This study investigates antecedents of corporate social responsibility in multinational corporations' subsidiaries. Using stakeholder theory and institutional theory that identify internal and external pressures for legitimacy in MNCs' subsidiaries, we integrate international business and CSR literatures to create a model depicting CSR practices in MNCs' subsidiaries. We propose that MNCs' subsidiaries will be likely to adapt to local practices to legitimize themselves if they operate in host countries with different institutional environments and demanding stakeholders. We also predict that MNCs' subsidiaries (...) will be likely to adapt to local practices to avoid spillover effects if their parent companies suffer major legitimacy problems at home or abroad. However, we speculate that MNCs' subsidiaries will be less likely to adapt to local practices if they are strongly annexed to their parent companies and the benefit to gain internal legitimacy outweighs external legitimacy. This article contributes to the discourse on CSR across borders by exploring the antecedents of CSR practices in MNCs' subsidiaries at social and organizational levels, and integrating institutional and stakeholder views. We provide a number of propositions for future studies and explore implications for practitioners. (shrink)

This study offers a theoretical framework for stakeholder management in an international and multicultural environment. Through the use of an extensive qualitative case study analysis, a methodological approach was developed for analyzing stakeholder dialogue data for cultural differences. Based on the empirical data it was possible to show specific ways in which cultural dimensions affect the international diffusion of stakeholder related policies. These findings contribute to the fields knowledge on internal stakeholder management implementation, by addressing the complexity of embedding stakeholder (...) management principles and practices within various international subsidiaries of the same multinational organization. (shrink)

Enterprise philanthropy is practiced in a very unique and rudimentary form in China. Based on a unique random survey data on 3837 Chinese private enterprises conducted in 31 provinces of China in 2006, I find the significant positive relationship between enterprise philanthropy donation and enterprise profitability, and the result supports the political and institutional power view of enterprise philanthropy in the latest development of China. Simply put, Chinese private enterprises carried out philanthropy activities to better protect property rights and nurture (...) political connections, which in turn, leads to better enterprise profitability. The␣result is even stronger in institutions weaker provinces. (shrink)

This article contributes to the literature on legitimacy by highlighting its paradox and constraints. While an optimal level of legitimacy-seeking behaviours may be necessary for organizational effectiveness, an excessive focus on legitimacy may lead to stakeholder mismanagement and have the opposite effect. These insights emerged from a longitudinal qualitative study of large-scale changes in public-sector health care in a Canadian province (1994-2002). In 1994, subordinate health care organizations underwent government-driven reforms to promote market-based logics of efficiency and cost reduction. Initial (...) years post reforms were characterized by a singular focus on government-driven priorities and inattention to other stakeholders. However, instead of giving benefits of legitimacy, these behaviours led to anger and activism from non-institutional stakeholders such as staff and community due to a decline in quality and patient satisfaction. Eventually, greater attention to stakeholder concerns ended the stand-off. These findings also elaborate Suchman's (Academy of Management Review 20(3), 571-610, 1995) framework on legitimacy and explain that legitimacy may occur for reasons other than institutionalization of values and be temporary in nature. (shrink)

Partnerships between businesses and nonprofit organisations are an increasingly prominent element of corporate social responsibility implementation. The paper is based on two in-depth partnership case studies (Earthwatch-Rio Tinto and Prince's Trust-Royal Bank of Scotland) that move beyond a simple stage model to reveal the deeper-level micro-processes in the selection, design and institutionalisation of business-NGO partnerships. The suggested practice-tested model is followed by a discussion that highlights management issues within partnership implementation and a practical Partnership Test to assist managers in testing (...) both the accountability and level of institutionalisation of the relationship to address any possible skill gaps. Understanding how CSR partnerships are implemented in practice contributes to the broader CSR and partnership literatures a contextspecific level of detail in a systematic way that allows for transferable learning in both theory and practice. (shrink)

