Skip to main content

Strategic Corporate Social Responsibility and Value Creation

A Study of Multinational Enterprises in Mexico

Abstract

  • This paper examines the conditions under which corporate social responsibility (CSR) is related to value creation in the multinational enterprise (MNE).

  • Following prior work by Burke and Logsdon (1996), we examine the relationship of centrality, appropriability, proactivity, visibility, and voluntarism to value creation.

  • The results of a survey of 111 MNEs in Mexico suggest that centrality, visibility, and voluntarism are related to value creation.

This is a preview of subscription content, access via your institution.

Notes

  1. 1.

    One of the anonymous reviewers pointed out that the wording of this item is somewhat ambiguous. The item may only test the extent to which the firm’s mission includes the solution of social problems. In future research, we would recommend asking how social objectives coincide or fit with the firm’s business mission.

References

  1. Abrahamson, M., Social Research Methods, Englewood Cliffs: Prentice-Hall 1983.

    Google Scholar 

  2. Acutt, N. J./Medina-Ross, V./O’Riordan, T., Perspectives on Corporate Social Responsibility in the Chemical Sector: A Comparative Analysis of the Mexican and South African Cases, Natural Resources Forum, 28, 4, 2004, pp. 302–316.

    Article  Google Scholar 

  3. Aragón-Correa, J. A., Strategic Proactivity and Firm Approach to the Natural Environment, Academy of Management Journal, 41, 5, 1998, pp. 556–567.

    Article  Google Scholar 

  4. Armstrong, J. S./Overton, T. S., Estimating Nonresponse Bias in Mail Surveys, Journal of Marketing Research, 18, 3, 1977, pp. 396–402.

    Article  Google Scholar 

  5. Austin, J. E. et al., Social Partnering in Latin America: Lessons Drawn from Collaborations of Businesses and Civil Society Organizations, Cambridge: Harvard University Press 2004.

    Google Scholar 

  6. Barney, J. B., Strategic Factor Markets: Expectations, Luck, and Business Strategy, Management Science, 32, 10, 1986, pp. 1231–1241.

    Article  Google Scholar 

  7. Barney, J. B., Is the Resource-Based “View” a Useful Perspective for Strategic Management Research? Yes, Academy of Management Review, 26, 1, 2001, pp. 41–56.

    Article  Google Scholar 

  8. Burke, L./Logsdon, J. M., How Corporate Social Responsibility Pays Off, Long Range Planning, 29, 4, 1996, pp. 495–502.

    Article  Google Scholar 

  9. Cemex, Building a Better Society, http://www.cemex.com/ cc/cc_cc.asp 2005.

  10. De Bakker, F. G. A./Groenewegen, P./den Hond, F., A Research Note on the Use of Bibliometrics to Review the Corporate Social Responsibility and Corporate Social Performance Literature, Business & Society, 45, 1, 2006, pp. 7–19.

    Article  Google Scholar 

  11. Dess, G. G./Robinson, R. B., Jr., Measuring Organizational Performance in the Absence of Objective Measures: The Case of the Privately-Held Firm and Conglomerate Business Unit, Strategic Management Journal, 5, 3, 1984, pp. 265–273.

    Article  Google Scholar 

  12. Dierickx, I./Cool, K., Asset Stock Accumulation and Sustainability of Competitive Advantage, Management Science, 35, 12, 1989, pp. 1504–1513.

    Article  Google Scholar 

  13. Economist, The Good Company, The Economist, 374, 8410, 2005, p. 11.

  14. Edwards, T./Battisti, G./Neely, A. Value Creation and the UK Economy: A Review of Strategic Options, International Journal of Management Reviews, 5/6, 3/4, 2004, pp. 191–213.

    Article  Google Scholar 

  15. Fombrun, C./Shanley, M., What’s in a Name? Reputation Building and Corporate Strategy, Academy of Management Journal, 33, 2, 1990, pp. 233–258.

    Article  Google Scholar 

  16. Freeman, R. E., Strategic Management: A Stakeholder Approach, Boston: Pitman 1984.

    Google Scholar 

  17. Gardner, D. G. et al., Single-Item Versus Multiple-Item Measurement Scales: An Empirical Comparison, Educational and Psychological Measurement, 58, 6, 1998, pp. 898–915.

    Article  Google Scholar 

  18. Garriga, E./Mele, D., Corporate Social Responsibility Theories: Mapping the Territory, Journal of Business Ethics, 53, 1 / 2, 2004, pp. 51–71.

    Article  Google Scholar 

  19. Geringer, M./Hebert, L., Control and Performance of International Joint Ventures, Journal of International Business Studies, 20, 2, 1989, pp. 235–254.

    Article  Google Scholar 

  20. Griffin, J. J./Mahon, J. F., The Corporate Social Performance and Corporate Financial Performance Debate: Twenty-Five Years of Incomparable Research, Business and Society, 36, 1, 1997, pp. 5–31.

    Article  Google Scholar 

  21. Gulbrandsen, L.H., Creating Markets for Eco-labelling: Are consumers insignificant?, International Journal of Consumer Studies, 30, 5, 2006, pp. 477–489.

