The objective of this thesis is to clarify the social responsibilities of management in a multinational corporation. By applying teachings from the school of Austrian economics to the normative literature of corporate social responsibility (CSR) and CSR’s derivatives, it is determined how the various approaches will be interpreted from an economic perspective. In order to attain a neutral position in the research, praxeology is used as the methodology for the report, since praxeology does not question the ends sought, but suggests the appropriate means to achieve those ends. The theoretical framework is established by conceptualizing CSR as the form of ‘the pyramid of CSR’ combined with stakeholder theory and business ethics. The OECD Guidelines for Multinational Enterprises and the 10 principles of the UN Global Compact are subsequently presented for the purpose of illuminating the ‘expected standards’ that international organizations are putting on multinational corporations. Additionally, the concept of shared value as a derivative of CSR is presented as a possible framework for corporations to create congruence between business and society. The findings of the report suggest serious inconsistencies in CSR and shared value, which imply that the frameworks are proposing standards, which are detrimental to their goal. Meanwhile, the school of Austrian economics provide insights of the necessity of respecting property rights and promoting the profit motive. If management in a multinational corporation works outside the interest of the owners of the corporation, it must necessarily infringe on the property of shareholders, and these actions can, ultimately, obscure the market system. Thus, the conclusion of the thesis will incentivize management in multinational corporations to increase their profits and respect property rights, since these two basic initiatives will contribute to the economic welfare of society; enhance social cooperation through specialization and the division of labor; secure efficient utilization of resources; diminish discrimination by external characteristics; and internalize externalities by refraining management from polluting activities.
|Educations||MSc in International Marketing and Management, (Graduate Programme) Final Thesis|
|Number of pages||75|