Legal determinants of external finance revisited : the inverse relationship between investor protection and societal well-being

This paper investigates relationships between corporate governance traditions and quality of life as measured by a number of widely reported indicators. It provides an empirical analysis of indicators of societal health in developed economies using a classification based on legal traditions. Arguably the most widely cited work in the corporate governance literature has been the collection of papers by La Porta et al. which has shown, inter alia, statistically significant relationships between legal traditions and various proxies for investor protection. We show statistically significant relationships between legal traditions and various proxies for societal health. Our comparative evidence suggests that the interests of investors may not be congruent with the interests of wider society, and that the criteria for judging the effectiveness of approaches to corporate governance should not be restricted to financial metrics

Seeking legitimacy through CSR: Institutional Pressures and Corporate Responses of Multinationals in Sri Lanka

Arguably, the corporate social responsibility (CSR) practices of multinational enterprises (MNEs) are influenced by a wide range of both internal and external factors. Perhaps most critical among the exogenous forces operating on MNEs are those exerted by state and other key institutional actors in host countries. Crucially, academic research conducted to date offers little data about how MNEs use their CSR activities to strategically manage their relationship with those actors in order to gain legitimisation advantages in host countries. This paper addresses that gap by exploring interactions between external institutional pressures and firm-level CSR activities, which take the form of community initiatives, to examine how MNEs develop their legitimacy-seeking policies and practices. In focusing on a developing country, Sri Lanka, this paper provides valuable insights into how MNEs instrumentally utilise community initiatives in a country where relationship-building with governmental and other powerful non-governmental actors can be vitally important for the long-term viability of the business. Drawing on neo-institutional theory and CSR literature, this paper examines and contributes to the embryonic but emerging debate about the instrumental and political implications of CSR. The evidence presented and discussed here reveals the extent to which, and the reasons why, MNEs engage in complex legitimacy-seeking relationships with Sri Lankan institutions

'Pouring politics down our throats': political CSR communication and consumer catharsis

This chapter theorizes the outrageous consumer response that may follow the communication of political corporate social responsibility (CSR). We consider two recent cases (Starbucks’s offer to hire refugees and Pepsi’s appropriation of protest movements in an ad) and how consumers-citizens reacted when these corporations communicated political issues. By drawing from psychoanalytic concepts, we illustrate how consumers’ outrage, expressed in angry social media comments, and in the creation and sharing of memes, is cathartic of unconscious repressed matter: the realization of their own powerless and the domination of corporations. We further note how these expressions of outrage may be understood to result from defense mechanisms such as denial, displacement, or more complex sublimation that help consumers maintain a position of passive domination by corporations. Like all psychoanalytic applications, our interpretation represents only a plausible metaphor that can explain the “irrational” behavior of consumers. Positivist traditions of CSR theorization may demand further causal studies to confirm the ideas we express. Our study is an original exploration of what underlies consumer responses to political CSR. These cases could inform academics and practitioners working in the business and society arena asking them to re-evaluate whether and how political CSR should be communicated, and the implications of the rapid diffusion of messages in social media that include mocking parody and offensive brand comments

Corporate tax: what do stakeholders expect?

Motivated by the ongoing controversy surrounding corporate tax, this article presents a study that explores stakeholder expectations of corporate tax in the context of UK business. We conduct a qualitative analysis of in-depth interviews with representatives of community groups (NGOs/think tanks and special interest groups), as well as interviews with those representing business groups (business leaders and industry representatives). We then identify eight themes that together describe “what” companies need to do, “how” they need to do it, and “why” they need to do it, if they wish to appeal to a wide group of interested parties. We discuss our findings based on the corporate social responsibility literature and propose novel ways for community groups and business groups to connect on the topic of corporate tax, suggesting opportunities and themes for dialogue and potential steps to co-create solutions in a stakeholder society

Die bedeutung institutionalistischer ansätze für das verständnis von organisations- und managementprozessen in multinationalen unternehmen [The relevance of institutionalist approaches for the analysis of organisation and management processes in MNCs]

