Stakeholders Sustainable development Sustainability While attention to the social and environmental impacts of international business (18) is not new, the past years have seen renewed interest due to pressing global problems such as climate change and poverty. Multinational enterprises (Mines) are regarded as playing a specific role given their global influence and activities in which they are confronted with a range of issues, stakeholders and institutional contexts, in both home and host countries.
Their potential in being not only part of the problem, but also perhaps part of he solution, is increasingly recognized and has come to the fore in research interest in corporate social responsibility (CARS) activities and sustainable development implications of B. Systematic study and inclusion in the literature has been lacking, however. This article examines the extent to which both concepts have been addressed in B research, and identifies some gaps in the body of knowledge and approaches so far. It also introduces recent studies that yield interesting findings, pointing at promising areas for further research. ; 2009 Elsevier Ltd.
All rights reserved. 1 . Introduction While attention for the social and environmental impacts of international business is certainly not new, the past years have seen renewed interest due to pressing global problems such as climate change, poverty, human rights violations and HIVE/aids. Firms are increasingly called upon to play a positive role, and thus contribute to a more sustainable development. This applies most notably to multinational enterprises (Mines), given their global influence and activities in which they are confronted with a range of issues, stakeholders and institutional contexts, in both home and host countries.
Current interest in the contribution of Mines to ‘solving’ problems has been preceded by a period in which non-governmental organizations (Nags) campaigned against the negative implications of globalization in general and the power of Mines in this process in particular. Nevertheless, attempts to regulate corporate behavior have not been very viable overall in view of the large variety of issues involved, with most of them being international in nature, and requiring a much wider consensus and harmonistic of rules and implementation mechanisms than politically and technically feasible.
The absence of widespread international regulation on social and environmental issues can be considered as both a problem and an opportunity for Mines. Regardless of one’s view, it means that there is a so- called ‘moral free space’ in which ‘there are no tight prescriptions’ for Mines, and ‘managers must chart their own course’ (Donaldson, 1 996: p. 56). Even if some aspects of business activities are regulated, this usually does not apply every”here, and rules are likely to differ across ;k Corresponding author. Tell. : +31 20 525 4289. E-mail addresses: [email protected] Nil (A.
Kola), [email protected] Nil (R. Van Teller). URI-: http:// www. Abs. VA. Inlet,’cloak, towpath. B-SMS. Org 1 Tell. : +31 10 408 1994. 0969-5931/$ – see front matter ; 2009 Elsevier Ltd. All rights reserved. DOI:1 016/j. abusive. 2009. 12. 003 120 A. Kola, R. Van Teller / International Business Review 19 (2010) 119-125 countries/regions, as will monitoring and compliance. For Mines, the ‘modern era of globalization’ thus entails a balancing act between the components that are part of their ‘regular’ internationalization strategies and broader corporate social responsibility (CARS) considerations.
As a result, for example, entry strategies, subsidiary relationships, and the choice of country, product ND market portfolios, both upstream and downstream, involve complex decision-making processes in which a variety of trade-offs come to the fore simultaneously: economic, legal, ethical, environmental and social. In that sense, the landscape of B has changed, and CARS is something to be taken into account explicitly in the study of Mines, as part of the challenges to globalization or the quality of global capitalism and its institutions (e. . Buckley & Ghana, 2004; Dunning, 2006, 2009; Griffith, cassavas, & xx, 2008; Penn, Sun, Pinkish, & Chem., 2009).
Although a debate on definitions is ended the scope of this paper, it can be said that approached in this way, CARS seems to be more than ‘beyond compliance’ and advancing a social cause (Rodriguez, Siegel, Hillman, & Eden, 2006: p. 736); nor does it involve ‘systematic overcomplicated’ (Portent, 2008) or only ‘sacrificing profits in the social interest’ (Reinhardt, Staving, & Vitro, 2008).
Corporate social responsibility rather involves managing a firm in such a way that it can be ‘economically profitable, law abiding, ethical and socially supportive’ (Carroll, 1999: p. 286), something which is complicated when operating in a large umber of different contexts with often diverging views of the role of business in society (cuff. Divine, 2009). It is the combination of these considerations that presents challenges to Mines, in their own operations but also in their dealings with other firms and with stakeholders, with implications for society as a whole.
