Abstract
This paper argues that the literature examining the role that MNCs play in ‘political CSR’—an emerging area of management research concern—can be enhanced by more a fulsome examination of the ‘varieties of capitalism’ that currently exist in the global economy. We argue that the willingness and capacity of a particular MNC to participate in governance activity—which we broadly equate to political CSR—are contingent, at least in part, upon the national systems of government-business relations present in its home market. We argue that the decisions MNCs make in terms of whether and how to participate in governance are predicated in part on the domestic system of business-government relations out of which they emerge. The paper then asserts that our current conceptions of political CSR are limited, because they do not take fully into account the increasingly important corporate form of statism, in which home governments maintain a large ownership position in the country’s MNCs, even as they expand abroad. We posit that a key question this reality poses is whether such companies will reinforce established patterns of ‘political CSR’, whether they will challenge those established patterns, or whether some mutual adaptation will occur. We conclude the article with some suggestions for how this question might be explored in future work by interested scholars.
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Notes
The overall growth in international investment and production activity during the 1990s was impressive. Foreign direct investment inflow grew from approximately $200 billion (U.S.) in 1990 to a peak of approximately $1.5 trillion (U.S.) in 2000, a figure which dropped to just over $600 billion in 2001, due to the slowdown in the global economy. Cross-border merger and acquisition levels grew from a value of under $200 billion (U.S.) in 1990 to almost $1.2 trillion (U.S.) in 2000, once again dropping in 2001 to approximately $600 billion (U.S.). In terms of MNCs, there are approximately 65,000 MNCs that have about 850,000 affiliates abroad. Value-added by MNCs is estimated at $3.5 trillion and total sales at $18.5 trillion, which compares with world exports that measure $7.4 trillion. All statistics taken from United Nations, World Investment Report 2002: Transnational Corporations and Export Competitiveness, (New York: United Nations 2003), chapter 1.
In the German system of corporate governance, the management board (the Vorstand) is entrusted with overseeing day–day operational issues, while the supervisory board (the Aufsichtsrat) overseas broad corporate impact across a variety of stakeholders. German domestic law stipulates that supervisory boards have clear representation from labour interests. In the Japanese case, boards of directors are large, feature heavy participation from centralized banks, and often have developed avenues for representation from outside suppliers and political interests.
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Detomasi, D. The Multinational Corporation as a Political Actor: ‘Varieties of Capitalism’ Revisited. J Bus Ethics 128, 685–700 (2015). https://doi.org/10.1007/s10551-014-2099-6
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DOI: https://doi.org/10.1007/s10551-014-2099-6