Corporate Social Responsibility and Globalisation - Literature review Example

Globalisation: Advocate or Detractor of Corporate Social Responsibility? An Essay Number Module and Number Submission Word Count: 2,132 Introduction The globalisation of the economy accelerates and will keep on enhancing the difficulty of coping with moral or ethical concerns due to diverse cultural views of ethics or morality. Hence, numerous multinational companies (MNCs) should discover means to deal with the problematic endeavour of choosing the ideal ethical practice for a particular organisation on a global level (Sims 2003). This essay discusses the relationship between the continuous growth of globalisation and the development of corporate social responsibility (CSR). The discussion mainly focuses on the ethical principles underlying social responsibility in the business world. Ultimately, this essay argues that CSR becomes more and more important as globalisation rapidly develops. Confronting the growing environmental issues in the current global marketplace, MNCs are aggressively or constructively taking part in strategic programmes towards resource management and environmental preservation. Dedication of global businesses to sustainable initiatives are motivated by several internal and external factors, such as social activism, technological improvements encouraging sustainable programmes, customer demand for ecologically friendly goods and/or services, and governments’ environmental policies (Wilson 2000). Concerns about the corporate social responsibilities have been the point of contention for decades. However, recently, a new approach towards the issue has emerged and prevailed (Lechner & Boli 2004). Both in the corporate domain and beyond it, there is far-reaching and mounting advocacy for the existing idea of Corporate Social Responsibility (CSR). Corporate social responsibility can be identified as the obligation of organisations to carry out their operations in a way that value human rights and supports human interests. Although the extent of social responsibility displayed by MNCs is reported to be getting better, excellence has barely been achieved. Citizens and governments across the globe appear to have a growing interest in monitoring the behaviour of global businesses, effectively obliging global organisations to be ‘good corporate’ entities (Manakkalathil & Rudolf 1995). A particular explanation for this may be the perception that global corporations are not as impregnable as they were believed to be in the past; hence, their operations can be controlled to profit society (Wilson 2000). According to Bomann-Larsen and Wiggen (2004), another explanation could be a perception that successful legal regulation of businesses whose operations reach outside national boundaries is unlikely, making self-regulation as the sole realistic, feasible option. Thus, MNCs should self-regulate in a way that promotes the wellbeing of the society and its citizens. CSR has been controversial for decades, and some aspects of the subject matter have been introduced by ethicists. This controversy has been broadened recently to encompass the practices of MNCs. Even nowadays, the long-standing issue still reverberates through the halls of international corporations across the globe: “If it is legal, does that make it ethical?” (Manakkalathil & Rudolf 1995, 29) The emphasis of the word ‘ethics’ can be related to views concerning what is moral and what is not; one description of ethics may be the explanation of what comprises human wellbeing and the actions needed to support it. The concept of ‘ethical norms’ is brought into play to characterise compliance to generally accepted moral codes (Sullivan 2002). Consequently, according to Sims (2003), these moral codes are ruled mostly by values, traditions, and behaviour that a society implements as parameters for interpersonal manners. Hence, corporate social responsibility is tantamount to societal norms and values, which then implies that MNCs should formulate objectives that are congruent to societal goals. There is no unanimously approved assertion of the exact meaning and implication of CSR, and thoughts on the issue are continuously developing. Even so, a universal body of principle has currently developed and gained widespread support among those who agree to the framework (Sims 2003). As stated by this approach, a blend of recent developments on the global landscape and demands from the public currently obliges companies to assume a new position, a modified objective. They should serve a very important function in realising the joint goals of public policy and having a positive effect on the world. Thereby, they should espouse the concept of ‘corporate citizenship’ (Yoon & Tello 2009, 290). As stated by Bomann-Larsen and Wiggen (2004), they must carry out their operations, in direct harmony with a range of various stakeholders, in order to attain the mutual objective of sustainable development. Thus, business must establish goals and evaluate their performance. They should seek to achieve the ‘triple bottom line’ (Manakkalathil & Rudolf 1995), instead of concentrating limitedly on success, shareholder value, and profitability. Each and every one of this has something to do with private companies generally, and particularly with major MNCs. Simply by behaving in this manner, according to various claims, can businesses address the expectations of a particular society (Sullivan 2002). Putting into effect such a proactive action is illustrated as the answer to permanent business success for companies nowadays. This is due to the fact that profits relies on status, which consequently relies more and more on being viewed to operate in a socially responsible manner (Manakkalathil & Rudolf 1995). Hence following the direction of CSR will actually be favourable to business success (Yoon & Tello 2009, 290): it will win and maintain approval and good reputation from outside the company, and go towards better commitment and enthusiasm from its workforce. To espouse corporate citizenship embodies informed self-centredness on the business side. This means that international businesses should, as much as possible, mask their self-centred goals with environmentally and socially friendly activities. Moreover, there is broader aspect, transcending individual organisation. The implementation of CSR by companies in general is viewed as crucial to guarantee long-term public support for the commercial venture altogether. For contemporary capitalism to be transformed into something suitable, satisfactory, and thus workable, it has to be represented ethically (Wilson 2000). According to the Economic and Social Commission for Asia and the Pacific (2002), CSR has been promoted by a considerable and increasing number of organisations, particularly among the MNCs which are subjected to rigid outside observation and have in numerous instances been under aggressive criticisms or movements. Proofs of the diffusion of CSR among businesses all over the world are to be viewed in the extensive and continuously growing membership of companies that are dedicated to it. Popular among these are the European Business Network for Social Inclusion and the World Business Council for Sustainable Development (Manakkalathil & Rudolf 1995). In numerous commercial sectors, as well as with known ones like pharmaceuticals, petrochemical, and mining, it is currently rare, and possibly irresponsible, for a major MNC to stay detached from CSR-driven companies (Lechner & Boli 2004). As argued by Sims (2003), CSR, beyond the business context, is generally supported, and usually pushed, by supposed public-oriented non-governmental organisations (NGOs), a large number of which are major and persuasive detractors of MNCs particularly and businesses generally. In numerous instances, the promotion of CSR by businesses can be viewed, to a certain extent, as a reaction to widely known criticisms of them as oppressive, manipulative, greedy, and interested only with generating profit for their executives and shareholders. The growth of the Internet has granted NGOs opportunities to take part in successful global movements against what they believe as dangers, exploitations, or irresponsible behaviour of private businesses (Sullivan 2002). Ultimately, numerous governments have promoted CSR. For instance, the current British administration has assigned a minister officially responsible for the task of promoting the principle of CRS on the whole. The European Commission, with backing from representatives of the European Union’s (EU) member states, has recently released a ‘green paper’ (Manakkalathil & Rudolf 1995, 30) on corporate social responsibility particularly. The growth of global trade and the development of regional trade leagues are potent mechanisms pushing various domestic economies to become an international marketplace. Economic globalisation, as envisaged in the 1980s by Theodore Leavitt, is increasingly becoming real (Manakkalathil & Rudolf 1995, 30). The growing commonalities among the demands and needs of populations across the globe reveal the meeting of their views, ideas, and values, which, consequently, reorganises the tasks assigned to global corporations by the various domestic markets. Due to this, the usually mentioned premise of moral pluralism—denotes conflicts among various cultures as to what is moral and immoral-- by global managers could ever more become immaterial (Lechner & Boli 2004). According to Wilson (2000), this pattern towards moral convergence will help MNCs formulate and implement international modes of conduct. A number of ethicists criticise the obligations tied to administrative positions within an organisation for being the fundamental source of unethical conduct by managers. The claim is that people are innately moral, but their deeds in an official task, for the improvement of the organisation, are usually regarded disreputable (Sullivan 2002). Various business and legal norms between markets usually compel decision-makers of MNCs to behave in an unethical way to guarantee the competitiveness of the company against others behaving in an equally intolerable way (Sullivan 2002). As stated by Yoon and Tello (2009), alongside the development of regional trade coalitions is the growth in the prevalence of business practices, industrial regulations, and trade contracts being reorganised between countries. This will grant executives more opportunities to be ethical, as their rivalry within the trading coalition comply with the same working parameters. As companies become global members, they foster, to some extent, a sense of dominance over their various markets. This, consequently, generates dedication towards such markets and will certainly bring about greater ethical norms in the actions of MNCs across the globe (Wilson 2000). Another transformation in the character of global corporations over the past few years is the increasing number of MNCs from developing nations operating in both less developed and developed countries. Almost all of the disclosed instances of disreputable actions were by MNCs doing business in less developed nations (Bomann-Larsen & Wiggen 2004). Traditionally, according to Lechner and Boli (2004), global corporations operating in these societies came across regulatory practices that were less advanced than those in their native soil. Inadequate and unclear business conditions and bureaucracies have commonly been mentioned as roots of global corporations’ lawful