IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v122y2014i4p655-674.html
   My bibliography  Save this article

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

Author

Listed:
  • Meng Zhao
  • Justin Tan
  • Seung Park

Abstract

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. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Meng Zhao & Justin Tan & Seung Park, 2014. "From Voids to Sophistication: Institutional Environment and MNC CSR Crisis in Emerging Markets," Journal of Business Ethics, Springer, vol. 122(4), pages 655-674, July.
    • Handle: RePEc:kap:jbuset:v:122:y:2014:i:4:p:655-674
    DOI: 10.1007/s10551-013-1751-x
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10551-013-1751-x
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10551-013-1751-x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jonathan P. Doh & Terrence R. Guay, 2006. "Corporate Social Responsibility, Public Policy, and NGO Activism in Europe and the United States: An Institutional‐Stakeholder Perspective," Journal of Management Studies, Wiley Blackwell, vol. 43(1), pages 47-73, January.
    2. Chen, Dong & Newburry, William & Park, Seung Ho, 2009. "Improving sustainability: An international evolutionary framework," Journal of International Management, Elsevier, vol. 15(3), pages 317-327, September.
    3. Arnold, Denis G. & Bowie, Norman E., 2003. "Sweatshops and Respect for Persons," Business Ethics Quarterly, Cambridge University Press, vol. 13(2), pages 221-242, April.
    4. Kaushik Basu & Gary S. Fields & Shub Debgupta, 2009. "Labor Retrenchment Laws And Their Effect On Wages And Employment: A Theoretical Investigation," World Scientific Book Chapters, in: Bhaskar Dutta & Tridip Ray & E Somanathan (ed.), New And Enduring Themes In Development Economics, chapter 9, pages 181-205, World Scientific Publishing Co. Pte. Ltd..
    5. Stephen Fineman & Ken Clarke, 1996. "Green Stakeholders: Industry Interpretations And Response," Journal of Management Studies, Wiley Blackwell, vol. 33(6), pages 715-730, November.
    6. Thomas I. Palley, 2002. "The Child Labor Problem and the Need for International Labor Standards," Journal of Economic Issues, Taylor & Francis Journals, vol. 36(3), pages 601-615, September.
    7. Vladimir Gimpelson & Rostislav Kapelyushnikov & Anna Lukyanova, 2010. "Employment Protection Legislation in Russia: Regional Enforcement and Labor Market Outcomes," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 52(4), pages 611-636, December.
    8. Justin Tan, 2009. "Institutional Structure and Firm Social Performance in Transitional Economies: Evidence of Multinational Corporations in China," Journal of Business Ethics, Springer, vol. 86(2), pages 171-189, March.
    9. Sergej Ljubownikow & Jo Crotty & Peter W. Rodgers, 2013. "The state and civil society in Post-Soviet Russia: The development of a Russian-style civil society," Progress in Development Studies, , vol. 13(2), pages 153-166, April.
    10. John Child & Terence Tsai, 2005. "The Dynamic Between Firms’ Environmental Strategies and Institutional Constraints in Emerging Economies: Evidence from China and Taiwan," Journal of Management Studies, Wiley Blackwell, vol. 42(1), pages 95-125, January.
    11. Zhao, Meng, 2013. "Beyond cops and robbers: The contextual challenge driving the multinational corporation public crisis in China and Russia," Business Horizons, Elsevier, vol. 56(4), pages 491-501.
    12. Anonymous, 2009. "Abstract of the discussion," British Actuarial Journal, Cambridge University Press, vol. 15(1), pages 202-217, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yingqi Wei & Sasa Ding & Ziko Konwar, 2022. "The two faces of FDI in environmental performance: a meta-analysis of empirical evidence in China," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 20(1), pages 65-94, January.
    2. Pei Sun & Jonathan P. Doh & Tazeeb Rajwani & Donald Siegel, 2021. "Navigating cross-border institutional complexity: A review and assessment of multinational nonmarket strategy research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(9), pages 1818-1853, December.
