Corporate Social Responsibility and Global Business Influence

Corporate Social Responsibility (CSR) has significantly influenced global businesses by fostering strong relationships with consumers and enhancing brand loyalty. Through various strategies like sustainability initiatives, community engagement, and ethical practices, companies can achieve a balance between social accountability and business profitability. This essay explores how CSR activities not only support the economic objectives of firms but also promote sustainable development, improve public image, and encourage regulatory compliance, thereby benefiting both businesses and society.

Running head: CSR ON INTERNATIONAL BUSINESS
CSR on International Business
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2IMPACT OF CSR ON INTERMNATIONAL BUSINESS
Abstract
This paper mainly discusses about the impact of CSR on International business. It also talks
about the several trends in the history of emergence of CSR. There is also the discussion of the
pros and cons of the corporate and social responsibility of the well known International
companies. The paper also goes on towards the discussion of the legal obligations that the
companies must always take into consideration while adopting the CSR activities. There is also
the example of many well known companies that have been often highly criticized because of the
unethical and illegal activities that were taken up by hose companies. It also talks about the
newest adaptations that have been made in UAE as a part of the joint effort towards taking up of
the CSR activities.
The importance of Corporate Social Responsibility on International Business
Introduction
CSR or the corporate social responsibility is a very important aspect of any and every
business organization in the present day business scenario. In this modern day the needs and
demands of people have underwent a sea change (Boulouta and Pitelis 2014). The business
organizations have also realized that in order to flourish in the long run they need to take up
several over additional responsibilities apart from just satisfying their customers. As a result of
this the companies have started this new approach called the CSR or the corporate social
responsibility. This is basically a new and innovative business model that enables the business
organizations to promote sustainable development for all their stakeholders. This can be done by
generating several social, economic and environmental benefits for each and every stakeholder.
It is also very important for the multinational companies to be able to utilize their corporate

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social responsibility as a part of their overall business. This will not only benefit the society but
also will be quite helpful towards the business organization itself. It is also very much essential
for the Multinational companies to make sure that they are very much capable in taking up their
responsibility towards the environment and also towards all their stakeholders (Boulouta and
Pitelis 2014). This paper will be dealing with the influence of corporate social responsibility over
the International Business.
Research Methodology
Qualitative analysis method has been used in order to get an overview of the emergence of CSR
in the historical framework. Different aspects of CSR of the international companies have been
described. This analysis has also dealt with the kinds of CSR that the global companies can deal.
The results also show what can be the pros and cons of adopting the CSR activities.
Hypothesis
 CSR activities will help in increasing the brand loyalty of the international companies.
Brands loyalty is one of the most important aspects of the present market scenario. In order
to survive in the long run, the companies will have to provide their customers with something
that is beyond the reach of their competitors (Brammer and Mellahi 2015).
 CSR of the international companies can make the company reputation suffer.
In order to carry on the CSR, the companies will need extra fund that will ultimately be
gathered from the customers itself. This will make some additions in the usual price of the
products. As the area of operation of internal companies is large they deal with many
different customers. Each of them has a different mindset (Soeberg and van Zandwijk 2016).

4IMPACT OF CSR ON INTERMNATIONAL BUSINESS
As a result of this, many customers may refuse to pay the extra additional price and switch
over to alternatives.
 CSR will enhance the overall production, popularity and goodwill of the International
business.
Customers will not be reluctant to pay a bit more for purchasing the products of the company
if they see a noble cause behind it like the company’s effort to help the poor children for
education, or compensating the customer losses, or donating for some social service (Tai and
Chuang 2014).
The research question and the purpose of the research
To analyze the importance of corporate social responsibility in international business
 1930s- The term CSR for the first time came into act. It was perhaps because Professors
A.A Berle AND Prof C.G Means at the Harvard University wanted to work upon
something that would make the organizations much more responsible towards taking up
more responsibilities after the Great Depression.
 1960s-1970s- All the companies were being encouraged to take up the different CSR
activities related to the social, environmental, economic activities.
 1980s-1990s- IUCN created a world conservation strategy as per which the business
organizations were asked to contribute towards a more stable economy, and also help in
supporting the poverty stricken population. The triple bottom line business model was
also invented.

5IMPACT OF CSR ON INTERMNATIONAL BUSINESS
The corporate social responsibility is a new kind of business approach that has been used up
by different business organizations. However in the recent years, all the different business
organizations are demanding for raising the matter of the corporate social responsibility and
making it compulsory for all the companies. All the companies usually play a very important role
in the society. In other words, it is the different business organizations which are responsible for
making the lives of people easy by providing them with all the necessary components of day to
day life. It is therefore essential for the business organizations to contribute more towards the
society. The companies must therefore try to play a very vital role in the society. However this
must be noted at the same time that the corporate and social responsibility is not really a very
new concept. It is something that has been present since time in memoriam.
The concept of the corporate and social responsibility is basically aimed at using the
environmental resources in a very sensitive way. In other words the business organizations that
are mainly engrossed in the manufacturing of several goods and services must also know how to
take up their responsibility towards the nature. The business organizations must not give priority
only to money making but they must also keep in mind that they have some responsibility
towards their environment as well. However the very origin of the corporate and social
responsibility can be traced back into time of Bible and the holy Christian scriptures where God
created The Earth and also man (Brammer and Mellahi 2015). This is a common fact that is
known to all. However the most important connection that we can derive from here and relate it
with the concept of Corporate and social responsibility is evident from the fact that man was
instructed by God to fill the Earth and to govern it. Same is the case with business organizations.
They must make sure that none of their activities are harming the environment in any way. They

