Organisation's Responsibility and Quality Management

The Ministry of Science and Higher Education of the Russian Federation Kazan National Research Technological University




R. I. Zinurova, A. R. Tuzikov


        ORGANISATION'S RESPONSIBILITY AND QUALITY MANAGEMENT

Tutorial











Kazan
KNRTU Press

2019

         UDC 658.012.4:658.562(075)
         LBC 65.9(2)я7



Published by the decision of the Editorial Review Board of the Kazan National Research Technological University


Reviewers:
Prof. G. F. Mingaleev Assoc. prof. F. T. Nezhmetdinova





         Zinurova R. I.
         Organisation's Responsibility and Quality Management : tutorial / R. I. Zinurova, A. R. Tuzikov; The Ministry of Education and Science of the Russian Federation, Kazan National Research Technological University. - Kazan : KNRTU Press, 2019. - 144 p.

         ISBN 978-5-7882-2770-2

       The tutorial will help graduate students majored in 27.04.02 «Quality Management», 27.04.06 «Organization and management of science consuming industries», 27.04.07 «High-tech technologies and economics of innovation» to study real practical cases and research work related to the specifics of implementing responsible policy in relation to employees of Russian companies, as well as show examples of best practices in the field of social responsibility of big businesses. The authors also proposed materials that reveal the problems of human capital development, and the principles of sustainable development of Russian enterprises. In addition, a circle of problems has been identified for the development of social responsibility of small and medium-sized businesses at the federal and regional levels. The tutorial also can be useful to undergraduates, graduate students, postgraduate students, scholars and universities’ professors.
       Prepared at the Department of Management and Entrepreneurship.



                                              UDC 658.012.4:658.562(075)
                                              LBC 65.9(2)я7


ISBN 978-5-7882-2770-2    © Zinurova R. I., Tuzikov A. R., 2019
© Kazan National Research Technological University, 2019


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    INTRODUCTION


       Corporate social responsibility is a very important trend in the ways of doing business all over the world. There is a special international standard ISO 26000:2012 dealing with the special norms that any company should respect if it wants to get the access to IPO. Today management cannot avoid paying attention on such global trends. Therefore it is necessary to study topics on corporate social responsibility based both on foreign and Russian practice. The tutorial consists of research and analytical materials as well as of cases. The authors gives special thanks to their colleagues I. A. Frolova, I. S. Garafeev, G. I. Garafeeva, A. P. Ostroumov whose research materials they use.
       The book includes some original materials dealing with the real practice of socially responsible organisations and enterprises. These cases help students to understand the ways of doing business according to the principles of CSR. Every part of the tutorial has questions and tasks for students. These tasks require demonstrating the analytical skills as well as help to train them. The students have to read carefully every part of the book, try to do tasks and answer the questions.

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RESPONSIBLE BUSINESS OF RUSSIAN COMPANIES
AND HUMAN RESOURCE MANAGEMENT THROUGH THE CORPORATE EDUCATION

      Conceptual field of corporate social responsibility has not been formed in the general and the final version in the different countries. Countries, in which private sector and corporate activity have a longer history, have come their way in development of the concept and technology of corporate social responsibility.
      In Russia researchers and business associations include to this notion a split-level range of problems: corporate responsibility in the relations with its partners; liabilities to customers; responsible policy for employees; environmental responsibility; corporate responsibility to the society as a whole. Understanding the various aspects of corporate social responsibility interfere the formulation of a common understanding. For us, as authors, who have many years of research scientific practice in the field of professional training and retraining of personnel, responsible policy towards their employees has the highest value and scientific interest.
      The multilevel specifity of the corporate social responsibility includes the basic level - the timely payment of taxes, salary payment; the next level - providing employees with high-quality working and living conditions, including worker's skills level improvement, preventive treatment, development of social sphere; and at the highest level -charitable activity.
      The development of human resources through educational programs and training and professional development programs, work on improving the quality of relationships with external and internal clients became the subject of our research on examples of Russian corporations.
      In the context of the modernization of the economy, the human factor has become a critical element that determines the survival and success of companies. Despite the rapid development of technology, people remain the basic capital of the organization. New trends in the management of the organization requires a qualitatively different approach to sourcing and personnel management, to realization of their potential. The main components, that determine the character of human potential realization, are the professionalism of the worker, his level of education and applicability of his qualifications to the specific manufacturing process, performed by him and necessary qualitative characteristics of labor results [1].

