Question

How do these two articles apply to today's situation?
- What are the reasons for the changing focus by companies?
- How does this fit within international business?
- What stood out for you in these two articles?

The Social Responsibility of Business Is to Create Value for Stakeholders.pdf

To Get Companies to Take Action on Social Issues, Emphasize Morals, Not the Business Case.pdf

Answer 1

The social responsibility of business implies that a corporate enterprise has to serve interests other than that of common shareholders who, of course, expect that their rate of return, value or wealth should be maximised.

But in today’s world the interest of other stakehold­ers, community and environment must be protected and promoted. Social responsibility of business enterprises to the various stakeholders and society in general is considered to be the result of a social Fig. 3.1. Responsibility of Business Enterprises towards Stakeholders and Society in General contract.

Social contract is a set of rules that defines the agreed interrelationship between various elements of a society. The social contract often involves a quid pro quo (i.e. something given in exchange for another). In the social contract, one party to the contract gives something and expects a certain thing or behaviour pattern from the other.

1. CSR IN A GLOBAL CONTEXT CSR AND DEVELOPING COUNTRIES JUSTIFICATIONS FOR CSR DEFENSIVE PROACTIVE POTENTIAL ROLES OF GOVERNMENT IN THE CSR AGENDA A MULTIPLICITY OF POLICY INSTRUMENTS
2. 6. CSR IN A GLOBAL CONTEXT CSR AND DEVELOPING COUNTRIES The concept of CSR aims to examine the role of business in society and to maximize the positive outcomes of business activity. Governments, companies and NGOs in many middle-and- low-income countries have accelerated the process of adaptation of the developed country-driven CSR agenda through greater direct engagement.
3. 7. CSR IN A GLOBAL CONTEXT JUSTIFICATION FOR CSR TWO BROAD SETS: DEFENSIVE-minimizing the potential bad effects of CSR on local communities, environments and markets when imposed through international supply chains and investments PROACTIVE-increase the domestic public benefits of CSR practices in economic, social, and environmental terms (there is various kinds of partnership initiative that seek to transfer knowledge and expertise, foreign investment)
4. 8. CSR IN A GLOBAL CONTEXT POTENTIAL ROLES OF GOVERNMENT IN THE CSR AGENDA Spans social, economic and environmental spheres including issues of corruption, poverty reduction and human rights. Goals differ from country to country. However, a broadly defined goal of public engagement in CSR is the alignment of business activities and public policy. It’s clear vision may increase the likelihood of success of corporate contribution to national development.
5. 9. CSR IN A GLOBAL CONTEXT A MULTIPLICITY OF POLICY INSTRUMENTS 5 distinctive roles for public sector engagement with CSR: 1. regulation 2. facilitation 3. partnership 4. endorsement 5. demonstration
6. 10. CSR IN A GLOBAL CONTEXT A MULTIPLICITY OF POLICY INSTRUMENTS Factors that may determine the course of action taken by any individual government: 1. capacity of constraints 2. size of domestic markets for products affected by CSR 3. degree of export orientation of the economy 4. presence of enterprises willing to champion change 5. degree of different stakeholders comfortable working partnership
7. 11. CSR IN A GLOBAL CONTEXT A MULTIPLICITY OF POLICY INSTRUMENTS Areas of legislation: 1. competition policy 2. basic investment and enterprise frameworks 3. rights of access to information and public participation in decision-making
8. 12. CSR IN INTERNATIONAL BUSINESS SUSTAINABLE DEVELOPMENT AND ENVIRONMENT HUMAN AND LABOR RIGHTS BE COMPLIANT BE CONSISTENT LOCAL ECONOMY AND SOCIETY TRANSPARENCY LEGALITY CONSUMERS SUPPLY CHAINS
9. 13. CSR IN INTERNATIONAL BUSINESS SUSTAINABLE DEVELOPMENT & ENVIRONMENT Today’s generation must invest for the future and stop borrowing from the future generation by wasting the resources at present. And so there’s a need to promote new economic development model, based on the context corporations should go beyond the minimum, this will bring turn to better consumer favor, product and process innovations, and raw material savings.
10. 14. CSR IN INTERNATIONAL BUSINESS HUMAN AND LABOR RIGHTS CSR Demands: Be Compliant – operational conduct of the enterprise should not be lower than the standards Be Consistent – have partners of the same kind in adopting the same observance and recognition of rights
11. 15. CSR IN INTERNATIONAL BUSINESS HUMAN AND LABOR RIGHTS Enterprises must protect the primary rights of its workers wherever it operates and strive to observe the following: Refrain forced or obligatory labor and intimidation Be an advocate of the abolition of child labor Respect right of privacy and freedom of opinion Respect exercise of political rights and trade unions Refrain from discriminatory treatment Fair compensation Healthy and safe working environment
12. 16. CSR IN INTERNATIONAL BUSINESS LOCAL ECONOMY AND SOCIETY Large international enterprises bring extraordinary impact on the development of less-developed countries. However, problems occur in the differences on technological capability of the host country’s lack of capacity to adapt. Involvement of stakeholders is necessary in terms of relevant decisions that would contribute to the development of the territory or to the host country in particular and that it reduces investment risks.
13. 17. CSR IN INTERNATIONAL BUSINESS LOCAL ECONOMY AND SOCIETY Typical examples of conduct of multinational companies that considered to be responsible and have gained wide positive recognitions: Transfer of technology The grant of licenses for the use of intellectual property rights at costs compatible with the local market Granting authority to manufacture products and brands that are protected Training for the development of local skills
14. 18. CSR IN INTERNATIONAL BUSINESS LOCAL ECONOMY AND SOCIETY Development of new products by means of local knowledge and skills Creation of viably durable forms of collaboration with local partners Corporate venturing investment in the local start-up capital
15. 19. CSR IN INTERNATIONAL BUSINESS LOCAL ECONOMY AND SOCIETY MNC’s sincerity to develop the host company or country is to invest on the fixed assets if allowed by the host. These assets (like buildings) means one thing, they will be here for long if not for good. “CSR in action” – giving out a portion of their income for projects like maintenance of roads, improvements of public hospitals, adoption of a school and other activities that should have been rendered by the government. These would give a good feedback from the community and create good reputation for the company.
16. 20. CSR IN INTERNATIONAL BUSINESS TRANSPARENCY Corporate transparency - is a form of deep-rooted managerial initiative which evolved into a philosophy of removing walls and facilitating free and easy public access to corporate information. It involves openness, communication and accountability. Transparent measures include financial disclosure statements, the freedom of information legislation, budgetary review, audits and religious compliance.
17. 21. CSR IN INTERNATIONAL BUSINESS LEGALITY Prerequisite of CSR is to go beyond the law provisions in order to contribute to the establishment of a fair and sustainable development. The enterprises that prefer a CSR strategy declare to the public and to the stakeholders that they do not participate to illegal engagements .
18. 22. CSR IN INTERNATIONAL BUSINESS CONSUMERS Enterprises know that their reputation and their success depends on their commitment towards consumers. Those who chose social responsible behavior watch consumer- stakeholder as a client and as a “collaborator” in pursuing their CSR strategy. Thy were not only concern health and eco- sustainability of the goods but also to prove its not produced by means of exploitation of human resources. “aware consumption” – represents a new approach in acquiring growing importance in the market by promoting a production that is safe and compatible with a sustainable and fair development
19. 23. CSR IN INTERNATIONAL BUSINESS SUPPLY CHAINS
20. 24. CSR IN INTERNATIONAL BUSINESS SUPPLY CHAINS It become very complex due to market globalization and often outsourced in countries where human right protection is low or there are no environmental regulations, or tolerance of hard labor is high due to absence of choices. These represents critical point for enterprises that have chosen to adopt a socially-responsible conduct. The lack of ethical control becomes a commercial and financial risks.
21. 25. CSR IN INTERNATIONAL BUSINESS SUPPLY CHAINS Companies able to observe ethical behavior through the whole production cycle may have positive effects in terms of:  Improvements in market reputation  Confidence of the ethical investors and consumers  Good relations with the institutions and social organizations

