Corporate Social
Responsibility (CSR)
as Competitive Imperative
for Taiwan Companies
Presented by : F. M. Tai
Abstract
 Technological
innovations spur globalization
 Corporate practices need a world structure and
sustainable development
 CSR benefit both shareholders and society in the
global economy, creates long-term sustainability for
corporate success
 Scholars recognize the complex relationship
between IB and society and MNEs are responsive to
the stakeholders' needs
Abstract – continued Most
Taiwan companies look for change in
strategy - mission statement
 Failed : Not adequate implementation difficulties in justifying CSR practices
 This paper emphasizes on the creation of a
global brands with a responsible MNEs by
FDI and show practices how to capitalize
further from its real implementation
Purpose of the Paper
 Aims
to FDI by identifying CSR and
implementing
 To
test the proposition, a questionnaire
will be assessed if firms can be
simultaneously socially responsible and
socially irresponsible
Research Questions
 Has
your Citizenship received any investor
feedback on its efforts, whether positive or
negative?
 How has Citizenship been impacted by Eco,
Social-Politic (marketing, innovation)?
 What percentage of the approach to community
contribution will be constituted to effort?
 What are the corporate metrics for the CSR
effectiveness to FDI?
Significance
 Research
exploring the study mixing
CSR, IB and marketing
 CSR had not drawn attention or has
been much conducted
 A little published research in Taiwan
The Theory Used
 CSR,
called corporate citizenship, is a
responsibility and obligation to protect,
foster, increase and enhance the benefit of
stakeholders and social people
 Most
corporations “establish” code of ethics,
Johnson-Johnson - a model/standard
Eclectic Paradigm (Dunning)


Dunning’s theory “Eclectic Paradigm of Globalization”
Causes globalization
OLI (Ownership-Location-Internalization)
 Ownership: firm specific advantage
• Core competency of a firm
• Patent and Trade Market
• Technology
• Name recognition
 Location: External to the firm
• Tariff barriers
• Infrastructure
• Investment incentive
Eclectic Paradigm (Dunning) –Continued
OLI
• Internalization:
 Transaction cost benefit
 Transfer pricing
 Avoiding buyer uncertainty
 Eclectic

Paradigm
Aadvantages to be gained by combining
firm’s unique asset and location advantage
OLI
Location Advantage:
Location Specific factor. These are external,
to the firm including factor endowment,
transportation cost, government regulation,
Infrastructure factors
OLI
Internalization:
Ownership Advantage:
Firm specific factors including
technology, , patent, process,
name recognition, and other
core competencies
Cost advantage from vertical and
horizontal integration, due to
transaction cost caused by market
failure
IB Time Is Coming
 Taiwan:
developed country, small-medium
firms- non advantages of MNEs – supported
by the government to FDI
 Theory of Wells, L.T. (1977) could be used
for small-medium firms to go international
business
 CSR of the Ownership Advantage can be
suggested to apply for Taiwanese
corporations when involving IB
Why Emphasizing Social
Responsibility
 Surveys
: “61% of consumers would buy
products from a CSR company or switch
retailers if cost and quality were equal.”
 “Social
responsibility” is defined as a
framework of measurable corporate policies
and procedures and the foremost about
obtaining better productivity and creativity
returns
Global Leader in CSR will Offset
Damning Charges against the Company
 Positive
CSR beliefs by consumers not only
greater purchase but also longer-term
loyalty and advocacy behaviors
 Integrating CSR
strategy with core business
strategy - more likely than brands that
merely engage in CSR to reap a range of
CSR-specific benefits in the consumer
domain
CSR Earned Consumers Attention

Theories of the strategic use of CSR emphasize the role of
information asymmetry and how CSR to be incorporated
into a firm's product differentiation strategy

Globalization and a call for increased corporate
transparency have given rise to CSR

More Businesses use CSR to improve customer satisfaction

Consumers purchases based on companies social and
environmental reputation
CSR and Marketing

CSR as a moral obligation and a positive financial
result for the firms
 Three dimensions CSR emerge: (1) purchasing based
on firms CSR performance; (2) recycling; (3)
avoidance and use reduction of products impact
environment

CSR provides marketers strategy - global markets as
their workplaces - choose any country to trade - build
branches in every country
 Important factor for impacting the enterprises :
environmental uncertainty. Whenever entering
multinational markets, internationally environmental
aware and socially responsible
The Amazing Rise and Scandalous Fall
Enron - doing harm to business ethics

In 2001, Houston natural gas and Power Company, the
most innovative and thought to epitomize a great New
Economy company, with its skyrocketing profits and share
price in the U.S.

With the world's largest Enron ever traded tens of billions
of dollars contracts, the corporation's total revenues 100 b.

