Abstract
This research investigates how top management team national diversity (TMTND) and corporate social responsibility (CSR) institutional uncertainty affect strategic CSR focus in foreign-owned subsidiaries. The paper develops a theoretical framework based on institutional theory and upper echelon perspectives to test a sample of MNE subsidiaries. Survey data were collected from subsidiaries in Thailand and Taiwan. Non-symmetric analysis suggests that while TMTND plays an important role in establishing a CSR focus, it is not conducive in itself to high-performance outcomes. Performance is measured by market share, sales growth, and profitability for each subsidiary. The results also show that there are notable differences between the subsidiaries located in Thailand and Taiwan as to what extent CSR strategic focus and top management team national diversity are relevant for high-performance outcomes. The study demonstrates that the links between CSR, TMTND, and subsidiary performance are much more complex than previously assumed.
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Notes
Contrarian case analysis is undertaken to show that there are cases in the sample that are counter to linear or theoretical assumptions. For instance, Table 5 shows that there are some subsidiaries that perform high, even though they report little CSR. Contrarian case analysis is often done before fsQCA is conducted to show that fsQCA is relevant.
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Acknowledgements
Preparation of this paper is supported in part by The Open University of Hong Kong, University, Thammasat University, and Bucknell University. The authors gratefully acknowledge support from the James & Elizabeth Freeman Chair in Management at Bucknell University.
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Appendix 1: Structural model and model fit
Appendix 1: Structural model and model fit
Path coefficient | P-Value | |
---|---|---|
Top management team national diversity and strategic CSR focus | 0.102 | 0.069 |
CSR uncertainty and strategic CSR focus | − 0.153 | 0.013 |
Intra-organizational network strength and strategic CSR focus | 0.045 | 0.260 |
Inter-organizational network strength and strategic CSR focus | 0.316 | < 0.001 |
A strategic CSR focus and subsidiary performance | 0.308 | < 0.001 |
Baseline model | Range | |
---|---|---|
Average path coefficient (APC) | 0.136, P = 0.012 | P < = 0.05 |
Average R2 (ARS) | 0.330, P < 0.001 | P < = 0.05 |
Average adjusted R2 (AARS) | 0.293, P < 0.001 | P < = 0.05 |
Average block VIF (AVIF) | 1.38 | Acceptable if < = 5, ideally < = 3.3 |
Average full collinearity VIF (AFVIF) | 1.519 | Acceptable if < = 5, ideally < = 3.3 |
Tenenhaus GoF (GoF) | 0.528 | Small > = 0.1, medium > = 0.25, large > = 0.36 |
Simpson's paradox ratio (SPR) | 0.857 | Acceptable if > = 0.7, ideally = 1 |
R2 contribution ratio (RSCR) | 0.973 | Acceptable if > = 0.9, ideally = 1 |
Statistical suppression ratio (SSR) | 0.762 | Acceptable if > = 0.7 |
Nonlinear bivariate causality direction ratio (NLBCDR) | 1.000 | Acceptable if > = 0.7 |
Standardized root mean squared residual (SRMR) | 0.079 | acceptable if < = 0.1 |
Standardized mean absolute residual (SMAR) | 0.062 | acceptable if < = 0.1 |
Standardized chi-squared with 702 degrees of freedom (SChS) | 15.607 | P < 0.001 |
Standardized threshold difference count ratio (STDCR) | 0.982 | Acceptable if > = 0.7, ideally = 1 |
Standardized threshold difference sum ratio (STDSR) | 0.931 | Acceptable if > = 0.7, ideally = 1 |
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Dahms, S., Kingkaew, S. & S. Ng, E. The Effects of Top Management Team National Diversity and Institutional Uncertainty on Subsidiary CSR Focus. J Bus Ethics 177, 699–715 (2022). https://doi.org/10.1007/s10551-020-04721-z
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DOI: https://doi.org/10.1007/s10551-020-04721-z