but unethical behaviour. The drastic rates of economic growth encountered by developing countries, alongside the collapse of the Iron Curtain dividing Western and Eastern Europe, have considerably improved the complexity of the international business context (Manakkalathil & Rudolf 1995, 31). Moreover, according to Sims (2003) with growing numbers of MNCs from underdeveloped countries joining the global economy, where the approved modes of conduct are lofty, people are expected to witness decreasing occurrences of unethical conduct by global corporations. There are some ethicists who think that MNCs, even with their official standing and associated responsibilities, do not hold ethical responsibilities for their behaviour. Because businesses do not have a sense of right and wrong or the capacity to take action all by themselves it is the managers who should be blamed for the disreputable behaviours of their organisations (Yoon & Tello 2009). This idea has resulted in rising cases where criminal accusations are pursued against managers for their organisation’s behaviour. This is an additional phenomenon that will unavoidably cause a bigger extent of social awareness among executives, hence leading to greater CSR (Bomann-Larsen & Wiggen 2004). Current research on the generation of baby boomers exposes a larger consideration of the community and the world on the whole among people in senior management. With almost all in this generation getting married late, they appear to be ever more aware of their behaviour and interested in the future of their children (Manakkalathil & Rudolf 1995). According to Manakkalathil and Rudolf (1995), this generation is particularly cautious not to break global business relations, which are more and more severe to the accomplishment of any company. Consumers nowadays are clamouring for greater ethical norms from businesses; they are more outspoken about social awareness, and voice their issues through their consumptions and buying behaviour. Simply put, consumers, in assessing their buying alternatives, are considering not just the features and the environmental impacts of the goods and/or service itself, but also the company’s conduct, way of thinking, and background (Lecher & Boli 2004). Because almost all MNCs operate in the United Kingdom, the informed UK consumer will certainly have an influence on the improvement of corporate social awareness among MNCs, irrespective of the country of origin (Lecher & Boli 2004). The accomplishment of human rights and environmental organisations in the past few years has increased societal demands, which appears to persuade people to disclose dishonourable conduct (Yoon & Tello 2009). This, along with the successful and precise global flow of knowledge and information, is compelling global corporations to re-evaluate thoroughly all the impacts of their conduct. As a final point, in contrast to those who claim that it is unreasonable to suppose an organisation to be ethical in a world that is borderless and usually unjust, there is an evident pattern towards a growing extent of social consciousness and responsibility. The rising inclination to take part in the global marketplace, instead of staying detached has persuaded countries to loosen trade regulations and led to heightened competition (Wilson 2000). With greater knowledge and a broader choice, consumers are likely to prefer companies that respect or value them and their demands. As global corporations understand this, they grow to be more sympathetic to the demands of the society and the general public. As argued in the discussions above, the author believes that corporate social responsibility is not becoming outdated, but rather it is becoming more and more critical in an evolving borderless world. Because businesses now hold great opportunities to expand on a global scale it becomes apparent that cultural and social issues are vital to the success of any ambitious businesses or organisations. Such cultural and social issues are what comprise CSR. Therefore, if a company plans to expand globally it should, whether it likes it or not, adopt CSR strategies or comply with official ethical codes for MNCs. The increasing members of CSR-oriented organisations, such as the World Business Council for Sustainable Development, attest to the fact that MNCs are ever more realising the need to implement or conform to CSR rules. Even so, the growing commonalities of domestic economies encourage MNCs to implement or conform to ethical codes. All of these factors prove that corporate social responsibility is no longer a ‘luxury’, but a ‘necessity’ in an evolving borderless world. References Bomann-Larsen, L. & Wiggen, O. (2004) Responsibility in World Business: Managing Harmful Side-Effects of Corporate Activity. Tokyo: United Nations University Press. Economic and Social Commission for Asia and the Pacific (2002) Sustainable Social Development in a Period of Rapid Globalisation: Challenges, Opportunities, and Policy Options. New York: United Nations. Lechner, F.J. & Boli, J. (2004) The globalization reader. UK: Wiley-Blackwell. Manakkalathil, J. & Rudolf, E. (1995) “Corporate Social Responsibility in a Globalising Market” SAM Advanced Management Journal, 60(1), 29+ Sims, R.R. (2003) Ethics and Corporate Social Responsibility: Why Giants Fall. Westport, CT: Praeger. Sullivan, J.J. (2002) The Future of Corporate Globalisation: From the Extended Order to the Global Village. Westport, CT: Quorum Books. Wilson, I. (2000) The New Rules of Corporate Conduct: Rewriting the Social Charter. Westport, CT: Quorum Books. Yoon, E. & Tello, S. (2009) “Corporate Social Responsibility as a Driver of Sustainable Innovation: Greening Initiatives of Leading Global Brands” Competition Forum, 7(2), 290+ Read More