GLOBAL CORPORATE SOCIAL RESPONSIBILITIES
MANAGEMENT IN MNCs

Anupama Mohan
University of Warwick

Warwick, UK

Abstract

The management of global corporate social responsibilities (CSR) in MNCs
is less understood This paper presents an analysis of CSR management in the
global operations of two MNCs of British origin, operating in diverse sectors,
The paper presents in-depth empirical analysis ofCSR practices in routine stake-
holder relations ofthese MNCs, across multiple levels within the MNC and across
multiple levels of its context. The study reveals that global CSR management re-
sultedfrom interplay offirms'strategic choices. internal design processes, as well
as irifluences of regulatory, normative and cognitive environment at the multiple
levels ofthe MNC context.

Introduction

MNCs are under increasing pressure for socially responsible behavior in their
global operations. However, global corporate social responsibility and the man-
agement of CSR behaviors in global operations remains less understood (Wood
and Pasquero, 1997; Wartick and Wood, 1998; Freeman, 1997). The national
business environments are increasingly promoting CSR (for example, see Bondy,
Matten, Moon, 2004; Moon, 2004). Furthennore, there are several emerging glob-
al guidelines and voluntary initiatives seeking to improve CSR in global opera-
tions (Waddock, Bodwell, Graves, 2002). These trends in MNCs' environmental
context need to be further supported by investigation of management of CSR in
the global operations ofMNCs and the environmental drive that influence global
CSR management in MNCs. The present paper meets this gap by providing em-
pirical study of management of global CSR in two MNCs of British origin. It
provides a multilevel analysis of management of CSR in these firms, revealing
several influences ofthe local, national and global environments on CSR manage-
ment in these MNCs.

MNCs are complex differentiated networks marked with internal heterogene-
ity and with the complexity of managing across globally dispersed, diverse units
(Bartlett and Ghoshal, 1989; Ghoshal and Nohria, 1989, Hedlund 1986, Hedlund
& Rolander, 1990). MNCs are faced with diverse stakeholder environments across
their international operations. This has several implications for MNCs' manage-
ment of stakeholder relations across the multiple levels and diverse contexts of
its operations. Global CSR management also involves cross-border transfer and



10 Journal of Business Strategies Vol. 23, No.1

management ofCSR practices, from one part of the MNC to another, as well as
the management of local CSR practices suited to the local context of the subsid-
iary units.

The management of CSR in the global operations of MNCs, discussed in this
paper, is an empirical in-depth investigation using an embedded sample of eight
case studies across two MNCs of UK origin, and across four stakeholder dimen-
sions within these MNCs. The analysis of self-reported CSR practices in these
MNCs revealed the globally-managed CSR practices and their transnational man-
agement processes, as well as several CSR practices not transnationally man-
aged across multiple units and levels of the MNC and also several local CSR
practices.

The review of literature presents the existing understanding of management of
global CSR and several arising unanswered questions. It notes that the manage-
ment of CSR in global firms involves internal coordination processes, as well as
environmental influences at multiple levels of MNC operations, however these
are less understood. The exploratory study undertaken for this research, using
multiple embedded case studies is then briefly presented. The empirical findings
of MNCs' management of CSR in routine stakeholder relations, with employees,
consumers, environment and communities are presented. Influences of the home
country environment in the UK, as well as the global and local environments
faced by these MNCs are analyzed. Then contributions of this research in ad-
vancing our understanding of CSR management in international operations are
presented. Finally, the limitations of this research and avenues for future research
are outlined.

Conceptual Background

Business is an inseparable and embedded part of the society. In addition to its
economic role in society, business also has several other roles and responsibilities
towards society (see Preston and Post, 1975; Davis and Blomstrom, 1971; Carroll,
1979; Margolis and Walsh, 2001), viz. responsible conduct of business activi-
ties while pursuing economic gains; the social and environmental responsibilities
of the business towards its stakeholders; and business's contributions that would
benefit the society at large (Margolis and Walsh, 2001; Sethi, 1975). Business
responsibilities have been thus discussed in reference to the stakeholders of busi-
ness (see Freeman, 1984; Clarkson, 1991; 1995) and the wider society.

The socialized view of business challenges the overtly 'economic-institution'
or 'market-system' view of business held in the neo-classical economic traditions
(e.g., Levitt, 1958; Friedman, 1970; Jensen, 1998). However, debates continue on
CSR definitions, its scope (see Carroll, 1979; Schwartz and Carroll, 2003), and
the motivations that guide CSR actions of business, i.e., business might be moti-
vated by the instrumental role that CSR could play in achieving business interests
(McWilliams and Siegel, 2001; Waddock and Smith, 2000a), or businesses might
undertake CSR actions for their intrinsic good (Weaver et aI., 1999).



