to the contemporary market economy and expose the traditional managerial commanding habits as inhibiting factors to social responsibility in organizations and society. The economic and environmental decline of Atenquique, Mexico, associated with socially irresponsible corporate ownership- José G. Vargas-Hernández: supports the above findings with a bad case caused by the lack of social responsibility of the influential persons who are rather onesided than socially responsible. Socially responsible business in the “BRICS” economies: the way to a sustainable future - Zhanna S. Belyaeva, Alberto G. Canen: expands the cases to expose the economic need for social responsibility in the most rapidly developing economies. Matjaž Mulej University of Maribor Slovenia & Robert G. Dyck Virginia Tech USA

vii

List of Contributors Belyaeva Zhanna S.

Ural Federal University, School of Economics and Management, International Business Department, Mira Str., 19, i-419, 620019 Yekaterinburg, Russia

Canen Alberto G.

COPPE/Federal University of Rio de Janeiro, Department of Production Engineering, Caixa Postal 68507, 21941-972 Rio de Janeiro, RJ, Brazil

Chroust Gerhard

J. Kepler Univ., Linz, Austria

Gorenak Štefka

Faculty of Commercial and Business Sciences, Celje, Slovenia

Hrast Anita

IRDO Institute for Development of Social Responsibility, Maribor, Slovenia

Ivanuša Teodora

Faculty of Safety Sciences, University of Maribor, Kotnikova 10, Ljubljana

Medvedeva Tatiana A.

Department of World Economy and Law, Siberian State University of Transport; Novosibirsk, Russia

Mulec Breda

Faculty of State and European Studies, Kranj, Slovenia, and Office of the Government of the Republic of Slovenia for Slovenes Abroad

Ossimitz Günther

passed away.

Podbregar Iztok

Faculty of Safety Sciences, University of Maribor, Kotnikova 10, Ljubljana

Potočan Vojko

University of Maribor, Faculty of Economics and Business

Rosi Bojan

Faculty of Logistics, University of Maribor, Mariborska 7, 3000 Celje, Slovenia

Roth Markus

Creative Bits, Traun, Austria

Šarotar Žižek Simona

University of Maribor, Faculty of Economics and Business, SI-2000 Maribor, Slovenia

Štrukelj Tjaša

University of Maribor, Faculty of Economics and Business, SI-2000 Maribor, Slovenia

Sturm Nadine

Research Institute of the Red Cross Austria, Wien, Austria

Vargas-Hernández José G.

Marketing and International Business Department University Center for Economic and Managerial Sciences, Universidad de Guadalajara Periférico Norte 799 Edificio G-306 Zapopan, Jalisco C.P. 45100; México

Ženko Zdenka

University of Maribor, Faculty of Economics and Business, Maribor, Slovenia

Ziehesberger Peter

Ziehesberger Elektronik, Neuhofen/Krems, Austria

Social Responsibility - Range of Perspectives Per Topics and Countries, 2015, 3-32

3

CHAPTER 1 Responsible Corporate Management and Community Involvement Štefka Gorenak* Faculty of Commercial and Business Sciences, Celje, Slovenia Editorial Note: In terms of ISO 26000, this chapter adds the concept of corporate citizenship to the concept of social responsibility, aimed at realizing “Total Responsibility Management.” It focuses primarily on organizational governance and environmental management, and includes a concrete field research case. Abstract: For at least five decades, scholars of Corporate Social Responsibility (CSR) have attempted to find and develop a constructive relationship between business and society. Corporate ethics implies a critical assessment of discourses and practices in organizations. This contribution reports about the importance of CSR, total quality management (TQM) and total responsibility management (TRM), as well as corporate citizenship. TRM principles and standards reflect rising public expectations about CSR. Many companies develop TRM requisitely holistically, and hence successfully manage their responsibilities toward their stakeholders and their natural environment. The evolution and implementation of TRM in business practice include vision, integration innovation and sustainable indicators according the ISO 26000. TRM indicators focus on stakeholders, together with the triple-bottom-lines of economic, social and environment issues measured in terms of cost-benefit. The concept of corporate citizenship is closely linked with CSR in terms of social and environmental issues. The top ten corporate values (integrity, honesty, justice, equality, objectivity, loyalty, devotion, respect, prudence, tolerance) are what one may generally observe expressed in most corporate codes of ethics. Ethical leadership is a kind of leadership by which one can create the social, political, economic, cultural conditions required for living together. Morally proactive leadership is critical for successful responsible management and corporate citizenship. The proactive companies focus on the importance of CSR and its management, inside and outside the global company. The Gorenje Group has included the proactive and innovative TRM as well as corporate citizenship into corporate strategy. These activities are transparent and represent the holistic and systemic responsible stakeholder management at the corporate level. Introduction of requisitely holistic TRM may hence be a management innovation toward CSR and success. *Corresponding author Štefka Gorenak: Faculty of Commercial and Business Sciences, Celje, Slovenia; Tel: 00386 3 5755 238; Fax: 00386 3 5755 238; E-mail: [email protected] Matjaž Mulej and Robert G. Dyck (Eds) All rights reserved-© 2015 Bentham Science Publishers

4 Social Responsibility - Range of Perspectives Per Topics and Countries

Štefka Gorenak

Keywords: Case study, corporate citizenship, corporate social responsibility (CSR), corporate values, ecology, environmental management, ethical business behavior, Gorenje Group, holism, leadership commitment, organizational and personal learning, plan-do-check-act, responsible corporate strategy, responsible competitiveness, sustainable innovation, stakeholder management, sustainable indicators, total responsibility management (TRM), total quality management (TQM), well-being. 1. INTRODUCTION ‘Corporate citizenship’ is a challenge that companies cannot ignore and that managers cannot avoid. New ‘communities’ are part of every company’s reality, generating new problems and creating new opportunities. In the 21st century, corporate citizenship may become the standard expectations for global business enterprises. The reason is clear: the benefits and costs of business activities are so extensive that no society can develop without seriously thinking about the role of the global corporations. The challenge of achieving a balance between economics and social wellbeing and placing the problem in sharp relief says: businesses will not reap the economic benefits of open global markets without responding to their social and political responsibilities. Moral leadership is critical for successful corporate citizenship. Of the four faces of corporate citizenship, the ethical or moral face can be the most challenging to fulfill. The European Union (EU) acknowledged the potential role that CSR might play in realizing the EU’s goal of becoming the most competitive knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion. Businesses can compete effectively across the responsibility spectrum (Zadek, 2004). Quality management is in the modern companies - a competitive imperative (more about this in Gorenak and Bobek, 2010). Researchers suggest that CSR under certain conditions can stimulate innovation, investment or trade and consequently also competitiveness, consumer’s behavior, accountability and responsibility to the society (Porter & Kramer, 2006; Cramer, 2003; Grayson & Hodger, 2004). The concept of CSR is being replaced by the term »corporate citizenship«. We suggest that the alternative term »business citizenship« may better incorporate the

Responsible Corporate Management

Social Responsibility - Range of Perspectives Per Topics and Countries 5

broader perspective on business rights and duties, stakeholder relationship, opportunities and challenges that accompany the global socio-economy of the 21st century. In order to develop a working theory of business citizenship, we first extract several key ideas about citizenship of individual persons and apply them to business organizations. This step requires an analysis of two perspectives on the individual, the organization, and the state: the minimalist or the libertarian view, and the communitarian view. This approach allows for a view of business citizenship that accommodates strong moral guidance, structural and institutional relations and the flexibility necessary to respond to the changing circumstances of particular company-stakeholder relationships. This chapter presents the importance and interdependence of the quality management, corporate citizenship, CSR, sustainable indicators as well as their implementation - in e.g. Slovenian Business Practice. 2. HOLISTIC CORPORATE CITIZENSHIP Lester Thurow wrote, nearly 50 years ago, in The Future of Capitalism: ‘Paradoxically, at precisely the time when capitalism finds itself with no social competitors - its former competitors, socialism or communism, having died - it will have to undergo a profound metamorphosis’ (1966: 326). That metamorphosis of capitalism lies at the very heart of the discussions about CSR and, more recently, about the corporate citizenship; it has been around throughout most of the 20th century. As more and more pressure is put on capitalism to perform as basically the only major economic system the world now has left, the focus on the social and environmental impact on that system will inevitably increase. Sustainable capitalism, to use John Eklington’s (1997: 258) term, as a building ideology for rethinking business beyond CSR activities towards a holistic corporate citizenship requires systemic cultural change. That cultural change involves investing in the long term, and in building a sustainable society as part of it, not just a sustainable business in economic terms. This is at the core of a holistic corporate citizenship and is what distinguishes it from the very important, but much narrower, generally program-based, discussions on CSR of the past 40


Štefka Gorenak

years or so. A (requisitely) holistic corporate citizenship is best viewed, I would argue, not as a program of activities, but as a requisitely holistic system of organizational behavior affecting every level and aspect of an organization’s policies and practices. The social ‘must’ - Kenichi Ohmae argued in ‘The Borderless World: Power and Strategy in the Interlinked Economy’, that a corporation is a social institution whose responsibilities extend far beyond the well-being of its equity owners to giving security and a good life to its employees, dealers, customers, vendors, and subcontractors. Their whole life hinges on the well-being of the corporation (1991: 214). If that is the case, and we believe it is, then a requisitely holistic corporate citizenship is not simply about philanthropy, corporate generosity, business community partnerships, executives leasing to community organizations, cause-related marketing, good causes and so on (though these may well be some of the concrete (externalized) realization of CSR), it is about a changing business ethos. If the organization is to survive; if it is to be sustainable; if it is to create wealth, it absolutely requires what Thurow described over 30 years ago as a ‘social must’ (1966: 303). Stories of corporate citizenship practice abound (see McIntosh et al. 1998; Tichy et al. 1999); theories of corporate citizenship are in the making (Altman ad Davenport 1998; Davenport 1998; Waddock 1999 and 2001; Wood and Logsdon 1999). However, as far as we are aware, there is as yet no substantial research bridge between theory and practice, no assessment of the gap between desired and current states of corporate citizenship. When asked what constitutes a good corporate citizen, participants consistently ventured beyond their own narrow stakeholder perspectives, ultimately defining corporate citizenship as follows: ‘Good corporate citizens strive to conduct all business dealings in an ethical manner, make a concerted effort to balance the needs of all stakeholders while working to protect the environment. Three attributes are presented, which indicate the good corporate citizenship: 1.

Ethical business behavior. The company is guided by rigorous ethical standards in all its business dealings.



2.

Stakeholder commitment. The company is managed for the benefit of all stakeholders: the community, consumers, employees, investors, suppliers, etc.

3.

Environmental commitment. The company moderates its overall environmental impact through programs such as recycling, waste and emission abatement, and through impact assessment via environmental audits.

To support these three attributes, participants identified 20 principles of corporate citizenship as criteria for guiding and assessing an organization’s performance (Davenport 1998). These are shown in Table 1. Table 1: 20 Principles of corporate citizenship. Source: Davenport 199 Ethical business behavior The company… Engages in fair and honest business practices in its relationships with stakeholders Sets high standards of behavior for all employees Exercises ethical oversight at the executive and board levels Stakeholder commitment The company… Is well managed for all stakeholders Initiates and engages in genuine dialogue with stakeholders Values and implements disclosure Community commitment The company… Fosters a reciprocal relationship between the corporation and the community Invests in the communities in which it operates Consumer commitment The company Respects the rights of consumers Offers quality products and services Provides information that is truthful and useful Employee commitment The company… Provides a family-friendly work environment Engages in responsible human-resource management Provides an equitable reward and wage system for employees Engages in open and flexible communications with employees Invests in employee development


Štefka Gorenak

Table 1: contd....

Investor commitment The company Strives for a competitive return on investment Supplier commitment The company Engages in fair-trading practices with suppliers Environmental commitment The company… Demonstrates a commitment to the environment Demonstrates a commitment to sustainable development

3. WHAT ARE CORPORATE SOCIAL RESPONSIBILITY (CSR) AND RESPONSIBILITY MANAGEMENT? The research into CSR, carried out over the last 30 years has mainly been related to the analysis of value creation (Clarkson, 1995; Harrison and Feeman, 1999; Waddock and Graves, 1997, Stanwick and Stanwick, 2006; Johnson and Greening, 1999; Mahoney and Thorne, 2005; Maignan and Ralston, 2002; Doh and Guay, 2006; Maginan and Ferell, 2003; Matten and Moon, 2008; Wisser and Tolhurst, 2010; Welford, 2005; Sotorrio and Sanchez, 2008; Aguilera et al., 2006; Matten and Moon, 2008; Louche et al., 2010; more about this in Gorenak and Bobek, 2010). 3.1. Briefly About Total Responsibility Management (TRM) Briefly, TRM starts with inspiration. It means that the company has articulated a values-driven vision to which top management is committed. Built on generally agreed foundational standards that provide a floor of expectations about company practices and performance while incorporating the company’s own explicitly stated values, the vision guides strategy development and implementation, processes, procedures, and relationships. The next major component of TRM is integration. TRM integrates the company’s inspirational vision into its strategies, its employee relationships and practices, and the numerous management systems that support company strategies. TRM, using continual improvement tools creates feedback loops that foster innovation and improvement in management systems. Key performance indicators, or a measurement system that assesses how well the company is performing along at least the triple bottom line of economic, social,



and environmental criteria, are important elements of the TRM framework; so are transparency and accountability for results. TRM in brief means (Waddock & Bodwell, 2007): inspiration, integration, innovation, and indicators. In analogy with quality management TRM follows the traditional process sequence embedded in quality systems in their implementation - plan, do check, act - a process that is embedded in the corporate accountability management system called SA8000 (Social Accountability 8000), which primarily focuses on implementation of labor standards but can be extended to TRM (Strum et al. 2000 in Gorenak and Bobek, 2010). 3.2. Putting Responsibility Management into Practice Employees in quality-oriented culture instinctively act as a team. Organizations where focuses on customers, continuous improvement, and teamwork are taken for granted have a good chance to attain the total quality. The criteria are built upon a set of “core values and concepts” (Evans, 2007). At the company’s level, sustainable development strategy should be “fostered by a strong sense of social environmental purpose”; it implies a commitment to a triple bottom line that includes profitability, environmental, and social goals (Fowler and Hope, 2007; Collins & Porras (1997 more about this Gorenak and Bobek, 2010): The comparison of core values and concepts in TQM/Baldrige Award and TRM is presented in Table 2. Table 2: Comparison of core values and concepts in TQM/Baldrige Award and TRM Baldrige Award Core Values / Concepts

TRM Core Values / Concepts

Visionary leadership

Visionary and committed leadership

Customer-driven excellence

Stakeholder-driven excellence and responsible practices

Organizational and personal learning

Organizational and personal learning through dialogue and mutual engagement with relevant stakeholders

Valuing employees and partners

Valuing employees, partners, other stakeholders

Agility

Agility and responsiveness

Focus on the future (short and long term)

Focus on the future (short and long term)

Managing for innovation

Managing for responsibility and improvement

Management by fact

Management by fact, transparency, accountability

Public responsibility and citizenship

Public responsibility and citizenship

Focus on results and creating value

Focus on positive results, impacts and value-added for stakeholders with responsible ecological practices

Source: Waddock and Bodwell (2007: 57-59 in Gorenak and Bobek, 2010).


Štefka Gorenak

A necessary condition is having the top management’s clear vision about CSR and well-articulated guiding core values that support the vision. For example, Ketola’s (2007) CSR model with anthropocentrism illustrates preference for social responsibility, biocentrism, ecological responsibility, and techno-centrism: the view that economic and ecological responsibilities can be simultaneously achieved through technological solutions. 3.3. Leadership Commitment Leaders and managers in company play a crucial role in developing vision and values. Leaders, who seek to integrate ethics-wisdom with management’s wisdom, will find ways to address social problems while fulfilling the mandate to be profitable. The transition from moral management to moral leadership is similar to the transition from management to leadership - generally. One cannot be a moral leader without first being a leader. Moral leaders possess a number of important qualities. Perhaps these qualities could be referred to as ‘habits’, which distinguish them from immoral or amoral leaders. Moral leaders have a passion to do the right thing (Fassin et al., 2010). They are appropriately motivated. They are morally proactive - they take the initiatives and are on the cutting edge of doing the right thing. They include stakeholders. They adopt and use the stakeholder model of the organization. They strive to be sure that all relevant stakeholders are taken into consideration. They have a strong ethical character and an obsession for fairness. Moral leaders are principled decision-makers and they know how to integrate ethical wisdom with management wisdom in all that they do. With respect to moral leadership, how might one further articulate the essential attributes of moral leaders or moral leadership? What qualities do leaders need to possess and display to be thought of as moral leaders? Borrowing from the language used by Stephen Covey in his best-selling book The Seven Habits of Highly Effective People (1989), we could easily term these ‘the seven habits of highly moral leaders.’ In this section, we identify seven important attributes or habitual qualities of moral leaders: 1.

They have a passion to do right.

2.

They are morally proactive.



3.

They consider all stakeholders.

4.

They have a strong ethical character.

5.

They have an obsession with fairness.

6.

They undertake principled decision-making.

7.

They integrate ethics wisdom with management wisdom.

Adopting a TRM approach means systematically innovating the entire company, ensuring that vision and values are integrated into all company’s strategies and operating practices; it also requires the top management’s involvement (Waddock & Bodwell, 2007 in Gorenak and Bobek, 2010). Table 3 summarizes the eight disciplines that form the core competencies required to create sustainable value. Table 3: The eight disciplines of sustainable value Discipline

Key Attributes

1. Understand current value position

Understand where and how the company is creating or destroying stakeholder value - and what it means in terms of business risks and opportunities

2. Anticipate future expectations

Track emerging issues and interests for stakeholders - and what it means for future business risks and opportunities

3. Set sustainable value goals

Establish a strategic intent to create new business value based on reducing negative impacts and/or increasing positive impacts for key stakeholders

4. Design value creation initiatives

Identify value creation opportunities that elevate both financial and societal performance

5. Develop the business case

Build a compelling business case. Obtain the resources and support needed to move the value creation initiatives forward.

6. Capture the value

Assess the requirements to successfully implement the initiatives

7. Validate results and capture learning

Measure progress. Develop metrics for stakeholder value and how it translates into shareholder value

8. Build sustainable value organizational capacity

Develop the mind-set, management capabilities, and skills needed to capture shareholder and stakeholder value

Source: Laszlo (2008, 135-136 in Gorenak and Bobek, 2010).


Štefka Gorenak

3.4. Stakeholder Engagement The proactive stance is the best in this attempt to anticipate and hence respond to problems before they arise (see e.g. Clarkson 1995; Waddock 2006; Gorenak and Bobek, 2010). 3.4.1. Integrating Responsibility Management Integrating responsibility management into the organization is contingent on many factors unique to each situation. What is clear is that responsibility management approaches must be systemic, i.e. holistic, if they are to be effective Table 4. Table 4: Baldrige criteria extended to total responsibility management Baldrige National Quality Award Criteria for Performance Excellence

TRM Criteria for Performance Excellence

Continuous quality improvement

Continual responsibility improvement process ensures that TRM standards are met.

Meeting customers’ expectations

Lives up to expectations of global business, NGOs and governmental communities regarding responsible relationships with employees, suppliers, customers, and communities through sustainable management practices.

Long-range planning

Long-range planning.

Increased employee involvement

Meeting employees’ expectations about responsible practices through engagement and dialogue.

Process management

Increased stakeholder engagement and management of stakeholder relationships, practices and impacts through attention to systems, processes and outcomes.

Competitive benchmarking

Competitive benchmarking of responsibility systems, including systems/process management for continual responsibility improvement.

Team-based problem-solving

Employee, supplier and customer involvement in meeting standards and problem-solving.

Constant measurement of results

Constant assessment of results, externally verified auditing process, communication and reporting out to stakeholders.

Closer relationships with customers

Closer, engaged and mutually respectful stakeholder relationships.

Management commitment

Top-management commitment, management commitment at all levels, employee and supplier commitment, clear articulation of vision, core values and strategies for continual improvement of stakeholder relations and performance assessment.

Source: Waddock and Bodwell 2007:130-131 in Gorenak and Bobek, 2010.



In addition, the quality movement articulated a set of important principles, by which organizations could begin to move their practices towards higher levels of quality as well as continual improvement (Gorenak and Mulej, 2010 in Gorenak and Bobek, 2010). In Table 4 there is a similar roadmap for companies to follow when they are implementing TRM. 3.4.2. Indicators The improvement and radical innovation elements of TRM create a significant demand for companies to broaden how they measure performance (Gorenak and Bobek, 2010). Knez-Riedl and Mulej (2008: 103) presented some examples of the cost/benefit alternatives in business alternatives in business (directly visible and costs-indirect, maybe hidden costs). Social responsibility by ISO 26000 (ISO, 2010) is a new reaction to the problems of one-sidedness. In ISO 26000 SR differs from the old European Union’s and UNO’s definition of social responsibility (passed a decade ago) by including one more topic of crucial importance and by linking all seven listed contents with two crucial concepts of systems theory as the science about attainment of holism instead of one-sidedness and related consequences: holism and interdependence. The Implications of ISO 26000 are designed to guide both quality professionals and business leaders as they maximize the role of the quality professional in SR initiatives. The new ISO 26000 standard offers a definition of what it means to be a socially responsible organization and why companies should adopt the premises of the standard. Thus, SR is not only reinforcing systemic behavior; it is also requiring innovation as process for systemic, i.e. (requisitely) holistic (RH) behavior to become innovation as outcome. The seven contents of ISO 26000 include: (1) Governance and management of organizations; (2) Human rights (as the newly added topic); (3) Labor practices; (4) Environment; (5) Fair business practices, (6) Consumer issues, and (7) Community involvement and development. SR (without its limitation to charity) is a human attribute making humans and their organizations more conscious of interdependence; hence they practice more ethics of interdependence, and therefore attain more, or even requisite, holism. Measures of business success and dimensions of corporate sustainable development performance focus specifically on the key areas of (van Heel et al.


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2001 in Gorenak and Bobek, 2010): governance; general business; environment; socioeconomic, and stakeholder engagement. 4. ENVIRONMENTAL MANAGEMENT SYSTEMS AND STANDARDS Environmental policy in Europe and elsewhere has been suffering from a lack of effectiveness (Knill & Liefferink, 2007). As a response, two key strategies were proposed and partly pursued: (1) to adapt the level and spatial scale of governance to that of the environmental problems; (2) to enhance participation of non-state actors in environmental decision-making. In order to effectively respond to environmental problems, it has repeatedly been proposed to adapt the scale of governance institutions to that of the environmental issue (Young, 2002). Increasingly, functionally specific governance institutions on natural spatial scales are being marshaled (Hooghe & Marks, 2003). Environmental governance has become a highly complex system of decision points. An important aspect of governance - as opposed to government, and of multi-level governance in particular, is the participation of non-state actors in decision processes on the different levels of governance (Bache and Flinders, 2005; Papadopoulos, 2007). In this context, a stronger decentralization in policy implementation is advocated. What about environmental policy, in particular the inclusion of non-stake actors in policy-making achieved prominence, thanks to four EU directives pushing forward more collaborative forms of governance. Drawing on the academic literature (Pellizzoni, 2003), participatory governance is expected to contribute to improving the ‘quality’ of decisions by incorporating locally held knowledge and by opening up the political arena for environmental interests. Further, it is argued that the inclusion of stakeholders increases the acceptance of decisions and thus improves compliance and implementation on the ground (Schenk et al., 2007). Based on these prerequisites, participatory and collaborative forms of governance are expected to lead to more effective improvements in environmental quality (Newig, 2007; Dietz & Stern, 2008). This is typically expected with environmental problems characterized by increasingly complex spatial interrelations of societal and ecological processes (Young et al., 2006; Fece (2005a, 2005b, 2007 and 2008).



We need to know which types of decision-making processes - multi-sector collaboration, hierarchical planning, command and control regulation, or marketbased mechanisms - perform best in terms of environmental outcomes’ (Rauschmayer et al., 2009). A particular challenge for research (and practice) arises from the fact that the question of (civic) participation is invariably connected to the issue of governance level, because participation is always carried out on a particular - typically local or regional - level. Although it is plausible to assume that there is unexpected potential and fundamental contradictions embedded in the relationship between participation and multi-level governance, this has not yet been the subject of scholarly attention (except by Warleigh, 2006). Environmental management systems (EMS) were developed as a response to pressure to show the environmental performance. Environmental policy should be planned, implemented, checked and corrected if necessary, and finally reviewed. In this way firms aim at continual improvement of the system in order to ameliorate environmental performance (Kolk, 2000). 5. RESPONSIBLE COMPETITIVENESS Even with an optimistic view of the growth in CSR practices the general public in most countries has little confidence that business is willing to become active in combating social exclusion, poverty, and environmental insecurity. The challenge is not so much to ‘find’ profitable opportunities in today’s markets, as to create markets (in societies) that systematically reward responsible practices. To understand competitiveness, the starting point must be the sources of a nation’s prosperity. True competitiveness, then, is measured by productivity (Cornelius and Porter, 2002). The question is whether CSR practices can play a significant role in driving ‘responsible competitiveness’, characterized by a positive relationship between national and regional competitiveness and a nation’s sustainable development performance (more about this in Gorenak and Bobek, 2010). Measuring country’s (region’s, community’s) progress of sustainable development strategy includes a wide set of indicators, additional and improved


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ways of measuring progress, strategic assessment of performance and progress; they are quoted in Table 5. Table 5: Sustainable development indicator set - Measuring progress

Well-being

1. women

Health Inequality: Life expectancy (by area) men /

2.

Air Quality: Air Quality Management Areas (AQMAs)

3. Economic opportunity: 16 - 19 year olds who are not in education training or employment 4. Economic opportunity: people of working age in employment Supporting thriving communities

5. Community: a) neighborhood satisfaction; b) volunteering 6. Crime: recorded crimes for a) vehicles, b) domestic house-breaking, c) violence, d) anti-social behavior 7. Households: a) childhood poverty; children in low income households, b) homeless households

Protecting country’s (region’s or community’s) natural heritage and resources

8. Waste: municipal waste arising a) total, and b) recycled/composted 9. Biodiversity - for example composite indicator of bird populations 10. River quality: kilometers of river identified as “poor” or “seriously polluted”

Country’s (region’s or community’s) global contribution

11.

Climate change: greenhouse gas emissions: total and net

12. Sustainable Energy: Electricity generated from renewable resources 13.

Sustainable Energy: carbon emission indicator

14.

Transport: total vehicle kilometers

Learning

15.

Learning: Eco-schools uptake and number with green flag

Context

16. Economy: Economic output: Gross Domestic Product (GDP) per head 17.

Indicators in development

Demography: Age profile of population

18. Social justice: new indicator being developed to support country’s (region’s or community’s) framework 19. Environmental Equality: new indicator being developed to support country’s (region’s or community’s) framework 20. Well-being: well-being measures will be developed in support of country’s (region’s, or community’s) framework, if supported by the evidence.

Source: White et al., 2006 in Gorenak and Bobek, 2010).



Cost/benefit alternatives in business are presented in Table 6. Table 6: Cost/benefit alternatives in business - some examples Directly Visible

Costs - Indirect, Maybe Hidden Costs

Cost of happiness/motivation/commitment of co-workers as creative/innovative people

Cost of strikes and poor use of creative and other capabilities (for work rather than resistance)

Cost of fidelity of co-workers in the enterprise (or other organization)

Cost of support to fired co-workers (via taxes) and enabling of new co-workers

Cost of privileges of the most influential ones

Cost of resistance and revolt of un-influential ones

Cost of reliability of business partners (other than coworkers)

Cost of checking/assuring quality of (all) phase of the supply chain of business

Cost of diseases prevention and provision of healthy work and life conditions and habits of people, especially coworkers, etc.

Cost of medication (via taxes and direct), of replacing co-workers and their enabling, of support to disabled co-worker etc.

Cost of public and internal education and training of coworkers and other stakeholders

Cost of too poor quality, rationality, productivity, creativity and innovativeness

Cost of broad information and refreshment and renewal of knowledge and values, culture, ethics and norms of coworkers

Cost of a too poor insight in the essence, adaptability to new conditions, etc.

Cost of charity to the benefit of cultural, sport, fire fighters etc. activities providing sense-making content and creativity in leisure time

Cost of consequences (via taxes and direct), of too much drinking and similar leisure time contents damaging health

Cost of government for security, reliability, order etc.

Cost of insecurity, unreliable, possible terrorism and similar experiences

Cost of non-toxic etc. natural environment by requisitely holistic (RH) use of external economics

Cost of illnesses, eco-remediations and other consequences of abuse of external economics

Cost of fair use of the law of supply and demand (normal profits)

Cost of abuse of the law of supply and demand (normal profits) (exceptional profits now, but later?)

Cost of training limited to a narrow, currently needed specialization without training for inter-disciplinary creative co-operation

Cost of training for inter-disciplinary creative cooperation, as a precondition for requisitely holistic (RH) behavior at work and otherwise

Cost of training for routine or even routine-loving work without creativity and co-operation.

Cost of capacity of creative or even innovative work and cooperation

Source: Knez-Riedl and Mulej (2008, 103 in Gorenak and Bobek, 2010).

Measuring progress on country’s progress on sustainable development strategy includes a wide set of indicators, additional and improved ways of measuring progress, strategic assessment of performance and progress ((Porter, 1998, Zadek, 2004 White at al., 2006; Cruz and Boehe, 2010; Gorenak and Bobek, 2010, and Aßländer, 2011).

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6. EFFECTS OF CORPORATE CONSUMER BEHAVIOR

SOCIAL

RESPONSIBILITY

ON

The researchers like Marin et al. (2009, Sen et al., 2001, 2006, Pirsch et al., 2007; Berens et al., 2005) show, that CSR initiatives influence consumer behavior by multiple paths. The social behavior of firms and this behavior’s influences on consumers’ purchasing decisions has been intensely researched in recent years, but the results seem to be inconclusive (Maignan, 2001; Maignan and Ferell, 2003; Margolis and Walsh, 2003; Rubbens and Wessels, 2004; Page and Fearn 2005; Gebben and Gitsham, 2007 - more about this in Gorenak and Bobek, 2010. Let us illustrate this with a case. 7. GORENJE GROUP - FROM TOTAL MANAGEMENT TO CORPORATE CITIZENSHIP

RESPONSIBILITY

7.1. Problem Definition Problem: The main researches on CSR should pay attention also to the corporate citizenship and its implementation into corporation strategies as well as its interrelations with Total Responsibility Management. Corporate citizenship, especially environmental management and social management in and outside the company help responsible companies to build good relations with the municipalities/communities and support the well-being strategies. Sustainable corporate citizenship strategies must be holistic and constantly measured. Hypothesis: Corporate citizenship, including environmental management and its implementation in corporate strategies (CSR, TRM) as well as cooperation with stakeholders in and outside the company, lead companies and long-term competitive advantages. Methodology: Gorenje Group - depth-interview (45 minutes) with head of the department of environment and health and safety at work and the internal data as well as public available data, like annual report, were investigated and included. 7.2. Research Questions Sustainable success for the business and, as a consequence, sustainable success for society are more likely to be reached by asking the following questions about



every policy and operation of the company or organization on a daily and recurring basis. Recognize that corporate citizenship is more than CSR and is not simply project-based: it is about three domains - the organization itself, the core business, and the community in which the organization operates. The questions are following this aim: 1.

Is TRM/CSR included in your corporate culture, values and strategies?

2.

How does your company put TRM/CSR, especially ecological management, into practice, and explain the leadership commitment?

3.

What is the context and why is special attention paid to environmental management?

4.

Which environmental-management encompassing dimensions have already been included in your strategies?

5.

Which TRM/CSR, especially environmental-management indicators, are introduced in your company and how is it measured - examples?

6.

Will this make a positive or negative difference - socially, environmentally, and financially?

7.

Is this fully transparent and accountable in terms of the triple bottom line?

8.

Is this fully inclusive, involving employees and stakeholder dialogue and feedback?

9.

Is this ethical, sustainable and profitable?

10. Does this add value to the long-term triple bottom line? 11. Will this enable all of us to be proud of our current behavior and the legacy we leave for others? 12. What are your goals regarding TRM/CSR and competitiveness?


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13. Why are EMAS and good working conditions so important? 14. What does Gorenje Group do to encourage sustainable behavior of the consumers? 7.3. Research Findings in General Gorenje Group wider values, leadership principles and policies are supplemented by the Gorenje Sustainable Development Policy, which lays down their sustainability strategy. The Gorenje Group has undertaken to pursue a sustainable and valueoriented business policy, in part through their commitment to the Global Responsible Care Initiative. The Gorenje Corporate Sustainability Board consists of the members of the management boards of the subgroups responsible for ecology and technology and the heads of the Corporate Center departments for Corporate Human Resources & Organization, Communications and Environment & Sustainability. Chaired by the Group Management Board member responsible for Innovation, Technology and Environment, this body meets regularly to jointly establish the sustainability strategy and objectives, to adopt Group sustainability-related directives and to decide on key initiatives. A corner stone in the implementation of these decisions is the Environment & Sustainability Department, The subgroups and service companies have established effective management systems for health, safety, environmental protection and quality (HSEQ). Rules governing health protection and workplace safety are particularly important and have thus been adapted. CSR in Gorenje Group incorporates the responsibilities to employees, to users of products and services, to close and wide social environment and to the natural environment (more about this in Gorenak and Bobek, 2010). Gorenje Group typically makes an effort to provide products that guarantee the satisfaction of customers and meets their expectations. The responsibility to customers ensures that the product is of high quality, accessible, safe and environmental-friendly, and has less social and environmental impacts. More long-term attention should be paid to education of sustainable consumers and all stakeholders (values) in welfare society. There is a wide array of community activities in which Gorenje Group is involved (corporate citizenship - especially very good cooperation with communities where their companies are and where their employees live), more about this in Gorenak and Bobek, 2013.



There are many advantages of contemporary technological solutions for an environmentally conscious user. Contemporary consumers are increasingly aware that price and appearance can no longer be the sole criteria for decisions regarding the purchase of a household appliance; product's impact on the environment should also be considered as a major aspect. Every household consumes a lot of power to provide a good and comfortable life. Comfortable way of life in households results in a major share of indirect greenhouse gas emissions. One way to reduce this share is to purchase energy-efficient and technologically topmost appliances, such as the ones manufactured by Gorenje - a company ranked among the best manufacturers of modern home appliance. There are presented awards 1 , which contributed to the competitiveness of the Gorenje Group. At the same time, we have to mention the Institute of ecological research ERICo (that has been a part of the Gorenje Group), which is among the winners of the European Regional Champions Award 20082. 7.4. Responsibility to Users of Products and Services - Eco Circle The institutions issue appropriate reports on tests and certificates before products are launched into the market. It is of vital importance that safety of each product is

1 Gorenje Group Awards: Nomination for the Ecologically Aware Company of the Year; Slovenia, 2008. Environment-Friendly Company Award; Slovenia, 2007. EcoTopTen award for the class A++ tabletop refrigerator; Germany, 2007. Winner of the Czech user test for Mora cooking appliances, by power consumption, price, functionality, and design; Czech Republic, 2007. Nomination Waterwise for efficient water management in the Gorenje Premium Touch washing machine; Great Britain, 2006. TESAW award for power savings in the new generation evacuation laundry dryers; Australia, 2006 . International Environment Partnership Award, Slovenia - Serbia, 2006 . Third place on the list of sustainable value of the European industry, in the Advance Project research, with regard to environment management; European Union, 2006. EMAS Award in the category of large companies; European Union, 2005. Eco Product of the Year - new generation of washing machines and dryers; Slovenia, 2004. The Product Award for Sustainable Development; European Union, 2004. Most Environment-Friendly Company Award, Slovenia, 2003. Award for the most efficient energy management with a special award for the person in charge of energy management, Slovenia, 2003. Eco Product of the Year - new generation kitchen ranges; Slovenia, 2001 . Eco Product of the Year -Simple&logical washing machine, Slovenia, 1997. 2 The Institute of ecological research ERICo, which has been a part of the Gorenje Group for a good year and a half is among the recipients of the European Regional Champions Award 2008, presented by the European Parliament and the Committee on Regional Development. The 30 best projects, selected among 250 nominees, also included the project COOT - Centre of Environment Technology Excellence, in which ERICo is taking part as a key partner. The project is coordinated by the Jožef Stefan Institute and financed by the European Regional Development Fund. The purpose of the award is to identify and acknowledge sound and successful practices and innovations in the EU zone, particularly in those regional projects that can set an example to other regions.


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checked already at the stage of production and after the completed production in special licensed and well-equipped laboratories. Through European Committee of Domestic Equipment Manufactures (CECED) it would like to be a partner and companion in talks to the European commission in preparation of the legislation. The mission of the CECED is to improve technical properties of appliances along with simultaneous reduction in the environmental influence. Eco-cycle which includes materials, production, products and recycling is presented below: Materials - Even before a Gorenje product sees the day-light, it is endowed with a very important feature: it matches all legal and environmental requirements. Hence, product planning phase is of great importance as this is when up to 80 percent of the product's total impact on the environment is anticipated. Gorenje products are made of excellent, ecologically sound and degradable materials, with as little different types of plastics as possible, and with a maximum viable number of standard elements. The purpose of selecting the materials in this way is to enable simple disassembly and recycling once the products useful life has expired. Production - New concepts come to life in Gorenje only, if they can be implemented in an environment-friendly manner. Hence, products are not only made from environmentally sound and recyclable materials, but also manufactured by environment-friendly technological procedures. The approach to introducing clean, environment-friendly technologies has grown together with Gorenje since the company's beginnings, which through its development, completed numerous environment-friendly technological improvements in its production programs. Investment into improvement of technological procedures and equipment in the last decade resulted in a 42 percent decrease of hazardous waste generated per product, 54 percent decrease in waste disposed per product, 76 percent decrease in total treatment plant load, 65 percent decrease in water consumption per product, and 39 percent decrease in natural gas consumption per appliance produced. Products - In addition to design and functionality, meeting the criteria of environment-friendly design which includes the entire life cycle of a product starting from development, through manufacturing and use, to handling after the expiry of useful life, is of utmost importance. Furthermore, energy efficiency is



defined as one of the key strategic goals in development of technical solutions both in products and production processes. Consistently with various lifestyles, various Gorenje appliances are designed to address various preferences. Nevertheless, they all share a common feature: they are equipped solely with almost entirely recyclable components that are not harmful to health or detrimental to the environment; they use less power, water, and detergent; they are classified among the most energy-efficient household appliances in the market; they meet and exceed the criteria of the highest energy classes as defined by the European standards; the level of noise emitted by operating appliances is at the minimum level; entire technological development and improvements are consistent with the goals of environment protection, as well as with general interests of the society. Top-class washing machines are classified as A+AA, while the best condenser dryers have reached the B energy class. New generations of washing machines and dryers also offer numerous functions and settings that allow additional savings. Recycling - Gorenje's developers are aware even before a product is launched in the market, that this same product will someday be obsolete. Hence, product development in Gorenje also includes meeting all requirements related to waste management. All products are designed to be as easily disassembled and recycled as possible. The products are made of materials and components that are at least 80 percent recyclable. 7.5. Responsibility to the Natural Environment The Gorenje Group’s mission and vision as to the improvement of the quality of life and work in the milieu in which it operates is incorporated in the Group’s strategic plans. Through the introduction of new materials, processes and technologies that minimize harmful impacts on the environment, Gorenje Group fully complies with the most recent ecological standards. Environmental protection and providing safe working conditions belong to the basic rights, obligations and responsibilities of all employees and are treated as a constituent part of company’s management.3 Eco-Management and Audit Scheme (EMAS) is

3 Gorenje Group is committed to: Include ecology and occupational health and safety in our development strategy, in annual and operative plans with anticipated measures, bearers, performers and timeframes in order to offer employees a safe and healthy fulfillment of their


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a directive by the European Parliament (2000) and the Council of Europe, elaborated as a tool for systematic treatment of environment (more about this in Gorenak and Bobek, 2010). 7.6. Environmental and Occupational Health and Safety Policy Gorenje Group creates original, technically perfect and user friendly products of top-design for an agreeable home. Due to its importance the policy of environmental protection and occupational health and safety is a constituent part of management policy in Gorenje Group and entrepreneurial culture of the company (more about this in Gorenak and Bobek, 2010). 7.7. Eco Family Initiative To commemorate the Earth day, Gorenje presented for the first time the Eco Family initiative to the public. The aim of the initiative is to motivate individuals to change their wasteful habits, to introduce energy-efficient technology in their homes, and to seek alternative options. By establishing the Eco Family initiative, Gorenje is extending the framework of thinking about the agents of efforts for a cleaner environment; in addition to asking ‘what I can do as an individual or employee’, it seeks to answer ‘how we as society can contribute’. Two books entitled ‘Ecofamily - Environmentally Friendly Operation in Order to Preserve the Planet’, and ‘Ecofamily - Help the Planet with the Informed Behavior’, have been published within the initiative of the Eco Family. job assignments along with permanent reduction of injury risks or medical harm while constantly reducing any negative environmental impacts; Monitor and measure indicators of conditions in the activity fields and environmental aspect, and in case of deviations, act accordingly; Continually improve workplace conditions and ecological situation while fulfilling current applicable requirements; Plan and introduce new technologies and products according to principles of environmental protection and introduce adequate, faultless and ergonomic working appliances while permanently seeking possibilities for improving working conditions; Use such materials and components, which will meet the most demanding local and international environmental standards; Plan new products in compliance with eco-design requirements comprising the complete life cycle of the product: development, production, use and disposal; Provide for quantity reduction of produced waste and take every measure for streamlined consumption of energy resources; Implement requirements regarding the exposure of workers to the risks caused by noise at the workplace; Train and qualify in order to rise their awareness of assuming responsibility towards the working conditions and environment; Co-operate with employees and interested parties, thus contributing to the success of joint efforts in environmental protection and occupational health and safety; Inform interested parties about our achievements in environmental protection and occupational health and safety.



