Global Corporate Governance and Social Responsibility

Global Corporate Governance and Social Responsibility

Microsoft Corporation

An in-depth analysis of all possible factors responsible for the Social efforts

Socio-Economic, Cultural, Technological and Legal Factors

Strategic ideas involved in addressing corporate social responsibility issues

The Unique Composition of Microsoft

Creating Better-Quality Products

Using Conventional and Contemporary Resources

Political acumen

In recent years, augmented degree of interest has been shown on the subject of "Corporate Social Responsibility," also known as "CSR." This interest has been shown, both in the international/national business and academic circles, because almost all the current studies indicate that "Corporate Social Responsibility" increases the credibility of the business in the eyes of the stakeholders, both within and outside the organization (Isabelle and David, 2002).

Another reason for the increased interest being shown in the direction of "Corporate Social Responsibility," both by international/national business and academic circles, is because of the constant emphasis by the global society towards the business community to play a more positive and constructive role in the growth, development and welfare of the society. After debating and discussing this issue for several years, almost all international business circles are now looking at ways and means to increase their economic activities in ways that would result in a social change for the international communities. Furthermore, quite a few international corporations have integrated a certain code of ethics in their activities so as to help the interest of the non-profit groups working to bring a social change in the community (John and Nabil, 1993).

One aspect of "Corporate Social Responsibility" is quite clear; the fact that consumers, stakeholders and societies have started protesting against the social evils that exist in the world and are causing unending misery to their lives. These protest have created awareness in the international business community to start acting in a socially responsible manner. Worldwide protests against deadly diseases, eradicating child labor, globalization, augmenting working conditions (particularly the branded merchandise), and environmental hazards have made the international business circle believe that it is time to start acting in a socially responsible manner. They think that this social responsibility should be directed towards improving the social conditions of the consumers and stakeholders so as to not only increase market access but also to increase customer loyalty (Christine, 2002).

However, the expectation of the consumers, stakeholders and societies has not come to a stand still. Notwithstanding, the present status of the social efforts being made by corporation, they want these profit-oriented organizations to do a lot more for the benefit of the society. These anticipations and prospects have made the business managers quite puzzled and concerned. This is because the corporate world of today is extremely influenced by the lengthy governmental rules and regulations, laws and procedures. Therefore, their task has become extremely complicated, since, certain business customs are gratifying in one community, however, those customs are intolerable in other communities (John and Nabil, 1993).

In light of the issues mentioned above it is imperative that we take an in-depth analysis of an international organization so as to understand the social dynamics that underlie the focus of the present business community towards their social responsibility. The international business firm that has been chosen is Microsoft Corporation. The paper gives a thorough analysis of all the factors that are causing this firm to act in a socially responsible manner. Furthermore, the paper discusses the strategic ideas that have been at the forefront of the corporation. Lastly, the paper concludes by highlighting the future challenges the company is likely to confront and the future direction the company is likely to take.

Microsoft Corporation

Background Information

Microsoft was founded in 1975. Microsoft is the global leading technology firm. It offers its services in software as well as Internet technologies for personal as well as business processes. The company believes in empowering the people with technology. It achieves this objective by offering its worldwide consumers an extensive variety of products and services. (Randall, 1998).

In 1983, Microsoft started its social activities. This made Microsoft the very first tech-oriented company to take a step towards making an effort in improving the socio-economic conditions in the world. Microsoft envisions that by offering the necessary training along with technology-tools, it can assist the unassisted by improving their social and economic prospects. This effort will in turn bring about a change in the backward communities and allow them to make full use of their aptitude (Randall, 1998).

Bill Gates, the founder of Microsoft, writes in his critically acclaimed book, "Business @ the Speed of Thought: Succeeding in the Digital Economy," writes that technology carries with it the inherent system of growth and development. As a result, any dialogue on the subject of "growth and development" eventually brings about the subject of "science and technology" and any dialogue on the subject of "science and technology" brings about the subject of "growth and development." Bill Gates further writes about the socio-economic dimensions of "growth and development," particularly the connection amid growth/development/culture/technology, and how culture/technology has not been correctly taken into consideration by both the business as well as the academic community. The writer adds that this disregard has paved the way towards the assumption that "growth and development" is simply tantamount to economic transformation. However, the writer adds that "growth and development" is in fact a complex as well as a three-dimensional progression, which comprises political, social as well as cultural realms.

Randall in his book, "The Microsoft Way: The Real Story of How the Company Outsmarts Its Competition" writes that Microsoft has played a huge role in upgrading modern technology. However, this is not the only reason for the company to have prospered in such a competitive environment. He writes that the company's social efforts, particularly that of Bill Gates, towards that world community has earned, both him and his company, a great deal of respect in the eyes of the consumers and the stakeholders. Following is the summary of his funds for the year 2003 and 2002:

Source: (http://www.gatesfoundation.org/nr/public/media/annualreports/annualreport03/2003_Gates-AR.pdf)

An in-depth analysis of all possible factors responsible for the Social efforts

Socio-Economic, Cultural, Technological and Legal Factors

Doug Dayton in his book, "Selling Microsoft: Sales Secrets from Inside the World's Most Successful Company," write that while Microsoft has acquired international recognition, by every stretch of imagination, it has been able to sell itself by becoming a major contributor towards the efforts being made all over the world to decrease poverty, disease and illiteracy. Its efforts in promoting its brand name and increasing its profits are particularly visible in regions that lag behind the developed world, that have high unemployment ratios, that have high ratios of starvation, and that have thousands of parents striving extremely hard to give the basic necessities of life to their kids (Doug, 1999).

