In a globilized world the question aries to whether or not it makes

sense to use Corporate social responsibility within an organization and

if so what benefits can it hold for the organization and customers.

Illyria J. Brunner

Senior Project Adviser: Erin Cummins-Roper

Abstract

The increasing importance of corporate social responsibility (CSR) in the modern interconnected

world is undeniable. CSR entails the implementation of ethical principles that encompass both

financial performance and reputation. This text delves into the impact of CSR on energy,

technology, and consumer product companies within the framework of globalization. Its

objective is to examine whether these companies prioritize their practices, profitability, or the

enhancement of their image and whether the utilization of CSR is justified by the potential

benefits it may or may not yield.

12th Grade Humanities

Animas High School

16 February 2024
Part I: Introduction

We live as an ant hill steady and calm till the hot water comes to make us turn frenzy in every

direction much left behind in the aftermath, and in a way, our economy is much the same. We for

the most part have a visible structure of economic order composed and efficient enough to keep the

hill running till hot water floods it ( The depression, Stokes market crash foreign-treated calamity,

etc..) CSR entails the consistent adoption of ethical practices that encompass financial performance

and reputation. By delving into the influence of CSR on energy, technology, and consumer product

companies about globalization, we will examine the extent to which they prioritize practice, profit,

or enhancing their image and whether or not using CSR is worth the payout that it may or may not

produce.

The behavior of consumers has a significant impact on globalization, as their choices in consuming

products and goods influence the practices and image of organizations.

Consumers are increasingly aware of the environmental and social impacts of the products they

consume and hold on a larger scale whether that has to do with how companies package and

distribute their goods or what goes into the actual creation of the products themselves. Despite

being attentive, consumers remain doubtful about the intentions of big corporations. A significant

majority, of the population nearly three-quarters, believe that when these corporations donate to

charities or engage in community projects, they do so primarily to enhance their image rather than

genuinely help those in need. Consumers are not easily convinced by corporate claims of social

responsibility, “(with only 9% stating that they believe these claims "all the time," while another

67% believe them some of the time. new studies show 70% of participants want to know what

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companies are doing to address social and environmental issues). Implementing CSR practices can

improve a company's reputation, build trust and loyalty among consumers, and contribute to

sustainable development. But there's a lot to be done by companies between claiming CSR and

using CSR to engage consumers strengthen relationships and enhance brand loyalty before it can

give them a competitive advantage in the global market.

Part II: Historical Context/Background Knowledge

Imagine you live in a small town and in that town is a field of greenery that no one owns but

everybody has access to one day the farmer starts bringing his sheep to graze there, and this goes

on for a while and eventually that Greenery is now ruined forming patches of brown for from

where the sheep have started to eat away at all the grass, and now the townspeople come to him

and tell him that he there has to stop bringing his sheep there or figure out a different way to fix it

he says it is not his problem for he does not own that patch of land but he does own the sheep that

have caused the damage; this is the Tragedy of the Commons. A story that is often used to help

people understand the basics of economic ownership. In a globalized world, the farmer of our story

is the corporation, sheep the drive for profit, growth damage of the common space (working

conditions, environment, etc.) in today's economy a space used by everybody but claimed by

nobody and damaged by some.

This crash course provides a concise explanation of economics and the impact it has on the

economy. It emphasizes the importance of corporate social responsibility (CSR) in organizations

that have significant environmental effects. In particular, it highlights the issue of large carbon

footprints in emerging markets where decision-makers and factory owners are not directly

affected. However, the chain reaction caused by these impacts can have long-term consequences.

CSR aims to address these issues and reduce our negative impact on the environment. As these

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concerns gain more attention in the media, consumers become more conscious of the origins of

their goods and services and the broader implications they have.

The term "globalization" was introduced by Theodore Levitt, a professor at Harvard Business

School, in 1983. Levitt observed how companies like Coca-Cola and McDonalds had created a

sense of uniformity across regional markets. Globalization has advantages such as allowing

businesses to access resources and labor at the lowest prices worldwide. This benefits consumers

by enabling them to purchase more affordable goods. It also benefits workers and farmers in the

poorest countries, as they can sell their products on the global market.

But globalization, despite its benefits, has its drawbacks too. Opponents of globalization claim that

it results in cultural homogenization, with multinational corporations taking over the global market

and diminishing the uniqueness of local cultures. Additionally, environmental deterioration is a

pressing issue, with nations prioritizing industrial expansion and monoculture agriculture, leading

to negative impacts on the environment.

