Journal of International Business Studies

, Volume 37, Issue 6, pp 747–766 | Cite as

Political behavior, social responsibility, and perceived corruption: a structuration perspective

Article

Abstract

This study unites the three lenses – political behavior, corporate social responsibility, and corruption – and evaluates the way in which multinational enterprises (MNEs) manage political and social forces in a foreign emerging market. Using the theory of structuration as the conceptual foundation, we propose that an MNE's propensity to cooperate with the host government is positively related to its philanthropic contribution and resource accommodation, whereas its propensity to be assertive with the host government is positively associated with its emphasis on ethics and organizational credibility. We argue that when perceived corruption in the business segment increases, an MNE's propensity to cooperate and be assertive with the government decreases, its focus on ethics heightens, and its philanthropic contribution diminishes. As to the three-way interactions, when perceived corruption in the business segment increases, MNEs that focus more on ethics have a greater propensity to use arm's length bargaining to deal with the government, whereas those focusing less on ethics have a greater propensity to use social connections to deal with the government. Our analysis of sample MNEs in China generally supports these propositions.

Keywords

political behavior social responsibility corruption emerging market 

Notes

Acknowledgements

We thank Professors Amy Hillman, Lorraine Eden, and three anonymous reviewers for their helpful comments.

References

  1. Ackerman, S.R. (1975) ‘The economics of corruption’, Journal of Public Economics 4(1): 187–203.CrossRefGoogle Scholar
  2. Ackerman, S.R. (1999) Corruption and Government:, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  3. Barley, S.R. and Tolbert, P.S. (1997) ‘Institutionalization and structuration: studying the links between action and institution’, Organization Studies 18(1): 93–118.CrossRefGoogle Scholar
  4. Boddewyn, J.J. (1988) ‘Political aspects of MNE theory’, Journal of International Business Studies 19(3): 341–363.CrossRefGoogle Scholar
  5. Boddewyn, J.J. and Brewer, T.L. (1994) ‘International-business political behavior: new theoretical directions’, Academy of Management Review 19(1): 119–143.Google Scholar
  6. Bryant, G.A. and Jary, D. (2001) The Contemporary Giddens: Social Theory in a Globalization Age, New York: Palgrave.Google Scholar
  7. Carroll, A. (2004) ‘Managing ethically with global stakeholders: a present and future challenge’, Academy of Management Executive 18(2): 114–120.CrossRefGoogle Scholar
  8. Conference Board (2002) Company Programs for Resisting Corrupt Practices: a Global Study, Research Report 1279–00-RR. New York: The Conference Board.Google Scholar
  9. Conference Board (2005) Corporate Citizenship Reporting: Best Practices. Research Report 1367–05-RR. New York: The Conference Board.Google Scholar
  10. Davis, G.F. and Thompson, T.A. (1994) ‘A social movement perspective on corporate control’, Administrative Science Quarterly 39(1): 141–173.CrossRefGoogle Scholar
  11. Doh, J., Rodriguez, P., Uhlenbruck, K., Collins, J. and Eden, L. (2003) ‘Coping with corruption in foreign markets’, Academy of Management Executive 17(3): 114–128.CrossRefGoogle Scholar
  12. Donaldson, T. and Dunfee, W.T. (1999) ‘When ethics travel: the promise and peril of global business ethics’, California Management Review 41(4): 45–63.CrossRefGoogle Scholar
  13. Doz, Y.L. and Prahalad, C.K. (1980) ‘How MNCs cope with host government intervention’, Harvard Business Review 58(2): 149–157.Google Scholar
