This is for business and society course. This is a exam review that im having tr

Question

This is for business and society course. This is a exam review that im having trouble finding out the answers to these with an understanding. Thank you for the help.

- Major transnational corporate meaning. How widespread they are?

- How is globalization is accelerating?

- Business in diversity rule:

- Global corporate citizenship:

- Critics of global corporate social responsibility and its commitment meaning. Critics of global CSR?

- Social environmental reporting meaning. Concept?

- Auditing process meaning and different ways you can use in the term.

Explanation / Answer

Major transnational corporate meaning. How widespread they are?

Transnational corporations are among the world's biggest economic institutions. A rough estimate suggests that the 300 largest TNCs own or control at least one-quarter of the entire world's productive assets, worth about US$5 trillion.1 TNCs' total annual sales are comparable to or greater than the yearly gross domestic product (GDP) of most countries (GDP is the total output of goods and services for final use by a nation's economy). Itochu Corporation's sales, for instance, exceed the gross domestic product of Austria, while those of Royal Dutch/Shell equal Iran's GDP. Together, the sales of Mitsui and General Motors are greater than the GDPs of Denmark, Portugal, and Turkey combined, and US$50 billion more than all the GDPs of the countries in sub-Saharan Africa

This is a widespread technique whereby TNCs set prices for transfers of goods, services, technology, and loans between their worldwide affiliates which differ considerably from the prices which unrelated firms would have had to pay.

There are many benefits TNCs derive from transfer pricing. By lowering prices in countries where tax rates are high and raising them in countries with a lower tax rate, for example, TNCs can reduce their overall tax burden, thus boosting their overall profits. Virtually all intra-company relations including advisory services, insurance, and general management can be categorised as transactions and given a price; charges can as well be made for brand names, head office overheads, and research and development. Through their accounting systems TNCs can transfer these prices among their affiliates, shifting funds around the world to avoid taxation. Governments, which have no way to control TNCs' transfer pricing, are therefore under pressure to lower taxes as a means of attracting investment or keeping a company's operation in their country. Tax revenue which might be used for social programs or other domestic needs is thus lost.

Moreover, in countries where there are government controls preventing companies from setting product retail prices above a certain percentage of prices of imported goods or the cost of production, the firms can inflate import costs from their subsidiaries and then impose higher retail prices. Additionally, TNCs can use overpriced imports or underpriced exports to circumvent governmental ceilings on profit repatriation, causing nation-states to suffer large foreign exchange losses. For instance, if a parent company has a profitable subsidiary in a country where the parent does not wish to re-invest the profits, it can remit them by overpricing imports into that country. During the 1970s, investigations found that average overpricing by parent firms on imports by their Latin American subsidiaries in the pharmaceutical industry was 155 per cent, while imports of dyestuffs raw materials by Indian TNC affiliates were being overpriced between 124 and 147 percent

How globalization is accelerating?

Globalization today, we heard about a growing level of connectedness above and beyond trade numbers. Some of the characteristics of this new connectedness include the digitization of information flows, the extension of access to more and more regions, and declining centralization in organizational and social structures. globalization is accelerating With the information that’s now available, the connectedness, the computing power, the data, things just are moving at a faster pace, so you have less time and organization to react to issues. We’re also more linked, if you will, so a problem in some part of the world quickly ricochets across the system.”

Business in diversity rule:

Diversity in business today makes good sense. Unfortunately, many companies don't manage their diversity initiatives effectively, resulting in the one thing they were aiming to avoid: discrimination.

When businesses use diversity to understand different types of customers, develop products or services that are competitive, and gain insight on future industry trends, they're using diversity initiatives correctly.

Use the following guidelines to ensure your diversity plan encompasses the total package a person brings to the table and to make your diversity initiative both effective and productive.

1) Instill accountability.

Diversity without accountability never works. That is, if you hire someone just so you can check a box on a form and meet some quota, but you don't hold that new hire truly accountable for results, then you're setting the company up for failure.

2) Create clearly defined objectives.

Companies that are recruiting to accomplish diversity objectives have to be honest in their definition of what's expected in terms of workplace contribution. In other words, why are you really hiring this woman, African-American, Hispanic, etc.? What do you want his or her unique viewpoint and background to bring to the team?

3) Reward people based on what's controllable.
You can't control what gender you are. You can't control what race or ethnicity you're born into. Rewarding people for what they can't control does not make good business sense. Rather, reward people for what they can control, such as their contribution, their performance, their skill development, their loyalty, etc. All those things that people can control should always outweigh the things they have no control over.

Global corporate citizenship

Many business leaders today consider it critical to engage with shareholders, the communities in which their companies operate, and others affected by and interested in what they do. The diverse activities needed to respond to these expanded duties are widely referred to by the catchall phrase "corporate social responsibility." various responsibilities with the single term "corporate social responsibility" is an oversimplification that has led to a great deal of confusion. It is necessary to distinguish between the different types of corporate activities, so that the work companies do to engage in society is fairly recognized and appreciated and companies are better able to benchmark themselves against the performance of different enterprises and learn from example. A better understanding of engagement requires separate definitions for corporate governance, corporate philanthropy, and corporate social responsibility as well as for an emerging element: corporate social entrepreneurship, that is, the transformation of socially responsible principles and ideas into commercial value

Critics of global corporate social responsibility and its commitment meaning. Critics of global CSR?

Social environmental reporting meaning. Concept?

“Environmental reporting” can be called in different names depending on its purpose and contents, such as a “sustainability reporting,” which include social and economic aspects or a “social and environmental (CSR) reporting,” which describes activities based on corporate social responsibility (CSR). Environmental reporting defined in these guidelines refers reports and publications which are periodically disclosed and which holistically and systematically stating the state of environmental burden caused by organizations’ activities and environmental efforts that mitigate them, and which are in accordance with general reporting principles of environmental reporting. Therefore, environmental reporting defined by these guidelines includes those statements that contains information about corporate social responsibility or sustainability

Auditing process meaning and different ways you can use in the term.

A set of actions and procedures to control an organization. They aim to test and prove that processes are being conducted effectively and follow due control mechanisms. They also aim to detect opportunities for improvement in the audit process.

Types of audit processes

As we warned at the beginning, audit processes don’t always have audit motivations, here are their three main types:

1- Preventive Audit Process:

This is a way of anticipating problems, presenting a series of guidelines for the process to take place in the best possible way and indicating, for example, the attributions and responsibilities inherent to it.

2- Detective Audit Process:

Used to detect if there are anomalies in the process, but without pointing out ways to correct them.

3- Corrective Audit Process:

In this case, once the audit process detects a problem, it should investigate its causes to suggest ways to correct it.

Check also: Governance, risk and compliance: All there is to know

Best audit process practices

In order to assist those engaged in an audit process, or who will be submitted to it, we have listed a number of best practices that you should follow:

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