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Defining and deterring corporate social irresponsibility : embracing the institutional complexity of international business
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Brammer, Stephen, Nardella, Giulio and Surdu, Irina (2021) Defining and deterring corporate social irresponsibility : embracing the institutional complexity of international business. Multinational Business Review, 29 (3). pp. 301-320. doi:10.1108/MBR-02-2021-0011 ISSN 1525-383X.
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Official URL: https://doi.org/10.1108/MBR-02-2021-0011
Abstract
Purpose
This paper aims to put forward a definition of corporate social irresponsibility (CSI) which is relevant to the study of complex organizations and in particular, the multinational enterprise (MNE). This paper then offers a framework as a foundation to discuss the institutional complexity of CSI to aid international business (IB) scholars, practitioners and policymakers achieve a clearer understanding of the mechanisms that may penalize and subsequently deter MNE irresponsibility.
Design/methodology/approach
In presenting the approaches taken by social regulation researchers and IB policy scholars to understand MNE irresponsibility, this paper proposes a definition of CSI and explicates the various mechanisms associated with deterring MNEs from behaving irresponsibly.
Findings
Therefore, how can MNEs be deterred from behaving irresponsibly? To further the research agenda concerning CSI in IB, far less common are a definition of CSI relevant to the complex IB context; and a framework that explicates both the legal and social components of CSI, particularly as they unfold in a complex, diverse and often divergent institutional landscape. Overcoming these two primary obstacles is important because when complexities associated with CSI emerge, researchers need to be able to ascertain and expound upon what they are observing so that comparisons can be made and more MNE CSI research can be accrued over time.
Research limitations/implications
To help the development of future research, we offered a more precise definition of CSI, one which is more relevant to the study of the MNE and the complex contemporary IB environment. By embracing complexities, this paper also outlines an institutional complexity approach, one which highlights both the role of formal and informal regulatory institutions. Though IB has traditionally focused on the role of formal regulation, there is much more to be unearthed by exploring the additional and concurrent influence of social regulatory institutions.
Practical implications
There is a high level of heterogeneity in the motivations and modes used by MNEs to enter international markets, which likely influence efforts made by these firms to adapt to different types of formal and social institutional pressures. When firms invest significantly in a market, they have a greater economic dependence in that market and institutions have a greater opportunity to exert pressures. For instance, foreign direct investment requires a higher level of (longer-term) commitment, transfer of capital, exchange of expertise and learning, meaning that firms depend much more on local authorities to perform in the market and accomplish their goals.
Social implications
Enabled by new technologies and, particularly, social media platforms, stakeholders can now engage in organized forms of regulatory activities, as is evident in the lesbian, gay, bisexual, transgender, queer, black lives matter and gender equality social activist movements. Through prominent collective actions, the impacts of globally organized social movements may be increasingly non-location bound, placing MNE managers at the heart of new challenges and opportunities to engage with global stakeholders. Infomediaries such as the press, have always been of historical importance, due to their role in shaping stakeholder expectations and opinions of the firm and thus, the reputation and legitimacy of that firm.
Originality/value
This study enriches the understanding of what CSI is, why we are likely to observe it in practice and how it affects MNEs. This paper offers a definition of CSI that is sufficiently nuanced to capture the complexity of the contemporary IB environment, as well as a framework that, this paper proposes, presents a clearer understanding of the institutional mechanisms that may deter MNEs from behaving irresponsibly. By encouraging scholars to examine the institutional complexity of MNE CSI, the paper hopes to contribute toward building a bridge which connects the IB policy and social regulation research streams.
Design/methodology/approach – In presenting the approaches taken by social regulation researchers, and IB policy scholars to understand MNE irresponsibility, we propose a definition of CSI and explicate the various mechanisms associated with deterring MNEs from behaving irresponsibly.
Originality/value – This study enriches our understanding of what CSI is, why we are likely to observe it in practice and how it affects MNEs. Historically, a primary hurdle to the advancement of research concerning CSI has been the lack of a precise definition tailored around what CSI is in relation to a diverse international business environment. MNEs manage complex global operations and supply chains, situated within varied institutional contexts, with often competing stakeholder perceptions, pressures, and demands. Should MNEs be identified as having engaged in CSI, they may experience pressures by formal institutional mechanisms led by government bodies, as well as by informal, social regulatory mechanisms, where deterioration in stakeholder perceptions and activist social movements can lead to damages in MNE reputational assets, financial losses and stock market underperformance. Accordingly, we offer a definition of CSI that is sufficiently nuanced to capture the complexity of the contemporary IB environment, as well as a framework that, we propose, presents a clearer understanding of the institutional mechanisms that may deter MNEs from behaving irresponsibly. By encouraging scholars to examine the institutional complexity of MNE CSI, we hope to contribute towards building a bridge which connects the IB policy and social regulation research streams.
Item Type: | Journal Article | ||||||||
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Subjects: | H Social Sciences > HD Industries. Land use. Labor | ||||||||
Divisions: | Faculty of Social Sciences > Warwick Business School > Strategy & International Business Faculty of Social Sciences > Warwick Business School |
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Library of Congress Subject Headings (LCSH): | Social responsibility of business, International business enterprises, International economic relations, Corporate image, Industries -- Social aspects | ||||||||
Journal or Publication Title: | Multinational Business Review | ||||||||
Publisher: | Emerald Group Publishing Ltd. | ||||||||
ISSN: | 1525-383X | ||||||||
Official Date: | 13 July 2021 | ||||||||
Dates: |
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Volume: | 29 | ||||||||
Number: | 3 | ||||||||
Page Range: | pp. 301-320 | ||||||||
DOI: | 10.1108/MBR-02-2021-0011 | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Reuse Statement (publisher, data, author rights): | © 2021 Emerald Publishing Limited. This AAM is provided for your own personal use only. It may not be used for resale, reprinting, systematic distribution, emailing, or for any other commercial purpose without the permission of the publisher. | ||||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||||
Copyright Holders: | Copyright © 2021, Emerald Publishing Limited | ||||||||
Date of first compliant deposit: | 2 June 2021 | ||||||||
Date of first compliant Open Access: | 14 June 2021 | ||||||||
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