Es ist auffällig, dass sich die sozialwissenschaftlich orientierte Organisationsforschung nur sehr wenig und theoretisch recht einseitig mit Multinationalen Unternehmen (MNU) als Organisationen beschäftigt. Organisationstheoretische Erklärungsmodelle, die das Verhalten in und von Organisationen jenseits technischer und ökonomischer Unternehmensumwelten erklären, sind daher eher rar und erst seit kurzem in einschlägigen Forschungsarbeiten zu finden. Ziel dieses Beitrages ist, die jüngere und vorwiegend englischsprachige Diskussion über den Einfluss von Institutionen und unterschiedlichen lokalen Rationalitäten auf Organisations- und Managementprozesse in MNU aufzuarbeiten. Im Folgenden werden die Grundlagen, wesentlichen Ansätze, Kernaussagen und Konsequenzen des europäischen und amerikanischen Institutionalismus dargestellt. Insbesondere wird der Beitrag die Bedeutung, aber auch Grenzen dieser beiden Ansätze für die Analyse von Veränderungsprozessen in Multinationalen Unternehmen skizzieren und evaluieren. Im Vergleich zum noch dominanten „evolutionären Paradigma“ in der internationalen Managementforschung wird hier das alternative Erklärungspotenzial von sozialwissenschaftlichen Institutionentheorien herausgestellt und anhand von vier verschiedenen Aspekten diskutiert: dem Einfluss des Heimatlandes, der Macht und der Autonomie von Tochtergesellschaften sowie der Entstehung transnationaler sozialer Räume. This paper provides an overview over one of the most recent debates in international management by discussing key assumptions, major approaches, main contributions and implications of European and American institutionalist theories. In particular, the article discusses and evaluates the consequences of these approaches for the theory of the multinational firm. The potential of these approaches is explored by highlighting four areas of interest: the role of the evolutionary paradigm, the influence of the country of origin, power relations in and autonomy of subsidiaries and the emergence of a transnational social space. The argument focuses on how these institutionalist approaches may further our understanding of and theoretical insights into the multinational firm

Sharing vocabularies: towards horizontal alignment of values-driven business functions

This paper highlights the emergence of different ‘vocabularies’ that describe various values-driven business functions within large organisations and argues for improved horizontal alignment between them. We investigate two established functions that have long-standing organisational histories: Ethics and Compliance (E&C) and Corporate Social Responsibility (CSR). By drawing upon research on organisational alignment, we explain both the need for and the potential benefit of greater alignment between these values-driven functions. We then examine the structural and socio-cultural dimensions of organisational systems through which E&C and CSR horizontal alignment can be coordinated to improve synergies, address tensions, and generate insight to inform future research and practice in the field of Business and Society. The paper concludes with research questions that can inform future scholarly research and a practical model to guide organizations’ efforts towards inter-functional, horizontal alignment of values-driven organizational practice

Behind the mask: revealing the true face of corporate citizenship

This paper traces the development of corporate citizenship as a way of framing business and society relations, and critically examines the content of contemporary understandings of the term. These conventional views of corporate citizenship are argued to contribute little or nothing to existing notions of corporate social responsibility and corporate philanthropy. The paper then proposes a new direction, which particularly exposes the element of "citizenship". Being a political concept, citizenship can only be reasonably understood from that theoretical angle. This suggests that citizenship consists of a bundle of rights conventionally granted and protected by governments of states. However, the more that governmental power and sovereignty have come under threat, the more that relevant political functions have gradually shifted towards the corporate sphere — and it is at this point where "corporate" involvement into "citizenship" becomes an issue. Consequently, "corporate citizens" are substantially more than fellow members of the same community who cosily rub shoulders with other fellow citizens while bravely respecting those other citizens' rights and living up to their own responsibility as corporations — as the conventional rhetoric wants us to believe. Behind this relatively innocuous mask then, the true face of corporate citizenship suggests that the corporate role in contemporary citizenship is far more profound, and ultimately in need of urgent reappraisal

Synthesising Corporate Responsibility on Organisational and Societal Levels of Analysis: An Integrative Perspective

This article develops an integrative perspective on corporate responsibility by synthesising competing perspectives on the responsibility of the corporation at the organisational and societal levels of analysis. We review three major corporate responsibility perspectives, which we refer to as economic, critical, and politico-ethical. We analyse the major potential uses and pitfalls of the perspectives, and integrate the debate on these two levels. Our synthesis concludes that when a society has a robust division of moral labour in place, the responsibility of a corporation may be economic (as suggested under the economic perspective) without jeopardising democracy and sustainability (as reported under the critical perspective). Moreover, the economic role of corporations neither signifies the absence of deliberative democratic mechanisms nor business practices extending beyond compliance (as called for under the politico-ethical perspective). The study underscores the value of integrating different perspectives and multiple levels of analysis to present comprehensive descriptions and prescriptions of the responsibility phenomenon