**1. Introduction**

The digitalisation has been entrenching into the economy of the 21st century. It has offered upgraded ways of economic production and consumption in many sectors. It has been bringing introduction of new ways of interactions through many different types of online or web-based interfaces, that have not been experienced before. Digital transformation has affected state or municipal government institutions, entrepreneurship, but also the public in their day-to-day task performing.

The impact is being reflected in new business models, the means of communication with customers, that effect the relationship among businesses. Each industry, but particularly accounting, financial services and banking industry are exposed to the tremendous progress in the technology, digitisation, social media, and mobility that may be beneficial to people and organizations. The EU has been at the forefront of enabling innovative Fintech solutions, in particular in the payments sector, but lagging behind the USA, Switzerland Singapore, Hong Kong.

These ambitious digital transformation projects cannot be accomplished without investments into progressive digital technologies. Not only businesses but also governments worldwide have adopted strategies to enhance the digitalisation of public services. Everywhere we are witnesses that manufacturing, merchandise and service providing businesses are being modernized and augmented. Utilizing digital tools, the operating processes are being optimized leading to the higher efficient and effective production process that should result in higher net earnings but also in higher added value for the consumers. Global survey among companies from October 2020 showed that majority of the companies driven by pandemic lockdowns digitalised their activity from 20 to 25 times faster that they thought innovation is possible [1]. The modernisation and innovation in the company should not only lead to shareholders wealth maximization, but also to the society benefits.

Over many years, strong voice is heard from stakeholders who have been appealing to business entities so that they will provide a special bonus for society. Such bonuses may represent these societal benefits that have come traditionally in the form of corporate social responsibility [2]. CSR is the concept in which companies integrate social, environmental concerns into their business operations on a voluntary basis. Many researchers studied impact of a business entity's getting involved into CSR activities and its performance measured as shareholders value maximization in short and long-run horizons. Opinions and results of their mutual influence vary.

The structure of our scientific work consists of several parts that will be investigated in our study to highlight the importance of the integrity of the CSR and Financial services nowadays. The first part highlights CSR ideas occurrence of historically significant personalities Adam Smith and Tomas Bata and Jan Antonin Bata at their work or CSR applied in the management approach (of brothers Tomas Bata and Jan Antonin Bata in their responsible entrepreneurship), although this CSR concept had not been defined during their life. CSR concept implementation and CSR complements and deviations are examined in the following part leading to the research results and discussion where CSR and related concepts from the development perspective in time are systemised and then financial services implemented in symbiosis with CSR in the digital environment.

As it implies from the abovementioned, the 21st century challenge is to successfully implement the process of digital transformation into society, the business life area or governmental organizations or variety of institutions but in symbiosis with concept of corporate social responsibility. Thus, it means, that the business entity strives to achieve the integrity of the organization's strategy, management, incurred effort and its internal directives/policies, which are shaped by digital transformation and CSR activities, influencing the complex business performance, thereby mutually affecting society and businesses, in order to achieve a desired target on the enhanced level. We perceive that the integrity of CSR and digital financial services is to achieve such a state that management of (preferably not only) digital financial services is implemented compliant with CSR concept, thereby forming complete, compact and trustworthy system of digital financial services generating "CSR-quality financial service product" beneficial to the society.

*Integrity of the Corporate Social Responsibility and Management of Financial Services… DOI: http://dx.doi.org/10.5772/intechopen.101057*

The company influences both the internal and external environment with its activities. It cannot exist independently as a separate entity that does not affect other entities. Due to this impact a thorough analysis of values, principles and social consequences is essential and it requires to pay sufficient attention in order this mutual interaction would result in societal benefits. Creating a positive image is a must and main challenge of the world of modern, dynamic and top companies in this digital era. Moreover, radical progress of digital technologies worldwide is bringing revolutionary changes for profit or non-profit organizations, which make them search how they could gain financial and economic value implementing their CSR activities.

