International Business- Article Review
You are asked to review the below academic article by completing the journal article review template provided. You are not allowed to edit the questions in the template or create your own. Your submission will not be assessed unless the correct template is used.
Note: on all written assessments, a +/-10% margin from the word limit is allowed. However, a deduction of 1% will be made from the final mark for each 1% beyond the 10 % margin. So, for a 500 word-limit assessment, no penalties are incurred up to 550 words. However, every 1% beyond the 550 words will incur a 1% deduction in marks.
Article: Mishra, P & Schmidt, G B 2018, How can leaders of multinational organizations be ethical by contributing to corporate social responsibility initiatives? Guidelines and pitfalls for leaders trying to do good, Business Horizons, vol. 61, iss. 6, 833-843.
Your review should:
identify the key concepts and theories related to your chosen article;
demonstrate a grasp of the authors main arguments in the article;
discuss the practical implications of the reading; you should consider why the topic of the article is interesting and important for managers of multinational enterprises in the contemporary global business world and how the understanding of the article would benefit the managers; and
present these by using an effective academic writing style.
Some tips for this assessment
When reviewing an academic article, it is critical to focus on what the authors are arguing rather than simply the subject that they are talking about.
Use your own words and avoid direct quotations as quotations do not explain your thinking or judgements. Summarising in your own words and paraphrasing are essential skills for academic writing. To summarise means to reduce a text to its main points and its most important ideas. Paraphrasing means putting it into your own words.
The criteria against which the assessment will be graded are:
evidence of critical reading and understanding of the article;
reflection on the practical implications of the article for managers the multinational enterprises; and
presentation which includes a clear writing style, good grammar and spelling and appropriate referencing (This course uses the Harvard (or RMIT-Harvard) citation method unless otherwise stated (see: http://www.lib.rmit.edu.au/easy-cite/ for more information the referencing style).
Article Review Template
Part A: Student and article information (This part is excluded from the word count)
Your name
Student ID
Number of words
Title of the selected article
Part B: Use your own words and sentences to complete each section (the questions are excluded from the word count)
Objectives: What does the article set out to do?
Subject and theories/concepts: What is the article about? What is its subject? What are the central concepts and/or theories discussed in the article?
Findings/main arguments: What are the key findings or main arguments of the author?
Practical implication: Why is the subject of the article interesting and important for managers of multinational enterprises in the contemporary global business world and how would the understanding of the article benefit the managers?
Part C: List of references (The references should be in alphabetical order according to the last name of the first author. This part is excluded from the word count)
International Business: Journal Article Review Template (Assessment 1) Assessment Task 1: Academic article review (500 words, 10%)
Assignment type: Individual, written
Value: 10%
Link to the CLOs: 1, 2, 3
Length: 500 words
Due date: 19:00, Friday, Aug 14 (Singapore Time)
Note: on all written assessments, a +/-10% margin from the word limit is allowed. However, a deduction
of 1% will be made from the final mark for each 1% beyond the 10 % margin. So, for a 500 word-limit
assessment, no penalties are incurred up to 550 words. However, every 1% beyond the 550 words will
incur a 1% deduction in marks.
Your review should:
identify the key concepts and theories related to your chosen article;
demonstrate a grasp of the authors main arguments in the article;
discuss the practical implications of the reading; you should consider why the topic of the article
is interesting and important for managers of multinational enterprises in the contemporary
global business world and how the understanding of the article would benefit the managers;
and
present these by using an effective academic writing style.
Some tips for this assessment
When reviewing an academic article, it is critical to focus on what the authors are arguing rather
than simply the subject that they are talking about.
Use your own words and avoid direct quotations as quotations do not explain your thinking or
judgements. Summarising in your own words and paraphrasing are essential skills for academic
writing. To summarise means to reduce a text to its main points and its most important ideas.
Paraphrasing means putting it into your own words.
The criteria against which the assessment will be graded are:
evidence of critical reading and understanding of the article;
reflection on the practical implications of the article for managers the multinational
enterprises; and
presentation which includes a clear writing style, good grammar and spelling and
appropriate referencing (This course uses the Harvard (or RMIT-Harvard) citation method
unless otherwise stated (see: http://www.lib.rmit.edu.au/easy-cite/ for more information the
referencing style).
You are asked to review one of the below academic articles by completing the journal article
review template provided. You are not allowed to edit the questions in the template or create your
own. Your submission will not be assessed unless the correct template is used.
Article 1.
