InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
Instructor Manual
Chapter 10: Corporate Social Responsibility
to accompany Mike Peng & Klaus Meyer: International Business, Cengage Learning
Prepared by Klaus Meyer
version February 2011
Introduction to the Topic
Learning Objectives
1. articulate a stakeholder view of the firm
3. explain how institutions influence firms’ corporate social responsibility activities
5. draw implications for action
General Teaching Suggestions
Globalization, among other consequences, makes ethical issues faced by managers more
complex. We have therefore chosen to integrate CSR right at the centre at book, within Part
III of globalization (rather than as an add-on last chapter as in some other textbook). Raising
students awareness for the complexity of ethical issues, and providing conceptual framework
to structure CSR discussion should be a central element within an IB class.
Opening Case Discussion Guide
The opening case ‘Starbucks’ outlines some of the challenges faced by firms that publicly
commit to high standards of CSR. In particular, by taking high profile initiatives, companies
also become vulnerable to attack by interest groups pushing their specific views on aspects of
CSR. The conflict features Starbucks and Transfair USA, the organization between the
FairTrade brand. To initiate a discussion, you as instructor may ask, “how do you suggest
Starbucks should handle demonstrations from Transfair?”
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
Chapter Outline, Section by Section
Section 1: Stakeholders of the Firm
Key Ideas
The section introduces key concepts in the CSR debate, including primary and secondary
Key Concepts
corporate social responsibility (CSR)
The consideration of, and response to, issues beyond the narrow economic, technical, and legal
requirements of the firm to accomplish social benefits along with the traditional economic gains which
the firm seeks.
stakeholder
Any group or individual who can affect or is affected by the achievement of the organization’s
objectives.
primary stakeholder groups
The constituents on which the firm relies for its continuous survival and prosperity.
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
normative view
A view that firms ought to be self-motivated to ‘do it right’ because they have societal obligations
child labour
Working persons under the age of 16
Section 2: CSR in the Global Economy
Key Ideas
The CSR challenges faced by companies operating across borders are considerably more
complex than those of firms operating in a single national context. This is because the ethical
Key Concepts
pollution haven
Countries with lower environmental standards
race to the bottom
Countries competing for foreign direct investment by lowering environmental standards
Section 3: Institutions, Stakeholders and CSR
Key Ideas
CSR debates vary considerably between countries because the legal foundation of what
companies do or do not have to do vary, as do the views the norms and values supporting
ethics. This often leads to major misunderstandings, and views that ‘our’ standards are better.
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
Key Concepts
explicit CSR
Voluntarily assuming responsibilities of societal concerns
reactive strategy
A strategy that would only respond to CSR causes when disasters and outcries break out.
defensive strategy
A strategy that focuses on regulatory compliance with little top management commitment to CSR
causes.
Section 4: Debates and Extensions
Key Ideas
The first debate concerns the impact of CSR on firms’ financial performance, a topic on
which empirical evidence remains (almost) inconclusive.
Key Concepts
hypernorms
Norms considered valid anywhere in the world
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
Section 5: Implications for Practice
Key Ideas
The final section emphasizes the need for managers to engage with CSR debates and to make
sure that their actions match their pronouncements.
Review Questions
Review questions are provided to students on the website accompanying the book. They
directly ask to summarize the material provided in the text. Instructors may also use the
questions to structure their lectures or review sessions.
Review Questions
(as provided to students on the website)
Material in the Book
1. What is corporate social responsibility?
2. What are some of the recommendations on how
MNEs ought to behave as responsible citizens of the
world?
6. What are the pressures that may or may not induce
MNEs to locate more polluting activities in less
developed countries?
7. What are the pressures that may or may not induce
MNEs to employ lower labour standards in countries
outside their home base?
8. What is the purpose of the ‘standards of
engagement’ created by many MNEs?
Page 297
Table 10.1
Pages 304-05
Page 305-08
Page 309, In Focus 10.4
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the world?
12. What are the levels of strategic responses that MNE
may adopt in response to pressures for CSR?
Page 312-14
Critical Discussion Questions
At the end the chapter, we provide discussion questions that aim to stimulate students
thinking beyond memorizing the material learned in the chapter. They are designed to be
used at a basis for in-class discussions, group work, or individual assignments. Below,
provide some indicative answers of issues that may be raised in response to these questions.
Discussion Questions
(as provided in the book)
Indicative Responses
1. In your opinion, how should MNEs act
when legal requirements on labour or
environmental issues vary between the
different countries in which they operate?
2. Some argue that investing in emerging
economies greatly increases the economic
development and standard of living of the
base of the global economic pyramid.
These questions concern ethical issues where
students are, based on varying values, are likely to
come to different conclusions. Critical is, however,
that they develop their arguments rigorously with
(customers), neither of which they can
afford to offend.
2. It should be clear that a lot of the labour
standard issues put forward by advocates
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
(2) the leader of a labour union in the home
country of the MNE that is losing lots of
jobs, or (3) the leader of an environmental
NGO in the low-cost country in which the
MNE invests?
from them. At the same time, you have to
retain your own credibility but enforcing
the SoE, which would require
discontinuing sourcing form this supplier
after appropriate warnings.
Closing Case
The closing case provides further opportunities to apply ideas and concepts learned in this
chapter in a real world setting. The Closing Case for this Chapter is “INSERT” and focuses
on “INSERT”. Below are some indicative responses to the case discussion questions.
Case Discussion Questions
(as provided in the book) Indicative Responses
1. In your country, should universities actively solicit
donations from wealthy individuals and private
These questions concern ethical issues where
students are, based on varying values, are likely
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
donor?
3. What should businesses ask for in return for
handing over large amounts of cash to universities?
Should shareholders support such donations to
universities?
Further Learning Activities
In addition to the cases and discussion questions provided in the book, instructors may want
to use any of the following activities to further engage students with the material.
1. China has been a recipient of considerable investment recently. However, little
research has been conducted by the green technologies company for which you
work concerning the exact nature of socially responsible technology investment.
Since your firm’s goal is to operate in China that promotes social responsibility,
you must identify the sectors of green technology that receive the most
2. Microfinance is an emerging area of individualized financial investment in developing
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
countries that is based on social responsibility principles. However, since it involves the
investment of resources with the expectation that a profit will be made, microfinance investors
tend to search for regions and portfolios that have the highest profitability. Analyze information in
a global data set to determine which areas of the world seem to have the most profitable
microfinance activities. What conclusions can you draw from this information?
One resource which can be used is “The Mix: Microfinance Information Exchange”. This
Further Readings
At the end the chapter, suggested further readings are provided. The primary aim is to
provide students a starting point for further work, for example when preparing a class
assignment or dissertation. These references also are recommended for instructors not
familiar with the topic and wishing to ‘get ahead of the students’ before lecturing on a topic.
J.H. Dunning, ed., 2004, Making Globalization Good: The Moral Challenges of Global Capitalism, Oxford:
Oxford University Press – a collection of essays by scholars as well as political and religious leaders about
the moral challenges of global capitalism.
InstructorManualtoMikePeng&KlausMeyer(2011):InternationalBusiness,CengageLearning.
CSR in a global context.
R. Van Tulder & A. van der Zwart, 2006, International Business-Society Management, Abington:
Routledge – a textbook that explores the role of companies’ CSR practices within the conflicting pressures
of markets, state and civil society.