Arguably, the responsibility of businesses and corporations has in the past been to increase shareholders value as well as making money. This implies that the main objective of the corporation is to focus on financial responsibility. Nowadays, this is not the case; multinational enterprises have expanded on its responsibilities to incorporate social responsibility. Certainly, the corporate responsibility for communities, environment, ethical practices, as well as working conditions has taken hold and gained tremendous momentum in various multinational enterprises. This new force within enterprises is known as CSR (corporate social responsibility). It is sometimes referred to Triple Bottom Line, implying the corporations’ totality in social, environmental, and financial performance in carrying out business. Corporate social responsibility refers to ways in which corporations manage businesses to produce a positive impact to stakeholders, community, as well environment.
Undeniably, corporate social responsibility in the 21st century has emerged as a global trend, which involves international organizations, corporations, civil society organizations as well as states. The trends of corporate social responsibility are portrayed in various ways that include regulatory framework, which launches new corporations demands, mobilization of the corporation towards aid provision, as well as management. Consumer social responsibility is a complex concept to comprehend. In most cases, it overlaps with concepts such as environmental responsibility, corporate citizenship, business ethics, and sustainable business (D’Amato & Henderson 2009).
In the recent past, many corporations have been debating on whether corporations should be socially responsible to both the stakeholders and the community. The debate has helped in the designing of corporate social responsibility. For example, the classical school of thought asserts that business responsibility should ultimately be aimed at internal stakeholders instead of them been responsible to the entire community. The school of thought believes that the essential and fundamental objective of doing business is to be making a profit and focus on returns (Agle & Craig 1999).
Conversably, other scholars believe that corporations need to go beyond profit making objective, and consider responsibility to the society. Business needs to incorporate both the two perspectives by integrating the principles (D’Amato & Henderson 2009). As a matter of fact, corporations and the society coexist in one way or another. Many corporations in the world today has successfully and effectively designed strategies to meet be financially, socially, and environmentally responsible. These include Adidas, BCE, BMW, Wall-mart, and Coca-Cola, just but to mention some. Corporate social responsibility is very important to all parties, this is because the stakeholders, environment, and community benefits. For example, reputation is an important asset to many corporations in the world. The best way to build and develop business reputation is to be socially responsible.
Multinational corporations need to focus on corporate social responsibility. Internationally, many companies increasingly address CSR as a way of making a profit and increasing shareholders value. Globalization, has made business very diverse; hence, organizations need to be more connected to the community in order to gain competitive advantage over other competitors (Kotler & Lee 2005). Corporate social responsibility could be the best strategy to venture into new markets. In the epoch of global competition, Multinational Corporation has introduced new strategies to support the declining differentiation of brands, increasing media clutter, as well as less responding business mix. Therefore, Corporate Social responsibility has become strategic and relevant marketing tool. For example, Coca-cola uses CSR as a tool to generate brand equity, increase companies image, as well as improving the loyalty of employees and consumers.
Globalization came up with many challenges that generated economic, social and cultural changes in the world. Since the end of 19th century, many political communities worked towards establishing their market space (Hewson & Sinclair 1999). These challenges led to the establishment of global governance. This is a global political form of interaction of multinational actors that are focused in solving problems affecting a state in the absence of compliance power. The interdependence of a human being, environment, and society bring in the designation of global governance to regulate the intended global scale.
Global governance approaches have emerged for various reasons that are mostly aimed at sustainability and development. As a matter of fact, global governance emerged to champion private property protection, individual freedom, environmental sustainability, as well as free markets. Global governance approaches entail formation of rules, norms, decision-making strategies, and principles that take control above national state (Wilkinson 2005).
Since the emergence, of global governance, there are many examples that have come up. The effects of globalization in the economic, environmental, and social sectors in the world trigger the emergence of various organizations championing global governance. These include League of Nations, United Nations, Kyoto Protocol, as well as Council of Foreign Relations. The organizations have established rules that ensure human rights and freedoms are observed in all aspects. Additionally, due to global warning corporations are under the watch of global governance as they undertake their businesses. Corporate social responsibility is important because it adheres to economic, environmental, and social sustainability of the globe (Hohnen & Potts 2007).
The effectiveness of Global Governance approaches is still unpredictable, but at least a small percentage is working. The developed nations have dominated issues on global governance until its effectiveness is questioned. Some of the principles and approaches of global governance have helped in ensuring sustainability (Bobby 2007). For example, due to global warming, global governance has incorporated strategies to reduce pollutions, nuclear risks, and climate change. Different sectors of global governance and environmental management have collectively taken action in tacking the crisis. Moreover, the Global governance approaches have been effective in governing economic issues, for example, the financial crisis in 2008, political issues, and environmental issues. Global governance approaches have been in the forefront in governing global security, peace, as well as conflict resolution.
