Corporate Social Responsibility (CSR) has become a globally recognized concept in recent times. It entails voluntary contributions made by organizations towards environmental preservation and social well-being, alongside their business planning and daily operations. Companies are now expected to take responsibilities beyond their profit-driven goals and cost-cutting measures. CSR covers issues that concern the economy, environment, and society, in line with sustainable development principles, which involves ethical decision-making. This paper emphasizes the ethical issues surrounding CSR in international business, from the cultural dimensions perspective of Hofstede (2005), such as power distance and masculinity.

The study of cooperative social responsibility (CSR) has cultural constraints, partly due to the lack of nonmarket strategies that align with the set sustainable development objectives in the home nation of the company. Hofstede's cultural dimensions offer critical insights into the quality of life and materialistic wealth's drivers for success, impacting a company's CSR strategies. The national culture and business philosophy significantly impact an international business's CSR performance. For instance, companies situated in countries with high power distance indices, such as Japan and the United States, tend to perform CSR-related activities better than those in low power distance index countries.

Companies seeking to enhance CSR-based competitive advantages and improved global performance must take into account the six anthropogenic elements described by Hofstede (2005). Businesses must adapt their CSR initiatives to account for social and environmental responsibilities that can differ significantly from country to country. Therefore, companies should develop country-specific policies to account for intrinsic characteristics of different nations, including cultural traits that shape successful CSR activities. Culture should not be ignored in transnational policy-making, as it impacts policy design and implementation for CSR proliferation, and may pose barriers to successful agenda-setting for sustainable development.

When engaging in cross-border CSR activities, it's essential to consider cultural differences. With an increasing number of businesses developing nonmarket-CSR strategies and competing in business systems that are far from where their head office was founded, taking cultural variations into account is crucial. This is especially significant for international businesses that rely heavily on subsidiaries for innovation and the development of competencies within a host-country business system. Ignoring cross-country distinctions in terms of cultural attributes can hinder the success of CSR initiatives for international businesses. Hofstede's cultural dimensions play a big role in the impact of CSR performance for these companies.

References:

Birkinshaw, J., Young, S., & Hood, N. (2005). Subsidiary entrepreneurship, internal and external competitive forces, and subsidiary performance. International Business Review, 14(2), 227-248.

European Commission. (2001). Green Paper. Promoting a European framework for corporate social responsibility. Industrial relations and industrial change. European Commission. Directorate-General for Employment and Social Affairs Unit EMPL/D.1

Halkos, G., & Skouloudis, A. (2017). Revisiting the relationship between corporate social responsibility and national culture: a quantitative assessment. Management Decision, 55(3), 595-613.

Hofstede, G., & Hofstede, G. J. (2005). Cultures and Organizations: Software of the Mind (Rev. 2nd ed.). New York: McGraw-Hill.

Hofstede, G., Hofstede, G. J., & Minkov, M. (2010). Cultures and Organizations: Software of the Mind (Rev. 3rd ed.). New York: McGraw-Hill.

Monteiro, L. F., Arvidsson, N., & Birkinshaw, J. (2008). Knowledge flows within multinational corporations: Explaining subsidiary isolation and its performance implications. Organization Science, 19(1), 90-107.

O'Fallon, M. J., & Butterfield, K. D. (2005). A review of the empirical ethical decision-making literature: 1996-2003. Journal of Business Ethics, 59, 375-413.