Corporate Social Responsibility is Fundamental to Developing a Global Essay

Corporate Social Responsibility is Fundamental to Developing a Global Reputation - Essay Example The company can build sustainable operations by investing in corporate social responsibility. Therefore investing in corporate social responsibility is fundamental to developing a global reputation. This is demonstrated by multinational corporations such as Johnson & Johnson and Starbucks. They have invested in different programmes of corporate social responsibility and thus have been able to face the recent financial crisis more effectively than competitors. The objective of developing a global reputation cannot be attained unless the multinational corporation is able to offer products and services which promote social and environmental standards. By enforcing social and environmental standards, a multinational corporation invests in corporate social responsibility which leads to a global reputation. Introduction Globalization leads to increased international trade through the reduction of tariffs. Increased international trade creates global companies which can be defined as those companies which possess production/marketing operations in more than one country. One of the key success factors for global companies is corporate social responsibility, defined as taking into account the impacts of business operations on the society and the environment in addition to the traditional measurement of the company’s profits. This creates an operational framework in which global companies have to take local concerns into consideration. By conducting operations in a manner which takes into consideration their social and environmental impacts, a global company is able to build a good reputation globally. The objective of this paper is to explore how corporate social responsibility enables a multinational corporation to develop a global reputation. Analysis of key issues Globalization increases the volume of international trade by reducing the national barriers to trade such as tariffs and subsidies. This leads to the creation of a multinational corporation which can conduct production and marketing operations in more than one international market. An example of globalization is China’s entry into the World Trade Organization enabling western companies to set up operations in the fast growing Chinese economy. However the Chinese market is still regulated by the government and there is a considerable level of regional fragmentation in the government regulations. Therefore it is essential for foreign organizations to develop a good reputation in the Chinese market so as to create a good image in the local communities. This is one of the key success factors given the rising level of competitive rivalry as the Chinese market has been liberalized enabling foreign companies to set up their operations in the fast growing market. As a result companies need to develop programs of corporate social responsibility to develop a competitive advantage by developing a global reputation. Global companies can implement programs of corporate social respons ibility by taking into account the triple bottom line (McConnell & Brue, 2007). First the global company has to take into consideration the costs of managing people when it comes to transferring operations to a foreign market. This focus enables the management to conduct operations in a socially responsible manner so that employee satisfaction is maximized. Second, the company has to take into consideration the environmental costs of global operations. This means that the management takes into account the impact of its operations on the planet. Third, the company takes into account the traditional measurement of profits. Therefore the triple bottom line consists of people, planet and profit, also known as the three P’s. By conducting its global operations according to the triple bottom