Although present research shows that ambitious corporate sustainability objectives improve employee engagement in business organizations, there is scarcity of research showing how employees engage in corporate sustainability objectives and become autonomous sustainability thinkers. We suggest that a strong, individual level of psychological ownership of corporate sustainability is a precondition for the development of sustainability thinking, and examine the factors that influence the emergence of such feelings of ownership. Our qualitative study, based on 29 interviews conducted in seven Finnish local business (...) units from three different technology-oriented multinational enterprises (MNEs), shows that several key factors can have contradictory effects, both strengthening and hindering the routes to psychological ownership of corporate sustainability. While these contradictory effects may potentially lead to confusion among employees, our findings may help managers to avoid pitfalls in developing a more sustainability-oriented organizational culture. Moreover, by applying the theory of psychological ownership, our study contributes to the business sustainability research by providing new theoretical opportunities to understand the process of how individuals may become engaged in enhancing business sustainability. (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)

This paper examines the growing number of publications on multinational enterprise management of sustainability issues. Based on an integrative literature review and thematic analysis, the paper analyses and synthesises the current state of knowledge about main issues arising. Key issues identified include the following: choice of sustainability strategies; management of the views of headquarters towards sustainability; local cultural sustainability perspectives in developed and developing host countries; MNEs with home in developing/emerging countries; and resource availability for implementing sustainability initiatives. (...) Findings indicate that although the literature is tending towards growing acceptance about sustainability and its challenges most researchers have focused on corporate social responsibility and investigate their own niche problem, industry, and country, using their own chosen theory and do not consider the need for consolidation and integration of social, environmental and economic performance. Avenues for future research are identified which will provide a means for the ethical foundations of theory and practice to be improved. (shrink)

Cross cultural ethical conflicts are a major challenge for managers of multinational corporations (MNEs) when an MNE''s business practices and a host country''s practices differ. We develop a set of decision principles to help MNE managers deal with these conflicts and illustrate with examples of ethical conflicts faced by MNEs doing business in contemporary Russia (DeGeorge, 1994). We discuss the generalizability of the principles by comparing them to the Donaldson (1989) and Buller and Kohls (1997) decision models. (...) Finally we discuss changes in the cross cultural ethical problems facing MNE managers and offer suggestions for future corporate and academic work on these problems. (shrink)

Cross cultural ethical conflicts are a major challenge for managers of multinational corporations (MNEs) when an MNE's business practices and a host country's practices differ. We develop a set of decision principles to help MNE managers deal with these conflicts and illustrate with examples of ethical conflicts faced by MNEs doing business in contemporary Russia (DeGeorge, 1994). We discuss the generalizability of the principles by comparing them to the Donaldson (1989) and Buller and Kohls (1997) decision models. (...) Finally we discuss changes in the cross cultural ethical problems facing MNE managers and offer suggestions for future corporate and academic work on these problems. (shrink)

We examine the responses of South African multinational enterprises to corruption in African markets in the context of institutional voids. Corruption is a source of uncertainty and additional transactional costs for MNEs and it necessitates a strategic response. The research employs a qualitative study of a sample of MNEs with experience in internationalising into Africa. The results indicate that corruption in African markets is pervasive and closely associated with the institutional voids in these countries. MNEs (...) see themselves as ‘institution takers’ responding to countries’ institutional makeup at the organisational and individual level but fail to fully appreciate their impact on institutions both positively and negatively. Rather MNEs focus on strategic responses at the organisational level to address corruption operationally in the host country. We add to the existing literature by providing a dynamic framework of the complex webs of association between institutions, MNEs and corruption in conditions of economic underdevelopment. The research suggests that MNEs do not need to get caught in a vicious cycle whereby they perpetuate corruption in conditions of underdevelopment and institutional voids but instead can contribute towards a virtuous cycle through which they institutionalise ethical foundations. (shrink)

In African countries such as Ghana, microentrepreneurs make formal economy goods and services available to base of the pyramid (BOP) consumers. Multinational enterprises (MNEs) co-opt BOP business models when they enter the BOP market. We conducted a case study of six MNEs and 36 microentrepreneurs in three key sectors. In two sectors (fast-moving consumer goods and telecommunications), reverse bridging enables MNEs to capture value from BOP business models, which has a negative impact on both the (...) financial and social capital of microentrepreneurs. In the third sector (finance), microentrepreneurs are buffered from the negative effects of co-optation through a process of integrating, which enhances their social capital but reduces their financial capital. Our research contributes to the BOP literature, first by demonstrating that financial and social capital are intertwined at the BOP level, and second by analyzing how the negative effects of co-optation can be cushioned by enhancing microentrepreneurs’ social capital. (shrink)

Researching the organization and management of international public affairs (IPA) in the then-new multinational enterprises (MNEs) started in the 1960s. At first, IPA studies kept fairly good pace with what was known about the MNEs' nonmarket environments, their structurings, and their processes. After 1980, a disconnect developed in our knowledge of these three interrelated topics. In particular, much of more recent IPA research (a) fails to reflect the true scope, real actors, and organizational location of the (...) IPA function; (b) remains focused on old issues (e.g., the hierarchical relationship between headquarters and subsidiaries); (c) is mired in complex statistical analyses of remote data; (d) uses relevant theories in rather marginal ways; and (e) overlooks the impact on IPA of such important developments as mergers, acquisitions, and divestments. Yet, investigators can stretch their research methodologies and refocus their studies on the organization and management of the two faces of public affairs—offensive and defensive—in the context of new nonmarket threats and opportunities. (shrink)

Almost no literature exists, both in Japanese and English, when it comes to the CSR activities of Japanese MNEs operating outside Japan, especially in developing countries. This exploratory research will try to fill this gap of literature by examining CSR activities of Japanese MNEs in one of the developing Asian countries, the Philippines.