    3. Jo Crotty & Peter Rodgers, 2012. "Sustainable Development in the Russia Federation: The Limits of Greening within Industrial Firms," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 19(3), pages 178-190, May.
    4. Runhui Lin & Yuan Gui & Zaiyang Xie & Lu Liu, 2019. "Green Governance and International Business Strategies of Emerging Economies’ Multinational Enterprises: A Multiple-Case Study of Chinese Firms in Pollution-Intensive Industries," Sustainability, MDPI, vol. 11(4), pages 1-32, February.
    5. Figueira, Sandra & Gauthier, Caroline & Torres de Oliveira, Rui, 2023. "CSR and stakeholder salience in MNE subsidiaries in emerging markets," International Business Review, Elsevier, vol. 32(5).
    6. Nicole Darnall & Irene Henriques & Perry Sadorsky, 2010. "Adopting Proactive Environmental Strategy: The Influence of Stakeholders and Firm Size," Journal of Management Studies, Wiley Blackwell, vol. 47(6), pages 1072-1094, September.
    7. Shubo Liu & Min-Ren Yan, 2018. "Corporate Sustainability and Green Innovation in an Emerging Economy—An Empirical Study in China," Sustainability, MDPI, vol. 10(11), pages 1-29, November.
    8. Pisani, Niccolò & Kourula, Arno & Kolk, Ans & Meijer, Renske, 2017. "How global is international CSR research? Insights and recommendations from a systematic review," Journal of World Business, Elsevier, vol. 52(5), pages 591-614.
    9. Lyton Chithambo & Venancio Tauringana & Ishmael Tingbani & Laura Achiro, 2022. "Stakeholder pressure and greenhouses gas voluntary disclosures," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 159-172, January.
    10. Kudla, Nicole & Stölzle, Wolfgang, 2011. "Sustainability Supply Chain Management Research," Die Unternehmung - Swiss Journal of Business Research and Practice, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 65(3), pages 263-301.
    11. Villo, Sofia & Halme, Minna & Ritvala, Tiina, 2020. "Theorizing MNE-NGO conflicts in state-capitalist contexts: Insights from the Greenpeace, Gazprom and the Russian state dispute in the Arctic," Journal of World Business, Elsevier, vol. 55(3).
    12. Reimann, Felix & Ehrgott, Matthias & Kaufmann, Lutz & Carter, Craig R., 2012. "Local stakeholders and local legitimacy: MNEs' social strategies in emerging economies," Journal of International Management, Elsevier, vol. 18(1), pages 1-17.
    13. Shujun Ding & Chunxin Jia & Zhenyu Wu & Wenlong Yuan, 2016. "Environmental Management Under Subnational Institutional Constraints," Journal of Business Ethics, Springer, vol. 134(4), pages 631-648, April.
    14. Justin Tan & Yuejun Tang, 2016. "Donate Money, but Whose? An Empirical Study of Ultimate Control Rights, Agency Problems, and Corporate Philanthropy in China," Journal of Business Ethics, Springer, vol. 134(4), pages 593-610, April.
    15. Meng Zhao & Xufei Ma & Seung Ho Park & Lingli Luo, 2023. "Attention-Based Constraint to MNC Coevolution in China's Changing Stakeholder Environment," Journal of Business Ethics, Springer, vol. 186(4), pages 797-814, September.
    16. Choi, Gunae, 2022. "Determinants of target location selection for acquirers in the manufacturing sector: Pollution intensity, policy enforcement, and civic environmentalism," Journal of Business Research, Elsevier, vol. 146(C), pages 308-324.
    17. Mohammad Sohail Yunis & Dima Jamali & Hina Hashim, 2018. "Corporate Social Responsibility of Foreign Multinationals in a Developing Country Context: Insights from Pakistan," Sustainability, MDPI, vol. 10(10), pages 1-20, September.
    18. Anton Shevchenko & Moren Lévesque & Mark Pagell, 2016. "Why Firms Delay Reaching True Sustainability," Journal of Management Studies, Wiley Blackwell, vol. 53(5), pages 911-935, July.
    19. Murad A Mithani, 2017. "Liability of foreignness, natural disasters, and corporate philanthropy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(8), pages 941-963, October.
    20. Bindu Arya & Gaiyan Zhang, 2009. "Institutional Reforms and Investor Reactions to CSR Announcements: Evidence from an Emerging Economy," Journal of Management Studies, Wiley Blackwell, vol. 46(7), pages 1089-1112, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jbuset:v:122:y:2014:i:4:p:655-674. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.