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Business activity in China and Hong Kong


In earlier times, business was merely a way of earning money and the main goal was to gain financial profit. But as we become more civilized, a sense of social responsibility was developed. Companies and corporations have learnt that besides earning, they should also be giving back to the society and that’s how they can contribute their part in the betterment and progress of whole society.

The Law of Long-Run Self-Interest, or the Iron Law of Responsibility (Davis and Blomstrom, 1971) states that:

In the long run, those who do not use power in a manner that society considers responsible will tend to lose it.

Corporations and companies have accepted this fact that if they don’t use their power and money for the society, in the long run, their power will cease to exist. Now-a-days, no corporation can publically declare that its only goal is to earn monetarily profit for its shareholder. If any firm do this, it will lose the trust of their customers and ultimately will fall.

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Instead, the corporations typically claim that they are taking steps to balance the needs of society and environment against the need to make money in the form of profit (Ihlen et. Al., 2011) Corporations claims that they are practicing the Corporate Social Responsibility (CSR).

1.2 Responsible Business Practices

It is famous saying that With great powers, there comes great responsibilities too’ which is applicable to every human, organization or corporation. If a celebrity have a fan following, he should be careful with what he say, do or endorse because his followers will be doing the same.

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He can use his fan-base to serve the humanity doing good deeds and floating and endorsing ideas like planting a tree, saving water etc. Likewise, corporations can use their power to do well to the society and make a positive impact.

Iron Law of Responsibility which also said as Principle of Responsibility, have three basic levels.

The firm is said to have three levels of involvement:

Primary involvement: The first level of iron is doing the firm’s basic tasks or missions. A person or company should be focused and loyal to its business and progress in a positive way.

Secondary involvement: Second level of this law is fixing the unintended byproducts of the primary level, such as cleaning up pollution.

Tertiary involvement: Third level includes everything else that a corporation may do, such as making speeches at business school graduations or acting as a public expert on the economy.

1.3 Corporate Social Responsibility (CSR):

The idea of Corporate Social Responsibility (CSR) can be explained in form of a broad concept which affirms that companies should not only be driven by financial profits, but also by purpose of benefitting the society. CSR involves many different and even competing interests as the sustainable wealth creation of organization’s stakeholders is also involved, it also interfere between the business and society.

This concept has evolved over time and since it was conceived till now, it can be divided into three eras, namely: 1) The Industrial Revolution, 2) Post World War II and 3) The Era of Globalization.

1.4 CSR and East-Asian Countries

1.4.1 Issues and Challenges Faced in Implementing CSR in China

The prime purpose of including CSR in corporate business is to make the corporate business activities sustainable in economic, social and environmental perspective. But many companies think that corporate social responsibility is a much exterior part of their business

High Cost: The main reason of challenge in practical work was that CSR requires high cost and corporations’ in adequate financial resources to train the staff (Jonker & Witte, 2006).

Lack of Support: Moreover, lack of support from customers and investors was an additional challenge.

Changing traditional business practices: It requires leaders’ great commitment in managing and in changing their focus and behavior.

Lack of Expertise: the lack of managers’ expertise and capability to successfully implement desired changes was also creating challenge in CSR implementation process (Aseghehey, 2018).

More or less, both China and Hong Kong were facing the same above mentioned issues and due to geography and political setting, they overcame with the situation in quite similar manner.

1.4.2 Case Study: Hong Kong

Hong Kong is an especially administrative region (SAR) of the republic of China and is an independent constituency. According to South China Morning Post, Hong Kong-listed companies lag behind European and US counterparts in developing corporate social responsibility, according to a new index developed by a Polytechnic University academic. (Ying-Kit, 2019)

On a scale of 100 points, researchers rated companies’ performance based on their values, management structure, projects and the impact of their efforts. The 50 companies scored an average of 41.7 points. The mean score of the top 20 companies was 57.25 points, a level categorized as the “learner” stage.

But a survey also found that a large portion of employees believed CSR activities are positively correlated with business success (Tsai et al., 2012).

1.4.3 Case Study: China

According to a study of environmental and social responsibility data in 34,000 CSR projects released by 839 companies in 31 provinces from 2006 to 2016 in China, results of data processing and modeling indicate that: (a) most projects got focused on improving companies’ environmental sustainability ( as compared to social); (b) the implementation of both environmental and social projects had positive impacts on companies’ performance and growth; and (c) trends, context, and impact of the projects varied with time, company type, and location (provinces).

In addition, data suggest that companies operating in regions with lower economic conditions (GDP per capita) seem to be less motivated to implement environmental and social sustainability projects compared to those operating in regions with higher economic conditions (Li et. al., 2019).

1.5 Conclusion

As noticed in case of China, governmental should be involved in implementing CSR practices in corporate sectors.

Bribe and corruption should be eradicated so that a clean and fair working environment is available so that CSR can be practiced.

Managers of corporations should be trained in the field of CSR as they are the one who should be aware and implementing these practices.

Corporate-Government-University collaborations are always a better way to make people aware about new trends and implementing them.


  • Aseghehey, Mekonen Araia. “Challenges in Implementation of CSR: A case study of Karlstad Bus.” (2018).
  • Crane, Andrew, et al. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press, 2019.
  • Davis, Keith, and Robert L. Blomstrom. “Business, society, and environment.” (1971).
  • De Witte, Marco, and Jan Jonker. Management models for corporate social responsibility. Heidelberg, 2006.
  • Ihlen, ?yvind, Jennifer L. Bartlett, and Steve May. “Corporate social responsibility and communication.” The handbook of communication and corporate social responsibility (2011): 3-22.
  • Li, Kun, Nasrin R. Khalili, and Weiquan Cheng. “Corporate social responsibility practices in China: Trends, context, and impact on company performance.” Sustainability 11.2 (2019): 354.
  • Tsai, H., Tsang, N. K., & Cheng, S. K. (2012). Hotel employees’ perceptions on corporate social responsibility: The case of Hong Kong. International Journal of Hospitality Management, 31 (4), 1143-1154.
  • Ying-Kit, L. (2019). Hong Kong companies ‘lagging behind on corporate social responsibility’. South China Morning Post.

Cite this page

Business activity in China and Hong Kong. (2019, Nov 24). Retrieved from

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