Question

Corporate Social Responsibility (CSR):

1. Why would an MNC (or any corporation for that matter) undertake corporate social responsibility measures? Discuss at least three reasons.
2. What are the sources of CSR standards and codes that most MNCs follow as their benchmarks?
3. Why do some countries (like India and Malaysia) top the list of countries in terms of the number of companies reporting CSR activities?

Answer 1

Answer: Corporate Social Responsibility is defined the self regulating business model that helps a company be socially accountable to the environment, society and public.

1.MNCs and other such corporations in the countries undertake CSR measures or to say initiatives in order to return the due share to society from which resouces have been used by such businesses.

2.Many countries provide the contributions under CSR by corporate firms under the ambit of exemption Income tax act.Hence they can avail tax benefits at the same time investing for social benefit like in sector of health , education etc.

3.CSR measures help to strengthen the ethical principles inside the firm as well and help to experience ground level exposer to the newly recruited employees.

(2) Sources of CSR standards and codes that most MNCs follow as their benchmarks are:

1.Ethical principle and raising the level of morality.

2.Social service and voluntary activities.

3.multiple stakeholder orientation approach

4.alignment of social and economic responsibilities to maximize the profitability.

(3)Some countries (like India and Malaysia) top the list of countries in terms of the number of companies reporting CSR activities because:

Countriea like India have made it mandatory for MNCs and other public and private firms which satisfy a certain criteria to invest their certain profit into CSR initiatives. Such an Act is known as Companies Act 2013 in India similar guidelines exists in other countries as well.

Another reason is under rule 80G of Income tax act, firms can attain exemption while paying taxes hence firms voluntarily invest in CSR as well by doing this they attian profits along wity fulfilling the social economic responsibility towards society.

Many firms invest in Education sector and then recruit the best talents for their firms as well , which at last proves as win win situation for all stakeholders.

Hope it helps!

Please do upvote.