Week 8 - International CSR & Labour Standards Flashcards
Define CSR
There is one and only one social responsibility of business - to increase its profits so long as it stays within the rules of the game, which is to say, to engage in open and free competition, without deception and fraud (Friedman, 1962)
What is the Foxconn scandal?
Apple abusing labour in its Chinese manufacturing facilities
What was the Rana Plaza collapse?
Factory, linked to many high street names, collapsed and 1,100 people were killed and 2,500 injured
List the stakeholders that businesses have a social responsibility towards
- General public
- Shareholders or investors
- Employees
- Consumers
- Government
- Local community
- Environment
What are Carroll’s (1991) pillars of CSR?
PHILANTHROPIC: be a good corporate citizen
- contribute resources to the community
- improve quality of life
ETHICAL
- do what is right, just and fair (people hold different views on this)
- avoid harm
LEGAL: obey the law
- law is society’s codification of right and wrong
- play by the rules of the games
ECONOMIC: be profitable
- foundation upon which all others rest
Once economic obligations have been fulfilled, companies then focus on legal and so on.
What sits at either end of the corporate responsibility continuum/spectrum?
Maximise firm’s profits to the exclusion of all else —–>
Balance profits and social objectives
- Two sides show different relationship between profit and compliance
What are the CSR issues that MNCs can engage with?
- environmental
- fair trade
- organic produce
- not tested on animals
- community involvement
- cause related marketing
- charitable giving
- concern for human rights
- support for education
- participates in local business initiatives
- commitment to reporting
- refusal to trade in certain markets
What are the 4 CSR theories?
1) Instrumental
2) Political
3) Integrative
4) Ethical
Define instrumental CSR
- A mere means to an end which is profits
- A social value or activity is accepted if, and only if, it is consistent with wealth creation
Define political CSR
The social power of the corporation is emphasised in this group of theories:
- CSR is based on the relationship with society and responsibilities in the political arena
- activities are accepted when they require social cooperation
Define integrative CSR
This group of theories accepts that business depends on society for its continuity and growth, and even for the existence of business itself
- business therefore ought to be integrated with social demands
- far right of spectrum
- understand that they need consumers, etc. to be successful
- companies are pace setters of CSR agendas and policies
Define ethical CSR
CSR should be accepted as an ethical consideration above any other consideration:
- influenced by Kantianism as opposed to Utilitarianism
Why do MNCs engage in CSR?
- enhanced brand image and reputation
- increased sales and customer loyalty
- greater productivity and quality
- enhanced ability to attract and retain employees
- workforce diversity
- product safety and decreased liability
- ‘because they have to’
List some of the global actors, tools and mechanisms through which MNCs achieve CSR
INTERNATIONAL ORGANISATIONS: ILO, United Nations, OECD
- conventions
- unilateral codes of conduct
- guidelines
PRIVATE MULTI-STAKEHOLDER INITIATIVES (e.g. Fail Labour Association, Ethical Trading Initiative)
GLOBAL TRADE UNION FEDERATIONS & ACTIVIST GROUPS (e.g. international framework agreements, cross-border campaigns)
CONSUMERS (i.e. product sabotage punishing unethical behaviour)
What is the impact of CSR ‘on the ground’?
It is constrained by different sets of factors:
- the very nature of initiatives: ambiguous legal character & vague language
- institutional: global norms often conflict with local laws, particularly in the Global South
- structural: how can MNC HQs enforce standards in minority-owned subsidiaries & suppliers?
- political: non-compliance an issue of strategic choice
