Corporate Social Responsibility and Multinational Corporations

Abstract

Multinational corporations (MNCs) represent an influential class of actors in the global economy. By coordinating the production and consumption of goods and services across national boundaries, they facilitate the global movement of capital and the creation of new employment opportunities. For developing countries, the investment by MNCs represents a significant source of external finance (UNCTAD 2011: 21), and for many people in these countries, MNCs have the resources to help meet many of their unmet needs. At the same time, the activities of MNCs have the potential to harm persons and the natural environment, especially in countries that lack robust legal and political institutions. In addition, MNCs are able to avoid national regulations and policies by shifting the site of their activities, and because of the benefits they bring, commentators argue that MNCs possess bargaining power in the area of policy-making (Navaretti & Venables 2004: 1; Dine 2005: 222). In this light, a central question that arises from the perspective of global ethics is what standards ought to apply to the activities of MNCs. This chapter surveys the contemporary theoretical literature on this question. The first sec-tion provides background on MNCs and their rise. The next section provides some grounding for the chapter by summarizing existing attempts to promulgate global standards for MNCs in relation to human rights, labour, bribery and the natural environment. In the light of the challenges associated with legally regulating MNCs at a global level, a good deal of scholarship has focused on the theory and practice of corporate social responsibility (CSR): those corporate activities and policies that are not legally mandated and are framed in terms of corporations’ impact on society. The following section surveys some of this literature by summarizing different conceptions of CSR and criticism of both the theory and practice of CSR. The chapter then turns to discuss attempts to specify and ground standards for the activitiesand policies of MNCs from the perspective of ethical theory. The fourth section of this chapter introduces this literature with a discussion of the debate surrounding the universality of moral standards in the context of business activity. The next section describes attempts to specify standards for MNCs that involve taking a position on two key debates in the broader literature: the debate over the purpose of the for-profit business corporation and debate about the moral agency of corporations. The sixth section of the chapter summarizes accounts that aim to specifystandards for MNCs without having to take a position on the purpose of the corporation or the moral agency of corporations.