Extant literature suggests that firms may gain legitimacy through imitation. But little known is about whom foreign multinational enterprises (MNEs) will imitate, given that they have multiple social referents: home-country peers and host-country industry competitors. Drawing upon category theory, we develop a dynamic imitation model and explicate how MNEs’ categorization process is affected by social activism, which causes the shift from self-categorization to categorical imperative. We investigate this model in the context of MNE philanthropy and propose (...) that the social movement may delegitimize MNEs’ original self-category and change their imitation target. Using a hand-collected dataset of MNEs’ philanthropic donation for the 2008 Sichuan Earthquake in China, we find that MNEs imitate their home-country peers first but shift to host-country industry competitors after an online social movement. This is because the online social movement delegitimizes MNEs as a category and suggests host-country industry peers as the new model for comparison. Further, we find that liability of foreignness impedes whereas firm reputation facilitates an MNE’s adaptation after the online social movement. Our paper contributes to the literatures on MNEs’ imitation behavior and CSR in emerging market. We also contribute to category theory by integrating self-categorization and categorical imperative and highlighting the role of social movements. (shrink)

The Global Economic Ethic Manifesto (" Manifesto") is a moral framework/code of conduct which is both interactive and interdependent with the economic function of the main institutions of the economic system: markets, governments, civil society, and supranational organizations, which lays out a common fundamental vision of what is legitimate, just, and fair in economic activities. The Manifesto includes five universally accepted principles and values: the principle of humanity; the basic values of non-violence and respect for life; the basic values of (...) justice and humanity; the basic values of honesty and tolerance; and the basic values of mutual esteem and partnership. We posit that the Manifesto provides an ethical foundation for explicitly assisting multinational enterprise's (" MNE") executive management and boards of directors to meet the moral failures criticisms associated with the expansion of global capitalism, and similarly how the U. N. Global Compact (" Compact") is focused on addressing complimentary market and institutional failures. In this article, we argue how the Compact and the Manifesto complement each other, explaining how the policies and guidelines of the Compact can now be implemented at the organizational/individual level through a comprehensive human resource management (HRM) plan supporting the ethical framework of the Manifesto. Finally, we have described how the Manifesto completes a comprehensive managerial framework (consisting of both the Compact and the Manifesto) for what we term an "MNE Moral Values-Based Corporate Governance Model." Ultimately, further research is needed in understanding how much impact external and internal influences make on creating a sustainable ethical culture in MNEs. (shrink)

Since the end of the Cold War, there has been a substantial increase in the number of intrastate conflicts around the world. During the last two decades, there have been more than 125 violent conflicts resulting in 7 million deaths (Smith, 2003). Given the prevalence of these conflicts, the inability of some governments to resolve them, and the reluctance of multilateral institutions to intervene, multinational enterprises (MNEs) engaged in international ventures may find themselves in situations where they (...) must respond to violent conflict to minimize investment risk and to promote stability in countries where they operate. Research on business response to violent conflict has tended to treat conflict as a homogeneous problem, when in fact conflicts vary on several dimensions. The purpose of this article is to extend the research with a focus on how the characteristics of the conflict affect MNE intervention strategies. Drawing on insights from the research on conflict resolution and the risk that violent conflict poses to the firm, we develop a framework and propositions that provide guidance to MNEs confronting violent conflict with respect to existing projects or facilities. (shrink)

Multinational enterprises venturing into emerging economies operate in relatively unfamiliar environments that, compared with their home countries, often display a high degree of administrative distance. At the same time, many MNEs face the question of how intensely to commit to corporate social responsibility in emerging economies, given the often relatively lower social standards in those countries. This research addresses the question of how administrative distance, MNE subsidiary size, and experience in the host country relate to the extent (...) to which MNEs strategically commit to CSR in their emerging economy subsidiaries. We argue that the greater the administrative distance between MNEs’ home and host countries, the lesser the MNE subsidiaries strategically commit to CSR. At the same time, we predict that the larger the size of MNE subsidiaries, and the longer their experience in the host country, the more the MNE subsidiaries strategically commit to CSR. To test our hypotheses, we use data from a large-scale, cross-industry survey of 213 subsidiaries of Western MNEs in Asia, Eastern Europe, and Latin America. We complement the survey data with country-level data from the World Bank Governance Indicators. (shrink)