Despite globalization's advantages and disadvantages, it is a natural progression from earlier stages

of global influence and trade. The exchange of ideas and trade has existed throughout human

history. Modern globalization can be traced back to various points in the 19th and 20th centuries.

Globalization allows for increased access to resources and affordable goods, but it also leads to

cultural uniformity and environmental concerns. The concept of globalization has roots in earlier

stages of global influence and trade, and its development has been enabled by technological

advancements.

The concept of Corporate Social Responsibility (CSR) has a long history, dating back over a

century. It originated in the late 1800s when businesses began to reconsider their production

models due to the combination of increasing philanthropy and deteriorating working conditions.

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Business tycoons started donating to community causes, and some business owners reluctantly

made improvements to factory conditions and reduced working hours. These actions laid the

groundwork for the development of responsible corporations.

However, it wasn't until 1953 that the term "Corporate Social Responsibility" was coined by

American economist Howard Bowen in his book "Social Responsibilities of the Businessman."

Bowen recognized the significant power held by corporations and acknowledged that their actions

had a tangible impact on society. He argued that businessmen must pursue policies that benefit the

common good.

Since its inception, the concept of CSR has undergone significant changes. Initially, it focused on

narrow issues such as charitable giving and reducing working hours. However, over time, the

scope of CSR has expanded to encompass a broader range of issues and impact various aspects of

business decision-making. It has transformed the way businesses operate and influences every

facet of their operations.

This transformation began in the 1960s when scholars started viewing CSR as a response to the

emerging problems of modern society's rapid economic growth. Businesses began implementing

CSR practices in response to these societal challenges. However, even during this period, CSR was

still seen through a relatively narrow lens. Many scholars argued that companies were only

responsible for addressing the direct consequences of their decisions and actions, rather than larger

social problems. Therefore, while progress was made in the CSR movement during the 1960s, it

did not fully reflect the comprehensive approach seen in our current understanding of CSR until a

couple of decades later.

Simply put CSR can be broken down into three essentially things practice, profit, and image.

Corporations that partake in CSR or claim to follow these three guidelines to ethical events

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whether that is environmental such as environmental impacts and reducing carbon footprint or the

image and reputation of the organization based on where they put their resources and how they use

their profit and what advantages come from the action that follow, and from there the image they

build for themselves.

CSR and globalization are topics that become interchangeable when bringing up one or the other

and in today's world of globalized economy you cannot talk about globalization without talking

about the practices of businesses in corporations and you cannot talk about the behavior in which

corporations hold themselves and partake in without discussing how it affects people on a global

scale, globalizations involvement with CSR has both benefits and drawbacks that come from and

depend specifically on how it is used. The perfect use of CSR would both benefit the environment

and the corporation in which is being implemented, but the applications of CSR are seldom found

to thrive in both categories, this is where the consumer starts to get involved whether or not

consumers are aware of it globalization and CSR benefit and impact them daily from the roads

they drive to get to work and school to the gas they put in their cars, the clothes they wear every

day and, the food they consume all of these things at one point in their manufacturing and

distribution process were influenced either by CSR or globalization.

First, look at the interconnectedness that goes on between CSR and globalization, CSR is built off

three main principles practice profit, and image an organization that typically participates in CSR

is one that considers all three of these factors when making decisions for their company image that

is going to be produced by their actions, the produces they introduce to the globe market, the

environment in which it's goods and services are created, from the workers to the factories to the

safety codes and manufacturing standers; and finale the profit that comes from each of those arae

suspific choice. From their globalization starts to get involved the profit organizations depend on,

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also depend heavily on how they are perceived by their consumers if they appear to have a clean

environmentally, and socially friendly company by doing charitable work creating safe work

environments, or reducing the environmental impact they're more likely to be patronized by

consumers and if that is the case then the better their image looks the higher their profit goes and

then you put that into the global framework and you start to see the interconnectedness between

globalization and CSR the mass production of products within a global scale and hundreds of

markets comes from supply and demand. The positive image and organization's presentation, along

with the quality of their products, contribute to building demand. This demand is driven by the

company's profit motive, but sometimes, the actual practice is neglected. Utilizing CSR within an

organization can enhance profitability through a reputable image. However, merely claiming to

implement CSR is insufficient to reap its benefits.