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must also keep aside a certain portion of their profit for being donated in several social
developmental works.
As far as the Multinational companies are concerned, taking up the usage of the corporate
social responsibility has become all the very essential. As they International business is usually
carried on a very large scale, it is natural that they have to deal with a large number of
stakeholders and also have to look after a large number of transactions taking place across
several different countries. The main concept main concept of the CSR is a particular set of
conducts that the companies must abide by while treating their customers. CSR comprises of
several rules that the company will have to keep in mind while carrying on its day to day
activity. CSR of the multinational companies will mainly be evaluated on the basis of the
company’s attitude towards the community. In other words, the CSR of the company will mainly
be conducted through the waste management, elimination of wastes, efficient and productive use
of resources of the company (Tai and Chuang 2014). However it must be taken into account that
corporate social responsibility is not always the same thing for all the organizations. Many think
that it is just related to legal considerations, while others may often consider it as a charitable
means. As the multinational companies usually operate in many different countries, they often
face many different kinds of problems and have to face many new kinds of social, ethical and
environmental problems.
The business organizations must be able to understand and take up their responsibility
towards the society and must always try to do something good for the welfare of all the people of
society. This can include activities like supporting the poor and the underprivileged people, or
some contributions for the remote village areas by contributing a good amount of donations for
street lightning and several other such activities (Brammer and Mellahi 2015).Corporate and

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social responsibility is also of great importance in teaching the companies about the unethical
practices that they often continue like that of appointment of child labor, keeping the employees
in general and specially the minor children as the bonded labor. As the CSR of the company is
very much associated with the legal obligations as well, it is also very essential for the
companies to pay very much importance to it. There are innumerable examples where the
renowned and the well known companies have often neglected this legal obligation, Some good
examples can be Nike, Nestle, James Hardie and several other such companies. This is really
very much unfortunate that such well known companies which are very much involved in the
global or the international business have been involved in such unethical and harmful activities.
These activities were adopted and followed by these international companies only in order to
satisfy their own personal benefits.
Nike is a very well known universally establish company that was highly criticized for
having overlooked its legal and ethical consideration by appointing and employing the young
and minor children as labor In this way they were promoting or rather taking the help of child
labor which is an universal crime. As a well known responsible company they must have
contributed towards supporting the poor and the unprivileged children. Same was the case with
Nestle as well. Though it is one of the most well known and u universally recognized company.
Nestle has also been criticized on a large scale to have ignored the legal considerations and have
used several unethical means. They have also made use of bonded child labor in order to utilize
the supply chain for their products.
Another such example can be that of James Hardie Company. One of the most important
aspects of the corporate and social responsibility of the multinational companies must be to make
sure that none of their activities are causing any harm to their consumers (Soeberg and van

8IMPACT OF CSR ON INTERMNATIONAL BUSINESS
Zandwijk 2016). The central idea of the corporate and social activity of the companies is to
contribute towards the well being of the society. However James Hardie products were harming
the customers a great deal by creating asbestos related diseases. It was from the building
materials of this company that the consumers were rapidly getting affected from the asbestos
related disease. In such cases it was the prior responsibility of the company to have helped the
consumers by providing them with ample compensations or by taking up the entire responsibility
of bearing the treatment of the affected consumers. However nothing such was seen in this case.
The company made up efforts from its own end to help those people.
Another such example is that of Ford Pinto that went to such a great extent of risking up
the lives of their customers by allowing a certain flawed car design to pass on (Tai and Chuang
2014). Though it was known to the company that this kind of a design will have fatal results,
they allowed this model to be designed only because it would have been cheaper for them to pay
off the law suits very easily. This flawed model of the car had resulted into the accidents and
death of many customers.
Hence, it is very much evident that the legal considerations are very much a part of the
corporate and social responsibility of the companies which they must always adhere to. There are
several pros and cons of the corporate and social responsibility that is taken up by the companies.
Advantages of CSR on Companies
Superior reputation management
In the present day scenario all the multinational companies have to maintain a very good
customer relationship in order to maintain their image worldwide. This is very much related to

