Tag Archives: corporate social responsibility

Party Building as the Guide to Social Responsibility in Non-Public Enterprises

This post presents a translation of an article discussing the role of Party groups in CSR in private enterprises, published on the People’s Daily. The article was translated by Larry Catà Backer, and edited by me.

Party Building as the Guide to Social Responsibility in Non-Public Enterprises

Dang Qimin

November 06, 2017 16:27

People’s Daily

In 40 years of reform and opening up, non-public enterprises have become an important force to promote national economic development, ease the pressure on employment, and promote public innovation. The number, role and status of non-public enterprises determine the extreme necessity and importance of strengthening Party building in this area, and giving full play to the role of political core and political leadership of Party organizations. To make this work a reality, we do not only need to face the actual problems in our current work. We also need to find a breakthrough and a starting point for our work.

1. The problems commonly and currently faced by Party building in non-public enterprises.

The CPC Central Committee has always attached great importance the work of party building in non-public enterprises, and local governments has been exploring it actively. Especially since the 18th CPC National Congress, under the strong leadership of the party Central Committee with Comrade Xi Jinping as the core, Party building in non-public enterprises has increasingly become an important part of grass-roots Party building in our country and has achieved remarkable results. However, we must see and recognize that, compared with state-owned enterprises and government departments and institutions, the work of Party building in non-public enterprises is still lagging behind, and there exist a series of problems that are in urgent need of a solution.

The first problem is that owners of non-public enterprises lack external constraints and internal motivation on Party building. The property rights of non-public enterprises determine that the business owners are the core of the property rights of the enterprises (or economic core), and they have the power to make decisions on business management and development. Party organizations, on the other hand, are a new systemic arrangement embedded from the outside, in order to promote the sustainable and healthy development of enterprises and guarantee their correct developmental trend. In this way, a binary system of co-existence is formed: one is an endogenous corporate governance structure centered on business owners, and the other is a Party organization system embedded from the outside that hopes to play the role of political core. There is no relationship of organizational leadership between the two, and there is no effective administrative restraint. For non-public enterprises and business owners, if Party building work can help enterprises to make good use of the government’s resources for development, enhance the cohesion of enterprises and promote the sustained and healthy development of enterprises, then business owners certainly enjoy its success. Otherwise, they will regard the Party as an ornamental vase or even a burden that binds their hands and feet. Even those large-scale enterprises that have already passed the initial stage of development, reaching a certain scale, will not be willing to devote too much effort, human and material resources to Party building.

The second problem is a lack of due encouragement and continued enthusiasm for Party building workers in non-public enterprises. The persons responsible for Party organizations in non-public enterprises, and Party building staff are mostly employed part-time, and they don’t have a fixed post and a salary. Their enthusiasm and motivation for Party building, on the one hand, comes from loyalty to the Party, and on the other hand it comes from a good desire for self-development. However, as non-public enterprises belong to “out-of-system” units, Party-building staff can hardly gain access to the system even if they work well. In addition, the part-time and residual nature of Party building work will, to a certain extent, affect the time and energy they devote to their work at the enterprise, so they often have less opportunities for business development than other staff members. Therefore, from the perspective of personal development, the work enthusiasm and motivation of Party building staff in non-public enterprises are difficult to maintain.

The third problem is that several departments are in charge of Party building in non-public enterprises, without a main subject of responsibility. Owing to the differences in the nature of non-public enterprise investment entities, in their industry and stage of development, the relationship of superior and subordinate affiliation of Party organizations in non-public enterprises is, from a structural point of view, quite complicated and diverse. Some adopt a territorial management model, and are placed under the management of street (community) Party work committees, or township and country Party committees, or village Party branches, accordign to the location of the enterprise. Some adopt the management model of professional associations, and are managed by the Party organization of their professional association or by the Party organization of the Chamber of Commerce. Some adopt a management model based on departmental coordination, and are managed by the Party committees of industry and commerce departments, tax departments, etc. Some use a management model based on institutional affiliation, and they rely on the Party organization of various intermediary service institutions for their management, and so on.

As a result, the daily coordination and management of Party building in non-public enterprises often involves many departments such as the organization, propaganda, united front, industry and commerce departments, social work committees,industrial and commercial administrations, workers and youth organizations, etc., none of which is the main subject of responsibility. As a result management is cross-cutting, dispersed and overlapping. At the same time, non-public enterprises have to deal with many ‘parents in law’, which fatigues them.

