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Csr in multinationals

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Csr in multinationals

  1. 1. Name: Unsa Soomro Roll no: 20S-MSHRM-BS-01 Topic: Corporate social Responsibility in Multinationals Assigned by: Respected Sir DR Adnan Pitafi
  2. 2. Table of contents What is MNC’s? Definition of CSR AND Its emergence Merits and demerits of CSR for MNC’s Global CR RepTrak 100 global survey Real life best CSR practices by Multinationals Real life Example of bad CSR practices by Multinationals Corporate social responsibility strategy and economic business value of multinational companies in emerging economies: The mediating role of corporate reputation Example of CSR in advertisement: Article: Corporate Sustainability Reputation Matters Most During Crises Greenwashing by Multinationals
  3. 3. What Is a Multinational Corporation (MNC)? • A multinational corporation (MNC) has facilities and other assets in at least one country other than its home country. A multinational company generally has offices and/or factories in different countries and a centralized head office where they coordinate global management. These companies, also known as international, stateless, or transnational .corporate organizations tend to have budgets that exceed those of many small countries.
  4. 4. What is CSR? CSR stands for Corporate Social Responsibility and is a business’s approach to sustainable development by delivering economic, social and environmental benefits. In essence, CSR looks beyond the company profits and focuses on benefiting the greater community. •What is involved? • A recent Deloitte survey found that 70 percent of millennials acknowledged that a company’s commitment to social responsibility influenced their choice to work there. With millennials soon to be the largest generational segment of the workforce, companies looking to hire these workers will need to embrace CSR in order to attract and retain talent. Millennials don’t just want to consume products and services made by companies that have a CSR presence; they want to take part in making these social and environmental changes also. A recent report from Reputation Institute, as published in Forbes magazine, found that 42% of how people feel about a company is based on their perception of its CSR activities
  5. 5. Emergence of CSR • CSR first came into existence in the year 1930. It was after the Great Depression in 1929, when two professors of Harvard University, Prof. A.A. Berle, and Prof. C.G. Means realized that corporations must come forward and take the responsibility. They also claimed that such a condition would not have taken place if the corporations had acted responsibly. • Although responsible companies had already existed for more than a century before, the term Corporate Social Responsibility was officially coined in 1953 by American economist Howard Bowen in his publication Social Responsibilities of the Businessman. As such, Bowen is often referred to as the father of CSR
  6. 6. CSR has changed in the last 20 years for multinationals CSR was a CSR is an Moral issue Strategic/profit “We want to do the right issue thing; we want to spend in the community” “Ignoring CSR potentially damages shareholders. embracing it creates value” 2000 2020
  7. 7. Advantages of CSR for MNC’s The potential benefits of CSR to companies include: • • better brand recognition • • positive business reputation • • increased sales and customer loyalty • • operational costs savings • • better financial performance • • greater ability to attract talent and retain staff • • organizational growth • • easier access to capital
  8. 8. Demerits of Corporate Social Responsibility for MNC’S 1. Deviation from the Profit-Making Objective: A popular economist named Milton Friedman is the biggest criticizer of CSR. a company is intentionally increasing its expenditure which has no payback or role in profit-making rather it is a pure outflow with no return. 2. Company Reputation is at stake: If a company has to comply with the CSR policies, then it is supposed to inform all the limitations associated with its own products. If there is any CSR policy violation in their product then it has to be made public. It can cause bizarre to the image of the company.
  9. 9. 3. Customer Conviction: At the start, people had good impression about these CSR programs. They also tend to be more inclined towards companies that have CSR programs. But as the time passes people become more impatient and start to expect instant results out of such programs. When they could not notice instant results or instant impact on the society then they start to feel CSR programs as mere publicity stunts. 4. Increase in Cost of Production: CSR programs lead to an extra cost to the company. The increment in cost forces the company to increase the basic price of the product, which is ultimately paid by the customer. This is an extra burden on the company, which is being imposed to customers.
  10. 10. Global CR RepTrak 100 is a global survey that rates multinational companies while accounting for their corporate social responsibility (CSR) reputation. During January and February 2019, the study collected the opinion of 230,000 people from the general public across the 15 biggest economies. What are the companies with the best CSR reputation? • 1. Rolex • 2. Lego • 3. Disney • 4. Adidas Group • 5. Microsoft • 6. Sony • 7. Cannon • 8. Michelin • 9. Netflix • 10. Bosch
  11. 11. Examples of multinationals with best CSR practices: • It’s simple; If a company doesn’t continue to offer high-quality products and services, customers will stop buying. If businesses don’t treat their workers well, they’ll leave. And if a company pollutes the environment, its public reputation will suffer. • Conversely, if a company is socially responsible, they improve their reputation, attract the best talent, build customer loyalty, and turn a healthy profit.
