Academic journal article SAM Advanced Management Journal

Global Corporate Social Responsibility Practices and Cultural Dimensions

Academic journal article SAM Advanced Management Journal

Global Corporate Social Responsibility Practices and Cultural Dimensions

Article excerpt

Manufacturing companies cannot ignore social responsibility issues, such as the environment, pollution, recycling, waste reduction, and work place health and safety. Differences in global cultural norms mean that socially responsible policies must also differ to be effective in a particular culture. Using data from the Global Manufacturing Research Group, this study examines the extent to which firms make socially responsible investments and how such investments correlate to major cultural dimensions, as defined by Hofstede's indices: power distance, individualism, masculinity, uncertainty avoidance, and long-term orientation. Results can help guide managerial decision-making around the globe.

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Introduction

Research issues related to corporate social responsibility (CSR) focus on many aspects of business practices and policies. International cultural differences are just one component of research. This study looks at CSR in the context of economic, social, and environmental policies, practices, and results to learn what, how, and why. Carroll (2008) provided an historical perspective, finding that CSR evolved with both theoretical and empirical studies across disciplines. Aguinis and Glavas (2012) noted the trend of continued research in CSR and ongoing efforts to develop a research framework across disciplines with an institutional, organizational, and individual perspective.

In addition to the "what" and "how" aspects of CSR, many studies attempt to explain why it is important. These studies focus less on the process and more on trying to determine whether or not CSR enhances or explains financial performance or stakeholder and market perceptions. Several studies support the importance of CSR in this context. Lungren (2011) hypothesizes that companies consider both the costs and benefits of CSR that might affect costs, goodwill, and the discount rate. He provides a theoretical background for further research and references prior studies, which, although limited, suggest CSR has positive outcomes. Maria (2011) also provides background on the perceived and actual costs and benefits of CSR in a theoretical framework.

Ameer and Othman (2012) examine whether or not superior sustainability practices relate to superior financial performance and growth. They found a higher return on assets, profit, pretax and cash flow over time. Lai et al. (2010) found a link between CSR and brand equity and performance, suggesting that managers should engage in CSR practices and publicize them. Cortez (2011) studied public companies in Japan, finding that markets cared about environmental performance but social costs were immaterial.

A study by Foote et al. (2010) produced mixed results and attempts to explain them. The idea is that there may be better ways to study and discern the affects of CSR on performance and perception. Fu and Jui (2012) review prior studies that show mixed results and conclude that results might reflect methodology, the industry and stakeholder groups included, the ways CSR and performance are measured, and control variables.

An international perspective has evolved as several studies analyze and incorporate cultural differences regarding CSR. The overall literature of CSR and research focusing on its international aspects examine how CSR might affect company performance and perceptions, explaining its importance in management decisions and business strategy.

The next step for global companies is to examine CSR within the global supply chain to determine what, if any, differences might explain the CSR process. Decisions about where to manufacture could then include the added dimension of CSR. If there are cultural differences, they should be considered. If not, that is also critical information for decisions. Companies need to understand whether or not there are cultural differences as they develop relationships with manufacturing companies and suppliers in other countries. …

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