Spring 2006 Mohan: Global Corporate Social Responsibilities 11

The term, CSR, in this paper, refers to a business organization's responsibil-
ity for integrating stakeholder concerns in routine business activities for prima-
ry stakeholders (employees, customers, suppliers), as well as environment (see
Starik, 1995) and communities (see Burke, 1999) often are considered extensions
of the primary stakeholders of the firm.

The international business domain offers a challenging context for inquiry into
firm's CSR and ongoing stakeholder relationship management since there are
many more and diverse stakeholders of international business firms (Wood and
Pasquero, 1997). The MNCs are faced with wider CSR expectations, and MNCs
are under increasing pressure for socially responsible behavior in their global op-
erations.

The numerous and diverse stakeholders ofMNCs include global customers, in-
vestors, creditors, global employees (Chamberlain, 1982; Amba-Rao, 1993; Gyn-
awali, 1996; Amba-Rao, 1989); 'supra-national' level stakeholders, e.g., the UN
and its agencies, the European Commission, the OECD; a variety of cross-border
interest and activist groups, international NGOs championing issues such as con-
sumer-protection, environment, safety, health-care, labour rights (Doh and Tee-
gen, 2002; Sethi and Steidl meier, 1990); local communities in home country as
well as host countries; and the environment at the global as well as the local level.
The communities in developing countries and the environment are often called
'weak,' or 'silent' stakeholders (Amba-Rao, 1993; Logsdon and Wood, 2002).

Moreover, CSR practices and stakeholder expectations vary across countries
(Mohan, 2001; Maignan and Ferrell, 2001; Yoshimori, 1995; Broberg, 1996) and
cultures, as values vary across cultures (Hampden-Turner and Trompenaars, 1993;
Fukuyama, 1995; Hofstede, 1980; 1983). With varied underlying sociological and
institutional paradigms, the societies may be monistic, dualistic or collectivist, in-
dividualist or communitarian (Lodge, 1978; Vogel, 1992; Sethi and Votaw, 1973)
leading to divergent perspectives on the role and relationship of business with
society, and hence the dominant definition of CSR in that society.

Furthermore, stakeholder expectations, critical social issues, norms, and val-
ues, and institutional and sociological requirements also change over time. CSR is
behavior that is "congruent with prevailing social norms, values and expectations
of performance" (Sethi, 1975 p. 62).

The temporal patterns of social issues (Lawrence et aI., 2001) are also context
specific. For example, while in the developed countries, some social issue might
have been already addressed, and the related corrective and preventive business
actions already institutionalized. At the same time, these issues might be still un-
known, or only emerging in developing countries (see Reed, 2002; Khanna and
Palepu, 1997; 2000; Amba-Rao, 1992; Mohan, 2001).

Thus, the social issues, social acceptance and societal expectations are differen-
tiated across the world, both in space and in time. In operating across the spatially
and temporally differentiated definitions and expectations ofthe 'role of business
in society' across the globe, MNCs need to simultaneously manage across these
diversities.



12 Journal of Business Strategies Vol. 23, No.1

Furthermore, MNCs' plural environments are collective and interconnected
(Xu and Shenkar, 2002; Hart, 1992; Rosenzweig and Singh, 1991; Sundaram and
Black, 1992; Westney, 1993). The complex legitimacy issues faced by MNCs (see
Kostova and Zaheer, 1999; Hawkins and WaIter, 1981) across these diverse politi-
cal, economic, institutional and sociological environments are also discontinuous
and marked with uncertainty and preclude universal corporate policies because
what may be acceptable in one country or at a time may run counter to public poli-
cies or acceptable norms elsewhere or at other times (Logsdon and Wood, 2002;
Sethi, 1975; Walter, 1975).

CSR in global operations is also influenced by several forces seeking to ho-
mogenize CSR across the world so that fundamental and universal social values
are protected and upheld. These homogenizing forces include a variety of policy
regimes at the global and national level. They include international guidelines
(Kolk et aI., 1999), bilateral or multilateral agreements among nation states, and
trade treaties, e.g., NAFTA, WTO (Sanyal, 2001; Sethi, 2003). Several nonnative
and descriptive standards of global CSR performance have emerged; such as the
Human Rights Principles and Responsibilities for Transnational Corporations and
Other Business Enterprises (UN Sub-commission on the Promotion and Protec-
tion of Human Rights 2002), the Tripartite Declaration of Principles Concerning
Multinational Enterprises and Social Policy (ILO 1977), and, the OECD Guide-
lines for Multinational Enterprises (OECD 2000). Similarly, several voluntary
initiatives and market based standards are emerging, such as the ISO, EMAS, SA,
8000, AAlOOO and the ORI, that seek to provide basic social and environmental
standards for business operations across the world.