Multinational enterprises (MNEs) have long had a reputation of not doing enough for their host communities in developing countries. This study critically examines the role of MNEs in community development initiatives in developing countries, using the Nigeria oil industry and the South African mining industry as case study. Specifically, the study assessed the usefulness of MNE-supported community development projects as a means of demonstrating corporate social responsibility. The findings suggest that expectations for community development projects are (...) greater in developing countries. This study introduced new information on MNEs'local development programs that were drawn from interviews with MNEs'managers, government officials, and local communities. (shrink)

Multinational enterprises (MNEs) must often address moral conflicts given their responsibilities to meet conflicting demands from diverse stakeholders in transnational operations. Thus, this study constructs a comprehensive theoretical framework to understand the co-evolution between MNEs’ ambidexterity strategies and moral conflicts by incorporating studies on institutional theory and strategic management. Through a longitudinal case study, we find that the balance of three dimensions of ambidexterity strategies influences the content and intensity of MNEs’ moral conflicts by shaping (...) the dual structure of stakeholders from home and host countries. Further, moral conflicts reshape the balance of ambidexterity strategies by the pressure of legitimacy and performance. Hence, to achieve better performance in transnational operations, MNEs must not only pay attention to the contingent ambidexterity strategies in dynamic environments, but also leverage the fitness among different dimensions of ambidexterity strategies. The findings provide implications for MNEs’ transnational operations in the increasingly complex global business. (shrink)

Effects of globalization have amplified the magnitude and frequency of corporate abuses, particularly in developing economies where weak or absent rules undermine social norms and principles. Improving multinational enterprises’ (MNEs) ethical conduct is a factor of both the ability of firms to change behaviors in the direction of the moral good, and their willingness to do so. Constraints and enablers of a firm’s ability to act ethically emanate from the external environment, including the industry environment of which (...) the firm is a resident, and the host country environment in which it operates. A firm’s willingness to engage in ethical conduct is determined by the effective bundling of internal resources and the commitment of those resources to social ends. The interaction of external and internal conditions carves out categories of expected firm behaviors and suggests interventions that would push these behaviors in a more positive ethical direction. With reference to integrative social contracts theory (ISCT), these categories of firms are examined, and a conceptual model for analysis is developed to explain the drivers of corporate choices in the adoption and implementation of codes of conduct, and the relative power of relevant communities to the process. (shrink)

Effects of globalization have amplified the magnitude and frequency of corporate abuses, particularly in developing economies where weak or absent rules undermine social norms and principles. Improving multinational enterprises’ (MNEs) ethical conduct is a factor of both the ability of firms to change behaviors in the direction of the moral good, and their willingness to do so. Constraints and enablers of a firm’s ability to act ethically emanate from the external environment, including the industry environment of which (...) the firm is a resident, and the host country environment in which it operates. A firm’s willingness to engage in ethical conduct is determined by the effective bundling of internal resources and the commitment of those resources to social ends. The interaction of external and internal conditions carves out categories of expected firm behaviors and suggests interventions that would push these behaviors in a more positive ethical direction. With reference to integrative social contracts theory (ISCT), these categories of firms are examined, and a conceptual model for analysis is developed to explain the drivers of corporate choices in the adoption and implementation of codes of conduct, and the relative power of relevant communities to the process. (shrink)

This study integrates the resource dependence perspective and the stakeholder perspective to analyze local Chinese suppliers’ environment strategies in response to environmental requirements of different types of customers. With a sample of 1,215 local Chinese manufacturing suppliers, we examine the impact of export intensity and environmental requirements of multinational enterprises on local Chinese suppliers’ environment strategies. The results show that local Chinese suppliers with high levels of export intensity are more likely to adopt positive environment strategies to reduce (...) environmental risks. In addition, local Chinese suppliers respond actively to environmental requirements of MNE customers but not to those of local customers. The linkage between MNE customers’ environmental requirements and local Chinese suppliers’ environment strategies remains significant, even after we control for the impact of export intensity. Implications of the findings conclude the article. (shrink)

The international strategic alliance in international marketing is international social network to realize superior performance. This requires firms to increasingly consolidate international relationship with foreign partners. Knowledge acquisition and integration by absorptive capacity as an antecedent for international strategic alliance is understudied. This study aims to explore the relationship between AC and international strategic alliance, and their impact on the international performance of multinational enterprises. This study empirically verifies the research framework from 223 Taiwanese MNEs. In terms (...) of structural model, researchers conduct PLS-SEM to verify the hypotheses in this study. The results confirm previous studies that indicate a positive relationship among AC, international strategic alliance, and international performance. The results also indicate that international explorative and exploitative alliance fits mediate the relationship between AC and international performance. (shrink)

Deferred prosecution agreements (DPAs) are legal means, alternative to trial, for the resolution of criminal business cases. Although DPAs are increasingly used in the US and are spreading to other jurisdictions, the ethics of DPAs has hardly been subjected to critical scrutiny. We use a multidisciplinary approach straddling the line between philosophy and law to examine the ethics of DPAs used to resolve cases of multinational enterprises’ (MNEs) foreign corruption. Deontologically, we argue that the normativity of DPAs (...) raises critical concerns related to the notion of justice as punishment, with serious cases of international corruption resolved with minimal retribution for offending MNEs. Taking a utilitarian ethical perspective, we also evaluate the effect of DPAs on MNEs’ tendency to self-regulate or re-offend. Our conclusion, supported by critical analysis of the juridical literature and case evidence on MNEs’ recidivism, is that DPAs do not foster ethical behavior. (shrink)

