Reference no: EM132663634
7921IBA International Business - Griffith University
Case Analysis Assignment
Overview
This is an individual written assignment that requires you to demonstrate your understanding of Corporate Social Responsibilities (CSR) issues & challenges faced by managers in an international business context.
Please choose one of the following two scenarios to conduct your analysis. Each scenario briefly describes a corporate scandal faced by a multinational corporation (MNC) in recent years. Your task is to evaluate to what extent the actions of the MNC prior and related to the corporate crisis were consistent with international CSR norms; identify factors that help explain these actions, especially where corporate actions inconsistent with international norms were found; evaluate the response of the MNC to the crisis and its impacts on the firm's strategies, relationships and business sustainability; and offer recommendations on how the MNE's response could be improved.
Case Scenario I: Apple and Tax Avoidance
Multinational Enterprises are often criticised for not paying their fair share of tax, engaging in profit shifting practices and making private deals with governments to reduce their tax. Apple has been in the limelight of late. In 2016, the European Commission found that Apple had transferred around Eruo110bn of sales from their European operations to a head office of two subsidiaries in Island (The Guardian, 17 July 2020). It was argued that Apple thereby avoided tax on its profit generated from its multi-billion euro sales of iPhones, as well as other products across the EU's market. It booked the profits in Ireland rather than the country in which the product was sold. Criticisms have been made concerning Apple's Australian operations in recent years as well. As one headline from The Sydney Morning Herald wrote, Apple's Assie profits grew but its tax bill went down (The Sydney Morning Herald, 26 January 2019). What Apple was doing wasn't alone, and many big tech companies have similar practices. What Apple was doing is not necessarily illegal either, but do they reflect the good corporate social responsibility of the giant company?
Case Scenario II: Volkswagen diesel scandal
According to a 14 June, 2018 report (The Sydney Morning Herald), Volkswagen was fined one billion euros (AU$1.6billion) over diesel emission cheating. This is one of the highest ever fines imposed by German authorities against a company. This German fine followed a US plea agreement from Jan 2017 when VW agreed to pay AU$5.7 billion to resolve criminal and civil penalties for installing illegal software in diesel engines to cheat strict US anti-pollution tests.
The VW scandal came above the water in September 2015, when the company admitted that about 600,000 cars sold in the United States were installed with "defeat devices" designed to circumvent emissions tests. The focal points of issues are when top managers of VW knew about the manipulation and when the company was obliged to inform the public of the problem.
Case Analysis Questions
Your case analysis must be structured to answer the following questions:
1. To what extent and how did the Apple/VW actions prior to the corporate scandal comply with or contravene international (e.g. OECD, UN, ILO) guidelines for Multinational Enterprises?
2. What factors (at the individual, organisational, national and/or international level) help explain these actions and the company's approach to CSR prior to the scandal?
3. Briefly describe and evaluate the response of Apple/VW when faced with the corporate scandal. Specifically: What was the Apple/VW's response? How did it affect the firm's strategies, relationships within the firm and with external stakeholders, and business sustainability?
4. What should the Apple/VW's management have done differently in their response to the scandal/ crisis, if anything? Note: We can always ‘wish' for a lot, but remember to consider feasibility in implementation when making recommendations.
Attachment:- International Business.rar