However, the discussions of international dimensions of CSR still remain in
their infancy (Carroll, 1996; Amba-Rao, 1993; Wartick and Wood, 1998; Nehrt et
al., 1970; Toyne and Nigh, 1997; Wood and Pasquero, 1997). Most existing mod-
els of CSR management in international business domain have focused on either
social issues, crisis management (e.g., Brewer, 1992; Nigh and Cochran, 1987), or
the attitudinal predispositions of firms' responsiveness, e.g., the ROAP proposed
by Walter (1975) and Gladwin and Welles (1976). Little is known about MNCs'
strategies for managing stakeholder relations with a multitude of stakeholders of
varied salience, interfaced at multiple levels of the MNC.

International business operations involve responsiveness to differentiated local
environments for some behaviors, and integration of behaviors across units for
some other behaviors (Prahalad and Doz, 1981; Doz and Prahalad, 1991; Bartlett
and Ohoshal, 1989). Typically, the HR and marketing practices are more locally
responsive and therefore decentralized and differentiated, while the Finance or
Accounting practices and procedures are more internally consistent and integrated
across the MNC (Rosenzweig and Nohria, 1994). The differentiation/integration
ofMNC practices across the diverse environments involves the use ofa combina-
tion of control and co-ordination mechanisms (Martinez and Jarillo, 1989) by the
MNC for achieving integrated or differentiated practices in seeking legitimacy or
efficiency gains.



Spring 2006 Mahan: Global Corporate Social Responsibilities 13

Many years ago Hawkins and Walter (1981) related management design and
planning to CSR management in the MNC. In-depth analysis of organization de-
sign ofCSR management and CSP ofMNCs however still remains missing. More
recently, Logsdon and Wood, (2002) typify MNC's CSR orientation as 'globally
integrated' or 'multi-domestic' and suggest a 'hybrid strategy' of uniform globally
applicable credos, and well defended local policies and codes to implement 'hy-
pernorms' or universal values. Hansen (2002), based on a survey and case-studies
of European MNCs' subsidiaries in Malaysia, China, and India, reported several
elements of organization design of cross-border environment management, and
proposed organizational typologies, drawing upon Bartlett & Ohoshal (1989), i.e.,
'decentralised' (no cross border management), 'international compliance,' 'cen-
tralised' (compliance to company-wide standards instead of local regulation), and
'globally integrated' (environment care initiatives stem from any unit).

Adopting the 'stakeholder orientation' perspective of CSR, Post et a!. (2002)
examined some global stakeholder relations in three MNCs of US origin and their
operations in China, focusing on a variety of business activities across several
stakeholder groups. A rigorous analysis oftransnational management ofCSR prac-
tices in routine (i.e., non-crisis) relations with stakeholders would further require
a systematic inquiry into the MNC design and coordination mechanisms within
the MNC and the environmental influences across the multiple levels ofthe MNC.

Moreover, the CSR practices have a normative basis, and those practices are
both values-based and contextually determined. The CSR expectations, defini-
tions and meanings are drawn from the context within which these occur. This
peculiar nature of CSR practices makes their cross-border management difficult.
Achieving consistent CSR practices across global operations involves not only
the transfer of the CSR practice, but also the transfer of its underlying value and
meaning. While, at the same time, faced with contextually diverse stakeholder
expectations and local CSR requirements, MNCs also need to practice differenti~
ated CSR at their local sites, in response to the local context. How MNCs meet
these competing demands for managing CSR in their global operations and what
determines their choices remains less discussed.

An empirical analysis of the management of stakeholder relations in MNCs
was undertaken using a relational concept ofCSR, i.e., on-going stakeholder rela-
tions in non-crisis situations, in routine business activities. This involved a within
firm inquiry of CSR practices and their management in international operations,
as well as a multi-level contextual analysis of influences in MNCs' environment.
Findings from this study are presented and discussed here.

Data and the Context

An in-depth study (Yin, 1984; Denzin & Lincoln, 2002) through multiple case
studies (Eisenhardt, 1989; Yin, 1994) was conducted of eight embedded cases in
two MNCs drawn from diverse business sectors. The embedded multiple case
study design was adopted as a research strategy to study the phenomenon em-



14 Journal (~f Business Strategies Vol. 23, No. I

bedded in its nested multilevel context and to draw analytical and inferential
generalizations (Yin, 1994; Gummeson, 2000). The cross-sector sampling (Phar-
maceutical health-care, and Aviation-travel) ensured sufficient diversity of CSR
sensitivities of the firms and diversity of stakeholder issues across the industry
sectors (Post & Berman, 2001). The home and host country context influences
were minimized by drawing companies of the same country of origin (UK) and
their operations in same host-country (India). This provided an illustrative case of
global operations of MNCs and the opportunity to study multiple subsidiaries of
the same MNC within a country. Two diverse contexts were also thus obtained for
study, the developed country context (UK - Home country) and the developing
country context (India - Host country). Multilevel access was obtained within
these MNCs, at the head quarters (HQ), the subsidiary units in India, and the
regional offices (ROs), and across the stakeholder dimensions. This resulted in a
sample of eight embedded cases studies in the two MNCs: XA (Aviation-travel
sector) and XB (Pharmaceutical health-care sector). The names of the companies
have not been disclosed in order to preserve their anonymity.

Thus, CSR practices for stakeholder relations in non-crisis situations described
by the managers at multiple levels within these eight cases were studied. The glob-
al management of these CSR practices was traced and pieced together from mul-
tiple data sources: key-informants' interviews across multiple levels, corroborated
by documentary data sources across levels, departments, and functions along with
investigation of relevant contextual influences at multiple levels of the context.

The contextual analysis (Pettigrew, 1985; 1995) provided an overview of the
contextual setting that embeds the firms, and the institutional regulations, social
norms and cognitive perceptions in the environment (Kostova, 1997; 1999; Scott,
1995) that influence CSR practices, at the global, national (UK and India), sec-
toral, industrial level (Health-care, Aviation-travel) and organizational levels. The
analysis of these interconnected and embedded contexts revealed a longstanding
emphasis on CSR in the national business environment in the UK and in India,
as well as contemporary normative, regulatory and cognitive dimensions of the
institutional context in these countries. Determinants of CSR conduct of interna-
tional business organizations were also evidenced in several recent and emerging
regulations and voluntary standards in the global business environment. Sector
specific concerns and influences on CSR behavior were also noted.

Data analysis involved successive stages of coding, and patterns and themes
matching within and across the two companies, across the eight cases and finally
across CSR practices, following rigorous steps to ensure validity and reliability
of research.

Empirical Findings and Analysis

The data reveal a variety of CSR practices within the MNCs, as well as sys-
tematic variation in global management of CSR practices. Several CSR practices
were globally managed across the MNC levels; and several CSR practices dif-



Spring 2006 Mohan: Glohal Corporate Social Re.~ponsihilities 15

fered across the MNC units or were specific to the local operations. CSR practices
within the MNCs varied across the stakeholder dimensions and within stakeholder
groups. CSR practices also varied across MNC's subsidiaries in different coun-
tries and across MNC subsidiaries within the same country.

In the vision, mission and goals statements these MNCs stated their business
objectives were to contribute to the wider societal benefit as well as to business
returns. At the policy level these MNCs made a commitment to CSR in all their
operations. For example, XA addressed the future viability of its business; the car-
ing role of the company and XA stated its community relations and environment
policy. In XB, corporate citizenship was part of the company's values statement.

CSR practices of these MNCs addressed socio-political, ecological, and envi-
ronmental issues at the corporate level. Furthermore, these MNCs collaborated
and partnered with governments and non-government organizations to address
negative impacts of business activities and to solve several social problems. These
firms also made corporate level commitment to transparency and social report-
ing and adopted at the HQ level, internationally recognized standards, such as
AAIOOO, GRI, and ICC Charter for Sustainable Development.

XA's HQ reported the management of stakeholder relations across employ-
ees, customers, suppliers, shareholders, communities, and the environment in the
global operations of XA, as well as XA's initiatives for promoting responsible
tourism and various other social responsibility activities in the UK and in its in-
ternational operations. XB's HQ reported environment, health and safety perfor-
mance for the group, and its initiatives to protect biodiversity, animal rights and
transparency of R&D and clinical trials.

Global policies for management of CSR across business operations were set
at the corporate level in these MNCs. For example, in XA, Sustainable Business
Unit (SBU), a corporate level department was set up to integrate social and envi-
ronmental responsibility across functions in XA-UK and to transfer these prac-
tices to XA's sites world-wide. An Environment and Social Council was set-up
in XA at the Board level that reviewed cross-functional issues and reported XA's
CSR to the top management team.

