Corporate Social Responsibility and Global Companies

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Indicate to what extent, and for what reasons, you believe that large corporations with a global reach need to be encouraged or compelled to engage with the corporate social responsibility agenda.

Corporate Social Responsibility (CSR) is a relatively new concept that has acquired more importance in recent years. Earlier, the prime focus of companies / organisations and businesses used to be only on generating profits and improving their bottomlines, even if that meant that they had to make use of unethical or destructive activities like polluting the environment or disturbing ecology / natural habitats. However, companies began to realise that ethical and fair practices in their operations would only help them attract and retain both customers and employees.  They responded by adopting a “New Consciousness / Awareness”, which has been termed Corporate Social Responsibility (CSR). This term was coined sometime in the 1970s, which is when this concept started gaining currency (Idowu and Filho, 2008).

With globalisation, businesses and corporations are no longer restricted within the established borders of their respective nation – states / countries. One of the main features of globalisation is that the market spreads up and there are changes in the ways of production. The mode of production is not concentrated in one location any more, but has become decentralised, with centres of production spread across the globe.

While globalisation has, on one hand, given a wonderful opportunity to organisations and companies to expand their market share and production base, there has been a flip – side as well. There has been mounting discontent and displeasure against large corporates, especially multinational corporations (MNCs), with protests from labourers, social & environmental activists, and marginalised consumers, against their ways of conducting business. Moreover, with more attention from the media, pressure from activists and non-governmental organizations, and rapid communication & information sharing, there has been an increasing demand from governments, consumers, and civic society in general, for businesses to conduct ethical and sustainable business procedures.

Corporate Social Responsibility (CSR) could be said to have different connotations for different people, but some notions are common to all. One of them is that CSR does not refer to charity or philanthropy by organisations, rather it is about being accountable and responsible for one’s actions. It can be defined as “Corporate initiative to gauge and be responsible for a company or business’ impact on the lives of people and on the environment” or “the continuing obligation by businesses to act ethically and contribute to economic development, while simultaneously improving the quality of life of their staff and their families, as well as of the indigenous people and society at large” (Boeger, Murray and Villiers, 2008). In fact, CSR expects an organisation to do a little extra than that required by the legal norms in terms of :

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treating employees in a just manner and with respect

working ethically in it’s dealings with business partners and customers

respecting human rights

sustaining ecology & environmental balance for posterity

being a considerate neighbour to local community and a model ‘corporate citizen’

Corporate Social Responsibility

Figure 1 : Source : Adapted from (Visser, Affairs. and al, 2010)

In short, businesses are now expected to do well not just in terms of increasing profitability and revenues, but also in non - financial spheres like business ethics, civil rights, environmental factors, development of the community, and workforce-related matters. Some instances of CSR ...

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