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       The key factor of human capital assets is the quality of it, at that the elements of the quality in this case should be seen not just as a potential employee's ability, but how practically applicable functions of his production and economic activities on the rational use of resources and production of a product with given quantity and quality. These practical functions of the human capital, which express the potential of the employee, should be prioritized object management in the quality management policy.
       In previous years, the problem of quality was considered in our country as a predominantly technical, related primarily to the imperfection of the equipment and technology, the role of human resources in quality management was underestimated. The former quality management model under the development of market relations became clearly inefficient. It became necessary to change rationally the old model or to form a new human resource management model, focused on quality management.
       At the turn of 20-21 centuries, Russia faced a real problem of professional education of personnel for organizations that operate in a competitive environment mainly with the purpose of profit generation. The state system of professional education satisfied the needs of the national economy appropriately, however, the labor market, related to mobility of professional activity and flexible framework for staff qualification, appeared unfilled. Despite the fact that competition in the market of educational services is increasing, this extensive development of education system has virtually no effect on the needs in personnel of high-tech enterprises and corporations.
       As a result, conditions for the institutionalization of another decentralized model of corporate education that can meet the needs of corporations for qualified specialists appeared. The article presents an analysis of the corporate training system based on the comparison of the best practices at the confluence of education and business.
       In Russia, the first Corporative universities appeared in the early 90s. -as the national branches of relevant structures of global companies who entered the domestic market. Among the first, who implemented corporate universities were such western companies as Coca-Cola, Mc Donald's, Motorola [1].
       Russian companies begun to create their universities since 1999. The first was founded in 1999 by the company «VimpelCom» and was named «Bee Line». Currently, according to the Foundation for Strategic Research «North-West» there are more than 30 corporate universities in Russia.

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       Corporate universities are often confused with training centers, although the difference between them is significant. Training Center is a local entity. As a rule, it is the collective name for a set of isolated trainings and short-term seminars, which from time to time «put» unsystematic knowledge into the heads of employees. Corporative training centers tend to organize and conduct fragmented, decentralized and often «reactive» education. Planning of training is based not on the company's development strategy as a whole, but on requests from certain departments. According to these demands from «internal customers» training center staff seek suitable sample programs on the external market. Oftentimes this process is weakly connected with the corporate objectives, and even less - with the corporate culture. In most cases the educational services provided to the internal consumers are not licensed or registered.
       The main difference of the corporate university is in its fundamental nature: it is a full-scale educational unit, which is aimed to maintain and develop the business system. Corporate university carries out an elaborate system of targeted measures on collection and dissemination of corporate knowledge. It develops a methodology, upon which new programs, forms and methods of teaching are selected. Moreover, corporate universities, having clear objectives, strategies and plans, manage all of the educational programs of the company as a whole, using various formats of learning and widely introducing information technologies.
       In Russian understanding Corporate University is a system of conceptual training programs that affects the company's strategy, i. e. being created on its basis, contributes to its realization, gives a boost to its further development, disseminate corporate values and culture [2].
       Experts of All-Russian Public Opinion Research Center interviewed representatives of corporate universities and training departments of large domestic companies in order to determine the place and role of the training system in the structure of education in our country. It turned out that the causes, which impel management of enterprises to deal with the training of their personnel independently, foremost are induced by conservatism of the existing professional education system that does not take into account the needs of modern business. Many experts point out that the material and technical base of educational institutions does not meet the requirements of today's market, in high schools obsolete theoretical knowledge are given, preparation of a new generation requires a different level of teachers who are able to develop students' practical skills required for a particular specialty [3].

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       In the western countries, the main reason for the emergence of corporate universities was aggravation of competition within the globalizing economy. Extension of labor division in the middle of the XX century gave birth to extensive demand for short-term training of personnel for work in a particular company, for training and retraining within the company. An adequate response to these changes has become a practice of internal universities creation. One of the first representatives of this type of educational institutions is the «Hamburger University» of McDonald's [4], founded in 1959. The majority of the world’s largest corporations (IBM, Samsung, Motorola, and other) have established later corporate universities. In Russia, this is not always the dominant reason [5].
       The following factors can inspire the company on creation of a corporate university.
       Firstly, the need to implement new business initiatives - mergers, acquisitions, introduction of new businesses into the portfolio, new products, etc. A classic example of such a university - the «Daimler-Benz» company’s corporate university, which allowed optimizing and merging together management of the new giant of machine industry after the merger of «Daimler-Benz» and «Chrysler».
       Secondly, the assimilation of new managers in the company and retaining valuable staff. This approach is typical for companies with a turnover problem. As an example we can cite Center for senior executives development Wolfsberg - training center of the Union Bank of Switzerland, UBS.
       From 30000 bank employees 13400 people tutored at the training program for preparation of certified specialists, 7,400 people complete specialized technical training, 5125 people passed the course of development of leadership and managerial skills within one year. Training was as on-site, so in classes attracting external and internal lecturers.
       Thus, the system allows to determine the need for training of each employee (if the aim set for the department/employee is not reached, the reason may be the lack of specific knowledge or skills), as well as individual achievement before and after training, i. e. the effectiveness of educational programs. Because of this approach, UBS managed to attract the best high-potential employees, increase profits and reduce staff turnover.
       The third reason for the creation of a corporate university is preservation of cultural heritage, strengthening and development of weakened corporate culture. Integration to the educational program of

