In the 1970’s and 1980’s a number of economic forces—soaring inflation, rising energy costs and
Western businesses to re-examine social corporate responsibility principles as being too expensive.
Milton Friedman, the voice of this sentiment, wrote that businesses should be allowed to go back to their
basic function – to make money, while governments should take care of society’s needs, using the money
paid by businesses in taxes.
In order to maximize profits, businesses cut back on labor safety, equipment
On 3 December 1984 a major leak of poisonous gas took place at the pesticide plant of Union Carbide, a
injured another 200,000 people. A subsequent investigation revealed that the management of the plant
did not meet minimum safety standards: safety equipment was beyond repair, the night shift had only
half the personnel required, the alarm system was out of order, and neither the local company staff nor
the surrounding local community were aware of the dangerous products being processed at the plant, to
say nothing of any precautionary measures. Such a simple thing as a piece of wet cloth, covering mouth
and nose, could have saved thousands of human lives. Financial losses amounted to $1.5 billion, and the
company paid $470 million to settle court claims alone. Enormous amounts were also spent to modernize
equipment and upgrade safety equipment. However, it was the U.S. financial market that dealt Union
Carbide the most severe blow–shares dropped so low, that the company incurred $ 900 million in
This case forced many companies to design their own crisis management programs, as an integral
constituent of managerial responsibilities that stressed importance of labor safety. Efficient crisis
management implies that a company has a crisis management plan, is able to quickly identify a crisis and
take urgent measures to bring the situation back to normal.
Production process safety
It goes without saying that it is impossible to foresee all accidents, however, every company can assess
the probability of accidents, take basic precautionary measures, and assign employees specific roles to
play in a crisis situation. It should be acknowledged that Azerbaijan workers in many professions often
do not adhere to basic rules of safety. It is still common to see a welder with protective glasses on his
forehead, a driver smoking at a gas filling station, or even a surgeon operating without gloves. For
example, how many offices, or even restaurant kitchens, have fire extinguishers? How many drivers carry
iodine, bandages, and tourniquets in first aid kits? There are many easy steps a business or individual can
take to ensure their own safety.
We have deliberately offered the simplest cases, as at the stage of economic development Azerbaijan is
field or an accident at a chemical plant. It should be stressed that the sad experience of some companies
shows that violation of the production process safety considerably affects a company’s financial balance.
CSR dictates that businesses should be liable for product quality and truthful advertising of their goods
Recently many big drugstores and pharmaceutical wholesale warehouses announced that they do not sell
and experts explain this boycott as an unfair, anti-competition trick, rather than the evidence of the poor
quality of Azfarma products.
M. Friedman, Capitalism and Freedom, University of Chicago Press, 1963, p. 133
St. Fink, Crisis Management, Amerıan Management Assocıatıon Press, 1986, pp. 168-189
Lately, the Union of Free Consumers has been regularly informing consumers through the media of
existence of various falsified goods in the market. However, Azerbaijan consumers face a huge
challenges in the area of falsified goods.
In the 1970’s, the West saw a series of environmental accidents, especially in the oil sector, which
the oil sector, this resulted in the establishment of the Oil Spill Fund of $1 billion and adoption by the
U.S. Congress of Oil Spill Act in 1991. We deliberately stress the oil sector, as in our country we are
particularly susceptible to environmental crimes due to the large oil and gas extraction industry.
Iran regularly raises allegations against Azerbaijan of environmental crimes in the Caspian, which have
At the moment in Zagatala we are losing valuable trees, which take many years to grow. Tracts of land
Impact of businesses on communities
Codes of ethics contain provisions that regulate corporate behavior in local communities. Unfortunately,
business behavior that is disruptive to the day-to-day life of their neighbors.
Ideally, businesses should show respect for the cultural heritage of local people. Conversion of the
historic center of Baku – Icheri Sheher into a business center in neo-Arabesque style speaks of disrespect
of local and foreign companies towards our history. To be fair, we should mention that it is difficult to
shift all of the blame onto foreigners. Two skyscrapers of metal and glass, housing the Radisson hotel and
Azerbaijan International Bank, belong to Azerbaijan companies. These two building make a sharp
contract with the turn of the 20th century architectural masterpieces in the Fountain Square.
In planning for the Baku-Ceyhan pipeline, BP financed excavations by a group of Azerbaijan
pipeline, to by-pass ancient settlement sites near Gobustan.
It is obvious that funding from an independent source and discussion of results of their findings in media,
Academy of Science displayed much interest in this issue. In contrast, in late 1960’s and early 1970’s, the
government of Azerbaijan showed much more persistency on a similar issue and upon initiative of the
academician Igrar Aliev forced the central Soviet government to bypass the excavation site of Gabala –
the capital of an early medieval state located in modern day Azerbaijan - Albania Caucasian, when the
Gabala radar station, an important Soviet military facility, was built.
Business and education
Many companies either support educational programs or accept interns to train on-site, especially during
summer vacations and holidays. This practice is mutually beneficial, as businesses obtain temporary
employees for free and students get work experience. Some companies use educational elements very
efficiently in their advertising, for example, the news program on ANS broadcasts weather forecasts
against the background of music by Azerbaijan composers, with information about the piece running on
Excessive consumption and hunger