Corporate Social Responsibility as an International Strategy

Modern corporations form an essential part of the “social fabric” the world of the later 20^th and early 21^st century is made of: They produce goods and foster innovations, which all satisfy needs and wants of consumers, mostly in the more developed countries, provide employment to millions, and carry with them even greater potential for advancing societies and the entire modern world. Nevertheless, large corporations, and especially MNCs, are increasingly faced with major distrust by the broad public. Contrary to quite wide-spread corporate belief, it is by far not only “anarchist” groups who portray corporations as the root of many social ills plaguing especially under-developed countries, but also the so-called 1^st world — it may be them who go as far as rioting at all of the major trade summits since the infamous “Battle of Seattle”,¹ but not only the “unwashed and unruly”² want corporations to behave in socially responsible ways:

To start with the very beginning, today’s corporations have their origins in century-old institutions which were founded for colonial purposes and put in charge for the management and execution of public projects — the foundation and existence of those early corporations remained a privilege granted by the state at first, and therefore, staid within its discretionary power alone. One might say, at this point, corporations were highly “socially responsible”, as they were acting on behalf of public interests exclusively (although this was not a choice they had made).¹

One can observe CSR has emerged and been pushed forward throughout the 20^th century, especially after socio-economic and socio-legal developments have shifted considerable social power to the private economy in general, and more specifically to (large) corporations.

Demands for private firms’ assumption of greater responsibilities toward society is not new, nor surprising, as the preceding historical and theoretical part has elaborated. Furthermore, business representatives try hard to excel each other in the CSRs they claim to take on — allegations that are frequently disqualified as PR fuzz. Therefore, a closer look at what can be done by corporations, besides mere CSR rhetoric, is useful:

Much has been written on the advantages good CSR policy would create in practice and on the potential it might offer for doing better financially. Such speculations include assumptions, or rather speculations, 3^rd world governments would soon require companies for future bids to have CSR policies in place, and consumers would sooner or later abandon any company which does not engage in CSR. However, the following analysis mentions no speculative or wishful-thinking advantages of CSR, but on the contrary only those that have withstood empirical analyses. Such proven benefits good CSR can bring include the achievement of competitive advantage, better reaching market segments like ethical consumers and socially responsible investors, and enhanced opportunities for strategic alliances or other partnerships as major business opportunities for corporations with external constituencies, and, from an internal point of view, enhancement of labour relations and employee commitment, and the achievement of overall better financial and strategic results.

After having discussed diverse choices for concrete CSR measures to be taken by corporate executives as part of their business strategy, and the good business reason potentially underlying such choices, the most crucial strategic implications seem to not lie in the fundamental willingness of corporations and their respective key decision-makers to engage in CSR, as the huge majority of corporate managers sureyed suggest they do have CSR on their agenda.¹ What seems to be key rather is the implementation stage, and thus the practical feasibility of such measures. A variety of factors will impact not only upon the mere decision-making itself on what the corporation is to engage in, but precisely those factors will further constitute a major influence on whether a corporation’s CSR strategy will eventually succeed or fail. Factors both internal and external to the organisation may work as barriers, obstacles or, on the contrary, as drivers for “good” CSR. They can mainly be detected on three different levels:

The goal of this book was to have a differentiated look at CSR under two main aspects: