TITLE

Foreign Investment and Ethics: How to Contribute to Social Responsibility by Doing Business in Less-Developed Countries

AUTHOR(S)

Bardy, Roland; Drew, Stephen; Kennedy, Tumenta

PUB. DATE

March 2012

SOURCE

Journal of Business Ethics;Mar2012, Vol. 106 Issue 3, p267

SOURCE TYPE

Academic Journal

DOC. TYPE

Article

ABSTRACT

Do foreign direct investment (FDI) and international business ventures promote positive social and economic development in emerging nations? This question will always prove contentious. First, the impacts differ according to context. Second, the social consequences and spillover effects of knowledge diffusion and technology-sharing may be limited and hard to measure. Third, contributions to enhancing social responsibility and improving living standards in host countries are delayed in effect, causally complex, and also hard to measure. Outcomes often critically depend on collaboration of governments, international institutions, the business world, and non-governmental organizations (NGOs). Research in this area is challenging and requires interdisciplinary collaboration between economists, financial experts, sociologists, ethicists, and other specialists. This paper explores: (1) the evidence to support the proposition that FDI and international business improve social conditions in less-developed countries, and: (2) how these improvements are linked to strategies of corporate social responsibility (CSR) and ethical business practice. The paper draws insights from development, FDI, poverty alleviation, and bottom-of-the-pyramid (BOP) literature. Applications are demonstrated using examples from poverty-stricken areas of Sub-Saharan Africa. The paper attempts not only to argue theoretically but also to provide practical evidence. The approach is simultaneously descriptive, analytical, and prescriptive in order to address a wide audience. It also highlights issues and trends for further academic research and presents the viewpoint that some limitations lie in the nature of ethics frameworks widely referenced in business and that these often fail to consider the compatibility of ethical constructs with relevant incentives. In this vein, we explore the application of Homann's framework for advantage and incentive-based ethics.

ACCESSION #

73824274

 

Related Articles

• Multinational Companies and Corporate Social Responsibility: Democratisation in the Developing World. Haymon, Kirsty // Melbourne Journal of Politics;2008, Vol. 33, p48 

  The article argues that the concept of corporate social responsibility (CSR) cannot improve local employment, education and health but can also promote open civil society by encouraging the rise of new social institutions and capacities. It addresses the question of how CSR can be made into an...

• Inverting the Pyramid of Values? Trends in Less-Developed Countries. Halter, Maria; Arruda, Maria // Journal of Business Ethics;Dec2009 Supplement 3, Vol. 90, p267 

  The authors discuss the consistency of transnational companies in their home, as well as in less developed host countries, concerning ethics, values and social responsibility. Ethical behavior offers good reputation, credibility and tradition to the corporation. It leads to corporate social,...

• An Attempt to Determine the CSR Potential of the International Clothing Business. Laudal, Thomas // Journal of Business Ethics;Sep2010, Vol. 96 Issue 1, p63 

  Most empirical studies of corporate social responsibility (CSR) focus on variables at the company level. In this article, I focus on the sector level: I consider features of the international clothing business and of the global economy in general, that may influence the CSR potential. There is...

• Benefits and Practical Difficulties of Interplay of Foreign Private Capital Flows and Business Ethics for the Millennium Development Goal of Global Partnership for Development. Demaki, G. O.; Tsetimi, J. // European Journal of Economics, Finance & Administrative Sciences;Nov2011, Issue 40, p169 

  The discourse of the interplay of Foreign Private Capital Flow and Business Ethics for the millennium development goal of global partnership for development, highlights the benefits accruing to the host nations and the difficulties therein. The components of codes of ethics for best business...

• NAVIGATING CORPORATE SOCIAL RESPONSIBILITY COMPONENTS AND STRATEGIC OPTIONS: IHR PERSPECTIVE. Nini Yang; Colvin, Caran; Yim-Yu Wong // Allied Academies International Conference: Proceedings of the Ac;Apr2012, Vol. 16 Issue 1, p5 

  This study has attempted to build linkages between cross-cultural ethical issues and potential corporate social responsibility (CSR) strategic options in a firm-industry specific context so as to achieve a proper balance between a firm's global strategy and its local responsiveness through the...

• The Effect of National Corporate Responsibility Environment on Japanese Foreign Direct Investment. Peng, George; Beamish, Paul // Journal of Business Ethics;Jul2008, Vol. 80 Issue 4, p677 

  We examine the relationship between Japanese foreign direct investment (FDI) and the national corporate responsibility (NCR) environment in host countries using corporate social responsibility and international business theories. Based on data from the Japanese Government’s Ministry of...

• The social responsibility of international business scholars. Peng, Mike W.; Sun, Sunny Li; Blevins, Dane P. // Multinational Business Review (Emerald Group Publishing Limited);2011, Vol. 19 Issue 2, p106 

  Purpose – The paper aims to argue that the social responsibility of international business (IB) scholars is to seek truth, disseminate learning, and make a difference on issues crucial to the global economy. Design/methodology/approach – Instead of making philosophical and abstract...

• CSR in Electrification of Rural Africa. Egels, Niklas // Journal of Corporate Citizenship;Summer2005, Issue 18, p75 

  Multinational corporations (MNCs) are beginning to explore low-income markets in Africa in search of legitimacy and growth opportunities. This paper examines the CSR (corporate social responsibility) aspects of this trend by analysing: (a) how the processes of defining CSR develop when MNCs...

• Theatres of virtue: Collaboration, consensus, and the social life of corporate social responsibility. Rajak, Dinah // Focaal;2011, Vol. 2011 Issue 60, p9 

  In recent years transnational corporations have become major players in the development arena. The rise of corporate social responsibility (CSR) elevates corporations as leaders in a new orthodoxy of business-led development that promotes empowerment through 'the market' as the panacea for...

Read the Article