How corporate responsibility can enhance sustainability of the corporation

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1.        How corporate responsibility can enhance sustainability of the corporation. Used real life illustration to support your views


While the conclusion to the above question is that the host country should provide relatively stable political environment for the foreign companies to engage in the long term based investment and business activities, if the MNCs are force to engage in the quick payback activities they have other ways to achieve the balance between a quick payback and good CSR (corporate social responsibility) performance, in the part of the assignment we will discuss the positive relationship between the corporate responsibility performance and the enhancement of the sustainability of the corporation.


1.1    Basic concept of corporate responsibility & sustainability of the corporation


Corporate responsibility involves the search for an effective “fit” between business and the societies in which they operate. The notion of “fit” recognizes the mutual dependence of business and society – a business sector can not prosper if the society in which it operates is failing and a failing business sector in the market will inevitably detracts from general wellbeing. The term “corporate responsibility” refers to the actions taken by business to nurture and enhance this symbiotic relationship (OECD 2001, p. 8).


While there are similarities between the term “corporate sustainability” and “corporate social responsibility (CSR)”, however, according to M. A. Quaddus and M. A. B. Siddique (2010, p. 1) these two term are separate as corporate sustainability involves the integration of social and environmental factor into the business administration which is still essentially a business decision to maximize profits by simply ensuring the continued survival of the firm while CSR on the other hand is the voluntary inclusion of social and environmental concerns into business based on the mere good will stemming from the managers’ ethical obligation to be a responsible entity n the society.


1.2    Stakeholder view and corporate sustainability


A stakeholder is a person or group with an interest in seeing an endeavor succeed and without whose support the endeavor would fail (Werner & DeSimone 2009, p. 213). Stakeholder theory suggests that the purpose of a business is to create as much value as possible for stakeholders rather than the shareholders alone. In order to succeed and be sustainable over time, executives must keep the interests of customers, suppliers, employees, communities and shareholders aligned and going in the same direction ( 2009). According to Dyllick and Hockerts (2002, p. 223) the stakeholder approach could be used to support corporate sustainability which concerns a firm’s long-term success and survival. As the stakeholder view considers a firm as a value creation network, moving towards creating value for all stakeholders involved. And corporate sustainability depends on sustainable relationships between the firm and its multiple stakeholders. Therefore, based on this view we can see that corporate sustainability is actually based on the sustainable relationship the companies build up with the key stakeholders. Below we will analyze a case to reflect the importance of the corporate responsibility performance by caring the stakeholders to the corporate sustainability.


1.3    Case analysis: Wal-Mart Stores, Inc.


Wal-Mart Stores, Inc. is an American public corporation that runs a chain of large, discount department stores. It is the world’s largest public corporation by revenue and is founded by Sam Walton in 1962. The company has a good record in the corporate responsibility which enhances its business success in the long term basis. For instance, at Walmart, the company knows that being an efficient and profitable business and being a good steward of the environment are goals that can work together. The company’s broad environmental goals at Walmart are simple and straightforward: (a) To be supplied 100 percent by renewable energy; (b) To create zero waste; and (3) To sell products that sustain people and the environment. To achieve these targets, the company has used techniques such as the Supplier Sustainability Assessment, Lifecycle Analysis Database and Information Disclosure to Customers to make the environmental goals achievable, shared by the upstream suppliers and known by the downstream customers. Especially the company has report the corporate responsibility in term of “Global Responsibility Report” to update the customers with the company’s effort in improving the environment. Such report system will enhance the company’s position as a CSR top performer and thus enhance the business success because customers tend to add value to such good CSR performers.



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Appendix 1.0 Criteria for emerging countries