Concerns as to a more sustainable development, in terms of realizing economic growth ‘that is forceful and at the same time socially and environmentally sustainable’, have been expressed more than 20 years ago already by the Borderland commission (WICKED, 1987: p. Xii). In the sat decade, the term triple p -? or people, Planet, profit -? has been coined to likewise point to the need for managers to focus concurrently on the social, environmental and economic dimensions of corporate activity, in order to help shape the (sustainable) future of societies worldwide (cuff.
Henries & Richardson, 2004; Kola, 2009; Van Teller & Van deer Swart, 2006). The impact of Mines on sustainable development is, however, largely unclear and needs further investigation (Dunning & Fortifier, 2007; Meyer, 2004). Doubts have been raised, for example by Affrays (2008), about the notion that complex velveteen problems might ‘easily’ be solved by corporate involvement, particularly in view of lack of evidence to support such a claim. And even though many Mines subscribe to the triple P and sustainable development, it is open for debate to what extent this is mere window dressing and public Relations or a realized strategy.
Nevertheless, Mines’ CARS activities are seen as becoming increasingly strategic, in the sense that they affect the core business of the firm and its growth, profitability and survival (Kola & Pinkie, 2008; Verb, 2009), with CARS as a potential source of competitive advantage Porter & Kramer, 2006). Some firms are actively searching to link their CARS strategies to core activities in order to manage international operations and earn a ‘license to operate’ in different cultural and institutional settings. CARS in some cases seems to move from a public affairs’ concern to a core strategic activity.
In which situations and under which conditions, considering issue-, stakeholder-, country-, industry- and firm-specific factors, are critical questions in this regard. The international dimension of these questions is extremely relevant, but has not yet been systematically addressed in international business research. CARS and sustainable development provide fertile areas in which existing international business theories can be tested, and from which new insights into the dynamics of the interaction between Mines and their national and international contexts can be induced.
This special issue of International Business Review contains papers on CARS and sustainable development, thus helping to fill some of the gaps in these emerging areas of interest. While this is only a start for further research, it brings together a number of innovative papers, conceptual and empirical, qualitative and quantitative. In order to frame the five papers that were selected for this special issue, we will first discuss the extent to which CARS and sustainable development have been covered in existing B research and briefly compare that to other managerial disciplines.
Subsequently, a number of conceptual and methodological challenges are indicated, as well as novel approaches that have emerged. The collection of articles yields interesting findings and also points at a promising future research agenda. 2. Research on CARS and sustainable development Sustainable development and CARS have only slowly been taken up as relevant concepts of study in mainstream management journals in general, and in International Business publications in particular.
If we consider leading journals in four categories (general management; functional areas; international business; and specialized journals) searching for these two key words in the 1990-2008 period, the number of articles is relatively limited. Table 1 shows the distribution of the more than 1 700 articles published in twenty leading journals that makes a reference to the terms. It should be noted that the number of articles that actually has CARS or sustainable development as prime topic of research is considerably smaller.
But even when using this very lenient criterion, it is still remarkable that, except for specialized journals on business ethics and business and society where CARS has received most attention, more than 97% of the articles in main management journals over the past two decades have not referred to either CARS or sustainable development at all. While the prominent consideration of CARS (and to a lesser extent, sustainable development) by specialized Business Ethics and Business & Society journals is not that surprising, the four main B outlets (Journal of International Business Studies, Management International Management Review, Journal of
World Business and International Business Review) have mentioned ‘sustainable development’ slightly more often than their mainstream management counterparts. This signals the growing attention for emerging- market multinationals perhaps much more than the attention for sustainable development per SE.
As Table 1 Reference to CARS/Sustainable Development in selected sets of journals (% of total articles, 1990-2008). Reference to keyword Corporate social responsibility Sustainable development Articles in total General management 1 82 (1. 9%) 80 (0. 8%) 9207 (100%) International business 43 (1. %) 3071 (100%) Functional areas 45 (1. 5%) 16 (0. %) 3091 (100%) 121 Business and society, business ethics 1 047 (20. 4%) 288 (5. 6%) 5142 (100%) a Academy of Management Journal, Academy of Management Review, Organization Science, Administrative Science Quarterly, Strategic Management Journal, Journal of Management, Management Science, Journal of Management Studies. B Journal of international Business Studies, international Business Review, Journal of World Business, Management International Review.
