- Corporate social responsibility (CSR, also called corporate conscience, corporate citizenship or sustainable responsible business/ Responsible Business) is a form of corporate self-regulation integrated into a business model.
- CSR policy functions as a self-regulatory mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards and international norms.
- CSR aims to embrace responsibility for corporate actions and to encourage a positive impact on the environment and stakeholders including consumers, employees, investors, communities, and others.
- Watch this video:
- https://www.youtube.com/watch?v=Z5KZhm19EO0
There are 3 layers of CSR activity:
- (1) company works toward a specific social cause;
- (2) company follows a code of conduct and operates with greater transparency;
- (3) company builds social responsibility into its core operations to create value and build competitive advantage.
Companies pursue “green” initiatives to reduce their carbon footprint and also to reduce operating costs and boost profit margins.
Some of the ethical dilemmas that international managers face include: Bribery and Corruption which leads to the mis-allocation of resources and damages the integrity of the business relationship.
In 2002, Congress passed the Sarbanes-Oxley Act (SOX), which set more stringent accounting standards and reporting practices for U.S. public company boards and accounting firms.
It was named after sponsors U.S. Senator Paul Sarbanes (D–MD) and U.S. Representative Michael G. Oxley (R–OH). As a result,” top management must individually certify the accuracy of financial information.”
SOX increased the independence of the outside auditors who review the accuracy of corporate financial statements. SOX was enacted as a reaction to corporate scandals that affected firms like Enron, Tyco International and WorldCom which cost investors billions of dollars when the companies went bankrupt.
