Global CSR

Question 1

What is the stakeholder view of the firm?

Answer 1

Considering and responding to issues beyond economic/technical/legal requirements of the firm in order to reap social benefits and traditional economic gains also

Question 2

How does the shareholder value perspective and the stakeholder value perspective differ?

Answer 2

Shareholder value emphasis on profitability over responsibility

Shareholder value focus on share price compared to serving all stakeholders involved

Shareholder value focus on individual responsibility whereas stakeholder focus on individual and organisational

Shareholder value pursuit of economic efficiency to serve society and stakeholder value pursuit of economic symbiosis to serve society (sustainable and regenerative economy)

Question 3

What are the different ethical domains?

Answer 3

• Corruption
• Environment
• Human rights and labour issues

Question 4

What are the challenges in implementing CSR policies?

Answer 4

• Differing ethical standards across countries
• Complex local situations
• Lack of international laws in areas of CSR, difficulties in enforcing laws
• Meeting increased costs of socially responsible approach
• Boundaries of MNCs responsibilities with suppliers and complexity of implementing CSR in a global supply chain

Question 5

What is the global CSR approach in terms of corporate governance?

Answer 5

Shareholder supremacy

Board monitors financial performance focus

Centralised accountability, vertical communication

Incentives linked to financial performance

Question 6

What is the local CSR approach in terms of corporate governance?

Answer 6

Shareholder value at HQ, local stakeholder focus in subsidiaries

Limited support for CSR at HQ, local stakeholder demand met at subsidiary level

Incentives linked to local performance benchmarks

Subsidiaries accountable to local constituencies

Question 7

What is the transnational CSR approach in terms of corporate governance?

Answer 7

Stakeholder interests focus within the context of LT sustainability

Strategic objectives around LT sustainability

Triple bottom line incentives alongside financial considerations

Question 8

What corporate governance changes need to be made to enable a transnational CSR approach?

Answer 8

• Move from financial to strategic controls
• Triple bottom line incentives
• Increase board diversity, including stakeholder representation
• Social and economic risk management systems
• Accountability to wider body of stakeholders
• Investors engage with firm’s board on CSR issues
• Stakeholder relations committee
• Non hierarchical communication between HQ and subs

Question 9

What are the factors influencing CSR implementation in supply chains?

Answer 9

Knowledge enhancing mechanisms - educate employees and suppliers, IKEA purchasing groups - check suppliers are adopting it

Firms specific assets - financial resources, reputation, design of supply chain, size: easier to implement, existing relationships

Knowledge controlling mechanisms - codes of conduct into performance management, change agents: IKEA are picky and control and check requirements

Corporate history - tradition of CSR

Question 10

What is the path to corporate responsibility according to Zadek (2004) in terms of organisational learning?

Answer 10

Every organisation learns and passes through 5 stages in how they handle CSR. The civil learning tool helps companies see where they fall on a societal issue and how they can develop their future strategies

Question 11

What are the five stages in civil learning?

Answer 11

1) Defensive - deny, reject responsibility
2) Compliance - policy-based approach, protect reputation, must be visible to critics
3) Managerial - embed societal issue in core management processes, realisation that they need to account for a long term problem
4) Strategic - align strategy and innovations with the societal issue to gain first mover advantages and contribution to long-term success
5) Civil - promote broad industry participation, lead the whole sector

Question 12

How does organisational learning relate to societal learning and issue maturity?

Answer 12

When the issue is starting to evolve, companies can get away with defensive actions

The more mature an issue becomes, the further up the learning curve an organisation must be to avoid risk and take advantage of opportunities

Question 13

What is an example of the global corporate governance approach?

Answer 13

Proctor and Gamble have a central, global CSR program for the 180 countries it operates in and adaptations are only made where it is a legal requirement

Question 14

What is an example of the local corporate governance approach?

Answer 14

Rhodia; French chemicals company bypassed HQ controls to maintain CSR standards at a local level after financial cuts through charity donation

Question 15

What is an example of the transnational corporate governance approach?

Answer 15

Teva pharmaceuticals operates with a beyond compliance leadership and the board of directors includes NGOs, experts, academics and they follow general principles not specific rules

Question 16

What is the global approach to CSR and what are the pros and cons of this?

Answer 16

HQ demands consistency, a globally standardised policy e.g UN global compact

Pros: clear rules, transfer of best CSR practices, manage financial and reputational risks, culture of responsibility

Cons: cultural arrogance/ethical imperialism, neglect of local interests, blind application of policies, turn a blind eye of human rights abuse

Question 17

What is an example of a firm with a global CSR approach?

Answer 17

Shell decided not to interfere with human rights violations by the Nigerian government due to policy of not intervening with countries’ internal affairs

Question 18

What is the local approach to CSR and what are the pros and cons of this?

Answer 18

Local concerns take precedence. Triple bottom line perspective.

Pros: actually meets stakeholder concerns, greater flexibility, builds trust and respect among stakeholders

Cons: form of ethical relativism, difficult to determine what is morally right, may neglect global stakeholder interests, no universal standards

Question 19

What are two examples of firms with the local CSR approach?

Answer 19

Ikea removing women to please local censors in Saudi Arabia - outraged people as they were known as ‘employer of choice for women and minorities’

GSK bribed local top managers in China for support on their drugs

Question 20

What is the transnational approach to CSR and what are the pros and cons of this?

Answer 20

Hybrid strategy of global and local responsiveness. Provides a template that can be adapted to meet local concerns.

Pros: allows subsidiaries to adapt to the circumstances which leads to higher CSR performance, can meet local norms whilst retaining reputation and company standards

Cons: difficult to strike a balance between global consistencies and local adaptation, high coordination costs and difficult to implement

Question 21

What is an example of a firm with a transnational CSR approach?

Answer 21

IBM does not have LGBTQ+ policies in some Asian countries by in others it is non negotiable due to views on sexual orientation