CSR in Belarus


 

I got back last week from Minsk, Belarus. BITC sent me there to train some of the MBA lecturers at Belarus State University in CSR. Fabulous place – the people were so friendly. But I’ll make observations about the city and its people later.

First I want to capture some thoughts about the business environment and the way CSR will have to look different if it is to succeed in Belarus (which it must … mustn’t it?).

Belarus is a former Soviet state and it’s probably not controversial to say that it holds more tightly to those roots than just about any of the now independent nations. The government has a controlling influence over a very large part of Belarusian business activity. The government’s brand of self-styled ‘market socialism’ (presumably as opposed to ‘rampant capitalism’) means that it still keeps control over commodity pricing and, to a certain extent, exchange rates. In one sense it’s a bit like China, but the level of State ownership of manufacturing is much higher in Belarus.

All of that State ownership makes just about everything about CSR look different. It collapses some of the stakeholders (the owners are also the government – and therefore also, mostly speaking, the regulator) and makes it really important to understand the politico-economic context before trying to drive CSR through business. For example, when the government is the owner of a business, it’s meaningless to identify the possibility that the government might step in and make regulatory changes that adversely affect the interests of the business. Of course it’s trite to say that remains a possibility, but the government as regulator and owner will need to deal with whatever consequences it gives, well, itself!

Apparently, doing business in Belarus isn’t all that difficult (it’s easier than Croatia and Turkey, for example), but it certainly isn’t the same as doing business in the UK. It’s worth talking about some of the differences and similarities.

Firstly, a similarity. Both productivity and Employee Engagement are really big issues in Belarus. For what seems to be very different reasons, productivity in Belarus and the UK are relatively low and companies can presumably still get a lot of benefit by better understanding employee motivation. I was surprised that Dan Pink’s TED talk on Motivation drew just as strong a reaction in the UK as in Belarus. It was a surprise to me to know that Belarusians respond in a very similar way to those talks: observations about the power of mastery and independence were just as profoundly felt. Perhaps the famous Belarusian passion and creativeness were not far below the surface when watching. But in any case, understanding the connection between creativity and mastery will help today’s MBA students drive performance for tomorrow’s Belarusian companies. The connection between CSR and HR is critical.

The environment agenda looks very different in Belarus. Recycling is virtually unheard of, as is carbon reduction, but Belarusian business is very keen to understand how it can reduce costs and the links between costs and energy use will play out as well there as anywhere else. The key difference in this area is making connections more directly to cost savings that can be realised through more efficient production, decreased waste and increased recycling.

Marketing is very important in Belarus. It seemed as though there were as many advertising billboards in Minsk as anywhere in London, many of which carried very creative and attractive signs reminding everyone that they loved Belarus. There were many others carrying exactly the sort of advertising that we would expect anywhere. But there doesn’t seem to be a big market yet for ethical consumerism. And there also didn’t seem to be much happening in terms of ethical procurement. All of which means that there are some big opportunities in both those areas, but which will require something of a leap of faith, or some strong corporate leadership.

One of the biggest difference in CSR that I identified in my short stay was the Belarusian approach to philanthropy. I realise that philanthropy is only a small part of CSR (if at all), but it’s a profound difference. Gifts to charity by Belarusian business are double taxed. Firstly, a gift to charity is not considered a deductible expense and therefore can only be paid from profits after tax has been paid. Secondly, a charity has to pay tax on the income it receives. This means that a Belarus charity receives less than half of the intended donation when compared to a similar transaction in the UK. Presumably there are good reasons for this treatment of charitable donations, but I confess I couldn’t make much sense of it. It seems as though the taxation approach also applies to employee volunteering and any kind of corporate/charity partnerships. That kind of active discouragement of community engagement means that philanthropy isn’t getting a lot of traction from business in Belarus. I’m still wondering whether that is a good or bad thing – keen to hear your thoughts.

I had a very long and interesting discussion with my new friends from the Belarus State University about how to go about teaching CSR. Of course we reviewed each syllabus and identified how CSR is connected to standard MBA subjects. But beyond that lies the question of whether students in an MBA would benefit from an overarching view of CSR. It struck me that CSR in Belarus is much more like philosophy than a relatively mainstream business context. Which means that teaching it as such, along with teaching weaknesses and strengths of the new ‘philosophy’, are important.

That question still hasn’t entirely settled in my mind, but it has helped me to take a new perspective on CSR. Many of the MBA students will stay around and manage businesses in Belarus. Which means that knowing about the growing international focus on CSR might not feel all that important. But it strengthened my resolve to understand the business case for being a responsible business.

In any case, I got the distinct impression that the style of business happening in Russia and China is much more important to the Belarusians than the UK. All of which leads me to thinking that influencing those countries will lead to stronger CSR in many other countries.

On an altogether different note, I am a very big fan of Krambambula, a vodka based drink that I tried for the first time in Minsk which has the same kind of spices found in Balzams, except that it tastes good.

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