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7/30/2019 Social Responsibility & Ethical Issues in International Business
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Is understood as an obligation totake actions that protect & improve
the welfare of society as a wholealong with Business interests
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Arguments for CSR Arguments against CSR
1. Changed Public expectations 1. Profit Maximization
2.Better environment for business 2. Society has to pay the cost
3.Balance power with responsibility 3. Lack of social Skills
4.Business has resources 4.Business has power
5.Prevention is better 5.Social overhead cost
6.Moral responsibility 6.Lack of accountability
7.Globalization 7.Experts views
8.Better employees 8.Scalability of the concept
9. A Way to resolve conflict 9. Lack of broad support
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Corporate Socialresponsibilityprogrammes
Shareholder/Investor
Govt. ProgrammesCommunity
Forces
Philanthropicrequests and
initiatives
crises Competitiveadvantage
Environmentalconcerns
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Factor Conditions
Context for strategy &Rivalry
Related & Supporting Industries
Demand Conditions
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I.Policy
II.Learning
III.OrganizationalCommitment
IV. Social Audit
Time (Years)
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Rejection Adversary Resistance Compliance Accommodation Proaction
Absence of socialresponsibility
Social Responsibility High Social Responsibility
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How to tackle the problem and make newpolicy work.
Specialized learning
Administrative learning
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Institutionalization of the new social policy bythe firm.
New policies well accepted throughout the
firm and are considered to be normal part ofdoing business.
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Last stage
Social audit leads to a report on the socialactions of the firm.
Decisions with high profitability but negativesocial effects (ex. cigarrette manufacturing)should be avoided.
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Cost
Efficiency (pressure of local community to keepan outdated model)
Relevance (Freidman law)
Scope & Complexity Environmental pollution,health problems, racial discrimination etc.
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Leadership (Tata, Aziz Premji, Narayn Murthy)
Mission Statements (NTPC mission statementDevelop and provide reliable power related
products and services at competitive prices,integrating multiple energy sources withinnovative and eco-friendly technologies andcontribution to the society)
Social issues : managers should detect, classify,analyze, track and prioritize issue.
Alignment of structure, culture & process
Corporate Social reporting(ex. ITC)
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Religion
Culture (hunting & gathering, agriculturalstage, industrial Stage)
Legal System
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Ethics corresponds to basic human needs
Value creates credibility with the public
Value gives management credibility with
employees Values help better decision making
Law cannot protect society, ethics can.
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Top Management
Codes of ethics
Ethics Committees
Training Programmes
Ethics hotline
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Stakeholder Affected Ethical/ Social responsibility Issue
Customers Product SafetyFair PriceProper disclosures and information
Stockholders Fair ROIEmployees Fair Wages
Safety on working conditionsChild labourDiscrimination by Sex, race, colour or creed
Host- Country Impact on local economiesFollowing local laws
Society in General Environmental protectionRaw material depletion