  14. Dunning, J.H. (1993) ‘Governments and Multinational Enterprises: From Confrontation to Cooperation?’, in L. Eden and E. Potter (eds.) Multinationals in the Global Political Economy, London: Macmillan, pp. 59–83.CrossRefGoogle Scholar
  15. Dunning, J.H. (1997) Governments, Globalization and International Business, Oxford University Press: Oxford.Google Scholar
  16. Eden, L. and Lenway, S. (2001) ‘Multinationals: the janus face of globalization’, Journal of International Business Studies 32(3): 383–400.CrossRefGoogle Scholar
  17. Fagre, N. and Wells, L.T. (1982) ‘Bargaining power of multinationals and host governments’, Journal of International Business Studies 13(1): 9–24.CrossRefGoogle Scholar
  18. Giddens, A. (1983) Profiles and Critiques in Social Theory, Berkeley, CA: University of California Press.Google Scholar
  19. Giddens, A. (1984) The Constitution of Society: Outline of the Theory of Structuration, Berkeley, CA: University of California Press.Google Scholar
  20. Giddens, A. (1995) Politics, Sociology and Social Theory, Stanford University Press: Stanford, CA.Google Scholar
  21. Gladwin, T.N. and Walter, I. (1980) ‘How multinationals can manage social and political forces’, Journal of Business Strategy 1(1): 54–69.CrossRefGoogle Scholar
  22. Goldsmith, A.A. (1999) ‘Slapping the grasping hand: correlates of political corruption in emerging markets’, American Journal of Economics and Sociology 58(4): 866–883.CrossRefGoogle Scholar
  23. Grosse, R. and Behrman, J.N. (1992) ‘Theory in International Business’, Transactional Corporations 1(1): 93–126.Google Scholar
  24. Grosse, R. and Behrman, J.N. (2005) International Business: Government Relations in the 21st Century, Cambridge: Cambridge University Press.Google Scholar
  25. Hair, J.F., Anderson, R.E., Tatham, R.L. and Black, W.C. (1992) Multivariate Data Analysis, New York: Macmillan.Google Scholar
  26. Hillman, A.J. and Hitt, M.A. (1999) ‘Corporate political strategy formulation: a model of approach, participation, and strategy decisions’, Academy of Management Review 24(4): 825–842.Google Scholar
  27. Hillman, A.J. and Keim, G.D. (2001) ‘Shareholder value, stakeholder management and social issues: what's the bottom line?’ Strategic Management Journal 22(2): 125–140.CrossRefGoogle Scholar
  28. Hofstede, G. (2001) Culture's Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations, Thousand Oaks, CA: Sage.Google Scholar
  29. Kim, W.C. (1988) ‘The effects of competition and corporate political responsiveness on multinational bargaining power’, Strategic Management Journal 9(2): 289–295.CrossRefGoogle Scholar
  30. Kobrin, S.J. (1982) Managing Political Risk Assessment: Strategic Responses to Environmental Changes, Berkeley, CA: University of California Press.Google Scholar
  31. Kogut, B. and Singh, H. (1988) ‘The effect of national culture in the choice of entry mode’, Journal of International Business Studies 19(3): 411–432.CrossRefGoogle Scholar
  32. Lambsdorff, J.G. (2002) ‘Making corrupt deals: contracting in the shadow of the law’, Journal of Economic Behavior and Organization 48(2): 221–241.CrossRefGoogle Scholar
  33. LaPalombra, J. (1994) ‘Structural and institutional aspects of corruption’, Social Research 61(2): 325–350.Google Scholar
  34. Logan, D., Delwin, R. and Regelbrugge, L. (1997) Global Corporate Citizenship: Rationale and Strategies, Washington, DC: The Hitachi Foundation.Google Scholar
  35. Luo, Y. (2001) ‘Toward a cooperative view of MNC–host government relations: building blocks and performance implications’, Journal of International Business Studies 32(3): 401–420.CrossRefGoogle Scholar
  36. Luo, Y. (2004) ‘An organizational perspective of corruption’, Management and Organization Review 1(1): 119–154.CrossRefGoogle Scholar