In Gorenje, protection of the environment is at the heart of short-term and longterm policies and goals; it is also an important part of Gorenje's corporate culture. Tradition of environment protection dates as far as 40 years back, when the company built its first waste water treatment plant. 1998 was a major watershed: the strategic plan of the Gorenje Group, adopted that year, also included environment protection among the priorities of the Group's operations. Hence, Gorenje was awarded the ISO 14001 standard for environment protection as early as ten years ago; furthermore, company operations were adjusted to meet the requirements of the EMAS regulation in 2003. Today, Gorenje sees environment protection not only as an obligation, commitment, and self-evident responsibility, but also as a source of numerous new business opportunities. In the field of environment protection, Gorenje is in the apex of European industry, both with regard to appliance development and management of technological procedures. One proof there-of is the Advance Project survey conducted by a group of independent research institutes from several European countries, which ranks Gorenje as third in Europe by efficient environment protection management. The results have shown that Gorenje's approach to sustainable development of environment protection was among the most efficient in the segment of environment protection, social aspects, and management economics. Gorenje invests between EUR 40 and 50 million annually into updating its technology and developing new products. In all segments of its operations and investments related to environment protection, the investments are deliberately planned to exceed the legal requirements. In addition to design and functionality, one crucial aspect of developing new products is compliance with the requirements of ecological design, which takes into account the entire life cycle of a product, from development, manufacturing, operation, to disposal. Furthermore, energy efficiency is one of the key strategic goals when developing new technical solutions, both for products and manufacturing processes. All new products are developed in a way that makes them environment-friendly, as they are made using environment-friendly technological procedures and materials, and as they consume less power, water, and detergent. These appliances rank among the most cost-efficient household appliances in the market. They reach and exceed the


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highest energy classes required by European standards. The noise that they emit during operation is minimal. In 2007, the German Institute of Applied Ecology Öko-Institut E.V. from Freiburg, ranked Gorenje's refrigerator RB 4139W on the first place on its scale of ten best appliances according to the EcoTopTen initiative. The EcoTopTen list only features appliances that meet the criteria of A++ energy efficiency class, which means up to 45 percent of savings in power consumption. With this recommendation, Gorenje met the most stringent criteria of the EcoTopTen initiative in the field of household appliances for the third time. Upon this foundation - clear vision of environment management and the most cost-efficient refrigerator in Europe in its category - Gorenje was nominated for the award of Ecology-Oriented Company 2007. On the occasion of the international Earth Day, Gorenje donated to the citizens of Velenje 21 trees gingko biloba for the reviving of the square Titov trg. By organizing the tree planting event with participation of Gorenje’s CEO and President of the Management Board, Mayor of the City Municipality of Velenje, and a pupil of the Gustav Šilih Primary School from Velenje, Gorenje is encouraging inhabitants of Velenje to take environmentally responsible actions. To commemorate the Earth day Gorenje presented for the first time the Eco Family initiative to the public. The aim of the initiative is to motivate individuals to change their wasteful habits, to introduce energy-efficient technology in their homes and to seek alternative options. By establishing the Eco Family initiative, Gorenje is extending the framework of thinking about the agents of efforts for a cleaner environment as described above. CONCLUSION Nowadays participants in stakeholder partnerships come together specifically to achieve social benefits through joint action. This is accomplished in part by enabling individual partners to pursue their own interests, which may include the direct or indirect commercial interest of participating companies, as well as the interests of other partners. New social partnership can be effective at both the



local and the strategic levels, but will not necessarily be so. Governance structures are changing fundamentally at all levels of society - locally, nationally, and globally. The way this transition develops will have critical implications for the ability of communities and countries to address the challenges of economic competitiveness, social cohesion and sustainable development. Though, we recognize that very few leaders fully achieve the above seven habits: (1) They have a passion to do right; (2) They are morally proactive; (3) They consider all stakeholders; (4) They have a strong ethical character; (5) They have an obsession with fairness; (6) They undertake principled decision-making; and (7) They integrate ethics-wisdom with management wisdom. Nevertheless, it should be stated that moral leaders achieve most of them or are a long way ‘down the road’ to achieving them. At a minimum, they stand as baseline standards against which leaders might be compared. In the final analysis, strong corporate citizenship is unattainable without moral leadership. CSR is included in the corporate strategies and long-term sustainable competitive advantages are expected. Gorenje Group typically makes an effort to provide products that guarantee the satisfaction of customers as well as other stakeholder and meets their expectations. More long-term attention should be paid to education of sustainable consumers and all stakeholders (values) in welfare society. Social marketing (i.e. marketing products with social claims or labels) is still not implemented; it will be demanded in the future. Company-customer relationships in pursuing CSR are in defining exactly what CSR means to customers and in understanding how customers perceive it. Goals regarding environment protection until 2010 were: introduction of requirements relating to the contents of hazardous substances in household appliances; decomposition of waste electrical and electronic devices; reduction in quantity of produced waste; reduction in the produced industrial waste packaging and rational consumption of energy sources (more about this in Gorenak and Bobek, 2010). FUTURE RESEARCH Gorenje Group, as a good corporate citizenship entity, is involved in a wide array of community activities. The aim - to highlight the case of Slovenian corporate


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citizenship at the corporate level as well as other researches - is achieved. There is an immense opportunity to utilize this information to learn and gain new useful insights, approaches and concepts understanding and managing corporate citizenship, CSR and sustainable development. Future research could focus on companies following low-cost strategies, as the strategic stakeholder management and its contribution to the company competitiveness as well as to the research within a single industry (or regions/countries especially the Scandinavian countries where the sustainable business practice is very well developed). Further research should pay more attention to responsible and sustainable customer behavior. We have to understand corporate citizenship not as a mere public relations activity, but as an important device of new governance structures on an international and global level. Humans need a global dialogue between politicians, business and research institutions about ‘best practice’ and ways to enhance and effectively coordinate corporate citizenship activities. ACKNOWLEDGEMENT Declared none. CONFLICT OF INTEREST The author confirms that this chapter contents have no conflict of interest. REFERENCES Aguilera, R.V., Williams, C.A., Conley, J.M. and Rupp, E.D. (2006). Corporate Governance and Social Responsibility: A Comparative Analysis of the UK and US. Corporate Governance: An International Review, 14(3): 147-158. Alperson, M. (1995). Corporate Giving Strategies that Add Business Value. New York: The Conference Board. Altman, B., and Davenport K. (1998). New Frontiers in Corporate Citizenship Research: the Theory/Practice Link. San Diego, CA: Academy of Management. Altman, B.W., and D. Vidaver-Cohen. (2000). A Framework for Understanding Corporate Citizenship, Business and Society Review 105.1 (Spring 2000): 1 -8. Andriof, J., and McIntosh, M. (Eds.). 2001. Perspectives on corporate citizenship. Sheffield: Greenleaf.



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33

CHAPTER 2 1

Social Responsibility and the Rule of Law Breda Mulec*

Faculty of State and European Studies, Kranj, Slovenia, and Republic of Slovenia, Ministry of Agriculture and Environment Editorial Note: This contribution addresses, in terms of ISO 26000, the issue of fair working practices. It shows interdependence of the rule of law and social responsibility. Abstract: The author refers to the current political situation in Slovenia and tries to answer which players behave in a socially irresponsible way and hereby contribute to the overall political and social crises. The rule of law includes similar components as a socially responsible activity, for example: different levels of integrity, which will be specifically addressed in the second subchapter. In the third subchapter we will address the lack of interaction of different levels of integrity and some examples of social irresponsibility, in order to confirm or reject hypothesis about the close connection between social responsibility and the rule of law, with a higher percentage of social responsibility’s actions.

Keywords: Chimney sweeping service, environmental protection, European bureaucracy, European cohesion policy, European Community, human rights, inefficiency, institutional integrity, integrity, liberalization of public services, minority rights, monopoly, personal integrity, public authority, regulation, rentseeking, social integrity, social responsibility, socially irresponsible behavior, the rule of law. 1. THE SELECTED PROBLEM The current situation for e.g. in Slovenia gives the impression that in this country all is wrong. And why is this so? Do we not all carry the blame? What can we do

*Address correspondence to Breda Mulec: Faculty of State and European Studies, Kranj, Slovenia, and Office of the Government of the Republic of Slovenia for Slovenes Abroad; Fax: ++386 2 2510461; E-mail: [email protected]. 1 The research was not co-financed. Matjaž Mulej and Robert G. Dyck (Eds) All rights reserved-© 2015 Bentham Science Publishers


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as individuals, civil servants, politicians, community, and what can we do as a country? What is the role of media in strengthening the social responsibility? Slovenia, like the entire world, is currently facing a major political and economic crisis. We witness great debate on reforms in various areas of public interest, with the absence of upgrading, updating and gradual change of existing solutions. Such approaches can have disastrous consequences and cause inefficient performance of the tasks in the areas of public interest. A socially irresponsible act of public authorities is present in an effort to "increase the efficiency of public administration". Objectives of efficiency and professionalism of public administration are not achieved due to the demagogic approaches of the respective governments, which are uncritically talking about reducing public administration, while they perform political recruitment in return for the support in the elections. In such situation the public administration is increased by professionally unskilled human resources and the proportion of qualified staff is reduced and they seek opportunities for better paid positions, or even go abroad (brain drain). Country in such situation hires expensive outsourcing of public tasks, and understaffing causes unjustified "privatization" of public goods in the interests of individual capital holders. This is strongly reflected in the inefficient performing of the various areas of social importance. Individuals carry the blame for the absence of the rule of law because of their socially irresponsible behavior. For Slovenes, the State/government was ‘no part of us and we have not been part of it’ (Avbelj, 2010); this reflects the historical conditionality – a long-lasting absence of rule of law and a lack of social responsibility. With any deviation from the rule of law, citizens do not harm their country, but our-selves. It is virtually axiomatic that we avoid paying taxes, and proclaim us as single parent for it (ibid.). Being successful is not desirable, is not a value. Being socially responsible is no majority-preferred standard. We can criticize, but above all foreign actions, and we most like to blame others for our inaction. However, we are the country. And when we are cheating, first of all we are cheating those who respect the rule of law (ibid). When we do not proceed ethically and socially responsibly, we harm ourselves. The rule of law begins and ends with the humans. A state of citizens with integrity will be according to the rule of law, and not vice versa. Social responsibility is the

Social Responsibility and the Rule of Law


desired standard that can significantly complement and build upon the legal obligations and requirements; it is however the Superior of our activities. One could say that socially responsible behavior requires something more than the law and is a part of legal culture. True legal culture is not something that would be limited to formal legal processes and legal practices, but is something that should be part of general awareness (Zupančič, 1994). And if we fail as players under a positive rule of law, we cannot be successful players of social responsibility. Examples of good practices of social responsibility are not very well promoted in public press because of poor editorial policies of major media, which give special attention to reporting on the "affair". A matter of responsible journalistic and intelligent assessment - "Salus rei suprema lex publicae" – is whether it makes sense to educate the public in contempt of state authority in a country where the building process of the state is just being performed (ibid: 38) or is it still faced with the transition; perhaps, it would be more appropriate to report with a more socially responsible approach, particularly in terms of more objective reporting in pointing out errors and greater promotion of good practices of social responsibility. Otherwise the reporting of mass media in the service of commercial establishment may lead to progression of anomy, which causes that the power and influence in the country are coming into the hands of the least moral individuals. Considering the Zupančič’s opinion (see ibid: 95) the anomy can be the consequence of low moral rating of public authorities, that causes the lack of interest in the politics and state affairs by the people who have at least a single shred of self-respect, which may be unfair and bad for the rule of law. And this is likely to occur when in the society the impression is created "that here all is wrong." Better public awareness about good practices of social responsibility, to the author's opinion, may help reduce this phenomenon. The concept of social responsibility comprises various contents, levels and players. Socially responsible behavior may relate to various areas of social engagement from the socially responsible practices at the environmental protection, socially responsible strategy in companies and other organizations by the private or public ownership in order to strengthen their production of high quality products, till to socially responsible and effective spending of public


Breda Mulec

money. Social responsibility encompasses different levels and can be personal, social or institutional. Its performers can be individuals, institutions and organizations. Given the generally negative social climate in Slovenia, which emerged as a resul of political crisis, poor financial and economic situation in Slovenia and abroad, a transition in terms of irresponsible behavior towards public, the author wants to give specific attention to the link between social responsibility and the rule of law. Therefore the author will try to reject or to confirm the following hypothesis: "there is a close connection between social responsibility and the rule of law, with a higher percentage of social responsibility actions of individuals or institutions only under the rule of law." "Conversely, a deficiency of rule of law could mean low percentage of socially responsible practices which should be a complement to the rule of law”. In Slovenia, the social responsibility is significantly under-expressed in the strategies of the state, private institutions and other economic organizations and is still in early stages of development; that shows also the lack of some elements of the rule of law. 2. THE RULE OF LAW: PERSONAL, SOCIAL AND INSTITUTIONAL INTEGRITY AND SOCIAL RESPONSIBILITY Social responsibility is closely interrelated with the rule of law and effective European and other international organizations with significant impact on the country. The rule of law consists of personal integrity, institutional integrity and social integrity. Similarly, we can define social responsibility as a personal and institutional social responsibility and it includes integrity. In details the concept of integrity is explained in Oxford English Dictionary and American Heritage Dictionary. According to the Oxford English Dictionary, compact ed., »Integrity« means »soundness of moral principle; the character of uncorrupted virtue, especially in relation to truth and fair-dealing, uprightness, honesty, sincerity«. The American Heritage Dictionary says that »integrity« is »strict personal honesty and independence«. Webster's Third New International Dictionary defines »integrity« as »an uncompromising adherence to a code of moral, artistic, or other values; utter sincerity, honesty, and candor; avoidance of deception, expediency, artificiality, or shallowness of any kind. Slovenian language dictionary defines integrity as "completeness, consistency or totality."



Personal integrity is a complex concept with alliances to conventional (i.e. made by agreement, convention) standards of morality – especially those of truth telling, honesty, and fairness – as well as to personal ideas that may conflict with such standards (McFall, 1987). Personal integrity is influenced by family, peers, educational institutions, professional environment, the media and eventually the state. In order to act socially responsibly and to introduce standards of social responsibility in areas of our activity, we must first have developed personal integrity. Efficient and socially responsible action of respective individual is based on individual's personal integrity, which is an important element of the rule of law and certain other qualities such as creativity, and desire to enforce the public good. Honesty and fairness are complementary to values such as diligence, creativity and concern for the public good. These individual characteristics should become the virtual values and truly respected and required in the public/society. Then, the society should reward those qualities. According to Dworking, the starting point of the integrity of society is free, equal individual, to whom the status is recognized by all his countrymen for his equal dignity and common sense of belonging to community (Avbelj, 2011). According to Dworkin, the carrier of Unity (law as integrity) is personalized community, which corresponds to the analogy of the idea of personal integrity. The society shall be treated as if it had a personality that is subject to the same kind of moral criticism, as is subject to the criticism a person who was not acting from integrity (Guest, 1992: 79). Integrity requires that the community as a whole may be committed to the principles (.) as in analogy individuals are committed to the beliefs or ideals (Dworkin, 2000: 167). Such “personified” community corresponds to a direct analogy with activity attitude of the individual (Svetlič, 2008:108). Institutional integrity is a special form of social integrity, which is required from institutions in specific areas of their activities. A society with integrity, institutional performers with personal integrity, and institutional performers with integrity, which is expected of each institution are required for existence of institutional integrity.


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According to Hart’s opinion the content of integrity of institutions is in internal relation to law. Otherwise, the legal positivists contribute to loss of real value basis of law by their arguing and do not question themselves about the fairness of the law. The Hart's Concept of Law is an analysis of the relation between law, coercion, and morality and it is an attempt to clarify the question of whether all laws may be properly conceptualized as coercive orders or as moral commands. Hart says that there is no logically necessary connection between law and coercion or between law and morality (Hart, 1994: 110). The approach in preparation of legal solutions in many cases is quite in accordance with the views of Hart. The specific cases will be therefore introduced in subchapter 3. Dworkin made a step forward in evaluating the integrity and law. According to Dworkin’s Law's Empire, a complete legal theory must consider not only the relation between law and coercion, but the relation between law and rightfulness or justifiability. Dworkin states that in the Anglo-American law system political practice accepts integrity as a distinct value, that is, integrity is so much part of political practice that in practice it cannot reasonably be ignored. (Crowe, 2007: 172). 3. IMPACTS’ INTERACTION OF THE LACK OF DIFFERENT LEVELS OF INTEGRITY AND SOME EXAMPLES OF SOCIAL IRRESPONSIBILITY 3.1. Examples of Social (ir-)Responsibility in the Field of Environmental Protection An example of socially irresponsible behavior is presented by inefficient implementation of a chimney-sweeping service. For centuries chimney-sweeping services in Slovenia have existed as geographical monopolies. Lately, the government started to look at more appropriate legal arrangements, mainly on the basis of EU liberalization of such services, even though bad quality services, high and inefficient prices, and public disappointment with current arrangements in Slovenia should have been enough for the government to examine thoroughly the situation. The question arises: what kind of regulation is then appropriate, if any. Regulation by granting monopolies is excessive and creates more costs than benefits to the society. Author is of the opinion that a licensing system should be



put in place, which would protect the consumers and at the same time through increased competition lower the prices of services rendered1. Monopoly position has been acquired also by the individuals, without feeling for the enforcement of the public good. Moreover, the right to perform the public service is possessed by individuals who do not have a sufficiently developed personal integrity. This is evident from the following data. The current arrangements for implementing the chimney sweeping service have proven to be ineffective. In the year 2008 the Inspectorate for Environment and Spatial Planning passed 160 measures and imposed 99 infringement proceedings2 in the field of emission of substances into the atmosphere from combustion plants. A total of 541 inspections were carried out (Poročilo, 2008: 49). Operators of small combustion plants hamper the performing of chimney sweeping service because they are not satisfied with the quality and price of services. Thus the inspectorate was informed by performers of chimney sweeping services about disabled access to the combustion plants and provided a number of notices on exceeding the limited values of concentration of carbon monoxide in the emission of substances of small combustion plants, which could threaten human health (ibid.). Numerous complaints about dissatisfactory performance of the chimney sweeping service were submitted to Market Inspectorate (Tržni., 2008: 26). Market Inspectorate is responsible for controlling the prices of chimney sweeping services according to Article 39 of the Decree on chimney sweeping service. The government has set by Decision in 2007 (Odlok, 2007) the maximum prices for chimney sweeping services for each item (regular cleaning, annual inspections, emissions measurement, and the like), which may account for the regular performance of chimney sweeping services in order to ensure a uniform tariff. When a particular concessionaire performs a service in time shorter then

1 However, the move from the concession system to the licensing system should be thoroughly planned since there is a very high probability that the state might be captured in the process and therefore all the gains from the liberalization would be lost for the consumers. Besides, a very tough supervision system should be put in place since it is a well-known fact that there are more fires and death related to the poisoning in the licensing systems compared to the concession systems. 2 A concessionaire, who does not follow the prescribed tariffs for chimney sweeping service, is penalized with a fine. A fine is also imposed for an individual who does not repair the defect.


Breda Mulec

normalized, services should be charged per minute of actual work, but in practice, the performers were charging users the maximum services price 3 . Chimney sweeping service users have complained about this kind of charging to the Market Inspectorate, which has limited possibilities for action. However, it is difficult to prove that the service was performed in a shorter period of time (Tržni, 2008: 91). Civil initiatives were established by disgruntled users to advocate for the liberalization of the chimney sweeping service. In their view, it is unacceptable that: “One can choose his/her own doctor, but a chimney sweep is chosen by the state, despite the fact that he performs his work unsatisfactorily.” (Šubic, 2009) ”Chimney sweeps charge a lot of money for little work by misusing their monopoly position, which is given to them by the concession arrangement (ibid).” Concessions discriminate "smaller" chimney sweep companies and favors larger businesses. Civil Initiative calls for a regulation, which would leave the chimney sweeping service to the market and implement licenses instead of concessions (Vrbnjak, 2007). In this case one derogated personal integrity of performers of the monopolized public services and the institutional integrity of the responsible state institutions. This resulted in the adoption of legal and other solutions by responsible institutions, which were reflecting the interests of the monopolists and were monopolistic and discriminatory. Media reported on continued granting of concessions to individuals to provide them a monopoly; it was in fact already legally forbidden. Public debate on the inefficient performing of chimney sweeping services has also been launched by the civil initiative. A public debate should answer, which model of chimney sweeping service is appropriate from the users’ point of view and in regards to the public interest: the concession based, or the licensed one. Many scientific and political debates have not led to effective solutions. Responsible institutions became aware of the problem, but the process of amending the legislation probably stopped because of too "positivistic"

3 However, in new Decision on price list of chimney sweeping services (see ibid, note 46) Government of RS explicitly defines the charging of services according to the actual time used up for service as obligatory, when a particular concessionaire performs a service in time shorter then normalized.



conception of law and legal obligations, which overrides justice and the principles that Dworkin would require. Although interpretations of the existing legislation are completely legitimate, the question is whether the interpretations are fair, considering a broader public interest, and socially responsible: In reference with our example, each transition from one to another model of chimney sweeping service is extremely important, in terms of legal consequences. The abolition of the monopoly status by the cancellation of concessions before its deadline, which is almost 8 years, would mean that the persons (performers of public services) involved would have a right to recover damages. Moreover, this would also mean a constituted violation of the acquired rights. Such a reduction of the period would also allow the affected parties to launch proceedings at the Constitutional Court for breaching the constitutionally guaranteed rule of law and would have been contrary to the comparable decisions of the Constitutional Court on a required reasonable transition period for adaptation to changed circumstances and conditions (Odločba, UI-64/96 & Odločba, U-I-32/95). The question is: where the public interest is, if unfair and ineffective environmental and social solutions can be eliminated only after eight years!? Where is the social responsibility of institutions? Nevertheless, it is important to stress that it is often difficult to determine whether the institutional responsibility is the consequence of malicious, deliberate attitude or just of lack of knowledge. Eventually, similar solutions were adopted by some other European countries. Nevertheless, the author believes that such a socially irresponsible act cannot be excused, as from public servants a certain behavior and knowledge of the problem is expected. Let us look at another case. 3.2. Human Rights and Minority Rights within Social Responsibility Human rights and minority rights can be considered in terms of their (non)compliance. Democratic societies give special emphasis to the protection of minorities. To the public one mostly presents examples of violation of human and minority rights, but less is heard about the individuals’ social (ir)-responsibility in their performing of acquired special rights.


Breda Mulec

Republic of Slovenia pays special attention to the protection of indigenous ethnic communities in Slovenia (Italian and Hungarian national communities and the Roma) and indigenous Slovenian minority in neighboring countries. Slovenia is committed to high standards of minority protection, which is its national interest. The passed legal acts and strategic policy documents have made Slovenia (and earlier its predecessor, the former Yugoslavia) for decades support the Slovenian minority in neighboring countries in its exercise of its rights and the preservation of Slovenian culture and identity. The support is not just a political and moral one, but also financial. Annual financial support for activities of the Slovenian minority in neighboring countries is almost 8 million EUR. (See http://www.uszs.gov.si/). The financial resources are not always used rationally and efficiently. Money is not always socially responsibly spent by recipients of funds, who have acquired the right to be financed. In this “game” the minority lobbies have an important role. The minorities lobbies state as a political problem any increased control over money spending or cuts of financial support by the state, and therefore the entire »Slovenian public« is engaged in the problem. Financial resources are used inefficiently due to duplication of the content of minority organizations. As much as possible the activities of minority organizations should be complemented with special offers, rather than be doubled with the same content (e.g. two music schools in the same area should have a complementary offer and content, but not the equal content). This is an example of social irresponsibility, which comprises the lack of elements of integrity at all levels: personal, social, and institutional levels. On a personal level one refers to the lack of individual responsibility, that funds are used fairly, efficiently and development-oriented, and thereby socially responsibly. Each year the minority organizations obtain financing regardless of their effectiveness. Each year they "reasonably" expect at least the equal amount of funds (rent-seeking). Financial resources often do not reach those individuals and organizations who implement projects in the broader public interest. The “game” of respective organizations gives the impression that the new priorities in the state’s policies and organizations are needed, which would reflect the real national interests of the country and would be development-oriented to both the Slovenian national community and to Slovenia; an emphasis on border areas is not always desirable,



since the existing funding scheme would be disrupted. At the institutional level, the socially irresponsible behavior corresponds with socially irresponsible behavior of some politicians due to acquiring the political battle and anemic attitude of various state institutions. And finally, it reflects itself at the general social level in terms of maintaining the overall situation in society (status quo) and non-critical assessment of information. Let us switch to the third case. 3.3. The lack of Institutional Integrity and Social Responsibility within the European Community Democratic deficit in EU institutions is due to a lack of institutional integrity and social responsibility at the European level which has an impact on Member States' inefficiency and lack of institutional integrity at the national levels. Over-growth of European bureaucracy, which requires more and more taxpayers’ money, does not take into consideration exclusively the public interest. Very convincing is the case of ineffective European cohesion policy. 3.3.1. Social Responsibility in the Field of the European Cohesion Policy The European cohesion policy, which comprises the implementation of European structural funds and European Cohesion fund, has not been economically efficient. The structural funds and the Cohesion fund system implementation were not efficiently designed; the main aim of the funds’ establishment, which has been to increase state’s development, therefore, has not been reached. Several economic analyses pointed out that European Cohesion policy has negative impact to the increasing of GDP (-0.35%), or the impact however has been minimal (+ 0.7%) (Mulec, 2008: 85); therefore it has a limited influence on the development of the respective country. 3.3.2. The Reasons for the European Cohesion Policy Inefficiency, and Interrelation Between the Inefficiency of Cohesion Policy and Social Responsibility The main factors do not act according to social responsibility as early as in the phase of planning and determination of European cohesion policy. The complex


Breda Mulec

implementing system, which has been founded at the various phases of financial support implementation, is defined by comprehensive European legislation. More the system is complex, the more extensive is the European bureaucracy, more taxpayers’ money, however, is intended for the payment of great administrative expenses. When the European funds system working was simple, European Commission could not justify its existence. The phase of programming of the European support is not performed according to social responsibility, since national operational programs support also private goods, which are not public goods: European Regional Development Fund usually supports economically and enterprisingly non-attractive projects of small and medium size companies. The example of the emphasis on the private interest could be financing of bullfights in Spain and Portugal. It has to be said that this is an activity based on tradition, but is also an activity by which some individuals have full pockets. The public financial support is not used in accordance with social responsibility. The major part of Common agricultural policy supports rich and successful farms; European fund in the field of agriculture, which has been supporting structural actions, however, should support less developed regions. Abovementioned situation brings about diverse regional development. The measures of both institutes, however, had due to the supporting of intensive agriculture, negative consequences for environment. Since the measures, due to interests of wealthy farmers, supported surplus production (for example by the intervention prices), the disturbances in the inner and external markets appeared. Consumers, however, still purchase expensive products, since the subventions are included into the final price. Ecological products, which could be supported by the structural fund, however, still are reachable to limited groups of consumers. It has to be said that the final beneficiary is often not responsible for efficiently realized activities, for which he/she receives financial support. Food industrial plant, supported by EU could start its activities; however, this is not obligatory,



since the owner would not be punished in case he/she does not perform the activity. Where is there, then, the public interest? Also the factors in the implementation phase, respectively, in the phase of using of European financial support have not been acting according to social responsibility. In performing the projects supported by the European Cohesion fund, the conflict between private interest and public interest has been obvious. Since the Cohesion fund supports costly projects in the field of traffic infrastructure and the environment, there is the interest of contractors (companies) to maximize the profit. The conflict of interests between the person placing an order (The state) and the contractors most often causes dispute, then the whole financial support to the national operational program could be cancelled by the European Commission. The possibly resulting trial expenses are covered by tax payers’ money additionally. Expenses are above the advantages, which should be acquired from Brussels and have negative impact on the member-state’s development. Therefore, the handling of particular factors in the implementing process of financial support, however, is contrary to the rules of social responsibility. The European funds implementing system enables the security of interests of the respective groups and, therefore, has not been founded on social responsibility principles. CONCLUSION Social responsibility and the rule of law are closely interrelated. Institute the rule of law often fails due to the low level of social responsibility of individuals and institutions, while nobody wants to take their own responsibility. Therefore there should be more public debate on increasing the social responsibility of e.g. the Slovenian state, which is now at a crossroad. Public debate on social responsibility should include all levels: personal, institutional, and social integrity. In an unobtrusive way it should be introduced into the learning content of the books for pupils and students. Socially responsible practices in institutions need to become more visible due to incentives and rewards. Good practices should become part of the editorial policies of media.


Breda Mulec

ACKNOWLEDGEMENT Declared none. CONFLICT OF INTEREST The author confirms that this chapter contents have no conflict of interest. REFERENCES Avbelj, M.: Komu se smejite, smejte se sebi, IUS INFO, http://www.iussoftware.si/DnevneVsebine/Kolumna.aspx?id=60399,12 Nov. 2010. Avbelj, M.: Kaj je integriteta, IUS INFO, http://ius.info/DnevneVsebine/Kolumna.aspx?id=62841, 21 Jan. 2011. Dworkin, R. (2000): Law’s Empire, Hart Publishing, Oxford and Portland, Oregon Crowe, J. (2007): Dworkin on the Value of Integrity, Deakin Law Review, Volume 12, No 1, p.p.167180. Guest, S. (1992): Ronald Dworkin, Edinburgh University Press. Hart. H.L.A. (1994): The Concept of Law, Oxford: Clarendon Press. McFall, L.:Intergrity, JSTOR:Ethics, Vol. 98, No.1 (Oct., 1987), pp.5-20. Mulec, B. (2008): Kohezijska politika Evropske unije in problemi njene implementacije s posebnim poudarkom na Republiki Sloveniji in državah jugovzhodne Evrope, Ljubljana: Koščak. Poročilo o delu Inšpektorata RS za okolje in prostor za leto 2008« (the “Report on the work of the Inspectorate for the Environment and Spatial Planning of Slovenia in 2008”), 1-59, available at: http://www.iop.gov.si/fileadmin/iop.gov.si/pageuploads/IRSOP_dokumenti/Porocila_IJZ/le tno_porocilo_2008.pdf (access May 2010). Odločba Ustavnega sodišča RS, U-I-64/96« (Judicial decision of the Constitutional Court of the Republic of Slovenia, UI-64/96) Official Gazette of the Republic of Slovenia, No.86/99. Odločba Ustavnega sodišča RS, U-I-32/95« (Judicial decision of the Constitutional Court of the Republic of Slovenia), Official Gazette of the Republic of Slovenia, No. 44/95. Poslovno poročilo Tržnega inšpektorata RS za leto 2008« ( “Market Inspectorate of the Republic of Slovenia Report for the year 2008”), 1-110, available at: http://www.ti.gov.si/fileadmin/ti.gov.si/pageuploads/TIRS2008.pdf (access May 2010). Sklep o določitvi tarife za cene storitev obvezne državne gospodarske javne službe izvajanja meritev, pregledovanja in čiščenja kurilnih naprav, dimnih vodov in zračnikov zaradi varstva okolja in učinkovite rabe energije, varstva človekovega zdravja in varstva pred požarom – Cenik dimnikarskih storitev«, Official Gazette of the Republic of Slovenia, No. 71/07 (“Decision determining the tariff for prices of mandatory public utility services for the management of measuring, checking and cleaning of combustion plants, flue ducts and ventilation on devices for the purposes of environmental protection and efficient energy use, human health protection and fire protection- Price list on Chimney sweeping services”).



Svetlič, R: Filozofija prava Ronalda Dworkina (2008), Ljubljana: Nova revija. Šubic, M.: »Kranjski upor zaradi dimnikarjev«, Novice. Dnevnik.si, 23 October 2007, available at http://www.dnevnik.si/novice/Slovenija/276432, (access: February 2010). Vrbnjak, T.: »Koncesije za dimnikarske storitve ostajajo«, Nepremičnine Si 21, 4 Sept. 2007; see: http://nepremicnine.si21.com/Novice_iz_sveta_nepremicnin/Koncesije_za_dimnikarsk. (access February 2010). Zupančič. B. (1994): Prvine pravne kulture, Ljubljana: UL, Fakulteta za družbene vede, Teorija in praksa.


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CHAPTER 3 Well-Being as the Basic Aim of Social Responsibility1 Simona Šarotar Žižek*,1 University of Maribor, Faculty of Economics and Business, SI-2000 Maribor, Slovenia Editorial Note: In terms of ISO 26000, this chapter addresses governance, human rights, and labor relations. The author links economic and psychological factors as interdependent in order to attain a requisitely holistic approach to the issue of wellbeing as the ultimate purpose of social responsibility. Abstract: The contemporary world is full of innovations, causing both good and bad consequences, including different outcomes of well-being. Most well-being problems cannot be resolved with the usual management and/or economic theories and practices that have caused these problems. Therefore, the question is raised: what could be done about the well-being of co-workers, if principles and measures of social responsibility were used? The well-being of individuals, employees, and society can result from technological and non-technological innovations (including honest behavior, care, and an end of abuses by managers in their treatment of employees, business partners, the broader society, and the natural preconditions of humankind’s survival), much more easily than without them. This is significant because people who enjoy well-being feel and work better, thus contributing to requisite holism and success. In this chapter the author presents strategies for enabling the well-being of co-workers in organizations.

Keywords: Affluence, economics, employees, eudaimonic tradition, governance, happiness, hedonic tradition, human rights, humans, innovative society, interdependence, ISO 26000, labor relations, objective well-being, positive psychology, psychological well-being, subjective well-being, self-determination theory, social responsibility, well-being. 1. INTRODUCTION Economy, both as the daily practice and the theory, is too often considered as something of its own rather than as a tool serving human happiness and well-being. *Corresponding author Simona Šarotar Žižek: University of Maribor, Faculty of Economics and Business, SI-2000 Maribor, Slovenia; Tel: ++ 386 2 22 90 324; Fax: ++ 386 2 25 10 461; E-mail: [email protected] 1 This contribution is based on research project supported by the Public Agency for Research, Republic of Slovenia; contract number: 1000 – 09 – 212173. Matjaž Mulej and Robert G. Dyck (Eds) All rights reserved-© 2014 Bentham Science Publishers


Simona Šarotar Žižek

Humans are not only economic beings – producers, exchangers, and consumers – but multi-layered. Therefore it makes sense to spend some time on the topic of wellbeing. Well-being is indirectly exposed by the concept of social responsibility in ISO 26000 (ISO 2010), because ISO 26000 mentions (1) governance of organizations, (2) human rights, (3) labor relations, (4) environment, (5) fair work practices, (6) consumers, and (7) community involvement and development, and links all seven topics with two crucial concepts: (1) interdependence, and (2) holistic approach. All of them are supposed to support efforts for human well-being as the general final aim of all human activities. Thus, ISO 26000 links economics and psychology, especially the positive psychology. This is especially important now, when capitalism has changed from its liberal, monopolistic, state monopolistic to its neoliberal phase, which needs a way out from its current blind alley (Merhar et al., 2014) and depends therefore on human creativity and innovativeness that is used beneficially much more under social responsibility than under the abusing management. 2. POSITIVE PSYCHOLOGY The research of the positive aspect of human life has not taken place in psychology until recent times (Musek and Avsec 2002: 3). In the last 10 years positive psychology has flourished. The positive psychology is the study of how human beings prosper in the face of adversity (Froh 2004). It is nothing more than the scientific study of ordinary human strengths and virtues (Sheldon and King 2001: 216). Maslow (1954) was the first to use the term positive psychology. »Maslow and Seligman's call for more serious attention to the positive side of life has been echoed by many, including visionaries in psychiatry such as Karl Menninger, and business gurus, notably Peter Drucker.« (Lopez & Gallagher, 2009). Seligman at al. (2005: 410) mention that positive psychology is an umbrella term for the study of positive emotions, positive character traits, and enabling institutions. Positive psychology is the study of how human beings prosper in the face of adversity (Linley in Joseph 2004: 32). Linley in Joseph (2004: 32) mention positive

Well-Being as the Basic Aim of Social


psychology’s focus on identifying and enhancing the human strengths and virtues that make life worth living, i.e., “The good life” (Selingman 2002a, b; Selingman & Csikszentmihalyi, 2000), and allow individuals and communities to thrive (Sheldon, et al., 2000). Positive psychology is the movement in psychology that studies the conditions and processes that contribute to the optimal functioning of people, groups, and institutions; the following three sections of the researches of positive psychology are presented (Rijavec and Miljković 2006: 640): 

Positive subjective experiences,



Positive individual characteristics, and



Positive institutions and communities.

After Seligman (2002b: 3) the field of positive psychology at the subjective level is about positive subjective experience: well-being and satisfaction (past); flow, joy, the sensual pleasures, and happiness (present); and constructive cognitions about the future - optimism, hope, and faith. At the individual level positive personal traits are important: the capacity for love and vocation, courage, interpersonal skill, aesthetic sensibility, perseverance, forgiveness, originality, future-mindedness, high talent, and wisdom. At the group level (after Seligman and Csikszentmihalyi 2000; summarized after Seligman 2002b: 3) it is about the civic virtues and the institutions that move individuals toward better citizenship: responsibility, nurturance, altruism, civility, moderation, tolerance, and work ethic. Applied positive psychology, which is concerned with facilitating good lives and enabling people to be at their best, has applications that span almost every area of applied psychology (clinical psychology, counseling and psychotherapy, humanistic psychology, etc.) and beyond (education, development of specific happiness-increase interventions, management), etc. (Liney et al. 2009: 35). Applications of positive psychology in society are also important as they are also in the field of Industrial Organizational Psychology; applications are presented



throughout work on transformational behavior, appreciative inquiry, and strengths-based organization (ibid: 35). All research findings of the positive psychology are intended to supplement, rather than replace, what is known about human suffering, weakness, and disorder. A real intent is to reach more complete and balanced scientific understanding of the human experience (Seligman et al. 2005: 410). The positive psychology is thus an attempt to urge psychologists to adopt a more open and appreciative perspective regarding human potentials, motives, and capacities (Sheldon and King 2001: 216). It is becoming increasingly clear that the normal functioning of human beings cannot be accounted for within purely negative (or problem-focused) frames of reference (ibid.: 216). The majority of human race achieves a state of thriving, rating themselves as happy and satisfied with their lives (Meyers 2000). This is a reason for researches of psychologists, who from day to day know relatively more about human thriving and what to encourage. One of the research models/topics of the positive psychology is well-being. 3. WELL-BEING Positive psychology develops the concept of well-being. “Well-being is more than the absence of illness or pathology; it has subjective (self-assessed) and objective (ascribed) dimensions; it can be measured at the level of individuals or society; it accounts for elements of life satisfaction that cannot be defined, explained or primarily influenced by economic growth.” (SDRN 2005: 2). The well-being is a complex construct. Its meaning remains contested and key distinctions are between: (1) hedonic and eudemonic well-being; and (2) objective and subjective measures (SDRN 2005: 4). 3.1. Main Tradition in Study of Well-Being Two broad psychological traditions have historically been employed to explore well-being; hedonic and eudaimonic tradition (Springer and Hauser 2006: 1083). In hedonic tradition psychologists have concentrated on the assessment of “subjective well-being”, which consists of three elements: (1) life satisfaction; (2)



the presence of positive mood; and (3) the absence of negative mood. All this together is summarized as happiness (Ryan and Deci 2001: 144). On the other hand, the eudaimonic perspective assesses how well people live in relation to their true selves (Waterman 1993; summarized after Springer and Hauser 2006: 1083). The eudemonic theorists argue that well-being and happiness are distinct, for not all sources of pleasure foster well-being (Ryan and Deci 2001: 146). They presented the self-determination theory, which posits that there are three basic psychological needs – autonomy, competence, and relatedness – and theorizes that fulfillment of these needs is essential for psychological growth and well-being (ibid: 146). In terms of philosophical theories of human well-being we can distinguish subjective and objective well-being theories. “Objective theories, in their turn, maintain that an agent’s well-being is not determined by her own desires and attitudes of favor and disfavor. Instead of concentrating on these kinds of subjective states, objective theories usually make well-being dependent on such objective issues as whether a thing or an activity satisfies human needs, realizes the human nature, etc.” (Varelius 2004: 74). Literature on well-being suggests the following points of common ground: 

Well-being is more than the absence of illness or pathology.



Well-being has both subjective and objective dimensions. It can be assessed in subjective terms (seeking individuals' views in surveys) or objectives terms (by measuring access to physical, environmental, social and other resources). There are pros and cons to each approach. Both types of information are useful and together they provide a fuller picture of well-being.



The terms »life satisfaction«, »happiness«, »quality of life« and »wellbeing« are often used interchangeably. The significance of seeing the terms as interchangeable results from the fact that they express a global assessment of satisfaction, rather than capturing a momentary mood. Such measures of well-being potentially give policymakers an



indication of overall levels of satisfaction in the population and suggest the impact of living in the current regime. 

The burgeoning literature on happiness (e.g. Layard 2005, Nettle 2005, Martin 2005) is concerned with subjective well-being, and draws on the same pool of survey evidence regarding »quality of life« and »life satisfaction«.



Most researchers agree about the domains that make up well-being: physical well-being; material well-being; social well-being; development and activity; emotional well-being. The elements can be paraphrased as physical health, income and wealth, relationships, meaningful work and leisure, personal stability and (lack/absence of) depression. Mental health is increasingly seen as fundamental to overall health and well-being. These elements are sometimes viewed as »drivers« of well-being.



Both, individual and societal well-being, are important and measurable. Veenhoven (1997) describes quality of life as »the presence of conditions deemed necessary for the good life, and the practice of good living as such«. The interaction between the two is where much of the link with policy comes: what enhances personal well-being may be negative for society, or possibly vice versa, and the balance of well-being now and well-being in future must be taken into account.



Well-being is an important area for future policy as it accounts for elements in life experience that cannot be defined, explained, or primarily influenced by economic growth« (SDRN 2005: 6).

Felce and Perry (1995) presented objective domains1 of well-being and subjective evaluations 2 of well-being, the two main approaches to measuring well-being in

1 »Objective measures of well-being consist of survey data related to material and social circumstances which may foster – or detract from – well-being. These include income, housing, educational attainment, access to, and use of, public services. Objective measures have not provided a coherent explanation for trends in well-being. Notably, rising economic growth and GDP per capita in developed countries have not been accompanied by commensurate increases in reported life satisfaction.« (SDRN 2005: 2).



research. The objective well-being includes material and social circumstances, which influence an individual’s personal objective well-being; it consists of the following dimensions (McAllister 2005: 9; summarized after: Prosenak and Mulej 2007a: 3): material, physical, social, and emotional well-being, development and activity. McAllister (2005) and Arthaud-Day et al. (2005; summarized after Prosenak and Mulej 2007a: 3) mention, that subjective well-being stems from individual’s perception of objective well-being. Because the perception depends on individual’s subjective starting points (knowledge, emotions, mentality, and values), a high objective well-being does not necessarily simultaneously mean a high subjective well-being (Prosenak and Mulej 2007a: 3). We know also of relative well-being, which depends on one’s comparison with people playing important roles in one’s life (Revkin 2005). Diener and Seligman show the following partial formula for high well-being (2004: 25; summarized after Prosenak and Mulej 2007a: 3): living in a democratic and stable society that provides material sources to meet needs, having supportive friends and family, rewarding and engaging work and an adequate income, being reasonably healthy and having treatment available in case of mental problems, having important goals related to one's values, philosophy or religion that provide guidance, purpose and meaning to one's life. Hsee and others (2009: 397) argue that well-being’s holistic concepts are influenced by myriad factors, including religion, culture, marriage, unemployment, political system, and so on. Defining well-being is a complex matter. This is the reason that Samman (2007) suggested measuring of psychological and subjective states of well-being within individual and household surveys. In particular, he proposes a shortlist of seven indicators, and a module containing the relevant questions needed to construct them. The indicators address both eudemonic and hedonic criteria, and cover four aspects of well-being: 

Meaning in life;



Relatedness, following self-determination theory; the three »basic psychological needs« of autonomy, competence and relatedness;

2 »Subjective measures are usually based on survey questions asking respondents to rate their own happiness or satisfaction with life as a whole. These measures have been shown to be statistically robust and have largely superseded more specific measures of subjective well-being and emotional state«. (SDRN 2005: 2).




Domain-specific and overall life satisfaction; and



Happiness;


(Samman 2007: 459). We find subjective well-being especially important, because it affects human behavior quite directly. 3.2. Subjective Well-Being (SWB) 3.2.1. Definition and Measuring of Subjective Well-Being (SWB) SWB is the main subject in the context of positive psychology (Musek and Avsec 2006: 51) and has an important place within well-being theory and practice. It is defined as a person's cognitive and affective evaluations of his or her life, which include emotional reactions to events as well as cognitive judgment of satisfaction and fulfillment (Diener et al. 2002: 63). Diener and Seligman (2004) define the SWB or welfare as the evaluation of an individual’s life taking into account his or her positive emotions, work, life satisfaction and meaning. For Musek and Avsec (2002: 10) the SWB is the main notion, which combines a series of evaluations, which refer to the individual’s life, cognitive and emotional, general and more specific. SWB is a measure of a person's well-being that incorporates all life events, aspirations, achievements, failures, emotions and relations of human beings, as well as their neighboring cultural and moral environment (Rojas 2004: 2). SWB has been studied in disciplines such as psychology (Kahneman et al. 1999; Argyle 1987 and 1999) and sociology (Veenhoven 1988, 1993, 1995 and 1997). This area comes in study in economics (Easterlin 1974, 1995, 2001; Clark and Oswald 1994; Di Tella et al. 2001; Frey and Stutzer 2000; McBride 2001; Oswald 1997; Pradhan and Ravallion 2000; van Praag and Frijters 1997; summarized after Rojas 2004: 2). Diener (1984: 543-544) mentions the following three hallmarks of subjective well-being: 

It is subjective – it resides within the experience of the individual.



It includes positive measures – it is not just the absence of negative factors, as it is true of most measures of mental health.





SWB measures typically include a global assessment of all aspects of a person’s life.

Kahneman and Krueger (2006: 22) mention that acceptance of self-reported measures of well-being, subject to the many caveats that subjective measurement requires, could have profound impacts on economics: 1.

Subjective measures of well-being would enable welfare analysis in a more direct way that could be a useful complement to traditional welfare analysis;

2.

Currently available results suggest that those interested in maximizing society's welfare should shift their attention from an emphasis on increasing consumption opportunities to an emphasis on increasing social contracts;

3.

A focus on SWB could lead to a shift in emphasis from the importance of income in determining a person's well-being toward the importance of person rank in society.

