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International Business: Corporate Social Responsibility

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Question:

Discuss about the International Business for Corporate Social Responsibility.

 

Answer:

Introduction:

Corporate Social Responsibility activities of a company may vary from country to country because CSR activity depends on the social and culture values of each country. In the viewpoint of de Mooij, (2013), Canadian culture has a considerable influence in the lives of people. According to de Mooij, (2013) Canadian culture has a global impact, and CSR activities have a capability of reaching worldwide. It is for the same reason that major organizations often undertake the perspective of the Canadian culture as a part of CSR activity. My report evaluates the news story of Dsquared2 and understands the approach that has been taken by the fashion company to carry out their business activity regarding CSR activity. To support the claim, a detailed review of the literature shall be discussed as well.

Summary of the Article:

The news article describes how the indigenous culture has been misused for presenting the outfit of the indigenous people by using the theme of the indigenous group of people (Forsyth, 2016). The article Dean and Dan Caten, the co-founder of Dsquared2, responsible for designing the Team Canada’s outfit for the Olympics in Rio, 2016 issued an open apology letter to the indigenous people of Canada (Forsyth, 2016). They show their regret for mistakenly using a derogatory name for their fall/winter fashion collection as they showed their concern in the news. They used the tag name Dsquaw for their fashion line and found it inappropriate to use the word. However, the fashion designers also confirmed that their intentions were in good faith and they wanted to respect the strength and beauty of the indigenous people of Canada.

A sense of racism appeared in this doing. They realized that profiting from the root of inequality is main stream and that it should not be the goals for any commercial objectives.  The term ‘squaw’ has been used to indicate child rearing practices and sexuality and the murder of the Indigenous women and their labor. Thus, representing any kind of such exploited for the purpose of marketing their product is somehow a degrading for of identity for a particular brand. However, the apology has been criticized and has been termed as a means of CSR activity of this fashion brand.

 

Literature Review

Corporate Social Responsibility

Customers today not only expect business organizations to provide quality products and services but also expect it to operate responsibly. However, customers expect that the business organizations will make profits and address social and environmental issues. They also expect that companies will spend some of their profits to help the communities to live a better life (Baumberg et al., 2014). In this scenario, corporate social responsibility is known as a business approach that contributes to the sustainable establishment by providing economic, social and environmental remuneration for all stakeholders (Mària & Devuyst, 2011). Today, most companies perform some activities around the world for improvement of the communities and environment (Fernandez et al., 2014). Those activities are counted as CSR activities. However, before implementing any activity, it is the responsibility of the companies to find out whether their activities will do any good to the communities or not (Korschun et al., 2014). The business organizations should also understand that they must implement activities that the communities need, not the activities that the organization is capable of (Servaes & Tamayo, 2013). In recent times, due to globalization, most of the companies are operating in more than one country (Fernandez et al., 2014). In this line, it is also vital to understand the cultural differences between two countries before implementing any CSR activity.

Cultural Differences

One way to understand cultural differences among countries is to understand the Hofstede’s Cultural Dimensions Theory.  He figured out that culture and values are hypothetical constructions. This model has always helped users to identify and understand different cultures of different countries. Hofstede developed this model based on research conducted by IBM between 1967 and 1973. After going through several updates, currently, this model shows each country is different from others based on its culture (Udy, 2014). There are six dimensions in the model that identifies the unique culture of a country. Therefore, countries possess diverse cultures, values, and requirements that a business organization must understand before conducting any activity. Before implementing any event or activity an organization should identify those cultural differences between the countries. For example, the same collection named Dsquaw might not offend t he consumers of other countries where the culture is different from Canada.

Awareness of Cultural Differences in CSR

 Davis and Franks (2011) stated that several researches are done over the past few years to find out what factors can affect efficiency of CSR activities. From those researches only Financial-social presentation and the examination of firm and industry level factors that explains CSR commitments have gained much more attention and popularity (Bondy & Starkey, 2014). Cultural differences among nations must be given serious importance by the multinational companies for their CSR agendas as different culture means different thinking and different requirements. If a business organization implements CSR strategy without understanding those requirements, then the chances are high that it will not cultivate positive results (de Mooij, 2013). Udy (2014) mentioned that any business organization that is operating in different countries must conduct more comparative investigations to find out national level and regional level cultural differences before implementing CSR activities. As per mentioned by Baumberg et al., (2014) 35% of total explicable discrepancy in CSR commitment pertains to country-level factors. Dsquared2 founders Dean and Dan provided an apology letter for hurting the cultural feeling of the country. However, the letter included a limited definition of their wrongdoings, especially no mentioned of Hudson’s Bay name in the letter.  Therefore, it can be stated that Dean and Dan did not follow the cultural background of the indigenous people of Canada. They could conduct a research to find out whether the name “Dsquaw” is appropriate or not in Canada. However, they did not conduct any research and this shows they had minimum awareness about the importance of cultural in CSR activities.

From the literature review and the news, it can be stated that there is almost no awareness exists among the business organizations about how important cultural differences are. Some business organizations such as Dsquared2 are not conducting proper research to find out about the culture of the country; such as what their beliefs are, what things are wrong in the culture and what the local culture appreciates. Besides, the senior management of Dsquared2 is also not responsible enough to provide a proper explanation for what they have done. Therefore, it can be stated that business organizations are not aware enough of the cultural differences plays a significant role in CSR activities.

Conclusion

An overall understanding of how various businesses conduct corporate social responsibility has been done in the study. CSR activities are common and major organizations often consider this activity as a part of their promotion or reaching out the most number of target groups of people. With the detailed analysis of the literature review and gaining the point of view of the scholars, it is evident that the impact of CSR activities has been increasing. Companies always try to formulate different kinds of CSR activities to create a good image of them in the society. However, at times the activity might take a negative turn and can hamper the emotions of a group of people as it has been evident from the case study.

 

References

Baumberg, B., Cuzzocrea, V., Morini, S., Ortoleva, P., Disley, E., Tzvetkova, M., ... & Beccaria, F. (2014). Corporate Social Responsibility.

de Mooij, M. (2013). On the misuse and misinterpretation of dimensions of national culture. International Marketing Review, 30(3), 253-261.

Fernandez-Feijoo, B., Romero, S., & Ruiz, S. (2014). Commitment to corporate social responsibility measured through global reporting initiative reporting: Factors affecting the behavior of companies. Journal of Cleaner Production, 81, 244-254.

Korschun, D., Bhattacharya, C. B., & Swain, S. D. (2014). Corporate social responsibility, customer orientation, and the job performance of frontline employees. Journal of Marketing, 78(3), 20-37.

Mària SJ, J. F., & Devuyst, E. (2011). CSR and development: A mining company in Africa. Journal of Management Development, 30(10), 955-967.

Servaes, H., & Tamayo, A. (2013). The impact of corporate social responsibility on firm value: The role of customer awareness. Management Science, 59(5), 1045-1061.

Udy, V. (2014). The Appropriation of Aboriginal Cultural Heritage: Examining the Uses and Pitfalls of the Canadian Intellectual Property Regime. Intellectual Property Issues in Cultural Heritage: Theory, Practice, Policy, Ethics.

Davis, R., & Franks, D. M. (2011, October). The costs of conflict with local communities in the extractive industry. In Proceedings of the First Seminar on Social Responsibility in Mining.

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