We investigate what determines a multinational enterprise’s propensity to engage in lobbying and bribing in host countries where the overall institutional development for market exchanges is insufficient, and thus, their governance systems are relatively weak. We extend the current literature on institutional strategies by theorizing and showing the persistent and significant impacts of home country institutions on an MNE’s choice of influencing activities to address institutional constraints overseas. More specifically, our results demonstrate that the MNEs from a home (...) country with a stronger governance system are less involved in bribery, but have a higher tendency to lobby in transition economy countries, which have been characterized by relatively weaker institutional development, particularly in the area of governance. This tendency still holds even when these MNEs rely more on the local market for sales. We draw theoretical and practical implications from these observations. (shrink)

We examine how corporate bribery is impacted by cultural distance between multinational enterprises home and host countries, and organizational distance to core values between MNE entry modes and MNE headquarters. Tension between external and internal legitimacy helps to explain why cultural and organizational distances will affect MNE bribery. The empirical analysis used data from cross-border transactions by MNEs that were sanctioned by US regulatory officials between 1978 and 2011. We find statistical support for all hypotheses capturing main (...) and moderating effects and suggest that MNEs may be seriously risking their legitimacies from transactions in corruption-prone host countries. (shrink)

We examine recent evolution in corporate responsibility in the forest industry, an important natural-resource-based industry which is under rapid internationalisation and structural change under challenging financial pressures. We address two recent trends in corporate communication: corporate disclosure, that is the adoption of consistent external reporting standards [namely the Global Reporting Initiative (GRI) ], and the growing awareness of engagement with and impact on local communities through philanthropy, generation of prosperity, communication and the social impact of core activities. This study uses (...) a comparative qualitative case approach to forest industry multinational enterprises (MNEs) based on a combination of secondary (reporting, company newsletters and other documentation) and interview data. Three large-scale multinational forest industry firms, all pursuing different strategies in terms of internationalisation and geographical and product diversification, were chosen for the study: Stora Enso, SCA and Sappi Ltd. Our results show that the overall quality of sustainability reporting has improved in these companies from 2005 to 2009 with the adoption of GRI. However, based on our fourfold categorisation of social impact, the core social impact indicator in GRI (SO1) has been interpreted very differently in these MNEs, and the adoption of GRI has not actually much improved the comparability of the reports or transparency of practices. (shrink)

We examine recent evolution in corporate responsibility in the forest industry, an important natural‐resource‐based industry which is under rapid internationalisation and structural change under challenging financial pressures. We address two recent trends in corporate communication: corporate disclosure, that is the adoption of consistent external reporting standards [namely the Global Reporting Initiative (GRI) ], and the growing awareness of engagement with and impact on local communities through philanthropy, generation of prosperity, communication and the social impact of core activities. This study uses (...) a comparative qualitative case approach to forest industry multinational enterprises (MNEs) based on a combination of secondary (reporting, company newsletters and other documentation) and interview data. Three large‐scale multinational forest industry firms, all pursuing different strategies in terms of internationalisation and geographical and product diversification, were chosen for the study: Stora Enso, SCA and Sappi Ltd. Our results show that the overall quality of sustainability reporting has improved in these companies from 2005 to 2009 with the adoption of GRI. However, based on our fourfold categorisation of social impact, the core social impact indicator in GRI (SO1) has been interpreted very differently in these MNEs, and the adoption of GRI has not actually much improved the comparability of the reports or transparency of practices. (shrink)

The focus of this study was to assess the mediating effect of green innovation, in the relationship between green human resources management (GHRM) and organizational competitiveness of manufacturing multinational enterprises (MNEs). The study further looked at the moderating effect of organizational learning in the relationship between GHRM on organizational competitiveness of manufacturing MNEs. The population comprises manufacturing MNEs in Ghana. Through purposive and simple random sampling techniques, 231 manufacturing MNEs were selected for the study. (...) Data was analyzed using frequencies, percentages, mean scores, and Structural Equation Modeling (SEM), using SPSS and SMART‐PLS (Partial Least Square) software. The study concludes that green innovation partially mediates the relationship between GHRM and organizational competitiveness. It was further concluded that organizational learning positively moderates the positive relationship between GHRM and organizational competitiveness. The study recommends that manufacturing MNEs should invest and improve the level of their organizational learning as it not only strengthens the effects of GHRM on organizational competitiveness, but it also directly improves competitiveness. Further, particular attention should also pay to green innovation, as it intervenes the relationship between GHRM and organizational competitiveness. (shrink)

The question of how multinational enterprises respond to local corporate social responsibility expectations remains salient, also in the context of many African governments’ attempts to define and regulate business responsibilities. What determines whether MNEs respond to such local, state-driven expectations as congruent with their global commitment to CSR? Adopting an institutional logics perspective, we argue that a higher global CSR commitment will lead to higher local responsiveness when regulatory distance is low, but it will lead to lower (...) local responsiveness when regulatory distance is high. We find support for our hypothesis using data on 93 MNEs’ responses to the South African state’s Broad-Based Black Economic Empowerment policy. We thus contribute to the global–local CSR literature and show how MNEs’ local CSR responsiveness will be shaped by not only the local context but also their home country and firm-internal environments. (shrink)

