Skip to main content
Log in

The Political Roots of Corporate Social Responsibility

  • Published:
Journal of Business Ethics Aims and scope Submit manuscript

Abstract

This article argues that whether and how a firm chooses to adopt Corporate Social Responsibility (CSR) initiatives is conditional in part upon the domestic political institutional structures present in its home market. It demonstrates that economic globalization has increased the pressure applied to companies to develop CSR policies that might help overcome specific governance gaps associated with the globalization phenomenon. Drawing upon an examination of domestic institutions and overall political structure, it argues that the political conditions and expectations present in a company’s home market will condition whether a firm might pursue CSR activity. For home markets, it is posited that perceived electoral salience will be filtered through government type and ideology, and state/societal structures will influence if and how firms will use CSR. Specific arguments are developed from these categorizations. The article concludes with a discussion of how researchers might further explore links between CSR, domestic political structures, and corporate political activity.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Similar content being viewed by others

References

  • American Law Institute: 1994, Principles of Corporate Governance: Analysis and Recommendations, Vol. 1 of 2, Pt. II (St. Paul, MN)

  • Baron D. 2001. Private Politics, Corporate Social Responsibility, and Integrated Strategy. Journal of Economics & Management Strategy 10(1): 7–45

    Article  Google Scholar 

  • Baron D. 2003. Business and Its Environment, 4th edition. New Jersey: Prentice Hall

    Google Scholar 

  • Baron D. 2005. Competing for the Public Through the News Media. Journal of Economics & Management Strategy 14(2): 339–376

    Article  Google Scholar 

  • Bartlett C. A., Ghoshal S. 1989. Managing Across Borders: The Transnational Solution. Boston: Harvard Business School Press

    Google Scholar 

  • Behrman J., Grosse R. 1990. International Business and Governments: Issues and Institutions. Columbia: University of South Carolina Press

    Google Scholar 

  • Bergsten F. C., Horst T., Moran T. H. 1978. American Multinationals and American Interests. Washington: Brookings Institution

    Google Scholar 

  • Blumentritt T. P., Nigh D. 2002. The Integration of Subsidiary Political Activities in Multinational Corporations. Journal of International Business Studies 33(1): 57–77

    Article  Google Scholar 

  • Bonardi J.-P., Hillman A. J., Keim G. D. 2005. The Attractiveness of Political Markets: Implications for Firm Strategy. The Academy of Management Review 30(2): 397–413

    Google Scholar 

  • Bordo, M., Eichengreen, B., Irwin, D. A.: 1999, ‹Is Globalization Today Really Different from Globalization One Hundred Years Ago?’, National Bureau of Economic Research, Working Paper 7195 (Cambridge, Massachusetts)

  • Branson D. M. 2001. The Very Uncertain Prospect of ‹Global’ Convergence in Corporate Governance. Cornell International Law Journal 34: 321

    Google Scholar 

  • Brewer T. L. 1983. The Instability of Governments and the Instability of Controls of Funds Transfers by Multinational Enterprises: Implications for Political Risk Analysis. Journal of International Business Studies 14(3): 147–157

    Article  Google Scholar 

  • Brewer T. L. (ed.) 1985. Political Risks in International Business. New York: Praeger

    Google Scholar 

  • Burke L., Logsdon J. M. 1996. How Corporate Social Responsibility Pays off. Long Range Planning 29(4): 495–502

    Article  Google Scholar 

  • Butler H. N. 1988. The Contractual Theory of the Corporation. George Mason University Law Review 11: 99–123

    Google Scholar 

  • Coase R. H. 1937. The Nature of the Firm. Economica 4(16): 386–405

    Article  Google Scholar 

  • Coffee J. J. Jr. 1999. The Future as History: The Prospects for Global Convergence in Corporate Governance and Its Implications. Northwestern University Law Review 93(3): 639–707

    Google Scholar 

  • Dowling J., Pfeffer J. 1975. Organizational Legitimacy: Social Values and Organizational Behaviour. Pacific Sociological Review 18: 122–136

    Google Scholar 

  • Downs A. 1957. An Economic Theory of Democracy. New York: Addison-Wesley

    Google Scholar 

  • Doz Y. 1986. Government Policies and Global Industries. In: Porter M. (ed) Competition in Global Industries. Boston: Harvard Business School Press, pp. 225–266

    Google Scholar 

  • Dunning J. H. 1993. Multinational Enterprises and the Global Economy. Boston: Addison-Wesley

    Google Scholar 

  • Eden L., Lenway S. 2001. Multinationals: The Janus Face of Globalization. Journal of International Business Studies 32(3):383–400

    Article  Google Scholar 

  • Fort T. L., Schipani C. A. 2000. Corporate Governance in a Global Environment: The Search for the Best of All Worlds. Vanderbilt Journal of Transnational Law 33(4): 829–876

