Definition of Corporate Social Responsibility

Dsicuss about the International Marketing In The Fast-Changing World.

Corporate social responsibility is one of the most vital aspects that have a significant impact, and that has been overlooked for quite some time. It has become challenging for corporations to balance between profitability, has implications for the society, environment as well as human rights. Social responsibility has been defined differently by different schools of thought, but the meaning remains the same. In general, corporate social responsibility can be described as the responsibilities of Multinational Corporate corporations beyond profitability for the corporate shareholders. At its best, corporate social responsibility can be defined as a situation whereby an organization expands its obligations and responsibilities to a broader group including its employees, customers as well as their stakeholders (Gugler & Shi, 2014). An excellent example of social responsibility is giving back to the community, providence of safe workplace as well as high level of environmental protection, say, having environmental policies.

This paper will look at global corporate social responsibility, profits, and the environment. It will take the fundamental interest in the relationship between social responsibility and profitability for the Multinational corporations as well as look into real-life examples of companies that are socially responsible and yet profitable. It will also take a keen interest as to why environmental concerns like global warming, emission of co2 gas are receiving a lot of attention and also look at Multinational corporations environmental activities as well why some companies embrace industrial ecology while others do not.

Evidently, social responsibility for multinational corporations has several implications concerning profitability. However Multinational corporations are increasingly becoming socially responsible in the contemporary world, some of them are shying away from diving into this and are even going to the point of overlooking it and looking at it in the profit perspective. Some corporations have argued that having social responsibility is equal to losing in profit-making and competition battle.

Economists have argued that the sole aim of business is maximizing profits while minimizing costs and therefore any general expenditure of income so acquired would lead to an increase in the cost of production and which would adversely affect the profit amounts. Consequently, they give a resolution to this by encouraging that customers or employees can spend their own money at their pleasure for social activities. 

Some Multinational corporations, therefore, find it challenging to spend financial resources in financing social activities like giving back to the community, engaging environmental management activities, etc. instead of purchasing supplies. These corporations also fear increasing the price of their commodities, something that could bring down their sales volume resulting in losses (Bondy & Starkey, 2014). These are organizations that are focused towards the wellbeing of the business owners and not any third party, and therefore any single step taken should leave a positive economic impact on the owners.

Implications of Corporate Social Responsibility on Multinational Corporations

However it’s a majority view that being socially accountable minimizes the number of profits earned by corporations, there are several ways in which a multinational corporation can be socially responsible in its host country and still be profitable.  To begin with, corporations can use the social responsibility aspect to increase their reputation (Yin & Jamali, 2016). They can involve themselves in social activities that bring themselves closer to the community. In this case, their status will be multiplied, and as a result, they are likely to make more sales hence making more profits.

Again, corporations can use social responsibility as a tool to attract more qualified staff.  On engagement in these social activities, the corporations get spotted by highly skilled persons who are full of productive ideas to improve the business performance (Crilly & Jiang, 2016). On acquisition of this staff, the productivity will increase, and therefore more profits will accrue to the business. It, therefore, depends on the angle that a particular corporation will view social responsibility. 

Another fantastic opportunity for multinational corporations is to use social responsibility as a tool for differentiating its products. In this aspect, a multinational corporation can engage itself in social activities such as prevention of environmental degradation, giving back to the community specially and powerfully and enjoy the advantage of out-competing their principal opponents (Lee & Hong, 2016). Therefore, it will always depend on the angle that social responsibility is viewed, either as an opportunity or a risk.

Amazingly, social responsibility with profitability is not a fiction. There exist several evident companies that are socially responsible and yet make huge profits as though they don’t spend a single cent in social activities. These are companies that offer favorable working conditions for all stakeholders as well as caring about critical social issues (Chaplinsky, Hanley, & Moon, 2017). One of these companies is Delloite.  This is a professional consulting firm that is committed to driving changes in the society as well as promoting the sustainability of the environment. It works on innovative solutions in conjunction with the government and other non-profit making organizations and encourages its employees to set some time for pro bono work which has resulted in massive profits.

3M is another socially responsible and yet profitable company. It embraces the trademark ‘science applied to life’ and focuses on the environment, the community as well as education initiatives aimed at boosting student interest in science and technology (Parrino, 2016). Another company is TOMS whose foundation was based on the concept of sustainable giving. It began with the promise of donating a pair of shoes alongside every pair bought. It has expanded this to supporting needy people.  Ever since, they have grown and succeeded in profitability perspective. Another well-known company for being socially responsible yet profitable is the Ben and Jerry’s that has a good reputation for social responsibility since the year 1985. It was created with an initial gift of 50,000 shares, and the company’s board decided that 7.5% of its pretax profits would be allocated to philanthropy.

Ways for Multinational Corporations to Practise Social Responsibility and Still Be Profitable

Issues of global warming, emission of C0₂ gas as well as corporate social responsibility have received a lot of attention over the recent past. This precisely is because they are the dominant emerging issues in the contemporary world. The relationship between global warming, emission of C0₂ gas and corporation social responsibility is interlinked and interwoven (Filatotchev & Stahl, 2015). Corporations that are not socially responsible carelessly emit C0₂ gas to the environment leading to global warming, and that’s the reason as to why the three are receiving much attention. Dealing with corporation’s social responsibility would be equal to the reduction of emission of C0₂ gas and global warming, and therefore these three have are inseparable and affect human beings.

As would have been expected, there has not been the absence of companies that have an environmental system that is designed to protect the environment and prevent adverse effects to it. According to the 10-k public annual report, of the 500 larger companies, 59% of them, at the end of the year made a climate-related disclosure in the United States (Khalil, Mansi, Mazboudi, & Zhang, 2017). On the same note, research has proven that the less environmental response by some of the companies, both those having environmental policies and those without is not as a result of ignorance but rather as a result of a voluntary choice made by the management and that which is supported by the board of directors.