This article assesses some of the implications of globalization for the scholarly debate on business ethics, CSR and related concepts. The argument is based, among other things, on the declining capacity of nation state institutions to regulate socially desirable corporate behavior as well as the growing corporate exposure to heterogeneous social, cultural and political values in societies globally. It is argued that these changes are shifting the corporate role towards a sphere of societal governance hitherto dominated by traditional political actors. (...) This leads to a discussion of the ambivalent results of such a process for a responsible corporate role in a globalized world. While assessing the current reception these changes have received in the management literature, the contributions of the four articles in this Special Issue are framed and evaluated. The argument closes by highlighting avenues of future research on this new challenge. (shrink)

This article assesses some of the implications of globalization for the scholarly debate on business ethics, CSR and related concepts. The argument is based, among other things, on the declining capacity of nation state institutions to regulate socially desirable corporate behavior as well as the growing corporate exposure to heterogeneous social, cultural and political values in societies globally. It is argued that these changes are shifting the corporate role towards a sphere of societal governance hitherto dominated by traditional political actors. (...) This leads to a discussion of the ambivalent results of such a process for a responsible corporate role in a globalized world. While assessing the current reception these changes have received in the management literature, the contributions of the four articles in this Special Issue are framed and evaluated. The argument closes by highlighting avenues of future research on this new challenge. (shrink)

: We discuss the role that transnational corporations should play in developing global governance, creating a framework of rules and regulations for the global economy. The central issue is whether TNCs should provide global rules and guarantee individual citizenship rights, or instead focus on maximizing profits. First, we describe the problems arising from the globalization process that affect the relationship between public rules and private firms. Next we consider the position of economic and management theories in relation to the social (...) responsibility of the firm. We argue that instrumental stakeholder theory and business and society research can only partially solve the global governance issue, and that more recent concepts of corporate citizenship and republican business ethics deliver theoretically and practically helpful, fresh insights. However, even these need further development, especially with regard to the legitimacy of corporate political activity. (shrink)

We discuss the role that transnational corporations (TNCs) should play in developing global governance, creating a frameworkof rules and regulations for the global economy. The central issue is whether TNCs should provide global rules and guarantee individual citizenship rights, or instead focus on maximizing profits. First, we describe the problems arising from the globalization process that affect the relationship between public rules and private firms. Next we consider the position of economic and management theories in relation to the social responsibility (...) of the firm. We argue that instrumental stakeholder theory and business and society research can only partially solve the global governance issue, and that more recent concepts of corporate citizenship and republican business ethics deliver theoretically and practically helpful, fresh insights. However, even these need further development, especially with regard to the legitimacy of corporate political activity. (shrink)

Modern society is challenged by a loss of efficiency in national governance systems values, and lifestyles. Corporate social responsibility (CSR) discourse builds upon a conception of organizational legitimacy that does not appropriately reflect these changes. The problems arise from the a-political role of the corporation in the concepts of cognitive and pragmatic legitimacy, which are based on compliance to national law and on relatively homogeneous and stable societal expectations on the one hand and widely accepted rhetoric assuming that all members (...) of society benefit from capitalist production on the other. We therefore propose a fundamental shift to moral legitimacy, from an output and power oriented approach to an input related and discursive concept of legitimacy. This shift creates a new basis of legitimacy and involves organizations in processes of active justification vis-à-vis society rather than simply responding to the demands of powerful groups. We consider this a step towards the politicization of the corporation and attempt to re-embed the debate on corporate legitimacy into its broader context of political theory, while reflecting the recent turn from a liberal to a deliberative concept of democracy. (shrink)

