Notesale: Turn your study into money

Document Preview

Extracts from the notes are below, to see the PDF you'll receive please use the links above

---

Corporate Social Responsibility in China
– A Competitive Advantage or a Waste of Time?
Word count: 1981

Corporate social responsibility has been a debated subject for several years
...
Some
academics, such as Barber (1996, cited in Moon, 2001: 35,) and Friedman (1970, cited in
Moon, 2001: 35) argue that businesses are not people, hence their only responsibility
should be towards their shareholders
...
, 2003: 480)
...
People are more and more eco-friendly and knowledgeable about
human rights issues
...
This could cause global pressure towards them
...
First, it will be established that China and
Chinese companies should be treated like any other country or company when it comes to
corporate social responsibility
...
The arguments will also be linked to contemporary examples from the Chinese
economy
...
According to the
World Bank (2014), China recently became the world’s second largest economy and is also
playing an important role in the global economy
...
This makes it questionable if China should be
treated like any other country, or whether it should be given ‘special treatment’ when it
comes to corporate social responsibility
...
First of all, evidence suggests that the current situation
in China is largely caused by unwillingness of local firms to invest in ‘ethical’ business
...
Furthermore,
it could be argued that China is rather being supported by the global economy than being
pressured by it
...
In the recent years, however, there have seen several cases where big
corporations have been caught using unethical labour in developing countries, and the
ethical problems in business have become more known issues
...
This common knowledge and pressure from
customers has influenced companies to carefully consider their practices when it comes to
offshore outsourcing as well as local manufacturing
...

Therefore it could be argued that foreign investors and other companies are not creating a
pressure towards China when it comes to economic growth, at least if it needs to happen at
the cost of corporate social responsibility
...

On the other hand, some people argue that social responsibility does not apply to
the business world – no matter whether it is the American or the Chinese economy that we
are talking about
...
Benjamin Barber (1996, cited in
Moon, 2001: 35) argues that businesses are incapable of being socially engaged, as the only
job of businesses is to make a profit for their shareholders
...
Friedman (2007: 173) continues with the argument that businesses are not
people, and it is only people that should have responsibilities in the first place
...


The stakeholder theory directly contradicts with the previous arguments
...
These include anything and anyone who is influenced by
the company or has an impact on the company themselves
...
,
2003: 481)
...
However, it
should be noted that this does not mean that all of the stakeholders should be treated
equally; rather, all of them should be taken into account and dealt with based on how big of
a part they play in the company’s activities (Phillips et al
...
So, in the case of
Chinese firms the stakeholders would be all over the world, as China plays a major part in
the globalised economy
...

The benefits of corporate social responsibility are vast
...
This directly enhances the
shareholder value
...
However, it was found out that there is a U-shaped
relationship between debt financing costs and corporate social responsibility (Ye and Zhang,
2011: 204)
...
Ye and Zhang do not provide an explanation for this in their case study but it
could be explained quite simply
...
This is because either the employees would be
neglected, hence making them unproductive workforce, or they would be getting more
money than they actually need in order to be ‘effective’ employees
...


Likewise, as China can and should be treated as any other country when it comes to
corporate social responsibility, all of the other general benefits of being ‘ethical’ should
apply to its economy, as well
...
These real options are specific to the firm rather than
the market forces
...
Exercising these options result in both direct and indirect
benefits, such as innovation and good reputation
...
By
contributing to regional economic development in their area the whole business benefited
by gaining new customers and widening the company’s prospects (Kanter, 1999, cited in
Husted, 2005: 178)
...
This would also make China a more attractive market for foreign
goods, as well
...
Porter and Kramer (2006: 78) write about the
problems of the current approach towards corporate social responsibility
...
Porter and Kramer (2006: 82) argue that this should not be the
case
...
There can be a productive workforce only if the society is provided with education,
health care, and equal opportunities
...
Efficiency and innovation are only
possible if supported by the government and legislation
...
Companies are the ones that provide the society with
employment, development, and a basis for innovation
...
By identifying the points of

intersection, both sides will benefit in the long run
...
When these arguments are
applied to China, it is clear that corporate social responsibility should always be thought of
...
By thinking only about what the businesses alone are gaining, and by not
integrating corporate social responsibility into their business strategy, the businesses are
only making temporary gains at the cost of the society
...

To conclude, it should be clear that China should pursue economic growth in a more
ethical manner
...
However, a significant reason for this might be, in fact, related
to the lack of corporate social responsibility
...
If not for moral or ethical
causes, corporate social responsibility provides businesses with a competitive advantage
...
Corporate social responsibility, when successful, is a
source of innovation and development, as well as of money and reputation
...
It would also make people more open
towards local Chinese products, and even increase the amount of workers and people in
general moving to China
...
(2007)
...
In
Zimmerli, W
...
, Richter, K
...
(eds
...
Berlin: Springer
...
173-178
...
W
...
Risk Management, Real Options, and Corporate Social Responsibility
...
60(2): pp
...

Khare, V
...
China and India: The scramble for business in Africa
...

Available at: http://www
...
co
...
[Accessed: 18/3/2015]
Moon, J
...
Business Social Responsibility
...
1(3): pp
...

Needle, David
...
Business Ethics and Corporate Social Responsibility
...
)
Business in Context: An introduction to business and its environment
...
Pp
...

Nisen, M
...
How Nike Solved Its Sweatshop Problem
...
Available at:
http://www
...
com/how-nike-solved-its-sweatshop-problem-2013-5?IR=T
...
, Freeman, E
...
(2003)
...
Business
Ethics Quarterly
...
479-502
...
E
...
R
...
The link between competitive advantage and
corporate social responsibility
...
84(12): pp
...

The World Bank
...
China Overview
...
worldbank
...
[Accessed: 13/3/2015]
Ye, K
...
(2011)
...
Journal of Business Ethics
...
197-206

---