We can, categorically, qualify all points of social responsibility as either human, economic, legal, or environmental. The human category of social responsibility would contain all issues related to individual persons and groups of people. These might be health, safety, unions, personal freedom and liberties, and human rights. Legal concerns relate to either conflicting international laws, regulations, or the political landscape. The economic category would contain issues related to currencies, monetary policy, investment, and wages. The environmental category would relate to the natural condition of the host nation and encompass environmental conservation, pollution, and the distribution and use of natural resources.
There are two fundamental problems that create the need for the human category of corporate social responsibility. First, all nations agree that there are some rights that people have. Second, there is no total consensus on what those rights are. This results in disputes over a reasonable minimum working age, a maximum number of hours of labor to be performed on a weekly basis, and minimum acceptable safety conditions at the place of employment. There are also questions about reasonable break lengths, frequency of bathroom use, and time to be dedicated to eating during the work day. There are also issues of racial and gender-based discrimination. For the multinational corporation (MNC), the matter of moving a contract overseas is no small one. While there are international guidelines on which policies should be adopted in these matters, the final responsibility for the ethical treatment of employees falls on the MNC.
There are several problems that give rise to the economic concerns of social responsibility. First, many MNCs have capital that far exceeds the total worth of less developed nations. Second, many less developed nations are unable to develop the level of economic and monetary policy to handle the influx of activity that a MNC represents. Finally, a less developed nation can be economically destroyed by the presence of a MNC if the business does not regulate their financial activities on an internal basis. Economic issues relate to the purchase of raw materials, investment in host nation financial products, capital markets, and taxation.
Legal concerns are more widely varied. A MNC is bound by international, local, and host nation law. They are expected to maintain lawfulness at all times. The issue of governmental corruption is also significant. A MNC must resolve disputes within the legal framework of its host nation. They must also avoid interference with the political machinery. The legal and political influence of a MNC can range from beneficial to warlike. Consider, a MNC that moves into a less developed nation and overwhelms the government with its economic power is less a corporation and more a conquering army.
Environmental concerns arise from several problems. First, less developed nations may not be able to properly value their national resources. Second, MNCs trade across markets and, as such, can engage in the arbitrage of cross-market price differences of environmental resources. Third, the value and dangers of certain environmental actions (i.e. waste disposal, pollution, water usage, etc.) are not fully known at this point in time. This creates further issues for the MNC. there is concern for how much, and what kind of, information the MNC should give to host nation governments on the potential dangers of their activities. Additionally, there is the danger on the MNC acting in a cut-and-run manner, destroying the natural resources of a less developed nation and running home with the profits. These are all significant problems that require solutions. The MNC must work with international regulatory agencies and host nations to produce a methodology that benefits both stakeholders and the host nation.
Rayn Hyden currently writes literary analysis articles on the subjects of Machiavelli and Don Quixote. While frequently mistaken for a well-known Berkley rhetor, Rayn lives in sunny Palm Beach and has never traveled to California.
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