Tobacco companies have started to position themselves as good corporate citizens. The effort towards CSR engagement in the tobacco industry is not only heavily criticized by anti-tobacco NGOs. Some opponents such as the the World Health Organization have even categorically questioned the possibility of social responsibility in the tobacco industry. The paper will demonstrate that the deep distrust towards tobacco companies is linked to the lethal character of their products and the dubious behavior of their representatives in recent decades. As (...) a result, tobacco companies are not in the CSR business in the strict sense. Key aspects of mainstream CSR theory and practice such as corporate philanthropy, stakeholder collaboration, CSR reporting and self-regulation, are demonstrated to be ineffective or even counterproductive in the tobacco industry. Building upon the terminology used in the leadership literature, the paper proposes to differentiate between transactional and transformational CSR arguing that tobacco companies can only operate on a transactional level. As a consequence, corporate responsibility in the tobacco industry is based upon a much thinner approach to CSR and has to be conceptualized with a focus on transactional integrity across the tobacco supply chain. (shrink)

In spite of extensive research on corporate social responsibility (CSR) and its link with economic and social performance, few studies have investigated the institutional determinants of CSR. This article draws upon neo-institutional theory and comparative institutional analysis to compare the influence of different institutional environments on CSR policies of European firms. On the basis of a dataset of European firms, we find that firms from the more liberal market economies of the Anglo-Saxon countries score higher on most dimensions of CSR (...) than firms in the more coordinated market economies (CMEs) in Continental Europe. This result lends support to the view of voluntary CSR practices in liberal economies as being a substitute for institutionalized forms of stakeholder participation. Meanwhile, CSR tends not to mirror more institutionalized forms of stakeholder coordination. Instead, in CMEs, CSR often takes on more implicit forms. Our analysis also shows that national institutional and sectoral-level factors have an asymmetric effect - strongly influencing the likelihood of firms adopting 'minimum standards' of CSR, but having little influence on the adoption of 'best practices'. (shrink)

The first United Nations Millennium Development Goal calls for a distinct reduction of worldwide poverty. It is now widely accepted that the private sector is a crucial partner in achieving this ambitious target. Building on this insight, the ‹Bottom of the Pyramid’ concept provides a framework that highlights the untapped opportunities with the ‹poorest of the poor’, while at the same time acknowledging the abilities and resources of private enterprises for poverty alleviation. This article connects the idea of business with (...) the poor to sustainable development and especially to the notions of inter- and intragenerational justice. These principles of justice can be linked with the ‹Bottom of the Pyramid’ approach directly through the Rawlsian principles to foster holistic thinking. On this basis, the article offers a normative-ethical reasoning of corporations’ possible responsibilities for the poorest of the poor. Today’s state of worldwide inequalities is likely to generate future tensions between the privileged western world and the uncounted mass of poor (let alone the ethical dubiousness of this status). However, it is at the same time problematic if not even impossible to improve the situation of the poor by simply copying the resource intensive western way of living to the ‹Bottom of the Pyramid’ due to the limited carrying capacity of the earth. After highlighting possible moral dilemmas which may occur through such a potential trade off, this article concludes with an outlook on how the concepts ‹Bottom of the Pyramid’ and sustainable development could be combined. (shrink)

There is a lack of theoretical consensus on how multinational enterprises (MNEs) should implement corporate social responsibility (CSR) to build legitimacy, particularly those operating in the smaller Asian emerging market context, where current growth in the global economy is being felt more acutely than elsewhere. This paper argues for theoretical integration of business ethics (BE) and international business (IB) research to address this concern. Hence, we explore the management of CSR strategies by MNE subsidiaries with specific interest on their proactive (...) adoption of strategic CSR to obtain legitimacy in a foreign host country. Drawing on the recent CSR literature and related theories, including stakeholder theory and institutional theory, propositions and a conceptual framework are developed and presented. The framework integrates BE and IB concepts on the different dimensions of CSR and provides a theoretical derived explanation of the process for strategic adoption of global through to more local CSR strategies by MNE subsidiaries to build legitimacy in an emerging market context. In addition, the framework provides valuable insights into the adoption of different ethical approaches or CSR strategies based on the level of ethical pressure in a host country and the degree of CSR ingrainedness in the parent company. (shrink)

