Answer. Corporate Social Responsibility (CSR) is considered to be the universal argument reflecting the globalisation of business and economies. The traditional ethos of maximising shareholder value without regard to other stakeholders is an outdated notion in today’s global environment. CSR not only sits comfortably with the mantra of maximising shareholder value, sustainable CSR practices enhance shareholder value.
The CSR debate broadly focuses on whether a corporation’s sole purpose is to maximise shareholder wealth (shareholder primacy principle), versus. the ability to consider a broader range of stakeholders in its decision making. The debate has been the subject of commentary throughout the twentieth century and continues to be relevant due to the size and power of MNEs and the globalisation of business operations. The debate in each era has been triggered by different catalysts. Traditionally the debate focused on the power of corporations, particularly large national and multinational corporations, however the debate has evolved over time to consider broader social impacts such as the environment, employee and community rights.
A race to the bottom represents an unbalanced economic condition where there is a surplus of labor relative to work.
When the amount of work is less than the available workers, each worker will reduce their wages willing until they approach the poverty level or less.
In the end the purchaser of labor makes all the profit and all the workers starve.
It is simple economics because each worker is forced to underbid the other because the consequences of losing the bid for work means no income.
Over time the wages just fall further after each round of wage completion since each round results in lower wages.
Simple bullet proof economics, the downside of free market capitalism because all the wealth goes to the business owners. The workers effectively make nothing, maybe a poverty level existence, maybe less.
This is has been being practiced globally for decades where third world countries underbid first world countries for work.
Then the same third world country “winners” get underbid by their 3rd world peers..
These new “losers” underbid even more to become “winners”.
The irony is by winning the right to work you and everyone else is guaranteed to lose in the long run.
“The Iron Law of Wages is a proposed law of economics that asserts that real wages always tend, in the long run, toward the minimum wage necessary to sustain the life of the worker. ”
As final thought you will often hear people say things are different with technology these days, it will fix these issues. I make a living in high tech, my income is based on creating products that eliminate jobs for humans, replacing humans with machines. Machines are far cheaper and far faster than people. They do not require an hourly wage. This increases the number of people looking for an every decreasing supply of jobs. Adding in population growth it is even worse. This quest for productivity is just a term for doing more jobs with less people. This is the race to the bottom, in the USA, in Europe, in China, everywhere,.
Most people are oblivious to this new reality, denial is very comfortable.