    Article  Google Scholar 

  22. Hair, J. F. et al., Multivariate Data Analysis, New York: Macmillan 1992.

    Google Scholar 

  23. Hanushek, E. A./Jackson, J. E., Statistical Methods for Social Scientists, Orlando: Academic Press 1977.

    Google Scholar 

  24. Hart, S. L./Sharma, S., Engaging Fringe Stakeholders for Competitive Imagination, Academy of Management Executive, 18, 1, 2004, pp. 7–18.

    Google Scholar 

  25. Hrebiniak, L. G./Joyce, W. F., Organizational Adaptation: Strategic Choice and Environmental Determinism, Administrative Science Quarterly, 30, 3, 1985, pp. 336–349.

    Article  Google Scholar 

  26. Husted, B. W./Allen, D. B., Corporate Social Responsibility in the Multinational Enterprise: Strategic and Institutional Approaches, Journal of International Business Studies, 37, 6, 2006, pp. 838–849.

    Article  Google Scholar 

  27. Jacobides, M. G./Knudsen, T./Augier, M., Benefiting from Innovation: Value Creation, Value Appropriation, and the Role of Industry Architecture, Research Policy, 35, 8, 2006, pp. 1200–1221.

    Article  Google Scholar 

  28. Kanter, R. M., From Spare Change to Real Change, Harvard Business Review, 77, 3, 1999, pp. 122–132.

    Google Scholar 

  29. Khoo, H. H./Tan, K. C., Using the Australian Business Excellence Framework to Achieve Sustainable Business Excellence, Corporate Social-Responsibility and Environmental Management, 9, 4, 2002, pp. 196–205.

    Article  Google Scholar 

  30. Liedtka, J. M., In Defense of Strategy as Design, California Management Review, 42, 3, 2000, pp. 8–30.

    Google Scholar 

  31. Logsdon, J. M./Thomas, D. E./van Buren III, H. J., Corporate Social Responsibility in Large Mexican Firms, Journal of Corporate Citizenship, Spring, 21, 2006, pp. 51–60.

    Google Scholar 

  32. Lozano, G./Moxon, C./Maas, A., Let’s Build Their Dreams: Danone Mexico and the Casa de la Amistad para Niños con Cáncer, I.A.P., Social Enterprise Knowledge Network Case SKE 010 2003.

  33. Margolis, J. D./Walsh, J. E., People and Profits? The Search for a Link Between a Firm’s Social and Financial Performance, Mahwah: Lawrence Erlbaum Publishers 2001.

    Google Scholar 

  34. McWilliams, A./Siegel, D. Corporate Social Responsibility and Financial Performance: Correlation or Misspecification?, Strategic Management Journal, 21, 4, 2000, pp. 603–609.

    Article  Google Scholar 

  35. McWilliams, A./Siegel, D., Corporate Social Responsibility: A Theory of the Firm Perspective, Academy of Management Review, 26, 1, 2001, pp. 117–127.

    Article  Google Scholar 

  36. Meznar, M. B./Nigh, D., Buffer or Bridge? Environmental and Organizational Determinants of Public Affairs Activities in American Firms, Academy of Management Journal, 38, 4, 1995, pp. 975–996.

    Article  Google Scholar 

  37. Moran, P./Goshal, S., Markets, Firms, and the Process of Economic Development?, Academy of Management Review, 24, 3, 1999, pp. 390–412.

    Article  Google Scholar 

  38. Nunnally, J. C./Bernstein, I. H., Psychometric Theory, 3rd ed., New York: McGraw-Hill 1994.

    Google Scholar 

  39. Orlitzky, M. O./Schmidt, F. L./Rynes, S. L., Corporate Social and Financial Performance: A Meta-Analysis, Organization Studies, 24, 3, 2003, pp. 403–442.

    Article  Google Scholar 

  40. Ostlund, L. E., Attitudes of Managers toward Corporate Social Responsibility, California Management Review, 19, 4, 1977, pp. 35–49.

    Google Scholar 

  41. Pacheco-Lopez, P, Foreign Direct Investment, Exports, and Imports in Mexico, unpublished paper, University of Kent, Canterbury, UK, www.kent.ac.uk/economics/papers-pdf/2004 / 0404.pdf 2007.

  42. Paul, K. et al., Corporate Social Reporting in Mexico, Journal of Corporate Citizenship, Summer, 22, 2006, pp. 67–80.

    Google Scholar 

  43. Podsakoff, P. M./Organ, D. W., Self-Reports in Organizational Research: Problems and Prospects, Journal of Management, 12, 4, 1986, pp. 531–544.

    Article  Google Scholar 

  44. Porter, M. E./van der Linde, C., Toward a New Conception of the Environment-Competitiveness Relationship, Journal of Economic Perspectives, 9, 4, 1995, pp. 97–118.

    Google Scholar 

  45. Prahalad, C. K., The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits, Upper Saddle Brook: Wharton School Publishing 2004.

