International Corporate Social Responsibility: A Legal Duty Analysis

This report addresses the complex topic of International Corporate Social Responsibility (CSR) within the framework of commercial law. The assignment explores the debate around whether the sole purpose of an Australian business is profit maximization, and whether the law should mandate human rights due diligence and accountability. The report critically discusses this statement, presenting arguments both for and against, while referencing relevant international legal instruments, such as the 2011 UN Guiding Principles on Business and Human Rights. It examines various CSR theories, including economic, philanthropic, ethical, and legal responsibilities, and their implications for businesses. The report also includes an annotated bibliography, offering critical commentary on selected literature relevant to the research question, evaluating the usefulness of each source for understanding the complexities of international CSR. The analysis also covers the different theories of CSR and their practical applications, demonstrating a deep understanding of the legal and ethical considerations involved.

Running head: INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY: A DUTY
INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY: A DUTY
Name of the Student
Name of the University
Author Note

1INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY: A DUTY
The pivotal aspect of running any commercial organisation is to earn profits, and like any
other business hold, the commercial organisation must implement policies and take up
operations that elevate their business. This results in the companies negating the aspect of
social welfare or adapting to any revised policies that cater to social or economic issues. The
stand of these organisations for social issues are often vague, and thus this results in low
inclination to adapt to strategies or approach topic that caters to human rights. This essay is a
work on how companies, business organisations and corporates need to structure their
policies. These adopted policies should cater to the duty aspect in their operations and
indulge in human rights-oriented works for the section of people in the society or the
organisation at large. The need for Corporate Social Responsibility, therefore, is essential and
requires legal approach and attention.
Corporate social responsibility initiates the need for elevating policies and standards
that help society grow. These are actions and plans taken up by the business organisation or
corporates to elevate the conditions of the stakeholders at large. These responsibilities are
divided into the following principal categories which include:
Environmental Responsibilities
Sustainability of the environment is an aspect that attracts businesses to amplify
initiatives and create a focus on reducing the emission of greenhouse gases and pollution in
general. The awareness to reduce air, water and land pollution by these companies and
eventually to take necessary steps to incorporate such awareness creates the space for these
businesses to establish a good corporate image. These responsibilities often incorporate
planting more greenery, incorporation of technology that strategises on reducing carbon
footprint levels and curtailing emission of greenhouse gases.

2INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY: A DUTY
Philanthropic or Benevolent Responsibilities
Philanthropic activities are often initiated to cater to the personal stakeholders of the
businesses or the society in general. These responsibilities include time benefits to workers,
monetary benefits and implementation of better pay schemes, supplies and resources to
organisations that are in need and charities of a local, national or international level. The
donations taken up are channeled towards a lot of causes including human rights affairs,
relief for natural disasters, water quality for drinking and implementation of education
programs for underdeveloped countries.
Moral of Ethical Responsibilities
The hub of attention to ethics or morals is to provide for fair and equitable labour
opportunities for the employees present in the organisation and also for the suppliers of such
employees. Fair and just business opportunities involve equal pay for equal level of work
done and compensation that allows employees to have a satisfactory and improving standard
of living. For the suppliers these practices amount to using certified products to adopt fair
standard means of trade, therefore, elevating the responsibility quotient (Chih Shen and Kang
2008).
Economic Responsibilities
Economic responsibilities are responsibilities that stress on improving the economic
standard of the stakeholders thereby improving the image of the companies as well. These
responsibilities should not affect the level of standards set for environmental, benevolent and
ethical practices (Bantekas 2004). By balancing economic policies incorporated with their
effect on society, businesses tend to improve their scheme of operations while equally
indulging in sustainable works. Economic responsibilities often involve incorporation of

3INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY: A DUTY
recycled products in the quality manufacturing of products keeping in mind the low cost of
materials and which eventually benefits the society.
Legal Responsibilities
Legal responsibilities involve the creation of policies for the safekeeping of the
interests of these employees and ensuring the safety of their rights to propagate functionality
and fluency of operations (Michael 2003). Legal responsibilities also necessarily mean the
upliftment of outdated rules and laws and it is done by ensuring that law and order are at par
with present times, and presence of no discrimination and exploitation policies.
Theories of Corporate Social Responsibility
The concept of corporate social responsibility or CSR is such that it provides the
fabric of the organisation’s vision and priorities, keeping at par with the accountability of the
organisation. Corporate Social Responsibility specifies policies and programs aimed at
facilitating the various stakeholders of the corporation or organisation. These stakeholders
include the employees of the business corporation and the customers of such organisation,
suppliers of the organisation, and the community circle involved. The theories involved are:
 Economic Structure of the Corporate Social Responsibility specifies the business
aspect that highlights the money-making purpose of the organisation. This generates
profits and promotes and expands the shareholder’s interests by producing suitable
goods or services thus meeting demands. This approach, therefore, is often tagged as
the Theory of Corporate Governance. According to a book of social responsibility by
Milton Freiman, introduced the fundamentals of the economic model in his doctrine
of social responsibility found in his 1962 book “Capitalism and Freedom” and a 1970
seminar article that appeared on The New York Times. The doctrine states that the
only social responsibility of a business is to maximise its profitability to benefit its

4INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY: A DUTY
shareholders while observing laws of the community in which it operates (Cramer
2008).
 Nonetheless, under the economic model school of thought, society will eventually
benefit from the success of a business organisation. Hence, to realise this benefit,
businesses should be free to produce and market products that the society and its
members need.
 Friedman further argued that extending the social responsibility of a business beyond
profit-making initiatives contradict the principle of a free-market economic system.
He also added that forcing businesses to serve the community through philanthropy is
akin to totalitarianism (Hopkins 2012).
 The economic model of corporate social responsibility also contends that promoting
the interest of the greater community is the duty of the government, as well as non-
profit organisations and other social institutions. It is not fair for investors or
shareholders to channel their assets to activities that would not generate profits.
 Also, the economic model argues that businesses are already indirectly contributing to
the betterment of the community by paying their taxes. The government depends on
these taxes to provide for the needs of society.
Milton Friedman, an early notable critic, has observed that the CSR1 might pit the
social goals against the corporate goals. The only one social concern of a business is to
engage in the activities and use of resources that increase the designed profit so that it
1 Corporate Social Responsibility

5INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY: A DUTY
remains for a long time within the law of the game which clearly states that engaging in free
and open competition without any fraud or deception. Because of Friedman CSR develops
disablements in the running of commercial activity or business and that can make confusion
concerning the true goals of an institution along with complexity growth of the trade
concerning the sustainability (Kolk and VAN 2010). Conflict can emerge for enhancement of
the organisation’s profitability in the long term and its influence in the community good.
Often the situation gets worsened by the lack of apparent reward in following the strategy of
CSR. For example, Walmart is being rewarded for cost-cutting in the market; Costco that
offers much better policy of insurance and benefits to the employees is punished for they did
cut the cost and was penalized by the market and they were unable to be a profitable as
Walmart.
Recently supporting a role for active government, Robert Reich contended in the book
of his own content “Supercapitalism” that the organisation’s that are not engaged in
embracing the main principles of CSR could be considered as neither greedy or insensitive.
They perform well accordingly and tries to provide the best deal to all the customers, and the
companies perform the task as they supposed to do the task, and therefore they increase the
percentage of return to their stockholders. The economy of a company relies on the
government as for setting up the ground rule just as a game needs a rule for playing fairly. If
the administration wants to change the process of the business of Walmart, it will alter the
current rules which make the employees easier to unionise for receiving the pensions and for
getting the best policy of health insurance and for grating the sufficient wage for living. It
suggests that CSR is influencing a democracy to some extent by providing the companies an
justification to indulge them in social work that is superficial and it diverts the administration
form taking any act to address pressing and real social concerns.

6INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY: A DUTY
One of the key problems which can be stated that CSR shortens or simplifies some
arguments that are complex and those that fail to acknowledge that the trade-offs should be
carried out in between the ethical outcome and the financial health of the company. When it
is made profit wins over the principle.
If the threat of loss in the account of profit becomes a motivation for several
entrepreneurs and managers to abstain from CSR, in this case, it can be easily considered that
ignoring CSR can also create a threat that will outweigh the threat of any type of loss or profit
(Preuss 2016). The modern companies expect not only to follow the norms and the ethical
standards but also they expect to live like a dynamic source of change in responsibility in this
present globalised world. The companies are not dependable, liable to scandal and corruption
that stain the world of corporate sector even few individuals can be held liable. The general
public understands the discharge of business to be functioned in an honourable manner and
also in social framework that will create a continuous public trust.
Corporations develop societal and social impacts both in the ways of negative and
positive operations that take place daily in the value chain of a company. Societies and the
corporations they operate are already intertwined. Societies always require the corporation for
providing employment to individuals and infrastructure. In the same way the corporation
requires some healthy society for providing a workforce that is capable. Alternatively the
society glances into many cases in world of corporate sectors for getting the employment and
the infrastructure.

7INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY: A DUTY
Annotated Bibliography
Windsor, Duane. "Corporate social responsibility and irresponsibility: A positive theory
approach." Journal of Business Research 66.10 (2013): 1937-1944.
Narrating and extending Corporate Social Responsibilities are important interdependent tasks
that can contribute and provide to the evolution of multiple international policy regimes
favouring CSR and disfavoring CSI. Progress toward a more general normative theory of
CSR and CSI occurs through an emerging virtuous cycle of interaction between
conceptualisation and institutionalisation processes. This article makes a contribution to each
process. The conceptualization contribution derives logically more universal conceptions of
CSR and CSI from a literature review. Universal conceptions can incorporate multiple
options and permit variation and evolution. The “essentially contested” character of a “cluster
concept” is partly about influencing legal and ethical standards, public policies, and specific
business practices. The second contribution argues that a more logically universal schema is
desirable for helping to inform institutionalisation processes. Gradual ongoing development
of multiple regimes for CSI control and CSR promotion involves fragmented persuasion and
negotiation processes at national and international levels.

8INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY: A DUTY
Fasterling, Björn, and Geert Demuijnck. "Human rights in the void? Due diligence in
the UN guiding principles on business and human rights." Journal of Business Ethics
116.4 (2013): 799-814.
The United Nations in its ‘Guiding Principles on Business and Human Rights’ essays and
ensures instructions for execution of the United Nations framework that safeguards,
institutionalises and makes affairs involving human rights usual in the procedural
management of corporates. They contribute and specify higher levels of accountability and
awareness within corporations with respect to the negative impact of business activities on
human rights. However, the understanding is such that the corporations find it feasible and
easy to meet the human rights requirement. The understanding also specifies that it is a safe
call for these corporates to incorporate the idea of human rights and abide by it to suit to such
requirements. The argument is that the moral aspect of the corporations navigate the extent of
human rights perseverance. In most scenarios, it depends on the effectiveness of the
commitment of such moral aspects. These Principles often create a loophole or room for an
influential implementation of perseverance. This act of due diligence in several and most
situations result in the fallout or depreciation of the elemental rules they seek to promote.
Revelation of certain specific limits of practical and relevant approaches to cope with human
rights violations or abuse in business organisations. With the surfacing of these limitations,
the further progress in human rights law, both internationally and also beyond territories
becomes guiding, compelling and rewarding. These further inputs more compelling and rigid
conversation or discussion on the ethical structure and foundation of these corporates and
their moral standpoints. This journal speaks about the fundamental approach of the corporates
in meeting the requirements of the United Nations guidelines. The reports incorporated in the
journal speaks about the necessary risk management guidelines that are accessible, and there
is a presence of care and safety within it. A company that has a remark for such prudence is

9INTERNATIONAL CORPORATE SOCIAL RESPONSIBILITY: A DUTY
required to locate, prevent, attenuate and account for how adverse human rights impacts are
taken care of or addressed to. The addressing involves understanding prospective and actual
impacts in the sphere of human rights, solving and taking actions about the issues in question
and influencing speedy responses. These responses communicate the procedures of how these
impacts are taken care of.
Reference:
Preuss, L., 2016. International corporate social responsibility.
Kolk, A. and Van Tulder, R., 2010. International business, corporate social responsibility and
sustainable development. International business review, 19(2), pp.119-125.
Hopkins, M., 2012. Corporate social responsibility and international development: Is business the
solution?. Routledge.
Blowfield, M., 2005. Corporate social responsibility: reinventing the meaning of
development?. International Affairs, 81(3), pp.515-524.
Chih, H.L., Shen, C.H. and Kang, F.C., 2008. Corporate social responsibility, investor protection, and
earnings management: Some international evidence. Journal of business ethics, 79(1-2), pp.179-198.
Kolk, A., Van Tulder, R. and Welters, C., 1999. International codes of conduct and corporate social
responsibility: can transnational corporations regulate themselves?. Transnational corporations, 8(1),
pp.143-180.
McWilliams, A., Siegel, D.S. and Wright, P.M., 2006. Corporate social responsibility: International
perspectives. Available at SSRN 900834.
Bantekas, I., 2004. Corporate social responsibility in international law. BU Int'l LJ, 22, p.309.
Michael, B., 2003. Corporate social responsibility in international development: an overview and
critique 1. Corporate Social Responsibility and Environmental Management, 10(3), pp.115-128.
Frynas, J.G., 2008. Corporate social responsibility and international development: Critical
assessment. Corporate Governance: An International Review, 16(4), pp.274-281.

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Cramer, J.M., 2008. Organising corporate social responsibility in international product chains. Journal
of Cleaner Production, 16(3), pp.395-400.