Corporate Social Responsibility. The question of real commitment or strategic window dressing and the example of Foxconn


Seminar Paper, 2016
20 Pages, Grade: 1,0

Excerpt

Contents

List of abbreviations

List of figures

1 Introduction

2 What is Corporate Social Responsibility?
2.1 Scientific approach
2.2 Definition by the EU Comission
2.3 Corporate Social Responsibility and business

3 Applied example
3.1 Introducing Foxconn
3.1.1 Foxconn - Facts & Figures
3.1.2 Foxconn scandals
3.2 Analysis of Foxconn’s Corporate Social Responsibility activities

4 Discussion
4.1 Corporate Social Responsibility - Nothing but empty rhetoric?
4.2 Ethical reasoning
4.2.1 Deontological view
4.2.2 Consequentialistic approach
4.2.3 Virtue Ethics

5 Conclusion

List of literature

List of abbreviations

Abbildung in dieser Leseprobe nicht enthalten

List of figures

Figure 1: Carroll’s pyramid of CSR

1 Introduction

The concept of Corporate Social Responsibility (CSR) becomes more and more important, as overcoming “the increasing environmental and social problems is one of the biggest challenges of this century”.1 Over the last years the discussion about the duty of companies to assume responsibility for society is well underway. Not only in executive boards, politics or science the concept in gaining in popularity, also the media addresses the subject with increased regularity and presents responsible companies with its management approaches.2 On the other hand, hardly a day will pass without having to deal with headlines of large organizations who have crossed borders of business ethical behavior and moral acting. One example is the electronics manufacturer “Foxconn”, one of Apple’s former suppliers and a big player in its branch: 2010, the suicides of 18 young employees, as a result of the bad working conditions at the Foxconn factory plants in China, shook the employer giant and the international community.3

The illustrated dichotomy is a matter for reflection and therefore well suited for the present seminar paper. The following pages now then deal with the these main questions:

- What is the purpose of CSR and is it suitable for the intention of business?
- Do companies use CSR only as a calculated strategy to survive in this complex marketplace? If so - is this morally right?
- How much worth do the CSR promises of companies in terms of today’s times of globalization and growing competition actually have?

The first chapters will give an overview on CSR as a theoretic basis for the following pages, referring to different concepts and definitions that exist.

After that, chapter 3 deals with the applied example of Foxconn. First there will be given some facts and figures about Foxconn and the occurrences in the year 2010 in particular. In the next step the CSR activities will be shortly analyzed in order to contrast the applied CSR intention of Foxconn and the actual outcome.

This will lead to a discussion with respect to the perspectives of Deontology, Consequentialism and Virtue Ethics.

Finally a conclusion will close the circle by summarizing the most important findings and answering the defined key questions.

2 What is Corporate Social Responsibility?

To the present day there does not exist an unique and explicit definition of the term CSR, neither in literature nor in corporate practice. On the contrary, one can find many different approaches that show inconsistency among one another and mostly set dissimilar focuses.4 In science the last decades yielded such a huge number of heterogenous approaches of CSR that one can easily refer to a so called „pluralism of theories“.5 In order to get at least an imagination of what CSR could mean, it probably makes sense to collect several ideas. This will not lead to a clear definition, but it can increase the understanding for the complex term.

2.1 Scientific approach

Garriga and Melé (2004) distinguish four approaches .6

The instrumental approach sees CSR as a strategic instrument to pursue and achieve economic objecitves. According to this idea, the state provides a framework legislation, which ensures that the consequences of the company’s profit-orientated strategies don’t hurt the commun good.7 One representative of this approach ist Friedman (1970). He holds the view that the true basic task of companies is the business operation itself. In order to ensure the business operation, economic success must be achieved.8

Political theories assume that companies do not only hold a private role but also have a certain responsibility to address social issues because of their position and power. This idea refers to the concept of Corporate Citizenship.

Integrative approaches include Stakeholder Management or the Corporate Social Performance theory. They focus on the inclusion and balance of the demands of all relevant social groups - “stakeholders” - in business processes.9 This idea means, that companies should ideally develop their business strategy based on their stakeholders, not only costumers and employees, but also society.10

Ethical approaches at last refer to those theories that are based on a moral conception concerning the relationship between society and companies.11 This approach sees social responsibility of companies as an essential attitude of economics and puts the term “ethics” at the heart of economical acting.12

2.2 Definition by the EU Comission

Over the intervening years, CSR is part of the company’s every day life and therefore cannot only be considered in economic theory, even though the implementation differs between companies.13 A more practice-oriented definition of CSR comes from the EU Comission. They describe CSR as “the responsibility of enterprises for their impact on society”.14 Ways of being socially responsible are there more than just following the law. The European Comission stresses the fact, that CSR is voluntary commitment that goes beyond the feasance of legal framework conditions. Furthermore they name several factors that should be integrated into the company’s business strategy in order to become socially responsible: “socia l, environmental, ethical, consumer and human rights concerns”15. This definition shows a very holistic approach, which already reflects many aspects from theories and concepts.

