Currently, attention to problems of socially responsible business behavior and its role in socio-economic development has significantly increased. In order to be competitive, companies maintain their image, work to improve their business reputation, and operate in accordance to the principles of social responsibility (Canniffe 2005). At the same time, every year the negative impact (environmental pollution, safety issues, corporate social responsibility, etc.) on the society increases. This has negative consequences for companies’ performance. Therefore, in order to ensure that companies carried out its activities in conformity with the expectations of the society, they should create a program of actions related to ethical, legal, charitable, environmental, commercial, and social principles (Hunnicutt 2009). In other words, they have to become responsible corporate members of civil society.
Therefore, the aim of this paper is to examine environmental and social consequences of international marketing and to understand how environmental and ethical concerns influence the conduct of marketing across borders. It starts with a discussion of the concept of corporate-social responsibility. Further, it reviews the main tendencies related to it, how it was developed, and what brought it to existence. Secondly, the paper examines challenges of international marketing that influenced corporate social responsibility development. Further, the paper covers issues related to the concept of corporate social responsibility and discusses the “going green” strategy, and how companies use it in order to gain competitive advantage and increase their profits. The paper also contains critical analysis of publications on the topic of corporate social responsibility and “being green” concept.
Corporate social responsibility is a set of practices adopted by organizations in order to increase the interest of the society. It implies recognizing the responsibility for the impact of company’s activities on macro- and microenvironment participants of its performance, who include customers, suppliers, employees, owners, publicity, etc. This commitment of the company is expressed by the promises to comply with legislation and emphasizing that organizations will actively participate in the process of improving the quality of life of employees and their families as well as of local community and society as a whole (May, Cheney, & Roper 2007). The concept of corporate-social responsibility emerged in the second half of the 20th century in the United States and Western Europe. Despite this, the US and Western Europe developed different approaches to understanding the corporate social responsibility term. Thus, there are the Anglo-Saxon model of corporate-social responsibility and model of continental Europe (Hussain 1999).
In the area of corporate governance, US companies are traditionally oriented to the model of “shareholders company”. This approach appears to emphasize personal matter of individual sacrifice and is not integrated into the system of management of a company. In many ways, this is caused by peculiarities of doing business and political conditions in the United States. Neo-liberal policies, which prevailed in the United States under the Republicans, imply little state participation in the activities of the business and encourage its maximum freedom (Story 2006). Companies create their corporate-social responsibility policies focusing primarily on their owners. The main areas of corporate-social responsibility in the US are discussed further.
Strategic philanthropy is the most affordable way for companies to implement corporate-social responsibility. Priority areas of investment are healthcare, social services, and higher education. Expenditures of sponsorship in the arts are rapidly rising. Proper positioning in the field of philanthropy creates considerable reputational capital for companies.
Different kinds of volunteer work of company’s employees. Such initiatives are often less expensive than large-scale charity events, however, they provide significant returns. They are not only building around the corporation to create a system of social relations, but also contribute to the growth of the spirit of "corporate solidarity".
The practice of socially responsible investing and focused marketing strategies. Their audiences are consumers that have the right personally and make a contribution to "good works" through the purchase of goods and services. Fixed income from such activities is transferred to particular socially relevant purposes, however, significant change in the strategy of corporate management does not occur (Windsor 2006).
In contrast to the US model, the model "of participants" is typical in Europe. This model focuses on corporate liaison with various stakeholders: from local communities to organizations representing different aspects of the public interest. European model is in contrast to the US one provides a high level of institutionalization of relations with stakeholders (Friedman 1970). The practice of developing partnerships is being realized at the EU level. In particular, it operates through the Economic and Social Committee (ESC), institutionalization relationship between business, wage labor, and local authorities. It also creates informal organizations among the companies. These organizations are coordinating positions and lobbying at EU level.
For Europe, the system is characterized by a tendency to develop a systemic vision of problems of interaction between corporations and society. Of course, this does not mean unconditional recognition of European business practices of corporate-social responsibility as an integral part of the strategy to enhance competitiveness. However, they are effectively used as a mechanism for the involvement of the public sphere, a platform for interaction with controls in addition to the scope of the tax and labor market regulation. European companies themselves see it as a continuous process of learning and become interested in interaction with partners.
Rapid development of corporate-social responsibility at the end of the last century has created a need to develop mechanisms of communication and verification. The first mechanism that companies increasingly use is corporate social reporting, which also includes reports in the area of sustainable development or non-financial reports. Mechanism for data verification of the reports implies audit by an external independent firm, which analyzes and validates information contained in company's corporate social report (Weiser & Zadek 2000). Corporate social responsibility report is a public communication tool for informing shareholders, employees, partners, customers, society, how and at what rate the company involved into strategic plans for the development objectives for economic sustainability, social welfare, and environmental sustainability. Such report is a tool for building company's reputation and its position in the global business space. In recent years, standardized reporting form is developed and used. Corporate social responsibility standards developed by international organizations or by special agencies and companies disclose information about its activities in the field of sustainable development.