C Marketing Science, Journal of Marketing, Leadership Quarterly, Supply Chain Management, Human Resource Management. Business Ethics Quarterly, Journal of Business Ethics, Business & Society. Guards CARS, the differences between the categories of journals are negligible; percentages are a little higher than for sustainable development for management, but not for the B journals. Overall, recognition has been relatively scant. If we look in more detail at the B articles in the various journals, some interesting aspects can be noted.
2 Firstly, more than 70% of the articles referring to sustainable development originate from JOB, with most of them (25) being published in the first half of the sass, presumably u to attention to the 1 992 Conference on Environment and Development in ROI De Jeanine.
In the 1990-1994 period, JOB also accounted for all publications relating to CARS. In that sense, the journal was a relative ‘early mover. Apart from the spike mentioned for JOB, we see a gradual increase of publications on both topics (see Figs. 1 and 2). 3 If we add up numbers for the two topics (90 articles in total), 46% was published in JOB, 33% in JIBS, 11% in FIR, and 10% in MIR.
Perhaps more relevant for the current situation is that in the last 4 years, all four journals published at least a few articles on both epics, but JIBS considerably more, particularly on CARS, thus being responsible for most of the increase in Fig. 1 . A special issue in 2006 seems to have played a role, and with one forthcoming in JOB and one in FIR, numbers are bound to increase in the coming year. The above is not meant to provide an extensive ‘state-of-the-art’ overview, but rather to supplement and support earlier, more detailed studies from a different perspective.
Locket, Moon, and Vise (2006: p. 1 33), for example, concluded, after having looked at 176 CARS articles in ten instrumentalists over 1 0 years (1992-2002), that knowledge appeared to be ‘in a continuing state of emergence’, with ethical and environmental issues being studied most frequently, usually in a quantitative manner. A similar observation was made in a review article Of the marketing field (54 articles in the 1995-2005 period) by Villain, Hide, and Gar?enough (2008), who noted that social issues were predominantly addressed conceptually.
They included one international marketing journal, but it contained no CARS articles, and the international dimension did not receive attention. This also applied to Locket et al. (2006), who focused merely on US journals (only one was European). International Management was explicitly addressed by Geri and Ralston (2008), who collected 321 articles for the 1998-? 2007 period, using a range of keywords related to governance, CARS, ethics and environment. They concluded that overall ‘mainstreaming’ (as regular articles) has remained limited as there were quite some special issues.
It should be noted, however, that Geri and Ralston (2008) included regional (European/Asian) journals in addition to IM/BIB journals. Moreover, Fig. 1 . Number of articles referring to CARS in the four B journals (1990-2008). 23 We removed articles that appeared for both key words, and put them in the étagère that seemed most appropriate. In Figs. 1 and 2 the time period was divided in five-year spans, except for the last one which consists of 4 years. 122 Fig. 2.
Number of articles referring to sustainable development in the four B journals (1990-2008). They cast a very wide net with their search terms, which means that articles were included that might be regarded by others as ‘mainstream’ articles (e. G. Those related to governance in a more generic sense). Despite these caveats, which particularly seem to affect the governance category, ethics clearly predominated in their sample, having twice as many articles as environment ND CARS (and with no special issues dedicated to ethics).
With regard to the underlying empirical evidence, quantitative research using primary data was most common, with half consisting of surveys and one third of cases; the remainder used databases and content analyses. Interestingly, more than 50% entailed single-country studies. Of the articles with country-specific data, almost one third focused on the US. In general, the developed economies in North America, Western Europe and East Asia received most attention in primary data collection.
This led Geri and Ralston (2008: p. 25) to conclude hat ‘it is particularly troubling that there has been relatively little on-the- ground CRY research in countries where the need for corporate responsibility is most pressing due to greater poverty, environmental degradation, and institutional governance issues’. This statement applies even more when extended to sustainable development. Africa as a region of in-depth investigation turned out to be strongly underrepresented. If we consider the list of articles included in Geri and Ralston (2008), most African countries are either not covered or are included only once or sometimes twice at best.