  37. Mahon, J.F. and Wartick, S.L. (2003) ‘Dealing with stakeholders: how reputation, credibility and framing influence the game’, Corporate Reputation Review 6(1): 19–36.CrossRefGoogle Scholar
  38. McWilliams, A. and Siegel, D. (2001) ‘Corporate social responsibility: a theory of the firm perspective’, Academy of Management Review 26(1): 117–128.Google Scholar
  39. Oliver, C. (1991) ‘Strategic responses to institutional processes’, Academy of Management Review 16(1): 145–179.CrossRefGoogle Scholar
  40. Pearce, J.A. and Doh, J.P. (2005) ‘The high impact of collaborative social initiatives’, Sloan Management Review 46(3): 30–39.Google Scholar
  41. Poynter, T.A. (1985) Multinational Enterprises and Government Intervention, New York: Saint Martin's Press.Google Scholar
  42. Pozzebon, M. (2004) ‘The Influence of a structurationist view on strategic management research’, Journal of Management Studies 41(2): 247–272.CrossRefGoogle Scholar
  43. Riley, P. (1983) ‘A structurationist account of political cultures’, Administrative Science Quarterly 28(3): 414–437.CrossRefGoogle Scholar
  44. Ring, P.S., Lenway, S. and Govekar, M. (1990) ‘Management of the political imperative in international business’, Strategic Management Journal 11(2): 141–151.CrossRefGoogle Scholar
  45. Rodriquez, P., Uhlenbruck, K. and Eden, L. (2005) ‘Government corruption and the entry strategies of multinationals’, Academy of Management Review 30(2): 383–396.CrossRefGoogle Scholar
  46. Sarason, Y. (1995) ‘A model of organizational transformation: the incorporation of organizational identity into a structuration theory framework’, Academy of Management Best Paper Proceedings, 47–51.Google Scholar
  47. Schleifer, A. and Vishny, R.W. (1993) ‘Corruption’, Quarterly Journal of Economics 108(3): 599–617.CrossRefGoogle Scholar
  48. Schwartz, M.S. (2004) ‘Effective corporate codes of ethics: perceptions of code users’, Journal of Business Ethics 55(4): 321–337.CrossRefGoogle Scholar
  49. Sharma, S., Durand, R.M. and Gue-Arie, O. (1981) ‘Identification and analysis of moderator variables’, Journal of Marketing Research 18(3): 291–300.CrossRefGoogle Scholar
  50. Suchman, M.C. (1995) ‘Managing legitimacy: strategic and institutional approaches’, Academy of Management Review 20(3): 571–610.Google Scholar
  51. Tanzi, V. (1998) Corruption Around the World: Causes, Consequences, Scope, and Cures. IMF Working Paper 98/63. Washington, DC: IMF.Google Scholar
  52. Transparency International (2002) TI Bribe Payers Index, 2002, Berlin: Transparency International Secretariat.Google Scholar
  53. Transparency International (2004) TI Corruption Perceptions Index 2004, Berlin: Transparency International Secretariat.Google Scholar
  54. Weaver, G., Trevino, L. and Cochran, P. (1999) ‘Integrated and decoupled corporate social performance: managerial commitments, external pressures, and corporate ethical practices’, Academy of Management Journal 42(5): 539–552.CrossRefGoogle Scholar
  55. Weidenbaum, M. (1980) ‘Public policy: no longer a spectator sport for business’, Journal of Business Strategy 3(4): 46–53.CrossRefGoogle Scholar
  56. Whittington, R. (1992) ‘Putting Giddens into action: social systems and managerial agency’, Journal of Management Studies 29(6): 693–712.CrossRefGoogle Scholar
  57. Wood, D. (1991) ‘Corporate social responsibility revisited’, Academy of Management Review 16(4): 691–718.Google Scholar
  58. Zaheer, S. (1995) ‘Overcoming the liability of foreignness’, Academy of Management Journal 38(2): 341–363.CrossRefGoogle Scholar

Copyright information

© Academy of International Business 2006

Authors and Affiliations

  1. 1.Department of ManagementUniversity of MiamiCoral GablesUSA

Personalised recommendations