Corporate social strategy

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Corporate social responsibility is a corporate strategy that controls a company's activities to ensure long-term growth. This strategy provides social, cultural, and economic advantages to all of a corporation's stakeholders. CSR encompasses a wide range of approaches aimed at ensuring that society is the prime beneficiary of market activities. The subject of corporate social responsibility also covers broad topics such as corporate governance, commitment to economic growth, environmental justice, health and safety, and human rights. This paper discusses the legal quandary of whether or not to implement CSR procedures. The discussion is divided into various sections. First, this analysis entails a description of the concept of CSR and the ethical dilemma in question followed by an explanation of the decision reached with the guidance of two ethical theories that apply to the dilemma. Lastly, this paper provides a resolution of the moral dilemma. Corporate social responsibility is an ethical approach that should be adopted and implemented by all businesses regardless of their size, location, or financial turnover.

Ethical Dilemma

Many definitions of CSR practices have emerged in the recent past prompting scholars to analyze and determine the key concepts of these practices. However, the principle role of corporate social responsibility has remained to be to achieve sustainable development. The biggest and undeniable benefits of CSR practices include the improvement of public image, the increment of media coverage, promotion of employee engagement, and the retention of more investors. To the society, CSR ensures environmental protection and the involvement of the community in decision-making practices (Pedersen, 2015).

The ethical dilemma in this paper is whether a multinational corporation does or does not have a moral responsibility in engaging in corporate social responsibility programs. Globalization has led to the development of many firms that work. These businesses encounter different rules and responsibilities in the various countries of operation. The multinational businesses are mainly driven by the large profit margins in these various parts of the world. Therefore, these companies strive hard to ensure that their brands are acceptable and loved by the residents of their nations of operation. Therefore, most of their practices are governed the nature of their consumer bases. The adoption of CSR among many firms has been to increase the profit margins of these multinational firms (Pedersen, 2015). However, most of the multinational companies have found means of maneuvering without the adoption of these practices. These corporations have always been profit-driven rather than sustainability-driven. Therefore, the multinational businesses only practice CSR in regions where it is both mandatory and profitable and compromise communal sustainability in other countries. Corporate social responsibility is becoming an extensively applied and crucial business practice of the 21st century (Pedersen, 2015). Many firms that operate in the midst of communities have in the recent past been striving to ensure that the society surrounding them not only benefits from the available employment opportunities but also from sustainability-based programs. Businesses have also been cautious of the environments in which they operate.

Decision

The most appropriate decision to this ethical dilemma is that these global or multinational firms have both moral and social responsibility to engage in corporate social responsibility practices. The investment in corporate social responsibility has been part of the business strategies of most firms in the 21st century. Many corporations have been investing heavily in CSR to advance on their competitiveness in the global market (Nalband & Kelabi, 2014). The notion of the success of a business depending on its environment has been the key driver of the massive investments witnessed. With the adequate training of employees, construction of various infrastructure that serves the community, ensuring the quality of institutions, and the cooperation with the suppliers for mutual benefit, many multinational firms have been receiving high financial turnover with minimal employee turnovers.

However, many other multinational companies view the adoption of CSR approaches as relatively expensive. An investment in the adoption and implementation of CSR practices may drain the limited finances that these firms gain (Pedersen, 2015). Consequently, these businesses have openly and unapologetically ignored business approaches that guarantee sustainability development. Most firms offer training to their future employees but do not reap anything from them. The trainees are absorbed into other highly developed companies with better compensation scales. Therefore, the companies that made a significant investment in their education will have made substantial losses. These firms use this reasoning as an excuse for their failure to adopt corporate social responsibility practices.

The decision of whether to adopt corporate social responsibility or not widely depends on internal stakeholders (Pedersen, 2015). The primary aim of most businesses is always to increase profits while minimizing costs. The internal stakeholders may view the adoption of CSR as inappropriate and too demanding and resolve that their multinational firm has no moral or social responsibility to engage in such practices. On the contrary, external stakeholders also have a say. Suppose the internal stakeholders such as the board of directors, managers, and other senior employees make an inconsiderate decision, external stakeholders such as the government and other members of the communities that live and work around the firm may be forced to differ. External stakeholders are, in most cases, pro-CSR practices.

According to Carroll’s Model of corporate social responsibility, the primary objective of the adoption of CSR is to ensure that companies conduct businesses that are ethically and socially supportive, law-abiding, and economically profitable (Nalband et al., 2014). This model supports the decision to the ethical dilemma discussed in this paper. The foundation of all the practices named in Carroll’s model is profitability. There is no way that a business can perform and adopt CSR practices without being profitable. The legal and ethical responsibilities are the second and third considerations respectively. The law that this model refers to is the consideration of right and wrong basing on the society’s perception (Nalband et al., 2014). Therefore, both local and multinational firms are obliged to respond to the obey and abide by the laid down rules. The ethical responsibilities that ethical companies have is to undertake practices that are just, fair, and right to avoid harm to both the firm and the society. Lastly, this model suggests that firms should have a sense of philanthropy. Philanthropic responsibilities enable firms to be great corporate citizens (Nalband et al., 2014). Firms should contribute some resources to the community to ensure that the quality of life in the society improves. In a nutshell, this model proposes that multinational companies must engage in CSR practices.

Comparison of Results Using Two Ethical Theories

There are several ethical theories in business and economics (Vaughn, 2015). The utilitarian set of ethical theories supports the decision of this dilemma. According to these theories, the multinational companies have the ability to predict. These theories can further be divided into act and rule utilitarianism. Act utilitarianism supposes that a person undertakes an action with the aim of benefiting other individuals regardless of the applicable laws or individual feelings (Vaughn, 2015). Rule utilitarianism uses the relevant sets of rules and is mainly concerned with carelessness. Multinational firms that use this set of theories learn that they have the moral and social responsibility of ensuring that they engage in socially responsible practices. Using utilitarianism theories to make decisions would enable multinational companies to foresee the repercussions of not engaging in corporate social responsibility thereby encouraging them to participate in sustainability development programs.

Ethical egoism is a normative theory of ethics that proposes that an individual’s drive to pursue a given action should be their own self (Vaughn, 2015). This moral theory is in direct contrast with the decision of the ethical dilemma. There are two distinctive types of ethical egoism namely individual and universal ethical egoisms. Individual ethical egoism promotes selfish interests while the universal ethical egoism supposes that individuals must conduct actions with other people in mind only if these measures contribute to their personal interests (Vaughn, 2015). Individuals that reason from this point of view may suggest that multinational companies have no social and moral responsibilities to adopt CSR programs.

Resolution of the Dilemma

Resolving ethical dilemmas is often a tedious task that requires creative and critical thinking. However, some values must be considered in finding resolutions to these dilemmas namely utility, rights and justice. The advantages of the adoption of CSR are more than its disadvantages. The most logical resolution to this dilemma is that multinational companies have a moral and social responsibility to ensuring that they engage in corporate social responsibility practices.

References

Nalband, N. A., & Kelabi, S. A. (2014). Redesigning Carroll’s CSR pyramid model. Journal of Advanced Management Science, 2(3), 1-4.

Pedersen, E. R. G. (Ed.). (2015). Corporate social responsibility. London: Sage.

Vaughn, L. (2015). Doing ethics: Moral reasoning and contemporary issues. New York: WW Norton & Company.

December 28, 2022
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Business Sociology

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