Colin Crouch and Corporate Social Responsibility - Article Example

Colin Crouch and Corporate Social Responsibility According to Colin Crouch, an increase in Corporate Social Responsibility initiatives seems to be one of the more likely consequences of the 2008-09 global financial or economic crises (Crouch, 2011, p.vii). Researchers have argued that here is no concept of global society in reality; almost no such kind of thing like global polity; and also there is considerable notion of global economy. Small number of researchers exists to need transnational enterprises in order to come to different terms with respect to the externalities of their varieties of activities. This is either in respect to the global level or within different parts of the world at which different national as well as other political arrangements are very weak and also local social arrangements are unable to cope up with the large western corporations. In this context, this institutional weakness is extended to markets themselves that are frequently greatly imperfect. The organisational hierarchy in regard to the firms is sometimes regarded as the only basis of their governance. This has not only been internally accepted, but also externally considered. Various literatures on corporate social responsibility (CSR), have argued that corporate citizenship as well as similar terms comprises of the effort to provide different frameworks for that concerned governance. It is thus considered as a characteristic literature. A part of this literature is consisted of boldness of their different social achievements by different firms or business organisations across the globe and also the academic supporters of these researchers. Another important part is consisted of appeals which are addressed to these firms around the world to behave with great responsibility. However, some researchers have realised a requirement for the learning of these different phenomena which are to be included within the general scientific literature in the context of these firms around the globe in respect to the environment. Consecutively, in the process of trying to come up to wide ranges of terms with the notion of CSR in this path assists in the process of the general development of the multidisciplinary approach in order to the learn the firm in respect to its wider context (Crouch, 2006, p.1). Corporate social responsibility Corporate social responsibility (CSR) has began life as the strategy which has been adopted by specific large corporations in countries across the globe to obtain good reputations, and/or avoid the bad ones, (Crouch, 2011, p.7) for the purpose of their behavior outside the severe orb of market operations of themselves, in regard to their different relations with the local communities, and/or the society and the environment or the surroundings in general (Crouch, 2011, p.8). Per se, there has always been a room for discuss whether it has been serious or just like an element of the different corporate public relations. In modern times it has been increasingly being regarded as the potential form of different economic governance; however, not just the corporate governance, although it has provided implications for that too, but also the governance of the concerned economy as well as of the society at large (Crouch, 2011, p.9). For considering CSR in this context makes it overtly political (Maclean and Crouch, 2011, p.1). CSR as a ‘Corporate Externality Recognition’: There exists discontent even among the CSR specialists with regard to the strong normative implications of the phrase called ‘corporate social responsibility’ (CSR). Also there exist recurrent searches for different alternatives. The core idea in this context may be best resolved to the social science theory with the help of defining it as the behaviour by firms which voluntarily incorporates the externalities that is produced by the market behaviour of these firms. Also the externalities are, in this regard, defined as the outcomes of various market transactions which are not themselves personified in such market transactions. CSR is fundamentally represented as the ‘corporate externality recognition’. Recognition of these externalities is not at all in itself the normative implement (Crouch, 2006, p.2). Normative judgment here enters at the time when one distinguishes between different negative externalities. This fact is closely related to the notion of the kind which is most often talked about, and also the positive externalities. For instance, considering a western multinational company that arrives in the traditional Islamic society (Crouch, 2011, p.10). Local women working for the particular firm and also the wider circles of friends as well as relatives of these workers can start to get influenced by the western ways and thus stop wearing the head scarves (Crouch, 2011, p.11). This fact is one of the most prominent examples of externality which is regarded as the effect of various activities of the firm that are not at all captured by the conditions of the market transactions (Crouch, 2011, p.12). In regard to some normative standpoint, this fact contains the positive sign. Also it is comprised of the degree of liberation of these women from the point of view of large number of people in the local society and community this fact is related to the degree of moral degradation and it is evaluated negatively (Crouch, 2011, pp.13-14). This fact does not possess the idea to get decided on the ex ante basis whether the given form of externality is regarded as positive or negative (Crouch, 2011, p.21). CSR and externalities: The first point is related to the function regarding large, oligopolistic multinational and transnational corporations in varieties of significant sectors, particularly those sector which are affected by the globalisation. These firms can easily get engaged in the competition, often fierce competition, between each other. However, markets of this type differ in greater than one feature or characteristic from the point of view of the economic theory related to the pure market. Transnational Corporations are not regarded as the passive price-takers in the market and also as the respondents to different demand signals which is envisaged in economic theory. Rather these firms shape their respective markets and also possess high visibility in the market. Operating across the world, these companies are also said to exist partially beyond the rules and regulatory reach of the national as well as international governments. The linked increase in the absolute number of various economic issues which cannot be determined at different levels of the individual nation states signifies a rise in those numbers which are governed by different individual companies or groups of companies instead of different