Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
Social Responsibility as Determinant of an Image of
Steelmaking Company: The Case of Arcelormittal Brazil
Letícia Rocha de Araújo, Luciano Polisseni Duque, João Roberto
Marques Lobo and Cid de Oliva Botelho Junior
This paper discusses the importance of actions that organizations
develop to be crafted his image and reputation, especially in
relation to the positive view of stakeholders. One of these actions
is the pursuit of social responsibility, often used as part of the
pillars of sustainability, sometimes as promoting social action. As a
case study we used the ArcelorMittal company, located in the city
of Juiz de Fora, an important economic brazilian hub in state of
Minas Gerais. The company instituted an award linked to the
thematic environment where participate students of the school
community and children of employees. The methodology included
a qualitative research with the stakeholders of the company,
collecting their testimonials about the image of this organization.
As a result, it was identified a positive image, being seen not only
as a company that occupies a physical space and generates
profits, but generates social counterparts to the community.
Field of Research: Sustainable Development
1. Introduction
The wealth produced during all the centuries of human life were generated from
production processes based on social and environmental exploitation, ie
consumption at higher speed than the renewability of natural resources and without
concern for human rights. The consequences are the exhaustion of these resources.
It is verified still the concentration of wealth in the hands of a minority, while a
considerable portion of the world population does not benefit (GRAJEN, 2004). And it
is from these all questions and the new placement of business figure in society, that
arises a concept of great importance today: Corporate Social Responsibility (CSR).
The campaign around CSR emerged in the mid-1980s, something relatively new in
Brazilian culture, coming in search of a new image for a business, more aware of
social issues (GARCIA, 2004). Emerges, so, a mentality based on the idea that the
State can not fulfill its role — the provider of the necessary conditions to achieve
supply the basic needs of human life — a time when society and private
Letícia Rocha de Araújo. Department of Marketing, Phormar Formaturas e Eventos, Brasil. Email:
[email protected]
Luciano Polisseni Duque. Department of Education and Technology, Instituto Federal do Sudeste de
Minas Gerais – Campus Juiz de Fora, Brasil. Email: [email protected]
João Roberto Marques Lobo. Serviço Brasileiro de Apoio às Micro e Pequenas Empresas. SEBRAE –
MG: Regional Leste MG, Brasil. Email: [email protected]
Cid de Oliva Botelho Junior. DCEEX, Universidade Federal Rural do Rio de Janeiro, UFRRJ, Brasil.
Email: [email protected]
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Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
organizations are mobilizing to find solutions that mitigate social inequalities, slowly
transferring this responsibility to the business sector.
This paper aims to reflects about the social responsibility and how it can be beneficial
to the corporate image, using as case study the company ArcelorMittal situated in
Juiz de Fora, Minas Gerais, Brazil.
2. Literature Review
2.1 Corporate Social Responsibility
Corporate Social Responsibility is the planned and methodical practice of projects,
strategies, actions and establishing channels between an organization and its
internal and external customers. Contributes to the social, cultural and scientific
development, the respect to the human being and environmental preservation
(BUENO, 2003).
Be socially responsible is decide to practice some actions that help the region in
which the company operates, according to the type of activity in which it operates
(NETO; FROES, 2001). An example this would be when the company seeks
suppliers who do not exploit child labor or even who care for the environment, from
where remove the raw material to be used in industrial production. When it uses
these resources, the organization incurs a "debt" with humanity and it is up to "pay"
the debt with solutions to social problems.
Thus, the socially responsible company is one that makes available to "listen" to its
public, sectors and stakeholders and incorporate in planning activities, seeking to
comply not only the demands of owners and shareholders, but also employees,
suppliers, society, consumers and the environment, called stakeholders (YANAZE,
2007).