This report has also shown that the percentage of companies having environmental policies is increasing up the line. This environmental policy is one that includes regulations on waste disposal, sewage treatment, emission of harmful gases to the atmosphere among other provisions (Kolk, 2016). This environmental policy is aimed at handling climate change that has been brought about by the emission of waste products to the environment by companies.

Surprisingly, multinational corporations almost have equal or even more cons as opposed to the pros. It has been evident from the research conducted there above that the world’s leading pollutant is multinational corporations. These corporations are responsible for the climate change evidenced in the world as well as the global warming terror which is a major emerging issue (Gao & Li, 2015). Companies have polluted water, soil, and even the air. It has been evident that most of the companies around the world do not have environmental policies and therefore carelessly emit solid, liquid and gaseous wastes into the environment.

Examples of Socially Responsible and Profitable Companies

It is still amazing how most of the multinational corporations have taken quick corrective measures to control environmental pollution and climate change. Navigating through some multinational corporations’ website, I have amazingly found that most of them are now realizing that there is more than a big reason to protect the environment because it’s where we all live (Bodnaruk, Loughran, & McDonald, 2015). It is surprising that companies that looked down upon environmental conservation have changed their thought and come up with policies aimed at taking care of the environment.

Industrial ecology can be closely likened to the natural ecosystem where organisms interdependent on each other for survival. Industrial ecology is designed such that during the manufacturing process, the waste products or the byproducts are either sold to other companies as raw materials or recycled in the same company to produce other useful commodities (Amba-Rao, 2016). Industrial ecology is beneficial in several ways. For example, it reduces production cost, boosts the company’s reputation, increases its relations with other companies as well as protect the environment.

Now, there are different reasons as to why some companies employ industrial ecology while others do not. For instance, companies that are devoted to protecting the environment, as well as maximum utilization of resources, would become involved in industrial ecology (Bodo, Schlegelmilch, & Shaoming, 2005). Since industrial ecology is aimed at prevention of overexploitation of natural resources by maximum utilization of raw materials and production resources, companies viewing this as a way to reduce production cost would embrace it.

On the other hand, in spite of the fact that industrial ecology is an advantageous practice, some companies would not employ it. One of the reasons for this is not viewing it as an opportunity for reduced cost of production (Wang, Tong, Takeuchi, & George, 20116). Other companies would be focused on the sole benefit of the shareholders and owners and would therefore not have any reason to be involved in environmental protection and hence not embrace it. Others believe in using original raw materials and not waste products or by-products and therefore choose not to employ industrial ecology.

Conclusion

Choices have consequences. That is a fact. While most of the corporations are giving a blind eye to societal obligations in the view of avoiding secondary expenditure, it is essential to know that this in one way or the other has an indirect impact on them in the long run. Social responsibility, giving back to the community and most importantly environmental protection is what should be upheld by all companies and corporations. Just but to draw the line, if all companies could be socially responsible and set out environmental protection policy, the earth could become the best place to live. Thanks to social responsibility.

References

Amba-Rao, S. (2016). Multinational corporate social responsibility, ethics, interactions and Third World governments. Journal of Business Ethics, 43,44.

Bodnaruk, A., Loughran, T., & McDonald, B. (2015). Using 10-k text to gauge financial constraints. Journal of Financial and Quantitative Analysis, 6,70,300.

Bodo, B., Schlegelmilch, J., & Shaoming, P. (2005). International marketing in the fast-changing world. Electronic resource, 70-79.

Bondy, K., & Starkey, K. (2014). The dilemmas of internationalization: Corporate social responsibility in the multinational corporation. British Journal of Management, 4-13.

Chaplinsky, S., Hanley, K., & Moon, S. (2017). The JOBS Act and the costs of going public. Journal of Accounting Research, 52-57.

Crilly, D., & Jiang, Y. (2016). Do?no?harm versus do?good social responsibility: Attributional thinking and the liability of foreignness. Strategic management Journal, 46-49.

Filatotchev, I., & Stahl, G. (2015). Towards transnational CSR. Corporate social responsibility approaches and governance solutions for multinational corporations. Organizational Dynamics, 45-56.

Gao, H., & Li, K. (2015). Comparison of CEO pay-performance sensitivity in privately-held and public firms. Journal of Corporate Finance, 36-41.

Gugler, P., & Shi, J. (2014). Corporate social responsibility for developing country multinational corporations: a lost war in pertaining global competitiveness?. Journal of Business Ethics, , 18-29.

Khalil, S., Mansi, S., Mazboudi, M., & Zhang, A. (2017). Bond Market Reaction to Untimely Filings of 10-K and 10-Q Reports. 34-40.

Kolk, A. (2016). The social responsibility of international business: From ethics and the environment to CSR and sustainable development. Journal of World Business, , 56-64.

Lee, J., & Hong, Y. (2016). Extraction and visualization of industrial service portfolios by text mining of 10-K annual reports. Flexible Services and Manufacturing Journal, , 27-35.

Parrino, R. (2016). SEC adopts rule to implement Dodd-Frank CEO pay ratio disclosure requirement. Journal of Investment Compliance , 123-134.

Wang, H., Tong, L., Takeuchi, R., & George, G. (20116). Corporate social responsibility: An overview and new research directions thematic issue on corporate social responsibility. Academy of Management Journal, , 39-45.

Yin, J., & Jamali, D. (2016). The strategic corporate social responsibility of multinational companies subsidiaries in emerging markets: Long Range Planning, 43-46.