Mishra, P & Schmidt, G B 2018, How can leaders of multinational organizations be ethical by
contributing to corporate social responsibility initiatives? Guidelines and pitfalls for leaders trying to do
good, Business Horizons, vol. 61, iss. 6, 833-843.
Article 2.
Bashir, N, Papamichail, K N & Malik K 2017, Use of Social Media Applications for Supporting New
Product Development Processes in Multinational Corporations, Technological Forecasting and Social
Change, vol. 120, 176-183.
Article 3.
Kim, C & Park, D 2015, Emerging Asian MNCs, Asia Pacific Business Review, vol. 21, iss. 4, 457-463. How can leaders of multinational
organizations be ethical by contributing to
corporate social responsibility initiatives?
Guidelines and pitfalls for leaders trying to
do good
Paresh Mishra *,1, Gordon B. Schmidt 1
Purdue University, Fort Wayne, 2101 E. Coliseum Boulevard, Fort Wayne, IN 46805, U.S.A.
Business Horizons (2018) 61, 833843
Available online at www.sciencedirect.com
ScienceDirect
www.elsevier.com/locate/bushor
KEYWORDS
Corporate social
responsibility;
Multinational
enterprises;
Greenwashing;
Transformational
leadership;
Participative
leadership
Abstract Corporate social responsibility (CSR) is a laudable goal for multinational
enterprises (MNEs) because of the significant positive impact they can bring to the
society and environment around the world. However, there are significant challenges
to the practice of CSR in MNEs. This article discusses two major barriers to CSR that
are especially significant for MNEs: leaders attitudes and cultural variance. We then
apply insights from Rests ethical decision-making and cross-cultural research to
offer guidance to leaders of MNEs to implement CSR in their organizations. We
present a multistep process by which leaders first reflect on and clarify what goals
they want to accomplish in the realm of CSR and then how to build consensus for those
goals and modify them to incorporate the values and beliefs of local constituents.
# 2018 Kelley School of Business, Indiana University. Published by Elsevier Inc. All
rights reserved.
* Corresponding author
E-mail addresses: [emailprotected] (P. Mishra),
[emailprotected] (G.B. Schmidt)
1 Authors contributed equally and are listed alphabetically
https://doi.org/10.1016/j.bushor.2018.07.011
0007-6813/# 2018 Kelley School of Business, Indiana University. Pu
1. Globalization: A love/hate
relationship
Globalization is one of the most hotly debated
topics in the social sciences. This is not surprising
because it is a complex phenomenon with multiple
and competing narratives, ideologies, and world-
blished by Elsevier Inc. All rights reserved.
http://crossmark.crossref.org/dialog/?doi=10.1016/j.bushor.2018.07.011&domain=pdf
https://doi.org/10.1016/j.bushor.2018.07.011
http://www.sciencedirect.com/science/journal/00076813
mailto:[emailprotected]
mailto:[emailprotected]
https://doi.org/10.1016/j.bushor.2018.07.011
834 P. Mishra, G.B. Schmidt
views. More importantly, it is a force that brought
about profound changes in economies, govern-
ments, cultures, technologies, organizations, peo-
ple, families, and the environmentand not always
in positive ways. Whether we love globalization for
the opportunities it brings or hate it for the dis-
ruptions it causes, it is undeniable that the world we
live in today is historically the most globalized
world ever, and we are on a relentless path toward
even more globalization.
Seemingly trivial and routine decisions that we
make today in our personal and professional lives
impact the lives of people on the opposite side of
the planet. The shoes or shirts that we buy at some
fashion store in the U.S. may have ripple effects in
the lives of thousands of people working in a sweat-
shop in Bangladesh where these products might
have been manufactured. A managers decision to
upgrade all the computers in his office with the
latest models every 2 years may impact the lives of
factory workers manufacturing and assembling
these gadgets across different parts of Asia or the
environment and health of millions of people living
in certain regions of China, India, Nigeria, and
Ghana that have become the dumping grounds of
the developed worlds electronic waste (Kiddee,
Naidu, & Wong, 2013).
The globalized world has made each one of us
into the metaphorical butterfly of Edward Lorenzs
(1995) Butterfly Effect; in a dynamically intercon-
nected system like the Earths ecosystem, the mere
flapping of the wings of a butterfly in Brazil can
cause a tornado in Texas a few days later. In the
dynamic interconnectedness of the globalized
world, a seemingly minor action of a human being
has the potential to influence the lives of thousands
of people around the globe. If a single human
beings action can impact so many lives around
the world, one can only imagine the potential scale
of the impact generated by a multinational enter-
prise (MNE).
