How social enterprises internationalize
Despite this, the current research does not prove the involvement of the social enterprises in the international markets as many of them are known to be involved in the region and certain countries. CSR is an important aspect of the business. It is one of how the business can influence the society in which are carrying their business activities in. The importance of this literature review is to bring out an understanding of the theories that explain the internalization of Social Enterprises. Some theories are going to be analyzed to determine how social enterprises can be involved in the process of internalizing their business activities. There is concern over organization’s that are aiming at making profits in the business environment without considering their social responsibility in the same environment that they are working in.
The market environmental growth which is of concern has become apparent in the present time, and companies that aim at making a profit from it have to strategize effectively to succeed in this competitive market (Halal, 2000). The firm internalization process has been studied broadly in research involving international business. The process of establishment of the foreign markets has been not of the interest research area in academia sector, and thus it has remained unexplored (Short et al. Empirical research and theoretical framework that explain the phenomenon of social entrepreneurship are still few and only explain the concept. According to Swanson (1995), CSR initiative is based on three philosophical outlooks namely positive duty approach, negative approach, and utilitarian approach. According to the negative duty approach, organizations adapt to social responsibility activities when there is a need to adhere to the beliefs of the stakeholders (Swanson (1995).
Utilitarian, on the other hand, viewed CSR as a performance which is objective on profitability and returns gained from investments (Swanson 1995), and finally, positive duty approach is inclusive of a socially responsible behavior applied by firms. From the above, it is clear that CSR can be based on different assumptions as well as presuppositions, with some being ethical and philosophical. This view was supported by Takala and Pallab (2000). This model came into existence due to criticism that other theories that explain about internationalism of a firm faced (Hill, 2008). The theory is inclusive of other factors such as internal foundation, and cultural differences which companies need to understand them to be in a position to handle international activities. The theory identifies the four key stages followed by any company that is in the process of entering into the market.
The four stages include sporadic export, export mode, the establishment of sales subsidiary for the foreign market and finally foreign production or manufacturing. Expansion of the company usually starts from the nearby markets according to the findings made from this theory (Reihlen & Alexandra, 2007). The above four stages were discovered by Scandinavian (Anderson 1993). The model suggests a sequential pattern that can be used to enter into a foreign market with this associated with an increase of commitment in each market. According to the theory, firms increase their commitment to the international market as their experience increases (Anderson 1993). This is an indication that corporates that have great experience in the market are likely to invest in the international market as compared to those that are new to the market.
Despite this achievement that this theory has achieved in understanding the internationalization process, researchers have found that there are still some weaknesses that the theory has. Despite that relationship between different firms in the market are governed by the relationship that exists between the different outsourcing firms, entrepreneurial decisions that exist between different firms are very important in bring about entrepreneurial coordination (Wit & Meyer, 2005). According to this theory, there is some coordination that can be made in the process of producing goods. According to this theory, organizations should consider their entrepreneurial agreements rather than the cost of taking part in trading activities as this creates a more suitable working environment for the two parties in the market. Capitalism and CSR There are some conflicting definitions of constituted of CSR.
Organizations face the ambiguity of defining what it means in being socially responsible and what it requires to execute CSR. Majority of the companies aims at increasing their loyalty to the market which may then lead to an increase in the demand for their products. “In a free economy, there is one and only one social responsibility of business – to use its resources and engage in activities designed to increase profit so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception and fraud” (Friedman 1996). Other scholars, with these including Johnson (1971), and Whetton, Godfrey & Rands, in their research of 2001, have a contradicting position as they claim that corporations have a greater complexity in a social relationship.
This is an indication that not all corporates that take part in CSR activities with the aim of making profits. According to Johnson (1971), “a socially responsible firm is one whose managerial staff balances a multiplicity of interests. ” CSR is considered a means because it is an integral part of an organization’s strategy (Chandler, 2011). CSR is an integral part of the organization because it affects the way that an organization goes as far as the deliverance of its services to the organization is concerned (De Wit & Meyer, 2010). On the other hand, CSR is considered as the end since it is a way that organizations use it in maintaining the legitimacy of the organization's actions in the entire society, by bringing into considerations the needs of the stakeholders (Werther, 2006).
According to Sethi (1975), CSR is based on the responsiveness of the stakeholders through anticipating together with addressing organizational expectations in the development strategy of the organization (Werther, 2006). Coombs & Holladay claim that both external and internal stakeholders can strongly influence CSR strategy (2012). Political and economic forces have caused an increase in the social expectations of the corporations. References Andersen, O. On the internationalization process of firms: A critical analysis. Journal of international business studies, 24(2), 209-231. Buckley, P. Corporate community: a theory of the firm uniting profitability and responsibility. Strategy & Leadership, 28(2), 10-16. Hill, C. International business: Competing in the global market place. Strategic Direction, 24(9). , & Alexandra Apel, B. Internationalization of professional service firms as learning–a constructivist approach. International Journal of Service Industry Management, 18(2), 140-151.
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