Certainly, most corporation in the world has respondent positively in sustainability of environment, human nature, as well as financial benefits. Many corporations are actively involved in Corporate social responsibility. Many companies in the world have established a long history of CSR (corporate social responsibility), a trend that has evolved to counter the complexities of contemporary business world, as well as challenges in the global community. Corporations have invested most of their money into the community by providing basic needs and other social amenities. In fact, some companies have fully established social responsibility to be companies lifestyle (The Economist Intelligence 2005.
Undoubtedly, some multinational corporations are doing a lot about corporate social responsibility through protection of environment, selling quality products, advocating issues on health lifestyle, adhering to societal ethical standards, promoting diversity as well as creating health workplace (Mallin 2010). For example, Nike is one of the companies in the world that are focused in corporate social responsibility. Nike has improved factories contracts, aimed at reducing and eliminating carbon emission, as well as providing and sponsoring sports among the young people. In United States, Business for Social responsibility organization has many members in support of social responsibility programmes. Furthermore, in developing nations such as Egypt, Brazil, Philippines, and India have many business associations dedicated to various CSR activities.
Today, many multinational companies, have realized that in order to be relevant, competitive and productive in the globalized society, they have to adhere to social responsibility. Technology and globalization has masked time and distance, as well as opening national boundaries. Perhaps, how multinational enterprises relate to host communities, marketplace and workers contributes to sustainability of business. Generally, corporate social responsibility benefits the company, community and environment. The benefits are interrelated ion various ways (Albrow 1997). The company benefits through improvement in financial value, cost reduction, workforce diversity, customers’ loyalty, quality productions and increased sales. On the other hand, the community benefit through charitable contributions, quality and safe products, employment, and general involvement of companies to community affairs. Moreover, environment is one of the beneficiaries of CSR; through recyclability, reduced carbon emission, durable products, as well as environmental integration issues.
In contemporary business world, government has become the core driver of CSR. The government of various nations influences CSR through ministerial leadership, implementing business associations, as well as developing soft laws and regulation. Government also affects CSR through fiscal policies that affect corporate profit making, and prices of goods and services. The government regulates utilities in various sectors. Additionally, the government act as regulator, supporter, and provider of public services. Business sector help in addressing public problems, but they depend on government objectivity, policy framework, and visions. Government forms various ministries to introduce and implement various CSR initiatives. These ministries include ministry of environment, and finance. Some of the landmark case demonstrating CSR includes provision of clean water, construction of infrastructure, as well provision for HIV. For example, Bill Gates is more involved in provision of malaria drugs in the developing nations. The trends of CSR are diversifying due to competition in the business sector, as well as the tendency to achieve competitive advantage.
Conclusively, social responsibility of corporations is very important. As consumer behavior changes, and become more demanding, and business stakeholders and investors become sophisticated. Therefore, corporate social responsibility has become very significant in global business, and many corporations have adopted it. Multicultural enterprises have strengthened their social responsible activities by diverging it too all sectors of human life. The extent to which social responsibility has influenced include sports, health, environment, finance, political, social and education developments (Werther & Chandler 2010). The extent that corporation’s social responsibility affects the society depends on the business nature. The extent of its effects are visible through fair trade principles, green policies, ethical labor principles, aid provision programs, and investments in local economies. CSR has gone global among small and big corporation and making tremendous changes in the business world.
Reference list
Agle, B. & Craig, C. 1999. Understanding Research on Values in Business. Business & Society.
Vol 38 Issue 3.
Albrow, M. 1997. Do Organizations Have Feelings? London: Routledge.
Bobby, S. 2007. Corporate Social Responsibility: The Good, The bad, and the Ugly. New York:
Wiley.
D’Amato, A. & Henderson, S. 2009. Corporate Social Responsibility and Sustainable Business.
North Carolina: CCL Press.
Hewson, M & Sinclair, T. 1999. Approaches to Global Governance Theory. California:
Springer.
Hohnen, P & Potts, J. 2007. Corporate Social Responsibility: An Implementation Guide for
Business. Canada: Manitoba.
Kotler, P. & Lee, N. 2005. Corporate Social Responsibility. New Jersey: Wadsworth
Mallin, C. 2010. Corporate Social Responsibility: A Case Study Approach. Cambridge:
Cambridge Press.
The Economist Intelligence. 2005. The Importance of Corporate Responsibility. Oracle.
Werther, B. & Chandler, D. 2010. Strategic Corporate Social responsibility. California: Sage.
Wilkinson, R. 2005. The Global Governance. New York: John Wiley & Sons