The size of many MNEs today is mind-boggling.
Some have annual revenues that surpass the annual
GDP of the vast majority of countries; the worlds
largest 100 economies in 2016 consisted of only
31 countries but 69 corporations (Green, 2016).
The annual revenue of Walmart, the largest corpo-
ration on this list, was higher than the annual GDP
of all but just nine countries of the world. Thus, if
the magnitude of the impact of a human beings
action can be equivalent to that of a butterfly
creating a tornado, then the impact potential of
an MNE could be even larger than a cataclysmic
Geostormborrowing the name of a 2017 science
fiction disaster film spread across the entire
world.
The immense scale of impact of MNEs is not just
hypothetical. Research published by Heede (2014)
showed that just 90 large companies contributed
66% of the total humanity-caused global warming
emissions between 1751 and 2010. According to a
report by The Economics of Ecosystems and Biodi-
versity (TEEB) that is part of the United Nations
Environment Program, the monetary cost of the
environmental damage caused by businesses was
estimated at $4.7 trillion per year (Fellow, 2013).
Globalization contributed to the acceleration and
intensification of global climate change that affects
us all. This Great Acceleration, as it has been
termed, is changing the Earths geology and eco-
systems at such grand scales that scientists say a
new human-induced geological epoch called the
Anthropocene epoch as begun (Barnosky et al.,
2012).
Because of MNEs high potential for global im-
pact, it is critically important that every MNE con-
ducts its business with the utmost sensitivity and
responsibility. In other words, the importance of
ethics in the global business landscape is more
important than ever.
The purpose of our article is to make a case for
corporate social responsibility (CSR) as the primary
means of conducting responsible business in to-
days globalized world. We first discuss the mean-
ing of CSR and its varied manifestations. Next, we
discuss the role of leadership in CSR. Then we
identify the key drivers and barriers that influence
leaders approach to CSR in MNEs. We classify these
factors as either generic, which would apply to
MNEs across the world, or culture specific, which
would be relevant only in certain regions of the
world. Based on this analysis, we offer a few
suggestions for leaders of MNEs to help them over-
come some of the unique challenges that come
from implementation of CSR strategies in the glob-
al environment.
2. What is CSR?
CSR is a complex topic. It rests on the idea that all
businesses have a responsibility toward the larger
society. It is a form of self-regulation that tries to
eliminate or at least minimize the harm it may
otherwise cause through its business processes. It
is also the eagerness with which business organiza-
tions consider the interests of the larger society
their responsibility and proactively attempt to do
good for the society and environment.
Researchers have proposed numerous defini-
tions of CSR that can vary significantly, in part
because CSR is a dynamic concept and thus its
Guidelines and pitfalls for leaders trying to do good 835
meaning varies by time, context, and culture.
What may be seen as good and responsible in
one country or in one era may seem reprehensible
in another.
However, despite the plethora of definitions of
CSR, there is a general agreement about its core
aspects. Drawing on the work of Carroll (1999),
McWilliams and Siegel (2001), and many other re-
searchers, we conclude that CSR refers to all those
organizational actions that are meant to further the
good of society and environment, and go beyond the
companys legal obligations. There are two key
components within the construct of CSR. First,
while businesses perform a wide variety of actions,
CSR refers only to a subset of those actions that are
explicitly aimed toward the betterment of society
and the environment. Second, CSR only refers to
those society- and environment-friendly actions
that an organization is not legally mandated to
perform. In other words, CSR is associated with
voluntary actions. While paying environmental tax
may help the environment, it would not be consid-
ered CSR because businesses are legally obligated to
pay their taxes.
As long as the above two conditions are met,
perhaps any action could be designated as CSR. CSR
actions may be directed inside the firm (e.g., mak-
ing the production process more environmentally
friendly), across the firms value chain (e.g., pro-
curing goods only from certified fair trade suppli-
ers), and outside the firm (e.g., creating
infrastructure for local communities). The avenue
of social good can also vary and includes environ-
mental (e.g., only using sustainable materials in
production), worker welfare (e.g., paying a living
wage), and charity work (e.g., donations into a
community).
A popular way of conceptualizing CSR is through
the idea that organizations should be pursuing not
only the financial bottom line but also the triple
bottom line, which includes social and environmen-
tal performance along with the traditional financial
considerations (Norman & MacDonald, 2004).