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subjects related to the human culture, to the company's history, to development and maintenance of corporate spirit denotes a solution of the main task - to bring purposes and principles of the corporation into compliance with the individual goals and values of an employee [6].
       The need to introduce corporate universities in Russian companies is determined by the fact that now actually it is one of the few instruments of attracting foreign capital. The absence of such a system impedes Russian companies to attract investments. When financial groups make decisions about investing, they consider not only business profitability, but also the degree of safety of money invested. All agencies that exhibit investment ratings, name two main factors. First - financial transparency, the second -managerial transparency. Moreover, the last is directly dependent on building of a staff training system within a firm [7].
       Finally, the main reason why is it worthwhile to spend money and efforts to create a corporate university, - the introduction of the company's continuous improvement, enhance the impact of transformation projects. The most interesting example that became axiomatic - Corporate University Motorola U. with an annual budget of about $ 100 million, 99 offices in 21 countries and a permanent staff of 400 employees. Motorola U has been the largest corporate university in the world for over 20 years.
       The University consists of four large departments linked to the four main regions: Europe, Middle East and Africa; Asia and the Pacific; Canada and Latin America; North America.
       Each of them face their own task. In Europe great importance is given to the planning and project management. In Asia they study partnership and the ability to make beneficial alliances. In Latin America they are focused on expansion and business development. Three colleges are the centre of university (Emerging Markets, College of Technology, College of Leadership and Transcultural Studies), that develop new courses and methods, conduct researches. Emerging Markets is engaged in problems of business development and marketing, College of Technology is focused on issues of engineering and technology and the quality of the software, College of Leadership and Transcultural Studies develops leadership skills of Motorola’s managers [6].
       Corporate University Motorola U - is an extremely profitable business. Every invested dollar brings here more than $ 30 profit. And the unique training programs and methods are not only the privilege of employees of Motorola, but also serve to strengthening the partnerships 
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specialists of partner companies are entitled to take advantages of this unique education system.
      The system is based on a unified huge database containing all the knowledge stored over decades of Motorola's existence. Data is divided into compact and separate fragments so that at any time one could make a separate course answering the current business requirements, and in case of need - to modify it easily [6].
      Modern corporate university is an effective system of training united by a single concept. The main objectives of the corporate university are:
      -  knowledge management system;
      -  formation of personnel reserve;
      -  forming corporate culture and value;
      -        the development of ideas and effective methods of formation of the company and company's operations [8].
      Perhaps today Corporate University «Severstal», created in 2001, copes with its tasks better than anyone in Russia does: it provides ability to administer knowledge effectively, to form a unified culture of business, to support managerial decisions, etc. Corporate University plays the role of research, information, educational, methodical and consulting center for the «Severstal» group. Two main objectives were pursued at its creation. The first - integration of a large number of businesses and offices across the country into a holding. And the second - the use of a corporate university as an instrument for implementation of changes (realization of transformation project) at the level of the holding. That is how chef executives of «Severstal» explain their quite expensive initiative: «First, we need to implement some general principles of doing business at separated enterprises. Second, in order to identify advantages and minimize the mistakes and failures a company-wide view is required. Therefore, the learning process will be a permanent system of acquiring new knowledge and good practices in all spheres of holding’s activities» [6].
      A common feature of all educational programs - commitment to educate managers, capable of managing innovations and changes at every level and in every sphere.
      In 2008 the JSC «Severstal» has launched a new educational program. This educational project was based on the experience of leading international companies and became known as Global Leadership Program. The main emphasis of the program - practical training, simulation of the real-world business situations. Students await international internships

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under the guidance of experienced teachers; furthermore, individual coaches will work with them [9].
      In the contest of education, international practice in most cases gives the examples of outsourcing (outsourcing - is the usage of external specialized companies). At the same time, they quite often build up their own staff of teachers, trainers or coaches. Internal teachers mostly develop and conduct courses according to the characteristics of the product, to sales technologies, applied to this product, and the so-called adaptation training for new employees for more efficient entering into business processes and corporate culture. The executives take direct part in educational work, both in the role of «teacher» and «students».
      The same approach is used by the majority of Russian companies. It finds its practical implementation in the companies Wimm-Bill-Dann, VimpelCom, Severstal Sibneft, Yukos and others.
      Today in Russia the initial stage of formation of national corporate universities is characterized by the absence of a sufficient number of professionals in the field of business education. Because of this, engaged consulting companies tend to provide services not only for the education but also for developing a general concept of a corporate university, which means offering integrated solutions to its corporate clients.
      Of course, for this work the company advisor should be able to implement such task with a help of a team of trainers - consultants familiar with the business not only from books but also from personal experience; sufficient «portfolio» of advanced training programs, built on a common methodological basis and common conceptual apparatus; experience of the systematic long-term cooperation with leading corporations [10].
      Western experience of realization of corporate education counts more than 40 years, while in Russia it is in formative stage. Of course, we apply some elements of this educational type, used in foreign companies, but also in doing so, we often go «our own way». If foreign universities are characterized by consistency and coherence, the practice of introducing the individual components of technology still exists in Russia.
      Any corporate educational department in western countries is created for the implementation of the company's strategy, as for us - on the contrary: first the educational department is organized, and then the company's mission is formulated. Quite often, this troublesome activity is postponed until better times.
      Experience of companies with successful corporate universities shows that the company's policy in the field of personnel training and

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