Using empirical evidence gathered from Chinese listed companies, this article explores the relationship between micro-governance mechanisms and corporate philanthropy from a corporate governance perspective. In China’s emerging market, ultimate controlling shareholders of state-owned enterprises are reluctant to donate their assets or resources to charitable organizations; in private enterprises marked by more deviation in voting and cash flow rights, such donations tend to be more likely. However, the ultimate controllers in PEs refuse to donate assets or resources they control or own, (...) which implies that corporate philanthropy by PEs comes at the cost of others, through assets or resources owned by minority shareholders. Even after devastating natural disasters such as the 2008 Wenchuan Earthquake, the controlling shareholders continue to express reluctance to donate any assets they control. Despite widespread evidence that corporate philanthropy boosts corporate growth and profitability, these ultimate controllers indicate no intention to donate their own money as a means to improve corporate performance. (shrink)

This study examines the varying roles of power, status, and national culture in unethical decision-making. Most research on unethical behavior in organizations is grounded in Western societies; empirical comparative studies of the antecedents of unethical behavior across nations are rare. The authors conduct this comparative study using scenario studies with four conditions in both China and Canada. The results demonstrate that power is positively related to unethical decision-making in both countries. Status has a positive effect on unethical decision-making and facilitates (...) the unethical decisions of Canadian participants who have high power but not Chinese participants who have high power. To explicate participants’ unethical decision-making rationales, the authors ask participants to justify their unethical decisions; the results reveal that Chinese participants are more likely to cite position differences, whereas Canadian participants are more likely to cite work effort and personal abilities. These findings expand theoretical research on the relationship between social hierarchy and unethical decision-making and provide practical insights on unethical behavior in organizations. (shrink)

Why do multinational corporations frequently encounter corporate social responsibility crises in leading emerging markets in the new century? Existing research about institutional impacts on MNC CSR has developed a void-based account about how the flawed institutional system allows misdeeds to happen. But the fact that such misdeeds have turned into increasing CSR crises in the new century along with institutional change is rarely taken into account. This paper combines studies of institutional voids, institutional entrepreneurship, and stakeholder theory to develop a (...) concept of institutional sophistication, which refers to both the top-down maturation of the regulatory system that standardizes firm behavior and the bottom-up diversification and intensification of grassroots initiatives that redefine stakeholder membership. Based on this concept, we developed a framework to comprehensively demonstrate how both institutional voids and sophistication drive the MNC CSR crisis in leading emerging markets. Empirically, we established an original database that includes 309 publicized CSR crises encountered by major foreign MNCs in China, India, and Russia, 2000–2011. Through a content analysis, the paper reveals six common sophistication processes that drive the MNC crisis across contexts and also specifies stakeholder strategies that make these processes happen and vary by social problems and national contexts. We also discussed the value of studying corporate social irresponsible behavior in understanding the institution–MNC relationship. (shrink)

With the expansion of multinational corporations (MNCs), the alarming upsurge in widely publicized and notable corporate scandals involving MNCs in emerging markets has begun to draw both academic and managerial attention to look beyond home market practices to the pressing concern of CSR in emerging markets. Previous studies on CSR have focused primarily on Western markets, reserving limited discussions in addressing the issue of MNC attitudes and CSR practices in their emerging host markets abroad. Despite this incongruity in academic response (...) to CSR in emerging markets, managers of multinational companies continue to face mounting and most often conflicting pressures to weigh among multiple strategic CSR responses in emerging markets. Such a task is often further complicated by the complexity of varying business norms and standards, regulatory environments, and stakeholder demands for CSR across national boundaries. With such a challenge in mind, I attempt to examine the explanatory factors in leading MNCs, otherwise recognized for accountability and integrity in their home markets, to employ inconsistent or negligent practices under CSR pressure in Chinese emerging economy. Preliminary findings reveal that discrepancies exist in how MNCs perform in CSR in home countries versus in host countries. While MNCs do have much to improve, the institutional environment in the emerging market, including the legal framework and the ethical culture, also needs to be improved by the host country governments, the industry associations, and local firms. Meanwhile, media interest and journalists, NGOs, third party monitors, industry stakeholders as well as consumer advocacy groups can raise the visibility of MNC's contradictory practices between their origin nations and countries with emerging economies and offer the pressures and incentives for MNCs to amend their ethical short-comings. This article also suggests implications for both theory and practice. (shrink)

In this study, we aim to investigate how multinational corporations (MNCs) balance ethical pressures from both the home and host countries. Drawing on theories from institutional theory, international business, and business ethics, we build a theoretical framework to explain the ethical behavior of MNCs. We apply the institutional logic concept to examine how MNCs with established logics and principles that have grown in the home country respond to local ethical expectations in the host country. We differentiate the core values from (...) the peripheral components of a MNCs institutional logic and propose that a MNC will pursue distinctive ethical strategies under different scenarios and choose the "right" configuration of core values and peripheral components that align with institutional environment in host countries. (shrink)