It is precisely because of the above difficulties, that generally speaking, at present, Party building in non-public enterprises is still at the stage of establishing a Party organization and expanding the scope of its work, and has not yet achieved a shift from “quantity” to “quality”. It has not yet achieved the transformation from organizational and job coverage to functional coverage, that is a full exertion of the function of political core and political leadership.

II. Social responsibility construction may be and can be an effective starting point to promote Party building in non-public enterprises

To solve the difficulties of Party building in non-public enterprises, we must find the starting point Party building work, a breakthrough, or the point where Party building meets the developmental interest of enterprises, to allow for the integration of endogenous management systems of enterprises and Party groups, which the Party and the state have embedded in enterprises from the outside. In this way, enterprises’ own internal motivation, and the external pressure of supervising departments would achieve a harmonious fusion, forming a Party building system where enterprise owners would be supportive, and the staff would be satisfied, achieving the goal of Party building and enterprise development in a harmonious win-win situation.

In theory, the construction of a corporate social responsibility in non-public enterprises, if led by Party building, may combine the benefits of Party building and enterprise development. On the one hand, by leading social responsibility in non-public enterprises, Party organizations can help improve the management level of enterprises, strengthen the cultivation of enterprise personnel and the construction of an enterprise culture, turning resources of the Party organizations into resporces for the development of non-public enterprises, organizational advantages into developmental advantages for enterprises, and organizational vitability into developmental momentum for enterprises. This would allow non-public enterprises to achieve the goal of a sustainable and healthy development. On the other hand, non-public enterprises, through the fulfilment of social responsibility construction, would ensure that their own endogenous and exogenous interest is in line with the interest of the state, of all ethnic groups, and of society, and also guarantee the socialist direction of their development, thus realizing the role of political core and political leadership of the Party.

From a practical point of view, our project team and Jiading District in Shanghai have started to explore new ideas for Party building work leading social responsibility construction in the non-public sector since 2013. We have formulated a plan, promulgated implementation documents, and created effective methods and experiences in “Realizing the Role of Political Core and Political Leadership of Party Organizations in the Construction and the Evaluation of Social Responsibility of Non-Public Enterprises”. In relation to the difficulties generally experienced in non-public enterprises, our experience can be divided in three aspects.

1. Establish a vertical and horizontal linkage mechanism to address overlaps in management, and the lack of a subject of responsibility.

The guidance of Party building in the construction of social responsibility in non-public enterprises is a complex project. The object of responsibility not only involves Party organizations and government departments, consumers, employees, but also the community, cooperation partners, social investors and other subjects. The diversification of targets is such to make it difficult for enterprises alone to realize social responsibility. Therefore, based on the overal perspective of the district, we have constructed a linkage mechanism involving the participation of multiple subjects from three dimensions.

The first one is the vertical linkage mechanism formed by the District Social Work Committee, the Street Party Work Committee and corporate Party organizations. In this linkage mechanism, the District Social Work Committee is the leader and supervisor of the guidance of Party building in the construction of social responsibility in non-public enterprises. The Committee is responsible for the overall planning and deployments of the construction of social responsibility of non-public enterprises in the district. It formulates and promulgates relevant evaluation standards, and incentive and punishment policies. The Street Party Work Committee is the coordinator and organizer. It is responsible for promoting the coordination and implementation of the construction of social responsibility in the regions’ non-public enterprises. Also, it has the role of promoting communication and top-down flows of information among Party groups in non-public enterprises. Party building staff in non-public enterprises are the actual implementers, and they are mostly responsible for preparing the propaganda that takes place prior to the evaluation of corporate social responsibility, for organizing the evaluation procedure, and for conducting rectifications, and the follow-up after evaluation has taken place. Through this three-level linkage mechanism in Party building, responsibilities have become clear, and a synergy has been formed.

The second one is a horizontal linkage mechanism involving coordination among each relevant commission and office, workers, youth and women’s associations, and the Federation of Industry and Commerce, under the guidance of the District Social Work Committee. Under this kind of linkage mechanism, the supervision and evaluation of the construction of social responsibility in non-public enterprises through Party building occurs from different angles, through a joint form of evaluation by experts from various commissions, offices, and bureaus. To a definite extent, this arrangement has solved the current separation among vertical and horizontal lines of command, as well as the fragmentation existing in Party building in non-public enterprises, which made it difficult to join forces in management.

