Corporate Social Responsibility
It is for reasons mentioned above, alongside other criticisms, that there is a lot of ambiguity, debate and criticism as to how as multinational corporation (MNC) should go about implementing a CSR code or plan both in their home country and overseas. Or even; if they should bother with such an effort. CSR however is an essential issue in this day and age for companies to place considerable emphasis on. Not only does CSR benefit development, particularly that of third world or developing countries, but it can raise the profile and bottom line of and organisation if implemented and adhered to sufficiently.
Bennett (2002) suggests that international company operations “can help provide stability by addressing the concerns of those who are neglected and excluded from the benefits of the operations. ” This can be done through poverty reduction plans, revenue-sharing schemes whish fund for foundations that support social development and environmental remediation which can make a world of difference. “CSR is now intertwined with international development and the related goals of poverty alleviation and sustainability,” (Blowfield, 2005). There are many benefits for a company who develops a high CSR profile.
Corporate Social Responsibility Essay Example
Although the costs of implementing a CSR strategy can be high, the overall outcome can prove most beneficial for both the bottom line and reputation of the company; as well as the development of third world countries and as stated above, the alleviation of poverty. The Body Shop is an example of an organisation that is highly successful due to their deep commitment to social responsibility and environmental change. The core values that drive their business include being: against animal testing, supporting community trade, activating self esteem, defending human rights, and protecting our planet.
The Body Shop thrives off these beliefs, and in staying true to themselves and the positive development of our world, they have become one of the most respected, internationally successful, socially responsible organisations in the world. Company CEO Jean Paul Agon states that “their values have been upheld for over thirty years…and they will continue to be nurtured for the benefit of all,” (The Body Shop Values CSR Report 2007). By benefiting all, Jean Paul is referring to the vast number of people from all walks of life who contribute to the Body Shop’s success.
The Body Shop is currently celebrating 20 years of their Community Trade Programme. Since 1987, the program has grown to involve suppliers in more than 20 countries across the world from Brazil to Zamibia. More than 15,000 people benefit from this programme. By incorporating suppliers from around the world, the Body Shop not only ensures that it uses the best natural products, but it directly supports all involved in the supplier process; contributing to the development and growth of third world and minority countries throughout the world.
It is for these reasons that the Body Shop is an international leader of CSR, and although their line of business allows them to submit entirely to social responsibility, many many areas of it’s practice can be used as benchmarks for other MNC’s throughout the world. . Manakkalathil & Rudolf (1995) quote that: “with more information and a wider selection, consumers are bound to choose corporations that take care of them and their needs. Overall, this provides benefits to the consumer, the MNC and those involved in the supplying and manufacturing of the overall product; which in light of the Body Shop’s values can be nurtured for the benefit of all. Although the benefits of becoming a socially responsible corporation are high, there are also many criticisms of CSR, however the majority of arguments against the issue revolve around the current lack of regulations and difficulty implementing a plan in which all countries can conform.
Academics agree that it is a valuable and beneficial concept, however international markets can easily be exploited without proper regulatory systems. Monshipouri, Welch & Kennedy (2003) state that “the rights of workers, and the obligations of business to the community are arguably too important to be left to the voluntary goodwill of the corporations. ” Incident cover-ups and rash decisions by managers under pressure are highly common and corporations will generally do what they can to keep up appearances.
Grit (2004) suggests that corporations face a classical problem of the tension between shareholders and stakeholders. The shareholder approach leads to “business without ethics,” while the stakeholder approach is to “ethics without business. ” Many corporations choose to side with the shareholders in a bid to keep them happy, and to do what they can to increase their bottom line. This however, can be viewed as a short term approach due to the increasing interest in social responsibility and morality in business. Manakkalathil & Rudolph (1995) claim that consumers in the U.
S are becoming more sophisticated, and demanding more ethical standards from corporations. This may affect the need for a more ethical and socially responsible approach worldwide due to the fact that most major multinational corporations market in the U. S. and the more sophisticated consumer will have an impact on the enhancement of CSR among multinational companies, regardless of their country of origin. Another issue which can sway the success or failure of CSR in a multinational corporation is whether or not a manager is adequately informed or trained in the changing effects of globalisation and CSR.
Bennett (2002) suggests that training in the past focussed solely on the company’s role to maximise profits for it’s shareholders. This is consistent with Grit (2004) who states “Managers regard moral issues as not functional for business, as they see moral language as a threat for the harmony within the organization, the efficiency of the enterprise and their personal image as decisive and effective managers. ” This perception needs to be modified to suit today’s business practices and the evolving management styles consistent with globalisation.
The rise of many Non-Government organisations, and regulations forced upon executives in some countries to become socially and environmentally engaged in their area have seen a rise in educational procedures to train managers to effectively deal with these situations and maximise their potential. When developing a critical approach to CSR Blowfield (2005) states that we are required not only to ask how CSR affects company behaviour in developing countries; it also requires us to ask if (or how) business is affecting the meaning of development itself.