Corporate Social Responsibility (CSR) is becoming increasingly very important in the business world today. Companies should not solely focus on profit making but as well mind the stakeholder interest as well as emphasize on other areas.
Corporate social responsibility (CSR) which is as well referred to as corporate citizenship, corporate science or responsible business is a type of corporate self-regulation which is integrated into a particular business model (Lindgreen, & Swaen, 2010). This policy is a self-regulatory mechanism which is used by businesses to monitor and ensure extremely active compliance with the ethical standards, the law, as well as both the national and the international norms. With some of the models, when a firm implements the CSR, it at most times goes beyond the compliance with the rules and regulations and engages in the actions that lead to further social good and which is beyond the firm’s interest but most importantly, these actions are required by law. The main aim of this is to increase the long-term profits of the company as well as the trust from their shareholdersthrough positive public relations as well as the high standards of ethics so as to reduce the legal and business risks by ensuring they take responsibility of the actions of the company (Lindgreen, & Swaen, 2010).
A multinational corporation also referred to as MNC is basically a particular corporation that has its services and facilities as well as other assets that it possesses in at least one other country which is not its home country (Ghoshal,& Westney, 2005).These are the companies that have its factories or offices located in several different countries but as well have a head office which is centralized where they are able to co-ordinate the global management of their companies. The major multinational corporations in the world are mostly either Japanese, American or from the Western Europe. These include companies such as Toshiba, Coca-Cola, Wal-Mart, Nike, AOL, BMW and Honda among others.
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The advocates of multinationals claim that these companies are able to create employment as well as bring forth wealth to the countries that are much in need of such development. Critics on the other hand say that these multinationals have political influence over their host governments and can thus cause exploitation to the developing nations and at the same time create huge losses of jobs in their home countries.
I deny the statement that “A multinational corporation has no moral or social responsibility to engage in corporate social responsibility (CSR) programs.”This is because corporate social responsibility or CSR has been increasingly a very essential element in the world of business.Many people in the present world have negative thoughts towards these corporations in that the businesses have for over a long period of time taken advantage of the society as well as the consumers.
Most of these people think that businesses are basically all about making of profits and thus have very little or no concern about the public, the human rights issues and the environment. They feel like these do not make much contribution to the society. Thus, many corporations have tried in the best way they could to make these negative thoughts be erased from the minds of the people. They work hard to prove this with their actions. This is the main reason why many companies are increasingly engaging in socially responsible activities. Most of the businesses, including the medium as well as the small sized businesses are at the present times working tirelessly towards the establishment of the strategies and programs to ensure the balancing of the areas of both social responsibility and profitability.
When a multinational organization practices Corporate Social Responsibility, it actually benefits the company in very many ways especially when implemented properly. First of all, the implementation of CSR boosts the reputation of the company and as well increases the brand awareness(Kotler
& Lee, 2005, p.14). The company thus stands out when comparison is made with other companies even when they share the same product and price. The sales will as well be increased as the clients will with no doubt opt for the companies that deal with the issues that concern them a lot. It has been found that most people are at most times ready to switch to the companies that have a positive image and which as well has support for a good course. Secondly, it enables the reduction of the operating costs of the company. Some of the companies which are very good corporate citizens ensure that their CSR efforts are directed to environmental issues. They protect the environment through reusing, recycling and reducing as well as participating in educating the citizens to ensure environmental sustainability. This ensures reduction in the operating cost in the long term.
Thirdly, most companies taking part in CSR practices at the end become more recognizable. They eventually reduce the advertising costs on the CSR programs they are undertaking. Finally, the companies that possess a positive image and a high reputation are able to retain their employees as well as attract more talent to work in the company which is considered as being socially responsible(Kotler & Lee, 2005). Most of the employees actually feel more honored to work in a corporation that has focused on the implementation of Corporate Social Responsibility rather than the corporations which have not. Most people as well do not prefer to work in organizations that have a bad reputation on their CSR practices.
The multinational corporations which practice the Corporate Social Responsibility programs are considered as being just in their distribution. In this case, they exercise the concept of distributive justice in that it ensures the allocation of goods in a society is socially just. These corporations ensure that the goods they produce are equally distributed in the region. For example, a company like Toshiba dealing with electronics ensures that their products are evenly distributed within their region of operation. This will enable every person in need of their products are able to access it. It will also maximize on the sales. On the other hand, if an organization needs to direct their services to a population but they lack the exact target population, the re-distribution of wealth is then employed. This involves what we can term as unjustly taking the goods that have been acquired justly and then distribute them to others. This is basically done by governments rather than the multinational corporations mainly through taxation of the social spending programs such as health care programs.
The CSR are considered to be almost the same as the triple bottom line concept. This is because both these conceptsdirect and moderate a corporation by making an examination on the conditions that are suitable for a business to exist. A triple bottom line concept is basically an accounting done on the business performance in the terms of the impact it has on the economy, the society and the environment. These two are basically the same although there exists a very fine line between the two. CSR employs some of the types of Triple Bottom Line reporting. For instance, if a company that puts forth a report that its Corporate Social Responsibility activities have made a contribution in reduction of water pollution in the lake and thus resulting to reduction of the water borne diseases is actually referring to the two P’s that is the people and the planet which is present in the TBL concept. In summary, the CSR activities enable the corporations to adhere to the triple bottom line accounting.
To sum it up, trends are thus changing as shareholders and consumers do not focus of profitability and price alone respectively. Most shareholders in the current economy thus focus on investing in a company which is obviously profitable but also has a very high reputation on all the social aspects. The consumers as well put more emphasize on the quality, brand image as well as value other than the price. It is thus very advisable for every multinational corporation to make a consideration on having a CSR program among their daily duties.
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