my views about social responsibility of business,

The benefits of CSR speak volumes about how important it is and why you should make an effort to adopt it in your business.

Some clear benefits of corporate social responsibility are:

• Improved public image. This is crucial, as consumers assess your public image when deciding whether to buy from you. Something simple, like staff members volunteering an hour a week at a charity, shows that you’re a brand committed to helping others. As a result, you’ll appear much more favourable to consumers.
• Increased brand awareness and recognition. If you’re committed to ethical practices, this news will spread. More people will therefore hear about your brand, which creates an increased brand awareness.
• Cost savings. Many simple changes in favour of sustainability, such as using less packaging, will help to decrease your production costs.
• An advantage over competitors. By embracing CSR, you stand out from competitors in your industry. You establish yourself as a company committed to going one step further by considering social and environmental factors.
• Increased customer engagement. If you’re using sustainable systems, you should shout it from the rooftops. Post it on your social media channels and create a story out of your efforts. Furthermore, you should show your efforts to local media outlets in the hope they’ll give it some coverage. Customers will follow this and engage with your brand and operations.
• Greater employee engagement. Similar to customer engagement, you also need to ensure that your employees know your CSR strategies. It’s proven that employees enjoy working more for a company that has a good public image than one that doesn’t. Furthermore, by showing that you’re committed to things like human rights, you’re much more likely to attract and retain the top candidates.
• More benefits for employees. There are also a range of benefits for your employees when you embrace CSR. Your workplace will be a more positive and productive place to work, and by promoting things like volunteering, you encourage personal and professional growth.