IntroductionAccording to McWilliams and Siegel (2001, p. 8), many international businesses put much efforts to achieve their business goals and at the same time maintain their corporate social responsibility. However, many researchers have argued that it is a challenging task for many international corporations to achieve most of their interests and simultaneously conform to their CSR. This is because most international business interests are focused on minimizing cost and maximizing profit. On the other hand, CSR can be described as the actions of a business that focus on the wellbeing of the stakeholders, employees, customers, and the wider society as required by law and not just the interests of the business (Egri & Ralston 2008, p.
320). From this definition, it is quite clear that there are many instances whereby, the interests of international business are incompatible with corporate social responsibility. This is because many are the times international business owners will make decisions that are profit oriented even though they might be going against their social corporate responsibility. Alternatively, other researchers have proposed that corporate social responsibility is an important tool that can enhance the image of an international business in the highly competitive markets.
Due to the increasing importance of corporate social responsibility in a business, many international businesses are integrating their interests with corporate social responsibility in order to achieve their interests and at the same time maintain corporate social responsibility. In line with these arguments, this paper aims to explain how the interests of international business are incompatible with corporate social responsibility. Factors that make International Business interests Incompatible with Corporate Social ResponsibilityThe main interest of international business is to maximize profit which is incompatible with corporate social responsibilityIn risk management terms, there are various reasons why businesses should enhance their corporate social responsibility.
Involving in CSR activities will mitigate the risks and cost for an international business and hence enable it to realize much profit. It is argued that an international business’s stakeholders present demands that pose various potential threats to the business. Therefore, these threats can be overcome through improving social and environmental performance. According to McLaren (2004, p. 193), international businesses should involve themselves in multiple CSR activities, such as equal employment opportunity and practices that are environmental friendly in order to improve the value of the shareholders by mitigating risks and costs.
Despite that CSR activities, such as providing jobs to local people have been argued to help businesses reduce risks and costs, few of these businesses involve in such activities (World Economic Forum 2002, p. 56). Many of the international business interests are to use cheap labour, use cheap means of production in order to maximize their profit. Therefore, instead of employing local people, they source for cheap labour from developing countries.
Some researchers have also identified that other companies fail to employ people from the surrounding areas of their operations on the grounds that they have limited expertise. Since the main interest of an international business is to maximize profit, it imports personnel who they deem qualified in order to steer their organization towards achieving its interests. By failing to offer job opportunities to local people, these businesses do not adhere to their corporate social responsibilities but instead aim only at achieving their business interests.