Academic journal article Academy of Strategic Management Journal

Navigating Corporate Social Responsibility Components and Strategic Options: The IHR Perspective

Academic journal article Academy of Strategic Management Journal

Navigating Corporate Social Responsibility Components and Strategic Options: The IHR Perspective

Article excerpt

INTRODUCTION

In the era of globalization, business and society have become increasingly interwoven. As many firms continue to expand their businesses across borders, scholars and managers have devoted greater attention to cross-cultural business ethics and the strategic implications of corporate social responsibility (CSR). International business mandates that companies manage their worldwide operations efficiently and effectively on the basis of openness, corporate integrity, moral obligation to the larger society, and accountability. A rich literature on business ethics and CSR has emerged in the form of institutional theory, stakeholder theory, political behavior theory, cultural relativism, ethical universalism, moral obligations, utilitarianism, and efficiency perspectives. A prominent idea is the notion of sustainability arguing that organizations can do well by doing good and secure long-term economic performance by avoiding short-term behaviors that are socially detrimental or environmentally wasteful. The focus on integrating CSR into competitive sustainability in a specific sector, however, with companies as the unit of analysis, has been minimal (Rana, Platts & Gregory, 2009). Critics argue that CSR efforts are oftentimes counterproductive for two reasons (Porter & Kramer, 2006). First, they pit business against society, when in reality the two are interdependent. Second, they pressure companies to think of corporate social responsibility in generic ways instead of in the way most appropriate to their individual strategies. The prevailing approaches to CSR are so disconnected from corporate strategy as to obscure many great opportunities for companies to benefit society.

Porter and Kramer (2002) draw attention to the decline of corporate philanthropy to the extent that corporate giving by U.S. companies as a percentage of profits dropped by 50% in 15 years. The current economic downturn has further impelled some to put CSR ideas on the backburner (Strandberg, 2009). Meanwhile, the pressure on businesses to play a role in social issues is growing in the wake of corporate scandal and scams involving MNCs and financial institutions like the fall of Enron, WorldCom and Lehman Brothers, PB oil spill, and numerous foreclosures as a group effect of real estate agencies, bankers and financial institutions such as Fannie Mae and Freddie Mac, AIG, GMAC (Citigroup), BAC (Bank of America), WFC (Wells Fargo), JPM (JPMorgan), etc.

Critics increasingly expect corporations to behave more socially responsible and adhere to moral standards beyond minimal compliance, whereas many executives feel relentlessly pressured to maximize short-term profits in economic hard times. MNCs that have outsourced or shifted their operations from developed to developing or emerging economies to gain a cost-efficiency advantage over production factors and supply chains are often caught in the spotlight for perpetuating sweatshop working conditions, child labor practice, environmental pollution, and lack of welfare programs for workers and their families.

Many ethical and CSR issues have a direct link to the human side of business. Although companies increasingly feel compelled to engage in CSR, most have not figured out how to do it well. CSR is approached more as a form of public relations or promoting a company's image and brand, with an emphasis "on publicity rather than social impact" or "truly strategic philanthropy" (Porter & Kramer, 2002: 6). Consequently there are genuine doubts about whether such approaches actually work or just breed public cynicism about company motives. Some scholars observe that certain CSR programs lack altruism and serve as a sign of submission to institutional pressures (Bies, Bartunek, Fort & Zald, 2007). CSR, however, includes a broad spectrum of actions and strategies that can open infinite opportunities that benefit both business and society.

The present study builds linkages between cross-cultural ethical issues and potential CSR strategic options in a company's specific competitive environment to achieve a proper balance between a firm's global strategy and its local responsiveness in the context of international human resource management (IHR). …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.