Emerging Multinationals and Corporate Social Responsibility

Corporate Social Responsibility, a concept that is widely regarded as a company’s efforts to improve and maintain the quality of livelihood of any society has been a center of focus for multinational corporations within their day-to-day operations and engagement in international trade. Earlier this year, Forbes reported that CEO of foods company KIND Snacks, Daniel Lybetzky has announced to make a difference by achieving mass distribution and making their company’s product healthier. Another example would be Microsoft’s strategy to come up with a partnership with a non-profit IT company NETHope, which aims to create IT related apprentices in Kenya. All these sorts of actions, at a glance, might indicate a sense of goodwill coming from multinational corporations in an attempt to actually achieve a better world and community. But in fact, several scholars have disputed this voluntary action and attributed this movement to the increasing demand by investors and employees for their own sake of sustainability, and most importantly, for the promotion and preservation of their public image through exhibiting their commitment in making a social impact.

However, it is quite rare that we see emerging multinationals from developing and underdeveloped countries engaging in these sort of movements. Start-up from these areas, I would like to assume, are mostly fighting for survivability to ensure their long lasting operations and their rise to the international market. Despite several startups actually engaging in CSR, Tarun Khanna, a professor at Harvard have pointed out that emerging MNCs need to be more attuned to social purposes, simply because in developing nations, governments often fail to provide effective means of a public good, and emphasizing the importance of a privately run sector entity to overcome these issues (Global Focus, 2015). With this argument in mind, it is also important to consider the importance of the sovereign of states and its changing landscapes thanks to globalization. In my other blog article, I have outlined that with globalization, there is an increasingly high risk of external shocks that could be experienced by many countries, which could turn out bad for developing/underdeveloped nations as they go through industrializing their economy. Governments are now required to pay more attention to the international realm and not just matters within their domestic border. With this, they would have to divide their attention to both sides of the fence and its diplomacy as well, which would make complete sense of why maintaining public good could be a difficult process nowadays.

Khanna further emphasized the possibility of acquiring a win-win situation for emerging MNCs. When an issue from a community is resolved through CSR, it would not only build a better livelihood for the people living in that particular community, but it also builds relations with these people which reduces the likelihood of protest coming from them and aggressive regulation from governments. Other than that, I would argue that companies should, in fact, realize the value they could put in for the company and the corporate benefits that would drive shareholder values and dividends. These days, I argue that public image and activity contributes to the forecast of its future prospect, and when companies indicate that they are engaging in positive activities through CSR, it would fuel up the positivity and trust they would have with many communities.


Additional sources:

Nov 12, 2015, Global Focus. “How Emerging Multinationals Are Embracing Social Responsibility.” Knowledge@Wharton, knowledge.wharton.upenn.edu/article/why-emerging-multinationals-are-embracing-social-responsibility/.

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