One of the new ways used by companies to demonstrate their social responsibility is to encourage employee volunteering, whereby employees engage in socially beneficial activities on company time, while being paid by the company. The reasoning is that it is good for employee motivation (internal effects) and good for the company reputation (external effects). This article reports an empirical investigation of the internal effects of employee volunteering conducted amongst employees of the Dutch ABN-AMRO bank. The study showed that (a) socio-demographic (...) characteristics from employee volunteers markedly differ from those of non-volunteers and community volunteers and (b) employee volunteering seems to have positive effects on attitudes and behavior towards the organization. (shrink)

Academic literature recognizes that firms in different countries deal with corporate social responsibility (CSR) in different ways. Because of this, analysts presume that variations in national-institutional arrangements affect CSR practices. Literature, however, lacks specificity in determining, first, what parts of national political-economic configurations actually affect CSR practices; second, the precise aspects of CSR affected by national-institutional variables; third, how causal mechanisms between national-institutional framework variables and aspects of CSR practices work. Because of this the literature is not able to address (...) to what extent CSR practices are affected by either global or national policies, discourses and economic pressures; and to what extent CSR evolves as either an alternative to or an extension of national-institutional arrangements. This article proposes an alternative approach that focuses on an exploration of links between disaggregated variables, which can then be the basis for imagining new national-institutional configurations affecting aspects of CSR. It illustrates this approach with an exploration of the importance of development aid policy for CSR practices in global supply chains. (shrink)

Since scholarly interest in corporate social responsibility (CSR) has primarily focused on the synergies between social and economic performance, our understanding of how (and the conditions under which) companies use CSR to produce policy outcomes that work against public welfare has remained comparatively underdeveloped. In particular, little is known about how corporate decision-makers privately reconcile the conflicts between public and private interests, even though this is likely to be relevant to understanding the limitations of CSR as a means of aligning (...) business activity with the broader public interest . This study addresses this issue using internal tobacco industry documents to explore British-American Tobacco’s (BAT) thinking on CSR and its effects on the company’s CSR Programme. The article presents a three-stage model of CSR development, based on Sykes and Matza’s theory of techniques of neutralization, which links together: how BAT managers made sense of the company’s declining political authority in the mid-1990s; how they subsequently justified the use of CSR as a tool of stakeholder management aimed at diffusing the political impact of public health advocates by breaking up political constituencies working towards evidence-based tobacco regulation; and how CSR works ideologically to shape stakeholders’ perceptions of the relative merits of competing approaches to tobacco control. Our analysis has three implications for research and practice. First, it underlines the importance of approaching corporate managers’ public comments on CSR critically and situating them in their economic, political and historical contexts. Second, it illustrates the importance of focusing on the political aims and effects of CSR. Third, by showing how CSR practices are used to stymie evidence-based government regulation, the article underlines the importance of highlighting and developing matrices to assess the negative social impacts of CSR. (shrink)

Academic interest in corporate social responsibility (CSR) can be traced back to the 1930s. Since then an impressive body of empirical data and theory-building has been amassed, mainly located in the fields of management studies and business ethics. One of the most noteworthy recent conceptual contributions to the scholarship is Midttun’s (Corporate Governance 5(3):159–174, 2005 ) CSR-oriented embedded relational model of societal governance. It re-conceptualises the relationships between the state, business, and civil society. Other scholars (In Albareda et al. Corporate (...) Governance 6(4):386–400, 2006 ; Business Ethics: A European Review 17(4):347–363, 2008 ; Lozano et al., Governments and Corporate Social Responsibility, 2008 ) have recently successfully used the model as the basis for their analytical framework for researching CSR activities in a large number of western European countries. While this research offers valuable insights into how CSR is operationalised, it also suffers from a number of significant limitations. To develop a stronger analytical framework with which to explore CSR, this article draws more deeply on political science literature concerned with governance and public policy analysis. This represents the main purpose of this article. In addition, this article also addresses a second and more modest aim: to reflect on the ways in which relational governance-inspired frameworks could be adapted and applied to politico-economic systems where state-industry-third sector relations differ from those found in North America and Western Europe. Both lines of argument are illustrated using vignettes from a case study of the Evenkia Hydro-Electric Station building project in the Russian Federation. (shrink)