The stakeholder theory was proposed by Freeman (1984) and indicates that the
groups included in the same environment and linked to the organization may be
affected — positively or negatively — by it, the same way that the organization can
be facilitated or hindered by these groups. So there is a broadening of the spectrum
of action of companies, which are now responsible not only for the generation of
profits for shareholders, but rather by expectations of a larger group. Thus, values or
intangibles of an organization as processes, skills, relationships, information, brands,
among others, are considered more "valuable" than large physical structures and the
most modern industrial equipment.
The role of managers, however, from the point of view of the classical theories of
management, was to produce assets and services efficiently, so that generate profit.
Actions of social context were not seen as collaborators of economic development
(FRIEDMAN, 1970). However, for modern theories currently used in organizations,
the enterprises are seen as important influences on members of society and
therefore are responsible for maintaining and generating the collective welfare
(DEEGAN, RANKIN and TOBIN, 2002). That's because they are linked to critical
social issues such as job generation, environmental pollution, among others. "As the
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Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
company has power over society, this society can and should blame the company for
social conditions affected by the use of that power" (JOYNER and PAYNE, 2002).
2.2 The Social Responsibility Linked to the Corporate Image
The Social Responsibility is increasingly present within organizations who care about
their identity, image and reputation with their stakeholders. Still, the social
responsibility programs of a broadcast company, indirectly, their values, ethical
principles and codes of conduct (KISIL, 2006).
A company is not just an image, but different images, depending on the different
readings that their stakeholders do about it. By taking an ethical and transparent
posture to all those stakeholders with whom it interacts, the organization is directly or
indirectly helping to shape its image positively.
According to a research conducted by the Instituto Akatu (2011) in partnership with
Instituto Ethos, "Corporate social responsibility — Perception of Brazilian consumers
— Survey 2010‖, 77% of respondents reported interest in how organizations seek to
be socially responsible. Still, 51% of the general public attributed a role for
organizations that goes beyond the economic, agreeing to stipulate this function as a
set of ethical standards, established by law in addition to, and helping to build a
better society for all. The Institutes mentioned are references, in Brazil, on the theme
Social Responsibility.
Failure to follow the obligations to the stakeholders can make the company lose its
base of social responsibility. "The first indicator is the loss of credibility. Its image is
harmed and its reputation, threatened "(NETO; FROES, 2001, p.94). Arise, then,
internal problems, such as organizational climate, and external, such as charges,
boycotts, loss of customers and shareholders.
Corporate social responsibility is focused on two different types of publics: internal
and external. Internal public part employees and their dependents, and suppliers or
partners. Already in the external public, is the community which the company
operates. In actions for this public, the company seeks the social return, the image
and reputation strengthened (NETO; FROES, 2001).
In this context, an analysis of the efficiency of social responsibility was conducted
with the public in an organization, through a case study of Environment ArcelorMittal
Award, focused on the city of Juiz de Fora and region - Minas Gerais.
2.3 Arcelormittal and the Environment Arcelormittal Award
Juiz de Fora’s ArcelorMittal plant is a steel manufacture which produces long rolled
steel, using pig iron and steel crap as its basic raw materials. Steel, such as: rebar,
bars, wire rod, wires, nail among others are produced by the company and used as
construction and industrial inputs.
The company is located in Juiz de Fora County — at Minas Gerais State’s ―Zona da
Mata‖. It produces one million tons of steel a year, holds 1.100 employees and many
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Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
Quality Certifications. Nowadays the company belongs to Arcelor Brazil Group,
launched in 2005, that is controlled by ArcelorMittal Group (2006). The group works
in 61 countries, has about 320 thousand employees, and leads some of the main
steel markets in the world, including automotive, construction and home appliances
markets. It presents a communication strategy aiming to get closer to the community,
developing social projects regarding education, health, culture and environment.
One of these projects — which is also the object of the current article — the
―Environment ArcelorMittal Award‖, is applied the group, not just in Juiz de Fora, but
also in some other regions where the company works in. Through the prize,
ArcelorMittal keeps straight contact with communities around its plants, besides
keeping contact with employees’ families as well as with public and private schools. It
takes place in 38 counties around the country and rewards three different categories:
―School’s students‖, ―Employees’ kids‖ and ―School Projects‖ — the last one was
included in 2006. The first category regards basic education children who compete
with drawings whereas high school students must compete writing a composition.
