Order from us for quality, customized work in due time of your choice.
Aim
Corporate Social Responsibility (CSR) is a notion whereby business organisations not only to maximise its profits and also have to consider to the welfare of the society and to take care of all kinds of interests of stakeholders like consumers, shareholders, suppliers, employees, environment and communities. Thus, a business should not have a sole aim to maximise its profits but also have a philanthropic, concise approach to other stakeholders. Under globalisation, now, multinational companies have a dual role as they have to answer both to the shareholders and consumers and other stakeholders. A multinational company cannot maximise its revenues by exploiting its consumers as awareness among consumers have grown in these days of globalisation. If a company does not have a passionate approach to consumers by supplying quality goods at an affordable price, it may not survive in these days of acute competition created by globalisation. If consumers are oppressed or swayed, then these companies will not only flout the rules of CSR but also be ignored by consumers as is evident by many recent happenings. In this research essay, I will be making strong contention against the statement that “In a world dominated by global capital, to what extent has the individual consumer become the victim of corporate power and influence?” and I am going to demonstrate that consumer is the real kingpin of today’s corporate world and if any corporate want to oppress or swindle them, their future will be doomed and they be driven out of the business in the short run.
Methodology
This essay will aim to justify the methodological decisions taken and used to investigate the research problem, mainly from the available secondary data, especially from books written by eminent authors on the subject. The objective is to match the most appropriate methodological approach to the problem, bearing in mind time frame restrictions and limited resources.
Hypothesis
Based on the literature reviewed and the concluding remarks from the “ Aim” section of this essay, the hypothesis is being questioned is that “In a world dominated by global capital, to what extent has the individual consumer become the victim of corporate power and influence?”
Review of relevant literature
Globalisation and corporate social responsibility are like each side of a coin. A company which is of transnational in nature has to adhere to social commitments and to enhance the consumer’s satisfaction by offering quality goods at an affordable price. If it disregards or overlooks consumer’s interest, that company whatever may its financial status will be meeting a bad catastrophe. I will be discussing in this research essay how a multinational company has to satisfy consumer needs through various real life examples in the analysis section.
Analysis
In their book, Lechner & Boli (2004) argues that most of the worst bitter yowls emanating from opponents against globalisation originate from self-interested business leaders who are being compelled to surrender to consumer preference. Homegenisation is not achieved by the globalisation. People want to consume movies, books and even potato chips that mirror their own distinctiveness and those individualities remain primary national. When a politician murmur that globalisation is transforming the society which is naturally true, but they never bother to inquire whose society they are talking about. When society is demonstrated by a fairly solid national economy, a consumer has a chance of co-opting it. (p.12).
Nibert in his book (2002) criticises that health organisations and consumer groups are more worried about the ‘long-run health impact of eating foods that come with foreign genes and insecticides. Opponents of genetically modified organism or GM, concern that agribusiness has wantonly flooded with genetically altered seeds in the world market to “defensively decide the matter, whether or not to acknowledge biotechnology or not. Some critics also argue against the feeding of animals with the genetically modified grains. As these animals are consumed by the consumers again it is creating health issues on human beings. (p.117).
Nibert in his book (2002) argues that some consumer group is of the view that the safety of cow’s milk, especially those produced in the big cow farms on an industrial scale which uses hormones to enhance milk production and use antibiotics to prevent diseases and these hazardous substances are finally found in the cow’s milk. For instance, Monsanto markets recombinant bovine growth hormone, rBGH, a substance predominantly used in the major dairy farms around the world. Further, Monsanto claims that its lion’s share of revenue is emanating from the selling of rBGH hormone in USA. Thus, Monsanto can be said to be responsible for spoiling of millions of health of consumers. It is to be noted that rBGH is supposedly associated to deform and dead calves, creates mastitis in cows demanding antibiotic treatments and has been proven to cause breast cancers among human beings and indeed, the product has been shunned or outlawed in many of the major industrialised nations. (p.127).