Globalization facilitates the rapid and widespread movement of goods and services, making it easy

for consumers to overlook its impact. However, the influence that Corporate Social Responsibility

(CSR) holds over consumers far outweighs the influence that individual consumers have on

globalization. It becomes challenging for one person to make a significant difference, particularly

in a rapidly growing economy and in today's globalized world where products and services can

reach any location within days. The question arises as to when the individual becomes significant

in the context of the collective and at what point the balance shifts, giving consumers the power to

shape organizations rather than organizations having power over consumers

Part III: Research and Analysis

Argument I: The Intersection.

The intersection of CSR and globalization plays a significant role in determining the impact

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on the economy. CSR affects you daily as a consumer whether or not you are aware of it, from the

roads you drive to get to work and school to the gas you pump into your car to the clothes you

wear and the food you consume all of these things were influenced by CSR and globalization.

When examining this intersection, “In fact, steady consumer spending in 2023 contributed to

surprisingly strong 2.5% economic growth that’s generally credited for staving off a recession”

This link between consumer behavior and corporate organizations' economic action, gives us a

starting point to begin delving deeper into the specific aspects of CSR and globalization, we can

gain a better understanding of their determined impact and subsequently cross-examine it

concerning the consumer and the economy.

The perception of Corporate Social Responsibility (CSR) and its impact on consumer buying

behavior in the process of globalization have been subjects of study. Nadanyiova (2021) highlights

the importance of understanding how CSR is perceived by consumers and its influence on their

purchasing decisions. In a globalized world, where consumers have access to a wide range of

products and services, their choices are increasingly influenced by ethical considerations.

Companies that engage in CSR activities, such as promoting sustainability, supporting social

causes, or ensuring fair labor practices, are more likely to attract socially conscious consumers.

This alignment between consumer values and CSR initiatives can have a positive impact on the

economy by driving demand for socially responsible products and services.

Furthermore, Menichini and Rosati (2014) emphasize the strategic impact of CSR on

consumer-company alignment. They argue that when companies align their CSR initiatives with

consumer values, it leads to increased consumer trust, loyalty, and positive brand perception. This

alignment can result in higher sales and market share for companies, contributing to economic

growth. Conversely, companies that neglect CSR or engage in unethical practices may face

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consumer backlash, damaging their reputation and financial performance. Therefore, the

intersection of CSR and globalization is crucial in shaping consumer behavior and, consequently,

the economy.

The intersection of CSR and globalization has a significant impact on consumers and the economy.

Understanding the direct links between consumers and the economy, influenced by the behavior of

organizations, is essential. By examining the specific aspects of CSR and globalization, such as

consumer perception and alignment with company values, we can gain insights into their

determined impact. This understanding allows us to cross-examine the relationship between

globalization, and CSR, and their effects on the consumer and the economy.

The effects that CSR can have on individuals, which in turn helps us comprehend its impact on

globalization. This implies that by studying how CSR affects individuals, we can gain insights into

its broader implications on a global scale. For instance, when companies engage in CSR activities

that positively impact individuals, such as supporting education or environmental conservation, it

can foster a sense of goodwill and trust towards the company. This positive perception can then

extend to the company's global image, as individuals share their experiences and opinions with

others, potentially influencing their attitudes towards globalization.

The main argument highlights the significance of CSR in the context of globalization. It suggests

that the impact of globalization can be either amplified or minimized depending on how effectively

CSR is implemented within corporations. To assess the alignment between a company's CSR

initiatives and consumer perceptions, a three-dimensional account of commitment can be utilized.

This account comprises the company's disclosed commitment (DC), consumers' perceived

commitment (PC), and the required commitment (RC) expected by stakeholders. By comparing

these dimensions, it becomes possible to identify areas of alignment and misalignment between the

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company and its consumers. This concept of commitment aligns with the earlier notion of practice

profit and image, but from a more corporate standpoint.

To evaluate these commitment variables, various methods can be employed. Firstly, the company's

Sustainability Report can be analyzed to determine the level of disclosed commitment. This report

provides insights into the company's CSR initiatives and their impact on economic, environmental,

and social factors. Secondly, stakeholder surveys can be conducted to gauge the required

commitment expected by stakeholders. These surveys help identify the expectations and demands

of stakeholders, which can influence the company's CSR strategies. Lastly, additional stakeholder

surveys can be conducted to measure consumers' perceived commitment. This involves assessing

how consumers perceive the company's CSR efforts and whether they align with their

expectations. By employing these evaluation methods, companies can gain a comprehensive

understanding of their CSR performance and make informed decisions to enhance their alignment

with consumer perceptions and expectations.

