MNE Topic 6 Flashcards
stakeholder
any group or individual who can affect or is affected by achievement of firms objectives
shareholder value perspective
- profit over responsibility
- serve SHs (org obj)
- success = share price
- stakeholder mngmnet = means
- individual social responsibility
- society served -> pursue economic efficiency
stakeholder value perspective
- responsibility over profit
- serve all stakeholders
- success = stakeholders satisfied
- stakeholder management = means and end
- individual and org social responsibility
- society served -> pursue economic symbiosis
CSR
consideration & response
social benefits & traditional economic gains
issue beyond narrow
req - economic, technical, legal
main ethical domains
- corruption
- environment
- human rights and labour issues
modern slavery
supermarket slave trail
5 challenges in implementing CSR policies in MNCs
- differing ethical standards
- laws-> lack of/enforcing
- increased costs
- boundaries of MNC’s responsibilities
- complexity globalised supply chain
child labour examples
- multinationals dont disclose info on ethical/HRM approaches
- BodyShop - state support ban on forced child/prison labour
- Elf Acquitaine -> state reject child labour use
- JCPenney -> claim not knowingly allow importation into US of merchandise manufactured with illegal child labour
- vague aspects = avoid other dilemmas that explicit child labour codes raise
civil learning tool - CSR organisational learning
- org pass through 5 stages = more socially responsible -> org learning process
- Defensive
- Compliance
- Managerial
- Strategic
- Civil
defensive
deny practice/outcomes or responsibilities
- defend against rep attacks in ST
- affect sales, recruit, productivity, brand
compliance
adopt policy based compliance approach as cost of doing business
- mitigate erosion of economic value in medium term
- ongoing rep and litigation risk
managerial
embedded societal issue in core management process
- mitigate erosion of economic value in medium term
-achieve LT gains by integrating responsible business practice in daily ops
strategic
integrate societal issue into core business strategy
-enhance economic value in LT
- gain FMA aligning strategy and process innovations with societal issue
civil
broad industry participation in corp responsibility = gains via collective action
- enhance LT economic value by overcoming first moving disadvantage
civil learning tool - societal issue maturity
societal maturity of issues - Zadek 2004 = societal awareness of issues
4 stages of issue maturity
- latent
- emerging
- consolidating
- institutionalised
Latent
- activists and NGO aware
- weak scientific/hard evidence
- ignored or dismissed by business community
Emerging
- political and media awareness
- energy research body, weak data
- leading business experiment with approaches to deal with it
Consolidating
-emerging body of business practices surrounding
-sector and issue based voluntary initiative are established
- litigation and increased view of legislation need
- voluntary standards developed = collective action
institutionalised
- legislation/business norms established
-embedded practices = normal part of business excellence model
civil learning tool
CSR approaches
- Global
- Local
- Transnational
-benefits-costs trade offs
Global CSR approach
- global integration/standardisation
- HQ perspective/demands for consistency prevail over local concerns
Local CSR approach
- local responsiveness/flexibility
- local concerns take precedence over demands for global consistency
Transnational CSR approach
- global integration & local responsiveness
- attempt to reconcile tensions between global and local concerns
found more effective in coordinating CSR activities worldwide (global template with variations & adaptations)
3 ways of corporate governance as influence on CSR approach
- stakeholder vs shareholder
- strategic vs financial control
- financial vs triple bottom line managerial incentives
triple bottom line
- profit
- people
- planet
corporate governance types
corp governance characteristics = play important role in adopting particular approach
- corporate governance emphasis
- board monitoring focus
- managerial incentives
8 corporate governance changes enable a transnational CSR approach
- shift financial -> strategic control
- incentives on triple bottom line
- board diversity - stkholder represented
- risk management (economic & social factors)
- accountability to wider body of stkholders
- non-hierarchical communications (HQ & subs)
- board functional structure = stkholder relations committee
- investor engage with board on CSR
4 Contingency factors influencing CSR implementation in MNCs and supply chains
- Knowledge enhancing mechanisms
- Knowledge controlling mechanisms
- Firm specific assets
- Corporate history
knowledge enhancing mechanisms
internally:
CSR training, experience sharing amongst employees
externally: create common reference frame between MNC & suppliers (training, visits, dialogue)
knowledge controlling mechanisms
- incorp codes of conduct in perf measurement systems
-groups, change agents = monitor implementation of CSR policies
firm specific assets
- company size
- financial resources
- reputation
- design of global supply chain
corporate history
- tradition of company working with environmental & social issues
- history of relationships with suppliers
