Corporate Social Responsibility as an International Strategy

Corporate Social Responsibility as an International Strategy

Cristina Márquez-Moreno (University of Cádiz, Spain) and Jose Luis Durán-Valenzuela (University of Cádiz, Spain)
Copyright: © 2019 |Pages: 21
DOI: 10.4018/978-1-5225-5781-4.ch011

Abstract

The objective of this chapter is to understand how important it is for companies, in a globalized environment such as the current one, to develop socially responsible behavior, particularly for those companies that want to project themselves internationally. As will be seen, this means that firms assume responsibility for the impacts of their activities on society and establish improvement processes in three main areas: economic, social, and environmental. As a result, corporate social responsibility (CSR) has emerged as a priority for business leaders in all countries. Therefore, this chapter analyzes the current environment in which companies make their decisions and how the environmental pressures determine the need to act responsibly. In addition, the concept of CSR is explored and the necessary tools for its effective implementation are explained. Of course, stakeholder theory is introduced as the core of CSR.
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Introduction

The financial scandals of the late twentieth century led to the context in which companies now act, one which is marked by strong social criticism. Awareness of and concern for business action has been growing gradually. Businesses are required to respect the environment, improve the working conditions of their employees, support social action and, among other obligations, avoid taking advantage, in their commercial relations, of those third world countries with lax laws, because this leads to an abusive exploitation of the citizens of those countries. In other words, achieving legitimacy and survival in the market requires that companies take responsibility for their actions through response processes that improve their performance, but also satisfy the demands of society. Thus, Corporate Social Responsibility (CSR) has emerged as a priority for business leaders around the world.

A manager of ZARA explains in an interview that, in this new era, companies must be productive, but also responsible, they must comply with labor legislation and, in addition, give fair treatment to workers, customers and shareholders, among other stakeholders. For this reason, they must inspect their subcontractors with a magnifying glass and interview their workers on a continuous basis to ensure that the labor legislation is complied with and the rights of the workers are respected. An example of this can be seen in the actions carried out in Morocco, where regular interviews are conducted with the workers of subcontractors to verify that the working conditions are appropriate, that the country’s labor legislation is respected and that the rights of workers are respected. In addition, in this same line, companies that have been contracted to sew in Morocco are prohibited from subcontracting. A very clear norm has been established, and that is that every company that subcontracts without permission stops working for ZARA. Why? To avoid problems such as the one they had to face in Brazil in 2011, when the company was accused of practicing slave labor through the suppliers that it had subcontracted. From that moment, the company undertook to eliminate the precarious working conditions of its suppliers and to invest 1.4 million euros in social action.

Another similar case can be seen in the United States, where some universities exerted pressure on the companies that supply them with clothes, resulting in changes in policy. Students threatened to stop buying clothes from all those companies that were employing workers in exploitative conditions. It should be noted that Nike provides sportswear to 14 universities in the United States, and this threat from the students caused the company to change its subcontracting policy in Asia. The company developed a code of conduct, signed up to the Global Compact and made a strong commitment to respect principles such as freedom of association and the protection of human rights.

Another example which should be emphasized is the role of the press and news media from around the world. In the confrontation that took place between the company Shell and Greenpeace over the decision to sink an oil platform in the North Sea, it was the pressure exerted by environmentalists and the media that led to Shell reconsidering the decision.

As can be seen from these examples, companies that want to survive in a globalized economy cannot ignore CSR as a strategic tool of the company. Therefore, the objective of this chapter is to explain the importance of aligning an organization with a social approach for its survival, because the strategy of social responsibility creates value for the organization and for society. To do this, firstly, the influence that the institutional environment has on the decision to incorporate CSR in the companies’ actions will be shown. The multiple threats of a changing and competitive external context will be considered as the main factor in the implementation of social responsibility. Next, the concept of CSR will be delimited, and the key advantages and disadvantages that can be generated by developing socially responsible actions will be explained, all with the assumption that stakeholders occupy an important place in this discussion. Finally, the importance of implementing CSR will be shown, from a theoretical and practical point of view, and a set of tools and concrete action plans will be laid out that go beyond of the improvement of the corporate image and organizational reputation.

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