Arguably, the corporate social responsibility practices of multinational enterprises are influenced by a wide range of both internal and external factors. Perhaps, most critical among the exogenous forces operating on MNEs are those exerted by state and other key institutional actors in host countries. Crucially, academic research conducted to date offers little data about how MNEs use their CSR activities to strategically manage their relationship with those actors in order to gain legitimisation advantages in host countries. (...) This paper addresses that gap by exploring interactions between external institutional pressures and firm-level CSR activities, which take the form of community initiatives, to examine how MNEs develop their legitimacy-seeking policies and practices. In focusing on a developing country, Sri Lanka, this paper provides valuable insights into how MNEs instrumentally utilise community initiatives in a country where relationship-building with governmental and other powerful non-governmental actors can be vitally important for the long-term viability of the business. Drawing on neo-institutional theory and CSR literature, this paper examines and contributes to the embryonic but emerging debate about the instrumental and political implications of CSR. The evidence presented and discussed here reveals the extent to which, and the reasons why, MNEs engage in complex legitimacy-seeking relationships with Sri Lankan host institutions. (shrink)

Multinational enterprises are often accused of taking advantage of lax environmental regulations in developing countries. However, no quantitative analysis of the impact of doing business in nations of different income levels on environmental corporate social responsibility has been done prior to this study. Incorporating institutional factors in our approach, we argue that endoisomorphic and exoisomorphic pressures relating to ECSR impact MNEs differently according to the MNEs' level of activity in low-, lower-middle-, upper-middle-, and high-income nations. We (...) predict and, using data from 113 companies, find that selling in poorer nations is positively associated with increased levels of ECSR. Our research suggests that MNEs may not be participating in a “race to the bottom” but may instead be responding to global institutional pressure by exceeding local norms for environmental stewardship. Alternative interpretations of our findings are discussed. (shrink)

Employing Porter and Kramer’s corporate social responsibility framework, we explored the strategic CSR programs of two Korean and two Japanese electronics multinational enterprises in Indonesia. We observed that the sample MNEs engage in strategic CSR either through investment in competitive context or the transformation of value chain activities. In addition, these firms strongly favor strategic CSR over responsive CSR, not just because of the economic benefits offered by the former, but also its advantages in managing the programs (...) and communicating with stakeholders. Furthermore, they have developed varied organizational methods and tend to manage their key CSR programs centrally to effectively link them to the competitive strategy. Lastly, the results of our analysis suggest that Korean MNEs have customized their strategic CSR programs for emerging countries more actively than Japanese MNEs. In sum, our analysis elucidates several important features of strategic CSR employed by the MNEs in emerging countries. (shrink)

U.S. multinational enterprises must now follow the policies of Title VII of the Civil Rights Act of 1964 in their overseas operations, at least with respect to U.S. expatriate employees. Doing so in a culture which discourages gender equality in the workplace raises difficult issues, both practically and ethically. Vigorously importing U.S. attitudes toward gender-equality into a social culture such as Japan or Saudi Arabia may seem ethnocentric, a version of ethical imperialism. Yet adapting to host country norms (...) risks a kind of moral relativism. This article supports the view that MNEs which promote workplace equality in a host country such as Japan, which is actively involved in the international economic and political community, is not ethical imperialism in any pejorative sense and is preferable to a moral relativism or social contract approach.We hold these truths to be self-evident: that all men are created equal, and endowed by their creator with certain rights — life, liberty, and the pursuit of happiness. (shrink)

Entry of new organizations, including multinational enterprises from emerging markets, raises the ethical question of will they benefit society. The concept of legitimacy answers this question because it is the overall assessment of the appropriateness of organizational ends and means. Moreover, gaining legitimacy enables EMNEs to succeed in new host countries. Past work examined collective level indicators of the legitimacy of MNEs, but recent research recognizes the importance of individuals’ perceptions as the micro-foundation of legitimacy. This study (...) first uses new pragmatism, deontology, and utilitarianism to demonstrate that legitimacy is fundamentally an ethical concept—a perspective that has been overlooked in management research. Second, this study uses a seven-step procedure to develop and validate a measure of individuals’ perceptions of the legitimacy of Chinese EMNEs operating in The Netherlands, a developed country. Six dimensions of legitimacy were identified. The study also finds support for this legitimacy judgment process linking the dimensions: validating knowledge → propriety judgments → generalized judgment. This work provides additional micro-foundations to research on legitimacy and contributes to the ongoing process of construct validation. Future research could use the validated measure in other settings and use specific ethical theories in depth to refine the concept of legitimacy. (shrink)

In “Sweatshops and Respect for Persons” we argued on Kantian grounds that managers of multinational enterprises (MNEs) have the following duties: to adhere to local labor laws, to refrain from coercion, to meet minimum health and safety standards, and to pay workers a living wage. In their commentary on our paper Sollars and Englander challenge some of our conclusions. We argue here that several of their criticisms are based on an inaccurate reading of our paper, and that (...) none of the remaining criticisms successfully challenge our main arguments. By highlighting the shortcomings of their arguments we hope to advance discussion of the ethical treatment of workers in global supply chains. (shrink)

