It is hard to tell whether an MNC is implementing a CSR for some reason or the other.

A practical method is to take the companys explicit explanation on their motivation for sponsoring a CSR activity or investment in a locality. However, press releases such as this that can be seen in annual reports are highlighted towards the moral issue. This is likely because the role of CSR in MNCs global operations is to suggest their commitment to assure that they have other plans aside from profit to their international partners. These partners are mostly classified as developing economies. As a result, the impact of CSR is relatively substantial compared on a situation where MNCs from mostly developed economies execute CSR also in developed economies. This paper tries to overcome this challenge by referring to recent CSR reports. It will aim to evaluate and perhaps found a different perspective from (2006) statement that For many MNC firms, social responsibility is as much as a moral issue as an economic issue.

Relevant Case Studies Starbucks and Rwandan Coffee Farmers Rwanda served as the bridge between Starbucks and East African countries in terms of improving capacity and quality of specialty coffee ( 2007). This is concretized by the announcement that a support center for coffee farmers headed by Starbucks specialists will be established in country. Evidenced by positive results in Costa Rica for the same project launched in 2004 that favors the Latin American coffee producers, the moral issue of the companys CSR is observed. Producers and farmers will have an accessible and highly-competent technical support in terms of producing coffee, attractive purchasing contract not only from Starbucks but also for other corporate clients and their lobbying power from the local government will be stronger. The last issue is supported by the fact that the Rwandan President is highly active in building favorable environment for Starbucks. More importantly, as giving free lunch is more fitting in moral than economic issue, other East African-sponsored charities from Starbucks such as $4 Million infrastructure development for the communities of coffee farmers is accounted for this cause. On the contrary, mutualism or the give-and-take relationship is hard to ignore. As earlier noted, the support center would result to higher quantity and quality of coffee harvests. This in fact is an economic benefit in which Starbucks will gain from Rwandan investment. These factors may likely increase its production scale and also customer satisfaction which can minimize inefficiencies and enhance profitability. To note as shown in Latin American experience, Starbucks is able to improve its yields per hectare up to 20%, decrease pesticides use and increase in supplier diversity. Further, the company can use those centers as a research facility that is a promising asset especially in improving biotechnology as the future of food products. The support center serves as an extension of Starbucks facility outside its headquarters. In effect, it is able to commit a 2009 rise in orders two-times as per 2006 because the centers assures that production is aligned with the firms standards. PepsiCo India and Water Conservation in India

Although the beverage industry in the country only accounted for a mere 1% of total water consumption, it became a prime destination of critics for water scarcity issues (2007). From 2003 until the projects milestone in 2009, PepsiCo India dedicated a significant part of its Indian operations towards Positive Water Balance. It is designed a framework on how the company can balance its water consumption to its water conservation efforts. These efforts are largely directed to the agricultural sector since the industry is responsible for at least 80% of the nations water supply. Moral motivation is a primary driver for the firm to commit on this dedication. Water scarcity is a national critical issue in which PepsiCo wanted to contribute and help to protect. This reasoning is supported by the fact that its project phasing is controlled and continuous. In the start of the project in 2003, the firm improved the production capacity and quality of tomato plantations which showed the companys commitment to understand agriculture industry before taking on water supply issues. To internalize the project, the company also put conservation endeavors to its manufacturing plants. This is an important action in order to balance its water debits against water credits through internal savings. Additionally, water recycling and reusage are implemented. Such effort requires manufacturing and process discipline which is a virtue more on the moral side. Finally, there is an incident later in the projects progress that PepsiCo had executed growing basmati and paddy-grown grains without putting them on a nursery. Primarily due to delay in seed delivery, the company had to undertake a risky cultivation practice through experiment. The result of this incident is that even though that harvest is lower compared to normal growing it shed light to the fact that non-nursery cultivation can reduce water consumption substantially. Economic issue is minimal on this particular case. It is to note that the firm must explicitly express its water conversation efforts to prevent lifting of support from the market. Raw materials that are used to produce some of its products are from agricultural output which is recognized as a high-ranking water consumer. With critics lobbying on such issue, it may not reach its sales target or even face direct regulation from the government. To avoid transaction costs, it had to do this project. In the contrary, assuming that these conditions are true, the possibility that a giant and global corporation can easily be discouraged in a local market due to resource depletion is unlikely to happen. Indian economy needs global investors. Secondly, data shows that the beverage industry is a minute part of water consumers. Economics is strong when the firm opted to result in a minimal grain harvest from a low water consumption production technique without the nursery. With this scenario, the water debits and credits would tend to be neutral and no additional CSR effort is required. Knowing these issues, moral overtook economic motivation to measure the CSR validity of the project. The 18-year operation of the firm in the country posts legitimate operations. In effect, it is likely easy to undermine critics or divert the attention of the market on the companys superior products. Alternatively, PepsiCo went on to address the national problem not only by thinking how to protect its contract suppliers that are mostly in agricultural sector but more importantly to shoulder the risks which this sector is not willing or able to take. As a result, the firm discovered new processes on how to conserve water albeit low production results from contract suppliers. The bottom-line is

that the firm chooses to conserve water resource by contraction on manufacturing. There is also a future sponsorship of the company aimed to educate farmers on how to conserve water through the companys newly-found practice. The firm also partnered with educational institutions and government agencies to expedite agricultural water-efficient studies. With this, the company is assuring its contract growers that any efforts to conserve water will not result income reduction but even increase them due to cost savings.