The third one is a linkage mechanism formed between non-public enterprises. This mechanism relies mainly on the resource integration function and cluster effect of Party organizations in industrial parks, street and township committees, trade association and intermediary service agencies, to establish a mechanism to build a governance coalition in the construction of a social responsibility led by Party building, and to share its costs. To a certain extent, this has promoted the exchange and sharing of experiences and information about a social responsibility guided by Party building among non-public enterprises. It has stimulated the enthusiasm and initiative of non-public enterprises in carrying out Party building to lead social responsibility construction, and apportioned the costs of a social responsibility led by Party building.

2. Standardize the system of rating indicators, to solve the lack of external pressure on business owners.

The construction of social responsibility in non-public enteprises through Party building is a process that needs to continue over the long term. In this process, external constraints and incentives are needed, and the premise of constraints and incentives is to establish a set of scientific evaluation criteria and evaluation processes. To this end, we have established and perfected a system of evaluation standards, an implementation system and a service platform for the construction of social responsibility in non-public enterprises through Party building.

First, in accordance with current international rules and in combination with China’s national conditions and the regional characteristics of Jiading, we have defined the five major dimensions of staff responsibility, management responsibility, government responsibility, community responsibility and environmental responsibility. We have introduced a system of 16 second-level indicators and more than 60 third-level indicators to evaluate the construction of social responsibility in non-public enterprises through Party building. Among these indicators, there are both indicators which are mandatory for enteprises, and indicators which are voluntary and leave room for being developed by enterprises. At the same time, there are special indicators defined according to the characteristics of enterprises. Through this system of indicators, the Party’s political core and political leadership role are integrated and transformed into assessments which are implementable and certain, into the evaluation of statistical quantities which can be analyzed, and into factors for evaluation. To a certain extent, this is a commitment made by business owners to society. It is also a kind of external pressure and either a soft or hard external constraint.

Second, through network information technology and big data technology, we have constructed and developed an information management and service platform on the social responsibility of non-public enteprises through Party building. This platform at the moment stores information and resources on more than 500 non-public enterprises. This platform is also the work platform used by the District Social Work Committee, the Street Party Work Committee, committees, offices and bureaus, non-public enterprises and evaluation experts to rate – together – the construction of social responsibility in non-public enterprises through Party building. It is also a data platform to effectively integrate and share information on the progress of social responsibility to Party building, and its evaluation. It is furthermore a platform providing follow-up to allow to continuously promote and improve the construction of corporate social responsibility through Party building.

On the one hand these standards and the construction of platforms have promoted the ingress of constructing social responsibility in non-public enterprises through Party building into a virtuous cycle of order and regularization, of a progress promoted by rating, and of linkages among stakeholders. On the other hand, they have helped the accumulation of resources and data on social responsibility, they are of continuous usefulness to innovating social governane, to constructing social integrity, and to further enhance the capability of Party building to serve non-public enterprises.

3. Improve supervision and incentive mechanisms to solve the problem of the internal motivation of business owners and Party building staff.

In the process of constructing social responsibility in non-public enterprises throuh Party building, rating is just one of the available means. The goal of rating is finding out the problems and difficulties in the construction of social responsibility. Supervision and incentives can manifest the image of an enterprise, and promote a sustainable and healthy corporate growth. To this end, we have adopted a project-based mode of operation in the construction of social responsibility in non-public enteprises through Party building. While constantly improving the relevant system of rating indicators, we have built a multi-level, multi-stakeholder supervision and incentive mechanism.

Its first component is a multi-channel monitoring mechanism. In order to strengthen the awareness of corporate social responsibility and supervise the continuous promotion of corporate social responsibility, corporate Party organizations are required to submit regular reports to social work committees on the fulfillment of corporate social responsibility by non-public enterprises, to regularly publicize cases and results about social responsibility through the internet, to regularly organize the publication of social responsibility reports, and to promote the results of social responsibility. Party organizations in enterprises are responsible for supervising and following up the construction of corporate social responsibility. The performance of the construction of corporate social responsibility through Party building is also a major component in the assessment of Party building.