Being a controversial industry, oil companies turn to corporate social responsibility (CSR) as a means to obtain legitimacy. Adopting a case study methodology, this research examines the characteristics of CSR strategies and CSR communication tactics of six oil companies by analyzing their 2011–2012 web site content. We found that all six companies engaged in CSR activities addressing the needs of various stakeholders and had cross-sector partnerships. CSR information on these companies’ web sites was easily accessible, often involving the use of (...) multimedia technologies and sometimes social media platforms. Furthermore, to boost the credibility of their CSR messages, these companies utilized a variety of tactics, such as factual arguments and two-sided messages. In sum, this research unveils the interconnectedness among business strategy, CSR practices, and CSR communication in oil companies’ attempt to gain legitimacy in an environment of controversy. The article ends with a discussion of the theoretical and practical implications of the research findings. (shrink)

Globalization has increased the economic power of the multinational corporation (MNC), engendering calls for greater corporate social responsibility (CSR) from these companies. However, the current mechanisms of global governance are inadequate to codify and enforce recognized CSR standards. One method by which companies can impact positively on global governance is through the mechanism of Global Public Policy Networks (GPPN). These networks build on the individual strength of MNCs, domestic governments, and non-governmental organizations to create expected standards of behaviour in such (...) areas as labour rights, environmental standards, and working conditions. This article models GPPN in the issue area of CSR. The potential benefits of GPPN include better overall coordination among industry and government in establishing what social expectations the modern MNC will be expected to fill. (shrink)

One of the new ways used by companies to demonstrate their social responsibility is to encourage employee volunteering, whereby employees engage in socially beneficial activities on company time, while being paid by the company. The reasoning is that it is good for employee motivation (internal effects) and good for the company reputation (external effects). This article reports an empirical investigation of the internal effects of employee volunteering conducted amongst employees of the Dutch ABN-AMRO bank. The study showed that (a) socio-demographic (...) characteristics from employee volunteers markedly differ from those of non-volunteers and community volunteers and (b) employee volunteering seems to have positive effects on attitudes and behavior towards the organization. (shrink)

This study examines how multinational corporations (MNCs) from the retail sector deal with four challenges they face when adopting Corporate Social Responsibility (CSR) policies: the challenge of developing well-performing CSR projects and programs, building competitive advantages based on CSR, responding to local stakeholder issues in the host countries and learning from different CSR experiences on a worldwide basis. Based on in-depth case studies of two globally leading retail MNCs (with strong operations in Latin America), the concept of Transverse CSR Management (...) emerged. Transverse CSR Management is defined as a distinctive form of organizational configuration that crosses different functional areas, country operations, and the boundaries of the firm. In particular, this article makes three main contributions: (1) we identify four central challenges faced by MNC managers when developing their CSR strategies; (2) we propose the concept of Transverse CSR Management to face these central challenges (together, at the same time) and identify its key elements (top management, external stakeholders, functional areas, and country subsidiaries); and (3) we propose four mechanisms (hierarchical, relational, cultural, and collaborative) through which the concept of Transverse CSR Management can be implemented by practicing managers. This study provides valuable insights for MNC managers in headquarters and subsidiaries on the issues they need to address in order to successfully deal with the four CSR-related challenges. (shrink)

