Special Issue of Business and Politics
Corporate Responsibility, Multinational Corporations, and Nation States
Aseem Prakash, University of Washington, Seattle
Jennifer J. Griffin, The George Washington University
Corporate Responsibility (CR) has emerged as an important area of concern and
opportunity for multinational corporations. This special issue of Business and
Politics poses the following questions: how do multinationals respond to the
twin pressures of globalization and localization in deciding their CR policies
in subsidiaries? Under what conditions do multinationals grant autonomy to
their subsidiaries to give more salience to CR policies that address
country-specific (or community specific) needs as opposed to working within a
global CR strategy developed at the headquarters located abroad? Under what
conditions does the multi-domestic/global mix of the product-market strategy
align with the multi-domestic/global mix of CR strategies? We invite both
theoretical and empirical papers from all social science disciplines (business,
economics, political science, sociology, and public policy). We welcome all
Bartlett and Ghoshal (1989) identify three approaches (global, international,
multi-domestic) for multinationals to manage the twin pressures of
globalization and localization within product-markets. Global strategies are
predicated on an integrated (economic) world market encouraging firms to adopt
a common product-market strategy across countries. If political boundaries and
social customs significantly impact the nature of institutions, then global
strategies may be less useful. If the institutional context requires
responsiveness to local needs, multi-domestic strategies which require
transferring parents’ expertise and adapting to foreign markets may be
preferable. Analogous to the market environment, multinationals’ CR policies
face similar global-local tensions. Globalization creates incentives for
governments and all stakeholders including transnationally networked citizen
groups to influence firms and their subsidiary’s activities. These groups are
aided by new channels of information flows and a consolidating media industry
whereby local events are quickly transformed into transnational news. In
effect, multinationals face ‘two-level games’ (Putnam, 1988) in both
product-market and socio-political CR environments (the nonmarket environment,
Baron, 1995) where what they do in one sphere impacts the other one, and vice
versa (Prakash, 2002; Griffin and Koerber, 2011).
Yet, multinational need to make strategic choices. They can choose from a menu
of CR initiatives that focus on different issue areas, stakeholders or
functions and this can vary across their subsidiaries. Given that corporate
resources devoted to CR are finite, how do multinationals decide the scope and
scale of CR initiatives in different countries and how might this cohere with
their product-market strategies? For analytical simplicity we classify two
salient dimensions of CR initiatives, scope and type.
Scope of CR Initiatives
Multinationals can design or subscribe to common CR initiatives which are
pursued across subsidiaries. These initiatives can have a distinct home
country character or they might seek to reflect the core skills and expertise
of the firm (e.g., financial firms and financial literacy). Regardless of the
specific factor influencing CR design, the analytically important feature is
that these initiatives are pursued across subsidiaries (or across subsidiaries
in a given region) irrespective of nation state boundaries. They are woven into
global/regional corporate strategy and often reflect efforts at global/regional
At the other end of the continuum, multinationals might allow subsidiaries
considerable leeway in the choice and design of CR initiatives. Subsidiaries
may subscribe to national level CR initiatives organized by industry
associations without a global counterpart. Beyond some global principles, the
corporation is not committed to the pursuit of a specific type of CR or a
specific issue area. The magnitude and direction of CR initiatives is directed
by local subsidiaries, local managers, or host country conditions.
Types of CR Initiatives
Multinationals have the opportunity to pursue CR in different issues areas
affecting different stakeholders. Indeed, the global-local choice may vary
depending on the type of CR being pursued. For analytical simplicity, we
identify the following types of CR initiatives where the multinational may
focus its efforts.
Human resources. These initiatives are directed toward raising the economic,
social, and political opportunities for employees, contract workers, and
potential employees in the workplace. They could seek to enhance employee
voice, improve employee benefits, wages, working conditions, and so on. They
could focus on a specific subset of employees or specific issues such as women
representation, diversity, stigma, and ethnic or linguistic capabilities. Often
directed toward internal stakeholders, workplace/labor CR initiatives often
appeal to pools of potential employees and broader actors via the media
influencing corporate reputation, trust, credibility and prestige.