Nike and Excessive Economic Motivation Since its inception in 1963, Nike is already outsourcing production to sub-contractors in Asia (2001). The strategy is proved to be efficient particularly in labor costs in which the home country in US cannot provide. The most common contractors are found in South East Asia operated by Taiwanese and South Korean firms. The manner how Nike located its production facilities can be analyzed using international product life cycle (IPLC) approach (2003). Since athletic shoes have short product life spans, what the home operations can efficiently provide is its design and research expertise. On the other hand, host operations can augment the inappropriateness of investing in highly mechanized machines. They serve as the house and pooling mechanism for laborers. As a result, Nike did not only have product life cycle compatibility but also cost efficiencies. The IPLC model is followed by Nike operations. In the introductory phase, the home market designs and approves the market feasibility of the products. As demand grows and matures in both actual and forecasted figures, the mass production of the models is delegated to the host operations. The two operations are distinguished by the stages in the product life cycle in which they play both significant roles. In addition, the assumption of IPLC holds in which knowledge as well as best factor endowments are not equally and universally distributed. The home operations are the best source of innovation and design trend while the host operations on labor and standardization practices. The host operations even provided other endowments like access to raw materials and lower tariffs. Due to this features, resource-based (RB) approach can contribute in the analysis as Nike had created competitive advantages and efficiencies in the value chain not strictly due to product life cycle but more on comparative advantages of Asian natural resources and economic policies. IPLC also explains the reason behind Nikes move to retain 100% stake in subsidiaries in hockey equipment, dress and casual shoes and licensed team products. Compared to production of shoes, these specific business areas are catered to specific markets that may have high bargaining power due to future contracts attached to Nike as well as complexity/ machine-based manufacturing involved. These factors make the short product life cycle of shoe design into shorter, personalized and dynamic trends and needs customers may using these products may demand. The production of hockey equipments and licensed team products are intended for specific markets while dress and casual shoes are easily replaced by fashion changes in developed countries. The home operations can

effectively handle these areas as sub-contracting to Asian shoe makers would result to sub-standard quality, expensive employee training or inefficient machine acquisition to complement the manpower of host operations. On the other hand, industrial organization (IO) has some symptoms in the strategy of Nike particularly in the aspect of labor. The firm directly employed 20,000 while around 500,000 are indirect employees in 565 contract factories in 46 countries around the world. In 1990, Indonesian employees are paid at around $1/ day compared to US $8/ hour. Despite the huge difference, such dollar amount is viewed competitive compensation in the country. Further, an operation of one factory in Vietnam accounted 9,465 factory workers within a pool of 10,000 total employees. The entry-level wages averaged at a mere $1.50/ day which is one of the lowest of Nike international factories. However, such amount is considered above industry by the locals that resulted for Nike to enjoy the 18-24 bracket of new employees comprised mostly of women. With this, monopolistic advantage on labor is eminent. Although several campaigns against Nike labor practices are enormously criticized by their home country stakeholders, the high wage benefits in the eyes of local people is maintaining their production efficiency in the host countries. However, Nike has yet to dominate the shoe industry in host countries to create monopoly over them due to the intervention of global shoemakers as well as embeddedness of local shoe products. More importantly, efficiency in factor of production (e.g. labor) and other local factor endowments serve as motivation why Nike continues to produce its shoes in the host countries. IPLC resolves these issues while preventing to imply that Nike is a monopoly in the host country.

Conclusion The cases of Nike and PepsiCo India present an exact position about statement while the case of Starbucks is positioned on the middle. In fact, the case of Nike used several economic concepts about multinational corporations while the other two case analyses is framed in subjective mood and guided by minimal theories. To this end, it is found that economic issue becomes more eminent in the CSR of MNCs when it is discussed using this frame while the case of moral issue proves the same stance. To this means, the discussion about Stiglitz statement is evaluated using different mindsets; namely, economic, moral and neutral. As conclusion, it is hard to tell whether the CSR of MNCs are devoted for a specific purpose because there are several stakeholders and several influences that may affect the pre-, during and post-implementation of CSR. The paper shows that author bias is highly possible that can undermine economic issues. On the other hand, being economics-centered, the numerical benefits of the CSR shadowed its potential and even those already felt social problems. Stiglitz may have judge his statement through

personal empirical finding or experience. However, the impacts and objectives of CSR are enormous that only analysis is only as good as a part of the whole story.