Argument II: Strategy & Dynamic’s.

The theory of international strategy and its relationship with globalization highlights four

main strategic approaches employed by multinational companies. These approaches are developed

in response to the dynamic interplay between the pressures for integration and the pressures for

responsiveness. The first approach, known as the international strategy, primarily relies on

exporting and does not consider the unique conditions prevailing in different countries. This

approach is similar to what we observe in emerging markets, but the consequences differ

significantly. In the international strategy, there is a lack of adaptation to local conditions, and the

subsidiaries are not integrated into the overall operations of the company.

In contrast, the multinational strategy allows for adaptation to local markets. Subsidiaries are

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granted autonomy, and products and services are tailored to meet the specific demands of local

consumers. Decision-making authority is decentralized, and crucial functions are also established

in the respective local countries. This approach recognizes the significance of customizing

strategies to suit the particular contexts of different regions.

On the other hand, the global strategy emphasizes achieving cost advantages through economies of

scale. Key assets, resources, and responsibilities are centralized at the headquarters, and

standardized products and services are offered on a global scale. This approach aims to leverage

the benefits of a centralized structure and uniformity across markets. For instance, a resource

provided by the company in America would be identical to the one provided in Bulgaria. In

contrast, the multinational strategy allows for variations within a product to better align with the

demand and requirements of the specific country it is locally based.

Lastly, the transnational strategy recognizes the need to simultaneously address local differences

and capitalize on global economies of scale. Responsibilities, resources, and capabilities are

distributed worldwide, with certain locations serving as hubs. This approach strikes a balance

between adapting to local contexts and harnessing the advantages of global-scale operations.

IV: Case Studies

Organization: AT&T/Tech

AT&T has solidified itself as a leading member of the global electronics industry, by establishing

itself as a major player in technology; but what did AT&T do to get there?

In 1877, after Alexander Graham Bell's groundbreaking invention of the telephone, Bell

established Bells Telephone Co., and subsequently, in 1885, American Bell incorporated the

American Telephone and Telegraph Co., which later adopted the name "AT&T." This subsidiary

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played a pivotal role in the expansion of the telephone network, starting with its initial

implementation in New York. This is just a glimpse at AT&T's history, but it is enough to start

painting a pitch of how long they’ve been around and where they got their start. AT&T has

consistently been at the forefront of technological advancements, shaping the ever-evolving

telecommunications.

But being at the forefront of your field makes it hard to take advantage of your power without

inevitably getting caught and that's exactly what they did. AT&T was first busted for adding failure

charges related to their “unlimited data plan” for self-profit by the Federal Trade Commission

(FTC) in 2014, although the FTC claims this began in 2011.”The FTC alleged that, despite

AT&T’s unequivocal promises of unlimited data, it began throttling data speeds in 2011 for its

unlimited data plan customers after they used as little as 2 gigabytes of data in a billing period.

AT&T’s alleged practices affected more than 3.5 million customers as of October 2014, according

to the FTC complaint (FTC. gov/Nov. 5 2019) and if you go a little deeper it wasn’t just their

failed “unlimited data” but a wide myriad of charges also known as mobile cramming, where

unauthorized charges were added to customers' bills without their consent. These charges included

subscriptions for various services such as ringtones and text messages containing horoscopes and

love tips. The FTC accused AT&T of retaining approximately 35 percent of these charges, which

had significant repercussions for affected consumers. As it was estimated that this started around

2011 the FTC had AT&T as part of their settlement pay up to $60 million deposited into current

and former customers (before 2011 ) as well customers were not required to submit any kind of

claims to receive their refunds former customers were issued checks wall current one received

credit to their bills.

The initial action taken to restore their customers' trust and reputation was just the beginning, as

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AT&T was deleing with the restoration of their image and settlement distribution one of the

questions felt for them was how to stop this from happening again and what way they could go

about it that would also restore their image, AT&T has consistently relied on CSR as their PR

savior sense 2014, and this remains true even after several years since the public fallout. CSR has

consistently played a pivotal role in their public relations strategy. By actively addressing their

clients' needs and ensuring that their solutions align with CSR objectives, AT&T showcases a

proactive approach that underscores their dedication to CSR principles. This approach not only

fosters trust but also nurtures enduring partnerships based on shared values and mutual trust. it

allowed them to fill in the gaps that were previously present in the organization.

Organization: Patagonia/Consumer Goods

Patagonia's engagement in CSR did not happen overnight. It was a deliberate and conscious

decision that stemmed from a desire to make a positive impact on the environment and society.