Lucas, Diener in Suh (1996, summarized after Diener et al., 2002: 64) demonstrated that multi-item life satisfaction, pleasant affect, and unpleasant affect scales formed factors that were separable form each other, as well as from other constructs such as self-esteem. This means that concept of the SWB covers three components: (1) the positive emotions and humors, (2) the absence of negative emotions and humors, and (3) the evaluation of life satisfaction (Musek 2005: 178). A second factor of the SWB tackles the emotional aspect of wellbeing, which is composed of two independent components – positive and negative affect 3 . A measuring device had to be built for measuring the three above components. Watson, Clark & Tellegen (1988: summarized after Musek 2005: 178) mention that positive and negative affection (PA and NA) is measured by numerous instruments and most of the time the PANAS questionnaire (Positive Affect Negative Affect Scale) is used.

3 In practice, we, however, believe, they are closer to being interdependent upon each other instead of being independent of each other, as it is very rare, to find truly independent attributes defining an individual person.



Diener and Biswas-Diener (2000; summarized after Musek 2005: 179) claim that the dimensions optimism and the feeling of fulfillment should also be considered as a part of the concept of well-being. Therefore we can speak about the emotional components of the subjective well-being, which are composed of positive and negative affects; and about its cognitive components, which are composed of, for instance, life satisfaction. Although the mentioned components correlate, they do not have the same meaning (Diener & Biswas-Diener, 2000; summarized after Musek and Avsec 2002: 12)4. Although life satisfaction is relatively stable and displays considerable adaptation, it can be affected by changes in the allocation of time and, at least in the short run, by changes in circumstances. Very important is the connection between differences in SWB and economic growth. Inglehart (1996: 518; summarized after Tomer 2002: 29) mentions, that when a country leaves poverty and scarcity to become a productive industrial country, there is a dramatic increase in subjective well-being. Interesting is that there is a threshold where economic growth no longer seems to increase SWB significantly. Inglehar (ibid.) presented the notion that once humans used to put the highest priority on narrow economic achievement, but once they have become economically secure, they place a higher priority on noneconomic quality-life considerations, such as self-expression. 3.2.2. Implications of Subjective Well-Being (SWB) Many studies indicated significant life benefits for people with high SWB. »For example, individuals reporting high SWB had stronger social relationships than less happy individuals (Diener & Seligman 2002). In longitudinal studies, people with higher levels of SWB were more likely to be married at a later measurement (Marks & Fleming 1999; Lucas, Clark, Georgellis, & Diener 2003). High individual SWB is a strong predictor of marital satisfaction (Glenn & Weaver, 1981). In the workplace, employees that are higher in dispositional positive affect receive higher supervisor ratings and better pay (Diener et al., 2001). In stressful circumstances, positive affect is associated with more effective coping and better

4 This can be presented on a case of two people who, for instance, globally evaluate their subjective well-being equally, but they have different components: one person has a higher level of positive affect, the other a lower level of negative affect. One must distinguish between emotional dimensions of subjective well-being and satisfaction; for instance: when we successfully finish some boring work we can feel satisfaction, although we would hardly speak of any higher level of positive affect.



overall outcomes (Fredrickson & Joiner 2002). High SWB is associated with lower levels of suicidal ideation and behavior (Diener & Seligman 2002). Thus, SWB is related to successful outcomes in a variety of life domains. People with high levels of SWB are more successful in relationships, more successful on the job, and better equipped to successfully cope with stress«. (Pavot and Diener 2004: 116). When we summarize we can say, that SWB is associated with improved social connectedness, positive health outcomes, and increased resistance to the negative effects of stress, and success at the work and in society (Pavot and Diener 2004: 129). According to Diener and Seligman (2004: 1) the individual’s income, when increasing, is becoming less relevant for the growth of well-being; on the other hand interpersonal relations and satisfaction at work are becoming more and more relevant. Non-economic indicators of social well-being are found important by these authors, such as social capital, democratic management and human rights, having effect on the satisfaction and profitability at work. Diener and Seligman (2004: 1) claim that the expected (economic) results are more often the effect of well-being than vice versa. They also discovered that people who are at the top of the well-being scale have more income and are more successful at work as those in the lower region of such a scale. Satisfied employees are better co-workers and therefore help their colleagues in various ways. Furthermore, people with a higher level of well-being have better social relations. Such people are more likely to get married, stay married and have a successful marriage. And finally, well-being is also connected with health and longer living, but the connections between them are far from being completely understood. Therefore a high level of well-being is not precious only in the context of well-being, but it can also be economically useful. These facts show that monitoring of well-being at the organization and state levels is necessary for well-being to become a central topic for the creation of the policy of management, and that accurate measuring of well-being forms a basis of such a policy (Diener and Seligman 2004: 1). Authors suggest that for the purpose of measuring of well-being the positive and negative emotions, commitment, purpose and meaning, optimism and trust as well as a wide concept of a full life be used as variables. At the same time they point out that for the measuring of well-being researches are important, which refer to social



conditions, income, physical health, mental disorders and social conditions. James (2007) warns about the border between well-being and the end of motivation because of the affluence combined with complacency: the border is not objective, but subjective. It could be added that on this basis one should monitor the subjective well-being, which supports people’s creative work and cooperation, which can then lead to an increased objective and personal well-being. Hornung (2006; summarized after Prosenak and Mulej 2007b: 6) provides an interesting common denominator: happiness counts as people’s constant goal and also as a comprehensive synergetic indicator of comprehensive well-being, good performance, physical, psychological and social health of a person. Hornung (2006: 334–337; summarized after Prosenak, Mulej and Snoj 2008: 6) states that for the good wellbeing the following needs should be met: material needs, informational and, at the level of individuals, psychological needs, security needs, needs for freedom and action, needs for adaptability, needs for efficiency, and needs for responsibility. As the SWB is important for several reasons, the interventions to increase SWB are important as well. They are important not only because it feels good to volunteer more, have more positive work behavior, and exhibit other desirable characteristics (Diener et al. 2002: 69). Few direct intervention efforts have been implemented. This is a reason for programs (Fordyce 1977 and 1983) or examples (Pavot and Diener 2004: 129-130) designed to boost people's happiness. Kasser and Sheldon (2009: 243) propose that businesses consider the possibility of »time affluence« as an alternative model for improving employee well-being and ethical business practice. 3.2.3. Interventions to Raise Subjective Well-Being Frey & Stutzer (2001: 1) argue that the reported SWB is a satisfactory empirical approximation to individual utility, and that happiness research is able to contribute important insights for economics. As the SWB is important for several reasons, the interventions to increase SWB are important as well. They are important not only because it feels good to volunteer more, have more positive work behavior, and exhibit other desirable characteristics (Diener et al. 2002: 69). Few direct intervention efforts have been implemented. Fordyce (1977: 1983;



summarized after Diener et al. 2002: 69) published several studies in which he evaluated a program designed to boost people's happiness. This program was based on the idea that people's SWB can be increased, if they learn to imitate the traits of happy people, characteristics such as being organized, keeping busy, spending more time socializing, developing a positive outlook, and working on a healthy personality. »Fordyce found that the program produced increases in happiness compared with a placebo control, as well as compared with participants in conditions receiving only partial information. In a follow-up 9 to 28 months after the study, Fordyce found that there were lasting effects of his intervention (Diener et al. 2002: 69). Pavot and Diener (2004: 129-130) suggested the following examples of interventions, which might increase subjective well-being: day-care programs, other forms of respite care, increased opportunities for physical exercise, and opportunities for older adults to maintain involvement and engagement in the life of the communities. Frey in Stutzer (2001: 22) identified the following examples of influence of happiness on important economic decision: 

Consumption activities. Kahn and Isen (1993) argue that happy persons are most likely to save and spend different proportions of their income, to distribute differently over time, and to acquire different combinations of particular goods and services than do less happy persons.



Work behavior. Researches shows that happier individuals may differ significantly in behavior on the job. There is a large literature on job satisfaction (e.g. Warr 1999), which analyzes, for example, whether more satisfied workers are also more productive (Iaffeldano and Muchinsky 1985).



Investment behavior. Happier people have a different attitude to taking risks than less happy people. Happier people may also prefer different markets and types of financial investments.



Political behavior. Happy people are likely to vote for different politicians and parties and for different alternatives in referenda.



4. FUTURE RESEARCHES ON SUBJECTIVE WELL-BEING Very important are future researches on subjective well-being. Frey and Stutzer (2003: 3-4) argue that further analyses of survey data will be worthwhile, e.g.: 1.

To research the relationship between discrimination of women on the labor market and their life satisfaction (e.g. Clark 1997);

2.

To study the interdependencies in well-being at the family level (Winkelmann 2002);

3.

To understand how various indicators of the quality of life, like crime, environmental quality or commuting are related to individual wellbeing (e.g. Michalos and Zumbo 2000);

4.

To analyze whether social capital has positive external effects on people's well-being (e.g. Helliwell 2002);

5.

To study how happiness affects individual behavior – people's level of SWB may influence many important economic decisions, like consumption activities, work behavior, risk taking in investment or even political engagement and voting behavior;

6.

To improve methods to research on well-being etc.

Well-being is a psychological rather than legal or economic viewpoint of human behavior. Hence, let us pay some attention to psychological well-being. 5. PSYCHOLOGICAL WELL-BEING The literature on defining positive psychological functioning includes many perspectives. First is Maslow’s (1968) conception of self-actualization, Rogers’s (1961) view of the fully functioning person, Jung’s (1933) formulation of individuation, and Allport’s (1961) conception of maturity (Ryff 1989: 1070). “A further domain of theory for defining psychological well-being follows from life span developmental perspectives, which emphasize the differing challenges confronted in various phases of the life cycle. Included here are Erikson’s (1959)



psychological stage model, Buhler’s basic life tendencies that work toward the fulfillment of life (Buhler 1935; Buhler & Massarik 1968) descriptions of personality change in adulthood and old age” (Ryff 1989: 1070). Musek (2005: 175) states that Jahoda (1958) was probably the first author, who has, researching the positive psychic health, analyzed the existing scientific literature on variables related to normal, optimal psychic activity on one hand and pathologic psychic activity and emotional functioning on the other hand. She was particularly interested in optimal and successful functioning in respect of content and not only as an absence of a negative behavior. All of these are bases of a multidimensional model of well-being. Ryff and Keyes (1995: 720) mentioned that the model of well-being included six distinct components of positive psychological functioning. “In combination, these dimensions encompass a breadth of wellness that includes positive evaluations of oneself and one’s past life (Self-Acceptance), a sense of continued growth and development as a person (Personal Growth), the belief that one’s life is purposeful and meaningful (Purpose in Life), the possession of quality relations with others (Positive Relations With Others), the capacity to manage effectively one’s life and surrounding world (Environmental Mastery), and a sense of self-determination (Autonomy). 6. SELF-DETERMINATION THEORY Self-determination theory (SDT) (Ryan and Deci 2000b) is another perspective, associated with the concept of eudaimonia, or self-realization, as a central definitional aspect of well-being and attempted to specify both what is meant to actualize the self and how that can be accomplished (Ryan and Deci 2001: 146). “People are more likely to be intrinsically motivated, that is, to do an activity simply for the enjoyment they derive from it, when they can freely choose to pursue the activity (autonomy), when they master the activity (competence), and when they feel connected and supported by important people, such as a manager, a parent, a teacher, or team-maters (relatedness).” (Gagné 2003: 202). In other words, we can say that individuals have three innate, psychological needs. “These are the need for competence, which concerns succeeding at optimally challenging tasks and being able to attain desired outcomes (e.g. Skinner 1995; White 1959);



the need for autonomy, which concerns experiencing choice and feeling like the initiator of one’s own actions (deCharms 1968; Deci 1975); and the need for relatedness, which concerns establishing a sense of mutual respect and reliance with others (Baumeister and Leary 1995; Harlow 1958).” (Baard, Deci and Ryan 2004: 2046). SDT suggests that work climates that allow satisfaction of these needs facilitate both work engagement and psychological well-being (Deci et al. 2001: 931). Summarizing we can say: “SDT differentiates the content of goals or outcomes and the regulatory processes through which the outcomes are pursued, making predictions for different contents and for different processes. Further, it uses the concept of innate psychological needs as the basis for integrating the differentiations of goal contents and regulatory processes and the predictions that resulted from those differentiations.” (Deci and Ryan 2000a: 227). Deci and Ryan (2000a: 243) mention that according to SDT fluctuations in need satisfaction directly predict fluctuations in human’s well-being. This includes employee wellbeing. 7. EMPLOYEE WELL-BEING Currie points out that the term »employee well-being« refers to the physical and mental health of the workforce (2001: 1). »Among the benefits and facilities that employers might provide are: a pension scheme; access to medical care; a healthy and safe working environment; help with long-term sickness; assistance with family matters, such as bereavement, creche facilities, paternal leave for fathers, help with schooling and transport for families of employees who are moved around geographically; counseling; access to employee support schemes, such as an internal Occupational Support Scheme (OSS), or an Employee Assistance Program (EAP); staff restaurants and social and recreational facilities; preparation for redundancy and retirement; advisory policies for contemporary welfare issues, such as HIV/AIDS and sexual health generally, alcohol and drug abuse, and the formulation of policies such as those on smoking in the workplace.« (Currie 2001: 2-3). In the background there is the fact that employees should be working in a stress-free and physically safe environment; this situation is more easily achieved in some organizations than the others. We must recognize that this view is narrow,



because humans are multilayered, not only professional entities. In synergy, not only per parts, we define humans as: (1) physical, (2) mental, (3) social, (4) spiritual, and (5) economic entities, marked by requisitely, though not absolutely, holistic pattern of relatively permanent characteristics, due to which the individuals differ from each other, and also as specialized professionals. All these and other attributes form synergies. Therefore the view of Nelson et al. (2008: 51) is more appropriate. They view well-being in its broadest and most comprehensive sense, recalling Aristotle's eudaemonia, the realization of one's true potential, as an overarching indicator of well-being and happiness and its causes (Nelson et al. 2008: 51). Because of Ryff’s and Singer’s (1998, 2002) comprehensive view of health, we can view well-being not as simply the absence of the negative; instead, we see it as the presence of the positive (Nelson et al. 2008: 51). Important cognition is that wellbeing, in its broadest sense, is at the heart of the individual outcomes that are positive, which in turn lead to positive outcomes at the work, team and organizational levels (Nelson et al. 2008: 57). Robertson and Tinline (2008: 42) mention that the well-being is psychologically important for individuals. They also stress that psychological well-being is even more important for employers and organizations; for this reasons Robertson and Tinline say (2008: 42-43): 

Psychological well-being is the main motivational force for individuals, the processes and systems of an organization. Therefore the organization needs to work in ways that enable employees' PWB to be sustained.



The PWB is associated with a number of highly desirable characteristics.



PWB is not fixed and stable. Important is that it can be enhanced or it can be damaged as time passes.



The research evidence shows that when people are higher on PWB their organizations do better (e.g. Harter, Schmidt & Hayes 2002;



Wright & Cropanzano 2004; Donald et al. 2005), PWB delivers direct benefits. PWB has many benefits, because it plays a central role in delivering most of the important outcomes that are associated with successful, high performing organizations. Individuals who are high on PWB have advantages as leaders, managers and employees (Robertson and Tinline 2008: 43). This fact is very important in times of affluence, which kills ambition to have more and to work hard therefore. 8. WELL-BEING AND AFFLUENCE Porter (1990, 2006) showed already in 1990, that the development of competitiveness passes through four phases: from competitiveness with natural sources, over competitiveness with investments, to competitiveness with innovations, and then to the phase resulting from it, as the experience shows: the phase of affluence. The latter has always been an essential wish of people and at the same time also a dead alley: having all, what you consider necessary, you have no ambition any more to work in order to have more, because you already have all (See: James, 2007). As the historical experience in similar situations shows, affluence is followed by ruining (for instance, the ancient Rome fell from one million to only 10.000 inhabitants). It is not possible just to continue with investments, on which the traditional economy is concentrated, nor solely with innovating, without reaching the affluence. A possible fifth phase5 is necessary, which we see in intertwining of the creativity (for innovating and for other life contents, including the leisure time), social responsibility (to set wider goals, rather than narrow individual ones, which are O.K. only in the short-term, while their consequences can be very expensive and even harmful in the long term), requisite holism, and the ethic of interdependence ('I need you and you need me, as we are different due to nature and specialization; let us therefore be less selfish for selfish reasons, to complete up each other by differences’). This practice and resulting ethic is a base, that the social responsibility and creation make sense to us. In the most successful US regions (Florida 2005) the creative class prevails 5

This is what this book is about.



because there is a prevailing socio-economic concept, expressed by '3T', that is a synergy of the tolerance, which attracts talents and therefore investing in technology makes sense. Social responsibility supports the 3T (Summarized after Mulej’s chapter in this book, to link it with well-being). Along with that, there is also a threatening danger that people do not experience well-being in their perception. The coming economic situation of the most advanced regions of the world that face affluence means: affluence makes their economic theory and practice lose ground – covering of needs with insufficient resources is no longer necessary, being the central topic of the economic aspect of life. Supply – under affluence – reaches beyond demand, even very much so. Therefore suppliers try to find their way by creating artificial and fictitious needs (James 2007; Prosenak, Mulej, Snoj 2008), total quality, low prices, and broad range, etc.; perhaps they include consideration of the natural environment, but more often they abuse it. Hence they threaten health, well-being of co-workers and other people who cannot afford everything they see with others, etc. The data in Mulej’s chapter in this book confirm this threat clearly. Let us think about them again, because they have a big impact over well-being. The recent two centuries have brought both un-seen socio-economic development and destruction of humankind’s future (Božičnik et al., 2008; Brown 2008; Dyck, Mulej et al., 2002; Ecimovic et al., 2002; Ecimovic et al., 2007; Kajfež-Bogataj 2009; Korten 2009; Stern 2006; Targowski 2009; Taylor 2008; Wilby, ed. 2009; etc.). Before industrialization the rate of economic growth used to 3 (three) % per millennium, after 1820 5500 (fifty-five times) in less than two centuries. Since then there are 6 times more humans of the Planet Earth, every person using on average +5 times more energy, having 17 times more wealth, and 1.000 times more mobility, travelling today about 40 kilometers a day. We can no longer afford to emit every hour four million tons of CO2, by burning fossil fuels, cut 1.500 hectares of wood, and add 1.7 million tons of nitrogen by mineral dunging the soil, like humankind is doing today. In the 6 (six) decades after WWII only, the number of humans has grown 2.5 times, use of natural resources 7 times, while the Planet Earth has not grown, but become depleted increasingly, allowing us to no longer talk about the



developed and underdeveloped countries, but about the self-destroying ones only. We are all on the same – sinking – boat, but on different decks. The poor ones cannot change the current trend, while the rich ones are not willing to change it. For humankind of the current civilization to survive climatologists warn of the need to reduce emissions in the air, water, and soil for 80%, which can be attained with the given technologies, but not without critical changes of the current consumption patterns, and big structural changes in production and use of energy. Only the renewal of natural preconditions for our civilization to survive, after decades of competition by destruction of nature, would cost more than both world wars combined, in a best case scenario, if the action is undertaken immediately. Postponing the action may increase cost to beyond 20 % of the world-wide GDP. The current affluence makes GDP an obsolete measure of success, because it disregards crucial aspects of human well-being and happiness. They started only to work on new measures (See: Mulej et al., 2009, and references in it; Stiglitz, 2009). The theory that the economic growth is unavoidable at any price (Baumol et al., 2007) is equally leading to a blind alley as is the neglecting of humans’ natural environment and happiness; it is related to the above cited piling up of tremendous cost threatening to cause poverty and no well-being of the generations to come. What leads to poverty and no well-being is their usual current combination in the synergy showing that only 15-20% of humankind benefit from the innovative society that ruins the natural preconditions of life of all 100%. Data that the income level of poor, and hence unhappy, people (and poor purchasers) in the entire world-wide population is higher than ever before in history, is exact in book-keeping terms only rather than in real economic terms (references above). This suiting image considers the monetary terms only. To be satisfied with it would be similar to being satisfied by reaching the second floor of a skyscraper alive – after falling off the top – but still have not been splattered on the ground. Data is not requisitely holistic and the theory backing it does not seem to have the potential to show the way out from the current blind alley. A similar blind alley is the destruction of ambition by affluence; it is visible in abuse of drugs etc. rather than having the motivation for creation grow, while creativity is the central human attribute (Guštin 2007; Mulej and Prosenak 2007;



Šek 2007; Škafar 2004, 2006;.). Such finding put questions that do not tackle knowledge only, but values/culture/ethic/norms. The values/culture/ethic/norms direct acquisition and use of knowledge in interdependence with them (Mulej 1974 and later, also: Mulej et al. 2008; Potočan, Mulej 2007). CONCLUSION In the current times the innovative society and economy prevails over the traditional routine-loving and routine-based ones of several millennia. Technological innovation used to be the central topic over the recent two centuries. This has now proven to be too one-sided rather than matching the law of requisite holism. Innovation of values, culture, ethics, and norms is more crucial and more difficult to attain. Hence, attention must be paid to well-being as the real long-term purpose of all human activities, including the economic ones. ACKNOWLEDGEMENTS Declared none. CONFLICT OF INTEREST The author confirms that this chapter contents have no conflict of interest. REFERENCES Argyle, M. (1987). The Psychology of Happiness. London: Methuen. Argyle, M. (1999). Causes and Correlates of Happiness. In D. Kahneman, E. Diener and N. Schwarz (ur), Foundations of Hedonic Psychology: Scientific Perspectives on Enjoyment and Suffering. New York: Russell Sage Foundation Publications. Arthaud-Day, M. L., Rode, J. C., Mooney, C. H., Near, J. P. (2005): The Subjective Well-being Arthaud-Day, M. L., Rode, J. C., Mooney, C. H., Near, J. P. (2005): The Subjective Well-being Construct: A test of Its Convergent, Discriminant, and Factorial Validity. Social Indicators Research. 74, 445–476. Baard, P. P., Deci, E. L. and Ryan, R. M. (2004). Intrinsic Need Satisfaction: A Motivational Basis of Performance and Well-Being in Two Work Settings. Journal of Applied Social Psychology 34(10), 2045-2068. Baumeister, R., Leary, M. R. (1995). The need to belong: Desire for interpersonal attachments as a fundamental human motivation. Psychological Bulletin 52, 396-424. Baumol, W. J., Litan, R. E., Schramm, C. J. (2007). Good Capitalism, Bad Capitalism, and the Economics of Growth and Prosperity. Yale University Press, New Haven & London.



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CHAPTER 4 First Responders in Regional Disasters: A Case of Social Responsibility Gerhard Chroust1,*, Günther Ossimitz2,, Markus Roth3, Nadine Sturm4 and Peter Ziehesberger5 Johannes Kepler University, Linz, Austria; 2 Alpen-Adria University Klagenfurt, Austria; 3Creative Bits, Traun, Austria; 4 Research Institute of the Red Cross Austria, Wien, Austria and 5 Ziehesberger Elektronik, Neuhofen/Krems, Austria

1

Editorial note: This chapter provides a case of society’s (non-governmental) rather than an individual’s social responsibility. It discusses theoretical analysis and practical consequences in the case of response to regional disasters. Abstract: Today’s disasters, many of them man-made or at least triggered by human activity, endanger an increasing number of humans in large geographic areas in numerous different ways, calling for more attention concerning appropriate reactions. We discuss what constitutes a “disaster” and analyze different response types (including Flight/Run Away, Fight/Intervene, Freeze, Submit/Sustain/Endure, and Ignore/Deny). Concentrating on the classical Fight/Intervene response, we investigate several alternative ways to view interventions: systemic (bringing a system, i.e. the object under danger, back to its domain of viability), process-oriented (characterizing an intervention as a set of interlinked process steps), organizational (identifying systemic strategies and tactics), and human (considering Social Responsibility, psychological problems, mental health, and multicultural aspects). We will also identify the role that modern Information and Communication Technology can play in supporting First Responders by making their job easier and at the same time more effective.

Keywords: Catastrophes, communication, computer support, disasters, fire brigades, first responders, human aspects, human reactions, information,

*Corresponding author Gerhard Chroust: J. Kepler Univ., Linz, Austria; Fax: ++386 2 2510461; E-mail: [email protected] Markus Roth: Creative Bits, Traun, Austria Nadine Sturm: Research Institute of the Red Cross Austria, Wien, Austria Peter Ziehesberger: Ziehesberger Elektronik, Neuhofen/Krems, Austria  'This paper is dedicated to the memory of Günther Ossimitz, who passed away much too early, and to his contributions to system thinking. Matjaž Mulej and Robert G. Dyck (Eds) All rights reserved-© 2015 Bentham Science Publishers


Chroust et al.

intervention, interacting systems, mental health, organization, psychological problems, process view, reaction strategies, simulation, social responsibility, systems view, well-being. 1. MOTIVATION Regional disasters (many of them man-made or at least triggered by human activities) seemingly have grown in number, in scale, in their impact and also in their publicity due to media coverage. Disasters endanger people, society, environment, infrastructure, and economies in complex, multi-facetted, and interrelated ways. Today the sensibility of our infrastructure is affected more easily by the disasters and humans are not well prepared for the interaction of multiplesource risks. Since the beginning of civilization it is understood that most of the possible reactions to a disaster require support and help from the society at large: it is one of humans’ Social Responsibilities. Society has to try to mitigate the effects of actual disasters and has to be prepared for emergencies ("expect the unexpected" (Tierney, 2001)). Animals and humans have five basic strategies to cope with threats (see section 3): 

Flight/Run away,



Fight/Intervene,



Freeze,



Submit/Sustain/Endure,



Ignore/Deny.

It seems to lie in the human nature to generally choose the "Fight/Intervene" reaction. Already the Roman Emperor Augustus acknowledged the need for a ’human’ intervention system, i.e. standardized handling in case of disasters by establishing in 23 BC an organization of full-time, professional fire fighters ("vigiles"). One has to recognize that in most cases interventions need the support

First Responders in Regional Disasters


of specialists for effective help in the case of a disaster. The need for specialists has grown over time until our days. Today humans rely heavily on the so-called First Responders (i.e. fire brigades, ambulances, police, technical aid teams, etc.) to intervene and to help the victims. In this contribution we will discuss disasters and the role of First Responders from a systemic, i.e. requisitely holistic perspective in order to understand some of the underlying issues and to identify special needs. We will also identify the role that modern Information and Communication Technology (ICT) can play in supporting First Responders by making their job easier and at the same time more effective. This includes considerations of modern threats for which humans do not have any inborn sensors and reactions (e.g. radiation). 2. DISASTERS 2.1. What is a "Disaster"? There are numerous reasons for the ’growth’ of the size and number of what is considered a "disaster": land has become more densely populated, consequently people also live in areas in which centuries ago nobody would have considered/dared to live. Today’s catastrophes frequently endanger a growing number of humans and larger areas in diverse ways. Human interference with the natural environment weakens and/or eliminates nature’s safety provisions and natural buffer mechanisms (e.g. land for inundation, protective forests, etc.). Growing trust in the infallibility of technology and a false sense of parsimony lets humans reduce safety margins. Failures of technical artifacts cause severe catastrophes (an atomic reactor in Chernobyl in 1986, an exploding oil rig in the Mexican gulf in 2010, failing atomic reactors in Japan 2011,…). Many of humans’ technical ’achievements’ often exhibit higher efficiency at the cost of reduced robustness (e.g. microminiaturized computer chips affected by solar eruptions, etc.). Global interactions and dependencies increase the impact of originally local disturbances (volcano ash from Iceland disrupting global air traffic in 2010 (Horiuchi 2012)). The advances of Information and Communication Technologies have created a large number of complex critical embedded systems (tools) on which we depend.


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Depending on one’s personal views and one’s worldview there are different ways of considering and defining a "disaster" (Tierney, 2001, Quarantelli, 1985): -

The functionalistic or effect-based perspective: "A disaster is a natural or man-made hazard that has come to fruition, resulting in an event of substantial extent causing significant physical damage or destruction, loss of life, or drastic change to the natural environment. A tragic event with great loss stemming from events such as earthquakes, floods, catastrophic accidents, fires, or explosions" (Wikipedia-e, keyword = Disaster). Nowadays this also includes large financial losses.

-

Loss of system viability: Mrotzek (2008 and 2009) identifies a disaster as any event where the system, i.e. the object under catastrophe, transgresses the boundaries of what is considered to be acceptable or safe (see Fig. 2 and section 4).

-

The social/political construction: Quarantelli (1985) and Kreps (1989) cited by (Tierney, 2001: 14) identify disasters as social or political constructions: disaster events and their impacts do not exist sui generis but rather are products of social definition. Thus "disasters are in the eye of the beholder".

-

The social disruption: (Tierney, 2001: 20) and (Quarantelli, 1985) consider the vulnerability of the built environment and the social disruption of the affected populations; referring to (Bolin, 1998: 910): "Vulnerability concerns the complex of social, economic, and political conservations in which peoples’ every-day lives are imbedded.". A break-down and destruction of a civilization (Diamond 2005) would be the ultimate result.

2.2. Classification of Regional Disasters Regional disaster can be classified according to many different dimensions. Some of the key characteristics of disasters are (Fig. 1): -

Originator: A traditional broad distinction exists between man-made and natural disasters. Man-made disasters can further be divided



into technological and mass violence disasters (Norris, 2002). Past catastrophes show that very often natural and man-made disasters are interwoven (Schoitsch 2012: chapter 3): the volcanic eruption of Mount Eyjafjallajökull (on Iceland in 2010) was a purely natural disaster, but the effect of the volcanic ash was that air traffic was extremely interrupted and this had considerable consequences for economy and humans. Without air traffic it would not have been seen as a disaster. Similarly the earthquake in 2011 in Fukushima, Japan, was a natural disaster, which triggered a terrible tsunami (Schoitsch, 2012: chapter 3.4). But due to the lack of electricity (the electricity supply was severely disrupted by the tsunami) the atomic reactors came into a very critical state.

originator Man‐made, man‐triggered, natural

cause/interdependence Volcanic, epidemiological, ,avalanche earthquake, chemical explosion, atomic reaction, …

size and type of damage Small material, large destruction, human lifes

selectivity what and/or who is affected? (humans, some animals, only artifacts, ...).

geographic distribution

recognizability big bang, slowly growing, hindsight recognizable, Human senses, simple/complex sensors

time evolution/ reversability Reversible/irreversible growing, shrinking, periodic,

media reaction daily headline/news, remark, ignored

Local, regional, international, global

Figure 1: Classification of disasters.

-

Cause: A classical distinction is based on the cause of disaster, for example the acronyms CBRN (chemical, biological, radioactive, nuclear (Chroust, 2009b)) or ABCDEF (atomic, biological, chemical,


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data-network, electromagnetic, energy release ("F" from German “Freisetzung", i.e. Release) are used to classify the dangers and the precautions/reactions to be taken (Ossimitz, 2006). -

Size and type of damage: Various classification provide a gauge for the ’size’ of the disaster and the resulting damage (human, monetary, nature, infrastructure, etc.). Examples are the Richter Scale for earth quakes, classification of hurricanes, etc.

-

Geographic distribution: What is the extent of land/air/water/area which is affected, what type of land, how populated, etc. (Racek, 2012)? Which countries are affected?

-

Time evolution: How does the disaster start and how does it develop over time? Mrotzek (2008, 2009) discusses different temporal behavior of catastrophes (Fig. 2). Characteristics of a disaster change over time: atomic plants get out of control, floods recede, snow gets converted to water and poses a different type of threat, etc. With respect to warning the potential victims the lead time before the catastrophe’s onset (warning time!) is of essential importance, e.g. slow versus rapid onset (Tierney, 2001; Skrbek 2010). This is strongly linked to the notion of recognizability (see below).

As a consequence humans must be prepared that even very well-designed and ’proven’ systems, i.e., natural parts, methods and/or tools, will eventually lose their dependability, often due to an unforeseen combination of influences which nobody ever considered in advance (e.g. aging of semiconductor memories). The loss of dependability - in the sense of an "aging" of the system - can be considered an emergent property of the system (Emmeche, 1997; Pessa, 1998; Minati, 2002; Chroust, 2002). It could be a hidden or latent error in the system (often in software) which only appears for a very specific and unusual combination of inputs or the variation of a parameter which was considered irrelevant or constant (e.g. an earthquake of exceptional strength).



Irreversible

Reversible

System State

(a) Deforestation of Easter Island

System State

Time

(b) Ponzi Scheme, Pyramid game

Time

Time

System State

(d) Collapse of World Trade Center

(g) Famine

Time

(h) Black Death epidemic

Time

System State

Time

System State

(e) Deer Population Kaibab Plateau

Time

System State

System State

(c) Global Warming

(f) Flood of river System State

System State

(i) Chernobyl radiation

Time

System State

Time

(j) Tree loosing leaves every winter

Time

Figure 2: Catastrophes, time behavior.

-

Recognizability: Not all disasters can be recognized by our human sensorsic’ apparatus. Typically atomic radiation is not felt immediately at all despite its long-term detrimental effects. As a consequence humans do not have natural, semi-autonomous reflex patterns (e.g. as in the case of extreme heat). For these cases humans need to be equipped with special tools to recognize dangers and have to be taught to use them properly (Chroust, 2009a).

-

Selectivity: It is important to understand what and/or who is affected by the disasters. Some illnesses affect only certain species (humans, humans of a certain age, some kinds of animals,…). The neutron bomb, e.g., does not destroy any buildings or artifacts and ’only’ kills humans.


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-

Interdependence: Catastrophes are often "trans-disciplinary". The Fukushima disaster can be seen as a combination of an earthquake (natural, geological), a tsunami (natural, hydraulic), and a nuclear power plant accident (man-made, technological) with impacts on ecology, health, traffic, energy production, economics, etc. It seems to be helpful to consider catastrophes as a systemic cross-disciplinary phenomenon. Similarly the volcanic eruption of Mount Eyjafjallajökull was a purely natural disaster, but the effect of the volcanic ash was that air traffic was extremely interrupted with considerable consequences for the economy and humans (Di Maio, 2012).

-

Reversibility: Catastrophe patterns may be either irreversible or reversible, cf. Fig. 2. Often it depends on the point of view which type of catastrophe it is. For a single leaf on a tree losing its contact to its home tree is an ultimate and irreversible catastrophe; for the whole tree losing its leaves in autumn is apparently only a temporary catastrophe, actually assuring the tree’s survival over the cold winter-season.

-

Media reaction: We have also to recognize the distortion of disaster reports by the media. A speaker of the Austrian Red Cross pointed out in relation to the Fukushima accident, that there are other disasters (even bigger ones especially with respect to human cost), which do not receive appropriate attention in the media.

2.3. Phases of a Disaster Situation Fig. 3 shows the five key phases of a disaster scenario. They are rather obvious, but due to varying types of overlap a clear delimitation is impossible. In the initial preimpact phase only a general uneasiness and fear of a potential disaster exists, hopefully causing various prevention and preparedness activities (section 6). Once indications of a potential/impending disaster can be recognized, the actual disaster prevention/mitigation activities are (hopefully) undertaken (Tierney, 2001). In most cases the big unknown is the impact point in time when disaster actually strikes. In the case of a slow-onset disaster (e.g. flooding (Ossimitz, 2006)) it is even not clear when exactly the ’point of actual impact’ is reached. When does high water become a flooddisaster? To some extent it depends on the tolerance level of people (section 3) and on



the level of pre-impact preparatory activities. As a consequence even close-together areas might be impacted to a different degree and sometimes even not at all. The actual impact (in the so-called trans-impact phase) triggers necessary reactions (most visibly the interventions), followed, but often with considerable overlap, by a phase where the systems is restored to some viable and acceptable state.

Figure 3: Disaster Phases and corresponding response processes.

3. FUNDAMENTAL REACTIONS TO DISASTERS 3.1. Fundamental Reactions For humans and animals (individuals and organizations) we observe several basic types of reactions when confronted with a dangerous situation (Fig. 4). -

Flight/Run away: This is one alternative of the classical response to a problem (fight-flight). A precondition is that flight is possible at all.

-

Fight/Intervene: This reaction intends to actively reduce, mitigate, or eliminate the effects of the disaster by appropriate actions in order to


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bring the system or environment back to an (at least temporarily) acceptable state, see section 4.

Figure 4: Fundamental (Re)Actions.

-

Freeze: Many animals are able to completely immobilize their whole body showing no reaction whatsoever (“playing dead ”). For them this is a successful strategy with respect to certain predators: these would not eat dead animals or might not notice them due to the lack of movement. For humans this does not seem to be a viable strategy and is considered rather an inadequate reaction.

-

Submit/Sustain/Endure: In some situations victims do not try to amend, improve, or change the system or situation, but try to change/adjust themselves in order be able to live under the supposedly disastrous situation. ’Riding it out’ is a strategy; but sustaining a disaster (and not "running away") needs a certain frame of mind, and also includes a certain risk. Sometimes people resort to re-interpreting the status of the system as ‘not-so-disastrous’ (Doerner, 1996). Some of the motives which induce people to stay (Tierney, 2001) are the disbelief in the severity, fear of losing of their properties, or waiting for other clan-members. The behavior is similar to Ignore/Deny. Obviously this approach is only



sustainable if the system - despite its disastrous effects - has a certain kind of viability in its behavior and properties. -

Ignore/Deny: Sometimes people simply ignore the immediate or upcoming danger. They act as if nothing has changed. This can be interpreted as an ’inner’ flight. In the worst case this can be a sign of mental disorder. In Vienna one describes such a state of mind by the phrase: "Do not even ignore it!" Doerner, (1996; p. 105) points out that in certain obviously disastrous situations the political leaders apply verbal camouflage ("inversion") by coining special words like "minus growth" (= shrinking), "front line balancing" (= retreat of troops). An even stronger distortion of the truth is a target inversion, where a negative outcome is interpreted as the goal ("this is the steel-bath of the nation" in Nazi propaganda, "many enemies - much honor").

Obviously not all of above reactions are appropriate in all situations. In the case of danger people have to make a decision about their course of action (section 3.2). Freezing and Submit/Sustain/Endure are in most cases the consequence of the inability to make a decision. In many situations Flight, Fight and Endure occur in parallel by different groups of persons: while people evacuate a certain area (flight), First Responders move in to fight the disaster, while psychologists try to help the victims to emotionally endure their fate. 3.2. Choices of Response to a Disaster The reaction to a disaster (especially if it not immediately visible) and the expectations of how it should be ’mastered’ depends on many factors, including basic cultural predispositions. -

Understandability of information/warning: Are people able to recognize the signs of the danger and/or issued warning messages? (Tierney, 2001; Skrbek, 2010; Kubat, 2012) discuss the problems of informing larger sections of a population. For not immediately visible dangers this implies effective warning systems (radio, television, public


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address systems, and word of mouth) and is linked to the reachability of affected persons. The understandability of messages has also to be considered (handicapped people, foreigners,…) and includes also the semantic of the message (including culturally different ways of interpretation), the credibility of the source ("you have to be believed to be heard" (Decker, 1992)), and proper understanding of the implications of different choices of behavior. Difficulties stem from language problems, from distrust in government agencies, from different cultures, etc. -

Reversibility of a choice: Depending on the circumstances an option might have the potential to be changed later or not. For some options time runs out faster than for others. Chroust (2008c) discusses alternatives in a technical context.

-

Evaluation and deciding on the options: Using available information (Takaku, 2012), and considering constraints and requirement everybody has to make a decision about the next steps, see (Tierney, 2001; Racek, 2012). Time pressure and the psychological singularity of the situation should not be under-estimated.

Affected persons may choose different reactions, depending on their personal/cultural predispositions, cf. (Tierney, 2001: chapter 5) like gender, education, previous experience, ethnicity, minority status, gender language, social bonds, age. The choice of reactions depends also on the point in time during the disaster phase, see (Tierney, 2001, Fig. 1) and Fig. 3. In order to analyze national differences Hofstede (2005) introduced the Uncertainty Avoidance Index. It indicates how much uncertainty, i.e. lack of dependability, a person is willing to accept. It shows considerable differences between different nations. It also explains different behavior in seemingly similar disasters. 4. THE SYSTEMS VIEW: INTERVENTION SYSTEMS 4.1. Intervention Systems In the cases which we call a "disaster" the victims will be unable to fight against it alone. It is the Social Responsibility of the ’larger’ community or even society as a



whole to help in order to ’fight back’, i.e. to try to counteract both the cause of the disaster and its consequences by a so-called intervention, an action from outside of the immediately affected communities and areas (Neal, 2012). Systemically we consider an affected area/person/victim as a system, i.e. a complex unit, which left (for some internal or external reasons) the range of acceptable system states and went into an unacceptable system state (Fig. 5). What is considered unacceptable in itself depends on many factors and attitudes, as discussed in section 2.1. If we suppose that the victims are not able to resolve the disaster alone and have to rely on external interventions then as a consequence we see it as the society’s Social Responsibility. In order to respond, the external world also has to see the situation as disastrous. An intervention intends to bring the system back to an ’acceptable’ state, e.g. which is safe, dependable (Chroust, 2009), reliable, etc. (Fig. 5). Following the Greek philosopher Heraclites (500 B.C.): "You could not step twice into the same river; for other waters are ever flowing on to you", this will not be the original state in all respects, in some instances even a completely different state. In many cases disasters cause a certain urgency to (re-)gain a temporarily acceptable state (e.g. providing tents for earthquake victims, or temporary dams for floods) to prevent further damage ("state 2" in Fig. 5). Only after a certain time, one will be able to bring the system into a longer-term acceptable and thus sustainable state ("state "3" in Fig. 5). This two-step approach implies to identify two systems (Fig. 6) for responding to a disaster (Chroust, 2011) which have different aims, purposes, and objectives. As a consequence they have different cost, time and efficiency requirements and are therefore probably radically different from one another: 

The (Emergency) Intervention System serves as a quick, immediate first response in order to (re)establish some short-term acceptability (Chroust, 2009a): "system 2" in Fig. 5.




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The (Disaster) Restoration System is charged with bringing the system into a state, which promises long-term, sustainable acceptability: "system 3" in Fig. 5.

Figure 5: Acceptable and unacceptable system states and transitions.

While the main challenge for the Intervention System is a speedy reaction, the Restoration System has to provide effective, efficient and long-term sustainable solutions. Its actors will be specialists, while the actors in the Intervention System usually will be generalists.

Figure 6: Intervention and Restoration System.



On a very high level of abstraction Klir’s terminology (Klir, 2001; chapter 10) allows us to identify an Intervention System as a ’goal-oriented systems’ (Fig. 7) with feed-forward and feedback capability. For regional disasters such a mechanistic system view is not sufficient. In the real world one cannot predict all possible disasters, as one must be "Facing the Unexpected" (Tierney, 2001). Following Ashby’s Law of Requisite Variety (Ashby, 1956) the Intervention System must have a greater variety than the anticipated variations of the expected or actual disaster: "If a system is to be stable the number of states of its control mechanism must be greater than or equal to the number of states in the system being controlled" (Wikipedia-e, keyword = variety (cybernetics)).

Figure 7: Goal-oriented systems with feed forward and feedback (Klir, 2001: chapter 10).

4.2. Intervention Systems: First Responders Taking into account the natural, technical and societal components of a disaster together with the many emerging unknowns, only a socio-technical system with strong human involvement can provide sufficient variety ("Required Variety") to cope with the often unexpected situations of a disaster and its aftermath and thus will be able to prove itself as an adequate Intervention System: We need humans, but supported by know-how, experience and whatever technology is available (e.g. Fig. 8 around 1720). This was understood from very early times on. We cited before: the Roman Emperor Augustus established a human intervention system in 23 BC by a group of full-time, professional fire fighters (vigiles). Nowadays we have fire brigades, ambulances, police, and technical aid teams, summarily called First Responders.


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Figure 8: Water-pump by Fischer von Erlach, around 1720 (Adam, 1973).



The main objective of First Responders is not to bring the system back into its original state, but into a state which is acceptable with respect to viability, security, safety and well-being, at least until further rescue and restoration measures can be organized, see also (Tierney, 2001). Some of the tasks are:

-

To minimize disaster damage: e.g. a fire brigade trying to minimize the damage of fire;

-

To save persons and property, e.g. by evacuation of people from flooded regions;

-

To maintain essential services (nutrition, protection, housing, transport) at least on a basic level: e.g. blankets, tents and/or public shelters for the people who have lost their homes (Tierney, 2001);

-

To repair/reconstruct damages, e.g. by pumping water out from a flooded cellar.



The intervention is successful, if the created status is acceptable at least for a while until the Restoration Systems provides something better. Systemically seen, the total system after a successful Intervention is in an acceptable state before and after a disaster with a certain transition period where acceptability is not guaranteed.





The Intervention System has to take into account that the affected system will probably change dynamically over time (Fig. 2). This time variant can be caused by internal (e.g. a chemical source or a house on fire change their properties over time) and/or external causes, e.g. by neutralizing the chemical substance or fighting the fire.



