Milton Freidman the famous economist once said, “There is one and only one socia
ID: 350000 • Letter: M
Question
Milton Freidman the famous economist once said, “There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”
a. Do corporations have a legal right or legal obligation to develop corporate social responsibility programs?
b. Should multinationals make charitable donations or political contributions in local markets?
c. How should a multinational balance competitive tools such as soft brand power (reputation and good will) and hard brand power (price, quality, product features, product availability)?
Explanation / Answer
DO CORPORATIONS HAVE A LEGAL RIGHT OR LEGAL OBLIGATION TO DEVELOP CORPORATE SOCIAL RESPONSIBILITY PROGRAMS?
Yes, corporate social responsibility (CSR) has gained more interest in the past decade, however it is not a new idea; it dates back to the 1930s, said Eric Orts of the University of Pennsylvania. Just before World War II, German industrialist Walter Rathenau claimed that business corporations had become very large and that they had grown to be a significant part of the society. CSR is not a static concept it is a moving, evolving target, said Norine Kennedy of the U.S. Council on International Business. According to Kennedy, there is no solid definition of CSR; however, it is not a replacement for the governmental role and responsibility in meeting challenges of sustainable development.
The scope of corporate responsibility varies country by country, region by region, interest group by interest group. At a minimum, it includes environmental issues but it also takes on social, ethical, governance, health, and other issues. Potentially, it is a very broad concept to cover, and it is a challenge for the business community.
Millennium Development Goals
As a follow-up from the world summit on sustainable development in Johannesburg in 2000, the United Nations developed Millennium Development Goals (MDGs) with the implications for corporate responsibility, environmental, and health issues. One hundred ninety-one UN member states endorsed the Millennium Declaration. There are 18 MDGs grouped around eight goals, most of them having 15–20 objectives.
The main notion of MDGs is that it is not just governments, but also other interest groups in society that are expected now to carry out the commitments. It is clear in the international arena that companies are increasingly expected and, in some cases, required to take on roles and responsibilities that are traditionally those of governments. Today’s world and its markets are globalized, and the international impacts are unmistakable, said Kennedy. What happens internationally matters to companies in the United States. There’s not a one-size-fits-all solution for corporate responsibility, which makes it quite a challenge as we are looking for an internationally-agreed-upon approach.
The World Summit on Sustainable Development work program refers to corporate responsibility in the following four places:
B. SHOULD MULTINATIONALS MAKE CHARITABLE DONATIONS OR POLITICAL CONTRIBUTIONS IN LOCAL MARKETS?
very long tradition of businesses donating money, goods or staff time to charitable causes, all of which falls under the umbrella of corporate philanthropy. But unlike an individual’s decision to make a donation to a Children in Need appeal or support the Ice Bucket Challenge to do their bit and have a warm inner glow, the motivation for a company to make a donation in whatever form it may take is considerably more complex Corporate Social Responsibility (CSR) is an increasingly essential element in the business world. The first impression many people have towards corporations is that businesses are taking advantage of consumers and society. In their minds, they think businesses are all about profit-making, and they care less about society, the environment, and human rights issues. They do not contribute much to society. In fact, many entrepreneurs want to erase the negative image Corporate Social Responsibility (CSR) varies across the globe and evolves over time. The concept might seem abstract. To simplify and summarize the core idea, CSR is all about “responsibilities to society beyond that of making profits for the shareholders” (Quak, Heilbron & van der Veen, 2012, p.3). During the early 1970s, Dr. Davis, a professor at Arizona State University and a CSR scholar, emphasized the importance of CSR. He mentioned, “CSR refers to the firm’s consideration of and response to issues beyond the narrow economic, technical, and legal requirements of the firm” (Sharma & Mehta, 2012, p.2). He implied that businesses should consider carefully the impact their activities and policies bring to society.
Value of Corporate Social Responsibility Many people question the value of practicing corporate social responsibility. Some people may not notice its long-term impacts on the company. An economist, Milton Friedman, makes a controversial statement in his book, Capitalism and Freedom, “there is one and only one social responsibility of business–to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud” (Friedman, 1970, p.6). Friedman strongly believes that the responsibility of a company is solely about making profits; a company has no obligation to exercise social responsibilities to society at all. However, many research studies have proven that practicing CSR actually benefits companies significantly when they implement it effectively in the long term
C. HOW SHOULD A MULTINATIONAL BALANCE COMPETITIVE TOOLS SUCH AS SOFT BRAND POWER (REPUTATION AND GOOD WILL) AND HARD BRAND POWER (PRICE, QUALITY, PRODUCT FEATURES, PRODUCT AVAILABILITY)?
While many tools target a particular niche, these tools analyze multiple areas of your competitor’s online marketing strategy to give you an overview of their efforts to spot potential avenues for growth.
SEO and Keyword Analysis Tools
Spy fu – As well as tracking back links and rankings, Spyfu has a great keyword feature showing how many keywords your competitors rank for and how much their keyword focus overlaps with yours. Several features are available for free (with data limits), prices start from $33/month and there is a 30-day money back guarantee.
Analysis shows a range of metrics around keywords, paid search, and rankings. You can search 10 URLs which will show limited results. To see all the data you need to upgrade, with prices starting from $99/month.
Ahrens – With free and paid options, Ahrens is a great SEO and keyword research tool. You can use it to see what your competitors are ranking for, how much organic traffic they’re getting, and see what content of theirs is performing the best. It’s not too expensive either.
Back link Analysis Tools
A wide range of link analysis is available, including an overview of back links, country and industry breakdown, and link age. Links have all been confirmed as active in the last 90 days. The free account is detailed, but access to the full range of SEO tools starts at $49.95.
Monitor Back links – New links, lost links, new competitor’s links and weekly domain changes will all be emailed to you once you have set up your account. Prices start from $24.90/month for 1 domain and 2 competitors, and a 30-day free trial is available.
Content Discovery Tools
Feedly – There is no shortage of news aggregator sites available. Feedly allows you to customize the sites you are following, so you can segment by general industry trends, clients, competitors. A browser extension exists to quickly add sites to your feed. A Pro account is $5.41 a month, but the free version will keep you up to date with content without any fuss.
SERP Rankings Tool
Search metrics – This is an incredibly powerful suite of tools. There’s a number of paid options (some of which will only be affordable for big agencies), but you can get a free taster. As part of this you can get a Search metrics SEO visibility score which shows how well a domain is ranking. You can then chuck in some competitors to see how they’re performing too.
This research aimed to investigate the link between a company’s strategy and its performance. The strategies that companies pursue in this investigation are Porter’s generic strategy and growth strategies: diversification and internationalization. Based on this finding, there is a positive impact on generic strategies and companies performance. But growth strategies that companies pursued do not have positive or negative impact on companies’ performance. However, further studies are required