This special issue of Business and Politics examines how multinational corporations (MNCs) respond to the twin pressures of globalization and localization when implementing corporate responsibility (CR) policies. While MNCs are often viewed as agents of global economic integration, MNCs are impacted by globalization pressures, often in ways they cannot adequately control. As economies globalize, so do politics and stakeholder expectations that MNCs must negotiate as they manage their global operations. Working from the premise that CR strategies need to cohere with product and factor market strategies, the papers in this special issue make two contributions. First, they suggest that CR is an integral component of MNCs’ market and non-market strategies. Second, in addition to multi-domestic CR strategies, MNCs should consider international and global CR strategies as well.

Global Framework Agreements (GFAs) are still a marginal topic in political and academic discourses over global governance and corporate responsibility. In functional terms, GFAs are a commitment to include global labor standards with respect to human resource management as part of this broader turn to CR. But to what extent are these intentions and goals actually realized? Are corporations able and willing to implement GFAs in a joint effort together with the unions across a vastly diverse range of institutional settings and national arrangements? And do GFAs have an influence on core elements of a company's business policy decisions? Drawing on the insights from an interdisciplinary and multinational project, this paper uses four case studies to explore the conditions and variations in GFA implementation in the USA. Although we observe, as have others before us, that key matters of business strategy such as investments, acquisitions, restructuring, or relocation are more centralized than corporate policies on labor relations, we provide some evidence that the implementation of GFAs can be moved forward by a confluence of external actor involvement and of corporate strategies motivated by a desire to streamline HRM practices (that include the goals covered by GFAs in their core business practices). This finding of the influence of external actor voice in implementation processes may also have broader explanatory power with respect to CR initiatives in general. And in theoretical terms it allows us to explore the interplay between macro structural explanations like the Varieties of Capitalism approach, and the strategic “micro-political” explanations. Our study, in fact, suggests a strong need to combine these in a more systematic fashion.

Multinational companies (MNCs) shape their nonmarket strategies in response to the social and political context in which they operate. Empirical evidence shows that these strategies frequently fall into one of two categories: they either consist of a disparate portfolio of disconnected country-level social and political programs or are composed of standardized corporate policies that are applied uniformly across geographies. The former type of strategy implies that MNC managers view their firm's context as extremely fragmented across country borders, while the latter reflects the perception of a highly homogeneous international environment. Yet, most industries and firms operate in a semi-globalized socio-political context. In this paper we propose that producing strategies that truly fit with the specific characteristics of an MNC's nonmarket context requires that this context be defined along four dimensions: stakeholders, issues, networks, and geography. Conceptualizing an MNC socio-political context in this way broadens dramatically the strategic choices of MNC managers. We illustrate the use of our model by describing four socio-political contexts frequently encountered by MNCs, and showing how alternative nonmarket strategies seem a better option than the standard “one-size-fits-all” or “every-country-a-different-strategy” approaches of today.

Scholars have shown that corporate responsibility (CR) initiatives can create intangible assets that help MNCs reduce their liability of foreignness and even gain competitive advantage over local rivals. But scholars have not addressed the ability of MNCs to transfer CR initiatives to subsidiaries. This study builds theory about the conditions that influence success and failure in the transfer of CR practices from headquarters to overseas subsidiaries. We analyze CR transfers from the headquarters of an Indian multinational to its subsidiaries in China and the U.K. Our findings suggest that CR transfer differs in substantial ways from operational practice transfer. In particular, the ambiguity of the CR initiative, the social competency of the business unit transferring the CR initiative, and the active involvement of local stakeholders play significant roles in CR transfer success.

Since the 1970s many firms expanded their operations across national borders and were restructured to fit the changing economic conditions during these times of economic globalization. Using a sociological approach to transnational firms, in this article the authors research the consequences of these developments for the responsibility of two transnational firms towards their employees in the Netherlands. These firms experienced a shift in their dual embeddedness in national and transnational economic fields, with the latter gaining importance. In response, they adjusted their corporate policies and structure to fit the competitive conditions of these fields, causing a centralization of their corporate labor policy on the transnational level, the polarization of this policy and the instrumentalization of labor and labor policy. This also meant that their responsibility for their employees was restructured and reduced.

