Social Perspectives of Business Internationalisation

Summary

All interactions, including those of an economic character, emerge in the social environment. From the perspective of organised social relations, this environment is subject to certain institutionalisation processes, which means that certain forms of behaviour become universal in a given community or society and reflect the commonly shared social norms. The plethora of institutionalised human interactions and relations between entities, communities and customers is the outcome of the diversity inherent in the roles individuals and organisations can have, among other things. The social environment is therefore created by the intermingling norms and subsequent behaviours shaped through family influences, belonging to a profession or to a particular business entity, or being an entrepreneur creating jobs. Such a situation implies a certain hierarchy, where social status can be the outcome of a natural authority, formal position, social capital, or ethnic background but can also be seen through the lens of economic position. Human existence, similarly to organisational activities, happens in the socio-economical fabric, where the social role played by businesses creates jobs and opportunities for development both at the individual level for employees and for shareholders and at the collective level for communities and economies.

A basic question pertaining to the social aspect of international business is therefore the question of whether international expansion and cross-border activities create growth, social, economic or even civilisational opportunities for development, and therefore whether they contribute to the well-being and common good of societies, communities and humans at large.

An attempt to answer this question calls for a two-fold perspective.

First, the net effects of international business should be considered, i.e. the effects related to the costs as well as the benefits for the host economy accepting FDI inflows and the effects related to advantages and disadvantages for the home economy—the source of FDI outflows.

Second, some areas of influence of transnational corporations are of highly strategic significance, not only social but also civilisational. Corporations largely control the pace of innovation, which is related to the dominant role of the private sector in financing R&D. Corporations can play a significant political role, seen through lobbying and different forms of influence on institutions and legislation, but also in political leadership, when corporations become powerful opinionmakers shaping state policies.