Corporate Social Responsibility and Globalization - Literature review Example

CORPORATE SOCIAL RESPONSIBILITY AND GLOBALISATION By Lecturer: of Affiliation: and Corporate Social Responsibility and Globalization Introduction Global frameworks on corporate social responsibility have significantly gained high popularity in the last decades. A number of researchers have examined varied reasons for the emergence of corporate social responsibility frameworks in the global economy. Corporate social responsibility (CSR) is linked with the conduct of corporation especially it determines in case corporations owe a duty to stakeholders. The CSR has significantly revolved around varied corporate conducts in multinational business and other private companies, with the ability to influence local and international policy and communities where they operate. In the competitive global market, many companies have tried to employ CSR strategy in order to achieve successful business performance. Globalization has contributed to varied changes in the international business activities. Globalization is defined as to the worldwide amalgamation resulting from international views, products and other socio-cultural aspects. The global integration has radically risen due to increased technological advancement; thus stakeholders have now started implementing CSR strategy in order to sustain their business in the competitive global market. Despite the growing concern to the global CSR frameworks and globalization issues, quite numbers of scholars have systematically examined the increased concern on adherents to these frameworks for the last decades. Literature Review Global corporate social responsibility has emerged in the last decades as the significant strategy employed by varied multinational corporations in the global business for creating effective business performance. In spite of the growing concern of CSR and globalization aspects, quite numbers of scholars have attempted to examine the increasing number of adherents to the CSR frameworks. From a rational actor model, the increased number of CSR is a puzzle since the costs and benefits associated with these frameworks are profoundly uncertain (Lim and Tsutsui 2012, p. 2). Many multinational companies that have attempted to operate their business across the globe have considerably gained some public relation benefits for demonstrating the commitment to CSR principles. Although corporations employing CSR might gain public relations benefits, some of them have been accused of making empty promises and evading regulatory devices (Lim and Tsutsui 2012, p. 2). Many scholars have argued on the issue of CSR in relation to the multinational corporations and large private organizations as well as their ability to international policies where they operate (Cramer, 2006, p. 78; Kiran and Sharma 2011, p. 12). Many people have raised issues as to whether local and international regulations concerning corporate responsibility can control the conduct of corporations in jurisdictions outside their quarters. The CSR supporters argue that the successful operation of international markets depends on socially responsible trade conduct. Varied aspects relating to the current debate on the CSR frameworks have attempted to focus on CSR strategies relating to key areas such as anti-corruption, environmental protection and human rights. Some organizations such as UN, International Labor Organization and other development organizations have developed guidelines, regulations and varied instruments that reveal the required corporate conduct. The debate also covers the need for the effective access to global information and social media services. This will enable the public to become well informed as well as monitor effectively global corporate activities. Cramer (2006, p. 34) argues that globalization has played significant roles in the global economy because many nations have developed because of globalization. However, other economies have faced varied challenges because of globalization issues especially the cost of maintaining the environment; thus many economies have sought to employ global business strategies for reducing such associated costs of globalization. Globalization, which for the last decades has contributed to increased business competition in the global market, has contributed to varied changes in the business environment. Many multinational companies have attempted to employ effective strategies that can enable them to sustain their business in the competitive business environment. Therefore, the CSR frameworks have been considered as the significant approaches for creating organizational change; thus enabling companies to improve business performance. Kiran, R., & Sharma, A. (2011, p.17) claim that it is crucial to make a shift towards a new politically extended CSR model in the globalized economy. In reality, globalization is deteriorating the state powers of political system in an attempt of regulating business activities. For instance, globalization forces the local authority into the underneath competition in order to enable companies to accomplish competitive advantage in the competitive business world. Therefore, local government understands that corporations should be well reorganized and understood as economic and political actors. Therefore, the civil society is influencing the state policies to create a significant transformation in CSR conduct. In the current business environment, companies are committed to their employees and the society where they operate; hence being forced to be accountable for business activities across the supply chain. For instance, Nike Company is one of the companies that had to make considerable investments in order to improve their working conditions for their suppliers. Recent corporate failures in an attempt of incorporating CSR have attracted many attentions of governors, human resource managers and the general public in the role that social responsibility play in the economy (Aras and Crowther 2012, p. 12). Social responsibility encompasses varied aspects in the business process, which ranges from managerial behaviors, reward, motivation, human rights, corporate governance to environmental protection. Aras and Crowther reveal the considerable debates, which have been carried out to determine the exact meaning of social responsibility and the way it can be applied in the business environment. The main features these authors bring about are the social responsibility and corporate governance. Many companies have made considerable efforts of employing CSR and but