ABSTRACT
The role of multinational corporations (MNCs) in the development process continues to be a hotly debated issue. On one hand the benefits that MNCs bring to an economy through foreign direct investments (FDIs) are underlined, especially in developing economies: efficiency and modern technologies, job creation, increased exports, higher wages, taxes, and product diversification. On the other hand, the behaviour of MNCs has been under severe criticism: exploitation of a poorer and less educated labour force, disregard for national and local values, unbalanced competition against local companies, environmental abuse and corruption. All these factors have been analysed in relation to different topics, from sovereignty to human rights issues. In the last decades these issues have also been included in the investigation related to the social responsibility of corporations (Utting, 2003).
This chapter proposes an analysis of the corporate social responsibility (CSR) of MNCs and indigenous companies based on literature review and on an analysis of several websites of companies in Romania. The question the chapter aims to answer is whether there are differences in approaching CSR between MNCs and indigenous companies and how such differences are explained in general, and specifically in the case of Romania. Romania, as one of the newest members of the European Union (EU), has a particular history of CSR. Romania’s communist heritage, lower level of market development and EU membership transform it into an interesting example.
The conclusions of this analysis reveal differences in CSR approaches of MNCs versus domestic companies. These differences can be explained by the role of MNCs in the development process; the expectations that societies in developed and developing countries have of MNCs compared to domestic corporations – the overwhelming majority of which are small and medium-sized enterprises (SMEs); and by the way CSR is perceived by MNCs and domestic corporations. With regard to Romania, the general understanding of CSR is less favourable to the involvement of local companies in CSR actions; and CSR is still considered a ‘luxury’ that only large companies – that is, mainly MNCs – can afford. The budgets devoted to CSR actions are unknown and very few companies announce how much money they intend to devote to achieving their CSR aims. 94There are important differences in communication policies, MNCs being much more active in communicating CSR actions than indigenous companies.