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the trust, consistency and the credibility. Maintaining a good CSR is likely to enhance the
relationship between the company and the consumers. The increased consumer attachment is
likely to bring many financial benefits for the company (Wood 2015).
Improved innovation and competitiveness
The multinational companies will be able to use the CSR as a very good opportunity of
increasing their innovation. CSR usually acts as the opportunity identifier for the companies
because many stakeholders will be sharing their valuable feedbacks that the companies can use
for their betterment (Hadfield and Measham 2015).
Positive publicity
It is needless to state that in the modern day business scenario needs to pay huge attention
on its publicity so that they can enjoy a very good reputation across all the regions of their
operation. A good CSR will always help in increasing the publicity of the company. This is
because the consumers will never mind to pay a little extra for buying the products of a company
if they see a noble cause behind it (Brammer and Mellahi 2015). A very good example can be the
advertisement of many companies that are often telecast on television in order to make the
customers aware about the CSR of the companies. The advertisements show that buying several
products of that company will help in contributing towards the education of the poor children or
for the medical treatment of the poor who cannot afford it on their own. This will make more
customers interested in buying the products of the company and the reputation of the company
will also be enhanced.

10IMPACT OF CSR ON INTERMNATIONAL BUSINESS
Disadvantages of CSR on companies
Shift from profit making objective
Though it is said that CSR always helps in making the company have a long lasting and
good reputation but at the same time it also makes the company shift its attention from the profit
making objective (Wood 2015). In the attempt of promoting the welfare for the community, the
companies start keeping aside their funds and other resources. This however makes the company
pay much less attention on its shareholders. The companies often forget that they have to work
for their stakeholders and also make profits for them.
Company reputation takes a hit
As per the policies of the CSR, the companies need to disclose all their errors to the
customers regarding their products. Often this creates a negative impact on the customers when
the companies have to declare their already sold out products as flawed and call them back. This
takes away the customer base from the hands of the company and also earns them a very
negative ratio.
Increase in the cost of production
The companies will naturally have to bear a huge amount of expenditure in order to
adopt and carry on with the CSR activities. If the companies want to keep aside and use a certain
amount of their profit for some of the welfare activities of the company, then this extra fund has
to be somehow raised by the company (Hadfield and Measham 2015). This can only be arranged
if the company takes extra amount of money from their customers. However the customers might
feel reluctant in paying more prices for the products. This is because of the fact that not every

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customer is of the same type. Particularly in case of the multinational companies this is very
much visible because these companies have to operate over a large number of areas and the
economy of all the different regions is also different. Hence, the customers operating in such
large area of operation will not be of the same mindset. So, some of the customers will be
reluctant to pay extra amount of money for the same products. At the same time there will be
some customers who will have no problem in paying the extra additional price of the product if
the company is having a noble case behind it.
Legislations and provisions related to CSR
As the multinational companies are the ones that usually operate over a large area they
often have to face many different kinds of legal obligations as well. Different countries have
different kinds of legal system. Often the legal system of many countries are too much
complicated a d the companies have to suffer through a lot of difficulties in order to get the legal
formalities done (He and Lai 2014). However if the companies are to carry on with their CSR
properly, then they will have to undergo with all these difficulties and the legal formalities done.
They will have to keep this in and that they cannot ignore the legal considerations of they are o
promote the welfare of the community in the long run. Companies like Nestle have been highly
criticized to have been involved in many unethical and illegal practices thus having overlooked
the legal consideration of their corporate and social responsibility.
Hence, it can be stated that in the modern day scenario it is very essential for the MNCS
to take up the CSR activities. Though the companies will have to undergo several difficulties in
this process, but they will have to overcome it. However they companies will have to keep pace
with the 21st century scenario and they have to emphasize on a multidimensional aspect. They

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have to take in consideration the area of their operation, the demographic and the psychographic
aspects of the consumers, the geographical location of their outlets and several other such factors
(He and Lai 2014).. The companies will have to realize the fact that they can and must take an
active participation in the pro motion of the social welfare. Particularly, the MNCs have a huge
scope for this. Taking up the CSR activities will also enable the firms to maintain a good
reputation all over their areas of operation. Many important companies all over the world have
started taking up many important steps towards the economic and social development.
There are many important companies that have taken up many important CSR activities in order
to serve for the welfare of the community and also for creating a good brand image for
themselves. Some of the important and well known companies that are known for best CSR
activities are Google, The Walt Disney Company, Microsoft and many others. One of the
important influences that CSR has over the international business is the rand loyalty. It is a
known fact that the present market scenario is a very competitive one and the companies need to
work hard in order to survive in the long run. One of the most important moves that can be taken
by the companies to establish the brand loyalty is by taking up the CSR very seriously.
Consumer loyalty is however very tough to earn. The company has to make proper research and
development in order to know the expectation of the customers. The companies have to keep in
mind that they need to do something that is very unique and that makes them different from their
competitors. They have to satisfy the customers to such an extent that is beyond the reach of their
competitive firms. Only then the consumers will consider buying the same product from the
same market even in future and under any kind of circumstances. Companies based in all the
countries have started taking up many different kinds of CSR activities in order to sustain in the