Its second component is a diverse incentive mechanism. Through rewards, commendations, and policy incentives as well as other means, non-public enterprises who comply with social responsibility and Party building are encouraged and receive publicity. For instance, through the status of pilot site in the construction of social responsibility; the status of outstanding unit; through prizes; their model role; through convening work meetings; through the recommendation of representatives of non-public enterprises with a good compliance record as representatives to local People’s Congresses, Political-Consultative Conferences: through their candidacy for appointment at federations for industry and commerce, non-governmental chambers of commerce, industry associations; through other special appointments. For Party building staff, a job post allowance system has introduced in the case of Party secretaries and Party staff in non-public enterprises. A training mechanism for persons responsible of grass-roots Party organs has been introduced. The construction of the troops of secretaries and staff of Party organizations in enterprises has been strengthened. Enterprises have been guided to take pride in social responsibility, to provide a motivation for the enterprise to comply with social responsibility, and to create an environment and atmosphere where the construction of social responsibility can take place through Party building.

III. Lessons Learned

From the point of the need to innovate Party building in the non-public sector, the most important issue at present is promoting a functional transformation of Party building, on the basis of a broad coverage of Party organization and Party work, to further stimulate the endogenous motivation for Party work in non-public enterprises; raise the effectiveness of Party building, and give full play to the role of Party organizations as political core and political leaders. The effectiveness of Party building and the quality of Party building are the key to Party building. An ineffective Party not only will not unite the masses. It may also have a tremendously negative impact on Party building. Generally speaking, Party building work in non-public enterprises is still in its stage of expansion, where Party organizations are established, and the scope of their coverage is broadened. It has yet to achieve a transition from “quantity” to “quality”. That is to say, the effectiveness of the work of Party building in non-public enterprises has not drawn any special attention.Therefore, now there is an urgent need to innovate Party building in non-public enterprises; to explore a combination of the development of enterprises and of Party building, to integrate corporate governance structures with the exogenous system of Party organizations; to achieve unanimity of goals; to achieve a functional transformation on the basis of the organizational and work coverage of Party organizations; to bring into play the political core and political leadership role of Party organizations. Organizational and work coverage are the premise and the basis, while functional coverage is the aim and the goal of Party building.

From the perspective of innovating Party building in non-public enterprises, the construction of social responsibility can combine the interests of Party building and enterprise development, and be an effective starting point and an important channel to realize the transformation from organizational and work coverage to functional coverage. Based on the lack of endogenous motivation for Party building in non-public enterprises, and starting from the actual developmental needs of non-public enterprises in Jiading District, we took the lead in “constructing social responsibility in non-public enterprises through Party building” to innovate the exploration and practice of Party building in non-public enterprises. Exploration and practice have proven that the construction of social responsibility in non-public enterprises through Party building may combine the interests of Party building and of enterprise development. This entry point may lead to the integration of corporate governance structures with the exogenous system of Party organizations, and thus continuously strengthen the motivation for Party building, and its influence on enterprise development, definitely raising the effectiveness of Party building in non-public enterprises, and bringing into play the political core and political leadership role of Party organizations.

In the actual operative process, it is necessary to take Party building as an effective starting point in the construction of social responsibility in non-public enterprises, and to promote the transformation of Party building in non-public enterprises from the “two coverages”. It is also necessary to provide a series of guarantees to systems construction and institutional mechanisms. On the one hand, it is necessary to do a good job in the overall planning and deployment of the construction of social responsibility in non-public enterprises through Party building from the aspects of the organizational system; the responsibility system; the support network, and environmental protection, based on the overall regional perspective. It is necessary to strengthen the linkage mechanisms of Party construction, included at the district, and township level, and as they concern Party organizations in enterprises. Importance must be attached to an effective integration and sharing of resources and forces in the construction of social responsibility in non-public enteprises through Party building. This means to explore and practice the path and the fundamental guarantees of the construction of social responsibility in non-public enterprises through Party building. On the other hand, it is necessary to promote the construction of an evaluation system for the construction of Party building in non-public enterprises, based on systema engineering. It is necessary to adopt a standardized evaluation, a support platform, a project mode of operation and other methods and models, to raise the development capability and level of Party construction in non-public enterprises, to cooperata in order to promote the construction of corporate social responsibility led by Party building, and to promote the ingress of the construction of social responsibility in non-public enterprises through Party building in a virtuous cycle of regularization, construction promoted by evaluation, and focus on results. This is what the exploration and practice of the main features and modes of operation of constructing social responsibility in non-public enterprises through Party building is.

(The Author is the Deputy Director of the Institute of Information of the Shanghai Academy of Social Sciences).