This article looks into the process of searching for new forms of legitimacy among firms through corporate discourse. Through the analysis of annual sustainability reports, we have determined the existence of three types of rhetoric: (1) strategic (embedded in the scientific-economic paradigm); (2) institutional (based on the fundamental constructs of Corporate Social Responsibility theories); and (3) dialectic (which aims at improving the discursive quality between the corporations and their stakeholders). Each one of these refers to a different form of legitimacy (...) and is based on distinct theories of the firm analyzed in this article. We claim that dialectic rhetoric seems to signal a new understanding of the firm's role in society and a search for moral legitimation. However, this new form of rhetoric is still fairly uncommon although its use is growing. Combining theory and business examples, this article may help managers and researchers in the conceptualization of how firms make sense of their role in society and what forms of differentiation they strive for through their rhetoric strategies. (shrink)

This paper analyzes the determinants of corporate reputation within a sample of large UK companies drawn from a diverse range of industries. We pay particular attention to the role that philanthropic expenditures and policies may play in shaping the perceptions of companies among their stakeholders. Our findings highlight that companies which make higher levels of philanthropic expenditures have better reputations and that this effect varies significantly across industries. Given that reputational indices tend to reflect the financial performance of organizations above (...) other factors (Fryxell, G. E. and J. Wang: 1994, Journal of Management 20, 1–14) and that elements of the literature emphasise that discretionary aspects of social responsibility, including corporate donations, may not be in the financial interests of organizations (e.g. Friedman, M.: 1970, “The Social Responsibility of Business is to Increase its Profits”, New York Times Magazine, September 13), this is a significant finding. It suggests that philanthropic expenditures may play a significant role in stakeholder management and may, in particular, lead to stakeholders holding more positive impressions of philanthropic corporations. (shrink)

Scholarship on corporate social responsibility (CSR) shows both that the concept itself is interpreted in a multitude of different ways and that significant cross-cultural differences exist in the way that business approaches the question of social responsibility and ethics. Little comparative work, however, has yet been carried out that investigates the reasons behind such differences. The authors analyze the cases of Mexico and France by drawing on Enderle’s practical, semantic, and theoretical dimensions of business ethics. The authors further integrate the (...) concept of “normative institutions” to explore attitudes toward CSR and assess the likely future adoption of CSR practices in each country. The article concludes that despite similar institutional conditions in Mexico and France, the interplay of those institutions combined with the historical role of business and its relationship with society produces quite different articulations of CSR in each country. The article highlights the need for further studies that explore how institutions enable and constrain business’ articulation of social responsibility. (shrink)

This study examines how multinational corporations (MNCs) from the retail sector deal with four challenges they face when adopting Corporate Social Responsibility (CSR) policies: the challenge of developing well-performing CSR projects and programs, building competitive advantages based on CSR, responding to local stakeholder issues in the host countries and learning from different CSR experiences on a worldwide basis. Based on in-depth case studies of two globally leading retail MNCs (with strong operations in Latin America), the concept of Transverse CSR Management (...) emerged. Transverse CSR Management is defined as a distinctive form of organizational configuration that crosses different functional areas, country operations, and the boundaries of the firm. In particular, this article makes three main contributions: (1) we identify four central challenges faced by MNC managers when developing their CSR strategies; (2) we propose the concept of Transverse CSR Management to face these central challenges (together, at the same time) and identify its key elements (top management, external stakeholders, functional areas, and country subsidiaries); and (3) we propose four mechanisms (hierarchical, relational, cultural, and collaborative) through which the concept of Transverse CSR Management can be implemented by practicing managers. This study provides valuable insights for MNC managers in headquarters and subsidiaries on the issues they need to address in order to successfully deal with the four CSRrelated challenges. (shrink)

In response to the IABS conference theme to “advise practitioners,” this paper is framed in terms of two questions that have been found to be critical to practitioners. These are “what is Corporate Responsibility and how to do it” and “what is the value of Corporate Responsibility.” The paper uses theories from within the academic literature to develop a model to answer these two practitioner-based questions. An empirical framework based upon the model is developed and tested with a study of (...) customers of a financial service organisation in the UK. (shrink)