At the recent World Economic Forum in Davos, Switzerland, one particular topic drew unusually strong support -- the need for organizations across the board, both public and private, to contribute more to the war on global poverty and illness.
Part of this push towards greater social advocacy is directed squarely at corporations, whose resources are seen as necessary to address such specific problems as the AIDS crisis in Africa and the lack of vaccines for children throughout the developing world. At the same time, critics of the corporate social responsibility movement respond that a company's main duty is to its shareholders, not society at large. Pay the shareholders dividends, some would argue, and let them decide what to do with the money, including donate it to charitable causes.
Last month, Wharton legal studies professor Nien-hê Hsieh tackled this topic during a luncheon presentation on "Multinational Corporations (MNCs) and the Ethics of Assistance," in which he noted that two principles may justify corporate social responsibility in special circumstances: Rescue and fairness.
A Question of Survival
Hsieh framed the issue as a "managerial challenge" and posed the question: "Is it possible for managers to heed calls for assistance in a way that does not undermine the business enterprise and its for-profit nature?" He noted that requests for help from MNCs are the result of several key factors. Multinational corporations often operate in countries characterized by unrelenting poverty. "The annual revenue of the five largest corporations is more than double the GDP (gross domestic product) of the poorest 100 countries in the world," Hsieh said. "So it is very natural for people to ask, 'Why are MNCs not doing more to assist those people in need?'" From the perspective of citizens in poverty-stricken countries, the companies would appear "well placed to do so.
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