The ―School projects‖ category rewards educational institutions that present the best
socio-environmental project developed by their students.
The project starts in the beginning of the school year, when schools get a specific
didactic material, a set of three booklets. One of them must be specifically used by
teachers and, the others, by the students — according to their school grade. All
coordinators and teachers involved in the project are trained by a team of expertise
— attending workshops — who aim to show them how to work with the given
material.
Figure 1: 2012 Environment ArcelorMittal Awards’ booklet cover
(Basic School Students)
st
th
Ideas to sustain the world / How to build a sustainable world together? / (1 to 5 grade)
Source: Juiz de Fora’s ArcelorMittal press office
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Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
Figure 2: 2012 Environment ArcelorMittal Awards’ booklet cover
(High School Students)
t
th
Ideas to sustain the world / How to build a sustainable world together? / (6th to 9 grade)
Source: Juiz de Fora’s ArcelorMittal press office
Figure 3: 2012 Environment ArcelorMittal Award’s teachers book cover
Ideas to sustain the world / How to build a sustainable world together? / (Teachers’ book)
Source: Juiz de Fora’s ArcelorMittal press office
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Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
According to data from Juiz de Fora’s ArcelorMittal press office, the total amount of
teachers in town involved with the project in 2011 was 812 and, in 2012, 723. Since
its creation, 449 schools have already attached the project to their subject matrix and
529 put the ―Environment ArcelorMittal Awards Day‖ in their class schedule. 36.897
people were granted by the program in 2011 and, in 2012, they were a total of
36.793.
3. Methodology
Thus, in order to analyze ArcelorMittal’s image and reputation due to its stakeholders’
opinion, the ―Environment ArcelorMittal Awards‖ was chosen as a parameter.
Besides holding regions beyond Juiz de Fora, the current research focused on the
work done in town. So, firstly, the last two years of project were picked, thereby we
have studied the years of 2011 and 2012. The research was concentrated in those
two years, aiming to find results as close as possible to the company’s current
situation.
After getting to know what the award was about, the fieldwork had started and local
opinion makers were interviewed. Therefore, leaders from the main communication
companies in Juiz de Fora, such as Tribuna de Minas Journal, Alterosa TV,
Panorama TV and others, were interviewed, in order to check how they see the
company and its local socially responsible actions.
Another step, regarding the research, focused in interviewing teachers, coordinators
or school principals who took part and had students rewarded in the years that were
chosen to be analyzed. Such interviews aimed to find out their opinion, that means,
what their opinion about the company is.
Some children who participated and won prizes, as well as their parents, were also
argued in order to find their views regarding the prize and the company. At last, pro
environmental NGO’s from Juiz de Fora, the local metalworker’s union and Minas
Gerais State Industry Federation were heard.
4. Findings/Analysis
We can realize how the positive image of the company was built in the minds of
those who are the Environment ArcelorMittal Awards’ target audience, based on
reports based on the interviews. As follows:
―I see it as a reference to Juiz de Fora, an important company to the city in
terms of job creation — direct and indirect ones — and financial incomes,
besides its important social participation‖ (Campos Matta, Regina — MGTV
st
1 edition Chief Editor – Panorama TV)
―The company became a reference and its actions generated multipliers,
besides creating a much wider social assistance culture in Juiz de Fora,
involving, above all, companies‖ (Magella, Paulo César — Tribuna de
Minas Journal General Editor [a printed newspaper sold in Juiz de Fora
area and in its surroundings])
―The ArcelorMittal Awards is very important to student’s awareness and
environmental education, mainly because future is on children’s hands
nowadays. Juiz de Fora is going to be rewarded by having a company, such
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Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
as ArcelorMittal, taking part in investments regarding children and teenagers
environmental education, promoting a contest as the ArcelorMittal Awards‖.