In “Sweatshops and Respect for Persons” we argued on Kantian grounds that managers of multinational enterprises (MNEs) have the following duties: to adhere to local labor laws, to refrain from coercion, to meet minimum health and safety standards, and to pay workers a living wage. In their commentary on our paper Sollars and Englander challenge some of our conclusions. We argue here that several of their criticisms are based on an inaccurate reading of our paper, and that (...) none of the remaining criticisms successfully challenge our main arguments. By highlighting the shortcomings of their arguments we hope to advance discussion of the ethical treatment of workers in global supply chains. (shrink)

In “Sweatshops and Respect for Persons” we argued on Kantian grounds that managers of multinational enterprises (MNEs) have the following duties: to adhere to local labor laws, to refrain from coercion, to meet minimum health and safety standards, and to pay workers a living wage. In their commentary on our paper Sollars and Englander challenge some of our conclusions. We argue here that several of their criticisms are based on an inaccurate reading of our paper, and that (...) none of the remaining criticisms successfully challenge our main arguments. By highlighting the shortcomings of their arguments we hope to advance discussion of the ethical treatment of workers in global supply chains. (shrink)

Arnold and Bowie (2003) attempt to derive ethical constraints on the actions of the managers of multinational enterprises (MNEs), orthe MNEs themselves, from a Kantian perspective. We contest Arnold and Bowie’s claims regarding MNE duties, in particular that MNEs have a duty to pay a subsistence wage above market levels. We conclude that even within Arnold and Bowie’s Kantian framework such a duty does not properly emerge. In addition, we argue that the account of coercion (...) used by Arnold and Bowie does not serve their purposes. Arnold and Bowie address consequentialist issues by arguing that their conclusions are not undercut by economic considerations regarding unemployment. We argue that Arnold and Bowie have misread the economic literature in this regard. (shrink)

Using panel data of 4,244 company years, we examine whether and how corporate social performance (CSP) affects a firm’s capacity to achieve profitable sales in foreign markets. Based on our extension of instrumental stakeholder theory into the international arena, we hypothesized a U-shaped relationship between CSP and multinationality. Results supported our contention that multinational enterprises (MNEs) need to be substantially committed to social performance objectives if they are to recoup the cost of their CSP investments, and improve (...) their capacity to compete in foreign markets. MNEs engaged in intermediate levels of CSP achieve lower levels of multinationality than firms operating at either anchor of the social performance continuum. In addition, this study demonstrates that CSP moderates a well-established relationship in international business literature – the relationship between R&D investment and a firm’s multinationality. Implications for research and practice are discussed. (shrink)

Public pressure is essential for providing multinational enterprises (MNEs) with motivation to follow the standards of human rights conduct set in soft-law instruments, such as the United Nations Guiding Principles on Business and Human Rights. But how does the public judge MNE involvement in human rights violations? We empirically answer this question drawing on an original survey of American adults. We asked respondents to judge over 12,000 randomly generated scenarios in which MNEs may be considered to (...) have been involved in human rights violations. Our findings reveal substantial gaps between public judgments and the standards set in soft law and the normative literature. We identify the attributes of episodes of human rights violations involving MNEs that influence public judgments, including the relationship between the MNE and the perpetrator, the practice of due diligence, and the type of abuse. These results provide insights as to when we might expect public pressure to drive MNE compliance with soft-law instruments, and they direct attention to specific standards that will likely require stronger, ‘hard’ law approaches or broader efforts to shift the public’s view. (shrink)

This paper builds on a debate between Velasquez and Fleming: Do multinational enterprises (MNEs) have ethical obligations to their host countries? Velasquez applies Thomas Hobbes' realism approach in arguing that MNEs have no special moral obligations to host countries: (a) obligations do not exist independently in a "state of nature," (b) MNEs exist in a "state of nature" independent of any sovereign authority or power, (c) therefore, MNEs cannot be compelled toward moral or ethical (...) behavior. Fleming counters that the lack of an international authority to compel morality from MNEs is irrelevant. MNEs are for-profit entities making rational economic decisions based on their perceived self-interest. Since they operate in "the goldfish bowl of international media," MNEs are very aware of the stakeholder model. First, the paper supports Fleming's position: Even if a philosophical case cannot be established for MNEs to act ethically - they still should. Being unethical in any arena, but especially in the international arena, is both bad-for-business and bad business. Applying stakeholder theory, if stakeholders perceive the MNE as unethical (which may or may not be true), the firm will ultimately lose business. (shrink)

Arnold and Bowie (2003) attempt to derive ethical constraints on the actions of the managers of multinational enterprises (MNEs), orthe MNEs themselves, from a Kantian perspective. We contest Arnold and Bowie’s claims regarding MNE duties, in particular that MNEs have a duty to pay a subsistence wage above market levels. We conclude that even within Arnold and Bowie’s Kantian framework such a duty does not properly emerge. In addition, we argue that the account of coercion (...) used by Arnold and Bowie does not serve their purposes. Arnold and Bowie address consequentialist issues by arguing that their conclusions are not undercut by economic considerations regarding unemployment. We argue that Arnold and Bowie have misread the economic literature in this regard. (shrink)