CSR actions can vary widely across MNEs. They
may include making charity donations, supporting
of local communities, using ecofriendly materi-
als, volunteering organizational time and resour-
ces to social causes, and even safeguarding
human rights in areas with unstable governments.
As MNEs spread across many different countries,
CSR also spans many countries. This raises the
inevitable question: Should MNEs opt for a CSR
strategy that is homogenous across the world or
should they tweak their CSR approach to the
idiosyncrasies of the different countries in which
they operate?
3. Global versus local strategies of CSR
Arthaud-Day (2005) identified four different CSR
strategic orientations that MNEs take. In the multi-
national orientation, companies seek to take up
social responsibilities that conform to local culture,
custom, and religion. A Western MNE operating in a
developing country may decide to be more accom-
modating to child labor, realizing that children may
engage in labor to contribute financial support to
their poor families.
The second orientation is the global approach to
CSR, which focuses on hypernorms, or universal
principles that are valued in all cultures
(Arthaud-Day, 2005). According to Donaldson and
Dunfee (1994), who coined the term, MNEs should
pursue hypernorms by providing quality health and
safety standards for all employees, by respecting
fundamental human rights of all people and by
instituting systems that minimize all forms of envi-
ronmental pollution.
The third approach is the international approach,
which involves exporting domestic CSR philosophies
and practices from where the organization is head-
quartered to other countries without making any
effort to adapt them to the circumstances in foreign
countries. This is not often a recommended ap-
proach because it can result in a version of moral
imperialism, where the morals of one country are
imposed on other countries. It can also be ineffec-
tive as citizens of other countries might resent or
even resist the attitudes and actions imported from
far-off lands (Arthaud-Day, 2005).
The final approach offered by Arthaud-Day (2005)
is the transnational approach, where organizations
recognize that global and local approaches to CSR
need not be mutually exclusive, and that local
perspectives should be taken into consideration
even while implementing global universals.
4. The necessity of a balanced
approach
In this article, we take the position that the trans-
national approach is the ideal approach for MNEs
because it provides a counter to the universal/local
dichotomy. Effective CSR is not about universal
versus local values, but about marrying the univer-
sal ethical values with the local ones. Its about
recognizing the universal values and acting accord-
ing to them, but in a way that doesnt disrespect the
values and traditions of the local culture. This often
would include engaging workers across the MNE in
discussing and creating those applications of
836 P. Mishra, G.B. Schmidt
universal values. So to some degree, its about
giving the universal values a local color in the
practice of CSR, helping to motivate agreement
and action across the MNE.
The primary reason the transnational approach is
most suitable for implementing CSR in MNEs is
because MNEs operate in a global environment that
is dynamic. Thus, the companys approach to im-
plementing CSR also needs to be dynamic. A dynam-
ic approach recognizes the fact that in a global
environment, new factors will periodically emerge
that may necessitate changing the nature and ex-
tent of CSR responsibilities practiced by an MNE.
MNEs cannot afford to be stuck in the other ap-
proaches described by Arthaud-Day (2005) because
they are relatively static and assume that the so-
cial, political, economic, and legal environment
within which the company operates will always
be in line with either universal, ethnocentric, or
local values.
5. Role of leaders in CSR
MNEslike other forms of business
organizationsare legal entities that have a
legal standing in the eyes of law. However, its
the leaders running the MNEs who make all the
important decisions on behalf of these organiza-
tions. Therefore, leaders play a crucial role in
how and even whether MNEs engage in CSR.
Leadership refers to the process of influencing a
group or an organization to realize certain objec-
tives. When CSR is viewed as an organizations goal
to further the good of society and environment
beyond its legal obligations, the importance of
leadership in CSR becomes obvious. Even when
CSR is defined in terms of realizing the goal of
fulfilling the triple bottom line, the role of leader-
ship is undeniable.
Perhaps the most important reason why the role
of leadership is critical to MNEs is that the basic
structure and system of all MNEsunlike those
of nonprofit organizations or democratic
governmentsare geared toward maximizing prof-
its. As discussed in the introduction to this article,
the actions of MNEs may have huge societal and
environmental impact, which causes us to advocate
for MNEs to take up social responsibilities. However,
since the systems within MNEs werent specifically
created to do good for the society and environment,
without leadership intervention, there may be little
to no practice of CSR in MNEs. Leadership matters in
CSR. Effective CSR in MNEs is only possible with
responsible and effective leadership in these orga-
nizations.