(de Paula Lopes, Rosania Aparecida — Formal Teacher at the Prof.
Helena Antipof School in Juiz de Fora. Former winner for the category
―School Students‖ – 2011)
―Certainly, the prize meets the company’s proposal which concerns to call
the local community’s attention to its role, facing the difficulties that the
planet has been through. We have heard about many actions taken by this
company in order to help our community and to make something else to
develop a better world for us all‖. (Salomão, Míriam — Former
Coordinator at Allan Kardec School, in Juiz de Fora [until de end of
2011]. Winner of the category: ―School’s Student‖ and the ―School
Projects‖ – 2012).
―It is the best example that just through education a new horizon will guide
humanity’s path. The awareness of a democratic and humanistic
management, concerning collectivity‖. (Melo, José — São José de Santos
Dumont County School’s Principal [MG]. Winner of the category:
―Employee Kids‖ – 2012).
―It is a great company and I admire it a lot because of the Project. It is a way
to encourage. I got to know the company and I liked a lot the projects they
have there‖. (Guilherme, Marcilene Aparecida do Carmo — Najane
Aparecida Guilherme’s mother [12 years old] Winner of the category
―School’s student‖ – 2011).
―I guess that it plays a very important role. Besides being a steel producer, it
feels love and great tenderness for the environment‖. (Ferreira Caruso,
Gustavo — [12 years old] Winner of the category ―Employee’s kids‖ –
2012)
―I guess that the works it develops are quite interesting. They value
sustainability and generate an interaction among community, family and
company. It also works the employee’s social side‖. (Fonseca Afonso,
Juliana Maria — Thaís Afonso’s mother [12 years old] Winner of the
category ―Employee’s kids‖ – 2012).
―Its environmental education projects reduced its impact and the
reforestation project with native trees along with eucalyptus trees simply
drifted. It does not belong to a company which is 100% socially and
environmentally responsible‖. (Guerra de Oliveira Jr, Theodoro —
President of the Juiz de Fora Environmental Assossiation [AMAJF]).
―Certainly, it happens in most of the companies. Actually, they use such
name to advertise its products. But if you look closer, we can see that things
are not happening‖. (Rezende Pedrosa, Anderson — Brasil Verde
Group’s Financial Director)
―I believe that the main item, as I have said before, would be inserting the
social responsibility concept in education, more and more encouraging
education institutions’ participation as a way to promote new paths towards a
more fair and balanced society‖. (Rodrigues de Medeiros, Paulo —
Technical Director of the Animal & Natureza NGO)
―I guess that it is profitable for the company’s institutional public image. In
order to make society thinks about the issue yes, but the most important
outcome relates to the institutional image”. (Majela Werneck, Geraldo —
Metal workers Union’s President, in Juiz de Fora)
―I see it as an important reference to other companies‖. (Rocha Queiroz,
Cláudia — Sales representative at Minas Gerais State Industries
Federation – Zona da Mata Regional [FIEMG]).
After listening to local opinion makers, it is possible to realize that the company
image they have developed dues to a corporation which generates economical
movement, once it hires a great amount of workers. Still, it is the image of a company
involved with social projects and with the local community’s well-fare.
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Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
Other people take the risk to say that it is a reference in Juiz de Fora, a corporation
which absorbs man power, generating direct and indirect jobs, besides systematically
trying to develop new employees. It is also seen as an ethic and transparent
corporation, which respects its tax’s obligations. Finally, and more important to the
current study, it is a company that brings a counterpoint to the community which is
already too affected by the company’s main activity — steel manufacturing. All
interviewees agreed that ArcelorMittal is a socially responsible company.
Thus, it is possible to see, among its stakeholders, the consolidated image of a
socially responsible. It is very important to the company, once such ideas echo — in
an enormous and efficient way — in the public opinion.
Regarding the opinion of teachers, coordinators and school principals who have
already participated in the prize project, it is possible to understand that the
company’s image is very good, once they figured all the investments that the
company has been doing in environmental education, seen it as something
important for school communities.