Multinational enterprises dominate the governance of global value chains, such that according to the concept of political corporate social responsibility, they are responsible to address governance gaps throughout the chains, even at the level of their independent suppliers. In practice, MNEs often struggle to cope with the complexity of these governance gaps, and PCSR does not provide a clear definition nor offer guidance for how to analyze and address them. By adopting the notion of governance mechanisms from (...) GVC literature, this study proposes a more nuanced view, in which governance gaps result from inactive, ineffective, or inequitable governance mechanisms adopted by relevant actors, rather than a complete absence of governance. MNEs, through their governance mechanisms, commonly create governance gaps. This study distinguishes different types of governance mechanisms to create a typology of governance gaps, such that it contributes to the literature on PCSR by offering a more refined understanding of governance gaps, along with a means to identify mechanisms to address them. Furthermore, it contributes to the literature on GVCs by defining governance-related terms and adding an ethical perspective on MNEs’ global business conduct. To illustrate the typology, this article presents the case of low wages for workers in the textile industry and efforts by H&M to deal with this governance gap. (shrink)

Multinational enterprises dominate the governance of global value chains, such that according to the concept of political corporate social responsibility, they are responsible to address governance gaps throughout the chains, even at the level of their independent suppliers. In practice, MNEs often struggle to cope with the complexity of these governance gaps, and PCSR does not provide a clear definition nor offer guidance for how to analyze and address them. By adopting the notion of governance mechanisms from (...) GVC literature, this study proposes a more nuanced view, in which governance gaps result from inactive, ineffective, or inequitable governance mechanisms adopted by relevant actors, rather than a complete absence of governance. MNEs, through their governance mechanisms, commonly create governance gaps. This study distinguishes different types of governance mechanisms to create a typology of governance gaps, such that it contributes to the literature on PCSR by offering a more refined understanding of governance gaps, along with a means to identify mechanisms to address them. Furthermore, it contributes to the literature on GVCs by defining governance-related terms and adding an ethical perspective on MNEs’ global business conduct. To illustrate the typology, this article presents the case of low wages for workers in the textile industry and efforts by H&M to deal with this governance gap. (shrink)

In this paper we evaluate the ethical aspects of a public-private partnership (PPP) for the production and distribution of electricity in a particular context, i.e.,in a developing country characterized by a high corruption rate. In general, multinational enterprises (MNE) are considered suspect in developing countries by their own populations and by others, especially in those countries perceived as corrupt. A second source of suspicion concerns the privatization of utilities: utilities such as electricity and clean water play an essential (...) role in people’s lives, thus, leaving their production and distribution in the hands of for-profit companies may seem imprudent, particularly with respect to the poorest people. On the basis of a questionnaire submitted to managers of a privatized utility company in Cameroon, this case study suggests that the combination of these two sources of suspicion does not automatically lead to negative outcomes. (shrink)

Drawing on stakeholder theory and the evolutionary approach to institutions, this paper investigates the channels through which corporate social responsibility (CSR) is developed in post-communist economies by focusing on the employee background factors that shape the employees' expectations with regard to corporate socially responsible behaviour. We identify three channels through which exogenous and endogenous CSR are developed: employees with work experience in multinational enterprises (MNEs) (leading to exogenous CSR), employees with CSR knowledge (leading to exogenous CSR) and (...) employees with experience of the socialist system (leading to endogenous CSR). Furthermore, we argue that the interactions between these channels lead to hybrid CSR in transition economies. We use a questionnaire-based survey with employees of domestic and MNEs in Romania and we conduct regression analysis. We find that employees with work experience in MNEs act as channels for exogenous CSR, while employees with experience of the socialist system act as channels for endogenous CSR. Furthermore, employees with experience of the socialist system and CSR knowledge or work experience in an MNE act as channels for hybrid CSR in transition economies. Based on our results, we put forward implications for theory, managers and policy makers. (shrink)

Drawing on stakeholder theory and the evolutionary approach to institutions, this paper investigates the channels through which corporate social responsibility (CSR) is developed in post‐communist economies by focusing on the employee background factors that shape the employees' expectations with regard to corporate socially responsible behaviour. We identify three channels through which exogenous and endogenous CSR are developed: employees with work experience in multinational enterprises (MNEs) (leading to exogenous CSR), employees with CSR knowledge (leading to exogenous CSR) and (...) employees with experience of the socialist system (leading to endogenous CSR). Furthermore, we argue that the interactions between these channels lead to hybrid CSR in transition economies. We use a questionnaire‐based survey with employees of domestic and MNEs in Romania and we conduct regression analysis. We find that employees with work experience in MNEs act as channels for exogenous CSR, while employees with experience of the socialist system act as channels for endogenous CSR. Furthermore, employees with experience of the socialist system and CSR knowledge or work experience in an MNE act as channels for hybrid CSR in transition economies. Based on our results, we put forward implications for theory, managers and policy makers. (shrink)