Bonanno and Constance (2008) quote that the Kim Humphery (1998) who argues that food consumption as a probable province of empowerment of consumers due to globalisation and despite the growth of political resistance and cultural alternatives. He turns down the argument that the consumers are just mere puppets of corporate power and looks them as actors who can demonstrate a new structure of consumption that change the manifestations of producers. However, in reality, these consumers may be still under the clutches of MNCs. (258).
Briggs (2009) in his book explains that due to increased competition in the background of globalisation, many companies employ deceptive practices or false advertisements, mainly to defraud millions of gullible consumers to make a hey in the bright sunshine. Berkeley Premium Nutraceuticals Company from Ohio was prosecuted for making a misrepresentative advertisement as Enzyte and charged for indulging in money laundering and mail fraud. The promoter of the company was placed under a twenty-five year imprisonment and the company was ordered to pay fine $500 million for defrauding consumers. (p.99).
One another criminal practice perused by companies is the price fixing, which happens when different companies selling a product collude secretly to sell that product at a higher price. In US, both state and federal governments frequently deal with such practices through civil antitrust laws. LG Display Company, Sharp Corp and some other companies were prosecuted in 2008 for engaging in fixing prices for LCD panels. These companies colluded secretly thereby agreeing to keep artificially high prices on LCD television thereby cheating consumers in that process. As a result, LG Display Company had to pay a fine of $400 million and Sharp Corporation had to pay a fine of $120 million.Further, a sentence of seven months was imposed on a vice –president of LG for this offense. (p.99).
In his book Waters (2001) quotes Ritzer’s view that today’s society is influenced by a process of ‘McDonadisation’, the process by which the concepts of fast-food restaurant are being used to dominate more and more provinces of American society and the rest of the globe. (p.199). McDonadisation can penetrate to almost all parts of the world and to the degree that it can induce consumers to enter their outlets; it can convert sovereign consumers into consumers of international style of consumption. Thus, McDonalisaton symbolises a reordering of consumption as well as production, a rationalisation of previous domestic and informal practices that forces the world in the direction of greater conformity in a unique style. (p.200).
Lechner (2009). In his book explains that McDonald offers a specific consumer experience along with the food, inculcating one replica for how to conspire about to eat and how to conspire about eating. The McDonalisaton in East Asia demonstrates that globalisation must contain some element of localisation and localisation is a two-way street demonstrating transformation in the local culture as well as changes in the company‘s standard operating procedures. Thus, this kind of globalisation is akin to adaption or filtering of global replica and practices within specific local contexts that in turn remodel those practices and models, which is one of the key elements of globalisation. (p.28).
In their book , Lechher & Boli (2004) states that the individual consumer became the victim of corporate power and influence, which can be well demonstrated by the following example; McDonald’s has become a famous in Hong Kong that parents frequently used to take their children to the neighboring McDonald’s restaurant as a reward for their academic excellence or good demeanor. For those children’s who have either failed to perform in education or those children which misbehave might be losing their after-school snacks delights or will be asked to remain in home alone while other siblings were taken out for a brunch at McDonald on a Sunday. When interviewed, parents reported that this kind of sanctions functioned well to correct the behavior of their children. McDonald’s culture has become so famous in Hong Kong that the children even refused to eat in the dim sam teahouses or Chinese-style restaurants with their grandparents or parents. In some Hong Kong’s conservative communities, this has resulted in intergenerational distress. (p.130).
Gronow and Warde (2001) in their book cite Hsien, (1998) that most of the Taiwanese companies tend to cheat the consumer through various sort of strategies. Taiwan as compared to with many Western societies, consumer protection laws are at low ebb. Many companies both multinational and national companies in Taiwan tend to reap the benefit of absence of any standard law for consumer protection. The magnitude of the problem is borne out by the fact that even the Taiwanese branch of the leading American bank, Citibank, had been charged of cheating consumers in their banking promotional activities in the mid-1990s. (p.78).
