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Antecedents of CSR Practices in MNCs’ Subsidiaries: A Stakeholder and Institutional Perspective

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Abstract

This study investigates antecedents of corporate social responsibility (CSR) in multinational corporations’ (MNCs’) subsidiaries. Using stakeholder theory and institutional theory that identify internal and external pressures for legitimacy in MNCs’ subsidiaries, we integrate international business and CSR literatures to create a model depicting CSR practices in MNCs’ subsidiaries. We propose that MNCs’ subsidiaries will be likely to adapt to local practices to legitimize themselves if they operate in host countries with different institutional environments and demanding stakeholders. We also predict that MNCs’ subsidiaries will be likely to adapt to local practices to avoid spillover effects if their parent companies suffer major legitimacy problems at home or abroad. However, we speculate that MNCs’ subsidiaries will be less likely to adapt to local practices if they are strongly annexed to their parent companies and the benefit to gain internal legitimacy outweighs external legitimacy. This article contributes to the discourse on CSR across borders by exploring the antecedents of CSR practices in MNCs’ subsidiaries at social and organizational levels, and integrating institutional and stakeholder views. We provide a number of propositions for future studies and explore implications for practitioners.

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Acknowledgments

We thank Justin Tan (the Guest Editor) and the anonymous reviewers for their valuable feedback. We gratefully acknowledge the support from the Faculty of Business, Queensland University of Technology through the Faculty Research Initiative Grant.

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  1. School of Business and Professional Studies, University of San Francisco, 2130 Fulton Street, Malloy Hall, San Francisco, CA, 94117-1045, U.S.A.

    Xiaohua Yang

  2. Faculty of Business, University of the Sunshine Coast, Maroochydore DC, QLD, 4558, Australia

    Cheryl Rivers

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Correspondence to Xiaohua Yang.

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Yang, X., Rivers, C. Antecedents of CSR Practices in MNCs’ Subsidiaries: A Stakeholder and Institutional Perspective. J Bus Ethics 86 (Suppl 2), 155–169 (2009). https://doi.org/10.1007/s10551-009-0191-0

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