Firm-Level Determinants of Political CSR in Emerging Economies: Evidence from India

Multinational companies (MNCs) frequently adopt corporate social responsibility (CSR) activities that are aimed at providing ‘public goods’ and influencing the government in policymaking. Such political CSR (PCSR) activities have been determined to increase MNCs’ socio-political legitimacy and to be useful in building relationships with the state and other key external stakeholders. Although research on MNCs’ PCSR within the context of emerging economies is gaining momentum, only a limited number of studies have examined the firm-level variables that affect the extent to which MNCs’ subsidiaries in emerging economies pursue PCSR. Using insights from resource dependence theory, institutional theory, and the social capital literature, we argue that MNCs’ subsidiaries that are critically dependent on local resources, have greater ties to managers of related businesses and to policymakers, and that those that are interdependent on the MNCs’ headquarters and other foreign subsidiaries, are more likely to be involved in PCSR. We obtain support for our hypotheses using a sample of 105 subsidiaries of foreign firms that operate in India. Our findings enhance our understanding of the factors that determine MNCs’ political CSR in emerging economies.     

Stakeholder pressures,EMS implementation,and green innovation in MNC overseas subsidiaries

In this paper, we address the issue of green innovation by the overseas subsidiaries of multinational corporations (MNCs). Drawing upon stakeholder theory and institutional theory, we propose a conceptual model to explain how stakeholder pressures in host countries prompt MNC subsidiaries to undertake green product and process innovations. Our findings indicate that MNC subsidiaries need to meet market stakeholders’ pressures in order to achieve social legitimacy in host countries, and that the implementation of formal environmental management systems (EMS) is an important mechanism translating these pressures into green innovation initiatives. Furthermore, we find that the positive relationship between market stakeholder pressures and EMS implementation is reinforced by global ‘green’ institutional pressures in the different host countries.     

Multinational Enterprise Subsidiaries and their CSR: A Conceptual Framework of the Management of CSR in Smaller Emerging Economies

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.     

Corporate Social Responsibility in Transnational Spaces: Exploring Influences of Varieties of Capitalism on Expressions of Corporate Codes of Conduct in Nigeria

Drawing from the varieties of capitalism theoretical framework, the study explores the home country influences of multinational corporations (MNCs) on their corporate social responsibility (CSR) practices when they operate outside their national/regional institutional contexts. The study focusses on a particular CSR practice (i.e. corporate expressions of code of conducts) of seven MNCs from three varieties of capitalism – coordinated (2), mixed (2) and liberal (3) market economies – operating in the oil and gas sector of the Nigerian economy. The study concludes that the corporate codes of conduct of these MNCs operating in Nigeria, to a large extent, reflect the characteristics of their home countries’ model of capitalism, respectively, albeit with certain degree of modifications. The home countries’ model of capitalism is also found to have implications for the degree of adaptability of these MNCs’ CSR practices to the Nigerian institutional context – with the mixed market economy model of capitalism adapting more flexibly than the liberal and coordinated market economies, respectively. The findings of this study will contribute to the emerging literature on the institutional embeddedness of CSR practices in transnational social spaces, understanding of varieties of capitalism, and CSR in developing economies.     

“Teaching the Sushi Chef”: Hybridization Work and CSR Integration in a Japanese Multinational Company

While corporate social responsibility (CSR) is recognized as taking on various national meanings and practices, research has not sufficiently investigated how multinational companies (MNC) simultaneously achieve global CSR integration and local CSR adaptation. Building on a qualitative case study carried out at ASICS, an MNC headquartered in Japan, we show how this organizational dilemma may be solved through hybridization work, a form of institutional work performed by CSR managers in subsidiaries to combine and adapt different institutional approaches to CSR. By developing the notion of hybridization work, we contribute by (1) revealing a set of practices that contribute to institutional change within organizations and (2) enriching the study of CSR organizational change and international business by showing how hybridization Work leads to a greater organizational integration between core and periphery, and by identifying the triggering factors for subsidiary initiative in CSR.     