Enron's rise from obscurity to the top of the business
world to disastrous demise - owing to Skilling’s creative
bookkeeping invented something falsely upping the stock’s
value. Tragedy made thousands of employees lost jobs and
life savings; top executives are too inhuman for tragedy
and lost the morality in management
Victim on Personal Profit Without
Regarding Social Public Welfare
 Sixty-five percent
of 158 experienced top
CEO agreed - profit is more important than
products safety, allocation of resources is
the main reason of ethics problem
 Hard
for the top executive to choose: to
balance their gains and losses within
different interest groups for accurately
decision making on the basis of ethics
How Engage in Social Responsibility
(Applicability)





Consumers in the US have placed social and environmental
issues at the top of the agenda, i.e., actions taken by
consumers to enforce social commitment
Social responsibility orientation of firms is related to
strategic social planning
Positioning is related to value creation for the MNEs
Three principles : 1. awareness of historical and institutional
dynamics of local communities; 2. necessity of good
communication with local constituencies; 3. degree to which
the firm’s operations safeguard and indeed improve the
social and economic assets of local communities
The question of adequate compensation for the inevitable
disruptions that an international business brings to a local
community
By Whom
 Business
leaders integrate an awareness of
socio-political issues more explicitly into their
strategic decision-making processes
 The ethical leadership in professional business
will improve understanding of how ethical
behavior confers legitimacy and sustainability
necessary to achieving the corporation’s goals,
and how a leadership approach to ethics can
serve as an effective tool for dissemination of
moral values in organization.
How

The Greening of Management: every country government - all industries
emphasized on this kind of management: whole products life cycle from design
to waste disposal could match 4R－Reduce, Recycle, Reuse, Regeneration, and
3E－Make use of Economic (resource), Ecological, Equitable

Green Window Dressing
Green Meetings and Events
Social Consciousness:Wal-Mart's efforts to reduce its packaging materials and
operate on renewable energy
Answers to the Trust and Public Image Issues Facing
Concern for Environment
Differentiation Strategy
Ethical Behaviors
Understanding Unethical Sales Behaviors Especially for Sales Managers
Four Practical Approaches
Ethics Ombudsman
Customers-Centered by Technology










Implementation Cases of Citizenship

Socially responsible companies add
implementation, the ability to generate long term
profits - positive
 European, Japanese, North American companies,
Finland developed advanced human rights policies
and equal opportunities for women and their
community involvement range from simple
donations of money to donations of expertise, time
and resources
The Charitable Behaviors
2nd biggest Taiwanese Investor

Global brand "Foxconn", 2005 beyond Flextronics, the world's largest
electronics manufacturing and services (EMS) companies, original CMM
(Component, Module, Move, adding e - The concept of a eCMM)

"design, create two areas, three districts delivery" ambition, the company
throughout three continents

Hon Hai Group's total market value of 2.25 trillion Taiwan dollars.
Contributions more to China, the past 10 years donated nearly NT$5
billion (NT$32=US$1)

A full support of the local government in Shanxi and no any problem in
sources of raw materials of Magnesium Alloys, make international
automotive components manufacturing market possible, materials used by
laptops were imported from Europe, now Shanxi energy full support
“My dictionary has no such word - management, as I am a responsible
man. A man of responsible does not need management; no responsibility
for the management of useless” The CEO, Mr. Guo, Ming said

Obstacle in Implementation

Cost is the main obstacle of CSR programs

Budget tightened, charitable are restrained

Companies used to support philanthropic work are
now limiting on some social projects or coverage and
from which get some repay (to contribute money on
working-training not on public welfare’s art object to
foster better employee and to receive direct benefit)
Methodology

Methodology/Approach: The study builds on existing
literature and theories on IB, CSR and Marketing, as
well as literature on consumers' perceptions of CSR
related issues
Two parts:
 1. explorative stage on qualitative method, qualitative
investigation including identified important society
attitude-based attributes of social responsibility

2. quantitative part is based on some examples or
surveys describing the performances along these
attributes
Methodology – Continued  Validity
assured through the literature review
and Chinese translation for the questionnaire
to assure better understanding by Taiwan
participants providing greater reliability and
validity of results
 To further establish validity and
interpretability, the Questionnaire-Chinese
Version was critiqued by three Taiwanese
graduate students at the Alliant University, …
 Factor
analysis discussed in the applicability
towards theoretical testing would be instead in
order to counteract this effect.
Research Limitations/Implications

Dr. Kelly (2008), this is a good topic, which is a study mixing CSR, IB and
marketing; also it relates to implementation
Resource Allocation & Management
 a balanced humanistic/analytic understanding in marketing system,
corporation FDI goal/objective, and CSR for the top executives to integrate
 decision to rank and place the priority order in considering fulfilling the CSR
and the stakeholders benefits
 limited resources, how carry out the SCR before the benefit of stakeholders? conflict between harmony and how to decide the extent?
 Is it ethic behavior, if he/she fulfills personal principle by sacrifice the benefit of
stakeholders, employee, and corporation? the reason for the top executives to
be employed is his/her professional capability not on his/her charity behaviors
or notions;
 he/she should perform on the employment contract to do the right thing not to
avoid the possibility of his/her personal generosity
 “A manager’s job should be to take the corporate FDI goals and strategies and
redefine them in a way that makes them real for the people in their department
Conclusion

strategy formulation - practical; improper implementation prevents strategies
from reality. In conceptualizing global CSR, CSR fall along a continuum

provides implications in favor of social responsibility and implementing
perspectives from the definition of marketing and IB, aid proceed smooth and
quicker -keenly competition and uncertainty


new competency needs to help Taiwanese enterprises/firms exceed the
efficiency

4R and 3E getting trend and responsible for customer interests: understanding
and connecting with customers, innovation through products and services, CSR
and marketing strategies, or effective internal marketing organizing

Sanzo Industrial Co., Ltd., launching a positive commitment to social
responsibility through its strategic program into its FDI in developing a better
ethical and social responsible process
Further Research
 Future
studies could involve validation of
factor structure, relationship between CSR
and preference, and ability to positioning in
another location, perhaps in more mature
markets in terms of well-developed
structures of CSR and some products