The role of empathy in sustainable development and corporate social responsibility of multinational enterprises in china

Abstract

This chapter is based on my reflection from twenty years’ research work on sustainability and corporate social responsibility (CSR) of foreign multinational enterprises (MNEs) in China. I advocate that firms need to incorporate the process of the development of empathetic engagement with different stakeholders in their corporate social responsibility programs if they really need to sustain their business and the market economy system. Companies need to develop the process of empathy with principles of care and justice in their relationship development with different stakeholders. The practice of empathetic engagement with stakeholders at organizational levels also develops the capabilities for social reflection and resilience in a world of permanent white water. The process allows the companies to develop their moral progress that is grounded on our innate human capacities and moral ecology of the capitalist system. During my ten years of field work in China, I interviewed Chinese executives from multinational enterprises in many cities including Beijing (2006, 2008, 2009, 2010); Shanghai (2006, 2007,2010, 2016); Hangzhou (2007, 2010), Guangzhou (2011), Wuhan (2012, 2013), Hong Kong (2006–2016), and Chongqing (2006, 2007, 2009). It appeared that some companies which received global CSR awards still used evasive compliance mechanism and followed the isomorphic practices (CSR) in China. In my study, only two out of twenty foreign MNEs practice empathetic engagement with their Chinese workers and suppliers despite having to compete in an extremely price-competitive market. These two companies are committed to corporate social responsibility in their global supply chain management and consistently connect with their local stakeholders through extensive training and development. Corporate social responsibility practices can lead to sustainable development when there is empathetic engagement with local stakeholders. Empathy, embedded in an organization culture with care and justice, allows MNEs to be more responsive to local needs and capable of transferring learning from the local to the headquarters and other areas when they want to use corporate social responsibility initiatives to sustain the companies and the best of the capitalistic system in China.