The only exceptions are Nigeria and South Africa, but more attention to these two countries has been found more generally in CARS research on Africa (Kola & enfant, 2009; Vise, 2006). Looking in more detail at the articles relating to the other African countries, it turns out that in almost all cases they examine broader governance and corruption issues in a multi-country database set up; research which, as noted, frequently uses single indicators for countries without much attention for within-country variability or differences (Geri & Ralston, 2008).
In effect, only three studies of this kind account for almost all he output on African countries included in their list, leaving just one HARM study on Tanzania as the IM ‘CARS output’ in addition to two studies that include Nigeria and three South Africa. So the picture for Africa is even worse than it appeared at first sight. Reasons explaining this absence appear to be the difficulty of doing research and collecting primary data in Africa as well as the more limited presence of Mines than in some other regions (Kola & Lenient, 2009).
Together with the small number of B studies on CARS and sustainable development in general, the very unbalanced geographical distribution of empirical research is notable. In a sense this contradicts the more generic interest as expressed by several B scholars and the apparent relevance to the field, as mentioned in the preceding section. Interestingly, a recent paper used a Delphi method amongst the most prolific authors in the period 1996-2006 to identify emerging issues in B (Griffith et al. , 2008). CARS and ethics came out amongst the secondary priority themes; Nags, globalization and emerging economies belonged to the primary category.
At the same time, according to the same Delphi study, the top ten influential books in B featured four books (by Dunning, Friedman, Stilling and, most reminiscently, Parallax on the ‘Bottom of the Pyramid) which might be considered as vital reading for understanding the relationship between Mines, CARS and sustainable development. 3. Challenges and some ‘answers’ Hence, while often mentioned as relevant topics for the study of Mines, the number of articles published in B journals on CARS and sustainable development has been very limited so far, and the literature might consequently be considered as rather ’embryonic’ (cuff.
Rodriguez et al. , 2006). This may have to do with problems related to definitions, the relative novelty of the themes, or their roadbeds, which complicates matters as big themes are difficult to nail down into publishable papers; this requires specific skills and capabilities.
A peculiar challenge related to CARS is how to distinguish public relations (or stated 123 preferences) from actual strategies and performance. And whereas Daft and Lenin (2008: p. 78) noted ‘creeping parochialism’ and narrowness as something that ‘can happen to any journal’, this might be assumed to be less applicable to the interdisciplinary area of B (although some have expressed concern that it is multi-disciplinary rather than interdisciplinary, e. G. Sheehan, 2004).
A crucial limitation seems to be the availability of data. There are hardly large-scale databases on CARS or on the impact of Mines on the various dimensions of sustainable development which can be used for B research purposes, and primary data collection is very difficult and time consuming.
This seems to be the reason behind the focus on the US and some other Triad countries, and on topics such as corruption and environmental standards (e. G. ISO 14001 ) for which rankings, adoption rates or other information can be obtained. Settings where doing research is complex, for cultural, political, instincts or security reasons, tend to be avoided, leading to studies characterized by lack of local knowledge and context-rich approaches (cuff. Sheehan, 2004). Such absence is understandable in terms of a publication strategy, because risks are higher from that perspective as well.
This is also due to the fact that more innovative or unusual data collection and research methodologies need to be adopted, and arriving at sufficiently large sample sizes for adequate quantitative analyses is hard. However, it is also the case that these difficulties should not hamper research on relevant topics. The challenge for those interested in CARS and sustainable development is to move to the mainstream, not only in terms of outlets but also when it comes to embedding and relating to B theories and themes.
This special issue has aimed to do exactly that, and called for papers that established the relationship, while being open to a variety of approaches. Although obviously a double-blind review process was followed, the five papers that we could include after several rounds of revision (out of the 40 that were submitted) show an interesting spread of themes underexposed so far, covering environmental and social aspects, with innovative and original primary data collection methods, and some specific attention to Africa as well.
The first article, by Miguel Riviera-Santos and Carols Rubin, focuses on an issue that has received much attention in relation to both CARS and sustainable development: the Base (or Bottom) of the Pyramid (BOP). BOP assumes that business can help alleviate poverty by servicing the poorest and bringing them into the global economy, while concurrently developing new profitable markets. Theoretical insights and systematic empirical evidence supporting these claims have been limited, however.