Drawing on stakeholder theory and the evolutionary approach to institutions, this paper investigates the channels through which corporate social responsibility (CSR) is developed in post‐communist economies by focusing on the employee background factors that shape the employees' expectations with regard to corporate socially responsible behaviour. We identify three channels through which exogenous and endogenous CSR are developed: employees with work experience in multinational enterprises (MNEs) (leading to exogenous CSR), employees with CSR knowledge (leading to exogenous CSR) and (...) employees with experience of the socialist system (leading to endogenous CSR). Furthermore, we argue that the interactions between these channels lead to hybrid CSR in transition economies. We use a questionnaire‐based survey with employees of domestic and MNEs in Romania and we conduct regression analysis. We find that employees with work experience in MNEs act as channels for exogenous CSR, while employees with experience of the socialist system act as channels for endogenous CSR. Furthermore, employees with experience of the socialist system and CSR knowledge or work experience in an MNE act as channels for hybrid CSR in transition economies. Based on our results, we put forward implications for theory, managers and policy makers. (shrink)

The new millennium has witnessed a growing concern over the impact of multinational enterprises (MNEs) on human rights. Hence, this article explores (1) how wide-spread corporate policies on human rights are amongst large corporations, specifically the FTSE 100 constituent firms, (2) whether any sectors are particularly active in designing human rights policies and (3) where corporations have adopted such policies what their content is. In terms of adoption rates of human rights policies, evidence of exemplary approaches in (...) individual companies contrasts with a less satisfactory engagement pattern across the sample, as 42.8% of firms do not seem to address human rights at all. With regard to the content of corporate human rights policies, the study found shallow commitments to dominate, where companies focus on a narrow range of negative rights, i.e. on respecting human rights, rather than positive ones, i.e. initiatives to protect or fulfil human rights. (shrink)

We examine the extent to which host country income inequality influences multinational enterprises’ (MNE) expansion strategy for foreign production investment, depending on their specific strategic objectives. Applying a transaction cost framework, we predict that national income inequality has an inverted U-shaped relationship with foreign production investment. As inequality increases, MNEs accrue lower transaction costs arising from interactions with various local actors, leading to higher probability of investment. As income inequality increases further, its effect on location attractiveness will (...) become negative, as its attraction effect is increasingly offset by additional monitoring, bargaining, and security costs owing to the more fractious nature of high inequality societies. In addition, we suggest that the impact of income inequality is contingent on investment objectives: The inverted U-shaped relationship is stronger for efficiency-seeking investment but weaker for market-seeking and competence-enhancing investments. We find substantial support for our hypotheses through an analysis of 27 years (1986-2012) of data on Japanese MNEs’ overseas production entries. (shrink)

Drawing on the themes of men and masculinity, this article examines texts in the corporate social responsibility (CSR) reports of local multinational enterprises (MNEs) in South Korea, an emerging economy. This article explores how Korean male hegemony is hidden and naturalized in CSR reporting. Focusing on the discursive construction of gender identity, we analyze how CSR reports portray gendered identities in ways that may foster gender inequality by examining how the texts reflect the inferior position of women (...) and marginalized male workers in the workplace. We review 15 CSR reports from Korean MNEs as a primary data source for examining corporate policies and disclosure on gender‐equality issues in the workplace. We explore the inherently embedded meaning of CSR reports to evaluate the masculine tone of gender relations in these texts. To deepen our understanding, we retrieved the original text segments, coded them by using a categorical framework and revisited our data to critically examine our interpretation of the narrative structures that we argue reflect and reproduce certain discourses of masculinity, through the (in)visibility of women, the marginalization of women and (part‐time) men, and the silencing of their voices by the Korean male hegemony. (shrink)

This paper analyzes the interlink among managerial experience, capabilities, and social capital in relation to corporate social responsibility (CSR) activities of multinational enterprises' (MNEs) subsidiaries in an emerging market context. Based on the empirical sample of 104 subsidiaries of 28 Italian MNEs operating in India, we found that CEO managerial capabilities are positively associated with CSR activities. However, interestingly, our findings also show that subsidiary CEO (managerial) experience is negatively associated with CSR activities in emerging markets. (...) Therefore, our study is one of the few that highlights the negative repercussions of experience in the context of CSR activities in emerging markets. Moreover, our findings show that while social capital alleviates the negative influences of CEO experience on CSR activities, it does not enhance the role of CEO managerial capabilities in CSR activities. As such, our study contributes to research on business ethics with a focus on sustainable development in business. (shrink)

This paper examines prospects for and content of a global regime for human rights. Competing schools of thought forecast convergence and divergence of national standards under stress of globalization. No such regime exists, and there is no compelling theory of international corporate social responsibility. However, elements of an emerging global regime can be identified and partially overlap with environmental protection issues. This regime is highly fragmented, underdeveloped, and only partially enforceable—but it is in development. The UN Global Compact, the Global (...) Reporting Initiative (GRI), ISO 26000 (expected in 2010), the U.S. Alien Tort Claims Act (ATCA) of 1789 and the permanent international criminal court established in 2002 are illustrations of such elements. The third Ruggie Report, issued 2008, is an important summary of conditions and proposes a strategy for forward progress. Human rights impose important obligations on multinational enterprises (MNEs) operating across highly diverse political, legal, and cultural realities. (shrink)