The organization recognized the need to change its practices and began to engage in CSR by

implementing various initiatives. These initiatives were prompted by a growing awareness of the

environmental challenges faced by the planet and a recognition of the role businesses can play in

addressing these issues.

The benefits of Patagonia's adoption of CSR are twofold. Firstly, it aligns with the organization's

values and mission, allowing it to operate in a manner that is consistent with its commitment to

environmental sustainability and social responsibility. This enhances their brand reputation and

strengthens their relationship with environmentally conscious consumers who value ethical

business practices. Secondly, CSR initiatives can also yield tangible benefits for the organization,

such as cost savings through energy efficiency measures or improved employee morale and

productivity. By investing in CSR, Patagonia not only benefits themselves but also their customers.

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Upon analyzing Patagonia's involvement in corporate social responsibility (CSR), it is evident that

the company has wholeheartedly embraced this ideology and integrated it into its operational

framework. Yvon Chouinard, the founder of Patagonia, has offered invaluable perspectives on the

organization's principles and driving forces, underscoring the significance of environmental

sustainability and social accountability. This dedication is further demonstrated through the

company's sustainability endeavors, including its active measures to diminish carbon emissions

and incorporate recycled materials.

Organization: Saudi Aramco/Energy

Saudi Aramco Energy is one of the world's largest leading conglomerates in gas and oil. Aramco

Gas has no notable history of using CSR. In their business endeavors up to 2019, under the

guidance of CEO Amin bin Hasan Al-Nasser, Aramco reported sales of $329.8 billion in 2020

according to Forbes. In 2019, a small portion of Aramco, constituting 1.5%, was listed on the

Saudi Arabian stock exchange, generating $25.6 billion and valuing the company at around $1.7

trillion - positioning it as the largest company globally. Aramco, the Saudi Arabian state-owned oil

and gas company, is recognized as the largest corporate emitter of greenhouse gasses on a global

scale. “Since 1965, it has been estimated that Aramco is responsible for more than 4% of the total

worldwide greenhouse gas emissions. The Saudi Arabian government, which holds a 98.5% stake

in Aramco, has a well-documented track record of opposing efforts aimed at combating climate

change”(ClientEarth).

In 2019, it forecasts that Saudi Aramco planned to produce and sell carbon dioxide (Carbon

dioxide is a chemical substance characterized by the chemical formula CO₂. It consists of

molecules in which a single carbon atom is covalently double bonded to two oxygen atoms.) which

would be equivalent to 27 billion tonnes between 2018 and 2030. This amount represents a

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significant share, accounting for 4.7% of the global total "carbon budget" that the IPCC had

estimated the world had left in 2018 to have a 50% chance of meeting the 1.5°C target outlined in

the Paris Agreement. The IPCC also highlighted that achieving a 66% chance of success would

require reducing the global carbon budget by nearly 30%.

Furthermore, a comprehensive analysis reveals the presence of ethical dilemmas within Saudi

Arabia, particularly concerning the activities of Saudi Aramco/Energy. These ethical challenges

have been extensively scrutinized in a research investigation carried out by Woodman et al. (2022),

which conducts a systematic review and bibliometric analysis of ethical issues in Saudi Arabia

spanning the period from 2010 to 2021. The outcomes of this study emphasize the existence of

notable ethical concerns that demand attention and resolution within the organizational framework.

Furthermore, addressing the ethical challenges reported in Saudi Arabia is of utmost importance

for the organization's reputation and long-term sustainability. The evidence presented by

Clientearth.org (2024) in their complaint regarding Saudi Aramco underscores the need for

enhanced ethical practices within the organization. This evidence can serve as a valuable resource

in informing the proposed solutions and changes, guaranteeing that ethical considerations are taken

into account and integrated into the decision-making process

Part V : Conclusion

Wall there's still important in international strategy Emerging Markets none other

non-government-owned organizations and so much more within the economic Global world the

tangible representation of corporate social responsibility helps consumers and organizations Better

understand the expectations of both sides and by utilizing strategic approaches through CSR

initiatives multinational corporations can navigate the complexities of our ever-growing globalized

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landscape, and if we as a society can start moving in the direction of sustainability positivity then

the continued use and talk of CSR with an organizations will help corporations evolve and adapt a

within the environments they are formed both Environmental Financial and physical leaving them

prepared to meet the demands found in the global market through responsive customer economic

relations.

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