public authorities. These facts incorporate the standardisation as well as the management of different multinational supply chains. According to Maclean and Crouch (2011), “whether or not one calls this globalization, it cannot be claimed to be the operation of markets tout court, and it presents interesting questions to formal, national politics and for issues of governance. The prominence that this accords to giant firms makes them, whether they want it or not, political actors, vulnerable to criticism. It is difficult for them to respond to allegations of bad social behaviour by proclaiming that they are only in existence to make money, as this can damage their reputations with important groups of customers, possibly even investors and employees” (Maclean and Crouch, 2011, p.2). These multinational companies therefore discover themselves under the immense pressure in respect to the policy of implementation of different developmental strategies in respect to political sensitivities and also in respect to the prevailing financial, technical as well as marketing capabilities. In reality, when researchers talk about the notion of ‘responsible corporation’, in regard to the global economic structure, these researchers actually mean that they are talking about the Transnational Corporations or about the ‘globally integrated enterprise’. These enterprises are becoming the reference that these researchers make in most of the times (Maclean and Crouch, 2011, p.2). The issues which are at the stake are related to various criticisms which are usually made as the negative externalities. In regard to the definition of these aspects it becomes very problematic for the market for different goods and services to correct the errors that might be regarded as the negative aftereffects. These negative aftereffects are opined by researchers to be flowing from different activities of the firms which are getting generated from outside the ranges of the price calculations of these firms. One of the most important cases of this notion of negative externality is related to the notion of pollution. There exists a classic answer related to pollution and also the other cases related to the social cost. According to researchers, such as Ronald Coase, under the situation where the damage caused to the people who are suffering from the pollution which has been generated by the firm is greater compared to the amount of loss that has been occurred to the firm in regard to controlling the level of pollution, then it is regarded as the interest of those affected people to pay some amounts of money to the firm which is crating the pollution for the purpose of controlling the level of pollution. This control needs to be imposed due to the fact that the amount of pollution generated by the firms are creating lesser amounts of costs compared to what are negative effects that are getting generated on their health status and on their overall lives (Crouch, 2011, p.18). When, on the contrary, the cost associated with the pollution control efforts are found to be higher than the costs of dealing with it, which is reflected by the fact related to the willingness to pay of the victims, then the overall level of pollution is regarded to be controlled by the firms for increasing the overall welfare of the society or the economy (Maclean and Crouch, 2011, p.3). This fact sounds more reasonable and thus provided the fact that there exist no serious issues related to the distributional aspects in relations between the polluter and the victims. This issue thus revealed the fact that latter are to be treated as a particular set capable of captivating collective action, even without taking help from the state. This has also expressed the capability of individuals to decide on whether to pay the amount of cost, and also how much amount to pay to the firms, for the controls. However, these environmental issues in the vanguard of the present debate have failed to satisfy these conditions of betterment of the environment and also of the economy. International issues, such as climate changes as well as the decline in biodiversity are creating vast, incomprehensible cost calculations to the firms across the globe, the threat of creation of a long-term damage, and also the generalisation of different harms which are identifying the victims and the potential victims and are enabling those firms to make rational and economic cost calculations makes impossible. These economic, social and environmental aspects are creating greater amounts of concern to the business organisations across the globe and after the occurrence of the global financial crisis of 2008-09, these issues are increasingly becoming the most debated issues. This is because after the prevalence of the global financial crisis, business organisations across the globe are running out of financial resources which are affecting the ability of people across the globe to bear the costs of the environmental damages. Hence, business corporations are facing severe problems to reduce the degree of negative externality created by these firms. This is in effect raising the need for CSR (Maclean and Crouch, 2011, p.3). Colin Crouch and CSR: The financial crisis of 2008 and 2009 has created significant set of crisis to various economic policies and strategies in the developed countries of the world. These economic policies and strategies have been effective since the 1970s and have been causing the policy of neoliberalism to be effectively influencing the growth of economic variables in positive manner throughout the world. In the face of the global financial crisis, these policies have started to face greater amount of challenges in terms of effectiveness of these policies. With the collapse of the largest banks and other financial intermediaries through the world, the effectiveness of these policies and strategies has greatly been challenged (Crouch, 2011, p.vii). During this time the financial crisis has caused business organisations across the globe to experience lesser amounts of profit and investments and thus these business corporations started to face difficulty in respect to development of economic, social and environmental aspects across the globe. Hence, these companies started to develop new set of policies which are aimed at making significant amounts of positive impacts upon the positive growth of business houses (Crouch, 2011, p.viii). In recognising the personal as well as the subjective aspects regarding both settings of the notion of CSR policy as well as its implementation, the term ‘the corporation’ softens to reveal that the individuals who are sitting round on the tables in executive boardroom. These business managers are also making policy-decisions regarding the desirability of the CSR policies. This also generates the idea that