The Case of Modco Inc.

TheCase of Modco Inc.


TheCase of Modco Inc.

of relevant facts

Corporatesocial responsibilities (CSR) is an aspect that has gained a lot ofimportance in modern business organizations. Though most nations donot have laws requiring entities to engage in CSR, companies havemade it a policy to engage in this strategy as it works in theirfavor. Today, CSR refers to issues that deal with ensuring thatbusiness organizations engage in sane economic, ethical,philanthropic and legal practices as they conduct their operations.Multinational entities have been on the forefront in ensuringcompliance as they face more public scrutiny in their operations thanlocal entities. To counter the scrutiny, these entities have beenvoluntarily publishing their sustainability report in agreement withglobal reporting initiative (GRI). Modco Inc. is a multinationalentity that has operations in over 15 nations and has beenoperational for over five decades. However, in the recent past, theentity has come under scrutiny after it was sued for improprietiesthat show it has not been fulfilling its CSR duties.


Question#1: Corporate Social Reporting is a term that defines organizationalpractices that are initiated with the aim of benefiting the society.

Question#2: CSR uses four main theories firstly, there are instrumentalprinciples that aim at achieving economic results. There are alsopolitical theories which evaluate the power these corporations havein the society and how it is used to influence political schemes(Bondy &amp Starkey, 2014). There is also integrative theories thatevaluate the ability to meet the demands of the society. Lastly,there are ethical theories that look at how these firms conductthemselves.

Question#3: the conceptual basis for CSR is that entities have aresponsibility to indemnify the society for the impact of theiractivities.

Question#4: companies are motivated to engage in CSR because it enhancescustomer and employee engagement. It is also a long-term thinkingstrategy that ensures brand differentiation. Moreover, CSR leads tocost saving and innovations and thus beneficial to the entity.

Question#5: climatic change has disrupted the natural order that allowsentities to operate. Its implications are that CSR strategies nowhave to factor in climatic change and ways it can be averted(Brammer, Jackson &amp Matten, 2012). This involves increasingresearch and funding into projects that reduce the effects of thechanging climate.

Question#6: there are several terms used in assessing impacts of climaticchange, and they include carbon tax, emission brokerage,sustainability, risk assessment and emission trading among others.

Question#7: CSR practices need to be regulated to ensure that they are notused by entities to mask underlying financial motives, avoidgovernment regulations or divert attention from real issues affectingcompanies.

Question#8: there are five mechanisms of regulating CSR practice, and theyinclude self-regulation, international cooperation, CSR reporting,the creation of an international monitoring body and adoption ofstiffer penalties for companies without CSR policies.

Question#9: regulating CSR through legislation is hard because multinationalsoperate in different nations and thus impossible to legislate on theissue in all these jurisdictions (Bondy &amp Starkey, 2014).Additionally, CSR issues are ever changing, and legislation may failto deal with these changes accurately.

Question#10: CSR reports usually include corporate governance, environmentalaudits and social performance of the entity.

Question#11 the Kyoto Protocol is a treaty that binds member states toreduce greenhouse emissions by setting targets that will reduce theglobal warming effects.

Question#12: global reporting initiative (GRI) is a guideline that helpsmultinational to prepare sustainability reports.


Basedon the facts presented on Modco Inc. and the analysis presentedabove, it is evident that the CSR policy of this company is lacking.CSR compliance requires entities to conduct themselves is inagreement with ethical, legal and economic frameworks. Thus, it isimportant for the entity to reevaluate its strategy to ensure thatthe company meets all these requirements. Additionally, the entityshould make sure that they implement the recommendations of the newadvisory board. Additionally, they should audit the operations of theentity to ensure that issues like child labor are not tolerated.


Bondy,K., &amp Starkey, K. (2014). The dilemmas of internationalization:Corporate social responsibility in the multinational corporation.British Journal of Management, 25(1), 4-22.

Brammer,S., Jackson, G., &amp Matten, D. (2012). Corporate socialresponsibility and institutional theory: New perspectives on privategovernance. Socio-Economic Review, 10(1), 3-28.