The corporate responsibility report between private interest and collective welfare

This study seeks to analyse how the search for the conditions of internal and external teleonomy in production firms represents the basis for the formation of the managerial objectives function (Mella 2008) and how the achievements of such equilibriums must be supported by an appropriate operational and information tool: the corporate responsibility report. Firms are permanent organizations, created and governed for longevity; in particular, productive organizations, as “instruments of human activity in the economic field”: a) possess endogenous teleonomy to the extent that, from an internal perspective, they provide value to the suppliers of capital and labour, so that it is in their interest to keep the system going. The value obtained from the organization's existence keeps the organizational ties cohesive and guarantees that efficient metabolic processes can be carried out; b) enjoy exogenous teleonomy – from an external perspective – since they can provide value to those with an external interest in the firm (clients, suppliers and society) by continually renewing their instrumental processes while searching for ever higher levels of efficiency. Starting from these premises this study tries to identify the main factors of endogenous and exogenous teleonomy, demonstrating in particular that: - endogenous teleonomy implies a satisfying and stable profitability that guarantees satisfactory levels of shareholder value for the suppliers of capital and adequate monetary and non-monetary motivation for collaborators, thereby favouring conditions of “happiness”; endogenous teleonomy implies maintaining conditions of maximum productivity, economic efficiency and profitability (as shown by the key performance indicators) at every level of the organization; - exogenous teleonomy implies the continual increase in the value of products for the market – through improvements in the price-quality relationship – in order to ensure stable customer appreciation and trust, a stable and constructive relationship with suppliers and a structural tie that is compatible with the physical, social and political environment. Such conditions are revealed by a convenient balanced scorecard system and assume the total acceptance of social responsibility. The conditions of teleonomy must be pursued by successfully fighting the numerous endogenous and exogenous factors that threaten the life of the organization, among which the weakness of governance, the interference of external organizations and the insufficient competence of managers, which makes the business and managerial control of the organization scarcely effective; internal organizational conflict, which inhibits the pursuit of conditions of efficiency; the withdrawal of economic value flows, which reduces the internal resources available for growth and the attractiveness of the firm to capital suppliers; the heightened dynamics of the sector, which increases the risk from competitors; uncontrollable market dynamics, which increases the demand risk for products and the supply risk of resources; and the lack of control of productivity. These considerations indicate that management, in forming the objectives function that guides the strategic process toward the achievement and maintenance of the conditions of endogenous and exogenous teleonomy, must be focussed on: - value based management and activity based management to guarantee the suppliers of capital adequate volumes of shareholder value, while maintaining the teleonomic conditions that allow them to benefit from adequate volumes of financial flows needed for growth; - knowledge management, in order to favour an organizational behaviour that is informal, motivated, efficient and open to learning on the part of all members of the organization; this allows the firm to maintain the teleonomic conditions of organizational learning which are indispensable for dealing with the growing complexity; - total quality management to guarantee the maximum value for clients and the market in order to maintain the conditions of exogenous teleonomy related to the appreciation of and trust in the company; - community management and social accountability that guarantee value for the entire group by augmenting the conditions of exogenous teleonomy linked to the stable trust that ensures sustainable growth. Against this conceptual framework the study proposes to examine how the above-mentioned modern tendencies of management can be brought together in a single approach that also provides the available information and operational instruments – among which the planning approach that focuses on the integral growth of the organization, social accounting and the use of performance indicators – that reveal the state of the conditions of teleonomy.