The research object of this study is CSR concept development, moreover its implementation in the digitalization era focusing on finance services. The aim of this research study is to focus on the integrity of CSR and digital technologies in finance services that assist in human decision making. The research methods applied in this study are qualitative methods comprised in the critical comparative analysis of the scientific concepts in the theory dealing and debating topics related to the business managerial approaches towards well-being of society. Then system of concepts generating benefits for the society is systemized in their historical development and their analysis and comparison are utilized for highlighting the results of the research, thus common features and discrepancies and deviations from the base of CSR in their historical perspective. CSR-quality product of the selected CSR concept cases leading to new CSR-quality financial product in the digital finance area are examined and compared, advantages and disadvantages of the process implementation are presented, and problems with CSR implementations are highlighted. So far the historical development was systemised till 2015 year in the research work of Gerde and Wokuch [3], in addition we concluded that certain deviations and complements of the CSR concept after 2015 are leading to enhanced CSR concept with its CSR-quality product that we defined, for which criteria must be identified and tested for products of the variety of industry sectors.

## **2. Selected ideas of CSR's in the past**

Sustainable development goals (SDGs) define a universal call to social responsibility of corporations, governments and human beings to eradicate poverty, to protect our Planet and provide people global peace, sanity and prosperity. The design and pursue of the SDGs should result in balance of **the social, economic and environmental sustainability**. Their accomplishment is stipulated by global support of all crucial players. Searching back even deeper to the history we could find more literary work or real-life stories dealing and debating topics related to the well-being of society. Over centuries philosophers, economists, merchants, priests, entrepreneurs, and politicians were thinking over the active participation in accomplishing the well-being of society via their actions, implemented policies or supportive legal norms. Brushing up selected Smith' ideas, we would like to induce the spirit of Corporate social responsibility in 18th century at the beginning of capitalism and then of the unique legacy of Thomas Bata and Jan Antonin Bata, in the era of industrial capitalism and at the same time in the epoch of WWI and WW2 marked by political, economic and social hardship. Their undecadent responsible industrial capitalism implemented through CSR activities in their business and political governance brought them admiration and respect of many people and inspired entrepreneurs to promote an idea of inclusive capitalism.

## **2.1 CSR - Adam Smith and sustainability and pricing**

The economist and moral philosopher of the 18th century, Adam Smith, well known with his famous book "The wealth of the Nations" as a contributor to the theoretical thresholds of capitalism, for his explanation and defense of the emerging system with his invisible hand belief. Although he is criticized for starting to think about others once the entrepreneur's self-interests are satisfied, mocking him that this could highly likely happen only with the magician help [4] is not completely fair. It is actually very sad, a sort of tragedy that greediness is so prevailing trait of us, people. This author's conceptualisation can be derided by his contemporaries. Is it fair that any individual's thinking living in the 18th century under a certain political and economic regime be comparable with individual's contemplative living in the 20st or 21st century? Who is compared misses the knowledge and experience of approximately 200 years of the development.<sup>1</sup> Throughout history there are always good/correct and bad/ wrong examples, humans should learn from past experiences and take the best sublime elements out of it and build on them. Without experiencing where the bad decisions or wrong conclusion led to, we could miss the opportunity of this lecture. Analyzing Adam Smith's legacy, we may perceive the elements of CSR in his statements. He may be perceived as an honest, moral, maybe naive, but his prioritizing profitability and stable and steady growth may be viewed as an **element of long-term sustainability**, beneficial to society and firm' stakeholders, not suggested by Smith like that though.

Smith stressed in some of his statements the importance of self-interested competition in the free market that would be beneficial for the society. He had been demonstrating responsibility towards the consumers addressing the issue of fair pricing and motivating producers to variety of products to satisfy the customers' demand. Product's utility and faultless performance were expected, **as a high quality** of a product or service were the best advertisement then. Responsible businesses' goals, the primary one, has always been to provide the value to their customers.

The behavior of sellers and consumers is not easily foreseeable, there are situations, as if a big supply of products surprisingly did not have effects on prices in certain geographical areas, for example, banking services or grocery products. Producers compete with the offer of ecologically free products, obviously the question is raised whether the customer is indeed ready and willing to pay more for such products as it is observable nowadays. What if they rather choose to save and sacrifice the **value linked to the quality** due to the high price? Lee and Bateman analyzed consumers' behavior when selecting between Fair Trade and Organic (FTO) coffees and conventional coffees, despite similar lower prices customers preferred conventional coffee to FTO coffees [5]. Matching prices of certified coffees to conventional ones had not improved the demand, researchers argue more effort is required from the companies producing and selling **products with certification**. They highlight that these companies' only matching the prices and labelling the products with ECO tags policy is not sufficient and does not increase their **products' competitiveness**. They propose a) utilization of more efficient strategies that do not ignore the threat of substitution and b) the need to educate consumers or inform them well. However, we object that customers although educated if

<sup>1</sup> In Orwel's novel Animal farm, the author described communists as diligent horses and lazy and canning pigs. He could do it in 1945 because he observed the historic development from Lenin's communists to Stalin's ones, at the beginning there were all horses, later some horses started to turn into pigs thank to the power what they gained and abused. The history repeats, once the system is abused by the powerful group the attempts to change it start appearing.

