Discuss the importance of ethics and corporate social responsibility to organisations operating in international business. These elements are becoming increasingly important in the success of both MNEs and SMEs.

CSR issues

Corporate Social Responsibility (CSR) is considered as the procedure of assessing the impact of an organization over a society and evaluating its responsibilities towards environment, consumers, employees, communities, stakeholders and all others associated with the organization in any form. Some of the drivers that push businesses towards CSR are the decreasing contribution of government, requirements for higher revelation, increasing interests of customers, increasing pressure of investors, competitive labor markets and relations with suppliers (Rugman, A.; Collinson, S., 2012).

CSR practices in Developing Countries 

The industrial environment in developing countries is different from developed countries that is why, major issues that create impact on CSR practices also differ in accordance with the local setting. Due to lack of advanced capital markets, feeble controls of law and protection of stakeholders as well as economic and political ambiguity CSR engagement of corporations gets hindered largely (Zhao, et al., 2014). This is the reason that governments in developing countries emphasize more on promoting FDI for its economic growth instead of promoting standard CSR practices. 

In developing countries, CSR practices are mainly considered as being involved in charitable events such as in Sri Lanka, large banks in Middle East, businesses in Bulgaria observe CSR as practices such as sponsoring sports activities, charities and many more societal events. Similarly, in Thailand, the non-policing of labor standards of corporations depicts the lack of adequate resources to manage them but, the government's role in advocating CSR practices among corporations is commendable. In order to protect market and sustainability from getting compromised due to the lack of standard CSR practices, effective role of government is desired (Barkemeyer, R., 2011). For example, the environmental (air) pollution caused by industrial corporations in China has become the prime target of environmental groups and now the government is making efforts to standardize business practices to global standards. 

The contextual issues affecting standard CSR application in China is transitional economy, in Sri Lanka, it is country-specific CSR policy and in Thailand, policies of government and its dependency on corporations' practices are the contextual issues that affect standard CSR application in corporations (Zheng, et al., 2014).  

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