Marketing. A key activity here is encompassing new product features, for
example, the introduction of seat belts by Volvo or the introduction of hybrid
cars by Toyota. Consumer?oriented CR encompasses product and process
innovations (e.g., less carbon, water, or energy content) as well as promotion,
advertising and distribution strategies. Green marketing, pass?through
philanthropy for consumers, improved product functionality (e.g.,
miniaturization), and new products (carbon offsets, etc.) are often the
earliest evidence of consumer oriented CR.
Supply chain. These initiatives are directed at securing the acquisition or
accumulation of needed inputs. Needed inputs include capital, raw materials,
and technology. Supply chain CR initiatives may focus on monitoring and
enforcement of supply chain codes of conduct; carbon, water or energy
footprints from the extended enterprise; developing supplier innovations or
securing sustainable supplies (e.g., concentrated detergent in smaller bottles,
minimizing packaging, and reforestation). This includes securing permits to
operate (e.g., licenses for mine sites, fishing permits), socially responsible
funding, or access to non?renewable resources.
Development. These initiatives are directed at building social capital,
creating infrastructure and capabilities in communities to build commerce,
stabilize households, and improve public health, education, or general welfare.
These may be directed at the local community or at the underprivileged sections
of the society that may not be directly affected by the corporation. The
objectives are three: first, to enhance the human capital; second to improve
the physical infrastructure for the underprivileged to leverage their human
capital and third, to enhance the social capital of a given community.
Initiatives can range from providing tangible, bricks, and mortar resources for
community events such as hospitals and schools to a transferring of skills and
expertise (e.g., fundraising, project coordination, access to capital, grant
writing) for enhancing community infrastructure.
Environment. These initiatives seek to generate positive environmental
externalities or reduce the production of negative environmental externalities
associated with producing the organization’s goods and services. These
activities can be directed at specific actors (e.g., community groups impacted
by contaminated water streams) or institutions (e.g., investors, regulators).
Corporate governance. These initiatives seek to improve corporate governance
and voluntarily create new rules regulating the generation and/or the
disbursement of the residual or profit. These activities could seek to provide
for investor protection, new financial disclosure requirements, limits on
executive compensation, and so on.
In exploring the scope and type dimensions in multinational corporations and
their subsidiaries, papers might explore questions such as:
– How do home country factors influence what types of CR initiatives
multinationals might pursue abroad in their subsidiaries and the sequencing of
– Similarly, how do host country factors influence what types of CR initiatives
multinationals might pursue in specific subsidiaries and the sequencing of such
– How and why do CR initiatives of OECD multinationals differ from non-OECD
multinationals? Do they attach varying salience to home country and host
country factors? How do CR initiatives within South-to-South multinationals
differ from North-to-North multinationals?
– Do multinationals within specific sectors seek global CR initiatives? Under
what conditions, do multinationals defer to their subsidiaries regarding CR
policies and implementation? When is a blended approach to CR preferred?
– Does pursuit of CR differ in horizontal FDI as opposed to vertical FDI?
– Beyond subsidiaries, how and why multinationals differ regarding their
willingness to infuse their global supply chains or distribution chains with
– Do CR policies influence mode of entry? To what extent do multinationals view
CR as core to their strategy influencing their core business decisions?
– In what ways transaction cost and resource-based perspectives help us
understand how multinational corporations make CR choices?
– Does the absence of CR safeguards force multinationals to exit certain
markets? What lessons can be drawn from such experiences for understanding
theories of global business and nation states?
Tentative Dates and Timetable
– Initial submission: March 15, 2011
– CR Workshop for the short-listed papers in Seattle: May 5-6, 2011
Final submission: June 15, 2011
– Editors send papers out for review: July 1, 2011
– Authors invited to revise and resubmit: September 30, 2011
– Revised papers due: January 30, 2012
– Delivery of full set of papers and guest editors’ introductory paper: March
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