Term Paper (Advanced seminar), 2010, 30 Pages
Term Paper (Advanced seminar)
“Did you ever expect a corporation to have a conscience, when it has no soul to be damned and no body to be kicked? And by god, it ought to have both!” 1 Nowadays the power and impact of big organizations has reached a new peak. Cor-porations are among the world’s most powerful and dominant institutions. In some cases they are even surpassing the revenue-producing ability of small governments. 2 In contrast to this economic success, globally acting companies are often accused of social and ecological misbehavior. Activists often criticize the growing gap between developing and developed nations as well as between poor and rich. International production processes in different countries with different rules and regulations can easily lead to cut backs, concerning working conditions or environment protection and sustainability. Scandals like the Nike or Adidas case in the late 1990s have shown the extant to with some organizations are willing to reduce working conditions to a minimum for the goal of a cheap production. Referring to the stated quotation above, there really seems to be a lack of conscience, regarding some globally acting corporations. These critiques imply that corporations often act with solely economic interests and often fail to see the impact of their practices and strategies on nature, employees, society and stakeholders. 3 Nevertheless, revealed affairs like the Nike-case have increased the awareness of customers, governmental organizations, trade unions and other stakeholders. For this reason during the past decades, the construct of Corporate Social Responsibility (CSR) has gained growing attention, in both political and academic ways. Businesses and large corporations are increasingly
1 First Baron Thurlow (1731-1806), Lord Chancellor of England, c.f.: Banerjee, S.B., CSR, the Good,
the Bad and the Ugly, 2007, p. 15.
2 Anderson, S./Cavanagh, J. (2000), The rise of corporate global power, retrieved July 19, 2010 from
CorpWatch website, http://www.corpwatch.org/article.php?id=377 (accessed: 20-06-010).
3 Waddock, S., Building a new institutional infrastructure for corporate responsibility, academy of
Management Perspectives, 2008, p. 88.
showing signs of becoming aware of human rights and business ethics as well as being environmentally, economically and socially responsible and active. 4 While the image of socially contributing companies, acting beyond their legal duties and obligations, has a longer and more intensive history in the Anglo-Saxon countries and particularly in the United States, the concept is less implemented in central Europe. 5 This is often explained by the fact that in these states many environmental and social responsibilities of companies are defined by laws, which are optional in Anglo-Saxon countries. These cross-national differences shall be outlined and critically analyzed within this paper, by comparing the CSR practices of Germany and the USA. Furthermore the question shall be answered to which extend the institutional background of corporations can shape their behavior and finally lead to a high or weak adoption of corporate social practices.
For the purpose of this paper the following framework shall guide the reader through the complex topic of CSR and its cross-national differences. The first part is principally concerned with providing a theoretical understanding by creating a working definition and setting up the emerging infrastructure around CSR. For a better understanding, which influence institutions might have and why there are differences among the extent of applied CSR, the Neo-Institutionalism is going to be discussed and used as a theoretical framework.
In the main part of this paper, cross national differences among the adoption of CSR practices are going to be outlined. For this purpose a comparison of USA and Germany shall be provided, including two corporations that are heaving their headquarters in one of the stated countries. In the case of the United States the Ford Motor Company is going to be analyzed and for the case of Germany the Volkswagen AG.
4 Kanji, G.K./Chopra, P.K., Corporate social responsibility in a global economy, Total Quality Man-
agement, 21(2), p. 119.
5 Barth, R./Wolff, F., CSR in Europe, 2009, p. 3.
Three specific aspects of Corporate Social Responsibility shall be regarded and compared in particular: 1. Employee Rights 2. Environmental Policies 3. Volunteerism
The last part of this paper is going to sum up the similarities and differences in regard to the provided theoretical framework and definition.
Before proceeding, it is important to outline what is generally understood by the term Corporate Social Responsibility across nations. Certainly, there seems to be plenty of cross-national evidence that CSR varies massively concerning its understanding and underlying meanings. 6 Debates have existed concerning its implications and key elements, ever since the introduction and first usage of the term during the 1950s in the United States of America. 78 CSR is said to be a quite complex phenomena with open rules of application and a dynamic structure. And even though there is a vast and growing number of an academic literature concerning this topic, there is no overall accepted definition. For this reason describing or even defining CSR as a whole is not easy. Some often cited definitions are:
“A concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders on a voluntary basis.” (European Commission 2005)
6 Matten, D./Moon, J., Implicit and Explicit CSR: A conceptual framework for a comparative under-
standing of corporate social responsibility, Academy of management Review, 2008. 7 Bowen, H.,Social Rresponsibilities of the Businessman, 1.ed. New York, 1953. 8 Davis, K., The case for and against Business Assumption of Social Responsibilities, Academy of
Management Journal, 1973.
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