    Google Scholar 

  46. Reinhardt, F., Environmental Product Differentiation: Implications for Corporate Strategy, California Management Review, 40, 4, 1998, pp. 43–73.

    Google Scholar 

  47. Roberts, P. W./Dowling, G. R., Corporate Reputation and Sustained Superior Financial Performance, Strategic Management Journal, 23, 12, 2002, pp. 1077–1093.

    Article  Google Scholar 

  48. Robins, J. A./Tallman, S./Fladmoe-Lindquist, K., Autonomy and Dependence of International Cooperative Ventures: An Exploration of the Strategic Performance of U.S. Ventures in Mexico, Strategic Management Journal, 23, 10, 2002, pp. 881–901.

    Article  Google Scholar 

  49. Schmidheiny, S., A View of Corporate Citizenship in Latin America, Journal of Corporate Citizenship, Spring, 21, 2006, pp. 21–24.

    Google Scholar 

  50. Schrage, M., The Myth of Commoditization, MIT Sloan Management Review, 48, 2, 2007, pp. 10–14.

    Google Scholar 

  51. Schumpeter, J. A., The Theory of Economic Development, Cambridge, Massachusetts: Harvard University Press 1934.

    Google Scholar 

  52. Sharma, S./Vredenburg, H., Proactive Corporate Environmental Strategy and the Development of Competitively Valuable Capabilities, Strategic Management Journal, 19, 8, 1998, pp. 729–753.

    Article  Google Scholar 

  53. Stone, C., Where the Law Ends: The Social Control of Corporate Behavior, New York: HarperCollins 1975.

    Google Scholar 

  54. Thomas, A. S./Simerly, R. L., Internal Determinants of Corporate Social Performance: The Role of Top Managers, Academy of Management Best Paper Proceedings 1995, 1995, pp. 411–415.

  55. Thompson, M. S./Thompson, S., Pricing in a Market without Apparent Horizontal Differentiation: Evidence from Web Listing Services, Economics of Innovation and New Technology, 15, 7, 2006, pp. 649–663.

    Article  Google Scholar 

  56. United Nations Development Programme, Human Development Report, 2006, New York: Palgrave-Macmillan 2006.

    Google Scholar 

  57. Venkatraman, N./Ramanujam, V., Measurement of Business Economic Performance: An Examination of Method Convergence, Journal of Management, 13, 1, 1987, pp. 109–122.

    Article  Google Scholar 

  58. Waddock, S. A./Graves, S. B., The Corporate Social Performance – Financial Performance Link, Strategic Management Journal, 18, 4, 1997, pp. 303–319.

    Article  Google Scholar 

  59. Wood, D. J., Corporate Social Performance Revisited, Academy of Management Review, 16, 4, 1991, pp. 691–718.

    Article  Google Scholar 

  60. World Bank, From Plan to Market: World Development Report 1996, New York: Oxford University Press 1996.

    Google Scholar 

  61. World Bank, World Development Report 2008: Agriculture for Development, Washington, D.C.: The World Bank 2007.

    Book  Google Scholar 

Download references

Acknowledgements

The first author thanks the Tecnológico de Monterrey, where he was a professor of management, and the Instituto de Empresa, where he was the Alumni Association Chair of Business Ethics and Corporate Social Responsibility. These institutions actively supported this research. In addition, this research was made possible by a grant from the Consejo Nacional de Ciencia y Tecnología (Conacyt) of the Mexican Federal Government. The authors appreciate the comments of the anonymous mir reviewers.

Author information

Affiliations

Authors

Corresponding author

Correspondence to Bryan W. Husted.

Appendix: Survey Questions

Appendix: Survey Questions

Centrality

To what extent do the following objectives of social programs coincide with your firm’s mission?

  • Collaborate with community projects

  • Protect the environment

  • Support social causes

Specificity

Please indicate the extent to which you agree with the following statements:

  • The fulfillment of the firm’s social objectives is necessary to achieve its profit objectives.

Proactivity

  • We scan the social environment in order to promote our firm’s compliance with social expectations.

  • We are usually one of the first to adapt our corporate practices to reflect changing social expectations.

  • We track the development of legislation/regulation in order to have corporate compliance mechanisms in place by the time legislation is enacted.

  • We want to be a pioneer in adopting company policies which comply with new social expectations.

Visibility

The purpose of participating in social action programs is to:

  • Improve the image of the firm

  • Increase the presence of the firm in the media

Voluntarism (note: these items were reverse scaled)

The purpose of participating in social action programs is to:

  • Fulfill legal obligations

  • Follow a regular practice in the industry

  • Obtain favorable tax treatment

Value Creation

  • Influence customer purchase decisions

  • Obtain new customers

  • Develop new products and services

  • Open new markets

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Husted, B., Allen, D. Strategic Corporate Social Responsibility and Value Creation. Manag Int Rev 49, 781 (2009). https://doi.org/10.1007/s11575-009-0016-5

Download citation

Keywords

  • Corporate social responsibility
  • Multinational enterprise
  • Value creation