Interventions usually bring together many teams of First Responders with different methods from different locations and organizations with different (and unknown) knowledge, experience, and background. Communication, coordination and standardizes procedures (INSARAG, 2012) are the key to successful participation.



First Responders should also consider provision of the basis for learning from the current situation in order to avoid/prevent future disasters by failure prevention.

Minimizing the disaster damage and saving persons are usually the most urgent duties of the First Responders, with a time-window of minutes to hours after the outbreak of the disaster. (Re-)establishing the essential services (e.g. food) is a secondary issue, which comes typically after saving lives and property, with a time scope of hours to days. In the case of a big traffic accident in which a truck transporting some problematic chemical is involved, rescuing injured persons and isolating dangerous substances are the most urgent tasks before the road is cleared for normal traffic. The distinction between initial fixing and permanent restoration is fuzzy: A cellar flooded by water is pumped out by the fire brigade immediately - if one can expect that the cellar will stay dry afterwards. Sometimes immediate repair is required for limiting the overall damage - as in the case of a leaking dam or pipeline. In many cases repair and restoration work lasts for months to years after the disaster, e.g. permanently re-establishing logistic support and transport services after earthquakes or floods. In some cases there is no restoration at all, e.g. in the case of airplane crashes, sunken ships or the complete destructions of towns after heavy volcano eruptions, like in the ancient towns of Pompeii and Herculaneum destroyed by a tremendous outburst of the Vesuvius volcano in 79 AD.


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5. INTERVENTIONS AS A PROCESS 5.1. Process View of Interventions The key to interventions (First Responders!) are humans embedded in a sociotechnical system who follow a complex and difficult process of performing numerous activities to achieve their mission. Reasons are the comparative newness/unexpectedness of the challenges ("Facing the Unexpected" (Tierney, 2001)), uncertainty of the development of the disaster and in many modern cases the invisibility of many dangers (e.g. radioactivity). There are definite ’before’ and ’after’ relationship between activities; activities are supported by methods (e.g. how to approach a fire) and tools (pumps, ladders, etc.). The ’product’, however, is a service (Spohrer, 2007; Thomas, 2010). The process view corresponds very nicely to the functional view of disasters (see section 2.1). In business and in software engineering (Scheer, 1998b; Wang, 2000) the identification and analysis of the involved processes turns out to be very helpful (Chroust, 1996, 2009a) even in cases when many parameters of the situation are not know and require hitherto unknown actions. The more complex the situation is, the more a process view is helpful: "Industrial maturity demonstrates itself in the ability to abstract the development process from the specifics related to the production of the individual product". This also holds for interventions (replacing ’development’ by ’intervention’, ’production’ by ’performance’ and ’product’ by ’intervention’). Simple processes like constructing a chair are usually learnt once and for all in apprenticeship, more complicated ones (e.g. assembling furniture from prefabricated parts or cooking an unknown dish) need guidance by a written, formalized description, i.e. a Process Model (Chroust, 1996). Instructions on how to operate the video recorder, the car, etc. are essentially process models describing (in more or less detail) the necessary process steps. A process model is a concise, abstract description of the necessary activities based on the experience with past processes. These descriptions are collected in the process model to be used in future processes. It thus acts as a template for future processes, which are "instantiated" from it. Obviously this abstraction must be a



compromise between too general a process description - covering all types of situations but lacking any specifics about an individual situation - and too narrow a description which cannot be applied to a large enough class of situations. It has to provide sufficient flexibility and freedom to perform the intervention in such a way that one is able to react to unexpected and surprising situations and challenges (Tierney, 2001). The advantages of the use of a process model have been expanded in many different publications (Chroust, 1996; Scheer, 1998b; Wang, 2000). An important aspect of the process view - especially in view of process models - is that one can also answer questions like "How good are the used processes of an intervention (efficiency, quality, etc.)?" and "What is the maturity of the enacting organization?". The ISO-standard 15504-family (ISO/IEC, 2004), now replaced by the ISO 33000-family, provides the basis for defining a ‘maturity level’ of an organization. 5.2. Intervention Processes Following ISO/IEC 12207 (ISO/IEC, 2007) the processes to be enacted by the First Responders can roughly be classified into three essential categories (Chroust, 2009a, 2009b): -

Primary Intervention Processes consist of processes that serve the primary purposes and goals of the intervention, e.g. accepting an emergency call, recognizing hazardous material, estimating risks (Takaku, 2012), helping and treating victims, etc.

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Supporting Intervention Processes consist of processes that support other processes as an integral part with a distinct purpose and contribute to the success and quality of the intervention, e.g. communication support, accessing and using knowledge-databases, considering human reaction and cultural differences, management and coordination of First Responders, etc.

-

Organizational Intervention Processes consist of processes employed to establish, implement, and improve an underlying


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support structure for the enactment of the Primary Intervention Processes, improving the structure and processes, e.g. are concerned with long-term consideration. They consist of processes employed by the organization of Training, Reporting, Human Resource development, Process Optimization, etc. The Supporting and Organizational Processes are essential, because they often are the basis for successful Primary Intervention Processes (if the fire hoses have severe leaks, the intervention might not be successful); see also section 6. 6. ORGANIZATIONAL VIEW OF INTERVENTIONS 6.1. Base Organization As indicated in Fig. 3 many of the indicated actions fall into the responsibility of the underlying organizations and are part of the Social Responsibility of the embracing society. A necessary core of activities are of a preparatory nature, getting ready to meet the "Unexpected". Other activities are needed during a disaster, while the third set of actions is concerned with the "day after". First responders could be professional personal, but in many instances, they are volunteers. This must be considered in all operations. 

Strategic Preparedness: (Tierney, 2001) stresses the need for preparation and preview. Long before a real disaster strikes, the necessary provisions have to be made; see Fig. 3. This includes a proper organization of the response-units. (Reissberg, 2010) provides an analysis of the response system in Hawaii with respect to tsunamithreats, using Stafford Beer’s Viable System Model (Beer, 1995). To become prepared "in good times" is a Social Responsibility action. It cannot be performed by a single person and often appears to be a waste of communal money and effort.



Tactical enactment: In the case of a real disaster the provisions as referred to above bear fruit. Numerous problems have to be overcome: -

Disasters strike unexpectedly ("Facing the Unexpected" (Tierney, 2001)), often at more than inconvenient times.





-

Very often the disaster impacts also the functioning of the First Responders (inaccessible roads, lack of electricity, communications).

-

An Intervention System must be regionally grounded and autonomous in a sense that it may respond directly and informally to an emergency. It must be organized in a way that allows quick decisions and short ways of communications. Also the tools and technical equipment for first aid must be available on site in order to react quickly.

-

Different First Response units from different organizations (fire brigades, ambulances) with different organizational structures and traditions, from different geographical areas, different languages and cultures have to work together (INSARAG, 2012).

-

Communication and coordination will pose a problem.

Post-impact Restoration: Once the immediate danger is over and a temporary acceptable situation has been reached, the long, difficult and expensive Restoration phase starts. Again one has to rely on the Social Responsibility of the embracing society to not forget the victims and their needs; see section 7.

6.2. Information and Communication A key to a successful intervention is obviously the communication between First Responders, their command units, governmental agencies, even across organizational boundaries. Coordination and team work cannot be achieved without communication. In an actual intervention direct communication might be hampered or obstructed by physical (noise, smoke, visibility), or physiological gaps (hard hearing), or cultural barriers (language, taboos). In (Chroust, 2008a) communication problems are discussed in detail. Social Media will have a growing use in such situations (Kreiner, 2012; Rainer, 2012). 6.3. Training Adequate training (for professionals and volunteers) is of high importance in order to utilize available state-of-the-art best practices and tools, to operate the equipment, to


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make the correct interpretations of the results, to draw the correct conclusions, and to initiate the appropriate responses. Some best practices might be counter-intuitive and, if not well chosen, might negatively interfere with one another. Modern Information and Communications Technologies (ICT) can today provide training environments with simulated scenarios (Mixed and Augmented Reality) which are flexible and cost effective. A special advantage is a near-reality hands-on training, which is a key to sustainable learning. Simulation is a highly useful training methodology especially when the training cannot be performed in real environments, see (Rainer, 2009b; Sturm, 2009) and Fig. 9.

Figure 9: Training: Process substitution: real + virtual.

One of the helpful concepts for training (Fig. 9) is the substitution of some processes and some/all of the environments by simulated ones, whereas other activities are executed in the real environment. Examples are the replacement of a dangerous source of contamination by a harmless ultrasonic generator, or the body of a victim replaced by a projected image, or simulating virtual colleagues in a field exercise (Fig. 9). Many of the simulation tools can also be used during a real assignment for planning the next steps, for the assessment of the situation and the effectiveness of different measures to be taken, by provision of what-ifanalysis, time-series- estimates, sandbox-like support, etc. (Chroust, 2009b).



7. HUMAN VIEW OF INTERVENTIONS 7.1. Mental Health Problems of Victims In (IASC, 2007) one finds: "disasters cause significant psychological and social suffering to affected populations. The psychological and social impacts of emergencies may be acute in the short term, but they can also undermine the long-term mental health and psycho-social well-being of the affected population. One of the priorities in emergencies is thus to protect and improve people’s mental health and psychosocial well-being". A major concern during interventions tackles humans: freeing trapped people, removing them from dangerous locations, giving them medical and psychological treatment, etc. We know today that victims do not only need immediate psychological help (in the framework of the intervention) but often longtime help with respect to longtime mental health problems, like anxiety, depression, and posttraumatic stress disorder (Norris, 2002, van Griensven, 2006; Duckworth, 1986; Bundesamt-BK, 2011). 7.2. Psychological and Physiological Problems of Personnel Being a First Responder is a stressful experience, both in physiological and in psychological terms (Bundesamt-BK, 2011). Psychological problems appear not only during interventions, but often result in long lasting suffering. With respect to several of the modern disasters (e.g. chemical, biological, radioactive and nuclear threats) one can observe (Chroust, 2009b): •

Humans do not possess any inborn, natural sensors to recognize dangers early enough. They are not equipped with natural, semiautonomous reaction patterns.

•

They need to be equipped with special protective gears and tools to recognize/distinguish the dangers and the real sources. Special training is needed in order to operate these tools appropriately.

•

During an intervention many concerns come up, in approximately decreasing order of importance (Rainer, 2009a): protective gear, communication, background knowledge, physical effort, heat/cold,


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resources, personal concerns (family), crammed space, time-critical actions, etc. 7.3. Multicultural Aspects of Disasters The global cross-dependencies and interchanges also bring about that different cultures live in a potential disaster area together and meet/clash with international help-personnel from other countries and cultures (Daniel, 2008; Marsella, 2008). Following (Marsella, 2008) we can observe, that "good intentions are not enough. If you wish to help, you must understand (the victims’) nature (and culture)". (IASC, 2007) points out that "International staff and volunteers may come from different geographic, economic and cultural backgrounds than the affected population in the host country and may have different views and values. Nevertheless, they should have the capacity to respect local cultures and values and to adapt their skills to suit local conditions. The distress of the affected population may be worsened by an influx of humanitarian workers”. A key is the cultural competence of the First Responders (Chroust, 2008b; Schneider, 2001). SUMMARY Regional disasters are growing in reality, in awareness, in belief, in media coverage, and affect more people, more areas in more different ways. Disasters also have more secondary and tertiary effects due to global interaction, and fewer buffers between individual areas. This calls for systemic approaches to perform interventions by outside First Responders. By its very nature this is a version of Social Responsibility on the part of their members, their organizations, and the society at large, including government supporting them. Responses must be multidisciplinary, trans-disciplinary, trans-national, and trans-cultural. First Responders (fire brigades, ambulances, police, technical aid teams, military, etc.) must possess sufficient Requisite Variety in methods, tools and approaches, as well as requisite holism of approach to cope with disasters with requisite wholeness of outcomes. Humans are central both as victims and as First Responders. The latter need training and appropriate equipment; both can be provided by modern Information and Communication Technologies (ICT): analysis of emergency scenarios and possible responses, training environments, process support, tactical and strategic tools for planning and interventions (e.g. tracking personnel and detecting victims,



logistics, communication, etc.). Systems Theory is able to provide models for Interventions and organizational structures and offer alternative models for disaster prevention and post-disaster restoration. The help and support to victims of disasters is and always will be a matter of Social Responsibility. ACKNOWLEDGEMENTS The work reported was funded by project "KIRAS PL3:SimRad.COMP "Simulations- und Informationssystem zum Administrieren von Hilfseinheiten bei Katastrophen - Erforschung von Systemkomponenten". Project number 818784, October 2009, under the "Sicherheitsforschungs-Förderprogramm KIRAS" of the Austrian Federal Ministry for Transport, Innovation and Technology (BMVIT). CONFLICT OF INTEREST The authors confirm that this chapter contents have no conflict of interest. REFERENCES Aceves, F. (2012). A systemic comparative analysis of Japan 2011 and Chile 2010 earthquakestsunamis. In Bichler, R., Blachfellner, S., and Hofkirchner, W., editors, European Meeting on Cybernetics and Systems Research 2012 - Book of Abstracts, pages 85–87. Bertalanffy Center for the Study of Systems Sciences 2012. Adam, A. (1973). Vom himmlischen Uhrwerk zur statistischen Fabrik. Verlag Munk 1973. Ashby, R. (1956). Introduction to Cybernetics. Chapman and Hall, London, 1956. Beer, S. (1995). Brain of the Firm. John Wiley andtop Sons; 2. Auflage 1995. Bolin, R. and Standford, L. (1998). The Northridge Earthquake: Vulnerability and Disaster. Routledge, London 1998. Bundesamt-BK(2011). Psychosoziales Krisenmanagement in CBRN-Lagen / Psychosocial Crisis Management in CBRN Incidents. Bundesamt f. Bevölkerungsschutz und Katastrophenhilfe, 2011. Chroust, G. (1996). What is a software process? G. Chroust (ed.): Special Issue on ESPITI (European Software Process Improvement Training Initiative, Journal of Systems Architecture vol. 42(1996) no. 8, pages 591–600. Chroust, G. (2002). System properties under composition. In Trappl, R., editor, EMCSR 2002, Proc. European Meeting on Cybernetics and Systems Research, Vienna, April 2002, pages 203–208. Austrian Society for Cybernetic Studies 2002 Chroust, G. (2008a). Bridging gaps by cooperation engineering. In Kotsis, G., Taniar, D., Pardede, E., and Khalil, I., editors, Proc. of the 10th Int. Conference on Information Integration and Web-based Applications and Services (iiWAS2008), pages 382–389. OCG (Austrian Computer Sociey) and ACM 2008.


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CHAPTER 5 Requisite Holism of Behavior When Facing Complexity of Pandemic Diseases – New Trends in Healthcare Information System (HIS) Teodora Ivanuša1,*, Matjaž Mulej2,*, Iztok Podbregar3,* and Bojan Rosi4,* 1

Faculty of Logistic, University of Maribor, Mariborska 7, 3000 Celje, Slovenia; Faculty of Economics and Business, University of Maribor, Razlagova 14, 2000 Maribor, Slovenia, and IRDO Institute for development of social Responsibility, Maribor, Slovenia; 3Faculty of Criminal Justice and Security, University of Maribor, Kotnikova 8, 1000 Ljubljana, Slovenia and 4Faculty of Logistic, University of Maribor, Mariborska 7, 3000 Celje, Slovenia 2

Abstract: The essence of neoliberalism is one-sidedness that might be resolved by market, if the latter worked. A pandemic is a case of consequences of this over-simplified supposition. It is a difficult event for many; hence it requires social responsibility on the individual, organizational, and societal levels. It is also sufficiently complex and nonroutine occurrence that it allows for no successful consideration with one-sided and routine-based approaches, which may have been successful sometimes. It is useful to gather all available experience from previous cases, and use them to make indicative, but only indicative reminders, and to complement them with insights on the new individual, group-specific and perhaps also general parts of the considered pandemic characteristics. Thus gradually useful-enough reminders would arise that are both sufficiently reliable (in the general part) and sufficiently flexible (in the group-specific and even more so in the individual part) of attributes. How useful will such reminders be, depends on the situation and even more on subjective basic premises of the authors, and users of reminders as check-lists for users’ actions. Whoever does not conform to them at all can exaggerate to the detriment of people, similarly as those who would obey reminders rigidly without any proper creativity or even innovation. The overview of emergency measures, we have summarized, can serve as a reminder for a requisitely holistic action at eventual pandemic, for nothing unpleasant to surprise us. *Corresponding authors Teodora Ivanuša: Faculty of Logistic, University of Maribor, Mariborska 7, 3000 Celje, Slovenia; Fax: ++386 2 2510461; E-mail: [email protected] Matjaž Mulej: University of Maribor, Faculty of Economics and Business, and IRDO Institute for Development of Social Responsibility, Maribor, Slovenia; E-mail: [email protected]. Iztok Podbregar: Faculty of Criminal Justice and Security, University of Maribor, Kotnikova 8, 1000 Ljubljana, Slovenia; E-mail: [email protected]. Bojan Rosi: Faculty of Logistic, University of Maribor, Mariborska 7, 3000 Celje, Slovenia; E-mail: [email protected] Matjaž Mulej and Robert G. Dyck (Eds) All rights reserved-© 2015 Bentham Science Publishers


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Keywords: Complexity, creativity, culture, cybernetics of defense, dialectical systems theory, disease, ethics, experience, experience-and-innovation-based learning, flexibility, information, neo-liberalism, norms, one-sidedness, pandemic, reminder, requisite holism, rigidity, social responsibility, values. 1. INTRODUCTION A pandemic is the vast prevalence of a disease. It can be seen as a consequence of one-sided rather than systemic and socially responsible behavior of decision makers and takers. In order to cope better with it, or even prevent it, it is good to know it. This fact requires requisite holism of behavior rather than one-sidedness that is typical of neo-liberalism expecting all solution from market forces and forgetting about monopolies that are generated by neo-liberalism. Without useless panic and without useless delay we should ask the basic questions (When; What; How; Why; Where; Who; Whom; With whom; With what; For whom) and by communication obtain and spread the helpful information to people. As this is about a complex phenomenon, it is, in cases of potential or existing pandemic, necessary to observe, ponder, reflect, take decision, show and control emotions, communicate and operate – in short – behave – so that the minimum possible significant effects, impacts, events, phases of the process and consequences are overlooked. Interdependencies and resulting synergies should no way be overlooked. In terms of the prevailing values, culture, ethics, and norms (Potočan & Mulej, 2007) pandemic requires social responsibility to direct the available knowledge, data and information toward a requisitely holistic solution of the arising difficulties. A pandemic is a sufficiently complex and non-routine occurrence to allow for no successful consideration with routine approaches, which may have been successful in any other case. It is useful to gather all available/crucial experiences from previous cases, to use them to make indicative, but only indicative, reminders, and to complement them with insights in the new individual, groupspecific, and perhaps also general, parts of the considered pandemic

Requisite Holism of Behavior When Facing


characteristics. Thus gradually requisitely holistic and hence useful reminders that are both sufficiently reliable (in the general part) and sufficiently flexible (in the particular and even more in the individual part) would arise. The level of usefulness of such reminders depends on the situation and even more on subjective basic premises, i.e. starting points, of their authors, and users. Whoever does not conform to reminders requisitely holistically, risk exaggeration to the detriment of people; similarly do those who rigidly hold to them without any proper creativity or even innovation. Action must be requisitely holistically founded within both the determination/definition and realization of objectives. A pandemic is one of the potential crisis situations of serious importance. So, one must prepare for it in time, in order to not act in panic, confusion and one-sidedly, instead of using requisite holism. The legal regulations attend to this indicatively, yet practically the people, who assume enough responsibility, obtain enough information and are sufficiently professionally trained, do. Hereto, this chapter shall also help. The overview of emergency measures that we intend to summarize can serve as a reminder for a requisitely holistic action at a possible pandemic, for nothing unpleasant to surprise us, even in case of crisis. Methodologically, the list of reminders is based on the Dialectical Systems Theory (Mulej, 1974, and later) and the novel Cybernetics of Defense (Ivanusa, 2013). 2. PANDEMIC – IN TERMS OF PERCEPTION, COMMUNICATION AND INFORMATION We people do not act according to objective information on realities around us and in us, but based on our perceptions of them. This is also true when pandemic is threatening or has already occurred. Perception changes data in messages, i.e. expressing meaning of data as content/semantics, and then possibly in information, i.e. influential message generating action (all way from memorizing to work etc.). 2.1. Perception of the Idea of the Threat of Infection with Communicable Disease as a Threat Each person shapes one’s own perceptions of reality based on received data, their perception, and interpretation as information. In addition to individual level of


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perception, it is also necessary to take into account the organizational and/or group level, since the modern human does not function in an enclosed environment, but mostly in the context of small groups, organizations, as a member of a community and citizen, and in international relations, etc. All these contexts and relations with their more or less stable organizational processes also impact the user's ordinary perception. Generally looking, each individual is constantly in a state or in a certain gap between his or her own perception and the reality of the threat. The larger this gap, the more time one needs for decisionmaking and thus for the beginning of a successful problem resolution. The longer the path to the solutions when e.g. exposure to a virus shows up during one’s own uncertainty period, the greater is the likelihood of contamination by a communicable disease or even its expansion to the pandemic dimensions. Why does this phenomenon appear – the difference between perception and reality of the threat? Simply, because in our daily life we humans are dealing with things and processes, that are normally far away from threats such as communicable diseases and the like. We start to be engaged in these issues, when in some way we obtain information, not only data, about them. We become more profoundly occupied with them when our everyday matters happen in an environment where we could be infected. At that time the question arises, whether we are rapidly able to search and obtain the appropriate quantity and quality of the necessary information on measures against communicable diseases for quality decision-making and related action. Does our thought-pattern obtained by upbringing and education enable us to truly acquire sufficient data and information for decision-making and action in the available time? Time, which is our permanent enemy and ally, works relentlessly and runs in its completely independent rhythm; time also causes differences between our perception and reality of the threat. We must strive for ourselves to be pro-active about the events, which we have to take decisions about and act upon, but most often we are a step behind the events, and therefore, we are capable of more or less successfully manage only their consequences.



In a period of uncertainty and the gap between perception and reality of the threat, the following situations and considerations inside the individual somehow come to the fore: -

Something like this can never happen to me; therefore, this is not my problem.

It is difficult for a person to accept the fact that he/she may be the one to be exposed to contamination by a communicable disease. He/she believes that this is far from him/her, especially because it is something that cannot be perceived physically with our senses. Putting it simply, he/she prefers to avoid even the pondering about the problem that is not present now. Who has ever considered about e.g. car accident or a severe incurable disease such as cancer, if those have not been in his/her forthcoming close environment? -

The responsible ones will take care of everything necessary.

First of all, the questions arise, who are persons/bodies/organizations responsible for solving the surfacing problems, and whether they can be recognized at all. At the national and local level authorities that have their defined duties at all stages of the crisis, through which they contribute to its solving, are determined for several crisis situations. Various co-ordinations are also established as well as the communication system between them. There is no doubt about this. The problem arises because such working bodies are managed by people, who are concerned with their knowledge level and similar dilemmas as we ourselves are. The problem is also in the fact that concrete situations or threats tend to occur in, let's say, the gaps between responsibilities of individual authorities to solve them; thus no one feels the owner of the problem and responsible for its solution, in particular infection with severe communicable diseases. Alternatively, individual authorities may tend to believe they can resolve all substantive and logistical dimensions of a pandemic entirely independently, which is also an illusion. So again, we are wasting much needed time for quality information, decision-making and action. -

It is pointless anyway, because in any case, there is nothing I can do.

In the crisis stages, when we are confronted with some concrete information on e.g. the communicable diseases that threaten us, and on our level, we find out that


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multiple assignments need to be solved in order for us and others to be effectively protected against infection; some humans are not even mentally prepared to start dealing with the problems due to repletion of difficulties. This is especially difficult when we are under the pressure of the infection of our nearest and our surroundings. The principle of gradual steps should be applied. We should do those steps that we know and are able to, and at least we will contribute something to the successful resolution. -

I have no time to think about this matter.

Sometimes we are so deeply involved in our daily tasks and assignments or issues that we are interested in, that we simply do not perceive the new situation, which is even threatening us; due to over-occupation with our tasks we still keep being engaged in them only. This is particularly important when we as individuals are part of an organization and its missions, but we simply do not perceive a new threat. It is, nevertheless, necessary, regardless of the current importance of the regular tasks, to also monitor developments in the environment and assess the situations or their importance for us or for our organization. Unfortunately "time passes and says nothing"; therefore, it is necessary to walk around the world with eyes wide open to detect information in the observed data. -

Apathetic environmental observation.

It happens that we start to perceive such threats e.g. communicable diseases, but we simply observe the environment apathetically and do nothing. It looks like there is an invisible wall around us, which we are hidden behind; even if the problem or threat is at the immediate border of this virtual wall, we just observe the threat and do not react. Data does not become information. -

Hyperactive, extremely quick panic reaction.

Some individuals who receive few data and generate from them information resembling their personal experience, already implement decisions and measures based on these few limited information, which may be completely or partially wrong. The key question is where is the necessary limit of sufficient information on the communicable disease threat for us to take quality decisions? Such



hyperactive, even panic reaction may, in addition to completely wrong reactions, also cause an irrational use of resources, which are needed for quality decisionmaking. Particularly dangerous are individuals who think they are irreplaceable and do not take time for a needed consulting or even rest during work. Though this may sound strange, even during crisis time for rest is necessary. When too tired, we cannot be concentrated at work. Data becomes misinformation. -

Modesty checking with the responsible, if maybe we are not infected after all.

We become aware of some signs of infection, but we doubt whether this is true, or we are just imagining that we are infected with a communicable disease. In ourselves, we wonder whether we will be found ridiculous, if we burden the responsible with our uncertainties. We are even more worried about our personal reputation, if we are wrong and the responsible will determine that we are not infected with the communicable disease. Such situations should be overcome and the fact, that doubt and uncertainty are the worst states for the required time of right choices, should be somehow accepted within oneself. The reputation that will suffer due to an error primarily within us is insignificant in relation to time irrationally spent while living in the uncertainty. Data should be double-checked to not be misinformation. -

Other.

We described only a few of the states and phenomena that have already occurred in some past crises similar to infections with communicable diseases. Descriptions of previous situations are also very limited, but they still offer some guidelines that can help us reduce uncertainty and the gap between perception and uncertain reality. It is utterly clear that it is impossible to cover all possible uncertainties raised by the individual cases and humans. Man/woman is unique and all his/her processes are matchless. How can we comment the aforementioned cases? All of them are characterized by the absence of correct or incorrect questions and answers to them; every individual must clarify within him- or her-self as quickly as possible


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whether all the listed situations/data are only products of uncertainty and one’s gap between perception and reality. Therefore, we must first focus on – deliberate – reduction of the several times mentioned gap between our perception and reality to a minimum in the shortest possible time. The crucial data only must be collected and generate crucial information reducing uncertainty. 2.2. Key Questions to Reduce Our Uncertainty If we simply ignore this gap, we substantially increase the potential threat of infection with the communicable disease of ourselves and our near surroundings. Therefore: what should be our steps to reduce the gap between perception and reality? Based on past experience each person searches answers within him- or her-self first; after that one searches for answers in the environment that the individual is able to communicate with its different dimensions and hence very different quantitative and qualitative data, perceptions and resulting information. One of the searching ways is asking simple questions and constantly trying to answer these questions. The "magic words" that we need to cover all of, can help us with this: When must one react, when will I get enough good quality data, when can I expect help, when must one take decisions, etc.? What should I know, what should I do, what should I not do, what do I need to decide upon, what is the source of infection, what are the necessary measures, etc.? How should I react, how should I protect myself, how do I explain my problem, how should I decide, how should I inform my environment, how should I organize the isolation of my environment, how do I get safely to the succor, how do I take medicaments, etc.? Why do I have to decide this, why do I need to protect and isolate myself, why there is no necessary assistance, why did I get this information, why should I stop this action, etc.? Where is the problem, where is the assistance, where must one change something, where is the risk for me, where am I safe, etc.?



Who has the necessary information, who can help me, who needs assistance, who are the responsible, who are other participants, who will take decisions, etc.? Whom do I have to tell, to whom am I responsible, to whom the assistance is more necessary than to me, whom will I harm with my actions, etc.? How much time do I need for decision-making, how long have I already been in such a precarious situation, how many resources do I have available, how much assistance do I really need, etc.? With whom should I connect, collaborate, not establish contact, interrupt contacts, etc.? For whom do I work on all these issues, for whom do I find my life worth risking etc.? Other. The more questions and answers, of course, that we obtain based of the presented questions and answers and based on repeated or new questions, as the process must be ceaseless, the greater the likelihood that actions, reactions, and solutions will be properly measured out, as the perception will be increasingly more identical to reality. Obviously this is one of the simple ways of exceeding our uncertainty. It can also be used by those who within themselves didn’t form a better decision-making model yet. In this model we also didn’t use all the possible “magic words”, which ask us questions on our way to the answers. Each individual must find for him- or her-self the best, the most rational way out of uncertainty. 2.3. Communication in Crisis Situations Some of the following phrases will be intended for communication in crisis; though it needs to be pointed out that there are comprehensive works on the crisis communication, and it would be impossible to cover them in this contribution. We present only guidelines for an individual to read any of the work addressing this topic in his/her spare time, when crisis communication is not needed. This will greatly facilitate/shorten the time of uncertainty also in time of risk of infection


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with communicable diseases. In essence, communication and information in time of the communicable diseases' threat must urgently be limited and subordinated to only few goals: maintaining the conditions to prevent infection, preserving health and lives, or treating those infected with communicable diseases. Crisis communication must ensure that the information will reach every individual in each relevant instant, timely and measured out for him/her. All individuals and organizations should primarily have a built-up confidence that they will hold such information and, based on them, they will act really correctly. Transmitting and receiving data must exclude interference in both technical and even more so in personal terms, both quantitatively and qualitatively. In short, the right information must be held by everyone who needs it regardless of time, space and state in which one is and matching one’s level of data perception. Of course this is a description of an ideal situation that, as a model, we must build from the personal to all higher organizational levels. Every individual is obliged and entitled to do one’s best to contribute to an adequate communication and information, so that one truly contributes to successful resolution of the threats of infection by communicable diseases. 3. PANDEMICS – COMPLEXITY AND INTERDEPENDENCE AND SYSTEMIC/INTEGRATED BEHAVIOUR, ESPECIALLY THINKING 3.1. Necessity of Systemic Behaviour in the Case of Pandemics Pandemics are sufficiently frequent and complex, while at the same time exceptional phenomenon in contemporary society and its health care system that cannot be avoided and successfully coped with, if we are not sufficiently holistic, but too one-sided. As individuals who do not cooperate with each other, of course, we cannot be sufficiently holistic, therefore we need to take the natural and economic fact that we are interdependent, although we are trying to be legally independent, lest anyone would be allowed to abuse us, as our practical, especially mental basic premise, i.e. subjective starting point. As individuals – due to immense amounts of humankind’s expertise and knowledge – we just are



necessarily narrowly specialized to some fragment of expertise, knowledge and reality, therefore indispensable to others and in need of others, thus interdependent. Since the reality is complex and the humanity as a whole knows a lot about it, as individuals we necessarily specialize and inevitably simplify. The question is by how much. The answer of the great scientist Albert Einstein is said to be as follows: “Everything should be made as simple as possible, but no simpler.” Thus, let’s make an attempt to be holistic to the extent possible, sufficient and necessary at the same time, i.e. requisite. Otherwise we will not survive either as humankind or personally. That holism is necessary, applies markedly also to the emergency management and the eruption of pandemics: one-sidedly created and applied insight and measure usually cannot be useful, at least not in the longer term. It causes oversights and uncontrolled consequences, i.e. misinformation. Every human action can have three basic level of content integrity/holism: -

In one extreme we would take the notion holism literally and the system (i.e. the mental picture of the phenomenon in question) would have to cover all the characteristics of the phenomenon (according to Bertalanffy (1968) even all the biospheres, not only parts of nature). Then it would be a complete, total holism. One would express it - in vocabulary of the General Systems Theory – so-called absolute, total system. Of course the latter is not feasible, there are too many actual characteristics, and we would have to take into account the system (i.e. interlacement) of all aspects and of all characteristics.

-

In the other extreme, the notion holism would be confined in the frame of an individual selected point of view and would cover only one aspect and only that piece of actual characteristics, which the individual aspect is able to highlight. We would forget the others. He would express this state of insight unilateral system limited to only one aspect (i.e. the mental picture of the considered phenomenon).


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This one is, of course, easily feasible and fully in line with the needs of narrow specialists, therefore very common. For this very reason, it expresses a fictitious holism. It is therefore dangerous when it comes to complex phenomena, including pandemic. -

In some intermediate variant, we would consider neither of the two extremes when choosing a system (i.e. interlacement) of aspects and thereby considered characteristics (components and connections), but something intermediate. We would limit ourselves to the requisite holism. There can be no uniform answer to what is the right level of holism; what matters is what in a given case is the requisite breadth and depth of the consideration of the phenomenon that we are occupied with. The responsibility for the consequences? The one who chooses and decides bears it, of course. If he/she chooses too narrow, he/she causes oversights. However, if he/she chooses too wide, he/she causes unnecessary effort and cost (Mulej et al., 2000).

3.2. Requisite Holism – Depending on Humans The third variant, which is the one on the level of the requisite holism, is, therefore, the matter of human decisions, what to consider and what to leave aside. Thus it also demands human responsibility and full clarity of the definition which system (i.e. interlacement) of aspects to choose in a given case. As we already pointed out, this is a dilemma: 

Whether we choose a complex consideration and achieve simple consequence, as we leave nothing substantial aside.



Or, alternatively, we choose a simple consideration and achieve complex consequences, as we leave some essential parts aside, and beside the anticipated effects we therefore experience also side effects1.

1

In medical instructions today it is written, what side effects might be expected, if a synergy of the given medicine and something else occurs. In times past, this probably was not prepared so systemically. Thalidomide is an example of sedatives, which decades ago, if taken by pregnant women, caused birth of children without arms, etc. Side effects of lack of holism have become central and very serious – because of synergies oversight.



Therefore, holism should be defined in this way (Fig. 1): Holism covers (1) The Whole (Systemic), and (2) Parts (Systematic), and (3) Relations (Correlation, Dialectics, Interdependence), and (4) Realism (Closeness to reality, Materialism) as a system (i.e. interlacement), i.e. everything simultaneously and interlaced, interdependently and with interaction, in synergy. Figure 1: Definition of Holism after the Dialectical Systems Theory (Mulej et al., 2008: 40).

Let’s consider, therefore, that specialization is inevitable, and holism likewise2 is. Systems theory and cybernetics support holism as defined by developing and applying holistic, i.e. broad and deep perception, and management of complex and highly complex phenomena3 (of course within the decisions of the authors, researchers, decisionmakers) at the requisitely holistic level (Mulej et al., 2008: 41). This is easier to attain with the creative inter-expert/interdisciplinary cooperation than without it. It is therefore, essential to move from one-expert to inter-expert creative cooperation, whenever it appears that an individual profession probably does not provide the requisite holism and a broader definition of holism is needed. If it is not necessary, this would mean a waste of possibilities/resources, which are so often lacking, the narrow4 one would be sufficient. Conclusion: Which holistic variant should be relevant, essentially depends on the subjective basic premise that is on human personality - the values, emotions, talents, knowledge, and proficiency, on deliberation bases, decision-making,

2 Specialists are closer to the systematic (2) as systemic (1). Cooperation between different specialists, each dealing with the same subject from different perspectives and are therefore, in interdependence (3) makes it possible that based on relations the interacting influence, which enables the encompassment of the systemic - Synergy (1), originates. If they succeed in an appropriate level of compliance with the Law on the requisite holism to acknowledge the essence, without getting lost in the less significant details, nor diminish the whole to a too simplified picture, they even reach realism (4) [2]. (The numbers correspond to numbers in Fig. 1, which the sentence that this footnote refers to, and comments on). 3 I.e.: processes, events, conditions, nature, including human beings, society, etc. The pandemic belongs among them. 4 A common practical example is the research through the samples instead of total populations. The question is, which sample is sufficiently large and typical to allow researchers a reliable enough generalization of their findings, as they would apply to the entire population, and at the same time, small enough for the research not to be too expensive and last too long.

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action and behavior. What style of thinking someone is practicing depends on them (Mulej et al., 2000). About the Systemic Thinking (Fig. 2) we could, therefore, say: Systemic thinking is a way of thinking that • Considers and places particular emphasis of attention to the interdependence(s). • It is integrative thinking, which forms bridges between specialists. • It neither challenges nor nullifies the importance of specialization, but it complements it by cooperation between specialists that would lead to synergies. • It does not conceal the real complexity or complications, so that over-simplification would not lead to the oversights and therefore, to complicated consequences. Figure 2: Systemic Thinking - short definition (Mulej et al., 2008: 43).

Systems Theory provides the basis and methods for conviction, which (shall) enable the consideration of everything that is important. Soft-systems Theories are that part of it, which can be better used than others when managing Social-science phenomena, where responses to the influences are not completely reliable and predictable, hard, but soft, probabilistic. Hard-Systems Theories, on the other hand, are that part of it, which is essential when it comes to technical aspects, where the responses to the impacts should be the most reliable and predictable, hard, not soft, probabilistic. In the case of pandemics both types occur. Thereby it is important to connect at least the following professions: doctors of relevant medical sub-specialties, medical care workers, psychologists, sociologists, lawyers, economists, chemists and/or biochemists, hygienists, social workers, maintenance staff and attendants for the necessary technical equipment (from medical equipment to cars, etc.). Each of the experts involved necessitates at least a double ability: 

Expertise, knowledge and values of their immediate profession,



Expertise, knowledge and (interdisciplinary, inter-expert)

values for collaboration,

inter-professional particularly for



respectful consideration, including listening, especially those with whom we disagree, because they are viewing things from a different perspective, as right they can creatively complement and thereby strengthen the joint holism. How and to what extent someone succeeds in this, depends on his or her personality traits, which within the Dialectical Systems Theory are called subjective starting points, here the basic premises, as the work process begins with them. Thus its content and course depend on what are the subjective basic premises - whether they enhance or inhibit creativity and creative cooperation. Everyone can affect this for oneself and others around him/her, or at least monitors this, if one applies the guidelines: 

For the definition of the subjective basic premises necessary before the determination of the objectives and as a base for the objectives not to be too one-sided and therefore, dangerous;



For the definition of the subjective basic premises necessary after the determination of the objectives and as the base for the realization of objectives not to flow too one-sidedly and therefore, dangerously.

3.3. Summary of Guidelines for the Definition of Subjective Basic Premises for the Determination of Objectives Guidelines for the definition (= formation) of modern subjective basic premises as starting points of the process of human work, link and put in synergy ten interdependent components – guidelines for live in the contemporary creative knowledge-and-values-of-innovation society. The summary is as follows: 1.

Consideration of circumstances: ensure ingenuity (= inventiveness), integrity (= holism) and beneficial use of inventions (= innovativeness).

2.

Approach: methodological (i.e. creative), not just methodical (i.e. routine) skills.


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3.

What: the most established definition of the system “problem, objectives and tasks”.

4.

How: the most established plan of application procedures for each task.

5.

Consideration of everything significant: Dialectical System of consideration aspects.

6.

Personal ability for guideline/characteristic 5): dialectical way of thinking (interdependence, inter-professional communication, creative cooperation).

7.

Organizational feasibility for 5): teamwork, democratic session or meeting.

8.

Contemporariness: continuous updating of subjective basic premises.

9.

Expertise, knowledge and values/emotions: the interdependence of all three components of the subjective basic premises components (physiologically: the left and right hemisphere of the human brain).

10. Personality evolution: the prehistory of current subjective basic premises. It is a system (i.e. interlacement) of ten (related) aspects of formation or development of subjective basic premises, i.e. personality traits, which act as the general basis, reflected in the concrete consideration of anything as subjective starting points for activity, either research, influence exertion/governance and management, or implementation. Each guideline offers an answer to one question and opens another one to which the following guideline gives an answer, and so on in the endless cycle of interdependent guidelines and characteristics. 1) In order to protect ourselves against the danger as much as possible in case of new pandemic, we must – just like other professionals – always be innovative, i.e. able to create and successfully apply old and



new expertise, knowledge and values. This is hardly feasible, if we are not imaginative and holistic. 2) Only by way of exception an innovation would be feasible, if we uncritically applied old methods. Each approach directs us in its own way, has inherent consequences. Each pandemic has some features that others don’t, and some similar as well. Therefore, we need at least partially new methods. 3) The approach focuses on the general. This is not enough. No activity can be isolated from the environment, without a context. To be innovative, we do not approach the set tasks without looking, where does it belong! We should look what problems we are dealing with, what we want to do about them (as much substantiated as possible) and which tasks should therefore, be carried out! Each one separately is not enough to succeed. If with pandemic the objective is to prevent the spread of disease, the tasks and procedures are different than, if the objective is to get a single person to a safe place or provide him professional care. 4) It is not very possible that all the tasks would be carried out by the same methods successfully. None of which are likely to be successfully carried out without anticipation and sufficient preparation of the procedure. The point of this booklet on pandemic is primarily in this. 5) If we are dealing with all these details, it may happen that we forget that the outcome is so much better as more holistically it is prepared and processed. Holism is virtually impossible, without considering the Dialectical System of all essential and only essential aspects. This applies to every activity, routine and (especially) creative, as well as innovative, and for each task in its context. The same holds in case of a pandemic: we must reflect very well, which aspects of the preparations for it, and engagement with it, are essential, as well as how do they bind and interact with each other, differ and complement,


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and what implications they have collectively, not just separately, i.e. synergistically. 6) For the Dialectical System of all essential aspects to be taken into consideration, different specialists who cooperate creatively are needed. However, they are rarely qualified and willing to work with other specialists until they realize that they are interdependent. Afterwards they acquire a dialectic (i.e. interdependence considering) way of thinking and apply it. Who are the most likely needed specialists and what characteristics they need, we have already summarized above. The case of pandemic is no different, in principle. 7) After humans - specialists realize all six attributes, the question arises in which organizational form such a necessary ability should come to the fore. The answer is: the teamwork between different specialists in democratic sessions and similar gatherings. Within medicine counsels have this role. In the case of a pandemic the composition at the meeting will probably have to be broader for at least a part of the issues; a number of professions was mentioned before. 8) The team and the meeting might be joined by someone who is inclined to old habits (routine, one-sidedness, self-sufficiency, and non-cooperating). Such a person needs an update of his/her outdated subjective basic premises. The same as for values holds for everyone with outdated expertise, knowledge. In particular, he/she must get used to listen to those with whom he/she disagrees; in doing so, he/she should consider, from which aspects does he/she think, and from which others do, and how they are complementing each other for that reason. 9) In doing so, it is known from experience and researches that it is necessary to update the know-what expertise (for the answer to the question: what), know-how (for the answer to the question: how) and emotions, in particular values (for the answer to the question: what is important, worth the trouble for us; what is it that we value). This is



also feasible. In doing so, all three components are interdependent and influence each other. In the case of a pandemic is the same as elsewhere. A person necessarily has all of these three characteristics. 10) Even when people update this way and begin to cooperate interprofessionally as a Dialectically Systemic Team, what they have learnt and/or felt before will still repeatedly come to the fore. Therefore, their current subjective basic premises are influenced by their former ones, their prehistory. 3.4. Summary of Guidelines for the Definition of the Subjective Basic Premises for the Realization of the Objectives With them, we are trying to answer the following questions on the work of specialists: 1.

Whether now that I’m pursuing a selected task, am I considering, making decisions and acting pursuant to the law of requisite holism, in order to not cause an increase/implementation of the risk, e.g. pandemic?

2.

Whether now that I’m pursuing a selected task, am I considering, making decisions and acting in such a way that I’m not exaggeratedly closing off myself within my close circle of colleagues?

3.

Whether now that I’m pursuing a selected task, am I considering, making decisions and acting in such a way that I’m not only interested in a current situation and my own, fixed opinion?

4.

Whether now that I’m pursuing a selected task, am I considering, making decisions and acting in such a way that I’m not interested only in the opinion of colleagues from the same profession?

5.

Whether now that I’m pursuing a selected task, am I considering, making decisions and acting as that all is not crystal clear and expected responses to the impacts are not completely reliable and the only possible?


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6.