According to a study that was carried out by the consulting firm KPMG in 2008, the percentage of companies (from the 250 largest companies in the world) who adhere to social accountability principles increased from 45% in 2002, to 52% in 2005, and to 80% in 2007. The most widely used corporate social reporting was found among companies in Japan and the UK. The tendency of social reporting is the least common among companies in Mexico (Coombs & Holladay 2012).
Today’s most discussed trend, which increases attention to issues of corporate responsibility is globalization of capital markets. Improved awareness of investors and financial institutions make them prefer more sustainable business in terms of financial, social, and environmental performance (Harrison 1993). For an enterprise with a good reputation, it is easier to raise funds and it pays less interest on loans. In other words, good reputation increases company's capitalization and access to cheaper capital. In the USA, the numbers of investment funds are actively looking for the so-called "green businesses" that have a good reputation in terms of care for social services and the environment. Thus, the fund Calvert Online acknowledges that today's environmental and social issues can become problems tomorrow.
According to the article “A Resource-based Perspective on Corporate Environmental Performance and Profitability”, environmentally responsible policies are aimed to reduce the burden on the environment and reduce the amount of industrial waste (Russo & Fouts 1997). When choosing a product, criterion "impact on the environment during the production" is taken into account along with traditional factors such as price and product characteristics. "Green" principles allow organizations and companies in public and private sectors to reorient their practices on environmental technologies while addressing their organizational objectives.
The new tendency of companies to perform with the full policy of “green” commitment has even contributed to the development of IT products, services, and companies. An inherent part of modern technological production is demand control of the impact on the environment, social and environmental responsibility of company-producers of energy constraints, and deteriorating environmental conditions will inevitably turn to the direction of information technology known as Green IT (Snider, Hill, & Martin 2003). Green technology ("Green IT") in computers means usage of environmentally friendly production. The author argues that the purpose of such technologies is to reduce harmful effects on the environment and people, take care about future generations both in terms of protection of the environment (energy conservation, pollution, and recycling) and reducing the impact on human health and its progeny.
The excitement around environmental issues and related problems of producer responsibility in the last decade encourage clear isolation and search for solutions to numerous challenges posed by the development of information technologies and expansion of production of computers and accessories (Sen & Bhattacharya 2001). Complexity of problems that arise at the intersection of economics, environment, and ethics involve active introduction and implementation in practice of ethical and responsible attitude towards nature, caring for future generations, and respect for the rights of all living things.
In the last 2-3 years, the theme of environmental responsibility of producers of computer technology is one of the most frequently discussed in the media, academic and business conferences, trade shows such as IT Future, Fujitsu Siemens Computers, and annual exhibition of information technologies and communications «Cebit» in Germany.
There are several key benefits of CSR implementation for business development. First of all, it can cause increase of profits and growth rates. Also, it is necessary to mention that companies that use CSR policies have access to socially responsible investments, during the distribution of which investors take into account indicators of company's activities in social and ethical matters in the field of environmental protection. There are several indexes that evaluate the degree of social responsibility of organizations: FTSE4Good, Dow Jones Sustainable Index, etc. Thirdly, operating costs can be reduced, for example, by reducing waste and recycling, increasing energy efficiency or by selling the recycled materials. Improved brand and reputation will help develop and open up new markets and lines of business. By implementing the “going green” concept the company will be able to increase sales and customer loyalty. Consumers want to know what products are produced with the understanding of responsibility to the environment and other social aspects. Some consumers are even willing to pay more for “responsible” products. There are more opportunities to attract and retain employees in those companies that practice CSR because people prefer to work for companies whose values match their own. CSR implementation will cause increase of productivity and improve quality of the product (service), reduce claims of regulators, improve company’s risk management, and as a result will lead to the increase of company’s competitiveness (Anon 2010).
Recently, there has been a definite shift in priorities of consumers: neither price nor the quality or functionality will allow the manufacturer to stand out from the competition. Emotional involvement of consumers and common values is something that is difficult to develop as well as to replicate. Moreover, if they are rooted, giving them up is quite difficult.
The article “Strategic Corporate Social Responsibility and Value Creation among Large Firms: Lessons from the Spanish Experience” provides full assessment of the role of “going green” in corporate social responsibility of companies development (Husted & Allen 2007). One of the main findings of the research is a confirmation of the viability of the concept of corporate social responsibility and the recognition by the international community of the importance of this process. In recent years, it is possible to see the tendency of an increasing number of publications on issues of business ethics and corporate social responsibility. A growing number of large Western corporations that make non-financial reports and written codes of conduct are becoming socially responsible and follow the principle of "going green", which shows their desire to minimize its negative impact on the environment. This is largely connected to the fact that in the last 15-20 years, companies began to realize that the whole world progress can come to naught if the development will not be sustainable, and business will not be socially responsible.
This is caused by numerous signals of global warming and environmental degradation. In addition, integration of social issues and maintenance of local communities are especially important due to the need to establish social stability. This is especially true in developing countries where it operates many multinational companies. However, even in developed countries, the role of CSR is amplified by unsteadiness of capitalist positions and grievances of public deterioration of the economy, particularly by the financial crisis of 2008-2009. It is no coincidence that now the world community attempts to balance priorities of reason and morality, business and ethics. Adherence to principles of social responsibility is not only fashion, but also an objective reality, which allows companies to gain competitive advantage (Anon 2010).