Bigelow & Peterson (2002) is of the view that colonialism and racism previously divided the world as developed and developing and poor nations and how the U.S and European settlement produced inequalities in wealth on a global level. Today, profit –maximisation on the global level are designed institutionally through a structure of processes known as WTO, TNC, IMF, and MNCs. “Bigelow and Peterson” describe this process as “colonialism without colonies.” They demonstrate how these MNCs works together to shift wealth from poor nations to mighty nations and especially by transnational companies. He also quotes that a paper written by Jean Somers (2002) critically analyses how the IMF levy “structural adjustment programs” (SAPs) on deprived nations as a prelude of sanctioning of loans. The SAP compels poor nations to privatise their economy thereby opening up their economy by encouraging flow of FDI, differentiating their product and exporting. Bigelow & Peterson (2002) argues that WTO acts as an international court structure in the interests of multinational companies. (p.105). Massive advertising changes the gullible citizens into consumers who will purchase ‘product’ which they do not require at all thereby generating revenues for big companies. (p.300).
Bhagwati (2004) analyses his book that under globalisation, the interests of low-end consumers in US have been affected drastically. The present protection measures in US are considered to be injurious to the growth of low –end consumer goods that had now gone out of manufacturing in the USA and the net impact of workers’ well-being not emanating from the impact on their wages in employment but from their role as consumers. Bhagwati quotes the words of Edward Gresser in his writings in “Foreign Affairs, “Tariff policy without any indirect intention, has turned to be against the interests of the poor. Young single mothers who buy cheap shoes and clothes now compelled to pay tariff of about five to eight percent, which is higher than what a rich or middle-class family pay in a supermarket. Thus, the removal of these tariffs would annihilate this highly inegalitarian and differentiated tariff structure, which undermines the real incomes of the poorest consumers and the working class of the society. (p.127).
According to Bhagwati (2004), many opponents of globalisation agree one thing: the greediness of MNCs which they believe that MNCs are the real beneficiaries of this socially destructive globalisation and for exploitation of consumers. (ix).
According to Bhagwati (2004), the multinationals are often called as the root cause of today’s global economic disparity. They are termed as the heart of the issue: they are not to be considered to create benefits of consumers abroad as they exploit them. Waters (2001) in his book explain that multinational companies spread their authority over the consumers not only in their home nations but across the world. For instance, the Dutch Electronics company namely, Phillips, or ABB (Asea Brown Boveri), the Swiss –Swedish engineering group each of which have over about eighty-five percent of their sales outside their nation of their origin. (p.48).These multinationals are forming a global alliance now to expand their authority and to exploit the consumers. For instance , forming a global alliance is said to be the expansion of a MNC authority like for any national airline like Star, which has successfully formed alliance with many regional airlines like Australia –Air ,All Nippon –Ansett , Canada- Lufthansa –Singapore –Thai-United –Varig and Oneworld ( American , British , Canadian –AirLiberte /Deutsche BAPCPA / TAT –Finanair –Iberia –Quanta’s or telecommunications firms , e.g. World Source ( AT&T –Kokusai Denshin Denwa-Singapore Telecom) , BT-MCI , Deutsche Bundespost Telekom –France Telecom. Global alliance also occurs in unexpected sectors like information technology. IBM, for instance, once manufactured mainframe computers only, now it has refocused its strategy to manufacture of PC in collaboration with Intel, Microsoft and Lotus and also is now holding significant cross-holding in Apple where it is striving to develop common software architecture also. (p.77).
Scholte (2000) illustrates in his book that globalisation has, in fact, promoted a large scale of Merger & Acquisition activity within nations. Many domestic companies’ synthesise to have had the particular goal to foster a giant national company that can hold its own in globalising capitalism. In a nutshell, corporate mergers have been a strategy for survival of companies in the face of international competition. National governments are silent watchers and not to disrupt any M& A activities on the ground that it may force them to relocate or it may undermine the position of their activities in international markets. In recent years, M& A is flourishing in the global sectors like finance, information and communications and consumer goods. In consumer goods, for instance, M&A have made international players still bigger corporations like Philip Morris, Nestle, Unilever and RJR Nabisco. In the mid-1990s’ alone, the pharmaceutical sector witnessed some $80 billion merger activities. Through, M&A route, many international hotel chains like Sheraton and Hilton have also expanded their operations. Further, a number of aircraft manufacturers have perused the route of mergers with an aim to expand their global operations. In the banking sector alone, many top merger activities have happened. For instance, giants like HSBC, Tokyo –Mitsubishi Bank, Chase Manhattan had created veritable international giants in the banking sector. (P.127-128).
