Corporate Social Responsibilities of MNS

This article reviews the ethic and social responsibilities of multinational companies and offers a strategic approach for future interaction with other cultures. Not much has been researched or recorded about how multinational managers handle ethical and social responsibilities. The article defines corporate social responsibility as “the firm’s obligation to respond to the externalities created by market action” (Husted & Allen, 2006, p. 839) with externalities further defined as being the reaction to a corporate action. There has not been a theory to distinguish local from global corporate social responsibility and previous discussions regarding ethics or social responsibility centered on social contracts or universal principles. Studies show that there is a difference between universal principles and local norms. Environmental protection and human rights fall into the global social responsibility. By contrast local responsibility is based on needs and circumstances happening locally. Local needs can be the same as global needs such as fighting AIDS or unemployment in South Africa. However, multinational that are not affiliated with South Africa have little incentive to contribute toward South African AIDS and cannot actively affect the unemployment which are local social responsibilities but might fund a global AIDS awareness campaign which is a global social responsibility. Once a firm defines the local needs they must devise a strategy to manage it.
The importance placed on a Corporate Social Responsibility is seen in the strategy of a company. The article seeks to establish a method of improving on typology of the multinationals that was developed by Bartlett and Ghoshal, which hypothesized that multinationals shoul...

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...lity at the corporate level. This level will be easier observed and initiated by local management to benefit both the company and multinational manager. Benefits of local social responsibility can be seen in company goodwill, employee morale and absenteeism, staffing options and political helpfulness. These local benefits would not be obtained through traditional global social responsibility. Keeping the carbon footprint low may be a global responsibility but emerging markets may not be educated or aware of issues pertaining to carbon footprint. However, local markets see the benefit of increasing employment opportunities or funding local charities.

Works Cited

Husted, B. W., & Allen, D. B. (2006). Corporate social responsibility in the multinational enterprise: Strategic and institutional approaches. Journal of International Business Studies, 37(6), 838-849.