    Google Scholar 

  • Gourevitch P. A., Shinn J. J. 2005. Political Power and Corporate Control: The New Global Politics of Corporate Governance. Princeton: Princeton University Press

    Google Scholar 

  • Greider W. 1997. One World Ready or Not: The Manic Logic of Global Capitalism. New York: Simon and Schuster

    Google Scholar 

  • Handelman J. M., Arnold S. J. 1999. The Role of Marketing Actions with a Social Dimension: Appeals to the Institutional Environment. Journal of Marketing 63(July): 33–48

    Article  Google Scholar 

  • Hart S. L. 2005. Capitalism at the Crossroads: the Unlimited Business Opportunities in Solving the World’s Most Difficult Problems. Chicago: Wharton School Publishing.

    Google Scholar 

  • Hertz N. 2001. The Silent Takeover. New York: Harper Collins

    Google Scholar 

  • Hillman A. J., Keim G. D. 2001. Shareholder Value, Stakeholder Management, and Social Issues: What’s the Bottom Line? Strategic Management Journal 22: 125–139

    Article  Google Scholar 

  • Jensen M. C. 2000. Value Maximization and the Corporate Objective Function. In Beer M., Nohria N. (eds) Breaking the Code of Change. Boston: Harvard Business School Press, pp. 37–57

    Google Scholar 

  • Katzenstein P. J. 1978. Between Power and Plenty: Foreign Economic Policies of Advanced Industrial States. Cornell: Cornell University Press

    Google Scholar 

  • Katzenstein P. J. 1984. Corporatism and Change: Austria, Switzerland, and the Politics of Industry. Cornell: Cornell University Press

    Google Scholar 

  • Keck M., Sikkink K. 1998. Activists Beyond Borders: Advocacy Networks in International Politics. Ithaca/London: Cornell University Press

    Google Scholar 

  • Keim G. D. 1978. Corporate Social Responsibility: an Assessment of the Enlightened Self-Interest Model. Academy of Management Review. 3(1): 32–39

    Article  Google Scholar 

  • Klein, N.: 2001, No Logo (Flamingo Press)

  • Kobrin S. J. 1979. Political Risk: A Review and Reconsideration. Journal of International Business Studies. 10(1): 67–80

    Article  Google Scholar 

  • Kobrin S. J. 1982. Managing Political Risk Assessment. Berkeley: University of California Press

    Google Scholar 

  • Kobrin S. J. 1987. Testing the Bargaining Hypothesis in the Manufacturing Sector in Developing Countries. International Organization 41(4): 609–638

    Article  Google Scholar 

  • Korten D. 1996. When Corporations Rule the World. West Hartford: Kumarian Press

    Google Scholar 

  • Kostova, T., 1996. Success of the Transnational Transfer of Organizational Practices within Multinational Companies. Doctoral Dissertation. University of Minnesota, Minneapolis

  • Kostova T., Zaheer S. 1999. Organizational Legitimacy under Conditions of Complexity: The Case of the Multinational Enterprise. Academy of Management Review 24(1): 64–81

    Article  Google Scholar 

  • La Porta R., Lopez-De-Silanes F., Shleifer A., Vishny R. W. 1997. Legal Determinants of External Finance. The Journal of Finance 52(3): 1131–1150

    Article  Google Scholar 

  • Lecraw D. 1984. Bargaining Power, Ownership and Profitability of Transnational Corporations in Developing Countries. Journal of International Business Studies 15(1): 27–43

    Article  Google Scholar 

  • Lodge G. C., Vogel E. F. (eds.) 1987. Ideology and National Competitiveness. Boston: Harvard Business School Press

    Google Scholar 

  • Mahini A. 1988. Making Decisions in Multinational Corporations: Managing Relations with Sovereign Governments. New York: John Wiley and Sons

    Google Scholar 

  • Mahoney P. G. 1999. Contract or Concession? An Essay on the History of Corporate Law. Georgia Law Review 34: 873–893

    Google Scholar 

  • Maignan I., Ralston D. A. 2002. Corporate Social Responsibility in Europe and the U.S.: Insights from Businesses’ Self-Presentations. Journal of International Business Studies 33(3): 497–514

    Article  Google Scholar 

  • Margolis J. D., Walsh J. P. 2003. Misery Loves Companies: Rethinking Social Initiatives by Business. Administrative Science Quarterly 48: 268–305

    Article  Google Scholar 

  • McGuire J., Dow S., Argheyd K. 2003. CEO Incentives and Corporate Social Performance. Journal of Business Ethics 45(4): 341–359

    Article  Google Scholar 

  • Mitchell R. K., Gale B. R., Wood D. J. 1997. Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts. The Academy of Management Review 22(4): 853–886