Hassan and Kaynak (1994), in their book, observes that to remain as competitive in this globalised market, it is necessary to comprehend the dynamic of what is happening on an international level in terms of consumption styles and trends so as to make the companies to remain competitive. Today, many retailers are compelled to globalise their activities what considered to be a real domestic industry. Fashion retailers like Benetton and the Limited were able to construct their own international brand image. Benetton, as Europe renowned manufacturer of knits was able to function in many major markets as a local store with a scale of operation and a global vision. Benetton’s competitiveness is based on the awareness of the international consumption patterns like globalisation of teenage dressing market, which was the foundation for competitively initiating the “United Colors of Benetton “campaign of advertising around the globe. These improved stages of globalisation have ended in competition and markets have retorted back to market consumer goods through vibrant global strategies. In this age of the enhanced globalised atmosphere, many consumers oriented companies have to think and act internationally; else, competition is going to affect them that too in their own national markets. (p.19).
Thus, globalisation has now become realism for many industries, which are competing in the international market. Few examples are consumer electronics, consumer market place, watches and automobiles, which have now become global industries. The globalisation of these industries can be attributed in part due to paying attention to buyer needs, technological advancement, and benefits derived from fostering a competitive rank in varied markets that cut across national boundaries. In this globalised industrial phase, ‘a company’s competitive rank in one country significantly impacts or is being influenced by its rank in other countries. (p.20).
Without understanding and responding to the core needs and values of the consumer, competitiveness in the globalising consumer markets will not be accomplished. Those multinational companies with the global operations can face the cut-throat competition only when they are equipped with consumer-oriented strategies. Top managers of global consumer markets will win over these competitions only if they are able to “think of international identical practices and to peruse to make it localisation. (p.22).
Conclusion
Today, if a business wants to thrive among international competition, it has to wed to CSR principles and to take care of welfare of consumers and it’s aim cannot be maximising its profits alone. Today, informed consumers want the manufacturers to restrict their carbon emissions. Further, now, consumers are more concerned with ethical labeling, and they can refuse to buy blood diamonds, cocoa or goods manufactured with child labour or with low wages and with ‘human rights’ issues. Global consumers are waging a crusade against genetically modified (GM) foods. Hence, a corporation cannot disregard the above, and if they do not satisfy consumer needs, they may lose their competitive edge in the global market. According to me, multinational corporations have to respect expectation of consumers and adhere to social commitments and to take care of the interests of all of the stakeholders if they want to be really a successful business.
List of References
Bhagwati, Jagdish N. (2004). In Defense of Globalisation. Oxford: Oxford University Press.
Boli John & Lechner, Frank J. (2004). The Globalisation Reader. New York: Wiley Blackwell.
Bonanno Alessandro and Constance. (2008). Stories of Globalisation: Transnational Corporations, Resistance and the State. Penn: Penn State Press.
Briggs Steven. (2009). Criminology for Dummies. New York: For Dummies.
Gronow Jukka and Warde Alan. (2001). Ordinary Consumption. New York: Routledge Taylor & Francis Group.
Hassan, Salah S & Kaynak Erdener. (1994). Globalisation of Consumer Markets; Structure and Strategies. New York: Routledge Taylor & Francis Group.
Lechner, Frank J. Globalisation: The Making of World Society. New York: Wiley –Blackwell.
Nibert, David Alan. (2002). Animal Rights / Human Rights: Entanglements of Oppression and Liberation. New York: Rowman & Littlefield.
Sleeter, C. (2003). Teaching Globalisation. Multicultural Perspectives, 5(2), 3-9. Retrieved from Academic Search Premier Database
Waters, Malcolm. (2001). Globalisation. New York: Routledge Taylor & Francis Group.
Order from us for quality, customized work in due time of your choice.