Whether now that I’m pursuing a selected task, am I considering, making decisions and acting in such a way as to consider my interdependence with others, because we are specialized in different areas?

7.

Whether now that I’m pursuing a selected task, am I considering, making decisions and acting in such a way as to consider the clear task distinction as a precondition for good cooperation?

8.

Whether now that I’m pursuing a selected task, am I considering, making decisions and acting in such a way as to consider that each one of us covers a fragment of the entire interlacement of occupations and now have to be logically integrated and represented shortly and clearly?

9.

Whether now that I’m pursuing a selected task, am I considering, making decisions and acting so that I’m/we’re combining partial tasks/cognition as a Dialectical System, therefore, with restriction to the essential features only while taking into account all the essential features rather than only some?

10. Whether now that I’m pursuing a selected task, am I considering, making decisions and acting in such a way as to take into consideration that I’m working within previously identified/created basic premises and therefore, learn only within their context; that is why I’m able to draw conclusions within this context only? In order to facilitate the work and cooperate creatively, it is reasonable to define beside our personal characteristics also the characteristics of the phenomena that we are dealing with. For this e.g. two other Systems Theories - the Chaos Theory and the Complexity Theory are applicable when it comes to pandemic, which is a complex and hardly predictable phenomenon and process. 4. SUMMARY OF THE BASICS OF THE CHAOS THEORY The mathematician who created the Chaos Theory extremely briefly explained it as follows (Mulej et al., 2000: 52): "Chaos, i.e. a not entirely predictable running



of natural processes is an acceptable fact. It makes no sense to restrict mathematics or other professional consideration of something in the nature to the Newton’s laws, which say, that it is only scientific what is completely defined and has very/totally clear causes and effects." The Chaos theory, therefore, deals with actual phenomena that cannot be completely predictable and are not linear, i.e. with uniform and completely reliable causes and effects. The chaotic phenomena behavior is, therefore, partly predictable and identifiable beforehand, and partly not. It is therefore, possible that predictable processes have unforeseen effects, and unpredictable predictable ones. Medical measures, e.g., help differently successfully, as considered phenomena in addition to the general part of the characteristics, which is repeatedly occurring in everybody (e.g. increased body temperature) also have a specific part of the characteristics that is repeatedly occurring within the partial groups (e.g. old types of influenza, different from new ones) as well as individual part of characteristics (e.g. different natural resistance of individuals). Therefore, complex phenomena such as pandemic cannot be completely realistically/truthfully considered under entirely the same general patterns, as these patterns can encompass only the general parts of the actual characteristics, but not the specific and individual. Thus, the consideration where we would limit ourselves to the individual, i.e. merely medical perspective, or even to the aspect of one single medical (sub)specialization, cannot be sufficient. Given characteristics (properties) are partially visible and partially hidden, and usually are the consequences of numerous intertwining influences acting synergistically. The same applies for their courses and implications. They may vary even with places and within time periods (e.g. risk of a pandemic in the warmer and colder time of the year, in various health and climatic conditions, etc.). It is therefore, neither feasible nor completely impracticable to contain pandemic in every situation, much less everywhere in the same way. In practical situations, the laboratory and similar findings that are acquired with samples are only indicatively, not entirely. Life is just not linear. That is why it is so important what we have previously summarized about the subjective basic premises. The result of action in case of a pandemic is at least as


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dependent on them as on the nature, in which it occurs. Perception generates information and results in action dependent on information. Another modern variant of Systems Theory, which deals with the complex characteristics of the given phenomenon, is called Complexity Theory. 5. A SUMMARY OF THE BASICS ON THE COMPLEXITY THEORY This theory also originated from practical experiences, which have shown that traditional sciences with their presumptions lead to exaggerated simplification of the reality insight and, therefore, lack reliable evidence and conclusions. Instead of such research and behavior characteristics, the Complexity Theory requires taking into consideration the integrity and interdependence of the approach and behavior, consideration of selected aspects and their synergy, i.e., reciprocal rather than one-way causalities in influencing and establishing relations instead of focusing only on the individual characteristics in the center of analysis. Therefore, one rejects reductionism, i.e. over-simplification, so-called objective observation (which is unfeasible, as a human is observing, though perhaps with the apparatus), linear causality, unit of characteristic as a center of analysis, etc. This does not mean that the old approach is wrong in any case, but it is not an enough real general basis, as it would give too simplified images of the given reality, which would give a basis for erroneous conclusions; therewith it would cause problems that may also be fatal (Mulej et al., 2000). If we, for example, presumed that every body temperature rise is a sure sign of the new influenza, we could attempt to address any significantly different disease with the medicine for new influenza. This shows how essential the perception and resulting information is under the name of diagnosis: the subjective basic premises of diagnostics, often also the latter’s teamwork, are a large part of the bases for the definition of the objectives, later also for their realization, is based on their situation assessment. As long as it is a matter of repeating always the same characteristics, the linear reasoning can be applicable or even useful, as it reduces the effort from the excess to the requisite holism. When deviations from the routine occur, which in The Complexity theory is called Bifurcations (in Slovenian: partings such as at road-crossing, therefore, the possibility of several



different variants with significantly different implications), determinism or routine action is not useful any more. A transition to creativity, even innovation is needed. Pandemic is no exception. It is therefore, a worldview that accustoms researchers and practitioners to the warning that: 

over-simplification can have (very) complex consequences, because it induces oversights,



it is therefore, necessary to consider the law of requisite holism, mentioned earlier,



it is thus, essential, what are the subjective basic premises of people who identify objectives, and people who as specialists realize them and in doing so sometimes neither have the opportunity (but only temporary), nor the need to cooperate creatively with people from other professions.

Perception and information and action result from the starting points. The latter do not include only data about fact on needs and possibilities ‘out-there’, but to an equal extent and importance on the subjective starting points, called subjective premises here. This is why to guidelines in the Dialectical Systems Theory are so influential: they impact perception, information and action crucially. The Complexity Theory warns about consequences resulting from the failure of requisite holism in the phases of both definition and realization of objectives (Mulej et al., 2000). 6. PANDEMICS – MOVEMENT RESTRICTIONS MANAGEMENT AND CONTROL Movement restriction, which includes isolation and quarantine, is introduced in order to prevent transmission of communicable diseases. The introduction of quarantine and isolation is especially essential when there is a suspicion or a communicable disease is already present. The duration of quarantine depends on the incubation period of the disease and is usually longer than the known timetable for each communicable disease.


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The moment the suspicion that the population was exposed to the communicable disease arises, the diagnostic procedures must be carried out to determine the number of people who are infected or will fall ill. Until the persons are in the incubation period or present typical clinical signs, all people who have been exposed, including those who are already infected should be separated and treated as a potential source of further spread of disease and movement restrictions to a certain degree should be imposed. In this way, the control of the disease is most feasible. This control is significantly reduced when the number of diseased persons can no longer be followed. Movement restriction is implemented as restriction of the right to enter the danger zone and exit from it. Restriction of the right to enter and exit to/from the danger zone complicates the transfer and the complementing of medical resources for the support of the diseased persons care. Therefore, personnel responsible for planning medical care must assess the capacity - whether the current distribution and the number of medical personnel are adequate and whether their redistribution and the providing of additional personnel are necessary. The personnel confined within the movement restrictions area are strictly not to be moved, but they are (where possible) enabled to continue the work in a way that allows them to carry out their professional mission. Isolation. Isolation means the isolation of the infected individual or group of people from non-infected population. Isolation measures are implemented in the healthcare establishments, at home or elsewhere, as it is defined during the precrisis management. The number of infected determines specific requirements for the implementation of isolation. The measures of isolation do not reduce the responsibility of the healthcare system and medical personnel in providing the best possible care for the diseased persons. Quarantine. The quarantine requires a measure of forced detention or similar restrictions for individuals or groups of people who are reasonably suspected of being infected or were exposed to communicable diseases. If the transmission of communicable diseases causes an immediate danger to human health and by that a state of emergency, the imposition of the quarantine is necessary. The quarantine area must reduce the spread of the disease, while ensuring appropriate medical



care, essential life necessities and other goods. Quarantine includes movement restrictions of individuals or group of people and active continuation of medical surveillance until it is declared that they are no longer infected or are not in the incubation period. In extreme situations isolation, quarantine or both can be ordered for persons or individual, or other necessary alternative can be introduced.

Figure 3: Systemic Thinking - short definition applied to movement restriction (Ivanuša et al., 2009: 12).

Movement restriction - the protocol (NATO Standardization Agency [NSA], 2002a, 2002b, 2005, 2007): 1.

Movement restriction is a decision-making body’s tool, which is used with the intent to control the spread of communicable diseases among humans. The purpose of movement restriction is control over the spread of disease, which is attained by limiting contact between healthy population and those who fell ill or are suspected to become ill. Movement restriction may be also necessary to reduce the risk of communicable disease to be transferred into the territory through individuals or groups, returning in or travelling through the area.

2.

Decision-making body takes into account the current situation, the attainable evidence and opinion of medical and other professionals,


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and assesses the likely extension of exposure to infection and infections in order to be able to produce a scheme of the possibility to control the pandemic. 3.

Clear, precise and timely communication on all aspects of movement restrictions - and their connections and synergistic effects - is of critical importance for the affected population. Until the making of a precise diagnosis, the decision-making body should take into account that the population was exposed and infected, and reduce the potential for the uncontrolled spread of the disease in a balanced way. In parallel to this, daily imperatives for affected population or population who is reasonable suspected to be infected, also change.

4.

Prolonged movement restrictions have a distinctive impact on the functioning of the country as a whole. The decisions-making body may in such cases exceptionally decide on the limited, but strictly controlled spread of disease.

5.

With the imposition of movement restriction a strict isolation of the affected population is established. Protection of the restriction of movement areas outside boundaries must come first, with precise instructions for the management of potential loopholes that would allow the uncontrolled passage in both directions.

6.

Control over the individuals or groups, who are returning from areas where the disease is confirmed has the absolute priority. For them the introduction of rigorous monitoring of disease evolution and the specific process of personnel and equipment control over persons, who due to emergency circumstance often have to cross the boundaries of the surveillance zone in both directions, are required.

7.

The criteria for the revoke of the movement restrictions should be determined before the imposition of movement restrictions and is specific in regard to the nature of the disease and the precise circumstances. After the revoke of the movement restriction an extend



period of targeted health control, which is necessary to ensure the immediate perception of the subsequent outbreak of the disease, sets in. 8.

The restriction of movement area has a characteristic negative psychological impact for the affected population and the one who witnesses this. It is proven that the withholding of information is harmful, so the decision-making body has to communicate responsibly and prevent the possibility for the rising of a chaotic situation.

9.

The standard methods for the disease investigation and disease control are introduced, but require upgrading with expert groups. There may even be required a dissipated team of epidemiologists in different areas of the movement restriction, where members of the team cannot leave the area until the exit criteria are not specified. Each area within the movement restricted area needs an external center for logistics. Food, water, medical treatment supplying, and waste disposal including clinical, should be done in a manner and by methods, which prevent the uncontrolled spread of the disease.

7. ORIGINS OF INFECTIOUS DISEASES IN GENERAL Communicable diseases originate from a wide range of different sources/focal points. At one end of the spectrum are diseases that originate from various natural sources including humans and animals. On the other end of this spectrum are diseases that penetrate into the environment by artificial accelerators - among them are biological agents and biological weapons. Distinguishing natural from the offensively caused outbreak of disease is difficult and complex, but in both versions the imposition of restriction may be inevitable. Control of the disease which is transmitted from person to person (communicable disease), represent a particularly complex challenge. In times of crisis the operation of the nationalsecurity system requires performers and residents to lengthily work and reside jointly, usually under enormous physical, physiological and psychological stress. In such circumstances, the communicable disease has the additional potential of extremely rapid expansion, pandemic characteristic, which will affect both national and transnational human and animal population.


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Regardless of the origin and nature of communicable diseases, we must manage and control the operation of the national-security system to ensure its effective implementation, functioning of the social system and thereby constraining of the inevitably emerging damage at national and transnational levels. In this way, we can reduce human victims, victims in the animal population and maintain the economy. This is the best possible way to prevent the spread of communicable diseases and maintain control of the disease. To achieve the described, intervention of the healthcare system is needed: immunization, prophylaxis, strict hygiene prevention and severe contact restriction among sources or carriers of disease and the healthy populations of humans, animals and plants. For the responsible (decision-making body) the introduction of movement restriction represents a number of unique challenges. When the national-security system does not recognize the need for urgent awareness of the significance and necessity of introducing the movement restriction, even a short term crisis and its non-perception can lead to characteristic effects at least at the local level. Failure in considering, or even denying the imposition of movement restriction when it would be absolutely necessary, can lead to much greater operational degradation of the national-security and social system with consequences on national and transnational levels. It is crucial that the Security/Armed Forces, as the state’s only competent and highly equipped armed force also in the area of Chemical, Biological, Radiological and Nuclear defense, is the one that ensures continuous operation and the ultimate emergency call both for army members and the civilian population. It must therefore, be an integral part of crisis management and control system and strictly related to national research-scientific institutions (NSA, 2005). 8. DETAILS ON THE INTRODUCTION OF MOVEMENT RESTRICTIONS AND THE QUESTION ON WHO WILL SECURE THE ARMED AND OTHER SECURITY FORCES IN THE EVENT OF A PANDEMIC The presence of communicable diseases can be perceived by the immediate detection and identification or by state control over the disease. In the case of a



natural or an offensively caused outbreak of disease two scenarios, which cover one or another variant of perception, are envisaged. 8.1. The Perception with Immediate Detection and Identification In the event of an infection incident or suspected infection of members of the national-security system and the rest of the population the decision-making body must estimate the priority/triage and take the following actions (NSA, 2009a, n. d.): 1.

Introduce standard procedures of defense against biological agents and separate personnel who is or may be exposed to infection,

2.

The national healthcare system must immediately verify the health status of population at risk and their prognostic options for the decision-making body’s requirements,

3.

Urgent identification of biological agent and the confirmation of referential laboratories,

4.

At the time of referential confirmation of the biological agent, the audit of procedures referred to in paragraph 2 is required, and exact definition of the imposed movement restriction or exceptions, which are permitted in this diagnosis or are strategically acceptable regarding the circumstances,

5.

Introduction of movement restriction by resolution of the national decision-making body is not nearly as responsible as the decision to revoke the movement restriction. The introduction of movement restriction is a dramatic decision that causes characteristic paralysis of the national operation in full. Its revoking adds risk and liability, which is a matter of crisis management in a crisis period so a safe transition to the post-crisis period may occur,

6.

When infection covers part of the population, it is reasonable to impose movement restrictions to a wider area, which rounds the functional territory of the contaminated population activity. In this


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area, contacts between the primary infected part of the population and the others covered by the restriction of movement area must be limited. Within this area, a clear distinction between members of the national-security system and the rest of the population should also be established. To ensure the operation of the functional area, criteria for entrance in the restriction of movement area of the urgently needed personnel may be defined exceptionally, 7.

In the restriction of movement area, the establishment of uncompromising disease control, which dictates the further operation of the movement restriction institute and lasts until the unequivocal identification of terms for the revocation of the movement restriction and the transition to the post-crisis operation is of key importance.

8.2. Perception by National Health Control The perception of the infection occurrence in the population by the national health control institute can be distant in time from the primary source of infection that at the time could have already been spread to a wide range with the predictable migration, which represents a hardly manageable situation (NSA, 2002b). Therefore, at the occurrence of infection in the population at risk the national control authority introduces the following measures (NSA, 2002b): 1.

Deliberate decision on the establishment of isolation zones within the expected area at risk. Isolation zones are organized as satellites of the central medical capacities that provide health-medical and other supplies,

2.

The national health system must immediately verify the health status of the population at risk and their prognostic possibilities for the decision-making body’s requirements,

3.

Clinical signs and symptoms or supposed cases of infection may be the entry criteria of the situation diagnosis, which must be confirmed with unequivocal laboratory results as soon as possible. This allows us



to evacuate the potentially infected from the immediate vicinity of the expectedly non-infected population with strict disease control. This stage already signifies a serious reflection on the advisability of the movement restriction introduction, 4.

Movement restriction (if necessary) is established taking into account the already diseased or those who are reasonably suspected to become ill. In the event that the disease will follow its natural evolution and course, the movement restriction will be the decisions that will require a consensus of the highest authority of the decision-making body and the scientific-research authorities,

5.

Urgent extend of the health and disease control network,

6.

The basis for determining the revoke of the movement restriction is represented by the relevant laboratory data of the referential laboratories and the decision of the highest health decision-making authority, when an increased number of recovered is perceived, and the suspicion is disproved (in regard to the incubation period).

Implementation of measures for communicable disease control - establishing movement restrictions (NSA, 2007): 1.

Impose a complete blockade of the restriction of movement area,

2.

Implement a complete security control of the restriction of movement area’s borders,

3.

Define criteria for entry of the emergency personnel or units to the area approved by the national expert support,

4.

The same applies for the exit criteria,

5.

Having allowed the exit of personnel and the removal of equipment, the appropriate complete decontamination must be carried out,

6.

Provide the supply for those included in the restriction of movement area through the external resources and controlled entry points,


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7.

Implement strict measures to control vectors of disease transmission,

8.

Organize a special evacuation of the infected or for whom the suspicion is founded, and will certainly become infected, which represents a serious challenge or even the key challenge for crisis management and spread control of communicable disease,

9.

To provide within the restriction of movement area the insulation zone with an appropriate highly professional medical care with actually available therapeutic and laboratory capacities also for the potential unavoidable fact (death occurred at XX time), which requires facilities for appropriate storage of the corpses,

10. In the isolation area, we must provide adequate personnel protective clothing and equipment, decontamination showers according to the measures for disease control, 11. Establish exclusive zones in the restriction of movement area for the settlement and reside of healthy personnel who are performing the medical, technical and other assistance to the diseased, 12. Unconditional control over the known clinical signs of the disease in personnel, who reside in the exclusive zones of the restriction of movement area must be performed daily, 13. Implement established protection measures of disease control also in contacts outside the restriction of movement area, 14. Clinical wastes are managed pursuant to national or European legislation, 15. Abolition of exclusive zones in the restriction of movement area is carried out after the relevant decision of the highest Health Authority. 8.3. Psychogenic Factors and the Actual Number of Infected/Diseased Within the population in the restriction of movement area uncertainty and intense anxiety occur in individuals and groups who are healthy, but worry that they are not. Such individuals or groups significantly increase the actual number of



infected and diseased. In addition the non-infected and healthy persons or groups may develop a clinical picture of the disease, which is exclusively of psychogenic origin. One and the other represent an additional risk of spreading the disease by contacts with the actually infected or diseased. Medical personnel must detect this phenomenon in time by triage, clinical examinations, counseling or psychological support (NSA, 2007). 8.4 The Evacuation of the Infected and Diseased (Including the Healthy and their Equipment) In the restriction of movement area, a precise coordination of logistics, transport of medical equipment and medicines (personnel), both infected and diseased, if special circumstance so requires. The decision-making body and medical and other personnel jointly evaluate the current situation and opportunities for evacuation of the diseased (the healthy as well) that (due to special emergency circumstances) absolutely need to exit the restriction of movement area (NSA, 2007). Evacuation planning should include (NSA, 2007): 

Identification of air, sea and land transport or their feasibility and limitations in the specific circumstances,



Identification or introduction of separate clean and contaminated corridors of movement (entry/exit)



Identification of decontamination procedures for both people and equipment and



Identification of the legal bases that allow or restrict the movement of infected and diseased population.

The evacuation of infected and diseased population (including the healthy and their equipment) represents additional challenges (NSA, 2007): 

The number of infected and diseased may significantly exceed precrisis planning,



Infected, diseased, medical and other personnel, equipment and means of transport require decontamination and




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Discontinued control of the national and transnational borders, where all three forms of transport traverse, enables an increased risk of infection and transmission of communicable diseases from civilian to civilian populations and at the same time significantly threatens members of the armed and other security forces or the nationalsecurity system, which is the sole trained and capable to control the restriction of movement area, to lend complete support with available resources and thereby substantially increase the control of the disease. International transport of infected and diseased individuals or groups, who freely cross the international border at the highest level of risk or declared pandemic, represents a worrying element of crisis planning, management and control. Radical measures may be required, intensive co-operation of decision-making bodies at the international level is essential.

It is completely predictable that the diseased and infected in the restriction of movement area will need assistance for a long period of time, at the same time the time period of evacuation will also lengthen. Medical personnel will have to decide, which individuals or groups can be treated at the location of the restriction of movement area and which need a controlled evacuation. An outbreak of infectious diseases and a large number of individuals and groups in need of evacuation from the restriction of movement area can exceed the available transport capacity and the specific equipment used therein in a very short period of time. Decision-making body and medical personnel must therefore, consider the possibility of the occurrence of the mass infected and the diseased. The population that remains in the restriction of movement area requires sustained medical or comprehensive assistance until the revocation of the restriction of movement area. In case of a prolonged period in the restriction of movement area, medical and other personnel must introduce additional medical support and initiate measures of Collective Protection – COLPRO (NSA, 2009a). Transport in both directions (to/from the restriction of movement area) demands special attention as it has all potentials to increase the contamination or spread of the disease. The particularity of the decontamination depends on the type of agent, level of exposure and time. Before transportation at least a minimum



decontamination is immediately introduced when circumstances or available and highly trained personnel permit. Early decontamination reduces the possibility of cross contamination of medical and other personnel and equipment with agent residue on clothing or equipment of the infected or diseased. The use of protective masks with the infected and diseased before and during the evacuation is appropriate. To reduce the possibility of secondary contamination a minimum number of means of transport that yet provide a comfortable and dignified evacuation of infected and diseased from the restriction of movement area, is used. Means of transport should take the shortest possible path (minimum paths and roads, which in such transportation are subjected to contamination and represent a source of infection for the unaffected population) to the targeted location of the evacuation of the infected and diseased. After transport means of transportation must be preferentially decontaminated, regardless of whether or not they are returning to the restriction of movement area (NSA, 2009a). It is understood that the restriction of movement area with the infected and diseased and medical and other emergency personnel requires exceptional conditions or the functioning of supply, stock replacement and the both directions movement/transport logistics. Continuous activity of medical and other personnel and disease control management depend essentially on the applied crisis logistics system. Emergency circumstances and the restriction of movement area have at least two critical points for the proper functioning of logistics, which significantly complicate the operation: the possibility of uncontrolled spread of infectious disease and increased use of medical equipment, medicines, food, water, etc. Decision-making body in conjunction with medical and other personnel shall consider the following rules (NSA, 2009a): 

Because of an outbreak of infectious disease the restriction of movement area has specific needs in terms of requirements and consumption of equipment, medicines and other life necessities,



Medical and other personnel must be trained to identify the appropriate or substitutive equipment for the treatment, management and control of infected and diseased population within the restriction of movement area during the emergency situations,


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

Trained personnel should immediately test the food, drinking water, facilities, environment and equipment that could be or is contaminated within the restriction of movement area,



The priority of trained staff should be to protect water resources, food and medical equipment and other property in the restriction of movement area,



Trained personnel should be able to manage the decontaminated equipment to remain in such a condition, and does not represent a secondary source,



Trained personnel should perfectly implement and be familiar with specific requirements for assistance, protection and evacuation of infected and diseased in emergency circumstances of the restriction of movement area,



Trained personnel must control and perfectly manage contaminated waste, waste water and the corpses of the deceased.

8.5. Procedures with Corpses General (NATO Military Agency for Standardization, 1999a, 1999b): 

Whenever possible, the burials of the deceased are carried out separately,



Burial procedure is in the domain of the armed and other security forces and not in the domain of civil burial societies.

Emergency burials are carried out in such a manner to guarantee (NATO Military Agency for Standardization, 1999a, 1999b): 

Appropriate synergies with hygiene requirements



Maximally prevent the access of animal predators and war profiteers,



Maximally enable consecutive exhumation and identification and





Maximum safety for the environment in case of Chemically, Biologically and Radiologically (CBRN) contaminated corpses.

Definition (AAP-6) (NSA, 2009b): 1.

Emergency burial that takes place at the area of the operations/movement restriction itself where circumstances do not permit/allow the evacuation, departure to the cemetery and burial.

2.

Group burial where unidentified remains of two or more bodies are buried in a common grave.

3.

Burial in excavated trenches, a method of burial - classification of corpses’ remains by laying them side by side and thus preventing the necessity of arrangements for individual burials.

Location of the burial. Graves and burial sites are located as close as possible to the location where death occurred. The place must be chosen so as to maintain a calm and dignity reference and at the same time allowing the consequent transfer of corpses and their subsequent identification. Graves should not be dispersed; a quick solution and protection of water resources or water catchment are required. Minimum depth of grave/burial sites must be at least 1 meter, corpse in the bag for human remains or covered and protected by any means that is available. Burials shall be carried out according to the nationality, which means that the graves/burial sites and burials are separated. If possible, at the burial a brief ceremony according to the deceased religious belief is carried out by preserving a high dignity (NATO Military Agency for Standardization, 1999a, 1999b). Marking graves. It is necessary to place the labels to define religious belief of the deceased and are high enough to be visible. Near the label, a bottle or other suitable packing should be placed, turned upside down, half buried containing a paper on which the following information is written (NATO Military Agency for Standardization, 1999a, 1999b): 

Name (last name, address before the name, first name or initials),



Rank or grade,




Sex,



Number of the identification plate/matricula,



The nationality of the deceased, possibly unit and place of birth,



The date and cause of death,



The name of the person who buried the corpse,



Religion of the deceased,



The nature of the contamination.

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In the case of collective graves or burials in the excavated trenches it is required that the bottle or other suitable packaging is placed on each of the ends of the burial site, the data are written on the bottom, the distance from the label defines the order of precedence of the deceased, which is identical to the one written on the bottom of the packaging. On the group graves the number of corpses with names or unidentified should be stated. If the burial site is contaminated or contains victims of a Chemical, Biological, Radiological and Nuclear (CBRN) event, the procedure is different (NATO Military Agency for Standardization, 1999a, 1999b). Death of civilians. Procedures with corpses of civilians are identical to procedures with the corpses of members of armed and other security forces. The community should take care for the burials in accordance with general instructions, the instructions and control can yet be assumed by the armed and other security forces (NATO Military Agency for Standardization, 1999a, 1999b). Unidentified causes of death. Burial, where the cause of death has not been identified, is implemented by standard procedure with the difference that in the name section is written “unknown”. Special attention shall be given to the inventory of all available information, which may facilitate or enable the subsequent identification of corpses. It is a precise physical description, description of the teeth; if possible, fingerprints should be taken. To the



description of the corpse details of uniforms or other clothing, equipment, vehicles, boats and the surrounding area, where the unidentified cause of death occurred are added. Each record must be photocopied or provided in duplicate (NATO Military Agency for Standardization, 1999a, 1999b). 8.6. Contaminated Corpses and their Remains from a Radiological, Chemical and Biological Event Death identification (NATO Military Agency for Standardization, 1999a, 1999b): 

For the procedure with corpses, where maximum risk subsists, the identification of death, time of death and detection or diagnosis of the agent’s nature (radiological, chemical, biological) is a necessity. All information is carefully recorded,



The death cause may be gamma radiation, alpha radiation, neutron radiation, stable and unstable chemical agents, toxins and microorganisms,



The risk at the manipulation with the corpses is represented by the residual contamination.

Types of risks: Radiological: The victim may have died outside of the radioactive areas. The risk is represented by the radioactive dust on the skin and the victim's clothes and reaerosolization of dust due to weather effects. Personnel responsible for the corpses of the deceased must wear protective equipment (gloves, apron, protective boots, respiratory protection/mask and clothing that can be easily washed or discarded), continuous detection and monitoring of radiation are performed. Reaerosolization of radioactive dust in the procedure with corpses and its subsequent inhalation pose the greatest risk. To reduce this risk, the corpses are placed in bags as soon as possible. After the burial, the personnel must carry out a decontamination of hands and equipment. Corpses and their clothes do not need to be decontaminated, because the possibility of contact with skin and clothing of the deceased, if these are put in bags as soon as possible and the personnel is properly protected, is small (NSA, 2007).


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Chemical: Liquid nerve agents and vesicants represent a special problem. Vesicants and some nerve agents may persist in the soil for months, even years. Again, the toxic environment, in which the personnel, carrying out procedures with the corpses of the deceased, are moving, poses a greatest risk. The CBRN protective equipment is fully and unconditionally required; the personnel must try to identify the type of agents as soon as possible. Decontamination of corpses is not a routine. The use of body bags for the deceased is immediate and urgent for the corpses or their remains not to become a source of emissions of toxic agents or contamination, which could be infiltrated into water catchments and contaminate wider environs. The bags also protect the personnel handling the corpses and later exhumation and the transport of corpses to more appropriate burial sites or graves. Contaminated corpses or their remains are the source of contamination and therefore, the bags must be watertight, well-sealed, durable, and the material must not permit the permeability of chemical agent. The bags shall be labeled “hazardous material”. The place where corpses are deposited and buried must immediately notify that there is contamination or the possibility of recontamination (NSA, 2007). Biological: Microorganisms, in particular spores (including viruses in winter time) have an amazing ability to persist and pose a risk for the origination of infection. If not ordered otherwise, respiratory protection, gloves and protective clothing are necessary. To reduce the risk of spore/agent transition in the air or spread of infection, the corpses or their remains are immediately protected by bags. The essential requirement to reduce the risk of infection spreading is a detailed record of all events, especially when and where the outbreak of infection occurred, the prevalence of infection, the duration of the introduced risk zones and their revoke, and most important: time of death. Right this last data is particularly significant and allows the personnel during the subsequent exhumation to eliminate those corpses who were not or are not contaminated. The burial alone also requires a detailed record of the type of contamination or decontamination. It is necessary to remove clothing to the mass victims or their corpses and wash them. Clothing is incinerated or buried separately, before that it is cut and placed in special sealed bags (NSA, 2007).



9. COMPLEXITY OF PLANNING AND FUNCTIONING WITHIN THE RESTRICTION OF MOVEMENT AREA Among the most demanding challenges for the decision-making body in planning the operation within the restriction of movement area are undoubtedly those that define requirements for active protection of members of the armed and other security forces or national-security system and medical and other personnel on whom the reduction of the spread of communicable diseases, the establishment of maximum possible control of the disease, timely assistance to the civilian population and their safety depend significantly. A flawless coordination is indispensable – a synergy for effective response and course of action. That the interdisciplinary and inter-spectrally is naturally necessary for the operation must not and cannot be overlooked. An outbreak of infectious diseases exceeds the traditional forms of defense and operation. In the planning period, the decisionmaking body must imagine at least the approximate dimensions, new ways and means that an outbreak of a contagious disease represents. The rough reality, without the phenomenon of its perception, will have an image of masses of infected, diseased and deceased, demanding logistics of transport in both directions, radical measures, negative side effects both at the real as well as at the emotional level of the individual and the population as a whole, the negative economic consequences, etc. Responsiveness is directly related to reality, its perception, and only systemic consideration is and will constitute the "Ariadne’s thread« from the labyrinth of a currently underestimated possibility of declaring a state of emergency and movement restriction. The effective planning before the pre-crisis period begins enables an application of the very- well applied, timely preventive, measures and consequently, limitation and reduction of the significantly negative – all-embracing impact of an infectious disease outbreak incident. The success of the operation in such emergency situations at all levels depends crucially on the operationalization of the prepared plan, and especially on the rapid flexibility and even faster response of talented individuals who are capable of systemic consideration and immediate adaptation to the unpredictable, which is human and expected. Being aware of the situation represents a key factor for the survival and success of armed and other security forces, medical and other personnel members and consequently,


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safety/survival of the civilian population. This is the ability of identifying, processing and understanding the essential information elements that reveal what's really happening in the area of interest/area of a communicable disease outbreak. It covers the absorption of critical data and provides the basis for further assessment of environmental performance and effective decision-making and immediate realization of decisions taken. Planning of operation in the restriction of movement area in the event of an infectious disease outbreak contains a special responsibility, which support situation awareness of: 

Medical Intelligence – MEDINT assessment (NSA, 2006)



Preparation of the accurate partial risk assessment for support of the overall risk assessment and



Support of timely warning and reporting potential or actual threat of a communicable disease outbreak incident and all-embracing risks arising from that fact.

Medical Intelligence - MEDINT provides expert analysis and Intelligence (Intelligence cycle products) on natural and offensively caused communicable diseases' outbreaks for a specific geographic area and thus determine the basis for further risk assessments. The international association of Intelligence and security services and their capabilities in this area are reasonably expected to deliver data that will be a constructive basis for the systemic, i.e. holistic consideration and systemic decision of the decision-making body. Active involvement and consideration of Medical Intelligence significantly increase situation awareness and reduce the real possibility of fatal oversights (NSA, 2006). Medical Intelligence (under the national Crown Intelligence and Security Agency) channels its attention to the focal point of CBRN hazards for specific areas. The CBRN hazards exist if the opponent has both: the ability and the intention of applying these abilities. An identical risk is represented by the natural outbreaks of diseases, the separation of naturally from an offensively caused disease outbreak requires highly trained experts at all levels (science, social science and



technical scientist discipline) or national support for the recognized /over-sighted experts (NSA, 2006). Each of the categories of CBRN hazards poses a unique threat and has specific characteristics that require consideration (NSA, 2006): 

Chemical agents: risk assessment and persistent and non-persistent chemical agents,



Biological agents: risks and danger of a natural outbreak or offensive use of biological agents, which may include a contact infection and uncontrolled spread, especially during the incubation period and the absence of forensic diagnosis of biological agent,



Radiological agents: risk and danger of combined radiation injuries due to radioactive dust/rain or nuclear explosions, and



The possibility of an accident or offensive discharges of Toxic Industrial Materials - TIM - radiological, chemical or biological, which demand identical and timely perception by the Medical Intelligence, risk assessment and prompt response of the decisionmaking body.

10. NECESSARY SKILLS OF NATIONAL-SECURITY ACTIVITY EXECUTANTS: BASIC SKILLS OF EACH MEMBER Each individual must be pre-qualified to a level, which ensures his own survival of the emergency event and safe operation in a hazardous or contaminated environment. One should also be trained to carry out activities to ensure as an individual the functioning of the national-security system at a one’s own level. Individuals, who are active members of the national-security structures, acquire knowledge and skills in the process of fulfilling the conditions and requirements for the pursuit of professions or duties, and within provided regular refreshers and advanced training. For other residents who, due to special skills or providing of the necessary larger number, additionally join the national-security structures’ personnel, the training, which provides them the necessary knowledge and skills,


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must also be carried out. The providing of an adapted, quick, but not superficial qualification and training process should, therefore, be an integral part of the measures also in the pre-crisis and crisis period (NSA, 2002a). Summary of the basic skills structure (NSA, 2002a): 

Perception and recognition of the signs of a hazardous event and implementation of appropriate protection procedures,



Intervention or identification of alarms, which warn of a hazardous event,



Recognition of all the agreed denotations for the designation of contaminated or hazardous areas,



Correct installation and verification of protective equipment installation within the prescribed times and in the prescribed manner. Necessary time and manners depend on the type of available equipment and may be different,



Execution of immediate personal decontamination procedures,



Execution of procedures for proper and required removal of contaminated protective equipment,



Recognition of the contamination or infection signs and the implementation of first aid or other emergency measures (self-aid and aid of others),



Maintenance of health and personal hygiene for protection against the spread of disease,



The urgency for awareness of responsible behavior or proceeding within the personal critical times. On detection of damage or failure of protective equipment, leading to the irruption of contaminants in the personal protected area and contact with the contaminant, the individual must implement the procedures to limit the irruption. He



must responsibly inform the superior and others present of the event and implement procedures to prevent the spread of contaminants or disease, pending the completion of the task, 

Undoubted interpretation and implementation of instructions and powers in the event of the affected individuals or crowds threatening the member’s personal and functional integrity and the integrity of his personal protection zone,



Maintaining a high level of usability of personal and other assigned protective equipment,



Crossing or making tour of inspection of the denoted contaminated area or operating within it at a minimum possible risk,



Demonstration of the qualification to carry out one’s duties and the use of equipment at the contaminated or hazardous areas,



Familiarization with the procedures at the decontamination points



Familiarization with the procedures in exclusive zones or systems with a protected atmosphere.

11. SPECIALIZED KNOWLEDGE FOR THE PERFORMING OF THE DUTIES AT THE INTERVENTION LEVEL Each individual must be pre-qualified to a level, which ensures his own survival and the possibility to operate in a contaminated or hazardous environment. At the intervention level unifying of individuals from various professional fields and different structures (e.g. civil defense, fire brigade, police, army, scientific and research institutions, medical service, veterinary service, etc.) into functional intervention groups takes place. In the process of forming and planning the organization of crisis operations, it is important to verify the compatibility and interoperability of equipment, personnel and activities of the various structures and modify the everyday equipment and procedures, for them to also be useful in a crisis environment or identify problems that can be expected in this area (NSA, 2002a).


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Therefore, the set of specialized skills determines the kinds of crises and tasks of members composing the intervention group and the purpose of an individual group. A fleeting overview of the potential sorts of specialized skills of individuals who are acting in groups to (NSA, 2002a): 

The security control at the external boundaries of the area - blockade. Operators must have clear, unequivocal instructions and powers for the implementation of the blockade. They must know the risks posed by contaminant. They must follow the changer of the restriction of movement area’s boundaries in relation to the development of the contamination,



Control at authorized entry/exit points. Operators must have clear, unequivocal instructions on who and how can enter or leave the restriction of movement area,



The security control in the restriction of movement area at the dangerous or contaminated area. Operators must have clear, unequivocal instructions and powers to exercise control, which provide the proclaimed law and order and the functioning established infrastructure,



Reconnaissance and inspection. Operators are required to master the procedures for the use of equipment to detect and identify contaminants, measure and determine their amount, monitor the contamination development and mark the boundaries of contamination or danger zones,



Sampling. The structure and equipment of groups depend on the desired level of sampling; whether an operative or forensic sampling shall be carried out. The preparation of the transport packaging sample for transportation must be defined accurately. The assembly of the group for the so-called bio-medical sampling requires special attention,



Technical rescue and fire-fighting,





Medical rescue,



Medical control,



Veterinary control,



Sanitary control,



Decontamination, disinfection. Full decontamination procedures are carried out at the restriction of movement area’s exit points and at the entries to the exclusive zones or protected atmosphere systems. Appropriate decontamination procedures are carried out on buildings and land with an intention to reduce the contamination rate, eliminate potential focal points, further contamination or reaerosolization of the contaminant. The implementation of decontamination procedures contributes to the progressive and final sanitation of the area,



Material supply and transport. Prior to the transport of all kinds of supply items into the restriction of movement area, they must be protected so as to prevent their contamination prior to the application or ingestion upon the entry into the restriction of movement area,



Waste, sewage and corpses management,



Communications and Information Technology. Special attention must be paid to the protection of the enhanced data transmission,



Technical maintenance,



Specific tasks. Psychological support, Intelligence-Security and expert assurance and other, which proves to be necessary.

In addition to personal special skills the leader of intervention groups must have supplementary skills, directions and information (NSA, 2002a): 

On efficient use of material resources or equipment and the efficient organization of work of group members for safe, fast and accurate task realization,


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

On the impact of identified hazards to the task realization and the survival of the group,



On the spread of hazards in the wind direction and on the effects of weather events,



On monitoring of exposure, exposure rules and recording this information for group members,



On the contamination control.

Leader of the intervention groups must also (NSA, 2002a): 

Understand the functions and roles of group members, coming from other structures or areas of expertise,



Fully understand the task and know the limits of operation area,



Have clear directions within the governance and decision-making hierarchical structure,



Have clear instructions for communication and transmission of data and information, and their protection,



Have clear instructions and authority to take decisions on the implementation of measures requiring an immediate response. Particularly in the case when there is no available time for consultation or the establishment of communication with the superior hierarchical structure of governance and decision-making is impossible,



Have clear instructions and authority to take decisions in cases when within the intervention, we encounter points of collision between: 

The level of personnel’ exposure to the risk and the importance of the task realization,







The importance of the task realization and ethical/moral, ethnic, religious or legal diversities,



The assessing of decision correctness/incorrectness and the responsibility for the decision on unconditional implementation of the urgent tasks,

Be familiar with the broader task, tasks and positions of neighboring groups and other groups operating in his responsibility area in carrying out tasks.

12. KNOWLEDGE FOR THE OPERATION OF MANAGEMENT AUTHORITIES AT THE OPERATIVE LEVEL At the operative level managing bodies and individuals from various professional fields and different structures (e.g. civil defense, fire brigade, police, army, scientific and research institutions, medical service, veterinary service, etc.) are joining into a functional operational managing body or operation headquarters, whose mission is to conduct the implementation of the crisis action based on the highest decision-making body’s idea and to send clear feedback to it. It communicates clearly and unequivocally the decisions and directions of the highest decision-making body to the intervention groups, established for the implementation of the highest decision-making body’s decisions. Given the great diversity of structures and areas of expertise that make up the intervention level or groups, the operative managing body must build or develop a task realization considering all the diversities and interdependence to achieve the necessary synergies (NSA, 2002a). Managing bodies at the operational level and their consisting members must have the organization and knowledge for (NSA, 2002a): 

Absolute implementation of decision-making body’s tasks by fragmentation to realizable tasks of intervention groups, the collection of their results, implementation of results merging into an integral scientific expert deduction, which is transformed into an undoubtedly understandable advice for the highest decision-making body,


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

Appropriate communication of decision-making body’s explicit directions, instructions and powers to the intervention groups for implementation of the integral restriction of movement area institute,



Formation of necessary intervention groups of individuals coming from different structures or areas of expertise and the establishment of unequivocal directions for leaders of such groups,



Absolute control over all tasks, positions and boundaries of areas and issuing of unequivocal direction to the leaders of intervention groups for the realization of tasks and the definition of limits of their operational area,



Having established a clear organizational scheme of the hierarchical structure of governance and decision-making and distinctly communicate it to the leaders of the intervention groups,



Having established a functional hierarchical communicationinformation network and clearly determine the rules of communication and transmission of data and information to the leaders of the intervention groups,



Protection of the communication-information network,



Distribution of powers and the formation of directions for the intervention groups leaders’ decision-making on the implementation of measures that require their immediate individual response,



Making clear directions and the issuing of decision-making powers to the leaders of the intervention groups in case when within intervention points of collision between task realization and other interests are being encountered,



Managing of the available capacity for decontamination and for the establishment of the exclusive zones,



Regime management on the entry and exit points of the restriction of movement area,





Standardization of practices with all types of waste within the restriction of movement area and waste coming from the restriction of movement area,



Managing of different types of evacuations,



Managing of emergency burials and handling of corpses,



Evaluation of subordinate levels capability to survive and continuation of operations in a hazardous environment by monitoring the contamination exposure of personnel, recording this data and transmitting the rules of exposure,



Providing the functioning of various constituted analytical centers for data processing and formation of expert deductions,



Advising the planning of logistics organization in the vicinity of the restriction of movement area, according to the anticipated development and spread of contamination or the danger zone,



Planning, managing and control of training,



Planning and control of exercises in terms of providing qualification for crisis operation, control of the material-technical resource maintenance, etc.,



Immediate adaptation of the operational organization of the operative level to the necessary changes of directions, which were issued by the highest decision-making body based on the operative level’s analysis of the deductions.

13. KNOWLEDGE FOR THE OPERATION OF THE DECISIONMAKING BODY AT THE STRATEGIC LEVEL At the strategic level, the coordination of highest state representatives and social structures that shape directions for crisis resolution management occurs. In the process of determining the extent of the orientation for real crisis resolution


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system is reasonable to take into account the Law of requisite holism. All the elements that fall out of the so-formed extent shall not be discarded, but it is reasonable to register them, and thereby maintain them in constant awareness of their possible occurrence within the whole process of crisis resolution management. In the process of strategic planning and implementation of the plan it is necessary to anticipate and respond adequately to the disruptive or welcoming effects of the arisen positive and negative feedback loops and determine their point of impact, and respond with appropriate transformation of the output value of these points. It gives the operative level clear and unequivocal directions for the achieving of desired effects and obtaining answers or information needed in the decision-making process (NSA, 2002a).

Figure 4: Systemic crisis management (Ivanuša et al., 2009: 27).

