CSR and Climate Change Implications for Multinational Enterprises
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CSR and Climate Change Implications for Multinational Enterprises

Edited by John R. McIntyre, Silvester Ivanaj and Vera Ivanaj

Multinational economic actors, particularly corporations, play a defining role in the response to the climate change or warming debate and the emerging scientific consensus. This book describes, explains, and predicts how multinational firms will rise to the multiple challenges posed by global climate issues and the organizational and behavioral various responses of the international corporate community. It focuses on three core research and learning objectives. Firstly, it develops the core idea that multinational enterprises cannot implement meaningful sustainability initiatives without an appropriate governance system and corporate culture. Building on this notion, it addresses the question of environmental sustainability across select industry sectors, such oil and banking. Finally, drawing on a diverse range of contributing experts, it presents select best practices such as the opportunities arising from smart technologies implementation to achieve symbiotic industrial relationships, directed particularly towards the ecological environment of these firms’ transborder operations and global reach.
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Chapter 3: Organizational design thinking for sustainability

Sanjeeb Kakoty

Abstract

The end of the Second World War saw the emergence of a plethora of multinational and international organisations led by the United Nations, being constituted to lead the comity of nations on an agreed path of dignity and development. Around the same time, often away from the lime light, the multinational business enterprises, often unlinked and unknown to one another, quietly emerged to create wealth through markets. Although the national governments struggled through the maze of real politic to create a semblance of the dream of a United World Order, the multinational enterprises went on to achieve an incredible model of a Globalised Economy and a global consumer without too many people noticing it! Soon, there was hardly any aspect of life that remained untouched by the multinational enterprise (MNEs) and it was reported that the top 20 MNEs had a combined turnover that was higher than the gross domestic products of the 100 poorest countries of the world! But interestingly, in addition to the legal provisions governing them, the primary responsibility of the corporation was towards its shareholders. Wealth creation was therefore aimed primarily at adding value to the shareholder, and its primary responsibility began and ended with its shareholders. It was then realised that shareholder value creation may be achieved at the cost of social good and environmental well-being. To overcome this problem, the concept of corporate social responsibility (CSR) was introduced which would ensure that businesses would be obliged to spend a part of their profits either for the community or the environment as a part of their CSR. However, in a situation where 0.7 percent of the world population has 45.6 percent of the wealth, and where 8.2 percent of the population has control over 86.2 percent of world wealth, and if consumption levels of the developing nations were to reach the levels of the developed nations, one Planet Earth would not be enough! In terms of reach and efficiency, there is no doubt that the MNE would be the vehicle of choice to take the world to its desired destination of both inclusive and sustainable development. The challenge is to bring about the required design modification in both its philosophy and its functioning and thereby create a new organisational design. Can it rise to the challenge?

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