2.3 Corporate Social Responsibility and business

Still these different ideas of CSR represent a complex concept and even seem to contradict: Above all society wants companies to act in a responsible way, since they have a huge impact on the evironment and on society through their business operations.16 As opposed to this, what counts for companies is their economic performance. Accordingly one can assume, that they do only undertake responsibility, if it is of importance for their success.17 This consideration shows, that choosing only one approach of CSR cannot be the solution. In reality, it requires an integrative perspective of the different criteria, in order to draw a realistic picture of nowadays, applied CSR.18

The CSR model of Carroll differs between four kinds of responsibilities that companies have to consider through their business operations. According to him, CSR includes an economic, legal, ethical and philanthropic responsibility at the same time. With that, instead of choosing one CSR definition, he provides a comprehensive approach that embraces the multidimensional nature of social responsibility of companies.19

illustration not visible in this excerpt

Figure 1: Carroll ’ s pyramid of CSR

Source: Adapted from Caroll (1991), p. 42.

The economic responsibilities are described as the foundation of CSR. This part of Carroll’s pyramid refers to the instrumental approach, defined by Garriga and Melé: Companies have the duty to generate profit.

The law thereby represents the basis for the interaction between economy and society and simultaneously reflects the norms of the society. For that reason Carroll requires compliance with laws and regulations and so the assumption of legal responsibilities by companies.

Ethical responsibilities ask for the adhering to values and principles that are seen as morally right and fair by society, but are at the same time not part of the law. This happens on a voluntary basis, however society expects companies to act so.

Voluntary activities are also the undertaking of philanthropic responsibilities, but this is an approach, which is not expected by society. The term deals with corporate citizenship concept (see chapter 2.1: “political theories”) and includes the proactive commitment by companies.20

The CSR approach of Carroll describes the basic idea of a CSR, which is not considered in isolation of a company’s economic success. The pursuit of profit of companies is justified, as social responsibility can only be assumed, if the organization exists in the long term, meaning: the generation of profit is indispensable. A strategic use of CSR by companies is therefore not morally wrong; it is on the contrary even desirable. The active inclusion of CSR into the business strategy can be seen as “business case” and can lead to economic success:

“ [...] the proper ‚ social responsibility ’ of business is to tame the dragon, that is to turn a social problem into economic opportunity and economic benefit, into productive capacity, into human competence, into well-paid jobs, and into wealth.21

3 Applied example

In the following chapters the implementation of CSR activities will be presented by the applied example of the controversial company „Foxconn Technologies“. The purpose behind this approach is to contrast CSR promises made in the annual management report and literal actions.

[...]


1 Kirchgeorg, M. (2004), p. 371.

2 Cf. Schneider, A./Schmidpeter, R. (2015), p. 1.

3 Cf. Pun, N. et al. (2016), p. 166.

4 Cf. Van Duong Dinh, H. (2011), p. 12.

5 Cf. Scherer, A. G./Patzer, M. (2011), p. 324.

6 Cf. ibid. (2011), p.324.

7 Cf. ibid. (2011), p. 324.

8 Cf. Jonker, J. et al. (2011), p. 25.

9 Cf. Scherer, A. G./Patzer, M. (2011), p. 324.

10 Cf. Jonker, J. et al. (2011), p. 37.

11 Cf. ibid., p. 324.

12 Cf. Schranz, M. (2008), p. 35.

13 Cf. Schneider, A./Schmidpeter, R. (2015), p. 46.

14 European Comission (2016).

15 Ibid.

16 Cf. Van Duong Dinh, H. (2011) p. 1. / cf. Jonker, J. et al. (2011), p. 25.

17 Cf. Van Duong Dinh, H. (2011), p. 1.

18 Cf. ibid. p. 15.

19 Cf. Caroll, A. (1991), p. 43 ff.

20 Cf. Caroll, A. (1991), p. 43 ff.

21 Drucker, P. (1984), S. 62.

Excerpt out of 20 pages

Details

Title
Corporate Social Responsibility. The question of real commitment or strategic window dressing and the example of Foxconn
College
University of Applied Sciences Essen
Grade
1,0
Author
Year
2016
Pages
20
Catalog Number
V340716
ISBN (eBook)
9783668301351
ISBN (Book)
9783668301368
File size
542 KB
Language
English
Tags
Corporate Social Responsibility, CSR, Business Ethics, Ethics, Deontology, Virtue Ethics, Consequentialism, Ethical Reasoning, Foxconn, CSER, Foxconn suicides, Factory plants, bad working conditions, China
Quote paper
Ronja Sieberg (Author), 2016, Corporate Social Responsibility. The question of real commitment or strategic window dressing and the example of Foxconn, Munich, GRIN Verlag, https://www.grin.com/document/340716

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