Knowledge of the strategic level decision-making bodies (NSA, 2002a): 

Ensuring the conditions for task realization (ensuring conditions for appropriate equipping and training, providing of regular and extraordinary legal norms, providing expert support, forming of clear and realistic directions, etc.) for the operative level,





Ensuring the implementation of the crisis resolution process, even when communication with the operative level are disconnected,



Awareness of the urgency for action pursuant to the principles of the highest national legal acts,



Decision on the onset moment of the emergency situation and the beginning of the resolution process,



Whether part of the national population is at risk, whether the entire national population is at risk, whether a national population is endangered within the endangered international population, whether the neighboring national population is at risk,



When to make the decision on the movement restriction, in what extent and how to implement it,



What broader social consequences are expected and to what extent, and how they are expressed in the broader international environment or how optimally manage the resolution of the crisis,



At what point a collision of different interests is expected and a decision on the powers for their exceeding. The perception of the necessity and justification of changes or complementation of the highest legislative solutions for the new emerging circumstances and determination of the duration of such changes,



Know the available countermeasures and their impact on the implementation of operations, especially when in contact with the ethical/moral, ethnic, religious and legal norms,



Develop, understand and implement the philosophy or the system of theoretical principles of responsible risk-taking within the crisis resolution process,



Provision of logistical solutions at the national and supranational level,

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

Planning of approved corridors for a deliberate spread of contamination in cases of emergency events,



Anticipate possible forms of evacuations,



The ability of current response to new situations and direction making,



Information management,



Following the latest global concepts and methods.

14. EXCLUSIVE ZONE OR PROTECTED ATMOSPHERE

RESIDENCE

SYSTEM

WITH

A

Exclusive zone or residence system with a protected atmosphere, also known as a CBRN system of collective protection (COLPRO) is intended to provide full protection of personnel against contact with Chemical, Biological, Radiological and Nuclear agents during a longer emergency residence in the CBRN contaminated environment, without wearing personal protective equipment. It provides an adequate working environment for the needs of the Staff or operative center, hospital or medical capacity and for emergency technical repairs or workshops. It is also used to provide rest and recovery, where the personnel rest, regenerate (cool down) and meet the physiological needs and maintain personal hygiene. The capabilities of collective security, functioning in the restriction of movement area, are used as a countermeasure to physical and psychological exhaustion of the personnel caused by prolonged use of individual protection means. Systems can be stationary or mobile, different classes of protection, etc. (NSA, 2009a). CONTAMINATION CONTROL AREA (red-colored zone) is located in front of the entrance to the toxic free area. The organization and equipping of the area provides a safe entry into the toxic free area and a preparation for a safe exit to the contaminated area. TOXIC FREE AREA (blue-colored zone) is the area that is air-tight/water-tight for hazardous agents, furnished with a controlled atmosphere, and designed to allow the personnel realization of tasks and residence without wearing personal protective equipment.



Figure 5: Example of the mobile modular system (Ivanuša et al., 2009: 28).

VENTILATION CONTRIVANCES are the systems for the provision of facilities with clean air to maintain the positive pressure and leveling of temperature and humidity. They are an essential element, without which it is impossible to establish an exclusive zone. The ventilation system must have the following elements: the unit for CBRN air-filtration and removal of dust particles, control units for measuring air quality and pressure in the interior, units for oxygen regeneration in the inlet air and units for re-circulated air filtration. All components of the exclusive zone system must be constructed and interconnected in a manner that prevents penetration of contaminants or agents to the premise interior and ensures the maintenance of constant positive pressure. Materials must be non-combustible or self-extinguishing; they must prevent the development of micro-organisms or mold, resistant to possible mechanical damage and to action of decontamination means. CONCLUSION A pandemic is one of the potential crisis situations of serious importance which can be hardly solved with one-sided and innovation-hating behavior. It is sufficiently complex and non-routine occurrence that it does not allow a successful consideration with routine approaches, which may have been successful in any other case. So we need to prepare for it in time, lest we would act in panic, confusion and one-sidedly instead of by requisite holism (integrity).


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The legal regulations attend for this indicatively, yet practically the people, who assume enough responsibility, obtain enough information and are sufficiently professionally trained, do. The usual training of people to be specialists is necessary, but not enough for them to cope with risk and threat evaluation and mitigation in order to avoid subsequent danger and use of force and to find humankind’s way out from the troubles resulting from natural disasters. It is useful to gather all available experiences from previous cases, based on them to make indicative, but only indicative reminders, and to complement them with insights in the new individual, group-specific, and perhaps also general, parts of the considered pandemic characteristics. Thus gradually useful enough reminders that are both sufficiently reliable (in the general part) and sufficiently flexible (in the particular and even more in the individual part) would arise. How useful will such reminders be depends on the situation and even more on subjective basic premises of the authors and users of reminders. Hereto, this article shall also help. ACKNOWLEDGEMENTS Declared none. CONFLICT OF INTEREST The authors confirm that this chapter contents have no conflict of interest. REFERENCES Bertalanffy, von L. (1968). General System Theory. New York: Braziller. Mulej, M., Espejo, R., Jackson, M. C., Kajzer, Š., Mingers, J., Mlakar, P., Mulej, N., Potočan, V., Rebernik, M., Rosicky, A., Schiemenz, B., Umpleby, S. A., Uršič, D. & Vallee, R. (2000). Dialektična in druge mehkosistemske teorije: (podlage za celovitost in uspeh managementa). Maribor: UM, Ekonomsko-poslovna fakulteta. Mulej, M., Fatur, P., Knez-Riedl, J., Kokol, A., Mulej, N., Potočan, V., Prosenak, D., Škafar, B., Ženko, Z. & Likar, B. (2008). Invencijsko-inovacijski management z uporabo dialektične teorije sistemov: podlaga za uresničitev ciljev Evropske unije glede inoviranja. Ljubljana: Korona plus. Ivanuša, T., Mulej, M., Pečan, S., Tičar, B., Podbregar, I. (2009). Pandemija: upravljanje in obvladovanje omejitve gibanja. Ljubljana: Zavod za varnostne strategije pri Univerzi Maribor. NATO Standardization Agency. (2002a). STANAG 2150 NBC (Edition 7) – NATO Standards of Proficiency for NBC Defense. Brussels: NSA.



NATO Standardization Agency. (2002b). STANAG 2228 (AJP-4.10) Allied Joint Medical Support Doctrine, for CBRN Intelligence Product Guidance. Brussels: NSA. NATO Standardization Agency. (2005). NATO Handbook on the medical aspects of NBC defensive operations (Biological): AMedP-6(C) Vol. II. Original. Brussels: NSA. NATO Standardization Agency. (2007). Concept of operations of medical support in chemical, biological, radiological and nuclear environments: AMedP-7(D). Original. Brussels: NSA. NATO Standardization Agency. (2009a). Collective Protection in a Chemical, Biological, Radiological and Nuclear Environment (CBRN – COLPRO): ATP-70. Brussels: NSA. NATO Standardization Agency. (n. d.). CBRN defense on operations: AJP-3.8.1 Vol. I. Ratification draft 1. Brussels: NSA. Brussels: NSA. NATO Military Agency for Standardization. (1999a). EMERGENCY BURIAL FOR NUCLEAR, BIOLOGICAL AND CHEMICAL (NBC) CONTAMINATED REMAINS. (Annex B to STANAG 2070 /Edition 4). Brussels: NSA NATO Military Agency for Standardization. (1999b). STANAG 2070 EMERGENCY WAR BURIAL PROCEDURES. Brussels: NSA. NATO Standardization Agency. (2009b). NATO Glossary of Terms and Definitions (English and French) – AAP-6. Brussels: NSA. NATO Standardization Agency. (2006). Allied Joint Doctrine for Medical Intelligence – AJP 4.10.3. Brussels: NSA. Potočan, V. & Mulej, M. (2007). Systemic understanding of trust and ethics of interdependence in innovative business. ISA 2006 Congress "The quality of social existence in a globalizing world" [Electronic]/XVI World Congress of Sociology, International Convention Centre Durban, South Africa, 23-29 July 2006 (9 pp.). Bethesda: CSA.


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CHAPTER 6 Innovation of Managerial Attributes to Incorporate a More Systemic World-View1 Matjaž Mulej1,*, Tatiana A. Medvedeva2,*, Vojko Potočan*, Zdenka Ženko*, Simona Šarotar Žižek*, Anita Hrast* and Tjaša Štrukelj* 1

University of Maribor, Faculty of Economics and Business (EPF), and IRDO Institute for Development of Social Responsibility; Maribor, Slovenia and 2 Department of World Economy and Law, Siberian State University of Transport; Novosibirsk, Russia Editorial Note: This chapter elaborates, in terms of ISO 26000, implementation of interdependence and the holistic approach, as necessary managerial attributes, especially in labor relations. Abstract: To get to the root of socio-economic problems, the responsible leadership must be positively influenced. Innovation of managerial attributes is usually necessary, requiring a shift to a more systemic world-view. Our empirical research describes the situation. Education of future managers by new methods is discussed. This chapter elaborates the related short subchapter in Mulej et al.’s introductory chapter.

Keywords: Attributes, behavior, culture, dialectical systems theory, education, ethics, innovation, innovativeness, managers, norms, requisite holism, selfrealization, Slovenia, social responsibility, Russia, systemic thinking, systems theory, training, values, well-being. *Corresponding authors Matjaž Mulej: University of Maribor, Faculty of Economics and Business (EPF), and IRDO Institute for Development of Social Responsibility; Maribor, Slovenia; Tel: ++ 386 2 22 90 262; Fax: ++ 386 2 25 10 461; E-mail: [email protected] Tatiana A. Medvedeva: Department of World Economy and Law, Siberian State University of Transport; Novosibirsk, Russia; E-mail: [email protected] Vojko Potočan: E-mail: [email protected] Zdenka Ženko: E-mail: [email protected] Simona Šarotar Žižek: E-mail: [email protected] Anita Hrast: E-mail: [email protected], Tjaša Štrukelj: E-mail: [email protected] 1 This contribution is partly based on research project supported by the Public Agency for Research, Republic of Slovenia; contract number: 1000 – 09 – 212173. Matjaž Mulej and Robert G. Dyck (Eds) All rights reserved-© 2015 Bentham Science Publishers


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1. THE SELECTED PROBLEM AND VIEWPOINT Problems cannot be solved with mentality that has caused them, including the global socio-economic crisis of the current years. Political and economic measures depend on humans’ approach and action, hence on influential persons’ attributes. The latter are addressed here based on Slovenian and Russian research and Russian educational application for managers. 2. CRISES RESULT FROM ONE-SIDEDNESS OF INFLUENTIAL PERSONS The decisive persons’ attributes make organizations succeed or fail (Wilby, ed., 2010). The global 2008- crisis, e.g., results from the managers', governors', governments', and other professionals' oversights and require crucial innovations, but the invention-innovation-diffusion processes (IIDP), which crucially impact the contemporary life depend on systemic behavior by interdisciplinary creative cooperation. See Table 1. Table 1: Systemic thinking about IIDP as defined by EU (2000, 6) ‘The Action Plan [First Action Plan for Innovation in Europe, 1996, based on Green Paper on Innovation, 1995] was firmly based on the ‘systemic’ view, in which innovation is seen as arising from complex interactions between many individuals, organizations and environmental factors, rather than as a linear trajectory from new knowledge to new product. Support for this view has deepened in recent years.’

3. THE SELECTED SYSTEMS THEORY Table 1 says that not all versions of systemic thinking in François’s Encyclopedia (2004) equally apply to IIDP. The ones aimed at precise description and elaboration of a selected problem from one selected viewpoint, serve better in other cases. In IIDP the Bertalanffy’s approach (1979: VII ff) works, in principle: it attacks overspecialization. Bertalanffy requires interdisciplinary creative cooperation for holism as the unavoidable worldview for humankind’s survival, but he does not support it enough in methods. The Mulej’s (1974, and later) Dialectical Systems Theory (DST) and its ‘requisite holism’ (Mulej, Kajzer, 1998; Mulej, 2007) enable consideration of all, and only, essential viewpoints/professions in synergy to lead to requisite holism of approach and requisite wholeness of outcomes.

Innovation of Managerial Attributes to Incorporate Social Responsibility - Range of Perspectives Per Topics and Countries 165

Pioneers of Cybernetics and Macy discussants practiced interdisciplinary cooperation, too (Hammond, 2003). ISO 26000 supports interdisciplinary co-operation by its linking concepts of interdependence and holistic approach (ISO, 2010). 4. ATTRIBUTES TO BE LEARNED/BECOME VALUES/CULTURE/ ETHICS/NORMS FOR SUCCESS Rather than in systemic behavior, the influential persons of the current times are normally educated as narrow specialists, who rarely want/know to carefully listen to those who disagree with them and find them complementary. Without attaining this capacity one hardly can practice creative interdisciplinary cooperation to resolve problems. The usual specialists’ one-sidedness was/is backed by the neoliberal unrealistic supposition that market can solve all problems, although it is actually imperfect, monopolized and therefore biased. Government cannot do much more, once it is one-sided per political parties. Hence, one-sidedness is normal and causes crises. Application of DST’s requisite holism offers an alternative to one-sidedness (See Mulej et al., 2013). For many managers, governors, government members and officials, as well as other professionals, DST enables innovation of their values/culture/ethics/norms (VCEN) replacing their one-sided VCEN (Potočan, Mulej, 2007). Despite their un-realistic hope that an ‘invisible hand’ might solve problems instead of them, humans influence the invisible hand. Therefore they must innovate, i.e. renew beneficially, them-selves to be able to solve their problems. Humans in influential positions should innovate, i.e. beneficially renew, their management/influence style (Mulej, 2007a, b) to lead humans to success. Seven interdependent sets of attributes – below – have proven more efficient in practice than bosses’ issuing orders without listening and making synergetic syntheses, the research backing this chapter by Strukelj in Vol. 3. 5. SEVEN INTERDEPENDENT SYSTEMS OF INTERDEPENDENT ATTRIBUTES OF DECISIVE HUMANS The briefly summarized attributes happen to result from our field and desk research as seven times seven.


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A. The seven S-s are several decades old and still poorly applied; they may not be practiced alone. They tackle governance’s and management’s mastering of the organizational strategy (which realizes enterprise policy: mission, purpose, and basic goals, and results from vision, including phases of learning, preparation, search for strategic possibilities, and economic etc. evaluation and selection of strategies) by structure (depending on, and adapted to, processes, hopefully), and ’systems’ (i.e. helpful tools), as the three hard variables, with support from four soft variables: shared values, skills, staff (i.e. coworkers as multi-dimensional humans), and style of management in line with the situation and co-workers' attributes. The 2008- crisis exposes the soft variables again as the priority impact. B. Decades of experience have shown the one-sidedness of the rationalistic claim that only hard variables matter. They are just easier to measure/estimate. Now less and less humans work as uncreative attachments to machines such as assembly lines without their own impact; attention must move to the soft variables as success factors – knowledge and VCEN (Mulej 1990; Mulej, Kajzer 1991; Bygrave 1994, 23; 2010; Moore, 2010). We summarize them as 7 F (in B.All 1-7) of all and + 7 F (in B.MG 1-7) of managers/governors: B.All.1.: Focused (= on our know-how); B.All.2.: Fast (= speed in implementation of innovations as useful routines); B.All.3.: Flexible (= creative adaptability to new conditions); B.All.4.: Friendly (= good relationships with partners, including all coworkers and other stakeholders); B.All.5.: Fit (= physical and psychical capability of standing the efforts of the current rapidly and radically changing conditions of life and especially work-life);


B.All.6.: Free (= freedom from pressure from work, bosses, and customers without chances to use one's creativity); B.All.7.: Fun (= based on created results and requisitely pleasant and challenging way toward them). The second set of F-initials addresses owners, entrepreneurs and managers. B.MG.1.: Founders (= establishment of advantageous circumstances; every start-up and other enterprise needs first-rate leaders/businesspersons, motivating their co-workers and oriented toward innovation); B.MG.2.: Forever innovating (tireless innovators); B.MG.3.: Flat (= entrepreneurial organizations have the least possible number of managerial levels – to make reconciliation and creative cooperation as easy as possible); B.MG.4.: Frugal (= low administration costs and high productivity); B.MG.5.: Faculty of changes (= open mind and capacity to change one’s interests and adapt one’s VCEN and knowledge for innovation); B.MG.6.: Fostering of awareness of individuals how important is requisite holism and social (and other) responsibility and well-being (based on creativity and innovation); B.MG.7.: Fully professional and requisitely holistic relations with all co-workers and other stakeholders (supportive of synergy of expertise of all). C. The above two B-sets of 7 F-attributes of everybody and entrepreneurs/leaders/managers and their policy, strategy, tactic and operation are easier to realize, if owners and managers are innovative and have the following constructive seven L attributes (named for


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[Linden, 1990] in [Mulej et al., 2006]), which can be learned and support IIDP even without the market pressure: C.1.: Strategic vision-oriented long-term developmental thinking and action rather than short-term and narrow-minded ones, e.g. like statesmen versus politicians, or managers of visionary companies (Collins, Porras, 1997; Collins, 2001; Collins 2005); C.2.: Persistence about goals and making room for coworkers to find their ways to realize their share of goals and tasks (e.g. like the famous cartoon frog climbing the Eiffel tower all way to the top despite all discouragement from onlookers, because the frog did not hear); C.3.: Creating of the feeling of one-self and others that we need requisitely holistic innovation instead of routine-loving and complacent behavior, to survive (e.g. like the current crisis makes people perceive); C.4.: Starting with concrete steps – instead of 'paralysis by analysis' – one should take action and analyze in parallel, based on a framework plan of learning, routine and innovative working, including all types of innovation (e.g. an obsolete invention does not become innovation); C.5.: Use of structural change (for organizational structures to provide room for creative, innovative and constructive work, lateral and parallel thinking, cooperation and innovation based on requisite holism/wholeness to achieve strategies, policy, and vision of enterprise); C.6.: Consideration and mastering of risk, rather than avoiding it (the latter is very risky in an innovative society requiring efficiency and sufficiency covered, for clear economic reasons, by social and other responsibility of organizations/individuals allowing for no abuse of coworkers, business and other partners, broader society, and natural


preconditions for humankind's survival, hence based on requisite holism/wholeness); C.7.: Use of political skills (for persuasion, acquiring of partners and coworkers in IIDP, perception and blocking of enemies of IIDP/innovation and requisite holism/wholeness in time, etc.). D. Attributes of humans’ personal VCEN should include also personal and personality’s development of influential individuals toward the personal: (D.1) requisite holism, (D.2) innovativeness, (D.3) social responsibility, (D.4) well-being, (D.5) emotional stability, (D.6) self-realization, and (D.7) application of them in action. 6. COMMENTS 6.1. Personal Requisite Holism On the basis of the research project mentioned in footnote to the chapter’s title, we define the requisite holism of a human as an individual existing and conscious of self as: (1) Physical person respectively, implementing active techniques to gain physical balance; (2) Mental entity, enriching sentiment, perception, mind and will-power by life balancing techniques; (3) Social entity, building quality communication with others by the techniques of professional and working development and social integrity; (4) Spiritual entity, longing after selfactualization and the sense of life, carrying it into effect by the techniques of spiritual development; and (5) Economic entity, striving to satisfy her material


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needs as a person, family member, co-worker and as a member of a wider society. All of them exist in synergy. Techniques for the requisite holism of employees as individuals existing and conscious of them-selves include: -

Healthy food, Ayurveda, massage, aromatherapy, relaxation, breathing techniques, physical activity, observance of biological rhythm, additional medical treatments etc. supporting humans as natural, physical and biological person respectively, implementing active techniques to gain physical balance;

-

Life balancing techniques: emotional intelligence, focusing on the present moment, positive thinking etc for mental wholeness, enriching sentiment, perception, mind and will-power;

-

Techniques of professional and working development and social integrity: education, training, gaining working experience within professional career, etc. support humans’ social entity, building quality communication with others, etc.;

-

Techniques of spiritual development: spiritual intelligence, meditation, mantras, yoga, logo-therapy, practical Buddhist principles for building balance, etc. for humans as spiritual entities, longing after self-actualization and the sense of life, carrying it into effect;

-

Partnership, parent-ship, employment, membership in associations and political parties, etc for humans as economic entities, striving to satisfy their material needs as a person, family member, as a coworker and as a member of a wider society.

6.2. Innovativeness Innovativeness results from synergy of knowledge, creativity, persistence, capacity of creative cooperation, especially the interdisciplinary one, etc., as human attributes of individuals and teams and organizations. Permanent refreshment of capabilities supports this attribute.


6.3. Social Responsibility Social responsibility is a contemporary version of informal systemic behavior aimed at requisite holism of behavior of influential persons and their organization. It requires their honest behavior, care, and end of abuse of their ownership rights in treatment of employees, business partners, broader society, and natural preconditions of humankind’s survival. It extends to governors, managers, and governments the managerial principle called ‘process owners’ that entitles subordinates to run parts of organizations with responsibility including their right of (efficient and effective!) use without their right of abuse. 6.4. Well-Being Well-being of humans as persons, society, and employees may result from such innovation much more easily than without it. This is important because people with well-being feel and work better, thus contributing to the requisite holism and success. Two broad psychological traditions have historically been employed to explore well-being; hedonic and eudaimonic tradition (Springer and Hauser 2006: 1083). In hedonic tradition psychologists have concentrated on the assessment of “subjective well-being”, which consists of three elements: (i) life satisfaction; (ii) the presence of positive mood; and (iii) the absence of negative mood. All this together is summarized as happiness (Ryan and Deci 2001: 144). 6.5. Self-Realization Optimal psychological functioning requires that one achieves the above characteristics, but also that one continues to develop one's potential, to grow and expand as a person. The need to actualize one-self and realize one's potentialities is central to the clinical perspectives on personal growth. Openness to experience, for example, is a key characteristic of the fully functioning person. Such an individual is continually developing and becoming, rather than achieving a fixed state wherein all problems are solved. Life span theories also give explicit emphasis to continued growth and the confronting of new challenges or tasks in different periods of life. Thus, continued personal growth and self-realization is a prominent theme in the aforementioned theories. It may also be the dimension of well-being that comes closest to Aristotle's notion of eudaimonia (Ryff 1989: 1071).

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6.6. Emotional Stability Emotional intelligence is a core variable for humans performance. Proponents of emotional intelligence concept argue that emotional intelligence affects one’s physical and mental health (Goleman 1995). Emotional intelligence is connected also to spiritual and social intelligence. Also job satisfaction is significantly correlated with it. 6.7. Application of Them in Action Human attributes become useful, once they are used. Managerial attributes in point B need support from all essential coworkers’ attributes and actions. Methods of creative cooperation can be used and need to be used (mentioned in F). (For details see Šarotar-Žižek, Treven, Mulej, 2009). E. The principles of stakeholder interests, enterprise developmental, economic, and socially (SIEDES) responsible (enterprise) policy (see: Bleicher 1995: 100-120; 2004) are aimed to reach business excellence and hence to find their way out from the crisis, responsible enterprise policy should stress regular innovating; its bases include: E.1. Arising from innovations of VCEN (expressed as persons’ interests), the enterprise’s general definitions of its policy depend on interests of its important stake-holders; E.2. All stakeholders should once again rethink their long-term interests (benefits); and: E.3. Their stakeholders’ interests’ consequences; and E.4. Their stakeholders’ willingness/ability to innovate their VCEN toward their responsible, requisitely holistic behavior concerning all other humans (families, co-workers, other citizens and planet Earth residents) with predominating of long-term interests concerning all of them; E.5. Enterprise’s developmental orientation opportunities of its environment’s development);

(e.g.

using

the


E.6. Enterprise’s economic orientation (including striving for economic responsibility toward all inhabitants of the world); and E.7. Enterprise’s social orientation should also be innovated all the time (toward ecological and other socially responsible goals). F. Application of methods of cooperation, e.g. USOMID (creative collaboration of many in IIDP activities) in combination with the 6 Thinking Hats method, as a way toward requisite holism/wholeness with no serious trouble in the team work, incl. unmanageable disagreement and fight by arguing on a one-sided basis rather than settlement (Mulej and Mulej, 2006). This dialectical system of attributes is best used with one more attribute that is easier to have by nature than to learn, but it can be strengthened, at least, by learning and experience: confidence in ones’ agreed-upon objective, persistence and will to realize it with neither giving in nor stubborn sticking to wrong ones. Thus, these seven interdependent systems of interdependent attributes can become a dialectical system, leading to personal and organizational requisite holism and resulting wholeness of outcomes. For know-how to realize these principles see e.g. (Mulej et al., 2013; Mulej and Ženko, 2004; Mulej et al., 2006; Mulej et al., 2000; Mulej, 2007b; Likar et al., 2006; Bulc, 2006; etc.). An educational case will illustrate it later in this chapter. Troubles are unavoidable, if VCEN are not innovated, which they can be (Collins and Porras, 1997; Collins, 2001; Florida, 2005; Mulej et al., 2009; Potočan, Mulej, 2007; etc.). For all these and related suggestions to become humans’ reality too, the principles of VCEN and strategy should include social responsibility (SR) and ethics of interdependence (Mulej et al., 2006) and creativity of any related content. They should become the central attributes of human life and be supported with a shortened working time etc. and related lower prices – to become a new general practice. This should help the requisitely holistic innovative society to replace the current fictitious one (details in: Mulej et al., 2008; Mulej et al., 2013). It is fictitious because it has been focusing on the


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technological IIDP and innovation only, although they depend on the nontechnological ones (presented elsewhere in this book). Our model for governmental support to implementation of this model was also published (Mulej, 2007b): government should not direct the economic and other public life with redistribution of money through taxes and subsidies only; the entire public sector – being as a whole the biggest buyer – may and must buy only from suppliers proving to be best of all bidders in criteria of requisitely holistic innovation, business excellence, and social responsibility, including the above dialectical system of personal attributes of all crucial persons in all organizations, be them enterprises, civil services or governmental officials and politicians. 7. SOCIAL RESPONSIBILITY (SR) AND WELL-BEING AS WAYS OF, AND TO, REQUISITELY HOLISTIC BEHAVIOR SR is a contemporary version of informal systemic behavior aimed at requisite holism of behavior of influential persons and their organization (Esposito, 2009; EU 2001; Hrast et al., editors, 2006, 2007, 2008, 2009; 2010; 2011; ISO, 2010; etc.). It requires their honest behavior, care, and end of abuse of their ownership rights in treatment of employees, business partners, broader society/community, and natural preconditions of humankind’s survival. It extends to governors, managers, and governments the managerial principle called ‘process owners’ that entitles subordinates to run parts of organizations with responsibility including their right of (efficient and effective!) use without their right of abuse (About planning of requisitely holistic ethics as pre-condition for enterprise ethical behavior see Belak et al. 2010, about ethical behavior in family enterprises Duh, Belak 2009, and their chapter in this book, about entrepreneurial rationality for enterprise’s long-term survival and development Štrukelj et al. 2010 and her chapter in this book.). Well-being of humans as persons, society, and employees may result from such innovation much more easily than without it (Šarotar Žižek et al., 2009a, b, c, d; references therein). This matters: people with well-being (based on creativity rather than idleness) feel and work better, thus contributing to the requisite holism and success. For data on the need for the briefed model and related warnings see Mulej’s introductory chapter here.


8. THE CASE OF EDUCATION OF MANAGERS IN RUSSIA Let us now illustrate these findings with a case of influence over the influential ones aimed at helping them acquire the briefed attributes in Russia as a huge country with a short and poor history of market as an ‘invisible hand’ supportive of IIDP and related attributes of influential persons. Russia is far from unique in this respect. Actually, only 15-20 % of the world-wide population lives in innovative society and (fictitious) affluence, as data say elsewhere in this book. 8.1. Social Context of the Russian Market Reforms The social consequences of the Russian market reforms, after 1990, require more consideration of non-economic issues and a reconsideration of the idea that economic theories work in the same way everywhere. One way out of the current predicament is using a constructivist approach to education in order to develop the innovative competencies of people. 1 People must create “a new reality” innovative economy and society in Russia (too). The social content of the case demonstrates the lack of systemic thinking. Namely: When Western and Russian economists decided how to make the transitions in Russia, they failed to consider the structure of industries, the related prevailing VCEN, and the training of managers. Hence, non-economic issues or concerns were over-seen. Economic theories were assumed universal and working the same way in all countries. In the last 20 years, Russia has undertaken an amazingly complex set of tasks while moving from a centrally planned to a market economy. Results of Russian market reforms are controversial. Interpretations of results vary depending on the social, economic and political views of observers. There are radically different viewpoints about both the means, which were chosen for realizing the economic 1

In constructivism or second order cybernetics the basic idea is that "reality" is not only a social, but also an individual construct: people interpret their experiences to create their image of the world. Personal history is not destiny. Experiences are interpreted. New experiences can lead to new interpretations – new VCEN, thinking, and behaving. Innovation in management practices is easier, if people adopt a new conception of knowledge. If one can persuade people to this viewpoint (a new epistemology or theory of knowledge), a discussion of what interpretation is appropriate or beneficial is possible. If people think that what they believe is the "way the world really is", others with different views are deemed threatening. If another view is possible, is another authority relation possible? Presently people in Russia are experiencing great psychological pain caused by radically different views of the world becoming accepted.


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reform, and the goals and obstacles that have been encountered. Some authors conclude (Buravoi, 2009), that in Russia a transition without transformation has occurred: without accumulation of capital, economic or production transformation. People offer little initiative. There is no radical political transformation. Summarizing this view, the authors conclude that Russia has endured a new tragedy in its history and faces the danger of involution and degradation. Other authors think that Russia is experiencing a very difficult time, but the direction of reforms has been correct; it is too early to make conclusions because the changes, which started at the beginning of Russian market reforms, are not finished yet. The liberal group of Russian economists thinks so. However, all groups of economists agree that the macro-foundations (social and economic institutions) for a market economy have been created, but the microfoundations (new VCEN, beliefs, social networks helping the people to adapt to a market economy, new specialists, etc.) have not yet been created. (Medvedeva, 2010). Presently, when the Russian government is attempting to create an innovative economy (Medvedev, 2011), one asks: are managers capable of producing and managing IIDP. Unfortunately, practicing managers of the older generation, the new young managers, and the very few innovative managers had no opportunity to gain the necessary knowledge. A theory of innovative management alone cannot produce innovative managers. IIDP faces serious resistance from managers and employees, naturally: people make and face any changes with difficulty. But the problem is not only human psychology, in general, but the Russian mentality, in particular. In order to succeed in an innovative economy one must pass transformation. Ackoff (2004) said well: “Reforming and transforming are not the same things. Reforming means changing the system for achieving goals. Transforming means changing both the goals and the system for achieving goals”. (Here, system means a network of measures/influences rather than a complex object or its mental picture; N.B. by authors.) According to many authors, the capability to produce innovation in general and to produce innovations of any type – depends on national mentality, culturally


specific nature. The differences between people and countries in capabilities to produce innovations depend on the cultural environment, in which a person is socialized. During the last 20 years Russia has been passing through a very complicated transitional period from a command economy based on a strong traditional VCEN (of many centuries!) to a market economy based on an immature and un-innovated VCEN. Perhaps one can change economic parameters in 20 years, but one cannot crucially renew the VCEN. (E.g., Harrison (2006) pointed to the importance of cultural values and assumptions in creating “progress-prone” cultures.) Knowledge and consciousness differ, too: consciousness includes action (Kovačič, 2010). Innovative initiatives of people depend on the developmental level of their innovative consciousness as part of economic consciousness, including interests, goals, motives, and orientations connected with realization of IIDP (Kosals, 1989). Innovative consciousness is formed in IIDP and results from accumulated experiences in IIDP. Motivation for innovative behavior is crucial in the structure of innovative consciousness. That is the weakest part in the current state of Russian labor relations. The world-wide studies of IIDPs show that knowledge society differs from industrial society both in technology and social processes (economic, organizational-managerial, and legal). Innovations are needed in social and economic relations, in production processes, not just in technology and related products/services. IIDP tackles roles in organizations. A new internal organizational environment results (with new VCEN). Hence several questions surface: How do employees cooperate in the new organizational environment? How do they produce additional innovations? How developed is a new management style (a cooperative rather than an authoritarian one)? Similar conclusions about the addressed questions can be found in research on the most innovative companies (e.g. IBM 2006). Long ago Burns (1978) pointed out that technological innovations are not enough: innovations in strategies, processes and business models are also needed (see also Štrukelj, Mulej 2008, 2009; Mulej et al. 2009d, 2009f). Russia is only beginning to become innovative society. Innovation of VCEN must occur (Potočan, Mulej, 2007).


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Years of Russian market-reforms have clearly shown: the most serious Russian problems include innovation of the totalitarian VCEN of Russian managers, who consider personnel only as a means to achieve economic goals. A totalitarian consciousness produces repressive forms of management, which cannot promote development of a modern, innovative economy in Russia, but it makes development based on physically and psychologically exhausted humans. Goleman (2000) outlines six distinct leadership styles, based on different components of emotional intelligence. Each style has distinct effects on the working atmosphere of a company, division, or team. Coercive leaders demand immediate compliance. Authoritative leaders mobilize people toward a vision. Cooperative leaders create emotional bonds and harmony. Democratic leaders build consensus through participation. Pace-setting leaders expect excellence and self-direction. Coaching leaders develop people for the future. These styles may crucially impact the application of the above model of attributes. Center “Prioritet” in Nizhny Novgorod studied the leadership styles of Russian managers with Goleman’s approach: many practice repressive, distrusting and indifferent management styles (Table 2). Table 2: Negative styles of management (SO) (Lapidus, 2002) Attributes

Repressive SOM

Distrusting SOM

Indifferent SOM

Method of work

Aggressiveness.

Accent on control.

People are like mechanisms.

Motto

Find guilty people and punish them! Do not enter without an order!

I do not trust people, even myself.

Follow orders and instructions.

Dominating characteristics of emotional intellect

Expose weaknesses of employees. Suppress their will.

Mania of searching for enemies.

Lack of empathy.

Optimal conditions for work

Catastrophes, wars.

Special organizations.

Preparing enterprise for bankruptcy.

Influence on organizational climate

Destructive.

Destructive.

Marsh-creating.

Hence: Transformation can result from managing the social IIDPs. Innovative social processes transform social structures and processes and lead to changes in


the mode of functioning of social systems. Then, stakeholders’/shareholders’ interests, strategic priorities, technology, products/services, VCEN and social institutions are substantially innovated. The task to manage social innovations might be considered as a task of managing the society’s cognitive processes, its sense-creating activities and reflections. To consider this in the paradigm of social behaviorism as a problem of managing new forms of social behavior is insufficient. Behaviorism is detached from spirit as a subject of psychology. Behaviorism is a way of researching behavior, viewing human beings as complicated automatic machines. Behavioral science tries to understand behavior in order to make people more successful (see Arnold and Randall et al. 2010; Buchanan, Huczynski 2010; Mullins 2010). Using the formula “stimulus-response”, behaviorism cultivated an operational style of thinking. The science of behavior gives people the means to act in an instrumentally successful way. But in order to produce innovations one needs a strategic thinking style and appropriate VCEN (Mulej et al. 2009c; Štrukelj, Mulej 2010; Štrukelj 2010). The capacity to do IIDP requires a meta-level of thinking. This allows for serious innovation of approach to a problem: giving-up stereotypes, belonging to a tactical-operative style of thinking, and accepting an enterprise policy and strategic level of judgment (Štrukelj, Mulej 2008, 2009; Duh, Štrukelj 2010; Belak 2000, 2002; Bleicher 2004; Wheelen, Hunger 2010). If we think in terms of what is primary and what is secondary, or what is more important, in the long term, we put social innovations first and consider technical innovations as consequences of social-innovation processes (Moskalev, 2006). 7.2. A Russian Case of Constructivist Approach to Education The constructivist approach can be applied with the Participatory Strategic Planning (PSP). PSP is an example of an effective facilitation method for learning and practicing a new style of management: 1.

First, do a PSP exercise, and then discuss how PSP differs from previous management procedures.


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2.

Then discuss whether PSP would work in your organization. What would the benefits be?

3.

If PSP seems desirable, what steps could be taken to spread the use of the method in your organization?

Facilitation methods are based on philosophy of responsible participation. Rousseau (1994) found learning dependent on individual participation in social processes. An ideal social system (e.g. society, community, family, school) creates conditions for development of responsible individuals through participation in social and political action. By this, participants become aware that the word “each” includes them-selves; hence they see problems more broadly, considering not only their own interests, if they cooperate with others. They learn that their own interests and the interests of others are related. We can add: they must learn that their own “reality” and the “realities” of others are related too. Thus, ethics of interdependence emerges. In the Siberian State University of Transport (SSTU) the Medvedeva’s team often works with groups of young managers. Each group takes an interactive seminar or strategic planning activity based on the Technology of Participation (ToP). Use of ToP in SSTU’s educational process is aimed at encouraging innovations in thinking and VCEN of young managers. They must know and believe that they can create their own reality. (Medvedeva, 2010, 2012) In the Soviet Union, and earlier, workers learned to wait for bosses’ decisions. People in those times had to accept an authoritarian, repressive management style, suppressing individuality and initiative. Presently an authoritarian style of management is still common in Russian organizations. Thus, when somebody receives her task, she receives a “warning” about punishment for bad execution of the task. Therefore, this worker thinks about possible ways to avoid punishment rather than about the quality of fulfilling the task. This management style makes people believe that nothing depends on them in their country. Soviet Union developed high technology, but conserved the old, feudal, style of social relationships, including a repressive management style.


Market economy requires faster innovation and more worker initiative. Workers must learn teamwork, problem identification, and problem-solving skills. Group facilitation methods expose respect and focusing on releasing creative initiative of people, involving all employees at all hierarchical levels in continuous IIDP; methods help them develop an innovative thinking style. At the mentioned seminars in SSTU young managers become aware of a new leadership type and management methods. Facilitative leadership differs from hierarchical/commanding leadership: participants clearly state questions, create conversations for searching the real causes of problems, do problem-solving by combining different opinions/views, and create consensus on how to move ahead. One can discuss organizational problems with colleagues and create strategies for overcoming these problems. Frequently they see that another view offers opportunities for innovation. By creating IIDP based on the seminar results, trainees create plans for innovations as instruments of quality management. This is also a good example of a constructivist approach to education. Quality improvement methods also help IIDP concerning management practices. Adopting quality improvement methods requires transition from commanding management to self-managed work teams. Methods of participatory strategic planning and quality improvement are useful management methods leading to innovated ways of thinking and behaving and do not require deep theoretical or philosophical justification. Improved organizational performance is sufficient justification. Trainees are assigned to find solutions. They apply management methods, which they learned in the SSTU, to a problem which they face in their real business practice. Then trainees defend their plans for innovations at a conference “Innovations in the workplace through the managers’ eyes”. Trainees, teachers, and representatives of top management of the West-Siberian Railroads participate in it (Medvedeva, 2008). Facilitation methods make a key part of management training. They increase the confidence of people in their own initiative. They create atmosphere of trust, support, and enthusiasm. Self-confidence and motivation grow, because


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employees participate in decision-making process. People begin to trust their capability to change their situation. The process originally includes five phases. They are described in Table 3. (To these phases we added two now.) Tables 4, 5 and 6 describe results of the Strategic Planning seminar held in Novosibirsk recently. This group of young managers was especially good at thinking about what they can do in their current positions to innovate the organization. Tables 7, 8, 9 and 10 are theoretical and added now, with guidelines for developing an excellent (personal) vision (Table 7), enterprise policy from which strategic planning originates (Table 8), planning process by strategic management (Table 9), and operative directions for tactical/operative management originating in strategic planning (Table 10). Table 4 describes Novosibirsk managers’ desired organization where they would like to work. This company is a world-leader in transport service. New technologies, highly skilled personnel and contemporary management methods cause its success in students’ view. Table 5 shows the obstacles, which students see as disabling the desired organization: the old management style, unproductive personnel policies, excessive bureaucracy, inadequate problem-solving, lack of shared strategy, and ineffective use of funds. Table 6 illustrates strategies for overcoming the underlying contradictions. Steps designing the systematic actions and drawing the implementation timeline (see Table 3) are very specific for every enterprise, so we didn’t describe them. Table 3: Steps in the ToP Strategic Planning Process (Umpleby et al., 2004, supplemented) Mapping out the Practical Vision. Developing Appropriate Enterprise Policy.* Analyzing the Underlying Contradictions. Setting the Strategic Directions. Designing the Systematic Actions. Drawing up the Implementation Timeline. Setting the Operative Directions.* Legend: * We suggest these steps to be added (Slovenian Experience, Štrukelj).


Table 4: The Practical Vision (Russian example). Source: Medvedeva, 2010, 2012 An admired Organization

Highly Skilled Personnel

A role-model company concerning customer and executives. The largest international transport company. Developing partnerships with other countries. World leader in transport service. Competitive company. Use of high technology. Advanced production methods. New technologies. New managers. Personnel devoted to company. People’s unity on company’s goals. Professionalism. Modernized mentality of employees and managers. Employee: in the morning – I want to work; in the evening – I want to go home. No rejects. No traumatism. 100% job security.

Contemporary management

Everyone is responsible only for his or her job. Everyone in the company can influence the process. Prestigious organization. Self-control. Development of the organization based on creative management, without blind execution of orders. Transparent decisions and actions. Effective implementing of new approaches.

A prosperous organization

Up-to-date estimation of labor productivity. High level of income of employees. Profitable and independent company. Assessment of effectiveness of using profit for company development. Healthy finances.

Table 5: Underlying Obstacles (Russian example)Source: Medvedeva, 2010, 2012 Old style of management

Managers cannot apply contemporary management. Old principles of management. Old patterns of relationships in organization. Personal pride and ambitions of top managers matter most in decisionmaking. Unprofessional management. Old equipment. Old/Current mentality. Low managerial qualification.


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Table 5: contd...

Unproductive personnel policies

Promoting inferior ideas. Inoperative decision-making. Incompetent employees. Ineffective employees’ motivation. Discrepancy between employees’ contributions and their wages. Employees refuse the old way of living. Ineffective personnel policies. Very weak dialogue between employees and managers (one-sided monologue as a rule)! No feedback! Fear of punishment. Lack of information about positive changes.

Expressive bureaucracy

Bureaucracy. Too many bosses, too few subordinates. Creating “documents”, red tape. Too many forms or records repeating each other. Complicated and confusing management system. “Blurred” responsibilities.

Inadequate problem solving

Formalism and deception. Superficial study of problems. No wish to discover real problems. Blaming of each other. Biased investigation of work failures. Low quality of service. Need to accept the idea that the customer is always right! Distortion of information. Fictitious indicators of work. Biased estimation of work situations. Shortcomings are hidden.

Lack of shared strategy

Lack of a clear strategy of development. Discrepancies between documents and goals. Ineffective, slow introducing of new technologies. Lack of operative connections. Lack of clear goals.

Ineffective use of funds

Lack of financing. Ineffective use of investments. Unstable finances. Financial flows are vertical.


Table 6: Strategic Directions (Russian example) Source: Medvedeva, 2010, 2012 Improve management skills

Become able to accept criticism. Be open for relationships among coworkers. Learn and teach. Learn how to manage relations between managers and coworkers. Encourage personnel to improve professionalism.

Use process improvement methods

Organize work with clients following the principle: Client is always right. Do not fail to see the real state of affairs. Use group methods to determine task priorities and design actions. Improve realization of decisions. Envision the final result. Use process improvement methods. Plan clearly the necessary means for solving each task. Organize technical structures for common work. Discuss all rejects and defects with thorough analysis of all implemented technical means. Investigate “hiding” of rejects and defects. Formulate goals which can be achieved and pay attention to the methods of their realization.

Change & innovation incentive system

Implement responsibility with clear boundaries. Award bonuses based on final work result. Quality + progress = bonus. Individuals take personal responsibility for their jobs.

Share information widely

Make corporate spirit stronger. Create a team of like-minded people. Carefully select employees for any position. Involve employees in decision-making and problem-solving. Give information to employees about industry’s development. Explain company’s goals and tasks to employees. Increase honesty in relations. Define responsibilities clearly. Increase feedback. Reduce formalism. Exchange experiences.

Improve technical capabilities

Study the new technical literature. Increase the quality of teaching for technical workers.

8. A SLOVENIAN COMMENT TO THE RUSSIAN EXPERIENCE We would add here the following suggestions, as a research proposal to improve the practical work of management training in the ToP Strategic Planning Process.


