Corporate social responsibility (CSR) and its official identification is quite a new process. However, entrepreneurs and managers of firms are engaged in these activities almost from the commencement of the industrial revolution (Davis et al., 2006). Usually, the job embarked by a company or its individuals towards the people is known as corporate social responsibility (CSR). According to the definition of World Bank, "CSR indicates mainly a commitment implemented by the enterprise to all related interest counterparts for sustainable futures." On the other hand, the World Economic Forum considers that CSR consists of a reasonably first-class authority and ethical set of the enterprise, responsibility to all needy community, accountability to surroundings and broaden giving to social development which includes social and responsible interests of the region where its business operates (Yu-fang, 2007).
CSR is now a high point of discussion in political meetings, management thinking and market activities and perhaps, the most pulsating place for its expansion is Europe where the notion has been clinched for considered motives by the European Union (Breitbarth et al., 2009). The researchers in international management and global marketing acknowledged that the barriers faced by the companies regularly place outside the authoritarian structures, for example, WTO agreements and the reason is that they need the resources and facilities which may not be present in an organization (Breitbarth et al., 2009). Furthermore, CSR is the most important factor for the corporation to fit in the societal and environmental elements in their business and in discussion with stakeholders at a regular period making it a point of argument about internationalization, competitiveness and survival (Breitbarth et al., 2009).
Approaches towards CSR activities in globalization:
In the world of globalization, it has become a necessity to move towards a new politically inflamed idea of CSR. Actually the influence of national political authorities which control the actions of organizations that expand their operations globally is fading due to globalization. For example, governments are forced to the bottom into a race so that they can win the competition with other countries in order to attract more commercial investments. This is the main reason for the organizations to be understood as economic and political performers (Scherer and Palazzo, 2007).
Another important difference of this spirited environment of globalization other than the weakening of national boundaries is the fragile difference between actions and dealings which take place inside a company are seen as conflicting to the outside corporate world (Davis et al., 2006). On one side companies are shifting the operations from in-house activities to purchased goods and services and on the other side they are establishing a variety of close relationships with the associates and contractors. The promises made by the companies to their employees and to society where they are positioned show the way to the CSR activities where companies are now held accountable for their supply chain as well (Davis et al., 2006). For instance, Nike made a lot of investments to endorse enhancements in the operational circumstances of the factories of its suppliers after facing a consumer boycott about the issue that its suppliers were exploiting child labor in various developing countries (Polonsky and Jevons, 2006).
However, there must be restrictions to responsibility even if the company is documented as an official person and the supply chain is totally a different identity because the buying firm should not be legally liable to bear any responsibilities for the practices of its suppliers (Amaeshi et al., 2006). Amaeshi et al. (2006) also argues that the weaker parties are influenced by the firms in a scheming point to use the power sensibly by setting codes of conduct and standards for them. For example, in case of Marks & Spencer, the higher level management invested an amount of 200 million GBP for social and environmental responsibility in association with NGOs and its suppliers (Smith, 2009 at www.knowledge.insead.edu).
Barriers to integrate CSR as a value-driven concept:
The limited occasions to engage in political, industrial and social networks that are specific to CSR are the challenges relating to external culture. In Europe it is tough to gain trust and recognition by appropriate parties in order to gain from the improvement procedure of CSR discussions, set off own CSR activities and get license to operate whereas internally it is reliant on moral thoughts and action which is obsessed by nurturing an adequate organization along with sustainable business stratagem and practice (Breitbarth et al., 2009).
The most important element of CSR is communication because it needs the company and its managers to have sound relationships with both internal and external stakeholders. For example, political marketing and getting in has become critical with the EU and national governments as they are progressively modifying markets and there is high participation of the public sector in the CSR context (Herrmann, 2004).
Capabilities and Compliance:
The companies need different organizational competencies when it comes to CSR integration which require extra costs for internal and outsourced personnel setup and conduct the assessment and communication of CSR performance of a company. This may also go beyond the single organization and within different entities. In particular SMEs mostly not have different important resources such as financial, knowledge or networks. However in most of the MNEs it is common to have special CSR or sustainability departments (Breitbarth et al., 2009).
Globalization is one of the major causes to change CSR. On one side the fading of the boundaries between foreign and domestic companies along with the in-house and outsourced activities has led to see the industry as both economic and social actors (David et al., 2006; Scherer and Palazzo, 2007). On the other side, due to the suppliers' CSR issues, global companies are made responsible by an ever more politicized culture (Amaeshi et al., 2006).
Moreover, CSR cannot be defined with one particular definition as its meaning changes in different regions. There can be realistic penalties due to this conflict over dissimilar meanings and there should be more research. For example, Nike was involved in a major scandal when it was working according to the double standard because it was paying very low wages to the workers in its Southeast Asian plants which were still according to the local customs. In another place Nike paid significantly high wages but again in accordance with the local society there (Campbell, 2007). Therefore, there is a joint persuasion linking globalization and CSR. On one hand multinational companies should behave responsibly as they have taken the responsibility of the situation while on the other hand in order to defend this new role a corporate socially responsible action is vital (Ruggie, 2003).
- Amaeshi, K. M., Osuji, O. K. and Nnodim, P. (2006), Corporate Social Responsibility in Supply Chains of Global Brands: A Boundaryless Responsibility? Clarifications, Exceptions and Implications, Available at SSRN: http://ssrn.com/abstract=947583, accessed on 06 April, 2010
- Breitbarth, T., Harris, P. and Aitken, R. (2009), Corporate social responsibility in the European Union: a new trade barrier? Journal of Public Affairs, Vol. 9, pp 239-255
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