In the landmark Dodge v. Ford case in 1919, the Michigan State Supreme Court decided whether or not Henry Ford could withhold dividends from the Dodge brothers (and other shareholders of the Ford Motor Company) to engage in what today would be called CSR activities. Returning a resounding “No,” the court opined that “a business organization is organized and carried on primarily for the profits of the stockholders.” If the court in your country were to decide on this case this year (or in 2019), what do you think would be the likely outcome
Some argue that investing in emerging economies greatly increases the economic development and standard of living at the base of the global economic pyramid. Others contend that moving jobs to low-cost countries not only abandons CSR for domestic employees and communities in developed economies but also exploits the poor in emerging economies and destroys the environment. If you were (1) CEO of a multinational (MNE) headquartered in a developed economy moving production to a low-cost country or (2) the leader of a labor union in the home country of the same MNE and about to lose lots of jobs, how would you participate in this debate?
Hypothetically, your MNE is the largest foreign investor in (1) Vietnam, where religious leaders are reportedly being prosecuted, or (2) Estonia where ethnic Russian citizens are being discriminated against by law. As the country manager there, you understand that the MNE is being pressured by nongovernmental organizations (NGOs) of all stripes to help the oppressed groups in these countries. But you also understand that the host government could be upset if your firm is found to engage in local political activities deemed inappropriate. These alleged activities, which you personally find distasteful, are not directly related to your operations. How would you proceed?
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