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See Tables 7, 8, 9, and 10. We suggest one adds in the Table 4 the step The Practical Vision at the beginning of the procedure with guidelines supporting development of an excellent (personal) vision, to attract all enterprise stakeholders’ hearts and intellects (Table 7). Before using the Table 5 we suggest one adds the step Developing Appropriate Enterprise Policy (Table 8). To the Table 6 we suggest a supplement at the beginning of the used steps: the planning process at the level of strategic management should help focusing on the right enterprise strategies (Table 9). We also suggest adding the step Setting the Operative Directions (Table 10): the operative management originates in strategic management requiring also the strategic managers to be aware of operative consequences of their decisions (to prevent gaps between the strategic and tactical/operative managers’ work). Table 7: Developing an Excellent (Personal) Vision Source: Štrukelj 2010, adapted Guidelines for developing an excellent (personal) vision (answer these questions)

1. Do we (owner/manager/employee) agree what does this organization exist for, what are its major products or services (what needs do and shall we satisfy with them; what can improve quality/price/newness/customer satisfaction); why do we admire this organization? 2. Which is our desired product market position (on which markets does the enterprise compete; who are its customers; how to improve this position)? 3. What are the basic/core values, beliefs, enterprise culture, ethical (socially responsible) priorities, and norms of the enterprise that I want the owner/manager/employee to apply? 4. What type of the enterprise must we develop to reach the pre-defined attributes and to become a prosperous organization? (This answer should indicate the importance of creative individuals/teams and declare the importance of the requisite viewpoints of innovation.)

Table 8: Developing Appropriate Enterprise Policy (EP) Source: Belak 2002 Elements of EP

Description / explanation

Mission

Entrusted enterprise’s duty and role in its relation to its environment: sphere of activity (products/services), profession, basic and general environment/society relation, incl. modern treatment of environment.

Purpose

The reason for the organization’s existence. Simultaneously permanent satisfaction of all stakeholder interests (incl. innovation of managerial attributes); development of enterprise effectiveness.

Basic goals

Enterprise existence, operation, survival and development ability; preservation and increase of owners’ funds based on profit and quality (enterprise market value multiplication).


Table 9: The Planning Process at the Level of Strategic Management Legend Planning process at the level of strategic management

Searching for strategic opportunities (on the existent and potential markets: selling and purchasing markets – of resources, co-workers, finance and strategies (incl. innovation of managerial attributes). Economic evaluation and selection of strategies. Preparation of program for the development of the selected strategies (designing the systemic/systematic actions*, setting the implementation timeline*).

* see Table 3. Source: Belak 2002, supplemented with Umpleby et al., 2004

Table 10: Setting the Operative Directions Source: Belak 2000, supplemented a resulting issue is showing up: how to make these ideas work in practice Viewpoint of planning the enterprise’s functioning (operative business planning)

Description / explanation

Outcomes planning

Planning of practical outcomes (products/services, including innovation of managerial attributes), their quantity, quality, and value outcomes.

Engagements planning

Fields: R&D, selling marketing, production / service performing, human resources (incl. innovation of managerial attributes), supply of: working tools, raw material, etc, and outsourcing services, organizing, financing.

Costs planning

Pay role (incl. innovation of managerial attributes), working tools costs, raw material etc. costs, and outsourcing services costs.

Planning final results distribution

Profit distribution scheme: share for taxes, funds increasing, dividend/owner payment, co-workers payment, reserve with purpose, and not-disposed part of profit.

9. THE NEW ATTEMPT: APPLICATION OF DEMING METHODS IN RUSSIA More and more research confirms that Russian companies have been facing problems that cannot be solved in the old “Soviet and Czar’s” way, i.e. by commanding rather than co-operative management. (Kanji et al., 2001) Throwing technology at the problems also does not work. Hence, Russian top-managers are looking for new management approaches and one such approach is based on the concepts of Dr. W. Edwards Deming. There are many reasons for this. Deming’s quality methods and management methods, for example, are proven over decades to work, and to work well. A


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significant side benefit is that they foster social learning, which is very important in Russia, now. (Medvedeva and Umpleby, 2002) For example, while studying a large and typical Russian enterprise we are witnessing social learning taking place: 

People gaining confidence that improvement can be made.



People learning to rely on themselves, rather than on distant leaders.



People learning ways to persuade others that changes are needed and what changes are most needed.



An emphasis on customer and employee satisfaction. This improves morale, the quality of goods and services, and competitiveness.



People studying how to work together and how to resolve conflicts by measuring results and improving processes.



Demonstrations of respect replacing toxic authoritarian behaviors.

And there are a number of benefits one would expect to see: 

Improved performance. Deming’s methods assure, or enable, at least, that workers are aware of the whole process in which they are involved, that they measure the performance of the process, and that they are involved in continually improving performance.



Data driven decision-making by managers. This reduces politics and favoritism in the allocation of resources.



Workers and managers learning to test ideas on a small scale before implementing them on a large scale.



Deming’s methods spreading to supplier organizations. This is crucial to increasing productivity and quality.



Innovation and creativity being released because Deming’s methods foster the involvement of employees at all levels in continuously improving processes.


Of course, there are obstacles to the success of a full implementation of Deming’s teachings, just as there are in countries that have had the benefit of Deming’s insights for a much longer time. A few of the obstacles include: 

Underestimating the power of respect and support so people can achieve pride and joy in work. Managers still tend to see the organization as a mechanical entity and employees as parts of the machine, vs. seeing the organization as a living system that can be damaged by mechanical and coercive approaches.



Not understanding that a focus on improving the system in which people work has a long list of benefits – instead of blaming (or rewarding) people for the influence of the system on their work.



Vulgarization of Deming’s messages. Too often lip-service is paid to quality improvement, and in reality managers are not exposed to (or they ignore) the new management methods Deming advised that leaders use. (Medvedeva, 2011).

The last years of Russian history show that there are people who are able to implement changes in thinking and philosophy which create work environments that support people and ideas instead of suppressing them. Technology does not solve this problem, but Deming’s teachings provide a management method that leads to new ways of behaving, improved organizational performance, and a different, more effective style of management so we are no longer encumbered by the “Soviet legacy” management practices. CONCLUSION In order to succeed in creating an innovative economy based on social responsibility, people must behave innovatively by implementation of ethics of interdependence and requisitely holistic approach. Especially, these concepts must be internalized by managers, and their co-workers will follow their example. Primarily, this is initiated in education; a constructivist approach to education is a very appropriate way to create such behavior. Methods of participatory strategic planning and quality improvement are useful management methods leading to


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innovation in behavior without requiring deep theoretical or philosophical justification. Improved organizational performance is sufficient justification. Group facilitation methods, such as Deming’s approach, reinforce practice of respect and focusing on releasing the creative initiative of people by involving all employees at all levels in IIDP as continuous improvement processes. These methods help users develop their innovative behavior and their effective way of organizing people for constructive changes aimed at improving their conditions of life. Then, the dialectical system of attributes that we have briefly described above can become reality or even normality. ACKNOWLEDGEMENTS Declared none. CONFLICT OF INTEREST The authors confirm that this chapter contents have no conflict of interest. REFERENCES Ackoff, R. L. (2004): Transforming the Systems Movement. http://www.acasa.upenn.edu/RLAConfPaper.pdf Arnold, J., Randall, R. et al. (2010). Work Psychology. Understanding Human Behaviour in the Workplace. Fifth edition. Pearson Education Limited, England. Belak, J. (2000): Podjetniško planiranje kot funkcija managementa. Forth edition. MER, Maribor. Belak, J. (2002): Politika podjetja in strateški management. MER, Maribor. Belak, J., Duh, M., Mulej, M., Štrukelj, T. (2010): Requisitely holistic ethics planning as precondition for enterprise ethical behaviour, Kybernetes, Vol. 39, No. 1: 19-36. Bertalanffy, L. V. (1968, edition 1979): General Systems Theory. Foundations, Development, Applications. Revised Edition. Sixth Printing. New York: Braziller. Bleicher, K. (1995): Das Konzept Integriertes Management. Das St. Galler Management-Konzept. Campus Verlag GmbH, Frankfurt am Main/New York. Bleicher, K. (2004): Das Konzept Integriertes Managements. Visionen – Missionen – Programme. (St. Galler Management-Konzept). Campus Verlag GmbH, Frankfurt/Main. Buchanan, D. A., Huczynski, A. A. (2010): Organizational Behaviour. 7th edition. Pearson Education Ltd, UK. Bulc, V. (2006): Ritmi poslovne evolucije. Vibacom, Ljubljana. Buravoi, M. (2009) Transit without transformation: involution of Russia to capitalism, in Sociological Researches # 10. Burns, James McGregor (1978): Leadership. Harper Collins.


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CHAPTER 7 The Economic and Environmental Decline of Atenquique, Mexico, Associated with Socially Irresponsible Corporate Ownership José G. Vargas-Hernández* Administration Department, University Center for Economic and Managerial Sciences Universidad de Guadalajara, Periférico Norte 799 Edificio G-201-7 Zapopan, Jalisco C.P. 45100, México Editorial note: In terms of ISO 26000, this case addresses consequences of the lack of social responsibility in terms of labor relations, human rights, and environmental issues. The author adds his suggestions concerning how the open issues should be handled more holistically and with consideration of the interdependence of the issues and the human population. Abstract: This chapter analyzes the development process of Atenquique, a town now under corporate ownership, showing how corporate changes have affected the livelihood and welfare of its inhabitants. The chapter reports about the consequences of the privatization of the Paper Mill Company that used to belong to the state; it affected environmental conditions and caused economic decline in Atenquique. The ownership change resulted from globalization that took place after the very successful years of the paper mills after 1950s. This chapter reports about the quality of life of the labor force of this Paper Mill Company under the impact of globalization, and workers’ feelings about the new corporate owners. We applied descriptive and exploratory methodology. The Industrial Company of Atenquique was growing, while it was owned by the Mexican State. After the company had become private property, the town was declining and lost population and economic output, and this decline also affected the regional surrounding population.

Keywords: Atenquique, company town, culture, economic decline, environmental development, economic development, free time facilities, globalization, Jalisco, lumber, Mexico, neoliberal model, paper, privatization, regional development, shrinkage, state ownership, town, well-being. *Corresponding author José G. Vargas-Hernández: Administration Department, University Center for Economic and Managerial Sciences; Universidad de Guadalajara; Periférico Norte 799 Edificio G-201-7 Zapopan, Jalisco C.P. 45100, México; Tel/fax: +52(33) 3770 3340; Ext. 25685; E-mails: [email protected]; [email protected]; [email protected]

Matjaž Mulej and Robert G. Dyck (Eds) All rights reserved-© 2015 Bentham Science Publishers


José G. Vargas-Hernández

1. INTRODUCTION Regional development affects in different ways the livelihood and welfare of people who live there. Atenquique is a major paper- and-lumber-producing corporate town and it was founded as one of the first enclaved industries in the Southern region of Jalisco, Mexico, expecting positive effects in the regional economic development. Atenquique built its own company town giving a house for each worker, employee or manager, where their families lived, but they left every weekend to visit their relatives in the nearby cities and towns (Gabayet, 1988). Atenquique is a newer industrial town located in a dangerous area near Colima Volcanoes in the Southern Jalisco. In 1990s in México the paper mill companies started to restructure: large private companies that were owned by big corporations grew larger, fortified their vertical integration and trans-nationality, diminished their diversity, and hierarchy, due to globalization. Atenquique population found its impacts on life uncertain (Brady and Wallace 2000:91). Because of their world-wide competitors and capital mobility the new owners cared less for Atenquique residents (Miller, 2006). A Mexican-based private company dealing with forest products bought the paper mill in Atenquique, a small community. Earlier, the state owned company provided financial support for housing, schools and other community activities for employees and workers. After privatization, employees did not trust the new corporate owners. Most authors who report on impacts of globalization and focus on privatization of state owned companies find that employees lack trust. In Atenquique the people lived as a great family with a lot of friendship, solidarity at work and agreeable intentions. The Compañía Industrial de Atenquique, a papermill factory, supported this nice life and provided the township with adequate infrastructure, buildings and installations to promote co-living among the workers and their families. Therefore the Company owned restaurants, cinema, casinos, reading rooms, swimming pools, football courts, basketball, gym, etc. (Medina Enriquez, 1988). Company strengthened positive social relations among residents of Atenquique by supporting making of clubs in which workers, employees and their families were members and took part in programs of speeches, poetry, conferences and theater performances. Famous writers, poets and intellectuals joined cultural festivals and concerts. The Mariachi Atenquique group was created

The Economic and Environmental Decline


by Atenquique people and performed every Sunday evening in downtown. Dancing schools enjoyed support too. In sum, Atenquique was experiencing an intense social and cultural life and a very good quality of life. Then, the economic and environmental development of Atenquique was intense. A good recount of the Atenquique’s development is given by Gabayet (1988) picturing the economic, productive, commercial, political, and sociocultural changes. Compañìa Industrial de Atenquique showed very well that the generation of economic institutions (in line with the dominant pattern of the Mexican revolutionary State) cared for the welfare of all stakeholders, including employees and workers. As a public and State owned enterprise, the Company created sources of employment and welfare for the post-revolutionary generations of Mexicans, also those in the Southern region in the State of Jalisco. This Southern Jalisco alone concentrates 78 percent of forestry and wood production in the State of Jalisco (Mollenhauer, 1998). But, the economic globalization caused the privatization of Compañía Industrial de Atenquique resulting in less development of Atenquique and the surrounding Region of Southern Jalisco. This chapter is aimed to analyze the development process of Atenquique, a corporative town, and how these changes have affected the livelihood and welfare of its inhabitants. 2. MATERIALS AND METHODS The methodology included interviews with a sample of 40 workers of the Company who lived in Atenquique. They made 3% of all employees when Company was a state owned enterprise and 9% after privatization. They were interviewed in two parts: 10 in December 2008 and 30 in August, 2009. They worked in the Company and lived in Atenquique when the Company belonged to the state. The same 40 workers could not be interviewed after privatization: most interviewees had to leave their homes and Atenquique. For interviews we talked to workers outside the company premises. They filled in a written outline, and we recorded or noted their responses. We analyzed their responses by their similarity



per issues. The interview outline included five questions: “1) Since when have you lived in Atenquique? 2) Since when have you worked in Atenquique? 3) What are the most important changes that you have experienced in Atenquique? 4) What are the most important labor changes that you have had in your work? 5) How have these labor changes affected you?”

Figure 1: Map of Atenquique and surroundings. Source: Google Maps (2010).

3. BRIEF HISTORY OF ATENQUIQUE Atenquique had only 50 inhabitants for a century and was known as a camping location before the construction of the paper company. The Atenquique village was created in 1946 resulting from the development of a paper mill named Compañía Industrial de Atenquique, S.A. (CIDASA). It captured water from two rivers: Atenquique and Túxpan, which are vital for the industry. The main rail connection from the Center of Mexico to the Pacific passes through the town. Compañìa Industrial de Atenquique was inaugurated in October, 1946 and grew the largest one in the Southern Region of Jalisco. Immediately after the establishment of the Company, Atenquique grew to more than 4,000 inhabitants. Workers traveled from the nearby towns and relied on CIDASA as their principal employer. On 16th October, 1955 an intense storm lasting for 3 days devastated almost the entire Village of Atenquique.



A devastating flood surge formed a volcano-clastic debris flow on the eastern slopes of Nevado de Colima Volcano; early simultaneous flood surges formed in the Arroyo Seco, Los Plátanos, and Dos Volcanoes ravines coalesced with the larger flow in the Atenquique ravine. “Downstream, the flood wave reached the town of Atenquique as an 8-9 m catastrophic wave causing the death of at least 23 people, the partial destruction of the town, and losses of 13,000,000 pesos (1 million US dollars today) to the paper mill and company facilities” (Saucedo et al., 2008). The storm also resulted in strong Atenquique Creek currents flooding that killed ten persons and destroyed the church, a school, business and shops, buildings and around 20 homes. The storm also destroyed the industrial plant and killed 23 persons. The flooding left desolation and disabled the working of CISADA for 2 months; traffic lines were truncated and the material damages reached 10 billion pesos at that time. This catastrophic event forced the creation of new plans for Atenquique (Redacción Del Sur, 2005). The residents of Atenquique helped the Company to repair the damages. After installation of the paper Company in Atenquique the population had duplicated in only 20 years from 1950 to 1970, consolidating itself as a pole of regional attraction. However, the last censuses and counting of population and households (INEGI, 1995, 2000, 2005) show a trend toward decline in population (Table 1). Table 1: Population for the years 1990 and 1995 in the main localities of the Municipality of Túxpan Population (Year/Inhabitants)

Name of Localities 1990

1995

Cabecera Municipal

25,895

26,219

Atenquique

1,645

1,237

La Higuera

1,479

1,410

San Juan Espanatica (El Pueblito)

908

792

Pozo Santo

868

Platanar

582

Source: INEGI (200O). Table elaborated based on data from INEGI (1995, 2000, 2005), Censos y Conteos de Población y Vivienda.



During the 1990s there were more than 301 households with a total population of 1,645. In 2000, there were 291 households with a population of 1,143. The last census only counted 231 households and 849 inhabitants. A decline of population and housing can be drawn from these data. This decline in population is also observed in nearby localities. For the case of Atenquique, it can be determined that there were 1,645 inhabitants in 1990 while there were only 1,237 in 1995, marking a trend towards smaller population. Today, Atenquique is home for 849 inhabitants, out of which 59 percent are adults. Number of Atenquique youngsters attending school in 1988 and in 2007, is shown in Table 2. Table 2: Population of atenquique Year

Population Attending School

Total Population

1988

750

3700

2007

139

310

-611

-3390

Source: Own estimations after counting and taking a census.

The medium quantity of years of attending school is 9.27 years. There are still 28 persons who do not know to write or read and 4 individuals are of indigenous origin, speaking the indigenous language (Mexico Facts, 2010). 4. THE HISTORY OF THE COMPANY The region of the Nevado de Colima became officially a “protected zone” in 1934 and called a national park under President Lázaro Cárdenas. The law was changed in 1936 to allow the company in Atenquique to exploit the forest. México implemented a land reform in in 1930s and 1940s that gave plots of communal land (Ejido) to poor peasants (ejidatarios); plots came from expropriated land from large estates of private owners, generally called haciendas. To be able to use their ejidos, the ejidatarios were irrationally felling large forest surfaces, cleared



the forest and leveled the ground. The big land owners from Southern Jalisco who controlled the forests of the Volcanoes of Colima and the Mountains of Sierra del Tigre, El Halo y la Leona established Unión Forestal de Jalisco y Colima in 1940 to control the forest resources and protect their forests from possible risks. On 26th November 1940 the law was changed again and on 7th September 1941, CIDASA was established to exploit forest resources in the Southern Jalisco. The decree provided to CIDASA the concession for forest exploitation in the Southern Jalisco for 50 years for the production of chemical celluloses, mechanical past, paper, synthetic fibers, and diverse plastic materials. The concession was granted to CIDASA to exploit more than one million of hectares of regional forest in 16 municipalities. Since then, CIDASA operated as a regional monopsony because it fixed its own price policies, cancelling the opportunities to the owners of forest to sell their production in an open market (CUCBA, 1998). The local investors in Atenquique created the company CIDASA and a German military person promoted it. The federal government of Mexico granted a free concession for exploitation of 1.080.000 hectares for 50 years. This area covers 1.7 % of the total Mexican forests. The first major state-centralized efforts at logging were the Unidades Industriales de Explotación Forestal (UIEF). It also was the first attempt to harness Mexican forests to national industrial development. The first UIEF was established in 1941 in Atenquique. The UIEF limited the rights of the communities and gave the government authority over exploitation of forests (Barton Bray and Merino-Pérez, 2002). Griffiths (1958) argued that it was "partial expropriation based on Article 27" of the Mexican Constitution. The CIDASA was a state owned paper mill enterprise. The Company Kraft was created to meet national demand for paper, to promote industrialization of Mexico and to create employment opportunities for Mexicans. Since the beginning, The Company was not created to make profits and received fiscal support. CISADA diversified its productive activities in a conglomerate integrated by the lumber exploitation cellulose extraction, and packaging manufacturing. CIDASA was established in 1945 with public and private funds. On the 22nd March, 1945, an industrial forest exploitation unit was established to support CIDASA that was allowed to exploit timber on the area of 225,000 acres. This



area was located in 17 municipalities in the Southern Jalisco; its annual production reached between 60 and 70 percent of the global production in Jalisco. On the 27th March, 1945 the Industrial Unit of Forest Exploitation (Unidad Industrial de Explotación Forestal or UIEF) was created by decree to consolidate control of forests adopting a legal regime. In 1945 the Dirección Técnica Forestal (Technical Forestry Direction) was created with employees paid by CIDASA. Thus, this organization did technical surveillance of exploitation and was paid by company under surveillance. Between 1946 and 1948, the first forest inventory named General Project of Ordination was carried out.

Figure 2: Partial view of Atenquique. Source: Vargas-Hernández (2012).

There was a world-wide crisis in paper market in 1954 that CIDASA used well for its growth; hence, forest exploitation became its main economic activity. In 1963 and 1964 the CIDASA plant was modernized and enlarged. Between 1964 and 1968 the second forestry inventory took place. On this basis the exploitation of the forest resources grew. By 1969 the plant was modernized with new techniques and processes. In 1971, CIDASA was nationalized due to its financial problems. In 1972 a new decree expanded the UIEFA’s (Unidad Industrial de Explotación Forestal de Atenquique) uses of the exploited lumber from cellulose, cardboard and paper to wood, triply or wood-cardboard and other products. A manufacturing plant of triply was built although the oyameles (the needed variety of tree) were scarce after fierce exploitation.



CIDASA's main products included containerboard, industrial paper, and corrugated containers. The relationships between the neighboring cities of Túxpan and Cd. Guzman were considered family-like since CIDSA was “our fathers’ heritage of”. Generally, the wages reached between 150 and 160 pesos (15-16 US Dollars) per day; some workers attained more than 300 pesos (30 US Dollars) due to their high productivity and personal qualifications. In general, salaries and fringe benefits were considered high for the same type of work in the region. Employees and workers were hired and received the same wage and salary rise after being negotiated between the Union and Management. The employment rotation was low due to the fact that seniority was important as was the concept of getting pension. The Union was a delegation of the powerful Mexican Workers Confederation (CTM) and followed a traditional pattern of leadership characterized as a gerontocracy; unionist formed an elite group of people always linked to the firm´s management. CIDASA was a business empire in the Southern Jalisco: it exploited resources conceded by decree but belonging to ejidatarios and small property owners. Chambille (1983) examines the state of forest resources in southern Jalisco, describes the timber extraction and industrialization process and outlines the main conflicts arising from the interaction of different actors. Due to the CIDASA’s practical monopoly on the exploitation of the forest resources, the owners of the forest, private properties, ejidos, and comunidades (communities), hardly participated in the decisions about the use and management of the forest. After the Mexican crisis in 1982, economic policy gradually dismantled the State, sold and privatized public enterprises, merged, transferred, canceled and closed major companies and eliminated minor companies from the state owned sector. However, despite the economic crisis of 1982, CIDASA was working in black numbers and making profits (Gabayet, 1988), although the Mexican state was still broke and needed cash to repay its debts. In April, 1986 CIDASA was sold to private investors. The transformation of GIDUSA into one of Mexico's largest integrated packaging and forest products companies began in 1987, when it



purchased about 75 percent of the companies belonging to the state consortium Grupo Industrial Atenquique, S.A. de C.V., now named Envases y Empaques from the federal government and Nacional Financiera (NAFINSA). The remaining shares were purchased in 1996. After the end of the exclusive concession to the Industrial Company of Atenquique in 1990, the Company was sold to ‘Grupo Industrial Durango’, S.A. de C.V. (GIDUSA) that belonged to the family Rincón Arredondo. Immediately after acquisition of CIDASA by GIDUSA the leader of the Union of workers declared that they were ready for the dialogue with the new owners and to improve their economic and labor conditions (El Occidental, 1987). In 1992 Durango Group's Atenquique operation opened corrugated container plants in Ciudad Guzman and Tuhitlan. Container-board and industrial paper, produced at the Atenquique mill, included liner-board and corrugating medium, used in the production of corrugated containers (Reference for Business, 2010). After the end of the concession by 1995, the exploitation of forest areas propelled a drastic change in the distribution of wood production. While in 1994, 57 percent was cellulose and only 34 percent was for wood, by 1996 production changes drastically to production of cellulose reaching 23 percent and production of wood 68 percent (Mollenhuer, 1998). In 1997, Compañia Industrial de Atenquique established plantations of pine and managed land commissions primarily for fiber production (Steed and Willhite, 2006). Atenquique was owned by a large pulp and paper company, GIDUSA that managed paper plants, pulp mills, land concessions and holdings in México and United States. GIDUSA was established in 1980 as the sole producer integrating vertically the whole productive process of card-board and packaging from the lumber exploitation, cellulose, manufactured paper and products. GIDUSA provided 65 percent of packaging card-board that the Mexican exporters used, 80 percent of Mexican packing for the maquila (in bound industry) sector and 40 per cent of the packing consumed in Mexico. GIDUSA is the major lumber Company and the major manufacturer of brown papers and packing cardboard in Latin America. It has 26 manufacturing plants in México and 5 more in United States, too.



Currently, the Industrial Company of Atenquique is a subsidiary of Grupo Industrial Durango. Grupo Durango also owns ‘Productora e Importadora de Papel’ (PIPSA), that controls 90 percent of the paper used for newspapers in the national market. In 1998, the Mexican Bank of Foreign Trade (Bancomext- Banco Mexicano de Comercio Exterior) gave 80 million US Dollars to GIDUSA to help it to cover its debts to the banks due to purchasing PIPSA. The federal government remitted their debts for the acquisition of PIPSA, although it was sold off at half its value (Proceso, 1999). Though, a labor conflict started on January, 2001. The Revolutionary National Union of Workers of Euzkadi (SNTRE) planned to join workers from the Atenquique´s paper plant on the 26 or 27 of January in Túxpan, so that they can join together in a common movement, the SNTRE general secretary said (Pérez Vega, 2001). The workers’ distrust started in the third week of April, 2001, when company fired 97 workers out of 650, their contracts being rescinded with no reason; and then later further 30 workers lost their jobs. On 21st April, 2001, after the Company had stopped production for maintenance, it declared itself uncompetitive. Then, the workers went on strike outside the company’s facilities waiting for a conflict resolution (Rivera, 2001). The firm closed its door on 26th April, 2001, and dismissed all employees and workers. The paper company Kraft went bankrupt due to the increasing labor costs. After half a century, the Industrial Company of Atenquique closed its doors due to high cost of labor; 900 employees lost their jobs. Company took equipment away, which caused employees’ protests too (Milenio, 2001). One mentioned two different versions of reasons for the company to close: To the workers the Grupo Durango’s shareholders’ and managers’ ambition was the main cause. The Union tried to avoid the final end of the plant. The Company owners blamed the collective labor contract (signed 55 years ago with benevolent clauses added that benefited the employees and workers that resulted from negotiations between the labor union and the representatives of the State and the Company) as the cause for plant closure. The higher labor costs were argued to result from the lack of flexibility to change the labor culture. The owners maintained that Atenquique had the oldest and most uncompetitive labor contract in the Mexican paper mill industry. The firm declared that the collective labor contract included clauses, terms and benefits



incompatible with a very competitive market and borders open to imports (Milenio, 200l). Thus, the background of the conflict was the owners’ aim to dismiss the old collective contract and to hire personnel under new labor conditions lowering the labor costs. However, the Company agreed that the main problem was the workers’ age reaching beyond 35 years. It threatened with relocating the plant to achieve higher profitability. The message was clear: end of the labor contracts diminishing production efficiency. The closing of Atenquique meant the end of labor rights achieved in half a century by management decision and firing of 650 union workers, 120 tenured employees and 130 part-time workers. The new collective contract limited the daily production to 240 tons of paper; before the strike one produced more than 350 tons. When the Governor of the State of Jalisco visited Tamazula de Gordiano, a neighboring city to Atenquique, Guillermo Legarret González, and General Secretary of the National Union of Paper industries exposed this situation of the workers at GIDUSA. The Governor offered support to solve the conflict (Comunicación Social, 2001). During the labor conflict, the Municipal President of Túxpan, Tranqilino Rúa Laureano, expressed his moral support to the workers aimed to resolve the conflict. On 16th May 2001, the State Congressman Ramón León Morales submitted an agreement point to the Permanent Commission of the Congress which was turned to the Social Welfare and Labor Commission. The mandate of this point of agreement was to find a solution to maintain the jobs and respect the labor and contractual rights of employees and workers. But several meetings between the managers and the employers to settle the amount to be paid to the fired workers at liquidation attained no agreement. After the GIDUSA paper plant had closed and all the workers and employees had been dismissed, it was announced that the Economic Promotion Secretary of the Jalisco State Government would sustain the economic reactivation programs to create employment in the Southern Jalisco (Gobierno del Estado de Jalisco, 2004). In meetings between the Secretary of Labor, leaders of the Union, and representatives of the Village of Atenquique, GIDUSA accepted to pay maintenance of primary services that were enjoyed by the population and provided by the Company. The negotiators also agreed to review the collective labor contract to settle workers’ benefits and diminish the paper production costs. GIDUSA also agreed to hire all employees. The Company and workers accepted



the commitment; but, later on, GIDUSA refused it. The Secretary of Labor had to intervene to reach the agreement, after the workers had agreed to receive only part of the benefits, to settle the labor collective contract. The labor conflict in the paper plant GIDUSA was part of GIDUSA’s strategy to circumvent collective contract after 55 years, with an estimated cost of 160 million pesos. Once they had settled this collective labor relation, Atenquique could open the plant without the heavy burden of the payment of labor benefits. On the 3rd September, 2001, GIDUSA declared it was ready to open again (El Financiero, 2001) investing 50 million dollars (Rodriguez, 2001). The new Company was named Compañía Papelera de Atenquique S.A. de C.V. It started working in September 2001 with around 50 percent of the labor force. Since then GIDUSA’s management has been demanding new attitudes toward the multifunctional job assignments, supported by programs of training and productivity. Overall, salaries are lower than before. Starting on February 2007, the company was renamed ATENSA, S.A. de C.V., Empaques de Carton Titán, S.A. de C.V. 5. RESULTS AND DISCUSSION The Interviews showed that 96% of the interviewees had lived in Atenquique and worked for the Company before the crisis. The older interviewees started to work in the Company or other clustered companies such as Unión Forestal de Jalisco y Colima, Aserraderos Técnicos, etc. The important changes in Atenquique depended on the Company’s life cycle, such as privatization in 1987 by selling to the Grupo Durango. Another important change exposed by the interviewees was the closure of the Section XI of the Union Workers in the year 2001; then most workers were fired. In order to get free of the workers Union, the Company declared bankruptcy. Only some of the union workers were re-hired under new contract. When this contract expired, they were transferred to another clustered company with the preconditions in the new contract. An important change, which the interviewees recalled was at the beginning of work for the Company: they needed competencies for good performance and higher productivity. They were obliged to adjust and adapt to the work, including job promotions in the company, and changes in the information and data systems, personnel reduction, and new hires. 37 out of 40 interviews showed that the turning point had happened in September 2001 when the Union was there no more after the crisis and the newly



named firm started to work again and hired workers without experience and without fringe benefits and job requirements. More efficiency, productivity with less resources and new challenges was demanded. The employees were granted the same wages, while the workers earned less and had fewer fringe benefits than before privatization. After it, there is more pressure; the labor environment and climate are tenser and more stressful than earlier, when employees and workers experienced a more relaxed environment, less pressure on assignments and more persons assigned to the same duties. The new management increased their stress and required employees and workers to maintain equipment; some fringe benefits were cancelled, e.g. tires for cars, gas bonuses, profit sharing, etc. Four interviewees stated that before privatization supervision was difficult because the operative personnel within the Union membership were lazy and negligent. When the new Company began to work in September 2001, after the declared bankruptcy and crisis of the former Company, everybody with union membership was fired; some of them were rehired, but most labor force were new hires. The positive aspects to the labor changes include the personal job experiences, such as more participation of workers, earning more money, more labor options, learning more, and the opportunity to have a job. 28 interviewees declared that the labor changes in the company had helped them: they received more training. 7 respondents admitted increasing motivation by changes resulting from the globalization, commercial treaties, and unemployment: it made people value the job opportunity and the efforts for the company to survive in the Southern Jalisco. Five interviewees reported that labor changes had benefited them by promotions in rank and salaries. Further interviewees declared that the labor changes are more stressful with more pressure, but positive. Wages buy less, and workers must achieve goals to keep their jobs. In general terms, since they had started to work and until now, the personnel works better. Employees and workers learned more abilities and became multifunctional: for example a mechanic now knows welding and painting, etc. Before, he worked always with a partner, and now he works alone. 39 out of 40 interviews reported negative impacts of the labor changes in the company, including working under more pressure, working longer hours than the usual eight hours and getting no overtime payment or exchange of worked hours for more flexible time when they face personal problems such as health care. Other impacts include lower salaries and fewer employees and workers for



the same activities. Five interviewees stated that the negative impact of job pressure and stress was related to achieving productivity goals, but it generated better results with less costs for the company. Another negative aspect stressed by the interviewees was that the labor environment is difficult and stressful. The managers of the company must attain profits and hence press and manipulate personnel to attain better performance. An interviewee stated that “they manage psychologically to make us believe that we own progress and we are responsible for good results”. It is a scaling upwards objective, always improving productivity. 6. REGIONAL ECONOMIC AND ENVIRONMENTAL DEVELOPMENT 6.1. Analysis of the Economic Impact Atenquique was a supplier of paper after 1950; but it also had a huge impact on the economy of more than 1750 workers’ families, and through the process of trickling down also on local and regional business, etc.; it contributed to social differentiation (Gabayet, 19770; Gabayet y Rodríguez Avigoñoá, 1977) with a notable contrast between workers and community and even among workers, employees and managers (Gabayet, 1988). The company used to once be called the “economic engine” of Southern Jalisco for beyond 55 years; then it was closed. The labor conflict was a social and economic one reaching beyond the Southern Jalisco, into the entire State of Jalisco. The labor conflict had economic and affective implications. 95% of the workers of the Company in Atenquique were from Túxpan, a place with population of 33,000. There, they mainly live on agriculture of sugar cane and vegetables. From March 1995 to December 2000, investments in the Southern Jalisco reached 55 million US Dollars, which made 98 percent of all investment in the State of Jalisco, according to the Secretaría de Promoción Económica del Gobierno del Estado de Jalisco, 1995-2001 (Gobierno del Estado de Jalisco, 2004). The company provided more than 1,000 direct jobs and more than 4,000 indirect employments, which had an economic influence in Atenquique, in the neighboring cities of Túxpan and Cd. Guzmán and the towns of Zapotiltic and Tecalitlán, too. The economic spill-over was calculated to reach around 150 pesos per day per employee on average, making a sum of 750 thousand pesos per day or 22,800,000 pesos per month. 650 workers plus 300 employees were affected: they did not earn their salaries in the time of crisis,



which impacted the living standards of 4,750 persons. Even 4 out of 10 families in the municipality of Túxpan depended on the Atenquique worker’s income. More than 600 families lost their incomes. Therefore the local economy of Túxpan lost 60% of sales and experienced smaller sales in the regional market of Cd. Guzman. According to a study of the State Legislature the multiplication effect of the salaries spill-over was around 800,000 pesos per month, in the municipality of Túxpan alone. One should add the impact of the limited consumption and poorer living conditions in Mazamitla, Tecalitlán, Tamazula de Gordiano, Tolimán, Zapotiltic, Zapotlán el Grande and other locations in the State of Colima. The economic influences of the labor conflict impacted also the Tianguis (the street market) on Sunday, enjoying fewer customers. Due to the labor conflict, restaurants earned an estimated 40 percent less. The seniority average of workers and employees with a legitimate hope to attain a pension was around 20 years of service. Most of these workers had neither any other employment choice nor a chance to start their own businesses because of the poor regional economic development. This condition allowed the region to be fiscally favored. The analysis of the State Legislature implied that the social impact of the end of the Company could have caused familiar disintegration, health, nutrition, education, migration, and criminal problems. The Economic Progress Secretary announced that they can find solutions and economic alternatives to the problems caused by firing the workers. The municipal President of Túxpan suggested that they had undertaken some corrective measures to attract more investments to the municipality in order to avoid the high dependence on a single firm. Korean entrepreneurs working in the metal mechanics planned to create a plant in the municipality of Túxpan, but unfortunately, the negotiations failed. In fact, the Municipal President Rúa Laureano began negotiations to attract a Korean investment which should generate 3,000 jobs in the short term and 10,000 in the long term; women should be employed. This plant could break the trend toward migration to the North, mainly to United States, of the young generation, while only the older people remained. The future for the population of Atenquique is uncertain. Houses built by the firm during the 1940s and given to the workers, employees and managers, are now in process of deteriorating and destruction. When the General Director (El Sur,



2007) was interviewed regarding this situation, he commented that housing restoration and rehabilitation was not a priority. He also added that around 1,750 people working for CIDASA and her sister firm Forest Union in the old Atenquique, together with their families, needed housing and accommodation and there was a great demand. Nowadays, less people than before are living and they rather prefer to live in the nearby cities and towns where they can fulfill more easily their expectations. Thus, houses are not going to be repaired and over are the golden times when the inhabitants of Atenquique enjoyed their glamorous life. 6.2. Environmental Impact Analysis Over the recent several centuries, the region faced a significant environmental degradation that reached alarming dimensions beyond the forest communities’ natural capacity of natural regeneration. The irrational deforestation which was caused by the CIDASA became the most serious problem of the Southern Jalisco till GIDUSA. The Federal Government also modified the protected area by elevating limits from 2,300 meters above the sea level to 3,000. But these limits have never been defined precisely. Therefore, the Company devastated the forest resources of the National Park of the Nevado of Colima`s area. At the beginning the Company could exploit around 200 thousand cubic meters of lumber per year, which was an enormous quantity of falling trees. The abundant ecological resource supply with almost no restrictions allowed the Company to over-exploit more than 230 thousand cubic meters of lumber annually, which reaches beyond the sustainable capacity of regeneration of forests. Therefore, Atenquique’s production reaching more than one million cubic meters of lumber makes more than five times the forest’s regeneration capacity. This destroyed the forest. After 50 years of forest exploitation, agriculture and cattle, infrastructure, and commercial exploitation were introduced. The company under-utilized the forest resources with no plans concerning the byproducts derived from lumber. The Company exploited the pine for manufacturing paper and the holm-oak for the furniture industry, but never exploited the hundreds of tons of shavings that were spoiled. Other economic agents, political and social actors, mainly intermediaries and middlemen greedily took advantage of the forest and lumber resources of the local communities. The only form of erasing their opportunism and corruption is a client relationship with the owners of the lumber industry that manages the



forests. Many owners of forest decided to exploit their property and there were more than 25 operating sawmills around Cd. Guzman, exploiting the forest (García de Alba, 2004). This irrational exploitation of forests caused unstable soil and sudden flux of rubble and debris. Once the natural forest is there no longer, the roots of the trees cannot retain a compact ground. Because of the high slope of the hills, the water erodes the ground and causes the flux of materials. Several methods of forest management were used to match the needs, such as the Mexican Method of organizing irregular forests (Método Mexicano de Ordenación de Bosques Irregulares or MMOBI), Forestry Development Method (Método de Desarrollo Silvícola or MDS), Jalisco Coastal Plan (Plan Costa de Jalisco), Integral Management Plan for the Region of Atenquique (Plan de Manejo Integral para la Región de Atenquique or PMIFRA), Forestry Conservation and Development (Sistema de Conservación y de Desarrollo Silvícola, or SICODESI), Integral Management System (Sistema de Manejo Integral or SIMANIN). Though, corruption made the results of implementing these plans poor. After the earthquake of Armería on 21st January 2003, the geomorphology dynamics of the Atenquique basin has been accelerated. It can generate flows of detritus quickly, as it did in October 1995 and destroyed a great part of Atenquique. One must incorporate in Urban Development plans the risks resulting from flows of detritus in the locality of Atenquique. Natural phenomena, such as the crawling of hills and solifuction, when the materials suddenly and quickly split apart as flood, cause these natural disasters (Suárez Plascencia, Núñez Cornú and Díaz Torres, s. f.) The other area of high landslide concentration covered a 6 kilometer stretch of the Barranca de Atenquique, a deep, steep-sided canyon cut into the eastern flank of Nevado de Colima. On the south flank of Volcán de Fuego and along several smaller canyons south of the Barranca de Atenquique, moderate landslide concentrations evidently involved similar materials as those along the Barranca de Atenquique. Atenquique has been reconstructed within the area inundated by the 1955 flood wave, thus creating the conditions for a future disaster. Researchers at the University of Buffalo determined that “extremely fast-moving volcanic mudflows could inundate and destroy a large part of a key industrial town near Colima volcano in Mexico sometime in the next ten years” (Science Daily, November 4,



1998). These researchers developed a mathematical model to predict the risks resulting from the volcanic eruption; their results are consistent and show that “mudflows from the Colima Volcano will travel extremely quickly, and would reach as far as 100 kilometers. Anything in the way would be wiped out”. They conclude “Even the smallest predicted mudflow would wipe out most of the village”. Although this research note was written 16 years ago, the volcanic mudflows have not inundated and destroyed Atenquique so far. Another environmental impact from GIDUSA is the spillover sewage on the river Tamazula -Túxpan polluting the running waters and putting any forms of organic life at risk (García, 2008), mainly animals. There have been already cases of cattle´s intoxication because of the drinking water of the river downstream the Atenquique manufacturing plant. 7. FINDINGS The town of Atenquique was founded as a corporate town or company town originally designed as an enclave-industry to promote regional economic development. As an enclave-company, Atenquique reorganized spatial activities centered on forest and timber’s exploitation and production. Under a welfare concept of labor, this reorganization had contributed to a drastic differentiation of the working class in the region. The transfer of ownership from state-owned enterprise to private-owned firm had several implications for the workers and employees. Under a re-engineering program, redundant personnel were fired, salaries and wages were lowered, and fringe benefits were reduced. As a consequence, free housing provided to the workers’ families by the Company was cancelled and the town started to shrink. One relevant finding derives from the analysis of data, which confirms a trend toward a decline in population and shrinkage in housing. This trend started immediately after the privatization of Company. More important is the deterioration of physical capital invested in infrastructure, such as schools, casinos, subterranean piped-water and sewage, electricity, and so forth. Atenquique used to have an important role in supplying the needed paper during the second half of the 20th century in México, but it is no more so. While it is



narrowly tied to the availability of natural resources and under the pressure of economic globalization processes, the steady economic growth and environmental development of Atenquique are weak, instable and vulnerable. The past economic development plans in the Southern Jalisco were centered on an over-exploitation of natural resources based on forest activities, which have not been sustainable until now. 8. RECOMMENDATIONS AND POLICY IMPLICATIONS At the macro level, the existing Mexican Constitution and the regulatory national and state laws concerning the environmental and natural resources sustainability issues, must be changed, especially the law about the forest conservation, to make the exploitation of lumber more rational and match principles of community sustainability. Fostering the sustainable development of forests and jungles needs new legislation and institutions. The federal government passed the Forestry National Plan making forest a national security issue with full recognition of its impact on economic development. But, various studies refuse the official figures and claim that the forest issue is only the priority number 40 or more of the federal government; its inappropriate public policies endanger forest and jungles all way to total extinction, including ecological deterioration and its impact on economic growth and social development. New public policies are urgently necessary to support the economic growth and social development of the communities that have depended largely on natural resources in protected natural reserve areas. The government must increase its budget for forestry from 0.01 percent of its entire budget; the forest areas need support programs. Much more money is needed to make change happen. PROFEPA, the Federal Agency for Natural Resources Protection is in charge of environmental surveillance and auditing, industrial inspection, managing denounces and implementation of revisions of legal acts; it faces many challenges in assuring the environmental justice, but it is charged of corruption. Corruption is endemic among officials; inspectors’ low salaries cannot eliminate corruption. It requires government to raise wages. Illegal timber extraction in forest communities ruins forests and disrupts the community life. The new measures cause over-regulation of activities and proved damaging to community practices concerning sustainable management and use of natural resources. Deforestation keeps being a crucial problem in



Southern Jalisco causing serious soil erosion, which in turn threatens the biodiversity of life, disappearance of natural habitats, and bad change of microclimates. Several initiatives are necessary to dismiss illegal timber extraction, such as illegal wood cutting from protected forest land areas. The small-scale logging concessions devastated forests around the cities, townships and villages. Local governments, by communities and small private land owners and holders of communal land (ejidal) should encourage and undertake actions to diminish or even abolish deforestation and to increase re-forestation. Local governance, forest management programs, incentives and plans supportive of the sustainable use of natural resources are necessary for community forestry to be the practice. Local governments and landholders tend to protect natural resources there, where community forestry is practiced. Communities in the Southern Jalisco, such as Atenquique that used to depend on forestry and lumber for income, must urgently diversify their economic activities, such as environmental and rural tourism using the surrounding nature tracks. One can link forestry with ecotourism and other environment-friendly activities and non-timber products, such as botanicals, art crafts, etc. Besides, local government should promote alternative employment programs based on sustainable management of natural resources. A requisitely holistic view at the impacts of natural resources management in terms of forest and economic and social development should create the ground for any strategic planning of regional development that shall involve all actors and agents to generate the appropriate preconditions for community´s welfare. A final recommendation to prevent risk and future disasters: Two strategies to mitigate this risk should be formulated and implemented through a warning system about rainfalls and through educational programs for inhabitants. ACKNOWLEDGEMENTS Thanks to Angélica Jazmín Inda Galindo for her assistance. CONFLICT OF INTEREST The author confirms that this chapter contents have no conflict of interest.