Stated differently, leaders are the actual drivers
of CSR in MNEs. Their attitudes and behaviors can
significantly influence the extent and nature of CSR
practiced at any MNE. Unfortunately, research that
combines leadership and CSR is in its infancy
(Strand, 2011). Leadership and CSR are large inde-
pendent bodies of literature in the business disci-
pline, but there are very few studies that examine
the role of leadership in CSR. The good news is that
the studies that have investigated the intersection
of leadership and CSR help in the identification of
some significant global and local factors that can
prevent leaders from implementing CSR in MNEs.
We list these barriers to CSR, and later suggest ways
to overcome them.
6. Barriers to effective CSR in MNEs
CSR literature has identified many barriers to ef-
fective CSR. However, not all of these factors are
relevant for MNEs. The cost/benefit ratio of a CSR
initiative may be very relevant for small and
medium-sized enterprises (SMEs) that have limited
financial capacity but are of little to no relevance
for MNEs that have the advantage of economies of
scale (Laudal, 2011; McWilliams & Siegel, 2001). In
this short review of barriers, we focus primarily on
psychological factors that are likely to influence the
extent of CSR practiced in MNEs.
6.1. Leaders attitude about CSR
CSR would not be possible in any organization with-
out the firms leadership having favorable attitudes
toward CSR. Leaders will commit to CSR only when
they truly believe in its value. However, a leaders
conception of CSR, especially those in charge of
large MNEs, is not always positive. This is because
they usually had their education and training in the
tradition of a free-market economy in which the
prevailing view is that CSR is not the responsibility
of any business organization (Ghoshal, 2005). Peter
Drucker, who is considered the father of modern
management, once asserted in an interview: CSR is
a dangerous distortion of business principles. If you
find an executive who wants to take on social
responsibilities, fire him fast (Banerjee, 2007, p.
51).
While the proponents of CSR contend that busi-
nesses have social and environmental responsibili-
ties, the opponents vehemently argue against
businesses having such responsibilities. In a debate
on what constitutes the social responsibility of
business (Friedman, Mackey, & Rodgers, 2005), John
Mackey, the founder and CEO of Whole Foods,
Guidelines and pitfalls for leaders trying to do good 837
talked about his business not depending on the
invisible hand and embracing the new form of capi-
talism that worked consciously for the common
good. However, the Nobel Prize-winning economist
Milton Friedman argued in the same debate that the
one and only one social responsibility of businesses
was to increase profits. Reiterating views from his
book Capitalism and Freedom, Friedman (1962)
argued that as long as businesses dont engage in
any fraudulent activities, the pursuit of profits was
all that mattered. Similar disagreements have also
been expressed by others. Jack Welch, the former
CEO of General Electric (GE), criticized GEs later
foray into green and socially responsible business
practices, emphasizing that the main social respon-
sibility for a company should always be to win
(Singh, 2011).
6.2. Cultural influences on CSR
The topic of CSR gets muddled when we discuss its
relevance in the context of global business environ-
ments because values, norms, and practices vary
dramatically across nations and cultures. When
customers and consumers of a country are well
informed about societal and environmental mat-
ters, they are likely to put pressure on MNEs to
engage in responsible business practices. The cul-
ture, traditions, and values of the national origin of
the MNEsas well as the host countrycan influ-
ence the level of CSR practiced by the MNEs. The
culture of the country of origin may influence the
style of functioning of MNEs and how much emphasis
they place on human welfare and environmental
issues. The culture of the host country can also
influence CSR tremendously.
Waldman et al. (2006) found that cultural factors
strongly influence the CSR values of leaders. Spe-
cifically, they found that leaders coming from cul-
tures with high levels of institutional collectivism
demonstrated positive attitudes toward CSR. They
also found that MNEs in high power distance cultures
had lower concern for stakeholders such as employ-
ees, customers, and the environment. Strand (2011)
reported that leaders from feminine cultures tend
to demonstrate stronger CSR performance than
those from masculine cultures.
Although it is not clearly known why certain
cultures may be associated with low CSR, it is
possible that numerous mechanisms are at play.
Leaders from high power distance cultures may be
more removed from the difficulties faced by em-
ployees and customers, and consequently have
less empathy for them. Also, employees tend to
not express their voice freely in high power dis-
tance cultures, which may place less pressure on
leaders to act responsibly. Since masculine cul-
tures tend to give economic growth a higher pri-
ority and care for people and the environment a
lower priority (Hofstede, 1983), leaders in these
cultures may feel less normative pressure to en-
gage in CSR.