they have not yet achieved the desired objectives of these frameworks. Therefore, many academic scholars view the CSR frameworks as a term that has been misinterpreted because many cooperates have not met the desired objectives of these frameworks. Additionally, Crowther, Caliyurt and International Conference on CSR (2006, p. 23) argue that there are varied perspectives upon which CSR term can be defined and the way it can be applied within organizations. The CSR recognizes the international scope of global social responsibility and stakeholders can apply it in deriving good results from globalization. The local and international governments, as well as their international agencies categorized under the umbrella of UN, can utilize the CSR in achieving the developmental goals. However, it seems that these government bodies have failed in their attempts to rid the planet of underdevelopment and poverty (Hopkins 2009, p. 43). CSR aims to determine the amount of responsibilities that stakeholders need to deal with in a considerable detail in order to achieve the desired goals effectively. Aras and Crowther (2012, p. 54) assert that CSR as a business model should offer a broader stakeholder management, which can be seen as an effective competitive advantage in the global business. This model should enable stakeholders to perform their business successfully in the competitive global market. However, companies have failed to utilize this model due to failure of complying with the required regulations such as pollution laws and other legal requirements; hence the model is seen ineffective. The research indicates that CSR should offer the stakeholder management a clear picture and the way of carrying out sustainable business in the global market (Kiran and Sharma 2011, p. 18). This is essential because it can enable countries participating in the international business activities to achieve effective trade performance; thus achieving their developmental goals. Many policy makers, government institutions and the concerned general public are concerned of the nature and impact that result from globalization issues. This is because some strict corporate regulations of a certain state can benefit another state or encourage increased capital flow. The policy makers and business entrepreneurs have made profound efforts of generating new governance system in the business environment. This can enable them to address the issue arising from such restrict corporate regulations. This is through establishing binding regulations governing global business activities, but some of them have still failed because of oppositions from businesses (Hirschland 2006, p. 126). Therefore, political settlement among different states, businesses and civil societies has emerged with new voluntary frameworks vital for achieving successful business management across the globe. Despite the increased emergence of these frameworks, only few states, businesses and civil societies have adhered to them. This is because the CSR have been linked to varied uncertainties, but in spite of these uncertainties, the worldwide CSR frameworks have attracted many adherents globally. Kiran and Sharma in their article of CSR, a corporate strategy for new business attempt to reveal the way CSR strategy has become a significant concept in the contemporary business environment (Kiran and Sharma (2011, p. 31). The authors attempt to reveal the way the changing global market scenario has also altered the perception of business entrepreneurs towards the way they can conduct business activities in the current society. This is because business entrepreneurs in the current society understands that business is not about earning corporate profits but rather sharing the profits with employs and the society. Many of them have made significant efforts of implementing the CSR frameworks as an effective strategy for maximizing profits. The CSR practices enable the company to meet their stated business goals effectively. This is because these frameworks encourage them to be responsible for varied services they offer customers in the society. The model has encouraged many companies to work effectively towards achieving not only their demanding goals within the organization but also the society at large where companies operate. Therefore, there are significant needs of understanding the driving aspects that motivate organizations towards CSR implementation. This is crucial because it can enable one to understand the way global organizations perform their business activities in the global market. CSR can also enable one to understand the way CSR strategy would benefit companies participating in the international business activities. Tengblad and Ohlsson (2010, p. 653) argue that the globalization aspects is currently meant for swift international trade growth, increased fiscal transactions and cross-country economic assets ownership. Therefore, the authors reveal the way globalization of state trade mechanisms has influenced the implementation of CSR strategy for creating effective change in the global business. The rise of CSR discourse or the last ten years does not imply an increased commitment in corporate responsibility but only contributing to increased societal expectations. Thus, companies should develop the capacity to act more independently as moral agents to help the society achieve their desired goals effectively. For instance, financial banking institution are among the organizations that have made significant efforts of utilizing CSR model in order to achieve the expected needs of their customers. Many financial institutions have increased competition rate in the banking system by basing on social responsible strategy for the services they offer to customers. Many banking institution across the globe has increased competition through improving the CSR and corporate governance image. They have made efforts of enhancing their image before the eyes of the public in order to become successful in the global competitive banking activities. Thus, the strategy employed in the banking system regarding CSR aims to make a difference in areas such as social, education, entrepreneurship, culture and environment areas. Many emerging markets across the globe have made considerable efforts of improving profitability through employing CSR in the context of outsourcing information technology (Babin, Briggs and Nicholson 2011, p. 28). Many companies going global or new emerging market employs the CSR as an effective strategy that can enable them to survive in the global competitive market. Therefore, many of