Ethics and CSR in International Business

Question 1

What is corporate social responsibility? How can a corporation link corporate governance to corporate social responsibility? Provide examples.

Answer 1

CSR are the actions of a firm to benefit society beyond the requirements of the law and the direct interest of the firm.

In terms of CSR, firm-level corporate governance can and should include policy and actions in regard to ethical behavior, environment, social and governance risk

An example could be Microsoft who is a good corporate citizen in the world as it does charitable work. Another example is Apple donating computers to schools.

Question 2

What are the major criticisms of corporations in pursuing CSR? What are the major responses from the various quarters including corporations themselves?

Answer 2

The major criticisms of corporations pursuing CSR is the fact that it is impossible to state that there are direct links between CSR and financial performance. Furthermore, it is unnecessary and a waste of time.

The major responses from corporations are that they gain good image, reputation, loyalty of customers and tax reasons.

Question 3

‘There is no inherent contradiction between improving competitive context and making a sincere commitment to bettering society’ (Porter and Kramer, 2002, p. 68). Please explain this statement in the context of CSR.

Answer 3

In the context of CSR, it means that CSR offers more than just a good image. By incorporating and committing to CSR, a company can increase its productivity by getting workers who are more educated, safe and healthy. This means that a company can gain a competitive advantage through leveraging the efforts and infrastructure of nonprofits. Hence, CSR pays off and rewards the company.