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Interactive Effects of External Environmental Conditions and Internal Firm Characteristics on MNEs’ Choice of Strategy in the Development of a Code of Conduct

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  • Sama, Linda M.

Abstract

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.

Suggested Citation

  • Sama, Linda M., 2006. "Interactive Effects of External Environmental Conditions and Internal Firm Characteristics on MNEs’ Choice of Strategy in the Development of a Code of Conduct," Business Ethics Quarterly, Cambridge University Press, vol. 16(2), pages 137-165, April.
  • Handle: RePEc:cup:buetqu:v:16:y:2006:i:02:p:137-165_01
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    Cited by:

    1. Radka MacGregor Pelikánová & Robert Kenyon MacGregor & Martin Èernek, 2021. "New trends in codes of ethics: Czech business ethics preferences by the dawn of COVID-19," Oeconomia Copernicana, Institute of Economic Research, vol. 12(4), pages 973-1009, December.
    2. Till Talaulicar, 2009. "Barriers Against Globalizing Corporate Ethics: An Analysis of Legal Disputes on Implementing U.S. Codes of Ethics in Germany," Journal of Business Ethics, Springer, vol. 84(3), pages 349-360, February.
    3. Heidi Weltzien Hoivik, 2007. "East Meets West: Tacit Messages about Business Ethics in Stories Told by Chinese Managers," Journal of Business Ethics, Springer, vol. 74(4), pages 457-469, September.
    4. Elisa Giuliani, 2010. "Multinational Corporations, Technology Spillovers and Human Rights's Impacts on Developing Countries," LEM Papers Series 2010/06, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    5. Elisa Giuliani & Chiara Macchi, 2014. "Multinational corporations’ economic and human rights impacts on developing countries: a review and research agenda," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 38(2), pages 479-517.
    6. Bruce W. Stening & Daniel W. Skubik, 2007. "Do international management researchers need a code of ethics?," Management International Review, Springer, vol. 47(1), pages 103-126, February.
    7. Mulder, Laetitia B. & Jordan, Jennifer & Rink, Floor, 2015. "The effect of specific and general rules on ethical decisions," Organizational Behavior and Human Decision Processes, Elsevier, vol. 126(C), pages 115-129.
    8. J. Hamilton & Stephen Knouse & Vanessa Hill, 2009. "Google in China: A Manager-Friendly Heuristic Model for Resolving Cross-Cultural Ethical Conflicts," Journal of Business Ethics, Springer, vol. 86(2), pages 143-157, May.
    9. Cynthia Clark & Jill Brown, 2015. "Multinational Corporations and Governance Effectiveness: Toward a More Integrative Board," Journal of Business Ethics, Springer, vol. 132(3), pages 565-577, December.

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