  12. 12. 1. ORIX Corporation USA: •Philanthropy in the Hands of Employees • ORIX Corporation USA has broken the mold on corporate giving. Eschewing marketing platforms and top-down decision making, the organization created an entirely employee-led foundation. Since 2009, employees from every rank and division of the company have served on the board of ORIX Foundation, a separate nonprofit entity that has invested more than $16 million and thousands of volunteers hours into community organizations that employees personally care about. Now ORIX is looking to expand this democratic approach by sharing it with other businesses. This year, they are launching CARE, a collaborative effort of corporations seeking to engage employees and address critical community issues like children’s literacy.
  13. 13. 2. Once is never enough----Google • According to the journal Nature, data centers are estimated to use 200 terawatt hours each year, which represents approximately 1 percent of global electricity consumption. • Google has one of the largest data center networks on the planet, and they recognize the responsibility that comes with it. Here’s what they’ve implemented to combat this issue: • 1. Designed servers from the ground up to last longer. • 2. Recycle components from old servers into new ones. • 3. Sell old servers on the secondary market. • As a result of these initiatives, Google has increased the number of remanufactured units and sold over 2 million machines each year to secondary markets. • Key takeaway: Set specific targets to measure your progress towards a circular economy within your organization.
  14. 14. 3. LEGO: Developing Young Minds Through Play • LEGO’s CSR initiatives work toward LEGO’s mission of building a better world for children. Because they recognize that playing is not only fun but a vital tool for learning, LEGO has trained thousands of their employees to become “Play Agents.” LEGO Play Agents help children engage in the kind of healthy play that encourages learning and growth. • Furthermore, Most notably, LEGO has made promises to reduce its negative environmental impact, even to completely eradicate it. In 2018 LEGO launched plant-based polyethylene bricks to soon replace their standard plastic bricks. These bricks are sustainable and can considerably reduce non- environmentally friendly waste. LEGO also has tackled the inevitable waste problem by going above and beyond and planning to have absolutely no waste by 2025.
  15. 15. Multinationals with Bad CSR: 1. Fake Rides – Uber In 2014, Uber was accused of hiring employees to order and cancel 5,560 rides from ride-sharing competitor Lyft Key takeaway: Seek ways to learn from competitors instead of trying to bring them down.
  16. 16. Multinationals with Bad CSR: 2. Account Fraud – Wells Fargo In 2016, The Consumer Financial Protection Bureau found that employees of Wells Fargo opened up 3.5 million unauthorized customer accounts. The bank was slapped with a $2 billion fine, had to fire over 5,000 employees, and CEO John Stumpf was forced to retire. Key takeaway: Avoid coercive tactics to motivate employees and inspire them to do their best work instead. Focus on ethical sales practices like customer relationship management, cold emailing and networking
  17. 17. Corporate social responsibility strategy and economic business value of multinational companies in emerging economies: The mediating role of corporate reputation • Abstract • Corporate social responsibility (CSR) and business value of multinational corporations are significantly tied to corporate reputation. In this work, we investigated the mediating influence of corporate reputation of multinational companies (MNCs) on their CSR strategy and economic business value. The study adapted a quantitative methodology with a sample of respondents from multinational corporations in Ghana—an emerging economy. Drawing from 267 employees of MNCs in Ghana, a structural equation modelling and bootstrapping analysis are used to assess the hypothesized relationship. The results showed that CSR strategy positively and significantly predicts economic business value and corporate reputation of MNCs. Findings also showed that corporate reputation mediates the relationship between CSR strategy and economic business value of MNCs operating in emerging economies. This study suggests that good corporate reputation significantly influences MNCs' strategy in corporate responsibility and economic business value. Thus, management of MNCs can enhance their corporate business objectives through sustainability practices.
  18. 18. Article: Corporate Sustainability Reputation Matters Most During Crises Nareuporn Piyasinchai April 22, 2021
  19. 19. Example of CSR in advertisement: GE’s “Balance the Equation” takes on women’s underrepresentation in STEM
  20. 20. What Is Greenwashing? • Greenwashing is the process of conveying a false impression or providing misleading information about how a company's products are more environmentally sound. Greenwashing is considered an unsubstantiated claim to deceive consumers into believing that a company's products are environmentally friendly.
  21. 21. Brands called out for greenwashing in 2020 Using kids to sell natural gas • In a video campaign by Singapore’s Energy Market Authority to tell the city- state’s energy story, one episode used children to talk about Singapore’s main source of power: natural gas. “We need electricity to power many things. • Industry watchers such as Assaad Razzouk, the chief executive of renewables firm Sindicatum, were not impressed. “Seriously, Energy Market Authority? Using kids to greenwash natural gas? Natural gas is just as dirty as coal. Whoever named it Natural Gas instead of “Highly Explosive Climate-Change-Accelerating Fossil Fuel” wins top branding award,” he said

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