these companies utilize information technology tools for creating new markets for their products. For instance, the British firm Cooperative Services is among industries that have made considerable efforts of being social responsible in the business process, in the context of outsourcing information technology to their emerging markets. Social responsibilities encompass social, economical and environmental sustainability; thus companies strive to achieve sustainability through being socially responsible when conducting business activities in the global market. The study concludes that in order to determine companies’ responsibility to the society and the environment, these companies should be accountable and responsible for their activities by employing codes of business ethics in business practices. Okoro (2012, p.863) reveals the way globalization of markets and business organizations has led to increased numbers of corporate executives, multinational joint ventures and strategic allies. Other entrepreneurs are concerned in direct savings, in overseas markets with an aim of widening local operations, increasing market shares and profitability levels. Therefore, since the business opportunities are becoming highly attractive, organizations competing in the global markets need to employ effective ethical standards for achieving their intended goals successfully (Okoro 2012, p. 864) they can also employ CSR frameworks in cross-cultural and international business contexts in order to achieve competitive advantage. Many scholars have emphasized on the significant of maintaining high levels of ethics in the global market in order to compete favorably and sustain customer loyalty (Hopkins 2009, P. 32; Okoro, p. 865). Local conditions vary in the global market environment due to cultural differences and values or beliefs; thus employing ethical approach for conducting business in the global market is essential. It is imperative for multinational companies to adopt ethical approaches that are consistent with global business practices, which can enhance credibility, corporate image; hence enabling the business entities to achieve a competitive advantage (Okoro (2012, p. 866). The research review reveals the way globalization has significantly altered CSR; hence blurring he boundaries between local and foreign industries. It has also created a consequence to international companies, which are being held accountable for their activities. Hence, these companies need to behave responsibly because they have taken the roles of the state. Therefore, a corporate socially responsible behavior is necessary for the multinational companies to protect their new social responsibility in the labor markets. Even so, some questions remain rhetoric such as do all multinational companies adhere to CSR? Or do the responsible behaviors of multinational companies have a differentiation approach? Hence, the latter question can reveal as to why companies such as Wal-Mart stores and some Micro financial Institutions are still successful despite the varying irresponsible practices. For instance, by Wal-Mart charging customer lower prices for products, this can be an indication that they are competing with their competitors differently. Therefore, there in need for future research to provide a clear analysis of global CSR because these varied definitions results to diverse issues. Clear understanding of the CSR concept can enable people to understand the meaning behind the CSR. This is because many companies have employed this term without a clear understanding what being socially responsible means in the current business environment. Conclusion Despite the growing concern to the global CSR frameworks and globalization issues, quite numbers of scholars have systematically examined the increased concern on adherents to these frameworks for the last decades. Global CSR has emerged in the last decades as the significant strategy employed by varied multinational corporations in the global business for creating effective business performance. CSR aims to determine the amount of responsibilities that stakeholders need to deal with in a considerable detail in order to achieve the desired goals effectively. Therefore, many scholars have made significant efforts or analyzing the meaning of CSR, the costs and benefits associated with this concept. The research indicates that CSR is an effective strategy because it enables companies to be accountable for their business activities. Many emerging markets across the globe have made considerable efforts of improving profitability through employing CSR in their business activities. Although some of the companies have failed to clearly define the meaning of CSR, many of them have been successful in the global competitive market because of being socially responsible for their business activities. Bibliography Aras, G., & Crowther, D. (2012). Governance and social responsibility: International perspectives. Basingstoke: Palgrave Macmillan. Babin, R., Briggs, S., & Nicholson, B. (2011). Emerging Markets Corporate Social Responsibility and Global IT Outsourcing. Communications Of The ACM, 54(9), 28-30. doi:10.1145/1995376.1995387. Cramer, J. (2006). Corporate social responsibility and globalisation: An action plan for business. Sheffield: Greenleaf Publishing. Crowther, D., Caliyurt, K. T., & International Conference on Corporate Social Responsibility. (2006). Globalisation and social responsibility. Newcastle, U.K: Cambridge Scholars Press. Hopkins, M. (2009). Corporate social responsibility and international development: Is business the solution?. London: Earthscan. Hirschland, M. J. (2006). Corporate social responsibility and the shaping of global public policy. Basingstoke: Palgrave Macmillan. Kiran, R., & Sharma, A. (2011). Corporate Social Responsibility: A Corporate Strategy For New Business Opportunities. Journal Of International Business Ethics, 4(1), 10-17. Lim, A., & Tsutsui, K. (2012). Globalization and Commitment in Corporate Social Responsibility: Cross-National Analyses of Institutional and Political-Economy Effects. American Sociological Review, (1), 1-53. doi:10.2307/23102579. Okoro, E. (2012). Ethical And Social Responsibility In Global Marketing: An Evaluation Of Corporate Commitment To Stakeholders. International Business & Economics Research Journal, 11(8), 863-870. Tengblad, S., & Ohlsson, C. (2010). The Framing of Corporate Social Responsibility and the Globalization of National Business Systems: A Longitudinal Case Study. Journal Of Business Ethics, 93(4), 653-669. doi:10.1007/s10551-009-0246-2. Read More