Factors in the effective transfer of knowledge from multinational enterprises to their foreign subsidiaries: a Mozambican case study

The purpose of this article is to better understand the role of internal stakeholders in subsidiaries of multinational companies (MNCs) in order to offer potential insights into the cross‐border transfer of knowledge from those companies’ headquarters to their subsidiaries. The focus is upon subsidiaries in developing countries, here Mozambique. More specifically, the article is concerned with identifying factors that influence the learning of internal stakeholders and noting practices which seem associated with a high level of absorptive capacity and performance of subsidiaries. The starting point is evidence of ineffective transfer of knowledge by MNCs to their subsidiaries in developing countries, with consequent sub‐standard performance. The research reported involves four case studies of Portuguese companies operating in Mozambique and draws on data from interviews with senior and middle managers in the firms’ Mozambican subsidiaries. The results obtained suggest that successful knowledge transfer to overseas subsidiaries is found under the following conditions. First, the parent company knows the local context and provides a flow of relevant information. Second, application of knowledge locally is done flexibly to suit local circumstances. Next, a participatory approach is used so that local staff can see why the knowledge conveyed is necessary. Fourth, explanation and demonstration are key techniques, with major roles for on‐the‐job training, continuous improvement and training at headquarters. Finally, issues arising from local culture may need to be addressed.     

CSR and stakeholder salience in MNE subsidiaries in emerging markets

The purpose of this study is to identify the key stakeholder groups pressuring multinational enterprises (MNEs) in emerging markets (EMs), also if the pressure is global or local, to develop corporate social responsibility (CSR) strategies. Drawing on stakeholder salience and institutional theories, all the stakeholder groups acknowledged and analysed in the literature were identified and examined to understand if they were perceived by MNEs in China as effective in pressuring them to engage in CSR strategies and activities. Results demonstrate that only stakeholder groups with power – government power or voting power – are perceived as having enough pressure to make MNEs’ Chinese subsidiaries engage in CSR, which is contrary to current theories. Our results allow us to theorise on an extension of the concept of utilitarian power and political power when analysing stakeholder salience in EMs. This research has important implications for managers as balancing and working with limited resources and correctly identifying and prioritising key stakeholders are vital to successfully improving performance.     

Corporate Governance and Corporate Social Responsibility Disclosures: Evidence from an Emerging Economy

We examine the relationship between corporate governance and the extent of corporate social responsibility (CSR) disclosures in the annual reports of Bangladeshi companies. A legitimacy theory framework is adopted to understand the extent to which corporate governance characteristics, such as managerial ownership, public ownership, foreign ownership, board independence, CEO duality and presence of audit committee influence organisational response to various stakeholder groups. Our results suggest that although CSR disclosures generally have a negative association with managerial ownership, such relationship becomes significant and positive for export-oriented industries. We also find public ownership, foreign ownership, board independence and presence of audit committee to have positive significant impacts on CSR disclosures. However, we fail to find any significant impact of CEO duality. Thus, our results suggest that pressures exerted by external stakeholder groups and corporate governance mechanisms involving independent outsiders may allay some concerns relating to family influence on CSR disclosure practices. Overall, our study implies that corporate governance attributes play a vital role in ensuring organisational legitimacy through CSR disclosures. The findings of our study should be of interest to regulators and policy makers in countries which share similar corporate ownership and regulatory structures.     

Configuration of External Influences: The Combined Effects of Institutions and Stakeholders on Corporate Social Responsibility Strategies

This article introduces a theoretical framework that combines institutional and stakeholder theories to explain how firms choose their corporate social responsibility (CSR) strategy. Organizational researchers have identified several distinct CSR strategies (e.g., obstructionist, defensive, accommodative, and proactive), but did not explain the sources of divergence. This article argues that the divergence comes from the variability in the configuration of external influences that consists of institutional and stakeholder pressures. While institutions affect firms’ social behavior by shaping the macro-level incentive structure and sources of legitimacy (distal mechanisms), firms’ stakeholders can amplify or buffer the institutional forces by acting as mediators (proximate mechanisms). The two dimensions are interdependent in that stakeholders draw legitimacy and power from institutions, and institutions are often actualized through stakeholder mechanisms. Together, they form a particular configuration of external influences that shapes how focal firms construct their CSR strategy.     

