Corporate Social Responsibility

As tales of labor abuse in developing countries by multinational companies have ..... the headlines in developed countries, some of these companies have adopted voluntary corporate social responsibility codes.

These codes are ..... taken by companies over and above their legal obligations to treat the stakeholders of the firm ethically and in a responsible manner.

This is a move beyond the narrow view of pursuing only short-term profit-maximizing objectives to a broader view of greater social responsibility, but while these codes promote ..... work standards, they do not necessarily mean more jobs.

Companies are not implementing these new corporate social responsibility standards solely for ..... reasons, but rather there is a burgeoning market for standards in which companies will provide standards if consumer will pay more for this benefit.

But the demand curve for standards is kinked, with consumers not willing to pay ..... much more for standards but would cause a huge adverse impact if a company allowed for major labor violations.

The persistence of violations and consumers' desire for adequate labor conditions has led to the ..... of vigilantes and verifiers (organizations that check that companies are actually following their reforms, such as the Fair Labor Association and Social Accountability International).

For any effort by either the vigilantes or the verifiers to be successful, it needs to involve the workers in ..... since they are the ones who confront the conditions on a daily basis.

The standards market has an inherent limitation, since it relies on consumers in developed countries to take action; it therefore limits the number of affected products, and since the worst ..... occur in the informal sector, there is much that corporate codes of conduct will be unable to change.

While voluntary corporate codes of conduct are a start, they are not enough to fully ..... the problem.

National action (and perhaps legislation) can improve the ..... of corporate codes and monitoring, in areas such as transparency, consultations by auditors and monitors with local authority, and consistent enforcement of labor standards.