The paper “ Social Corporate Responsibility in Modern Multinational Corporations” is a spectacular example of a literature review on management. Over the last few decades, empirical research has brought to light massive evidence that there are measurable payoffs of corporate social responsibility initiatives to firms together with their stakeholders (Becker-Olsen, Cudmore & Hill 2006). However, some economists argue that firms should only pursue activities that add value to shareholder’ s economic interests. Advocates for corporate social responsibility hold that any business organization is a nexus of relationships that involve various stakeholders including employees, suppliers, customers, and the community within which the firm is operating without which lasting shareholder value creation is not possible.
On the other hand, the notion of social responsibility in business displays a fundamental misconception of the company’ s character and nature; the company’ s function should and must be economical, not social. This essay critically analyses the statement: “ Modern multi-national corporations increasingly have a responsibility to go beyond meeting economic and legal expectations to fulfilling ethical and philanthropic functions in discharging their social responsibility. ” For this reason, the essay will discuss why multi-national corporations should continuously engage in social corporate responsibility when compared to national corporations. BodyAccording to Xueming & Bhattacharya (2006), intensive research into corporate social responsibility (CSR) have established that corporations can hugely benefit from CSR in four broad ways including implementing cost and risk reduction; gain competitive advantage; develop corporate reputation and legitimacy, and seek win-win results through synergic value creation.
By modern multinationals continuously fulfilling ethical and philanthropic functions in discharging their social responsibility, they position themselves to profit from the aforementioned benefits (McWilliams, Siegel & Wright 2006).
Given this comprehension, this section analyses how these cross-border companies will be able to achieve the said benefits (Becker-Olsen, Cudmore & Hill 2006).
Basu, K & Palazzo, G 2008, ‘Corporate social responsibility: A process model of sensemaking’, Academy of Management, vol. 33, no. 1, pp. 122-136
Becker-Olsen, K, Cudmore, A & Hill, R 2006, ‘The impact of perceived corporate social responsibility on consumer behavior’, Journal of Business Research, vol. 59, no. 1, pp. 46-53
Campbell, J 2007, ‘Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibility’, Academy of Management, vol. 32, no. 3, pp. 946-967
Dahlsrud, A, 2008, ‘How corporate social responsibility is defined: an analysis of 37 definitions’, Corporate Social Responsibility and Environmental Management, vol. 15, no. 1, pp. 1-13
Lindgreen, A & Swaen, V 2010, ‘Corporate social responsibility’, International Journal of Management Reviews, vol. 1, no. 1, pp. 1-7
Matten, D & Moon, J 2008, ‘“Implicit” and “Explicit” CSR: A conceptual framework for a comparative understanding of corporate social responsibility’, Academy of Management, vol. 33, no. 2, pp. 404-424
McWilliams, A, Siegel, D & Wright, P 2006, ‘Corporate social responsibility: Strategic implications’, Journal of Management Studies, vol. 43, no. 1, pp. 1-18
Xueming, L & Bhattacharya, C 2006, ‘Corporate social responsibility, customer satisfaction, and market value’, Journal of Marketing, vol. 70, no. 4, pp. 1-18.