The Objectives Regarding Corporate Social Responsibility Commerce Essay


In the following paper presenting the objectives regarding corporate social responsibility and globalization. Over the time the integration of the business model has been increased to meet the consumers. In the past days companies are operated under the circumstances of one national culture and economical situations but from the past two 20years onwards the word 'Globalisation' came in to the picture. Globalisation can be described as the integration of national economies in to international economies through the technology, foreign investments, capital formulation, trade and migration.

According to Corcoran, 1998 globalisation can be defined as: "globalization refers to the increasing internationalization of economic life and its effects on trade, national sovereignty, laws and regulations, the mass media, and cultural identity. In economic terms, globalization is the process by which firms attempt to earn additional profits through entry into overseas markets". Globalisation has different aspects which affect the world in many different customs such as cause of Industrialization, emergence of worldwide financial markets, the effect of one organization related to the different economic matters of the different countries and competition between the firms across the globe became important concern to survive the globalized firm. Because of this globalisation every company across the globe are trying themselves to create a value, image to their firms in that way developing their business model 'Corporate Social Responsibility' came into the picture during the 20th century but it's usage in the corporate planning's tremendously increased during the 21st century. Now the term came in to the picture CSR, k what is CSR basically? Corporate social responsibility is one form of corporate self regulation integrated into a business plans or strategies it's became key term for the firms in this globalized world. According to academics, there is no proper one and only definition for the term CSR but different definitions are provided in the literature according to different organisations. There is no particular standard law for CSR, but formation of some companies together and those firms are adhere to the particular principles for example public sector organizations of the United Nations bound to the 'Triple Bottom Line'(TBL), it is extensively accepted that CSR stick to similar principles and ethics but with no proper legislative law. More broadly CSR is about how organisations business bring into line their values and behaviour with the forecasting and needs of stakeholders, not just investors and consumers but also employees, communities, suppliers and specially interested groups and the society as a whole. CSR describes firm's commitment towards the stakeholders accountable other than the shareholders. CSR demand the firm's business to manage their economical matters, social and environmental impacts of their activities to maximise the business and to reduce their losses in the competitive world (Steve and George, 2007).

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According to the Friedman, there is one and only one corporate social responsibility of business i.e. to use resources to run the business and moving that business activities according to the planning or strategies to increase the firm's profits so long as it adhere within the boundaries and free to competitions according to their own strategies without doing any fraud or deception (Friedman, 1962, p.133).

According to Sir Geoffrey Chandler, "at its best, CSR is defined as the responsibility of a company for the totality of its impacts, with a need to embed society's values into its core operations as well as into its treatment of its social and physical environment. Responsibility is accepted as encompassing a spectrum- from the running of a profitable business to the health and safety of staff and the impact on the societies in which a company operates (Steve, George & Juliet, 2007, p.53)."

Over the century's the fundamental of the CSR are changed, the transformation strongly related to the globalization and recognition of the permeability of private and public sector boundaries. Because of globalisation the media also spreads across the globe widely, the competition between the firms became important factor in the market. Considering the literature review over the 50years the concept CSR has been defined differently such as (Levitt, 1957; Friedman, 1962; Oliveira, 1984; Serva, 1993 and Tenorio, 2002). The concept CSR is very ambiguous (according to academics); it has different effects in the organizations in the different markets across the globe. The critical analysis of this topic the impact of globalization on CSR is going to discuss in the main body. (Fry & Meiners, 1986, p.105)

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Critical analysis of Corporate Social Responsibility: The impact of Globalisation.

In the last two decades the social and environmental matters are for activists, ten years from now these are to be amongst the very important factors in designing the government policies and corporate strategies. Twenty years ago the business is related to the local within the country and regionally connected. From ten years onwards every organization is globally interdependent as individuals and doing the business by considering local economical situations and cultures etc, the foreign investment across the regions have been increased massively all this factors central to the Multinational corporations (MNCs). Most of the organisations pursue growth through the globalization, MNCs encountered some challenges that effect their growth and the profits, so some firms are using CSR methodologies as a strategic designing to gain edge over the people support for their business in global market place, the pressure continuously increased from the global competition market on MNCs to study not only their internal matters like labour practices and profits but also their total supply chain from a CSR view (Fry & Meiners, 1986, p.105).

