Brands such as Apple, Hasbro and Nike have become staples in North American homes. These three companies are also a few examples of the several multinationals which have, over the years, come under extreme scrutiny for their lack of Corporate Social Responsibility (CSR) in their offices in China. Apple, time and again, is accused of taking advantage of the lower labour standards in China. Similarly, global campaigns and media awareness in the United Kingdom and United States have brought attention to Nike’s exploitative and often abusive treatment of workers in its factories in China. Hasbro’s product recalls in the past have also led to insight into poor working conditions for the employees.
The economic backbone of China is resoundingly built on cheap, often exploitative labour. Furthermore, combined with the heavy environmental pollution brought on by corporatization, public awareness in Western countries grew to become highly critical of business practices in China. Large corporations with offices around the globe continue to garner extensive criticism from their Western consumer base for their practices in China as taking advantage of the lower environmental standards and the cheap, sweat-shop like labour standards. As China quietly became an economic giant, questions arose about the country’s social and environmental commitment. However, a deeper look into what corporate social responsibility has come to represent can lead to a better understanding of China and CSR.
CSR, especially for western corporations, is largely seen as a standard dictated by a triple bottom line: a commitment to the financial, environmental and social welfare by the corporation in question. Business tycoons, investors and academics continue to debate the actual potential of CSR in a profit-driven system in which capital accumulation is an end goal in itself.
Can a legitimate commitment to environmental and social betterment exist in a system driven solely towards profits? One argument purports that businesses, similar to individual citizens, have a social function as well and should improve the environment in which they operate and work. Others argue the sole purpose of business is to increase profits and stakeholder commitment and CSR comes to resemble nothing more than public affairs and advertising campaigns.
Proponents of corporate social responsibility argue it is a good strategic move for the long run self-interest of the company: the long-term growth of the company benefits from such commitments and in fact helps to increase profits by supporting growth and sustainability. For example, a company maintaining environmental responsibility will have a better environment to operate in and will therefore be able to operate longer. These arguments follow from the fact that it supports professionalism and helps the profit-driven goals of the corporations. Given that the concept of CSR was popularized within Western corporations, these arguments have been drawn out using their business models, focusing on strategic campaigns and dictated often by a very explicit triple bottom line. It follows that corporations in China are often critiqued by similar standards: having a distinct triple bottom line and strategic campaigns envisioned for long-term growth.
China, like several other South East Asian countries is highly influenced by Confucianism. Central to Confucianism is respect for family and social harmony. These values emerge in the way Chinese multinationals conduct their business and CSR practices. By considering that CSR may emerge differently in China due to cultural considerations, we are able to gain a better picture of CSR in China.
In fact, research finds that over the past few years labour standards and environmental commitments have improved in China. A deeper look at some China-based multinationals provides a more holistic picture of CSR practices in China. One large telecom company, Huawei was recently examined to find that this growing multinational has a strong social commitment based on three values: Reciprocity, Sustainability and Solidarity.
Hauwei has sought to maintain strong, meaningful relationships with stakeholders, customers, and vendors, and emphasizes the value created by their products and services when delivered in sustainable ways. Local initiatives in which the company operated were especially supported to give back to the communities closest to them. These initiatives focused especially on education and could be as simple as providing school books to children living in mountainous areas. The local commitment also highlights the Confucian value of social harmony emerging within Huawei’s business practice.
While Huawei has delineated long term stakeholder engagement as key in its CSR practices, it is motivated less by the strategic impact of its decisions and more by a pressing social obligation to growing its business to meet the needs of all consumers. A culture-specific version of CSR is becoming clearer, one which hones in on core values (and in the case of Huawei, those of reciprocity, sustainability and solidarity) more so than corporate professionalism and long-run self-interest. It seems that corporations in China, with obligations to global and Chinese stakeholders, are committing to CSR in a locally specific way.
Criticisms of China must question the roots of Western corporatization as well, which also took advantage of cheap labour and lack of standards at the time of industrialization. Multinationals such as Nike or Apple which are based out of Western countries can learn how to operate ethically in China from locally-based multinationals.
Disclaimer: Any views or opinions expressed in articles are solely those of the authors and do not necessarily represent the views of the NATO Association of Canada.