Corporate Responsibility (CR) is today an essential component of corporate global strategy. CR can bolster the institutional context for market expansion fill institutional voids or facilitate market entry as a component of non-market strategy. Yet, in fulfilling these functions, CR may need to be highly sensitive to local contexts. How can transnational firms organize CR so as to maximize efficiencies from globalization and to minimize the fragmentation of corporate organizational cultures? provide a framework for analyzing the way that corporations coordinate global and local functions. We build on this framework in a case study of Novo Nordisk and its approach to determining global and local CR policies and procedures with regard to its China and US subsidiaries. Our findings suggest that it is important for companies to define a common set of organizational norms. In addition, CR need to be sensitive to local institutional contexts, but learning from subsidiary experience is important and lends itself to standardization and replication of initiatives across market contexts.

The primary research question animating this article revolves around understanding how multinational mining corporations (MMCs) are responding to the twin pressures of globalization and localization to develop Corporate Responsibility (CR) approaches that apply at a global level and to their subsidiaries in various different jurisdictions, with particular attention being paid to the role of home, host and international factors in shaping the CR approaches of MMCs. The focus of attention is on the experience of Canadian MMCs in Latin America, using as an illustration the particular CR response of one Canadian MMC at its subsidiary Guatemalan mining operation. Research suggests that home country factors play an important role in shaping corporate CR approaches in a manner which take into account the circumstances extant at subsidiary operations in developing countries, as do transnational advocacy networks and global normative instruments.

This paper explores the role of the state for an effective engagement of multinational corporations (MNCs) in corporate social responsibility (CSR). In the OECD context, the “shadow of hierarchy” cast by the state is considered an important incentive for MNCs to engage in CSR activities that contribute to governance. However, in areas of limited statehood, where state actors are too weak to effectively set and enforce collectively binding rules, profit-driven MNCs confront various dilemmas with respect to costly CSR standards. The lack of a credible regulatory threat by state agencies is therefore often associated with the exploitation of resources and people by MNCs, rather than with business’ social conduct. However, in this paper we argue that there are alternatives to the “shadow of hierarchy” that induce MNCs to adopt and implement CSR policies that contribute to governance in areas of limited statehood. We then discuss that in certain areas such functional equivalents still depend on some state intervention to be effective, in particular when firms are immune to reputational concerns and in complex-task areas that require the involvement of several actors in the provision of collective goods. Finally, we discuss the “dark side” of the state and show that the state can also have negative effects on the CSR engagement of MNCs. We illustrate the different ways in which statehood and the absence thereof affect CSR activities of MNCs in South Africa and conclude with some considerations on the conditions under which statehood exerts these effects.

This study uses club theory to describe the incentives of extractive industry MNCs to support the Extractive Industries Transparency Initiative (EITI), a multi-stakeholder promoted voluntary social program (VSP) aimed at creating national legislation to make the royalty payments received by governments from mining and oil and gas companies more transparent to the public. We characterize the EITI as a VSP that lacks stringent standards and that has a moderate to high level of enforcement through the national governments that have adopted its principles. According to club theory, VSPs with these characteristics produce only a low to medium level of club benefits, in this case “social branding,” for member firms. Noting that over 60 MNCs have signed on to the EITI as of April 2012, we argue that VSPs offering low to medium club benefits should be most attractive to MNCs from countries with long arm disclosure laws, to MNCs lacking relationships with NGOs seeking inexpensive CSR, to MNCs relying upon financing from institutional and social investors, to MNCs attempting to differentiate themselves from competitors on social criteria, and to MNCs with broad stakeholder-focused top managers. We also describe the implications for MNCs if the EITI were to include a more stringent set of social requirements.