Question: “MNCs” face particularly demanding challenges when it comes to managing their corporate social responsibilities”. Critically discuss this statement using real business to support your arguments
Boatright (2006) contend that corporate social responsibility denotes the responsibility recognized by a company for acting in socially responsible manner. There is no single universally accepted definition of corporate social responsibility, it has generally come to mean business decision making linked to ethical values, legal compliance, and respect for people, community, and environment. CSR accepts a company to go further than required by law so as to treat employees fairly and with respect, operate with integrity and in an ethical manner in all its business dealings with customer, suppliers, lenders, and others, respect human rights, sustain the environment for future generations and be a responsible neighbor in the community and a good ‘corporate citizen’. Hill (2009) asserts that corporate social responsibility has become a challenge which MNCs face in emerging markets. Galbreath (2009) support the view of Hill (2009) by saying that with increase in globalization, the importance of corporate social responsibility has increased a lot.
Davis (1960) assert that concept of CSR is important because businesses are based on trust and foresight. This trust with customers, communities and regulators is not simple and to be successful in long run, a company needs to think beyond what is affecting them today. Thus it is necessary to address changes to technology or the needs of customers taking into account alterations in social, environmental and governance issues (Holme 2010). This essay has made an attempt to explore the role and importance of corporate social responsibility for an MNC and various challenges in managing its corporate social responsibilities.
Corporate Social responsibility as a concept was evolved in 1970 and the focus of the concept at that time was on fulfilling business obligations of a company. Carroll (1979) asserted that proper definition and understanding of concept of CSR would help a company in identifying and addressing relevant social issues relating to CSR. The author suggested for clear prescription of duties of corporation so that their social responsibility could be fixed.
In the last two decades, many business houses have shown positive response to the fulfillment of their CSR. This is partly due to the reason that they want to show that they are following ethical practices and it will serve the purpose of indirectly getting the support of government for their operations. CSR movement has also gained popularity due to pressure of environmentalists and other activists for forcing firms to comply with their corporate social responsibilities.
Cavusgil et al (2012) contend that a strategic approach to CSR is increasingly important to a company's competitiveness. It can bring benefits in terms of risk management,...