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Chambille, K. 1983. Atenquique: los Bosques del Sur de Jalisco. [Atenquique: the forests of Southern Jalisco.] Mexico City, Mexico: Instituto de Investigaciones Economicas, Universidad Nacional Autonoma de Mexico (UNAM). Comunicación Social. 2001. Plantean al Gobernador el problema del cierre de La papelera de Atenquique. Boletín del Gobierno del Estado de Jalisco, 101/2001 del 7 de Mayo. CUCBA. 1998. Descripción del sector forestal. Documento de trabajo para la realización del plan de ordenamiento ecológico del Estado de Jalisco. No publicado. Universidad de Guadalajara. México. Davis, B., G. Stecklov and P. Winters. 2002. Domestic and international migration from rural Mexico: Disaggregation the effects of network structure and composition. Population Studies 56 (3): 291-309. El Financiero. 2001. Gidusa, lista para la reapertura de Atenquique. El Financiero 3 de septiembre del 2001: 53. El Occidenta. 1987. Atenquique. 14 de julio de 1987. El Sur. 2007. Incierto el futuro para el poblado de Atenquique. El Sur miércoles 26 de diciembre de 2007. Gabayet, L. 1977. Economía familiar de los obreros de Atenquique en Guillermo de la Peña y otros. Ensayos cobre el Sur de Jalisco, CISINAH, México, 1997. Cuadernos de la Casa Chata, 4. Gabayet, L. 1988. Obreros somos: Diferenciación social y formación de la clase obrera en Jalisco. El Colegio de Jalisco: CIESAS del Occidente. Gabayet, L. and P. Rodríguez Avigoñoá. 1977. Industrialización y diferenciación social: El caso de Atenquique. Controversia, Año 1, Tomo I, No. 4, Guadalajara, Mexico, Agosto-Octubre, 1977.

García de Alba, R. 2004. Cuenca de Zapotlán. Deforestación y deterioroambiental. IV Taller internacional de rehabilitación de la laguna de Zapotlán. Ciudad Guzmán, Centro Universitario del Sur. 13-15 Octubre. García, M. 2008. Contaminados 80% de los ríos en Jalisco. El Occidental, 22 de marzo del 2008. Gobierno del Estado de Jalisco. 2004. Modelo de ordenamiento ecológico. Secretaría del Medio Ambiente para el Desarrollo Sustentable. Guadalajara, Jal. Google Maps. 2010. Mapa de la región sur de Jalisco. Available at: http://maps.google.com.mx/?hl=es (accessed February 15, 2010). INEGI. 1995. Censos y Conteos de Población y Vivienda. Instituto Nacional de Estadística, Geografía e Informática. Aguascalientes, Aguascalientes. INEGI.



INEGI. 2000. Censo de Población. Instituto Nacional de Estadística, Geografía E Informática. Aguascalientes, Aguascalientes. INEGI. INEGI. 2005. Censos y Conteos de Población y Vivienda. Instituto Nacional de Estadística, Geografía e Informática. Aguascalientes, Aguascalientes. INEGI. Maré, D. and J. Timmins. 2000. Internal migration and regional adjustment: Some preliminary issues. In: Labour Employment and Work in New Zealand e.d. P. Morrison, P, 73-86. Victoria University of Wellington. Available at: http://www.motu.org.nz/files/docs/MEL0275.pdf (accessed December 23, 2011). Medina Enriquez, José. 1988. Atenquique una aportación a su historia. ¡Historia para qué? México, D.F. Siglo XXI Editores: 171-180. Mexico facts. 2010. Atenquique. Available at: http://www.mexicofacts.com/Jalisco/Tuxpan/Atenquique/ (accessed February 16, 2010). Milenio Diario. 2001. Nocault a Atenquique. Milenio Diario Mayo 2. Miller, C. D. 2006. Fear and Loathing in a Paper Mill Town: Local Perceptions of Globalization. The Journal of Regional Analysis and Policy (JRAP) 36 (2): 171-181. Mollenhauer, R. 1998. Informe técnico 91. Charla de difusión subprograma de comercialización. PROFEDO. Gobierno del Estado de Jalisco. Oswalt, P. 2005. Shrinking cities. Volume I. International research. Ostfildern-Ruit, Germany: Hatje CantzVerlag.

Paul, Y. and M. F. Sheridan. 2006. Estimated lahar hazard zones at Volcán Colima, México. Department of Geology, SUNY at Buffalo, Buffalo, NY 14260; [email protected]. Paul, Y. and Sheridan, M., 1998. Estimated lahar hazard zones at Volcán Colima, México; Geological Society of America Annual Meeting, Toronto, October, 389 pp. Pérez Vega R. and I. 2002. Employees of Euzkadi march in Guadalajara. Guadalajara, Jan. 15, 2002. Mexican Labor and Analysis January 2002, 12. (Article taken from Mural, January 15, 2002. translation by Dan La Botz.) Proceso. 1999. Atenquique en crisis. Revista Proceso Noviembre 7. Pueblos America.com. 2010. Atenquique. Available at: http://mexico.pueblos america.com/i/atenquique/ (accessed February 15, 2010). Reference for Business. 2010. History of Grupo Industrial Durango, S.A. de C.V. Available at: http://www.referenceforbusiness.com/history2/90/Grupo-Industrial-Durango-S-A-de-CV.html (accessed February 16, 2010). Renis, G. and J.C.H. Fei. 1961. A Theory of Economic Development. American Economic Review 51 (1): 533-565. Rivera, R. 2001. Nota. Gaceta Universitaria 4 de Junio del 2001 (6). Redacción del Sur. 2005. A 50 años de la tragedia de Atenquique. Periódico El Sur Domingo 16 de Octubre. Rodriguez, L. A. 2001. Invertirá Gidusa 50 mdd para reabrir la planta de Atenquique. El Occidental. 14 de septiembre: 28. Saucedo, R., J. L. Macías, D. Sarocchi, M. Bursik and B. Rupp. 2008. The rain-triggered Atenquique volcaniclastic debris flow of October 16, 1955 at Nevado de Colima volcano, Mexico. Journal of Volcanology and Geothermal Research 173 (1-2): 69-83.



Saucedo Girón Ricardo, Hernández Hernández Cristina1 y Macías Vázquez José Luís (2010) El lahar de Atenquique disparado por una lluvia extraordinaria el 16 de octubre de 1955 en el complejo volcánico de Colima, México. Mimeo, No publicado. Science Daily. 1998. Volcanic mudflows could wipe out industrial town in Mexico, UB researchers have determined. Science Daily Nov. 4, 1998. Steed, B. and B. Willhite. 2006. Trip report on IPS in intensively managed pine plantations in Jalisco, Mexico. IAT Interim Report. Tuirán, R. 2000. Tendencias recientes de la movilidad territorial en algunas Zonas Metropolitanas de México. Mercado de Valores México, D.F., México, Año LX, No. 3: 47-61. Vargas-Hernández, J. G. 2008. Cerro de San Pedro: Grassroots movements in cooperation and conflict to stop a living community from disappearing. In: The future of Shrinking Cities: Problems, Patterns and Strategies at Urban Transformation in Global Context, Karina Pallagst et al. (Eds.), 121-126. Institute of Urban and Regional Development, Center for Global Metropolitan Studies, and the Shrinking Cities International Research Network Monograph Series, Berkeley. Yúñez, A. 1978. Una evaluación del modelo de crecimiento dual de Ranis y Fei. El Trimestre Económico 45 (2): 357-399.


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CHAPTER 8 Socially Responsible Business in the “BRICS” Economies: The Way to a Sustainable Future Zhanna S. Belyaeva1,* and Alberto G. Canen2,* 1

Ural Federal University (named after the first President of Russia, B. N. Yeltsin), Graduate School of Economics and Management, International Business Department, Mira Str., 19, i-419, 620019 Yekaterinburg, Russia and 2 COPPE/Federal University of Rio de Janeiro, Department of Production Engineering, Caixa Postal 68507, 21941-972 Rio de Janeiro, RJ, Brazil Editorial Note: This chapter provides an overview of social responsibility in several of the most rapidly emerging economies and countries, including Brazil, Russia, India, China, and South Africa (BRICS), with a special focus on Corporate Social Responsibility (CSR) at the enterprise level. Abstract: This contribution provides general background concerning the practices of corporate social responsibility in the ‘BRICS’ countries (Brazil, Russia, India, China, South Africa). It discusses the problems that interfere with raising the effectiveness of social responsibility-based behavior, with reference to economic productivity. It also attempts to describe the existing organizational structures, as related to the need to support socially responsible business practices. In contrast to current analysis of BRICS’s economic success, the research outlines certain activities needed to overcome identified negative consequences of current practices. It also attempts to forecast results of more universal application of CSR, suggesting how the BRICS would rank in the world map of CSR.

Keywords: Brazil, BRICS, China, corporate development, CSR, economic culture, economic effectiveness, economic success, ethics, India, international business, ISO 26000, market instrument, multicultural societies, norms, society – business relationship, Russia, South Africa, values, world economy. *Correspondence authors Zhanna S. Belyaeva: Ural Federal University (named after the first President of Russia, B. N. Yeltsin), Graduate School of Economics and Management, International Business Department, Mira Str., 19, i-419, 620002 Yekaterinburg, Russia; Tel: +7 343 375 4148; Fax: +7343 375 41 49; E-mail: [email protected] Alberto G. Canen: COPPE/Federal University of Rio de Janeiro, Department of Production Engineering, Caixa Postal 68507, 21941-972 Rio de Janeiro, RJ, Brazil; E-mail: [email protected] Matjaž Mulej and Robert G. Dyck (Eds) All rights reserved-© 2015 Bentham Science Publishers


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1. INTRODUCTION A socially responsible model of business is widely considered as а competitive market instrument, as a managerial tool that increases economic gains for a company operating on a given market. Large companies consider corporate social responsibility (henceforth - CSR) beyond the limits of philanthropy, sponsorship and patronage. In the advanced countries corporations use CSR as a method of overcoming the hostile relationship between business and society. This approach is widely covered in literature (Bowen, 1953, Sethi, 1975, Freeman, 1984, Carrol, 1999, Porter et al., 2006, Matten et al., 2005). International regulatory documents, i.e. the set of CSR standards, requires more and more active implementation of social reporting, statistical data, drawing up ratings of sustainable development and, at last, calculation of financial and social companies` indexes. All these facts directly testify that CSR is capable of solving a wide range of problems and has the potential to become a reliable method of rising company efficiency. That is why there are quite a few research data devoted to the approach of the egoistic corporations’ usage of CSR power (Harding, 1996, Banerjee, 2008). In connection with the aforesaid, mechanisms of enhancement of the socially responsible business development model become more and more crucial. The present research focuses on the BRICS. The BRICS Countries, i.e. Brazil, Russia, India, and China are the largest countries in the world and are already responsible for 25 % of the World GDP and 40% of the world population. A general overview of multicultural, economic and legal aspects relating to the countries that form the BRICS is provided (Canen et al., 2009). Allocation of the given countries in a separate group is stipulated by the fact that emerging markets face constantly growing external pressure from foreign investors, trade unions, public authorities, and nonprofit institutions. An overview of the CSR models (Belyaeva, 2010) in the world economy is given and outlines BRICS, South Africa and also South Korea as the most developing new socially responsible business traditions. The BRICS grouping of major emerging economies is turning itself into the BRICS in 2011. And the new "S" - South Africa - clearly sees it as a significant foreign policy success that recognizes its economic strength and potential. South Africa's economy can be shortly described as follows: it is the only African member of the G20; GDP in 2010 was estimated at US$ 355bn; it is

“BRICS” Economies


one of the world's largest platinum, gold and chromium producers; and her stock exchange is the 18th largest in the world according to the BBC data. Perhaps the biggest reason for the coining of the term BRICS was the large size of these markets, and how big impact BRICS could present in the international economy once they will be developed. Though, the crisis of 2008 made the gaps in economic development visible and Russia is falling out of BRICS according to the economic data (Table 1). Table 1: The Main Economic Data of the BRICS countries Area (km²)

GDP (Nominal) 2012 (US$ billion)*

GDP (PPP) per Capita, 2012 (in Thousand US$)*

Population Size (mln, 2012)

GDP Growth (%, 2012)

Human Development Index

Brazil

8,514,877 (5th)

2 253 (7th)

11 463

193.77(5th)

0.9%

0.699

Russia

17,098,242 (1st)

2007 (11th)

14 015

143.2 (9th)

3.4%

0.719

India

3,287,263 (7th)

1 743 *(9th)

1 440*

1210 (2nd)

10.46%

0.519

China, PRC

9,596,961 (4th)

8 227 (2th)

6 091

1 351 (1st)

7.8%

0.663

South Africa

1,221,037 (25th)

402 (29th)

7 790

50.6 (24th)

3.5%

0.597

*2011.

Russia is falling behind other BRICS economies in global competitiveness and growth, according to The Global Competitiveness Report 2013, released by the World Economic Forum. The country ranked 64th out of 152 countries based on the report’s 12 pillars of competitiveness. The report noted that Russia can improve its poor ranking by reforming its institutions, improving the quality of education, stabilizing financial markets, and moving away from its focus on natural resources. The main outcomes to be highlighted from the 2013-2014 edition are the following up two positions to 29th place: China has reinforced its position within the top 30. China is the only BRICS country to improve in the rankings this year, thus increasing her gap against the other three. China’s performance remains stable in most areas measured with the Index compared with


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the last year, its main strengths being its large and growing market size, macroeconomic stability, and relatively sophisticated and innovative businesses. South Africa (SA) has moved up in the key global competitiveness index for 2013-14, overtaking India and becoming the second-highest ranked in the BRICS group of developing countries. The index, compiled by the World Economic Forum (WEF) and released in September 2013, moved SA to 53. SA’s ranking was supported by an outstanding performance in its financial market development, strength in the accountability of private institutions and the effectiveness of its anti-monopoly policy, according to the report. Among the BRICS countries, China outperformed SA with a rating of 29. Brazil ranked 56, India 60, and Russia 64. Although BRICS countries are geographically and ideologically apart, there are new mechanisms to integrate into the world economic culture. The desire of the BRICS companies to enter in the international market and to become worthy participants in the world economy make them search for effective mechanisms of managing CSR as a strategic attribute of business. Section 2 presents an overview of the corporate development trends in BRICS, Section 3 describes the CSR model in the BRICS countries, section 4 discusses the concept of increasing social responsibilities, and section 5 outlines the main conclusions. 2. THE CORPORATE DEVELOPMENT TRENDS IN BRICS COUNTRIES It is no secret that BRICS are the most attractive countries for investments, and the global attitude to these countries has been improving. According to the PricewaterhouseCoopers research, 71% of the world largest companies tops plan to do business in these countries, and consider them not as cheap factories, but as new commodity markets. Still the managers admit they are cautious and warned by the instability of the markets The growing markets of Brazil, Russia, India and China (unlike the settled economic systems) offer big-scaled, interesting, and challenging projects. The western managers would need to be trained to get some new skills, experience and



abilities to take part in those projects. Moreover, economic recession makes the emerging markets much more attractive, especially considering the possible size of corporate returns and directors` compensations according to the special report of The Economist (2008). For this reason the corporate governance issues in BRICS countries raise its value and demand a special attention. It is interesting to notice that, despite different history of institutes of corporate governance, the BRICS countries have much in common both in advantages, and in the infrastructure of principles of the regulation, in many respects providing their appeal to investors. But on the other hand one of deterrents of investment appeal of the corporate BRICS world would be their corporate governance risks, especially in respect to long-term investment in a share capital. Thus, it is possible to carry out the comparative analysis of the corporate organization in the companies on the countries BRICS (Table 2). Table 2: Corporate governance (CG) elements in BRICS countries Country

Brazil

Russia

India

China

Code

Best governance Practice

Code of CG

Code of CG

Best governance practice

Board

6-9

5-7

6-9

5-7

Audit Body

Revision committee (Consejo Fiscal). At the initiative of shareholders. Can include Board members

Revision committee (voted). Can’t include Board members

Audit Committee, selected by Board. No less then 2/3 of members should be nonexecutive

No

No more than 25% (only Board members count)

No more 1/3 Board

2/3 of the Board

3 year

1 year

5 years for executives, 3 years for non-executives

3 years

Independent Directors Max. Term of a director

No

3. THE CORPORATE SOCIAL RESPONSIBILITY (CSR) MODEL The CSR model of the BRICS countries is now under development, but even at this stage, companies start both applying international regulatory documents and more actively introducing social reporting. Moreover, this stage is supported by


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the experiences of the world largest transnational corporations. Based on the fact that the CSR model of the BRICS countries is still in its early stages, detailed assessment of drawbacks and problems arising from its implementation in these countries has become critical. Although the concepts «sustainable development» or «CSR» are still to be included into the lexicon of many companies working in these markets, it doesn't mean that they ignore such questions as climate change, struggle against poverty or standards of labor relations. Brazil shows most widely spread CSR practice. For instance, 1300 companies of Brazil formed a network «Instituto Ethos», aimed at the development of CSR in the country. The network’s overall objective is to influence social policy and corporate behavior so as to further a socially responsible market. The most known businesses in terms of CSR are cosmetic company «Natura» and the pulp-andpaper manufacturer «Aracruz». India is distinguished by old traditions of paternalistic philanthropy. The large companies are family businesses, such as «Tata», and especially active in maintenance of the basic services for local communities, such as school training and public health services, to a wide circulation of CSR experts. The Indian companies with the foreign capital adhere to business traditions of the parent companies or partners. The state-owned corporations consider CSR as the obligation to their society and an integral part of the activity of the company. Now, a weakness of businesses in India is the absence of a culture of comprehensible working conditions maintenance. The other trend lies in the fast business development. Thus, a rapid growth of the Indian economy over the last years promoted dizzy growth of the companies while social responsibility has been still presented by non-system philanthropy. In the meantime the society showed negative reactions to such demonstration of the business prosperity, because in fact the philanthropy did not serve the interests of stakeholders at all. The McKinsey’s research in September 2007 testifies to a difference of priorities in development strategy realization between the western countries and emerging markets BRICS (Belyaeva, Mavlutova, 2010). Respondents were offered to



allocate the three most important priorities of CSR for the next five years. In Table 3 ratings of priorities of five countries are shown, and also a total international estimation of each priority is presented. Table 3: Comparison of CSR priorities in advanced and emerging economies Rating

Priority

USA

The UK

Germany

China

Brazil

1

Environment

2

1

2

2

1

2

Safe products

5

4

6

3

2

3

Pensions

4

2

1

4

7

4

Sick leave support

1

5

8

1

8

5

Affordable goods

6

3

3

5

3

6

Human Rights issues

8

8

9

9

4

7

General Terms of working standards

9

10

4

7

6

8

Staff cuts when outsourcing

3

6

5

13

13

9

Inviolability and privacy of information

7

7

7

6

10

10

Ethical production

10

9

10

8

9

11

Investments into developing economy

16

11

14

12

5

12

Ethical advertising and marketing

12

12

16

11

11

13

Political pressure upon the companies

11

14

12

14

14

14

The salary of top-management

15

16

11

10

15

15

Others

13

13

15

16

12

16

Opposition to free trade

14

15

13

15

16

Unlike the companies working in the developed markets, the companies in the BRICS countries consider CSR as a business dealing part, a tool to increase competitiveness of the company, a possibility to enter new commodity markets, and also to strengthen mutual relations with suppliers, investors, and buyers. A comparative analysis of the social effects and advantages of the CSR model for business in the BRICS countries was undertaken (Nielsen, Thomson, 2010). It could be illustrated as follows in the Fig. 1.


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Figure 1: Interrelation of Social Effects and Business Advantages sorted by different CSR stages in BRICS countries.

Such approach reflects several factors. First of all, in Europe and the USA initiatives concerning sustainable development often are carried out as a reply to attacks on businesses from groups of activists; but for the companies working in emerging markets the issues of their brand protection are no emergency. According to Jodie Thorpe, heading the program of emerging markets of the British consulting organization «SustainAbility», the emerging markets’ company does not react actively to the threats related with risk-management, but consider some of these threats more likely as possibilities. Authors of the «SustainAbility» research that they carried out together with the International financial corporation, a part of the World Bank, found out that at the heart of activity of the companies in the field of a sustainable development there is the creation of the added cost, instead of brand protection. For comparison of the level of CSR in Brazil, India and China the following parameters were chosen: 1) historical preconditions of introduction and development of CSR; 2) features of corporate governance; 3) risks for foreign investors; 4) the purpose of CSR; 5) the basic CSR directions; 6) the initiator of CSR development; 7) major stakeholders; 8) obstacles against following the CSR principles; 9) economic stimulus; 10) transparency maintenance; 11) the contribution to development of local communities; 12) environment protection; 13) conformity to the international CSR standards; 14) social effect; 15) influence on primary activity of the companies (benefit for business).



“The lack of a common understanding and terminology in the area of CSR has made it difficult for organizations to develop consistent strategies.” (The Economist, 2008). According to the statistical data we can clearly see that social and ecological issues are highly considered in the business process. CSR is mostly presented by philanthropy and patronage of arts that is the initial stage of CSR, which is not giving high economic benefit. While the social investment brings benefit for businesses, in many respects it also causes mistrust in a kind of absence of the wide domestic practice. Despite the big similarity, Brazil, India, and China stand at different steps of CSR implementation. At present Brazil seems to be the leader in introduction of CSR principles. It can be caused by the thought-over policy of the government aimed at a sustainable development, and by active work of public organizations, networks «Instituto Ethos», introduction of the national standard of reporting NBR 16001, carrying out of social audit, and application of social share index ISE. At the same time the Chinese CSR institutes are more and more active. In the BRICS countries along with «the advanced» socially responsible group of companies there is a negatively minded group of businessmen and local residents. On the one hand, many companies in India and China consider CSR as the unnecessary western concept, on the other hand – as a trading barrier. CSR is not only a tool of the social problems management in the region. The companies in the BRICS countries consider CSR as a businesses’ dealing’s part, a tool to increase of competitiveness of the company, possibility to enter new markets, and also to strengthen mutual relations with suppliers, investors, and buyers. The pragmatism and economic benefit expectation force the companies to put huge investments into social and ecological spheres. The aforesaid outlines the system’s gaps in its way to sustainable future. We have grouped some problems to manage the way of CSR development in the region. Ten groups of problems, as shown in Fig. 2, refer to:

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

The historical preconditions (Yazenko, 2010,Thorpe, 2006, Thorpe, 2007; Belyaeva et al., 2010, Sustainability, 2008) of the formation and of the development of the CSR model in the analyzed countries;



The current state of the CSR level; and



The analysis of the stakeholders` core concerns and their perceptions of risks.

Generalization of problems that interfere with raising the effectiveness of socially responsible enterprises in these countries unveils the internal interrelation between them. This demonstrated interconnection determines the necessity of their complex solving. See Fig. 2. Institutionalization problem

Underdevelopment of partnerships

Legal problems

Image problems

Financial problems

Social problems

Organizational problems

Methodological problems

Low information transparency

Absence of holistic perception of corporate social responsibility

Figure 2: The system of problems that interfere with raising the effectiveness of social responsibility in the BRICS economies.

Looking at Fig. 2, it is noteworthy that the institutionalization problem is predetermined by the absence of national and public institutes whose core objectives should be: realization and coordination of CSR policy of businesses’ control over performance of corporations within the limits of CSR; and consultation services for enterprises concerning the creation and the introduction of CSR in practice. The spotlight of institutional problems includes also the wide



circulation of shadow-economic relations and a weak observance of legal rules (Belyaeva, 2011). As a result everyone loses: the government receives fewer taxes, employees experience the non-observance of the labor legislation, and they also suffer from social vulnerability and low guarantee of stability in the workplace, organizations suffer from poor activation of employees and other partners, perhaps also strikes, riots, loss of good employees, other business partners, customers, good image etc. (Mulej, 2011). Legal problems are caused by the underdevelopment of the national commerce, taxes, labor and ecological legislation that should establish frameworks and bases for the CSR regulation. It is exceedingly important to work out the standards in the form of laws, decisions, recommendations, codes, etc. The state should establish “an interaction corridor” for business and society in which government together with public structures create the necessary conditions for participation of businesses in the life of the society. In certain cases, the legislation is inconsistent with such a view inasmuch as it allows enterprises to find loopholes and use regulatory norms at their own discretion. First of all, the underdevelopment of partner relations between businesses, government, and nongovernmental/noncommercial organizations results from the absence of effective interaction practices, as well as the planning of joint actions and development of joint projects. The absences of trust relative to noncommercial organizations and funds, as well as low transparency of the latter do not allow the increase of cooperation in social and ecological spheres. There upon, Brazil is sharply different from other BRICS according to numerous surveys, including KPMG. Its business associations and non-governmental organizations play an active role in the advancement of the CSR, not only within the country, but also outside, participating in social and ecological programs in Latin America, in the United Nations Global Compact, in the Equator Principles, and even heading together with Sweden in the working out of ISO 26000 (Belyaeva-a, 2010). Image problems result from negative attitudes of a society to its businesses and of mistrust relative to their achievements. Image problems also trigger business


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ethics violation. Rapid economic growth of the BRICS countries during the last years ensured meteoric growth of the companies, while social and economic problems became aggravated and indeed have increased in various strata of its societies. Thus, the implementation of wide social programs can provoke growth of dissatisfaction among the poor, strain social pressure, and cause social conflicts. In India, for example, companies face additional pressure from negatively minded non-governmental organizations, which are aimed at carrying out large-scale protest campaigns against large corporations. The low capitalization of the majority of the companies, and the absence of resources for large-scale social programs, are considered as the first financial problems. A second problem refers to the shortage of social investments from the state funds. In order to popularize socially responsible behavior the latter should be stimulated by the state in the form of tax privileges and projects of challenge funding of socially significant programs. Otherwise, proclamation of high volumes of social investments activates heightened interest of the tax authorities resulting in the requirement of more thorough inspection of companies` performance. Besides, promulgation of social programs is frequently perceived by the state and the public as an indirect evidence of a company gaining super-profits that can cause increase in tax loading, toughening of tax discipline, and intensification of control over company’s operations. It is possible to call social problems the general condition of a civil society, mistrust of a society to business, and public inactivity. In India, China and Russia, paternalistic relations of employers and employees prevail over the partnering ones. Social problems first of all result from underdevelopment of a civil society, and also originate in both the unwillingness and the inability of a society to participate in managerial processes (Soboleva, 2005). The group of the so called “Organizational problems” includes the lack of a proper management system for social activities, a low degree of integration of CSR in developing a long-term strategy for the company, and the absence of the uniform coordinated policy. In many respects it is the result of absence of simple, clear and accessible methodological approaches to the organization and realization of social activities in the companies based on certain rules and



requirements. CSR should be considered a tool allowing the company to manage risks. Organizational problems, first of all, are reasons for the low degree of introduction of corporate governance principles. As a rule, in many companies the statement of the mission and values, carrying out socially responsible policies not always finds an embodiment in changes in the organizational structure, strategic targets, and real actions. As a result there seems to be no structural divisions and employees responsible for the CSR policy realization. Concerning methodological problems of the research, they are linked to the existence of “double standards” in estimation methods of social responsibility. Despite of existence of a multitude of tools for measuring the CSR, all of them analyze different directions of the social behavior of the companies. It seems that in the BRICS countries there is no complex methodology of measurement, monitoring and estimation, which would give the objective technique to provide a stakeholder with comparable information about the countries, consider the specificity of companies by their size (large, medium, small enterprises, industry, prevailing market) and operating scale (regional and transnational companies). On the one hand, companies in emerging economies attempt to introduce international principles of transparency, ecological safety, labor relations, and society support. On the other hand, they are compelled to build their policies in the crisis conditions of social sphere when social and economic problems become aggravated and include more and more various strata of society. Low information transparency neither allows getting the complete information on financial and non-financial performance of the company, nor carries additional risk for investors as it becomes impossible to control investments distribution within a company. The number of companies, which publish reports in accordance with the international standards and apply for external social audit and verification, is considerably low. In the analyzed countries this positive example is followed only by subsidiaries of multinational corporations which aspire to correspond to the international standards and internal policies of the parent companies. Absence of complete perception of CSR in the BRICS business community is the following: there is no clear understanding of the meaning and borders of social responsibility. Many companies in India and China consider CSR as an unnecessary western concept – a kind of trading barrier. In the majority of


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companies there is no clear view on the purposes and areas of corporate social policy, its influence on core activities of the company and direct correspondence between CSR and financial gain. There is no understanding that socially responsible behavior of a company is a sustainable development factor of business and of society as a whole. Not all businessmen consider CSR as an administrative leverage. Given the lack of experience, some companies are not ready to openly negotiate with stakeholders. The reality found on the UN Global Compact database on stakeholders, shows that only large national companies and business units of international enterprises take social responsibility as a policy and strategy of participation in society’s life seriously. 3. INCREASING SOCIAL RESPONSIBILITIES Formalization of problems of CSR development in the BRICS countries allowed us to develop the uniform concept of increasing the social responsibility, presented in Fig. 3. In the structure of the referred concept, the following three blocks are sorted out: problems, actions for perfection of existing CSR model, and expected results. As the analyzed problems of raising CSR in the BRICS countries run at all hierarchical levels (international, national, corporate, and internal), it is critical to allocate ways of perfection of the CSR model on each of these levels. What underlies the functioning of an effective CSR is the intention to reveal the requirements and expectations of stakeholders and allocation of company’s resources for their satisfaction in the best way (Soboleva, 2005). The definition of an accurate structural hierarchy, as well as the segregation of duties will allow making a management control system clear and transparent. By conforming to the corporate governance principles, the company can guarantee efficiency, openness and straight dealing, giving guarantees to its stakeholders. The effective management system of CSR presupposes introduction of systems of short-term planning and internal control. The system of monitoring and estimation in the CSR sphere promotes openness and increases the efficiency of business; it: 

Provides signals for the early prevention of backlog;





Defines the position of the company among the best in the field, region, and country;



Induces a fast introduction of new approaches at smaller risk; and



Reduces expenses for improving the company’s position.

The functioning of an internal control system is feasible with the introduction of a series of measures: performance standards, budgeting, and cooperation with consulting companies, project development, and so on. Monitoring and estimation of operating efficiency will allow adjusting its directions according to the mission statement and declared goals. With the participation in alliances, the company can collaborate in the creation of innovative products, raise professional level, develop partner relations network and promote its own interests. Social auditing is a necessary condition to company transparency. Information disclosure will be a sort of guarantee for all stakeholders, it will allow attracting socially responsible investment funds, involving new partners, expanding possibilities and influencing spheres of the company; hence, it will mobilize new resources. The attraction of public interest to the company’s operations will allow improving its image, and attracting additional resources for the realization of the declared goals. BRICS grouping has a possibility to take lessons from foreign experiences. Therefore the achievement of the new social contract between the state, the business community and the civil society, a goal that has been achieved in the European social model, is a contemporary need for BRICS as well. Certainly, each country has the features of its unique development, traditions, and national interests. However, in the context of the globalization all members of the world economy need to solve similar problems related to the interests of individuals, the protection of their rights, living and working conditions, as well as their social protection. World models of CSR formulate vectors of social architecture of the BRICS business and the variants of its development that match the calls of the 21st century.

236 Soccial Responsibility - Ran nge of Perspectives Perr Topics and Countriess

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Figure 3: The concept of raising corporate social s responsibility y in the BRICS cou untries.



The analysis of world practices allows for the allocation of some types of CSR that vary depending on the orientation vector of programs and state participation (refer to Fig. 3). In our opinion, all these features have had a strong impact on the formation of e.g. the Russian model of corporate responsibility. Though, concerning a national model of CSR, there are still many academic disputes, too. The institutional contour of the still new BRICS model of CSR should consider essential types of ideological, economic, and political factors that impinge on the public work, so to achieve a balance of interests of all stakeholders. The main problem of corporations of the emerging markets countries about CSR is the fact that there is a closeness of the information and opacity, and also a poorly developed practice of accounting under the international standards. It is necessary to notice that in each of the five considered countries, the necessity of creation of the uniform tool and the principles of CSR introduction, estimation and drawing up of non-financial reporting is underlined. CONCLUSION The present contribution argues that socially responsible behavior business models in the BRICS grouping have many common features. The most appealing socio-economic characteristic of the studied emerging markets underlies the forecasted economic effect on the group development and its integration into the world economy. Moreover, the suggested way to make up for the current lack of the systematic CSR resulting in some business and social disadvantages may be included in the local national strategies. We also propose that it is necessary to work out such methodologies of CSR which would be based on the international principles, but would also consider current realities of the analyzed countries. The IRDO’s suggestion for a national, or even international, strategy of development of social responsibility may help, too (Mulej et al., 2009). The present research suggested a framework for raising the CSR, which included detailed analysis of the core problems at the national level, then offered some possible structural methods to overcome possible barriers and also proposed some expected results. Such a framework may well be developed into details and


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implemented by all the members of the BRICS, including the new member country, namely South Africa. We hope to estimate and analyze its impacts as well as its ensuing changes in all those countries, in the near future. The dynamics of the current stage of corporate development in the context of an increasing corporate social responsibility gives a good possibility to the BRICS business community to raise the level of economic culture and to integrate national corporations into the world map of social responsibility/CSR. It will allow generating positive investment and corporate climate in the BRICS business environment underlined by a new world corporate development model. ACKNOWLEDGEMENTS Declared None. CONFLICT OF INTEREST The authors confirm that this chapter contents have no conflict of interest. REFERENCES Banerjee S. Corporate social responsibility: The good, the bad and the ugly. Critical Sociology 34(1) 2008: 51–79. BBC News (2011), http://www.bbc.co.uk/news/world-africa-12113830 {data access February 2011} Belyaeva Z S, Mavlyutova, M I. (2010) CSR Strategies in the Emerging Economies. Working papers. USTU.pp.20-21. Belyaeva, Z.S. (2013). Transformation Processes of the Corporate Development in Russia: Social Responsibility Issues. Systemic Practice and Action Research, 26 (6), 85-496. Belyaeva Z. S. (2010) New Approach to the Corporate Social Responsibility and Management Power in Russia: 20 Years of Changes. In Tatarkin A.(Ed)Analyzing Socioeconomic Inequalities within the Context of National Economic System Transformations. Ekaterinburg: Publishing House of Institute of Economics, p.172-178 Belyaeva Zh.S. (2010) Models of socially responsible business in the world economy(in Russian), IE RAN. Yekaterinburg, 174p Bowen H. R. (1953) Social Responsibilities of the Businessman. Harper & Row: N. Y. Canen N., Canen A.,Canen D. (2009) The BRICS´s Multicultural, Economic and Legal Aspects: a first insight, in: Integration of Russia Into the Fusion of the World Economic Culture in the Postcrisis Period, International Conference Proceedings, Eds: Strovsky, L. E.; Belyaeva, Zh. S.; USTU-UPI, Vol. 2: 175-180.



Carroll A. B. (1999) Corporate social responsibility: Evolution of definitional construct. Business and Society, 38 (3): 268–295. Freeman, R.E. (1984) Strategic management: A stakeholder approach. B.: Pitman Publishers. Golubov A.(26 July 2013) Proshhanie s illjuzijami. BRIKS stremitel'no terjaet svoi pozicii Korrespondent. No 29 from http://korrespondent.net/business/economics/1584979korrespondent-proshchanie-s-illyuziyami-briks-stremitelno-teryaet-svoi-pozicii Harding S. (1996) European expansion and the organization of modern science: Isolated or linked historical processes. Organization 3(4): 497–509. KPMG (2011) International Survey of Corporate Responsibility Reporting. http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/corporateresponsibility/Documents/2011-survey.pdf retrieved on 20 January 2012 Matten D., Moon J. (2005) A conceptual framework for understanding CSR. In: Habisch A, Jonker J, Wegner M, and Schmidpeter R (eds) Corporate Social Responsibility Across Europe. Berlin: Springer: 335–356. Mulej, M. (2011) Education for socially responsible entrepreneurship prevents business failures. In: Potočan, V., Dabić, M. (Eds) International Conference on Entrepreneurship, Education, Innovations. by University of Maribor, Faculty of Economics and Business, Institute for Organization and Informatics, and University of Zagreb, Faculty of economics and Business, TEMPUS ‘JPCR Fostering Entrepreneurship in Higher Education Project’ Mulej, M. (2011): Socially responsible entrepreneurship and business ethics, Workshop material, KEN, Graz, Austria. Mulej, M., Božičnik, S., Potočan, V., Ženko, Z., Hrast, A., Štrukelj, T.: Social responsibility as a way of systemic behavior and innovation leading out of the current socio-economic crisis. 2009. In: Wilby, J. (ed.). Proceedings of the 53rd Annual Conference. The International Society for the Systems Sciences, July 12-17, 2009, The University of Queensland, Brisbane, Australia. Making liveable, sustainable systems unremarkable, ISSS 2009: proceedings of the 53rd Annual Conference. The International Society for the Systems Sciences, July 12-17, 2009. [Compact disc ed.]. Brisbane (Queensland): University: The International Society for the Systems Sciences, 18 p. Nielsen, A E, Thomsen, C. (2010). Reporting CSR-what and how to say it? Corporate Communications: An international Journal, Vol.12, No.1: 25-40 Porter M., Kramer M. (2006) Strategy and society: The link between competitive advantage and corporate social responsibility. Harvard Business Review (12): 78–92. Sethi S. P. (1975) Dimensions of corporate social performance: An analytical framework. California Management Review 17 (3): 58–64. Soboleva I. (2005) CSR: global context and Russian reality (in Russian) Voprosy economiki. № 10.: 90-102. SustainAbility (2010) Road to Credibility: A survey of Sustainability Reporting in Brazil retrieved on 25 May 2012 on http://www.sustainability.com/library/road-to-credibility2010#.UlAKvSQvlLs The Economist. Special Report (2008) Corporate Social Responsibility: Going Global) retrieved 20 February 2010 from http://www.economist.com/surveys/displaystory.cfm? story_id=E1_TDQJTTPG Thorpe, J (2007) China: New Landscapes, SustainAbilityhttp://www.sustainability.com/library/ issue-brief-china#.UlALniQvlLs (date of access 20 September 2012)


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Thorpe, J, (2006) SustainAbility:Brazil: Country of Diversities and Inequalities,. http://www.sustainability.com/library/issue-brief-brazil#.UlALniQvlLs (date of access 20 September 2012) UN Global Compact Database of participants http://www.unglobalcompact.org/Participants AndStakeholders/index.html Retrieved on 12 February 2013 World Economic Forum. The Global Competitiveness Report (2013). Retrieved 1st October2013 from http://www.weforum.org/reports/global-competitiveness-report-2013-2014 Yazenko A.B.(2010) Social responsibility: price-consuming Pr-technology or a must have condition of the economic efficiency?(in Russian) VESTNIK USTU, № 1: 11-18


241

Subject Index A Affluence – 66, 67

Integrity – 36, 37, 38, 40, 42, 43 ISO 26000 – 13, 49, 163, 194, 228

B

L

BRICS countries (Brazil, Russia, India, China, South Africa) –221-239

C Capitalism, Sustainable capitalism - 5, 32, 50 Chaos Theory – 124, 125 Complexity Theory – 124, 126, 127 Cost/benefit alternatives – 13, 17 Crisis – i, iii, 34, 36, 101-103, 107, 109, 111 (Corporate/society’s) Social responsibility, socially irresponsible behavior, socially responsible behavior – i, ii, iii, 3, 10, 13, 27, 33, 34, 35, 36, 38, 41, 42, 43, 44, 48, 49, 65, 66, 76, 77, 87, 88, 96, 99, 100, 104, 105, 115, 169, 171, 187, 194, 218, 219, 222, 223, 225, 226, 227, 228, 229, 230, 231, 232

Leadership, leader, influential person, leadership style, management style, Enterprise Policy – 10, 161, 162, 163, 169, 175, 176, 178, 179, 180, 181, 182, 183, 184, 185, 186, 187, 202, 205, 206, 207, 209, 229

M Market economy, market reforms – ii, 176, 177 Methods of cooperation, USOMID, 6 Thinking Hats 173 Mexico, Southern Jalisco – 198,199, 208, 213, 216218 Minority, indigenous ethnic communities – 42 Monopoly, company ownership – 3, 5, 7, 30, 35, 174, 197, 215,

N

D Disaster, First Responders, Intervention – 77-104, 160, 214, 217

National mentality, cultural environment – 176 Neo-liberalism – 106

E

O

Earth day – 24, 26 Eco Family – 24, 26 Education, teaching, learning – 163, 168, 179, 185, 189, 195 Emotional intelligence – 178 Ethics of interdependence - 173 European Union, European Commission – 21, 30, 44, 45

G Gorenje Group – 21, 23, 24, 25, 27

I Information, information perception, gap between perception and reality, communication (in crisis) – 100, 102, 108, 109, 111-114, 125, 129, 130, 132, 133, 144, 147, 148, 151, 152, 153, 156, 157, 230 Innovation, innovative society, innovative economy, invention-innovation-diffusion process (IIDP), Innovativeness – 68, 161, 162, 163, 168, 173, 174, 175, 176, 179, 186, 187, 188, 232

Occupational health and safety - 23 Oxfam - ii

P Pandemic, communicable diseases, isolation, quarantine, movement restriction, restricted area, healthcare system, evacuation, (de-)contamination, burial, Medical Intelligence – 104, 105, 106, 107, 108, 109, 110, 111, 113, 115, 117, 122, 124, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, ¸151, 152, 153, 154, 155, 156, 157, 158, 159 Psychology, positive psychology – 49, 50, 51, 55 Public administration – 34

R Reminder – 105-107 Requisitely holistic action, systemic, interdependencies, synergies, total holism, fictitious holism, Systemic Thinking, Dialectical

Matjaž Mulej and Robert G. Dyck (Eds) All rights reserved-© 2015 Bentham Science Publishers


Systems (Theory), over-simplification, personal requisite holism – 104, 105, 106, 112, 113, 115, 116, 117, 118, 119, 120, 121, 122, 126, 128, 144, 154, 155, 157, 159, 161, 162, 167, 168, 173, 188, 194, 214 Responsible competitiveness – 15 Responsible Corporate Management, ((requisitely holistic) corporate citizenship, requisitely holistic behavior, Total Responsibility Management, Corporate ethics, corporate values, Moral leadership – 3, 4, 5, 6, 8, 9, 11, 12, 18, 19, 27, 162, 172 Rule of law – 33, 34, 36, 45 Russia – 173, 174, 175

S Self-determination theory – 52, 62 Seven S, seven F, seven L, seven D, seven E – 164, 165, 166, 167, 170 Slovenia – 33, 36, 42 Social transformation, social innovation, social change, systemic cultural change – i, ii, 5 Stakeholder – 10, 12 Sustainability, sustainable business, environmental responsibility, Environmental management

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systems, environment protection – 5, 15, 20, 23, 25, 26, 208, 210, 211, 212, 213 Sustainable consumer, environmentally conscious user, environmentally conscious production – 20, 21, 22, 27 Sustainable development sustainable future – 9, 16, 17, 27, 218, 225, 226 Sustainable society - 5

U UN Global Compact – iii, 228

V VCEN (values-culture-ethics-norms) – 164, 171, 173, 175, 177

W Wellbeing, happiness, quality of life, life satisfaction, subjective well-being, objective well-being, psychological well-being, employee wellbeing – 4, 6, 48, 49, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 66, 67, 98, 169, 172, 212 World Economic Forum – i, ii, 220, 221