In general terms, the interviewees’ opinion shows that the prize rises as a stimulus to
children, no matter if it goes to students or to the school. Moreover, it leads to a
conception change, due to environment and the place where they live in. So, the
attitude change becomes clear in such children. Interviewees say that they also
realize, in general terms, that ArcellorMittal is a serious company and that it respects
living beings whom they has contact with.
Another opinion that deserves being highlighted: the corporation not just occupies
physical areas and generates profit, but also generates social counterpoints to the
community. ArcelorMittal is seen as an income generator in cities that take part in the
project and, because of that, it helps improving local population’s quality of life.
Regarding children who participated in the project during the analyzed years of 2011
and 2012, as well as their families, opinions are quite similar to those from the school
managers: the company worries with the environment and with the community, as
well as generates jobs and incomes.
An important opinion to be highlighted is that, besides the fact that ArcelorMittal in a
steel manufacture, it is concerned with the environment. Another answer, seen in
almost all interviews, is that the corporation does not think just in profit, but also in
social matters linked to it. On the other hand, there are those who think that such
counterpoint is the company’s obligation, once it pollutes the environment in which it
is inserted.
Parents highlight, in their answers, that the prize helps to valorize children and teach
them about the environment, besides disseminating environmental respect, once it
also ―demands‖ parent’s responsible attitudes. According to them, the company
valorizes sustainability and is concerned about its employee’s social side.
Therefore, by listening to school representatives, participant children and their
parents, it is possible to figure that ArcelorMittal built — through its social projects,
especially through the Environment ArcelorMittal Awards — an image and a positive
reputation among its stakeholders, who are important disseminators of the
company’s profile in the community, generating, among other factors, support to the
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Proceedings of 5th Annual American Business Research Conference
6 - 7 June, 2013, Sheraton LaGuardia East Hotel, NY, USA, ISBN: 978-1-922069-24-5
company’s attitudes, once they see it as a partner and not an user of the resources in
the region, instead of just worry about profit.
On the other hand — when listening to some perceptions from NGO’s that fight for
environment issues and also by listening to the metal workers union — the opinion
changes when the subject regards to social responsibility and social cause’s
marketing. For such organized institutions — that naturally hold a more critic
viewpoint over this particular issue —, the actions are not socially responsible but
they are based on social marketing, once the biggest profit, according to them, goes
to the company’s image itself.
5. Conclusion
After a fast conceptual study done on social responsibility and communication in the
company’s current scenario, it is possible to assess the case presented in the
present article. The main proposal dues to check how much an action can bring back
— in terms of positive return to the image and reputation of the corporation which is
in the mainframe — to Juiz de Fora’s ArcelorMittal plant.
Thus, based on some collected reports, it is stated that the Environment ArcelorMittal
Award can be considered — by the society’s viewpoint on an environmental
education — as an efficient action in term of social responsibility, once it really
reaches its targets: educate children, and the community in which they live, about the
importance of preserving the environment, besides forming disseminators of good
practices. On the other hand, by the viewpoint of bringing advantages to the
company’s image, the project can be considered an action aiming to promote
visibility to the corporation, broadcasting a positive image among the stakeholders. It
was reinforced by the opinion makers, the school managers, the children and their
parents, and, somehow, by the activist leaders’ reports (even with their critical
viewpoint, regarding the corporation and the assessed actions).
According to the company, projects such as the one discussed by the current article,
allow the creation of a counterpoint to society, even when considered a small one.
Although the projects face damages caused to the environment because of the
company’s main activities. And, yet, it allows the company to improve its image in a
way to keep its status as a responsible one — when talking about socioenvironmental issues —, getting support and admiration from its target customers.
Finally, it is concluded that socially responsible actions influence the visibility of the
corporation, so communication must be improved and coherent to its values and
principles.
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Proceedings of 5th Annual American Business Research Conference
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