Social Responsibility of business refers to what business does over & above the statutory requirement for the benefit of the society.

CSR is also known as Sustainable Responsible Business (SRB), or Corporate Social Performance is a form of Corporate self regulation integrated into a business model

CSR is manner of operating a business that meets or exceeds the ethical, legal, commercial, and public expectations of customers, shareholders, employees, and communities

CSR includes: Take corrective action before it is requiredWork with affected constituents to Resolve Mutual ProblemPublicly admit their MistakesGet involved in Appropriate Social ProgrammesHelp to correct Environment ProblemTake needed public stands on Social issues

A strong CSR can:Help recruit and retain good employeesHelp differentiate the firm and enhance its brandsHelp cut costs, such as minimizing packaging, recycling, economizing on energy usage, and reducing waste in operationsHelp the firm avoid increased taxation, regulation, or other legal actions by local government authorities

Following charges that its foreign contract factories were run like sweatshops Nike took steps to improve working conditions. Now, Nike is the largest private employer in Vietnam.

Ethics are moral principles and values that govern the behavior of people, firms, and governments.

Corruption is the abuse of power to achieve illegitimate personal gain.

More than 30 percent of MNCs believe corruption is a major or severe concern in their global activities.

Bribery is common and can take the form of grease payments, small inducements intended to expedite decisions and transactions or gain favour.

Examples: Firms may- Falsify or misrepresent contracts or official documents

Offer or accept bribes or inappropriate gifts

Tolerate sweatshop conditions or abuse employees

Use false advertising or other deceptive marketing

Engage in deceptive or discriminatory pricing

Deceive or abuse intermediaries in the channel

Undertake activities that harm the natural environment

Growing sense that responsibility for righting social wrongs belongs to all organizations Growing business need for integrative mechanisms such as ethicsethics reduce operating uncertaintiesVoluntary guidelines avoid government impositions

Ethical conduct is needed in an increasingly interdependent worldCompanies wish to avoid problems and/or be good public citizens

Corporations are Primarily Economic Institutions.Must follow the lawManagers must act ethicallyDuty to correct the adverse social impacts they causeComply with the norms of the social contract.Managers should try to meet the legitimate needs of stakeholdersPublicly report on market, mandated, and voluntary actionsEffective abolition of Child Labour

The UN Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the following Areas:

Human Rights:Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; andPrinciple 2: make sure that they are not complicit in human rights abuses.

Labour:Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;Principle 4: the elimination of all forms of forced and compulsory labour;Principle 5: the effective abolition of child labour; andPrinciple 6: the elimination of discrimination in respect of employment and occupation.

Environment:Principle 7: Businesses should support a precautionary approach to environmental challenges;Principle 8: undertake initiatives to promote greater environmental responsibility; andPrinciple 9: encourage the development and diffusion of environmentally friendly technologies. Anti-Corruption:Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

Obstructionist Strategy: Meet Economic ResponsibilityDefensive Strategy: Do minimum legally required meet eco, legal and ethical responsibility.Accommodative Strategy: Do minimum ethically required meet eco, legal and ethical responsibility.Proactive Strategy: take leadership in social initiatives, meet eco, legal, ethical and discretionary responsibility.

UN code of Conduct for TNCsEuropean Convention on Human rightsInternational covenant on civil and political RightsUN universal declaration of Human rightsInternational covenant on Economic Social and Political Rights

Ethical issuesWorkers not well paid (often work 12 hours a day, 7 days a week)Piracy of intellectual property, counterfeiting, and industrial spying Human rights violationsUse of prisoner and child laborChina-

Political campaign contributions & lobbyistsFraud in mortgage sectorAttitude of caveat emptorRising wage inequalitymiddle class wages stagnant for a decadeLack of health benefits for workersLoss of promised retirement benefits

United States-

International agencies and national governments have also attempted to lay down business principles for guidance.

Rise of Civil Society GroupsResponse of TNCsGovernment Actions

Emergence of organized civil society and NGOs alteredBusiness environment globallyRole of MNC within global business environmentNGOs globallySave the ChildrenOxfamCAREWorld Wildlife FundConservation International

TNCs generally show a cautious response to social responsibilities issues.Some TNCs adopt their own codes of conduct to address social responsibilityCorporate codes of conduct help to boost corporate image.Some TNCs adopt a proactive approach to CSR on the belief that it is a good business practice.

Govt of various countries take actions on the basis of international standards or codes.

UN and OECD has laid down guidelines related to human rights, labor issues and environment.

*Ethics and appropriate behavior are essential in international business. Corruption and paying bribes are commonplace in many countries, particularly those that lack transparent business systems. Simply obeying the law is usually insufficient to ensure against violating standards of ethical behavior. This results because ethical standards vary around the world, which makes ethics a complex issue in international business. Most companies seek to ensure ethical practices in their international operations. The most advanced firms proactively emphasize not just ethical behavior, but also corporate social responsibility and sustainability.

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