What Are The Internal And External Barriers Of Peripheral CSR

Corporate social responsibility (CSR) is a concept that almost all firms state that they incorporate and embed into the core of their business activities and strategies. However, it can be argued that often times CSR is not properly embedded into a firm if their CSR strategy does not affect the firm’s strategy, routines and operations. This is known as peripheral CSR (Aguinis and Glavas, 2013). This essay explores what the defining internal and external barriers are to effectively embedding CSR policies into multi-national corporations. CSR is a relatively new concept, which can be said to have gained prominence during the 1950’s after the publication of Howard Bowen’s book the Social Responsibilities of the Businessman (1953). Bowen’s brief definition of CSR stated that it “refers to the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society”. Following in Bowen’s footsteps, many researchers argued over the meaning and definition of what CSR was and how best to effectively embed it into firms to achieve a socially desirable outcome. At present, there are still disagreements about how best to effectively embed CSR into multi-national firms. Therefore, firms often may not realise that they have their own internal and external barriers to embedding CSR, as they are not clear on the best way to implement a CSR strategy. It can be argued that the main internal barrier to embedding CSR into multi-national firms is shareholder theory (Milton Friedman, 1970). According to the shareholder theory, the only obligation businesses have is towards making a profit. It is clear that the objective of most firms is to make profit. It can be fairly assumed that a firm that does not profit will not be in business for very long. Therefore, we can ask this question, do multi-national corporations have an obligation to embed CSR? According to Friedman, the answer is no. Friedman has stated that firms are not obligated to seek anything but profits but he also takes it a step further by suggesting that employees who do anything other than maximize profits are actually doing something wrong. Friedman’s rationalization is that if a firm is seeking something other than profits, for example embedding a CSR strategy that will benefit society; it results in taking away from the firms profits. This can be seen as the firm having to spend some if its profits to give back to society but according to Friedman, this can be interpreted as stealing from the shareholders who own the company. Therefore, it would be considered unethical. This mindset and belief that some shareholders in multi-national corporations have is a very prominent internal barrier …show more content…
An internal barrier to correctly embedding CSR into a multi-national corporation may be the false perception that they have already embedded CSR into the firm. Aguinis and Glaves suggest that if CSR strategies are not tied to a firm’s overall strategy, core competencies or routines, it is not embedded CSR, but peripheral CSR. They consider Philanthropic efforts and employee volunteering to generally count as ‘peripheral CSR’. Therefore, some multi-national corporations may be under the perception that CSR is embedded into their firm, however that might not be the case as they may have only implemented peripheral