IFIS Lecture 6 Strategic CSR
IFIS Lecture 6 Strategic CSR
IFIS Lecture 6 Strategic CSR
INTERNATIONALIZATION STRATEGY
Lecture 6 Strategic CSR in International Business
Pei SUN
Sustainability
The ability to meet the needs of the present without compromising the
ability of future generations to meet their needs around the world.
Stakeholders:
Any group or individual who can affect or is affected by the achievement of
the organization’s objectives.
A Stakeholder View of the Firm
Primary and Secondary
Stakeholder Groups
• Primary Stakeholder Groups: The constituents on
which the firm relies for its continuous survival
and prosperity.
• Secondary Stakeholder Groups: Those who
influence or affect, or are influenced or affected
by, the corporation, but are not engaged in
transactions with the corporation and are not
essential for its survival.
– Non-governmental organizations: Activist groups not
affiliated with governments, e.g., Greenpeace
The Stakeholder Perspective
• The goals of business firms should not be limited to the
maximization of shareholder value. Rather, firms should
enhance the social wealth by making explicit allowance for the
interests of other stakeholders.
• Normative CSR: Firms ought to be self-motivated to ‘do it
right’ because they have societal obligations. They have a
moral duty to go beyond respecting the law and generating
profits. Firms purse CSR not simply to claim special credit for
doing so.
• Strategic CSR: Strategic in the sense that it aims to achieve
certain specified benefits for society as well as the firm itself –
doing well by doing good
• CSR activity is consistent with the notion of maximizing
long-run market value of the firm
Stakeholder Conflicts
• Berry, H., Kaul, A., & Lee, N. 2021. Follow the smoke:
The pollution haven effect on global sourcing. Strategic
Management Journal, 42: 2420-2450.
• Census data on US manufacturing imports from 77
countries over 2006-2016
• The stringency of environmental standards in a
country is negatively related to its share in sourcing
by US manufacturing firms.
• This relationship holds for both offshore integration
(sourcing from owned foreign operations) and
offshore outsourcing (sourcing from unrelated third
parties abroad).
Evidence of Institutional Arbitrage
• Surroca,J., Tribo, J. A., & Zahra, S. A. 2013. Stakeholder
pressure on MNEs and the transfer of socially
irresponsible practices to subsidiaries. Academy of
Management Journal, 56(2): 549-572.
• 269 subsidiaries in 27 countries belong to 110 MNEs
from 22 countries
• A holistic assessment of MNEs’ CSR performance
• In the face of the mounting stakeholder pressure in
their home countries, MNEs may transfer their socially
irresponsible practices to their overseas subsidiaries.
• This is especially the case in subsidiaries where the
HQs held a stake between 5 and 10 percent and at
least one HQ executive served on a subsidiary’s
board.
Cross-border Corporate Philanthropy