These MNCs engaged in the review of CSR implications for their choices of
the lines of business, use of resources and suppliers. For example, the social and
environmental impact of aviation, travel and tourism, and phannaceutical manu-
facturing businesses at the local operating sites, as well as at the global level were
reviewed. Similarly, corporate level strategies that determine major lines of busi-
ness of the MNC and the ways in which MNC links with its peers, investors, and
suppliers, guided the decisions about choosing business lines and investments,
e.g., minimize depletion of natural resources and pollution. The lines of business
that had adverse effects were divested. Corporate-level decisions in these MNCs
included the choice of technology, selection and guidelines for screening of sup-
pliers, and waste management. These decisions were primarily taken by the HQ
in XA. In XB, these decisions involved close consultation between the HQ and
the subsidiaries.



16 Journal ofBusiness Strategies Vol. 23, No.1

Implementation of CSR Practices in Global Operations

The implementation of CSR practices in global operations in these MNCs in-
volved a variety of approaches, with varying involvement of the HQs and the sub-
sidiaries. The CSR practices and their management in these MNCs are detailed
below, across four stakeholder dimensions.

Employee Dimension
While the HR functions tend to be largely decentralized and more locally man-

aged in MNCs (Rosenzweig and Nohria, 1994), the HQs ofXA and XB had sig-
nificant involvement in the management of some HR-related CSR practices in
their global operations, often to varying extents of effectiveness. For example,
XA's global policies for equal opportunities, bullying and harassment were avail-
able across the global operations through XA's intranet.

XA-UK reported its employee safety performance centrally, and employee
training and employee satisfaction surveys were managed internationally in XA.
The health and safety of employees in XB was globally managed in an integrated
way through the XBWMS (integrated global manufacturing system of XB) and
XBHELPS (XB's integrated system for management of health, safety, and envi-
ronment, quality, and responsible procurement and supplies). The group policy on
HSE, Equal Opportunity and Diversity, Quality, Policy on the Use of Animals in
R&D, the ISO standards, and the IFPMA guidelines were adopted across XB-HQ
and all group operations.

On the other hand, CSR in most HR practices was largely locally managed.
For example, in XA, equal opportunity practices, salary and benefits packages, or
training and development of employees were largely locally managed by XA's lo-
cal offices, often with a close involvement ofthe ROs. In XB, several HR-related
CSR practices, e.g., salary and benefits, were locally managed and implemented
in accordance with the local norms. While the group-wide equal opportunity pol-
icy ofXB was laid by the HQ, it did not require XB's local subsidiaries to report
their performance by this policy.

Customer Dimension
Marketing, like human resource management, is often decentralized in the

MNCs (Rosenzweig & Nohria, 1994) in order for the local units to meet the
differentiated needs of the local customers. The MNCs in this study illustrate
variety of integration of CSR in global marketing practices. In both XA and
XB, CSR towards customers significantly involved the HQ through centralized
or integrated management. Customer safety and security in XA were centrally
co-ordinated through routines set by the HQ based on global regulations. In
addition, the national regulations and norms were followed by the units. Cus-
tomer feedback procedures comprised a mix of formal routines set by the HQ.
Customer satisfaction and customer relations were globally managed through
centralized IT networked processes, which were often outsourced services op-



Spring 2006 Mohan: Global Corporate Social Responsibilities 17

erating centrally designed templates. The brands and various 'point-of-contact'
practices were standardised through global manuals and guidelines alongside
which the local norms and approaches were also informally followed by XA's
units.

In XB, the product portfolio of a unit was determined through the XBWMS,
and the internal buyer supplier arrangements within the XB network. 'Product re-
call' was centralized, as were world wide drug donation practices. Product pricing
was locally managed by XB units, often regulated by the national governments.
However, when XB's units in Africa were faced with the issue of access and
affordability of life saving drugs, XB-HQ centrally introduced several initiatives
for improved access and subsidized pricing in developing countries through HQ-
level partnership with UN and national agencies.

Environment Dimension
The existing discussions of environment care management in MNC operations

(Hansen, 2003; Shrivastava, 1987a, b) place the responsibility for environment
care somewhere between the HQ's and the local operations. In XA and XB the
HQs were clearly accountable for the environmental performance of the global
operations. The HQs took several measures to ensure implementation of environ-
ment care at the local sites either directly by the HQ, or by the local units. XA and
XB HQs centrally reported their global environment care performance. In addi-
tion, XB's local units reported their environment care initiatives locally.