Doug Dayton further writes that while the primary objective of Microsoft Corporation has been to acquire recognition throughout the world, the secondary objective of Microsoft has been to commit itself to the social cause by assisting non-profit organizations that have the aptitude to bring about a constructive change in the deprived and backward areas of the world. The writer adds that Microsoft aims to produce profound economic transformation and elevation of the living norms. Being a leader in the tech-industry, it aims to achieve this by bridging the digital divide between the underdeveloped world and the developed world. He writes that the under-developed countries are helpless without technology, and since technology has turned out to be a significant factor for the economic progress, it was comprehensible for the international stakeholders and consumers to push this technology giant to expand its horizon and help the deprived areas of the world (Doug, 1999).

In line with Bill Gates (as referenced in Doug, 1999) technology, not only controls the course of economic growth and development of the community, but also establishes vital constituents that play a central function in the social transformation. Moreover, he believes that technology is the driving force behind social change enforcing its personal logic on the social actors as well as on their relationship with the society. Gates believes that technology, in this century, has the aptitude to transform into a more effectual player and bring about a social change in the socio-economic spheres rooting for the basic human requirements. This viewpoint that Bill Gates carries with him has put Microsoft at the helm of philanthropy throughout the world (Doug, 1999).

Furthermore, Doug Dayton writes that education and health care has played a critical factor in the development of the global society, economy, as well as democracy. But the fact that not all the people in the world can acquire quality education and health has made Microsoft founder Bill Gates focus his energies towards bridging the digital gap between the developed world and the underdeveloped world. His efforts have been centered on educating the youth and providing them access to information through Internet and helping non-profits by providing them financial assistance so as to decrease the epidemic of deadly diseases; thereby giving them hope and desire to fulfill their dreams; and giving himself increased profits and recognition (Doug, 1999).

James Wallace and Jim Erickson in their book, "Hard Drive: Bill Gates and the Making of the Microsoft Empire," write that, in this modern era cultural backwardness exists in many developing countries because of inadequate growth and development in vital sectors such as science and technology. This aspect is considered to be the major reason for the cultural backwardness in the third world. The unregulated technological progress made by Microsoft Corporation has put it at the helm of affairs leading to financial assistance to bridge the cultural gap between the developed world and the underdeveloped world.

Furthermore, the writer adds that this correlation between technological progress and the growth of cultural standards, specifically, the impact of the technology upon social as well as cultural values has been under increased discussion due to its controversial nature. However, the implications put forward by certain quarters of the academia on this subject has not deterred the Microsoft Corporation from backing away in funding the non-profits to bridge the digital gap. It has continued with its efforts to bring a socio-economic transformation in the deprived parts of the world.

Strategic ideas involved in addressing corporate social responsibility issues

The Unique Composition of Microsoft

Shirley Sagawa and Eli Segal in their book, "Common Interest, Common Good: Creating Value Through Business and Social Sector Partnerships," assert that the influence of the unique composition of Microsoft Corporation on social strategic ideas provokes the dynamism with which it has dealt with its social responsibilities. Furthermore, Marc Benioff and Karen Southwick in their book, "Compassionate Capitalism: How Corporations Can Make Doing Good an Integral Part of Doing Well," describe the infrastructure of Microsoft Corporation as a role model for all corporations. "The inner fabric of the company possesses firm flexibility, sound legal restrictions, energetic abilities as well as administrative insight of the company's unique composition (Marc and Karen, 2004; pg 65)." This composite fabric of Microsoft has augmented the number of opportunities on the company's business as well as social strategy (Shirley and Eli 1999; Marc and Karen, 2004).

Creating Better-Quality Products

Shirley Sagawa and Eli Segal in their book, "Common Interest, Common Good: Creating Value Through Business and Social Sector Partnerships," assert that Microsoft Corporation is distinguished by substantial cost asymmetries that gives it (Microsoft) the edge with a price-lead in offering socio-economic products that act in accordance with the higher ecological and social values With the purpose of identifying products/companies in the market that fall short of fulfilling the traditional values, Microsoft uses strategic ideas in its social strategy to pressure and manipulate the policy makers so that the regulator compels high standards on the whole business. Such strategies, more often than not, offer the policy-makers with data and statistics in relation to the new course-of-action or develop public opinion in favor of such programs. Once the policy makers ratify the new values, Microsoft Corporation subsequently takes advantage of the price-lead in connection with its competitors. Thereby not only increasing its profits but also creating and producing better-quality products (Shirley, 1999).