Ethics and Social Responsibility in International Business

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- General Social Welfare

It usually includes something related to the society welfare. Doing charities, providing or improving public health and educations, and contributing in philanthropic or non-profit organizations are one of the efforts.

MANAGING SOCIAL RESPONSIBILITY ACROSS BORDERS

Approaches to Social Responsibility

- Obstructionist Stance: denying or avoid accepting social responsibility, e.g.: Nestle and Danone’s denial to the accusation of violating international agreements

- Defensive Stance: will do everything that is required of it legally but nothing more than it, usually unsympathetic to the concept of social responsibility, e.g.: marketing efforts of tobacco companies

- Accommodative Stance: do what meets its legal and ethical requirements but also willing to go beyond the requirements, yet they got to be convinced that the programs are worth to support, e.g.: donations to sports activities

- Proactive Stance: take to the heart the arguments in favor of social responsibility as they view themselves as citizens in a society and proactively seek opportunities to contribute, e.g.: McDonalds

Managing Compliance

Company should develop social responsibility that requires careful planning, decision making, consideration, and evaluation as well as they develop any other business strategy.

Formal dimensions of social responsibility:

- Legal compliance: the extent to which organization conforms to regional, national, and international laws.

- Ethical compliance: the extent to which the member of the organization follow basic ethical (and legal) standards of behavior.

- Philanthropic giving: the awarding of funds or gifts to charities or other social program.

Informal dimensions of social responsibility

- Organizational leadership and culture: can go a long way toward defining the social responsibility stance an organization and its members will adopt.

- Whistle-blowing: the disclosure by an employee of illegal or unethical conduct on the part of others within organization. However, attitude toward whistle-blowing are affected by culture.

Evaluating Social Responsibility

Any organization must ensure that its efforts are reaching desired benefits. Some organizations routinely conduct corporate social audits to evaluate the effectiveness of their social responsibility efforts. Corporate social audit is a formal and thorough analysis of the effectiveness of firm's social performance.

DIFFICULTIES OF MANAGING CSR ACCROSS BORDERS

Multinational companies often face difficulties in finding a proper balance between the roles and behaviors expected by their home government and the host country which they operate.

Van Tulder and van der Zwart's stereotypical behaviors in three regions in the world:

- The Anglo-Saxon Approach: the state, the market, and civil society are viewed as separate, competitive, and antagonistic.

- The Asian Approach: close cooperation between private sector and government, civil society plays a minor role.

- The Continental European Approach: more cooperative ways of working between the state, the market, and civil society.

REGULATING INTERNATIONAL ETHICS AND SOCIAL RESPONSIBILITY

There have been many attempts to regulate ethical and socially responsible international business conduct, for example: Foreign Corrupt Practice Act (FCPA), the Bribery Act, the Alien Tort Claims Act, the Convention of the Organization for Economic Cooperation and Development, and the International Labor Organization (ILO)

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Case Study: JPMorgan Indonesia and Bank Mandiri

JPMorgan Chase Bank Indonesia operates as a branch of JP Morgan Chase & co. JP Morgan Chase was originated in United States of America. It is an American multinational banking and financial services holding company headquartered in New York City. Today, JP Morgan Chase & Co. is ranked as Bank Most Crucial to Financial Stability by Bloomberg. As one of the biggest bank in USA, JP Morgan has various way to deliver their social responsibility.

JPMorgan Chase’s “New Skills at Work” has the objective of closing the skills gap, based on the fact that when the unemployment rate is high over the globes, some companies are facing difficulties in finding skilled labors. That’s why, JPMorgan invested $75 Million for the social responsibility. They believe that everyone, especially the youth, needs a pathway to reach success, and therefore they build the pathway in the form of providing a high-quality education. With the Council of Chief State School Officers and the National Association of State Directors of Career Technical Education Consortium they launched a multi-million dollar competition for states to expand and improve career-focused education that prepares students for high-skill and high-wage jobs.

JP Morgan Chase & co. is also supporting environmental sustainability through their business and operation. In order to strengthen the communities, JP Morgan take a range of actions to consume energy as efficiently as possible and reduce greenhouse gas emissions, which include: applying best practices throughout our global operations; purchasing and installing renewable energy; and purchasing Verified Emission Reduction credits to offset all GHG emissions associated with employee air travel. JP Morgan certainly use paper across their business for a range of purposes, from internal document printing and copying to customer-facing statements and marketing materials. Their priorities are to maximize the purchase of sustainably certified paper, encourage efficient paper use, and manage effective paper recycling programs.

Beside programs above, JP Morgan is also actively donating to aid several environmental crisis. For example, JP Morgan Chase and employee donate up to $350,000 to aid Flint water crisis and up to $ 2,000,000 to aid Refugee Crisis in Europe.

On the other hand, JP Morgan once failed to maintain its good reputation. On December 19th 2014,