From Voids to Sophistication: Institutional Environment and MNC CSR Crisis in Emerging Markets

Why do multinational corporations (MNCs) frequently encounter corporate social responsibility (CSR) 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.     

An Institution of Corporate Social Responsibility (CSR) in Multi-National Corporations (MNCs): Form and Implications

This article investigates corporate social responsibility (CSR) as an institution within UK multi-national corporations (MNCs). In the context of the literature on the institutionalization of CSR and on critical CSR, it presents two main findings. First, it contributes to the CSR mainstream literature by confirming that CSR has not only become institutionalized in society but that a form of this institution is also present within MNCs. Secondly, it contributes to the critical CSR literature by suggesting that unlike broader notions of CSR shared between multiple stakeholders, MNCs practise a form of CSR that undermines the broader stakeholder concept. By increasingly focusing on strategic forms of CSR activity, MNCs are moving away from a societal understanding of CSR that focuses on redressing the impacts of their operations through stakeholder concerns, back to any activity that supports traditional business imperatives. The implications of this shift are considered using institutional theory to evaluate macro-institutional pressures for CSR activity and the agency of powerful incumbents in the contested field of CSR.     

Sustainable banking in Latin American developing countries: Leading to (mutual) prosperity

This article examines multinational banks’ (MNBs) approaches to corporate social responsibility (CSR) in developing countries’ subsidiaries, particularly in Latin America. Building on in-depth case studies of two MNBs that are based in Europe and market leaders in Latin America, we analyze their CSR motivations and outcomes in host countries. We examine institutional environments by applying the national business system framework, and we suggest missing categories in its financial and educational dimensions. We theorize how institutional necessity determines MNBs' CSR in developing countries. Finally, we examine the CSR outcomes in Latin America, where banks’ responsible conduct has led to major improvements in educational levels and financial inclusion. These improvements alleviate poverty and enhance both country's social wellbeing and MNBs’ legitimacy, leading to mutual prosperity.     

Striving for Legitimacy Through Corporate Social Responsibility: Insights from Oil Companies

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.     

Organizing Corporate Social Responsibility in Small and Large Firms: Size Matters

Based on the findings of a qualitative empirical study of corporate social responsibility (CSR) in Swiss MNCs and SMEs, we suggest that smaller firms are not necessarily less advanced in organizing CSR than large firms. Results according to theoretically derived assessment frameworks illustrate the actual implementation status of CSR in organizational practices. We propose that small firms possess several organizational characteristics that are favorable for promoting the internal implementation of CSR-related practices in core business functions, but constrain external communication and reporting about CSR. In contrast, large firms possess several characteristics that are favorable for promoting external communication and reporting about CSR, but at the same time constrain internal implementation. We sketch a theoretical explanation of these differences in organizing CSR in MNCs and SMEs based on the relationship between firm size and relative organizational costs.     

Communication of Corporate Social Responsibility: A Study of the Views of Management Teams in Large Companies

