Globalization and Corporate Social Responsibility Issues

Running head: MANAGING INTERNATIONAL BUSINESS RESPONSIBLY
Globalization and Corporate Social Responsibility Issues
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1MANAGING INTERNATIONAL BUSINESS RESPONSIBLY
Introduction
As opined by Hopkins (2016), the process of globalization or internationalization is
often considered to be one of the single most important factors which had drastically changed
the nature of the contemporary business world. Albuquerque, Koskinen and Zhang (2018) are
of the viewpoint that the process of globalization had converted the entire world into a global
village wherein business firms from all over the world conduct trade activities regardless of
the nation or the region to which they belong. However, at the same time it needs to be said
that although globalization had greatly facilitated trade and commerce yet at the same time it
had significantly enhanced the business competition faced by the different business firms
(Dyck et al. 2018). More importantly, this had proved to be a boon for the customers because
of the increased number of choices or opportunities that they are having presently yet when
considered from the perspective of the business firms it proves otherwise.
Gupta, Briscoe and Hambrick (2017) have articulated the viewpoint that the business
firms in order to effectively address the plethora of problems that they face because of the
process of globalization are increasingly resorting to the usage of different kinds of
innovative strategies. One of the most important measures used by the contemporary business
firms in this regard is the construct of corporate social responsibility which not only offers
the opportunity to the business firms to improve their brand image but at the same contribute
in a responsible manner towards the planet (Frynas and Yamahaki 2016). This paper will
analyze the corporate social responsibility issues faced by the business firms in the particular
context of globalization and also the challenges that they face for the mitigation of these
issues.
The paper begins by providing an overview of the concept of CSR and its importance
within the framework of the contemporary business world. The paper next analyses the

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different CSR issues that the business firms in the wake of globalization and the issue of
‘labor rights’ had been selected for the purpose of analysis. A justification for the selection of
this issue and its prominence as well as relevance in the Australian business world had also
been offered. Next the paper undertakes an analysis of the key challenges that the firms face
for the resolution of this issues and also the key stakeholders who are involved in the process
have been discussed. Lastly, the paper concludes by offering some recommendations that the
firms can follow for the effective resolution of this issue.
Issue Analysis
Corporate Social Responsibility (CSR) and its importance
Wang, Dou and Jia (2016) have noted that the one of the most important trends seen
within the framework of the contemporary business world is the fact that the business firms
are required to take responsibility for the damage that they are causing towards the
environment and also to the stakeholders who are associated to them. In this regard, it needs
to be said that the resources of the earth are fast depleting and there is a high probability that
the resources which are available to the present generation might not be able to the future
generation (Jamali and Karam 2018). More importantly, it is often seen that the business
firms in their bid to earn a higher amount of profitability often comprise on the aspect of
quality and this in turn adversely affects the stakeholders as well as customers of the
concerned firms because of the usage of these comprised products or services (Harjoto,
Laksmana and Lee 2015). In addition to these, the environmental or the planetary damage
that the business firms are causing through their business operations like environmental
pollution, deforestation, fast depletion of the natural resources and others can in no way be
relegated to the background (Chernev and Blair 2015). In the light of these factors, the notion
that the business firms are not only required to take responsibility for their actions but at the

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same time contribute in an effective manner towards the cause of the environment and the
society had gained popularity in the recent times.
Ioannou and Serafeim (2015) have articulated the viewpoint that the construct of CSR
is a self-regulating business model which enables the business firms to be socially
accountable to the environment or the planet, its customers, stakeholders and other entities
which are related to it. In this regard, it needs to be said that over the years the construct of
CSR had undergone a substantial amount of change keeping in pace with the changes brought
on by the process of globalization. For example, in the earlier times the narrow view of CSR
which stated that the sole responsibility of the business firms is to make profit and thereby
contribute towards the economic development of the nations in which they were operational
(Petrenko et al. 2016). However, at the same time it was seen that the business firms in order
to maximize the amount of revenue or profit earned by them often took the help of means or
business practices which were not only unethical but also proved to be detrimental for the
interests of these firms in the longer run. This is precisely the reason why the broad view of
CSR which requires the business firms to contribute in an effective manner towards the
social, economic as well as environmental development of the nations in which they are
operational had gained prominence in the contemporary times (Kang, Germann and Grewal
2016).
As opined by Shamir (2017), because of the large number of options or choices which
are available to the customers in the wake of globalization the buying behavior of the
customers had undergone a significant amount of change. In this regard, it needs to be said
that the quality or the cost of the products or services are no longer the sole deciding
parameters on the basis of which the customers decide whether to opt for a particular service
or product or not. The brand or the market image of the business firms also play a key factor
in the decision of the customers regarding their purchasing decisions (Flammer 2015). This is