The social awareness between the people about the market has been improved in globalized world compare to the previous days, consumer buying thinking in the market also changed according to their own knowledge based on the brand value and image related to the company, and according to Rirse and Vincular's, 2005 most of the largest MNCs are showed interest themselves towards to include ethical values and policies which are socially responsible. Considering the stakeholders view they are expecting more than the service or products from the company's, so stakeholders expectations have been increased over the time in the market. Due to this globalization every company is trying to design integrated business model to beat the market. CSR is became most common use and key factor for the organizations to gain competitive advantage over the market.

At what extent organizations are following CSR in their business model? By looking in to the global MNCs like Wal-Mart, Timberland, McDonalds and Starbucks each and every company is following CSR techniques in their business model. Considering some company's those are faced some criticism from the public about their non cooperative acts towards the social and environmental welfare such as Nike manufacturing firm in Asia has been criticised for their poor working conditions and for employing under aged people, Nestle got some negative image because of their unethical marketing and using children in their supply chain, like these companies some firms have been faced problems from the society because of their negligence towards the social responsibility. Later on all those criticised organisations are also trying their part to follow CSR program due to the globalization.

Even though most of the corporate sectors are concentrating on CSR not only for social perspective, with an effective CSR programme companies have some following advantages in their internal matters like:

Improves their moment towards their capital formation.

Decision making analysis can be improved over the markets so that they will get option to calculate their risk involved in their new projects.

Improve their products or services brand image.

Get the chance to attract the qualified labours and employees to gain competitive edge in the market.

As a example, consider the Wall-mart's CSR program which will shows their interest towards the society and environmental protection. It is a value based and they have their own ethics to lead the market. Basically the company adhere to the 3basic beliefs those are founded by Sam Walton in 1962 those are Respect every one (those are shareholders and stakeholders or else investors and employees or individual), service to the consumers and try to deliver excellence in each and every aspect. According to the financial times, June 4, 2004, Wal-Mart has 10 global ethical principles those are designed to assist their supply chain to stakeholders and shareholders. Wal-Mart is very responsibly trying to innovate to offer quality of life to the people around the globe and it has some CSR programmes for their employees to improve their respect towards the organization. Wal-Mart is trying to find out the suppliers to develop new packing concept by using natural resources all this is doing because it's feeling their responsibility to protect the environment from the emission of carbon dioxide and Wal-Mart is organizing so many foundations, clubs, and offering scholarship for the students across the globe. This commitment towards the social responsibility across the globe will develop not only their brand image but also it will attract and motivates their employees to work with high energy and more importantly because of the globalization their CSR programme is well organizing across the globe.

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Considering the other example: At Timberland, full time employees in USA are dedicated their 40hrs pay for the community service; part time employees dedicated their 16hrs/yr. Themselves they created one program they used to called it as path of service. The program has been become more popular, company got the image, and their employee's commitment towards to the work has been improved. We can see the company commitment towards the social responsibility by considering this example. CSR programs are following mainly to improve and maintain the reputation across the globe and to recruit and retain potential quality of staff.

The Charities and Good works are different from the CSR program according to academics.

So we can conclude that most of MNCs are following CSR program because of the globalization.

Debate over the years is still going on different fundamental conclusions about the CSR. The regional joint committees are developing some ethical values regarding to the firms to protect the environment like Parliamentary Joint Committee (PJC), Triple Bottom Line report all these are developed some principles for the social purposes. In some countries some people are asking, demanding to implement certain laws in legislation to protect environmental, some countries are considering like this kind of demands, for example, Denmark created a law related to CSR on 16th December 2008. Like that Principles for Responsible investment made in April 2006, it's also voluntary initiation taken by some committee for the sake of social responsibility.

All these evidences are showing the clear imagination of the impact of globalization in corporate world.

CONCLUSION: Globalisation and considerable growth& influence of the private organisations across the globe have highlighted CSR. During evolution of these CSR programme MNCs plays major role to sustain competitive advantage across the markets. Most organisations CSR programmes are developed of voluntary initiation although some of these plans are actively supported by government. Due to the globalization the word become more popular in all markets, in this paper critically analysed by using Wal-Mart's case as an

example how the globalization has been effected to take actions towards the CSR programme. Increasingly corporations motivated themselves to become socially responsible because their important stakeholders are expecting more than products or service from the them. In the way the corporate companies creating their integrated business plans, CSR programme is implementing naturally because of the globalisation.