2. Literature Review
This study will review the impact of MNCs and government activities. It will throw light on the progression of government welfare packages and the challenges confronting the society in general. The literature will benefit from global, and political perspectives, as well as the specific theories of CSR which can be divided into three major areas namely: Stakeholder theory, Pyramid of CSR, and Relational Model of CSR. While not presenting an exhaustive review of each of these areas, the most relevant findings in each are presented below:
2.1. Global Perspective
The concept of globalization has opened up nations to new waves of political challenges and more needy responses from global stakeholders and individual governments
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The major challenge will be the benefits which will accrue to the parties involved and the impact on the society. Zadek and Swift, (2002) further assure that CSR is the right mechanism on which public policies can be operational. The role of government is to provide the framework on political stability, leadership, institutional support and an enabling environment for businesses to be sustainable, profitable, and for the society to be conscious of their operations (Bell, 2005). This is to ensure a coordinated and improved social, political, and economic development for countries, MNCs, and other stakeholders. European Commission, (2002) described CSR as “the business contribution to sustainable development”. Therefore, the essentiality for governments, MNCs and other stakeholders is to provide a forum in which global and local social issues are …show more content…
Among the many researchers, Zadek, (2001) described the inclusion of government roles in the CSR frame as the “third CSR generation”. He viewed governments as central determinants in the framework of CSR. Politically, there have been strong debates as to how government should be involved in the regulation and enactment of laws on CSR.
Government involvement in CSR public policies can also be considered as “soft intervention”. Joseph, (2003), highlighted government role as systemic; noting that government attends to societal needs through its established institutions. Researchers have also positioned that government CSR public policies through soft regulation can influence the CSR of MNCs (Fox et al., 2002; Zappal, 2003; Albareda et al., 2004; Lepoutre et al. 2004; and Bell, 2005). They were able to buttress the ways in which governments (through soft intervention) can promote and develop
Governmental CSR policies are beneficial for consumers and organizations. Consumers are protected from abuse when organizations adhere to policies set forth by the government. The government has passed laws and created regulations as a guide for organizations to follow for the protection of the environment.
Corporate Social Responsibility (CSR) is a movement that aims to promote a greater awareness of how business activities and decisions influence corporate environment, stakeholders, and society in general. Adam Lindgreen and Valerie Swaen’s article “Corporate Social Responsibility” addresses this broad topic in a more narrow direction of CSR implementation as it discusses the most important stages of this process. While this article relies only on the previous research, it provides unique insights into CSR and even challenges the common views of this concept as the authors thoroughly analyze their secondary sources.
Davis (1960) assert that concept of CSR is important because businesses are based on trust and foresight. This trust with customers, communities and regulators is not simple and to be successful in long run, a company needs to think beyond what is affecting them today. Thus it is necessary to address changes to technology or the needs of customers taking into account alterations in social, environmental and governance issues (Holme 2010). This essay has made an attempt to explore the role a...
Corporate social responsibility is globally defined as operating a business in a way that meets or exceeds the ethical, legal, commercial and public expectations that society has of business. The concern of CSR has drastically increased over the last two decades. It has enhanced interactions between governments, businesses, society and internationally. In the past, businesses primarily focus themselves with the economic results of their decisions. Now, businesses must also reflect on the legal, ethical, moral and social consequences of their decisions. Corporate Social Responsibility is no longer defined by how much money a company contributes to charity, but by its overall involvement in activities that improve the quality of people’s lives.
An organization’s Corporate Social Responsibility (CSR) drives them to look out for the different interests of society. Most business corporations undertake responsibility for the impact of their organizational pursuits and various activities on their customers, employees, shareholders, communities and the environment. With the high volume of general competition between different companies and organizations in varied fields, CSR has become a morally imperative commitment, more than one enforced by the law. Most organizations in the modern world willingly try to improve the general well-being of not only their employees, but also their families and the society as a whole.
The classical view of CSR is a prominent ideology which business organizations are seen merely as profit-driven organizations. Simply put, businesses work for the sole purpose of making a profit. Thus, this profit motive is the sufficient and unique social identifier that separates a business organization from other institutions in society. These business organizations have a limited, yet essential role in society. Social concerns are considered important, but businesses, in the classical view, are focused solely on the economic activities and are judged accordingly. By having a limited role in society (i.e.,...
Burke and Logsdon (1996) focus on strategic CSR by outlining five dimensions: centrality, specificity, proactivity, voluntarism and visibility. They define centrality by measuring how close a firm’s CSR fits with its mission. They propose this measurement can supply both feedback and direction for the company’s future. A firm’s specificity measures the ability of the firm to absorb the benefit...
What is CSR? CSR or Corporate Social Responsibility indicates the actions or conducts that have strategic importance to companies. CSR has been defined as a company’s efforts or obligations in reducing and getting rid of any detrimental effects on the community and maximizing long-term beneficial effects to the company and community in which it operates (Mohr et al, 2001, cited Trendafilova et al, 2013). CSR usually starts with the general emphasis that businesses are not only responsible to generate economic returns for shareholders, but are also responsible to the environment and to other stakeholders. This is usually known as the “triple bottom line” – the company’s returns for investors, the environment and stakeholders (Markley, 2014). In today’s modern business environment, CSR is undoubtedly important because whenever possible, customers would like to purchase goods from companies they trust; suppliers want to develop business partnerships with companies they can entrust; employees want to work for companies they have a high regard for and NGO’s want to work with companies seeking possible solutions in areas of common concern. Pleasing each of these stakeholder groups enable companies to maximize their obligations to their shareholders who gain most when the needs of other stakeholder groups are met (Waldman et al, 2010).
