AbstractThis essay discusses the corporate social responsibility for multinational. It first explains the two statements given my Friedman and Kaler, respectively. The essay then goes on discussing these statements in regard to multinationals, while explaining through examples of multinationals. It considers the reports and journals to support the ideas. Examples considered are of McDonald’s. Its practices and social responsibilities have been used to explain what both writers meant, and evaluated their statements. Corporate Social Responsibility for MultinationalsCorporate social responsibility (CSR) is an in-built part of business model. It is when a businesses considers law, stakeholders and profits when performing any actions, and balancing interests of all these areas.
It is essential for multinationals to recognize the importance of corporate social responsibility. After all, an action taken by a multinational firm in one part of the world is bound to affect its operations in one way or the other, whether directly or indirectly. Additionally, businesses will encourage activities which are socially acceptable and discourage those will are socially unacceptable, or like to bring negative publicity, regardless of whether these activities were legal.
Thus, public interest is given much importance when making decisions. According to Milton Friedman, “the discussions of the social responsibilities of business are notable for their analytical looseness and lack of rigor” (Friedman, 33). In other words, all businesses have social responsibilities. However, these responsibilities remain rather vague. That is, a corporate social responsibility for a firm in a free market would be to earn profits to satisfy the shareholders and employees. On the other hand, social responsibility also remains towards customers who are not to be exploited by charging higher prices.
Secondly, it is possible that it is a welfare organization, and thus the social responsibility is to people in general, that is, the community. No matter what the objective is, the social responsibilities of a business are not clearly defined and may fluctuate regarding different objectives of stake holders. An individual, who runs a business, may have some responsibilities towards his family and community, such as providing charity and helping the poor. He may refuse a particular job because it may be socially unacceptable. These responsibilities maybe regarded as social.
However, they are at his personal and individual expense. Corporate social responsibilities are those which concern the business, that is, whether the organization as an entity in itself is conforming to social responsibilities. These are not at individual expense either. Instead, it is at the expense of one or more stakeholders. Thus, social responsibilities are notable for lack of rigor and analytical looseness. Social responsibilities are never clearly defined, nor are they always in favor of all groups affected by business actions. That is, as stated above, one or more stakeholders are bound to pay when businesses are being socially responsible.
That is, when firms decide to cut price during inflation or economic recession, this will cost shareholders who will get lesser dividends, higher dividends being their objective. Thus, firm is spending shareholder’s money in order to be socially responsible to the community. Further more, firm may need to purchase pollution permits, which may be required by law. However, this does affect business profits. Therefore, social responsibilities are rather vague.