We live in an increasingly globalizing world, in which countries are closely linked by international trade and investment ties. Cross-cultural comparative studies of national values and ethics have attracted growing research interest in recent years, because shared practices, values and ethical standards depend on shared beliefs. However, the findings of such studies have been unable to reach a consensus on the impact of culture on ethics-related attitudes and behavior. Empirically, many "cross–cultural" differences reported by previous studies might actually stem from (...) cross-national differences. In order to partially fill this gap, this study advocates an analytical framework that isolates the role of cultural and national differences in order to test their relationship to individual level variables. Within this framework, we test competing hypotheses based on both cultural and national contexts by comparing groups of Chinese and American respondents together with a "bridging group" of Chinese Chinese-Americans. Theoretically, this contextual approach helps resolve the debate on the role of culture, by showing that culture plays a far more important role in shaping value orientations than the national background. Specifically, the two ethnic Chinese groups had many cultural values in common, and differed significantly from the Caucasian group. Implications are discussed. (shrink)

With the expansion of multinational corporations, the alarming upsurge in widely publicized and notable corporate scandals involving MNCs in emerging markets has begun to draw both academic and managerial attention to look beyond home market practices to the pressing concern of CSR in emerging markets. Previous studies on CSR have focused primarily on Western markets, reserving limited discussions in addressing the issue of MNC attitudes and CSR practices in their emerging host markets abroad. Despite this incongruity in academic response to (...) CSR in emerging markets, managers of multinational companies continue to face mounting and most often conflicting pressures to weigh among multiple strategic CSR responses in emerging markets. Such a task is often further complicated by the complexity of varying business norms and standards, regulatory environments, and stakeholder demands for CSR across national boundaries. With such a challenge in mind, I attempt to examine the explanatory factors in leading MNCs, otherwise recognized for accountability and integrity in their home markets, to employ inconsistent or negligent practices under CSR pressure in Chinese emerging economy. Preliminary findings reveal that discrepancies exist in how MNCs perform in CSR in home countries versus in host countries. While MNCs do have much to improve, the institutional environment in the emerging market, including the legal framework and the ethical culture, also needs to be improved by the host country governments, the industry associations, and local firms. Meanwhile, media interest and journalists, NGOs, third party monitors, industry stakeholders as well as consumer advocacy groups can raise the visibility of MNC’s contradictory practices between their origin nations and countries with emerging economies and offer the pressures and incentives for MNCs to amend their ethical shortcomings. This article also suggests implications for both theory and practice. (shrink)

This case study documents a high-profile incident involving the world-famous auto maker Daimler Benz with its customers in China. On the one hand, angry customers felt victimized by the auto maker's lack of willingness to take responsibility and its double standard between industrialized markets and emerging economies in dealing with customer complaints; on the other hand, the auto maker also felt frustrated at how this product warranty matter quickly escalated into a public relations nightmare. The case illustrates the complexity of (...) operating in emerging markets where institutional environments are vastly different, and the difficulty of balancing business interests with social responsibility. It also illustrates the urgent needs for emerging markets to develop institutional infrastructure to protect consumer rights, and to offer proper channel for conflict resolution. (shrink)

Despite the role women play in job creation, economic growth and society revitalization, especially in economies undergoing fundamental transformations, issues emerging from women in entrepreneurship have not received adequate attention in academic research. As a result, our understanding of women entrepreneurship in emerging markets as well as in nontraditional industries is even more limited. In this study, I attempt to partially fill the gap by comparing entrepreneurial orientations and venture performance between men and women entrepreneurs in electronics industry in Chinese (...) transition economy. I offer insights gained from statistical analyses based on a survey as well as case study. Results reveal that while women are influenced by the same factors that affect decision making among men and exhibit some similarities, they differ from men in their willingness to take more risks and make bolder moves in pursuit of greater returns and future competitive advantage. In addition, women entrepreneurs outperform their male counterparts. I compare these findings with existing literature and offer suggestions for future research. (shrink)

The way in which business ethics change over time will remain theoretically unclear unless we empirically reveal the temporal coevolution and coalignment among a changing environment, transitional institutions, strategic adaptations, and performance implications. To revitalize this coevolutionary perspective in business ethics research, in this special issue, we ask the following question: how do business ethics practices coevolve with a changing society and technology advancement as a result of the strategic choices of organizations in adapting to and shaping the environment? This (...) special issue includes a collection of seven empirical studies of business ethics in China that differ in methodology and empirical context but collectively showcase the change in business ethics practices in an emerging economy and the processes underlying this change. Based upon the findings, we propose a conceptual model of the coevolution among business ethics practices, technological innovation, institutional transition and disruptive events; then, we pose questions for future research. (shrink)

Although not frequently regarded as controversial, digital communications industries continue to be sites of CSR conflicts, particularly internationally. Investigating CSR issues in the digital communications industry is pertinent because in addition to being one of the fastest growing industries, it has created a host of new CSR issues that require further attention. This case study examines an incident in early 2010, when Google Inc. China and the Chinese government reached an impasse that produced a large-scale, transnational conflict that reached a (...) head ostensibly over state-mandated censorship, ultimately prompting Google to withdraw from the mainland Chinese market and redirect its activities to Hong Kong. We track Google's experience in China, both to explore its strategies and to consider the implications for corporate social responsibility. We situate Google's drastic decision to withdraw entirely from mainland China in the complex multiplicity of ethical, cultural, and political conflicts that affect this particular case. On a broader level, the incident raises the question of how multinational corporations (MNCs) can achieve corporate growth while negotiating the highly sensitive sociopolitical and institutional environments of foreign nations. (shrink)