What is the connection or relationship between Social Responsibility and the host-country environment?
Many studies have revealed that foreign affiliates in international Enterprise yield to Liability of Foreignness (LOF) (Engle, 2007). As firms and groups of people engage in international corporations, there are social responsibilities that came along that cannot be overlooked. International firms play great roles in foreign environment their influence to the host country is subjected to social responsibilities in that country. According to Pendleton (2004), “corporate social responsibility is an entirely voluntary, corporate-driven initiative to promote self-regulation as a substitute for regulation at either national or international level”(p.77).
Normally, there are laws and regulation in every country that helps the local citizens of that country to coexist peacefully and in harmony. Once a foreign firm comes in that country, it cannot assume an autonomous role, such that it operates as though established in a vacuum. The firms must understand that there are different cultures, religious beliefs, rituals, and norms that are prevalent in the host country and should be respected (Pendelton, 2004). This factors compells the foreign firms to review their policies to ensure that they avoid interference with the host environment. The relationship that exists between foreign firms and the host country is quite dependent on the host perception of firm’s suitability in its environment (Engle, 2007).
Social responsibility involves strategy and framework in an organizational culture to offer its services in the most responsible manner without being compelled by the host country. Sometimes, foreign firms can take advantage of the host country’s weakness to plunder the available resources and cause a great harm to the environment. Corporate Social Responsibility (CSR) suggests that international firms should take into account social, environmental and economic impact they pose to the host country. Engle (2007) view Social Responsibility as a, “self-developed set of standards of behavior for a company that will help make its impact on society positive and productive” (p.18).
Engle, R. L. (2007). Corporate social responsibility in host countries: a perspective from American managers. Corporate Social Responsibility and Environmental Management, 14(1), 16-27.
Pendelton, A. (2004). The real face of corporate social responsibility. Consumer Policy Review 14: 77–83