Environment care in XA was integrated by the HQ into functional areas, viz.
global procurement, product design, and technical operations. These practices
were primarily UK-centred with little involvement of XA's units even when
these activities were done at an international local site. XA's annual environ-
ment report provided details of the regular monitoring and measure of the key
characteristics of XA activities that may impact the environment in XA's global
operations. These included reporting on global NOx, C02 emissions, waste and
noise control in its worldwide technical operations, global impact of tourism,
compliance of international regulation in aviation, and several local issues in
the UK, such as addressing congestion near airports in the UK. There were no
significant environment care practices ofXA's local sites. XA-UK was involved
in a variety of wider environment care activities, e.g., initiatives to promote
responsible tourism, preservation of ecosystems and partnership with the World
Wild Fund for nature. These were directly managed by XA's UK-based depart-
ments without involving XA's local offices in the countries where these initia-
tives were conducted.

Care and protection of natural resources and biodiversity was adopted by XB's
units as well as its suppliers, and third party contractors across XB's world wide
operations as these practices were built into global manufacturing, R&D and
supply procurement procedures. Environment care in global operations of XB
involved extensively integrated multilevel internal reporting and audit. These sys-
tems operated alongside XB's processes for participating voluntarily in numerous



18 Journal ofBusiness Strategies Vol. 23, No. I

local environment care issues. XB-UK's membership in the WBCSD and ICC's
Business Charter on Sustainable Development guided XB's environment-care ini-
tiatives and bio-diversity protection. These principles were encoded in the HSE,
HELPS, and quality procedures for manufacturing and procurement. XB's units
were, in addition, members of similar sustainable development and CSR organi-
zations in the local countries.

Community Dimension
Community care by firms is typically localized at the sites of operation, i.e.,

the HQ and the subsidiaries in the case of MNCs. The MNCs studied here reveal
several patterns of localization and centralization of community work. The UK
operations of these MNCs had several impressive community care activities to
their credit. In XA and XB some international community initiatives were cen-
trally managed by the HQ. XA and XB also illustrated some shared themes of
community CSR practices across the global sites.

XA-UK adopted several community care initiatives throughout the UK. XA's
local units similarly conducted charity and community support activities locally
without the involvement of XA-HQ or other XA units. The 'charity' and 'care'
themes were followed throughout XA's global operations. XA-UN programs were
managed internationally, directly by the HQ even when these activities were con-
ducted at XA's local sites, and these projects did not involve XA's local units.
XA-HQ reported centrally, its worldwide community activities. XA's units were
required to report their local projects to XA's central community contributions re-
port towards XA's Percent Club membership in the UK, although XA-HQ was not
involved in implementing or managing these activities at the subsidiary's sites.

XB-UK undertook several community care initiatives at its offices in the UK.
XB-UK was also involved in several global social development programs such as
access to medicines in developing countries, health care and awareness. Several
of the programs were directly undertaken by the HQ in its worldwide operations.
Some CSR practices were shared across XB-HQ and its international units, e.g.,
the campaigns against counterfeit drugs, HIV-AIDS. Within XB, community ac-
tivities, though apparently decentralized, were globally integrated through XB's
corporate culture and awards, e.g., the Chairman's Corporate Citizenship awards.
CSR practices were integrated into manufacturing, marketing, XBHELPS, and
quality procedures. XB's units locally undertook activities such as innovative ru-
ral marketing for providing access to medicines for the poor people in remote
villages.

Discussion: The Management of CSR in Global Firms

It is evident that these MNCs managed some CSR practices in their global
operations. Several features of the 'CSR environment' in the UK influenced these
firms to manage CSR in their global operations. Similarly, several factors in the
global environment, emphasizing responsible business practices across interna-



Spring 2006 Mohan: Global Corporate Social Re.\ponsibilities 19

tional operations, also influenced global CSR management in these MNCs. Host
country, as well as sector-specific, influences on global CSR were also evident.
Finn level strategic choices of the MNC for global CSR management were also
noted.

The global management of CSR practices involved implementing or transfer-
ring HQ's CSR practices to its local units. In addition the local units followed
their own CSR practices. However, the HQs did not transfer or implement all
CSR practices globally. Only select CSR practices were prioritized to be globally
managed. A variety of reasons influence the selection of CSR practices for global
management.

Evidently these MNCs adopted a variety of approaches for the global man-
agement of CSR practices. These approaches ranged from centralized, direct
management, to integrated management, to decentralized management. MNCs'
approaches varied across practices. Employee, customer, environment, or com-
munity-related CSR practices were not decentralized like HRM and marketing
functions that are typically more decentralized. On the contrary, some select CSR
practices within these functions were managed directly by the HQ or were cen-
trally integrated. The reasons these MNCs accorded such importance to some
CSR practices are discussed later.

Moreover, the CSR practices of the HQ often differed from those of the local
units, when these practices were not linked across global operations. Thus, HQ's
CSR practices were embedded in the local home country context, while the units
followed the host country norms and CSR practices. CSR practices at the HQ
level also differed from the CSR practices at the local units, even when these prac-
tices were transferred or implemented across the global operations. Practices were
modified as they were adapted to the local environment. This local embeddedness
of the local units is further discussed in a later section.

