What is the Role of Corporate Social Responsibility in Global Organizations?
Many large multi-national organizations have taken on the added obligation of looking beyond motivations exclusively driven by profit and have shouldered responsibilities that address social impact rather than just their own economic well-being. The social impact is directed toward various stakeholders such as their communities, customers, employees, and the overall environment. This recognition is known as Corporate Social Responsibility (CSR), a form of corporate goodwill that endears stakeholders to the company and its products. Success in international markets depends not only on the quality of its goods or services, but also on its social consciousness, level of CSR, and corporate gifting. An international business engaged in CSR often ties its business ethics to corporate giving.
The role of CSR is more than a marketing platform meant to build goodwill but is an acknowledgment of the influence a company has on the macro-exterior ecosystem. CSR has gone beyond only recognizing concerns in the external macro-environment to engaging in efforts to solve problems and concerns of its stakeholders. Research continues on identifying cultural differences of attitudes and social practices worldwide to examine the role of corporate CSR in global organizations. A review of studies by Hofstede and the tri-dimensional Arthaud-Day research model to define and illustrate the role of CSR in global businesses and organizations.
Geert Hofstede conducted studies on power distance, individualism, masculinity, uncertainty avoidance, and long term orientation and cataloged responses in a worldwide survey of IBM employee values between 1967-1973. In Culture and Organizations: Software of the Mind (2005), Hofstede created a variety of indices to gauge the levels of inequality within both the “collectivist societies” where employees are managed in groups and as individuals. The study took into account gender roles and emotional overlap of masculine and feminine genders, the level of threats certain individuals in culture may feel, and future rewards such as perseverance and thrift. The resulting Hofstede model can be applied to many areas of the internal business as well as global CSR.
The tri-dimensional Arthaud-Day research model (2005) is used to examine practices in a sampling of worldwide businesses to evaluate the level and commitment of CSR activity. This research yielded three studies comparing business ethics and CSR in an international context to demonstrate the role of CSR in global organizations.
The first research track compares the global companies based in the United States with those based in Europe. International businesses demonstrated commitment to social responsibility via their social media. However, their actions often failed to mirror that commitment in different parts of the world. Another study compares the codes of ethics of U.S. and European based companies. It shows differences in attitudes toward corporate philanthropy.
The second research track compares the ethical perception of the global companies based in the United States with those based in Korea using quality of life as a metric judging a culture solely by the values and standards of one’s own culture and moral idealism drives social responsibility and the level of CSR. The ideals among management to CSR were measured by the Perceived Role of Ethics and Social Responsibility (PRESOR). These studies revealed that social responsibility differs depending on ethnocentrism and these differences leverage the result of decision making among management.
The third research track uses businesses in developing countries such as Mexico to compare to local or global CSR techniques. Results show that even though many companies understand CSR, multinational and transnational companies in developing countries appear more concerned with solving social problems that are country-specific.
The role of CSR in global organizations depends upon how the needs are perceived by all stakeholders and the level of responsibility global organizations commit to and act upon. The research tracks from the Arthaud-Day research model compared CSR among the U.S. and European global firms, U.S. and Korean based global businesses, and U.S. firms to firms in underdeveloped and emerging nations reveal a sustainable global commitment to CSR. The reports examined varying ideology and attitudes to CSR, showing support for CSR which remains significant.
Written by Brenton Peacock, Director VBOC Florida
June 11, 2020
The Florida Veterans Business Outreach Center is funded in part through a Cooperative Agreement with the US Small Business Administration. All opinions, conclusions and/or recommendations expressed herein are those of the authors and do not necessarily reflect the views of the SBA.
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