the people are writing various policies and guidelines; are seriously, those people who are translating. These decision-makers are also filtering those policies and those guidelines for the implementation and practice (Crouch, 2011, p.1). Most of the employees are experiencing the sometimes confusing costs of implementing those CSR policies in their regular working lives which may balance or disagree with different other core business targets. In the face of ineffectiveness of neo-liberalism policies in the face of the financial crisis these policies have generated significant need for these CSR policies to be fruitfully implemented (Crouch, 2011, p.2). Hence, it becomes important to remember the fact when researchers have spoken of different corporate decisions, various corporate actions and also large number of corporate responsibility, which researchers are talking regarding the decisions, different actions, and corporate or business responsibility of individuals, and also these morally responsible individuals exist throughout these organisations (Crouch, 2011, p.3). Large number of researchers across the globe has been attracted with substantial attention by reproachful business schools in the world regarding the involvement in the process of production of the managerial class which has seen its role as getting solely the policy of maximisation of profit without considering the moral concerns (Crouch, 2011, p.4). Among these main researchers the faculty of “Harvard Business School”, such as Michael Jensen (2001), who has resolved the difficulty related to the business ethics in respect to the principal-agent relations with the help of regarding different questions as the matter for the shareholders and not for the business managers (Maclean and Crouch, 2011, p.25). However, both aspects of this debate have failed to incorporate the positions of the firm’s employees to further down the prevailing hierarchy. These employees are tacitly considered to be meager automata. If these employees ever do emerge in the public debate, it has been in the extreme instances of great concerns to these business houses, and researchers also know that these individuals may rarely resume their careers in these businesses after these stakeholders have been exposed by the illegal behavior in their respective employing business corporation. An explicitly political focuses which has been the most important aspect in this respect for the developing countries of the world and hence places the biggest business corporations in the political globe, directly. Researchers have also enveloped these facts into two major parts. In respect to the first part they have assumed the United Nations thinking and various policies on CSR within the wider context of the progressive ideas of the UN in the respective fields of growth, development and the governance (Crouch, 2011, p.20). They have also identified the trend towards the convergence in these CSR policies among different UN organisations, also the World Bank, and also the IMF in the last few decades with the contemporary agreement on various institutional priorities as well as objectives, particularly the policy of poverty reduction. In this context, the notion of CSR has been felt most necessary after the occurrence of the financial crisis and creation of greater amounts of job loss during this time. However, the questions regarding the structural changes related to the power relations had and have, been kept greatly exclusive. Researchers have pointed out the fact that financial crises in the 1990s and also in the 2008-09, of the UN, have generated partly from the breakdown of the government of the United States to honour its funding obligations, encouraged a new development as well as governance approach, that incorporated a hunt for the alternative sources of growth and development funding like those resources which have been provided by the multinational corporations and also the new global philanthropists. This is because these philanthropists have been enjoying untroubled days of greater profitability. One conclusion of this new approach has been that the UNs policies and strategies incorporated policies and strategies where trade as well as investment regimes have been favorable to FDI and thus the multinational corporations would be protected in return for the greater volume of corporate self-regulation or the CSR. Once these paths in regard to CSR thinking and policies have been established within the UN, then the second part regarding the aspect has been argued for the purpose of taking a greater crucial view of the CSR. Per se, the operational effectiveness of the CSR policy has been assessed, and also the type of growth or development model which CSR reinforces has been analysed. In this context, developmental contributions have been defined as those which support greater amounts of social inclusiveness, greater sustainability, as well as significant amounts of human rights. Greater amounts of resource mobilisation, globalisation of corporate houses, and also the struggle for domination as different drivers of the CSR have considered, and also how those different logics as well as interests which strengthen the CSR eventually shape its content (Maclean and Crouch, 2011, p.25). Conclusion: The financial crisis of 2008-09 has greatly affected the business organisations across the globe in respect to different economic policies and strategies. During this time business organisations have failed to achieve the fruits of neo-liberalism and also the greater level of openness of global economies have also negatively affected these organisations. The level of environmental hazards started to rise to some exceptional level and social and economic aspects of these countries also got negatively influenced by these countries. Hence, business organisations across the globe started to implement policies aimed at making greater effective policies that will repair the economic as well as social and environmental aspects in these countries too. Hence, business organisations started to implement several policies through the most important policy called Corporate Social Responsibility. Hence, it is justified that the CSR policy has been an outcome of occurrence of financial crisis of 2008-09. References: 1. Crouch, C. (2011), The Strange Non-Death of Neoliberalism, UK: Polity 2. Crouch, C. (2006), Peripheral Vision Modelling the Firm in its Market and Organizational Environment: Methodologies for Studying Corporate Social Responsibility, Organization Studies, Vol.27, No.10, pp.1-19 3. Maclean, C. and Crouch, C. (2011), Introduction: The Economic, Political, and Ethical Challenges of Corporate Social Responsibility, OUP, available at: http://fds.oup.com/www.oup.com/pdf/13/9780199592173.pdf (accessed on April 30, 2012) Read More