Social Responsibility & Ethical Issues in International Business

7/30/2019 Social Responsibility & Ethical Issues in International Business

1/16


2/16

Is understood as an obligation totake actions that protect & improve

the welfare of society as a wholealong with Business interests


3/16

Arguments for CSR Arguments against CSR

1. Changed Public expectations 1. Profit Maximization

2.Better environment for business 2. Society has to pay the cost

3.Balance power with responsibility 3. Lack of social Skills

4.Business has resources 4.Business has power

5.Prevention is better 5.Social overhead cost

6.Moral responsibility 6.Lack of accountability

7.Globalization 7.Experts views

8.Better employees 8.Scalability of the concept

9. A Way to resolve conflict 9. Lack of broad support


4/16

Corporate Socialresponsibilityprogrammes

Shareholder/Investor

Govt. ProgrammesCommunity

Forces

Philanthropicrequests and

initiatives

crises Competitiveadvantage

Environmentalconcerns


5/16

Factor Conditions

Context for strategy &Rivalry

Related & Supporting Industries

Demand Conditions


6/16

I.Policy

II.Learning

III.OrganizationalCommitment

IV. Social Audit

Time (Years)


7/16

Rejection Adversary Resistance Compliance Accommodation Proaction

Absence of socialresponsibility

Social Responsibility High Social Responsibility


8/16

How to tackle the problem and make newpolicy work.

Specialized learning

Administrative learning


9/16

Institutionalization of the new social policy bythe firm.

New policies well accepted throughout the

firm and are considered to be normal part ofdoing business.


10/16

Last stage

Social audit leads to a report on the socialactions of the firm.

Decisions with high profitability but negativesocial effects (ex. cigarrette manufacturing)should be avoided.


11/16

Cost

Efficiency (pressure of local community to keepan outdated model)

Relevance (Freidman law)

Scope & Complexity Environmental pollution,health problems, racial discrimination etc.


12/16

Leadership (Tata, Aziz Premji, Narayn Murthy)

Mission Statements (NTPC mission statementDevelop and provide reliable power related

products and services at competitive prices,integrating multiple energy sources withinnovative and eco-friendly technologies andcontribution to the society)

Social issues : managers should detect, classify,analyze, track and prioritize issue.

Alignment of structure, culture & process

Corporate Social reporting(ex. ITC)


13/16

Religion

Culture (hunting & gathering, agriculturalstage, industrial Stage)

Legal System


14/16

Ethics corresponds to basic human needs

Value creates credibility with the public

Value gives management credibility with

employees Values help better decision making

Law cannot protect society, ethics can.


15/16

Top Management

Codes of ethics

Ethics Committees

Training Programmes

Ethics hotline


16/16

Stakeholder Affected Ethical/ Social responsibility Issue

Customers Product SafetyFair PriceProper disclosures and information

Stockholders Fair ROIEmployees Fair Wages

Safety on working conditionsChild labourDiscrimination by Sex, race, colour or creed

Host- Country Impact on local economiesFollowing local laws

Society in General Environmental protectionRaw material depletion

Documents

Social Responsibility & Ethical Issues in International Business