In light of the many corporate scandals, social and ethical commitment of society has increased considerably, which puts pressure on companies to communicate information related to corporate social responsibility (CSR). The reasons underlying the decision by management teams to engage in ethical communication are scarcely focussed on. Thus, grounded on legitimacy and stakeholder theory, this study analyses the views management teams in large listed companies have on communication of CSR. The focus is on aspects on interest, motives/reasons, users and problems related to corporate communication of CSR information. A questionnaire survey and in-depth interviews confirm that there is a distinct trend shift towards more focus on CSR in corporate communication. Whilst this trend shift started as a reactive approach initiated by the many corporate scandals, the trend shift is now argued to be of a proactive nature focussed at preventing legitimacy concerns to arise. These findings are significant and interesting, implying that we are witnessing a transit period between two legitimacy strategies. Furthermore, the findings suggest that the way respondents argue when it comes to CSR activities coincides with consequentialism or utilitarianism, i.e. companies engage in CSR activities to avoid negative impacts instead of being driven by a will to make a social betterment or acting in accordance with what is fundamentally believed to be right to do. This provides new input to the ongoing debate about business ethics. The findings should alert national and international policy makers to the need both to increase the vigilance and capacity of the regulatory and judicial systems in the CSR context and to increase institutional pressure to enhance CSR adoption and CSR communication. Furthermore, stakeholders need to be careful in assuming that CSR communication is an evidence of a CSR commitment influencing corporate behaviour and increasing business ethics.     

Is venture capital socially responsible? Exploring the imprinting effect of VC funding on CSR practices

We study how corporate social responsibility (CSR) is guided by ownership history, specifically whether a company receives venture capital (VC) funding or not. We argue that companies that receive VC funding are less likely to adopt CSR practices due to unique VC imprinting and that temporal and investment orientation moderate this relationship. We find that VC-backed companies have poorer CSR records, which do improve over time, but at a comparatively slower rate than non-VC-backed companies. However, when VC-backed companies receive funding from VC firms that have a responsible investment orientation and a broader stakeholder view, their CSR records are significantly better. This study contributes to our understanding of imprinting boundaries and related repercussions in stakeholder management strategies.     

U.S. Small Business’s Philanthropic Contribution to Local Community: Stakeholder Salience and Social Identity Perspectives

This study investigates relational attributes that explain small-business owners’/managers’ philanthropic contribution to their local community. Drawing on the theory of stakeholder salience and the social identity theory, we consider two facets of small-business–local-community relationship: a relationship with the local community as a stakeholder and a relationship with the local community as a social category that they belong. Data from 202 small-business owners/managers in the United States yielded support for the stakeholder salience and social identity perspectives. The results showed that the owners’/managers’ perception of legitimacy and urgency of local community’s claim and their social identity as a community member were important determinants of the small businesses’ philanthropic contribution. The findings provide strategic implications for local governments, civic organizations, and community authorities about managing the relationship with Small Business, Stakeholder salience, social identity, CSR, local community.     

Power,CSR strategy,and performance in foreign-owned subsidiaries

We investigate how a subsidiary's power base influences its strategic corporate social responsibility (CSR) focus on international and local issues, and performance. We develop a theoretical framework and test symmetric hypotheses as well as non-symmetric research queries based on insights from resource dependency theory and institutional theory. We use survey data collected from foreign-owned subsidiaries located in the mid-range emerging economy of Taiwan. We find that a large power base positively influences an international CSR strategic focus in subsidiaries. Furthermore, our symmetric results indicated that only international CSR strategies are conducive to performance. However, our complementing non-symmetric results show that the distinct power-base dimensions in combination with a local CSR strategic focus can also lead to high performance outcomes.     

Mapping the Relationship Among Political Ideology,CSR Mindset,and CSR Strategy: A Contingency Perspective Applied to Chinese Managers

The literature on antecedents of corporate social responsibility (CSR) strategies of firms has been predominately content driven. Informed by the managerial sense-making process perspective, we develop a contingency theoretical framework explaining how political ideology of managers affects the choice of CSR strategy for their firms through their CSR mindset. We also explain to what extent the outcome of this process is shaped by the firm’s internal institutional arrangements and external factors impacting on the firm. We develop and test several hypotheses using data collected from 129 Chinese managers. The results show that managers with a stronger socialist ideology are likely to develop a mindset favouring CSR, which induces the adoption of a proactive CSR strategy. The CSR mindset mediates the link between socialist ideology and CSR strategy. The strength of the relationship between the CSR mindset and the choice of CSR strategy is moderated by customer response to CSR, industry competition, the role of government, and CSR-related managerial incentives.