The preceding analysis ofCSR practices in the global operations of two MNCs
reveals interplay of several firm-level factors and national, global, and sectoral in-
fluences. A significant role of the HQ is evident in the global management ofCSR,
particularly in setting the guiding philosophy and corporate level policy for man-
agement of CSR in global operations of the MNC. Also, the HQ and the subsid-
iary units jointly participated in decisions regarding the social and environmental
implications of business activities and the implementation ofCSR practices. This
was evident in XB and in some cases in XA. The UK-based operations of the
MNC had several CSR practices that were often not transferred across opera-
tions and were limited to the UK. The local operations adopted several local CSR
practices relevant to the local context. Furthennore, in these MNCs, committed to
managing CSR in their global operations, the implementation of global CSR prac-
tices involved a variety of approaches, ranging from direct management by the
HQ to varying extents of integration of CSR practices across the global units.

Evidently, only some CSR practices were selectively managed across the glob-
al operations in these MNCs. For example, while HR management was largely
decentralized, the health and safety of employees was globally managed with



20 Journal of Business Strategies VoL 23, No.1

the HQs being accountable for this performance. The selective prioritization of
CSR practices for their global management within the MNC was influenced by
the global and national factors, as well as MNC's own strategic priorities. The
'macro-global' homogenizing forces of the wider external interconnected envi-
ronment lead to globally managed CSR practices. The CSR practices dominant in
the home (UK) country were globally managed across the units by these MNCs.

The global context with its international guidelines, universal standards for
performance and emerging legislation on several aspects of CSR practices also
determined selective prioritization ofCSR practices for their global management,
e.g., the WHO directive on marketing practices which is followed by all units of
XB worldwide and coordinated through lFPMA and its national and local chap-
ters. The market-based certificates and voluntary standards for international busi-
ness, viz. the ISO standards, and the GRT influenced the social and environmental
performance reporting in these MNCs. XA-UK supported TCAO, the UN body
responsible for setting environmental standards for civil aviation and noise stan-
dards for aircraft, as well as research and development on climate change and
impact of aviation on the global atmosphere. XA-UK signed the ICC Charter for
Sustainable Development and evaluated its performance for the year, against the
TCC principles of sustainable development. Similarly, XA-UK supported research
and innovation on issues such as European emphasis on noise around airports,
night-time restrictions, EU's Hushkit regulation (1999) of marginally-compliant
aircraft, global emissions and fuel efficiency, and waste management in the UK
and Europe. The context thus influenced prioritization of select practices and pro-
vided the formal definition and standards for CSR.

Global homogenizing forces included the multinational clients and global busi-
ness partners. Tn the XA example they were common contractors and partners
across the XA network, the global interest groups and non-governmental organi-
zations (Oxfam's role in the case ofXB's drug-pricing issues), and MNC's mem-
bership networks such as the Percent Club.

At the national level, the home country national environment in the UK for
these MNCs was marked by several factors promoting CSR including several
UK legislations (Moon, 2004), viz. the Sex Discrimination Act (1975), the Equal
Pay Act (1970), the Race Relations Act (1976), the Disability Discrimination Act
(1995), the Code of Practice for Employment of Disabled People (1984), the Em-
ployment Relations Act (1999), the Human Rights Act (1998), and the Health and
Safety Work Act (1974) that impose duties on the employers to ensure the health
and safety (H&S) of their employees and to ensure that the H&S of other persons
is not adversely affected by the employer.

Moreover, the firms followed requirements of the UKLA's Combined Code
(1992); UK Listing Authority guidelines, comprising Principles of Good Cor-
porate Governance (1998) and Code of Best Practice; and the Turnbull Report
(1999) that further expanded the Combined Code and provided guidance for the
Directors to include the internal control requirements of the Combined Code. This
required the Boards to identify and review the risks faced by their business opera-



Spring 2006 Mohan: Global Corporate Social Responsibilities 21

tions across the world as well as to introduce monitoring and control processes
and annually report the compliance to these, to their shareholders. All London
Stock Exchange listed companies are required to report in their annual report and
accounts their adherence to these guidelines. For example, following the Com-
bined Code, Principles of Good Governance and Code of Best Practice (1998)
issued by the London Stock Exchange for its listed companies, XB reported its
internal control in global operations, including financial, operational and compli-
ance controls and risk management procedures, to its shareholders. Similarly, XA
and XB also annually published an HSE performance report. HSE has been a
growing concern since the Bhopal tragedy in 1984 where Union Carbide's plant
leaked methyl isocyanate gas killing over 15,000 people in India. However, these
reports portrayed the HSE management in the global operations to varying extent
in these MNCs.