Nowadays, corporate social responsibility (CSR) becomes an integral part of each company. CSR can be understood as a management concept and a process that links social and environmental issues in business operations to a company’s interactions with it’s stakeholders. CSR not only gives the company a chance to help society but also enhances company’s reputation and investors’ attractiveness. In this paper, we will show a brief description about CSR and effects of CSR on international business, including pros and cons when a company applies the CSR program. Besides that, I give my ideas on conflicts of interest beween shareholders and the company’s managers. And then, advantages and difficulties for companies implementing CSR in Vietnam will be defined. Although CSR was first introduced widely in Vietnam many years, it is still a new concept. Therefore, pioneers in this area are facing lots of challenges in running CSR programs in Vietnam.
The writers agree with the purpose of practicing CSR because they support Aristotle’s view about “doing well by doing good” (Aristotle). Although, by pursuing CSR the corporations will gain ‘competitive advantage’ there are many reasons against it. Firstly, there is an intrinsic tussle between the company’s primary function (reducing cost, capital control, and profit maximization) and to be socially responsible (Fleming and Jones, 2013). The private sector’s goals substantially differ from the government’s and the third sector’s. The current researches show the interrelationship between financial performance and CSR. However, if firms were not considered to make only more profit by CSR practices, researchers would not need to examine solely the IV. Quadrant (Enlightened self-interest) of the BAIM model on implemented CSR practices (Fleming and Jones, 2013). Secondly, prope...
Corporate social responsibility (CSR) can be considered as a concept defining how companies integrate social and environmental concerns in their business operations and how they interact with stakeholders on a voluntary basis ([18] EC, 2010). [61] Spence and Bourlakis (2009) argued that the UK Government discourse on CSR focused on voluntary practices rather than government intervention namely that corporate responsibility (CR) is the voluntary actions that an organisation can take, over and above compliance with minimum legal requirements, to address both its own competitive interests and the interests of the wider society(Ibrahim,
A corporations CSR should be shaped in order to fit the goals of the corporation, although every corporation’s CSR should differ, since most have different goals and different communities behind them. The CSR should be molded into fitting the corporation’s goals in order to make it easier on the corporation in giving back to the community while achieving its goals. For example, a corporation located in a desert wishes to be more efficient, by reducing water usage it is not only creating lower costs, which result in higher revenue, but also helps the community by not taking up so much water. Taking this into consideration, it is critical that the corporation goals and values are established and clear throughout the corporation, they should be developed by the board or directors and CEO, and the highest managerial level should stress their importance to the rest of the corporation. By making the goals and values at the top branch of the corporate hierarchy, it will be simpler for the corporates community to develop in order to nurture those goals and values. Therefore, a corporation can reach the “shared-value,” a value for both its shareholders and community in a simpler manner that can result benefiting the corporation in the end as well. Throughout the article many examples are given of actual corporations that have benefited and changed their CSR in order to fit their goals, therefore, providing solid proof that these methods work. Nevertheless, as acknowledged by the author’s themselves, most of the corporations taken into consideration where one’s that Harvard CSR students were employed
Corporate Social Responsibility (CSR) is a word that is bandied about with really little regard as to what the full implications actually are. Consider a few thoughts: What exactly is a corporation’s responsibility? Who are the arbiters of CSR for corporations? What does it cost to “rein in” corporations? Why are some companies held to a different standard than others?
For Zhang et al. (2014), CSR implies that companies should be responsible not only for their shareholders, but also for their stakeholders including suppliers, customers, and communities. Carroll (1979) identified four types of responsibilities that might be subsumed under CSR: economic, legal, ethical, and discretionary expectations. Economic responsibility means that companies are obligated to achieve profitability and satisfy customer needs. Legal responsibility indicates that companies must operate within the framework of legal regulations. Ethical responsibility includes some moral requirements. Discretionary expectation equals philanthropic responsibilities that contribute to society’s development and welfare. Wang and Juslin (2009) held that the western CSR concept does not fit the Chinese market and adopted the Chinese harmony approach to define CSR: enterprises should apply harmony to business and operate in a harmonious way between people and nature. The overall purpose of CSR should be cultivating humaneness, righteousness, ritual, wisdom, sincerity, and responsibility, and becoming a superior company. However, this concept is too abstract to conduct and few Chinese people can truly understand it without a deep understanding of Chinese culture. Many companies in China do not view CSR as an effective investment to improve organizational value unless CSR has considerable payoffs. In contrast to these misunderstandings, Stewart (2006) argued that companies and society actually have the same interests because enterprises cannot make profit in a corrupt, weak, poor society; and social progress can provide a healthy environment for company governance. As compared, Carroll’s (1979) definition emphasizes simultaneous achievement of a company’s economic, ethical, legal, and philanthropic responsibilities, which can be applicable to all countries. In this dissertation,
They are held accountable for effectiveness of steps taken, (although a set of activities is specified as to what could constitute as CSR, corporate are given the flexibility tochoose the CSR initiatives it undertakes. Thus, despite the imposition by the new Law, to report CSR spending and reporting of initiatives taken by the firm Corporate Affairs Minister Sachin Pilot confirmed that there will be no pressure from the government on what the companies should do and that it would be up to companies on how to use it for a social cause‘ Hence, self –regulation,’ through CSR gives the impression of moral reflexivity and responsibility on the part of the companies without conceding power to the