    Article  Google Scholar 

  • Moran T. H. 2002. Beyond Sweatshops: Foreign Direct Investment and Globalization in Developing Countries. Washington, D.C.: Brookings Institution Press

    Google Scholar 

  • Murphy D. 2004. The Structure of Regulatory Competition. Oxford: Oxford University Press

    Google Scholar 

  • Murtha T., Lenway S. 1994. Country Capabilities and the Strategic State: How National Political Institutions Affect Multinational Corporations’ Strategies. Strategic Management Journal 15: 113–129

    Article  Google Scholar 

  • O’Brien R. O., Goetz A. M., Scholte J. A., Williams M. (eds.) 2000. Contesting Global Governance: Multilateral Economic Institutions and Global Social Movements. Cambridge: Cambridge University Press

    Google Scholar 

  • Ohmae N. 1995. The End of the Nation State: The Rise of Regional Economies. New York: The Free Press

    Google Scholar 

  • Olson M. 1965. The Logic of Collective Action. Boston: Harvard University Press

    Google Scholar 

  • O’Sullivan M. 2000. Contests for Corporate Control: Corporate Governance and Economic Performance in the United States and Germany. Oxford: Oxford University Press

    Google Scholar 

  • Prahalad C. K., Doz Y. L. 1987. The Multinational Mission: Balancing Local Demands and Global Vision. New York: The Free Press

    Google Scholar 

  • Risse T., Ropp S. C., Sikkink K. (eds) 1999. The Power of Human Rights: International Norms and Domestic Change. Cambridge: Cambridge University Press

    Google Scholar 

  • Robock S. H. 1971. Political Risk: Identification and Assessment. Columbia Journal of World Business 6(4):6–20

    Google Scholar 

  • Roe M. J. 1994. Strong Managers, Weak Owners: The Political Roots of American Corporate Finance. Oxford: Oxford University Press

    Google Scholar 

  • Roe M. J. 2003. The Political Determinants of Corporate Governance. Oxford: Oxford University Press

    Google Scholar 

  • Scherer A. G., Smid M. 2000. The Downward Spiral and the US Model Business Principles – Why MNEs Should Take Responsibility for the Improvement of World Wide Social and Environmental Conditions. Management International Review 40(4): 351–371

    Google Scholar 

  • Selznick P. 1957. Leadership in Administration. New York: Harper and Row

    Google Scholar 

  • Sen S., Bhattacharya C. B. 2001. Does Doing Good Always Lead to Doing Better? Consumer Reactions to Corporate Social Responsibility. Journal of Marketing Research 38(May): 225–243

    Article  Google Scholar 

  • Sethi S. P. 2003. Setting Global Standards: Guidelines for Creating Codes of Conduct in Multinational Corporations. New Jersey: John Wiley

    Google Scholar 

  • Shleifer A., Vishny R. W. 1997. A Survey of Corporate Governance. Journal of Finance 52: 737–783

    Article  Google Scholar 

  • Spencer J. W., Murtha T. P., Lenway S. A. 2005. How Governments Matter to New Industry Creation. The Academy of Management Review 30(2): 321–337

    Article  Google Scholar 

  • Swanson D. L. 1995. Addressing a Theoretical Problem by Reorienting the Corporate Social Performance Model. Academy of Management Review 20(1): 43–64

    Article  Google Scholar 

  • Tuzzolino F., Armandi B. R. 1981. A Need-Hierarchy Framework for Assessing Corporate Social Responsibility. The Academy of Management Review 16(1): 21–28

    Article  Google Scholar 

  • Vernon R. 1971. Sovereignty at Bay. New York: Basic Books

    Google Scholar 

  • Wartick S. L, Cochrane P. L. 1985. The Evolution of the Corporate Social Performance Model. The Academy of Management Review 10(4): 758–769

    Article  Google Scholar 

  • Williamson O. E. 1985. The Economic Institutions of Capitalism. New York: The Free Press

    Google Scholar 

  • Williamson O. E. 1996. The Mechanisms of Governance. Oxford: Oxford University Press

    Google Scholar 

  • Windsor D. 2001. The Future of Corporate Social Responsibility. The International Journal of Corporate Social Responsibility 9(3): 225–256

    Google Scholar 

  • Wood D. J. 1991. Corporate Social Performance Revisited. The Academy of Management Review 16(4): 691–718

    Article  Google Scholar 

  • Wolf M. 2004. Why Globalization Works. New Haven: Yale University Press

    Google Scholar 

  • Yergin G., Stanislaw J. 1998. The Commanding Heights: The Battle between Government and Marketplace that is Remaking the Modern World. New York: Simon and Schuster

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to David Antony Detomasi.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Detomasi, D.A. The Political Roots of Corporate Social Responsibility. J Bus Ethics 82, 807–819 (2008). https://doi.org/10.1007/s10551-007-9594-y

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10551-007-9594-y

Keywords

Navigation