Global village vs.. Mall town’ compares and contrasts business networks at the Base with those at the Top of the Pyramid (TOP, I. E. Everything outside the BOP), given that the two are said to be significantly different, and thus require major innovations by Mines to be successful in BOP markets. The authors identify peculiarities of the competitive and institutional BOP environments, develop propositions on structural characteristics, network boundaries, tie characteristics, member diversity, and evolution over time of both BOP and TOP, and analyses implications for Mines.
In the second article, Pat Auger, Timothy Divine, Jordan Louvre and Paul Burke empirically examine the importance of CARS product attributes in consumer purchasing decisions in developed and emerging economies (Germany, US, Spain, Turkey, South Korea and India). A multi-attribute design was used to force respondents to make tradeoffs, for both a higher and a lower involvement product.
The choice experiment included both tangible (functional and price-related) and intangible attributes; with the latter category including labor conditions in the production process (in the case of athletic shoes) and environmental aspects (for batteries) in edition to brand and country of origin. Consumers in the purchasing middle class in the respective countries turned out to place value on CARS attributes, but these were generally found to be more influential in developed than in emerging economies for both higher and lower involvement products.
The article adds the consumer perspective and sheds light on emerging markets, which both deserve further research attention, also considering a broader set of combined CARS dimensions. The third article deals with the environmental strategy of a single MEN, BASE, and consists of a multi-level case study, veering corporate headquarters in Germany, the US-based regional headquarters in the SIS as well as two subsidiaries in the US.
In ‘On the implementation of a ‘global’ environmental strategy: The role of absorptive capacity’, Jonathan Pinkie, Matthias Kiss and Evolve Hoffmann explore what role the uptake and integration of external knowledge plays in the chemical company’s attempts to roll out its environmental standards internally outside the home country. The study shows the complexities of integration and responsiveness even across developed-country settings, with the US as host country. This results in propositions on ‘green’ absorptive capacity considering different levels within an MEN.
F-rather research could extend these to larger sets of firms and subsidiaries, also in institutional contexts that may be more divergent than the US and Germany. A very different (host- )country context, I. E. Angola, is the subject of an industry-specific case study by Earn Wig and IVR Salted reported in the fourth article of this issue. Interviews with MEN oil executives and government officials were held to find out to what extent CARS activities matter for obtaining licenses and contracts.
In a country characterized by governance issues and abundant oil resources, a key question is whether MEN activities play a positive or negative role. In Angola, it appears that CARS is overall not particularly important for obtaining contracts, but some aspects (particularly local content requirements, use Of local staff and environmental issues) matter and appear to be used strategically by Mines for that purpose. The exploratory case findings lead to propositions suggesting that this dynamic may facilitate patronage, exacerbate the resource curse and fail to address governance problems, on which follow-up studies can build.
The final article that is part of the special issue also focuses on Africa, on the social dimensions of MEN activity in three countries (Ethiopia, Monomaniac and Tanzania) and a sector that are underexposed in B research. In their study on sustainable tourism, Faience Fortifier and Jerome van Wick explore the consequences of foreign hotels for local employment, an aspect that can be considered as important for stimulating sustainable development in both social and economic terms (the environmental implications were not covered). A qualitative and quantitative analysis of interview data 124 A.
Kook, R. Van Teller / International Business Review 19 (2010) 119-125 Of 1 23 foreign and locally-owned hotels in the three sub-Sahara countries showed that employment effect of foreign hotels was larger than local hotels, but only as a result of their larger size. Moreover, there appeared to be reverse knowledge transfer, meaning that foreign firms hired well-trained staff from local hotels rather than training employees themselves. This seems to have implications for local firms’ willingness to engage in schooling opportunities, which is a scarce good in general in these countries.
Overall, the set of articles pays attention to several dimensions of CARS and sustainable development, and contributes to a research agenda that can hopefully inspire further studies. 4. Conclusions and further research In this final section we will offer some concluding thoughts as to research on CARS and sustainable development that relates to B, considering the limited number Of publications thus far and recent studies highlighted above. One of the reasons for scant attention may be the problems of linking CARS/sustainable development to mainstream B debates.