CSR can also be controversial in nature as people
with different values may not agree on what corpo-
rate behaviors are responsible; there are prominent
examples of organizations that have engaged in
what has been termed greenwashing, taking corpo-
rate actions that look environmentally responsible
to the public but in fact have little positive impact,
being little more than public relations stunts
(Banerjee, 2007). CSR is a major concept in inter-
national business and an area almost all organiza-
tional leaders need to engage in.
7. Why do MNEs act irresponsibly?
To understand why MNEs act unethically or irre-
sponsibly, it is critical to understand the factors
that influence moral decision making. We apply
Rests theory of individual ethical decision making
to explain the causes behind the moral and immor-
al decisions that occur in global business organiza-
tions. Rest (1986), in his landmark treatise on
moral development, identified four distinct com-
ponents of ethical decision making. In order for
people to act morally in any particular situation,
first and foremost, they have to interpret the
situation from a moral dimension. In other words,
they have to be morally sensitive to how their
action might affect other people or the environ-
ment positively or negatively. Second, they have to
figure out the morally right course of action (moral
judgment). They next need to have the intention
(or moral motivation) to act in consonance with
their judgment. Finally, they would need to have
sufficient ego strength, perseverance, and imple-
mentation skills to follow through on their inten-
tions (moral character). According to Rest, people
may behave unethically because of lapses in any of
the above stages.
Applying Rests model into the global business
environment, when leaders of MNEs do not behave
ethically, it is either because (1) they fail to
recognize how their actions affect people and
the environment around the world, (2) they lack
the capacity to make moral decisions, (3) they
dont feel attracted by the possible outcomes of
making a moral choice, and/or (4) they dont have
the character strength to carry through their mor-
al intentions in the face of obstacles and chal-
lenges.
838 P. Mishra, G.B. Schmidt
8. Solutions
As seen previously, there are significant challenges
for leaders in MNEs who are trying to be ethical.
These challenges help illustrate why CSR initiatives
are often more talk by top leaders than organiza-
tional actions. While such talk can be valuable as it
can serve an aspirational function (Christensen,
Mackey, & Whetten, 2014), most people place
greater value on the actions taking place. In this
next section, we offer a four-step process to help
leaders manage these challenges and help their MNE
engage in CSR. Depending on the context of the
organization, its employees, stakeholders, and cus-
tomers, some of these steps will be more or less
relevant and more or less difficult to accomplish.
We offer them as a generic model for considering
the issues that can arise and initial solutions that
can help such issues.
8.1. Step #1: Determine organizational
meaning of what is good and craft a
connected vision for the organization
People can often disagree on what constitutes an
ethical action based on their own moral values.
While people can often agree that profit to share-
holders, support to the community, and environ-
mental well-being are worthy things to strive for,
how these balance and what is seen as beneficial to
each category varies widely (Eabrasu, 2012).
With such potential for disagreement based on
individual values, it is crucial for leaders to define
what they mean when they talk about doing good in
relation to the environment, community, and share-
holders. The assumption that people agree with
each others implicit and unstated definitions is
not well founded (Eabrasu, 2012). Such definitions
help define nuanced visions for the mission of the
organization.
8.1.1. Intellectual stimulation
One way in which leaders might consider definitions
of what is good and ethical is through the lens of
transformational leadership known as intellectual
stimulation. Leaders who engage in intellectual
stimulation-related behaviors encourage others to
think for themselves and to question long-held
assumptions (Robertson & Barling, 2013). This also
can be seen as aligning with Rests (1986) compo-
nents of being morally sensitive, considering how
ones actions may affect others, and moral judg-
ment determining the morally right course of ac-
tion. In defining the goals of CSR for an organization,
leaders can engage in reflections and question
assumptions coming with clear definitions of what
good is. When this is clearly defined by the leader,
that definition can be better explained to others in
the organization.
Defining clearly what the good is for an organi-
zation can also be important in making sure the
complexity of organizational CSR goals is consid-
ered. Organizations do not want to miss important
concerns or drawbacks when goals are being con-
sidered. During the 2008 economic crisis, the three
biggest banks in Iceland collapsed due to bad loans
and investments. All three banks were heavily in-
volved in CSR initiatives with mission statements
and annual reports touting humanitarian and cul-
tural donations. They were all devoted to
helping the local community through donations
(Sigurthorsson, 2012). This proved to be a narrow
view, as only donations were viewed as counting as
CSR actions, and not other ways of helping the
community. This view may have in part led them
to ignore the moral consequences of investing com-
munity money in risky investments, which ultimat