#### *Integrity of the Corporate Social Responsibility and Management of Financial Services… DOI: http://dx.doi.org/10.5772/intechopen.101057*

having other opportunities to save/or invest or not being able to afford to pay for certified products, they will prefer the cheaper although not certified substitutes. It may happen the eco or certified products may not be appealing to customers with their image, taste, design etc. The group of "eco customers" is growing and their philosophy is to give preference and thereby support products manufactured by the company **pursuing CSR concept**. It is essential to educate the customers, in order that eco - consumers -family will become larger, a stronger voice of theirs will influence the producers and new customers.

We also stressed that Smith had been an advocate of **keeping prices low for benefits of society** and thereby competitiveness having been impacted. The price may eventually persuade the consumers, but if the cost of productions is higher than selling price for a long period, obviously then the rentability will not be achieved. Producers could decide to cease the production unless there is offsetting profitable portfolio of other products or initially, they receive subsidies to support the onerous project. Nowadays many certified products are offered, but certain businesses find them as a good justification for increasing their margins, pursuing the certified branding due to their self-interest and not as much for societal benefits. It is absolutely clear that if eco-production of goods and services is very costly it is not possible to set up prices low, in spite of the added value certain group of customers will select a cheaper alternative. CSR management should result in management searching for production procedures that is cost efficient and ecologically friendly. One cost saving example is a new desulfurization technology, biological desulfurization has attracted more and more attention because of its advantages of low energy consumption and no contribution to the pollution [6]. Effective and efficient production is possible owing to the research and development effort leading to innovation processes in the company. All in all, CSR is associated to **innovation.** This part demonstrated the truth expressed in Smith' thoughts even today.

#### *2.1.1 Price conspiracy and contemporary corporate state*

Nevertheless, Smith was wary of businessmen and pointed out their "conspiracy against the public to raise prices" [7], with which he raised his worries of no CSR behavior on the entrepreneurs'side, the term at those times not known yet, though. Smith stressed the danger of the collusive nature of business interests, which may form monopolies, fixing the highest price "which can be squeezed out of the buyers" [8]. No doubt was the interest of manufacturers and merchants always in some respects different from, and even opposite to, that of the public. Moreover, he warned that a business-dominated political system would allow a conspiracy of businesses and industry against consumers, with the former scheming to influence politics and legislation. The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never be adopted unless it had been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention" [9]. Smith already at that time indirectly concluded that the efforts of many influential businesses to offer an assistance may affect decisions of politicians when approving laws or legislation in their favor but not prosperous to the society, thus not in accordance with the CSR concept. Currently, a corporate (or corporatizing) state may be perceived as further transmutation of the state into a corporate form [10]. Generalized into business environment Smith'invisible hand of businesses not functioning as believed was explained by Stiglitz (Nobel price economist) simple justification: "the reason that the invisible hand often seems invisible is that it is often not there" [11].

Governments with their politics, so as significant players of the economic forum influence economy in their country /in the world in negative or positive way. The

mixture of incorrect decisions approved in the area of economic politics, legislation, and behavior of the main actors in the world market not complaint with CSR were identified as a reason of the financial crisis [12], which confirms Thomas and Jan Antonin Batas's philosophy. In 1932 Czechoslovak entrepreneur Thomas Bata proclaimed that what was called a crisis is actually moral poverty. "Financial recovery must be preceded by moral recovery. Mr. Bata considered the moral poverty to be the cause of the crisis and the economic decline to be its consequence [13]. The big crises of the 21st century – the financial one and pandemic crisis caused by Covid 19, demonstrated examples of the states' operating in the interests of oligarchs via various bailouts or financial or non-financial subsidies. These actions have become silent witnesses of the fact that the state has become a subordinate functionary of corporate economic power [14].
