Friday, August 20, 2010

The State and the Social Responsibility

It has been usual to evaluate private firms market valuation, by their willingness to get on board of Social responsibility requirements : In this latest report previous to launch the new ISO 26000,( August 2010) the International standard organization says:
“The need for organizations in both public and private sectors to behave in a socially responsible way is becoming a generalized requirement of society. It is shared by the stakeholder groups that are participating in the WG SR(working group on social responsibility) to develop ISO 26000: industry, government, labour, consumers, nongovernmental organizations and others, in addition to geographical and gender-based balance.”
Thus, Social responsibility is getting wider field of application , while includes not just private firms, but public enterprises as well .The implications of this change are quite significant . Let get more details about it:
a.- Public enterprises and private firms might develop business partnerships on the basis of homogeneous management model.-
b.- Public enterprise develop new management model based on the accountability of its results, which creates incentive to transform public enterprises in a source of value creation, quite the opposite to the traditional public enterprises as the source of fiscal deficit, waste of resources and corruption.
c.- The Social responsibility in Public enterprises, set a new frameworks for all firms to do business based on new rules ,focused not just on short terms results but on the long run result as well.-
The implication of this new framework goes beyond business ,and get to politics. The State should also evaluate to be orientated by the boundaries of Social Responsibility.
Actually ,a lot of public services do not qualify to have high quality standard . Public Health, public education, macroeconomic policies , infrastructure capabilities , and even citizen safety .In this case accountability (democratic rules) works with imperfections which are not possible to fix them up ,because it is in the State interest to keep it that way: bad quality is a substitute to higher price, in case those services are provided by private firms.
It follows that this new framework for Social responsibility, will impose sooner or later new demand on the State actions, and how it fit with citizens expectations of better quality in everything , no matter whether it is either public or private.It would not be posssible to have again the experiences of some economies with their badly designed economices policies .