The UK national context is also marked by an active NGO and civil society
influence on the normative and cognitive dimensions of CSR of British compa-
nies in their overseas operations. For example, Amnesty International Business
Group, Oxfam, UK, the Prince of Wales International Business Leader's Forum,
the Percent Club, and the Business in the Community Principles are some promi-
nent NGO initiatives. The role of the Department for International Development
(DfID) is part of the government initiatives to promote CSR of British MNCs.

Recent surveys of consumer and public opinion in the UK on CSR also report
rising trends of consumer concern in the UK (MORI - CSR survey, UK, 2002,
and the annual MORI polls since 1990). CSR is reported as an important consid-
eration in the purchase decisions. Consumer activism, boycotts of products over
concerns for environment and human rights have also been widely witnessed in
the UK. Consumers and the public in the UK are noted to be sensitive to business
practices in their overseas operations, e.g., recent campaigns against the use of
child labour, bribery and corruption, and concern for environment-care, ethical
sourcing, and workplace practices of overseas operations of British MNCs.

At the sectoral level, selective prioritization of some CSR practices for their
transnational management was determined by the criticality of the issue within
the sector or industry. Chemical and pharmaceutical industries focused on health
and safety, and ethical marketing practices; while the travel-service sector focused
on passenger security and safety. Implementation of these CSR practices was re-
quired by the sector specific institutions.

The host country environment also influenced selective prioritization of CSR
practices. In many cases MNCs took selectively greater care to implement CSR in
the host countries where institutional mechanisms to ensure responsible practices
were lax, e.g., where the enforcement of environmental care was not up to world
class standards. Similarly, in areas where child labour is rampant, the MNCs mon-
itored their units as well as third party suppliers and contractors to ensure against
incidences of child labor at worksites.

At the firm level, strategies of the MNC influenced the selective prioritization
of some CSR practices for their global management, e.g., XA prioritized pas-



22 Journal of Business Strategies Vol. 23, No.1

senger, staff and aircraft safety and security, and its charity work; XB focused
on quality and HSE, covering a variety of practices within these themes, which
it integrated network-wide through specially designed management systems and
cultural processes.

At the local level, influenced by the local context, several CSR practices of
the local units of these MNCs were more isomorphic to the practices of the local
firms, perhaps in an attempt to compete more effectively in the local markets (nor-
mative isomorphism) or to 'fit in' by imitating local practices (mimetic isomor-
phism) (DiMaggio and Powell, 1983), while instances of 'coercive isomorphism'
for the legally stipulated behaviors were evident in local unit practices, such as
the provision of provident fund, pensions, work-hours regulation, or training bud-
gets for employees across global operations. For example, the subsidiary units in
India followed several CSR practices consistent with the institutional, social or
cultural norms of business behavior in India. Several non-statutory practices, such
as employee-benefits given by local Indian businesses, were followed by the units
of XA and XB. Examples include structuring salary packages, employee ben-
efits such as the provision of private medical and health-care for employees and
their families, housing and related amenities, conveyance and transport facilities,
or support for children's education. These practices of the local units were non-
isomorphic to the parent HQ or other units of the MNCs. These practices were
planned, implemented and reviewed by the local managers in the country, some-
times with a close involvement of the RO. XB-India followed local pollution and
emissions regulations, and XA-India followed the safety and security procedures
required by the national civil aviation authorities.

Several HR- or customer-related CSR practices, well established in the UK-
based operations of these MNCs, were not practiced in the international opera-
tions. Often there were no regulatory or other stakeholder pressures for conduct-
ing these practices globally, so their transnational management appeared to slack.
For example, the normative and cognitive expectations predominant in the UK's
national environment made it imperative for these MNCs to manage health and
safety care towards their employees in global operations. However, these norma-
tive and cognitive expectations were missing in both the UK national, as well
as the local country environment, for practices such as Equal Opportunity and
Investor-in-people. Therefore these practices were not followed across the global
operations in XA or XB.

Regulatory constraints preventing global CSR practices were also evident.
Strict waste disposal and health and hygiene regulations in the UK constrained the
donation of unused in-flight food to local charities in the UK while, at the initia-
tive of cabin crew, this was easily done upon arrival of XA aircraft at the airports
in India. Similarly, the national legal and financial institutions were noted to re-
strict employee share ownership in the international operations of these MNCs. In
all countries, the law stipulated the conduct of employment relationships, but the
varying scope of regulation across countries resulted in diverse behavior across
the units within the MNC. For example, the working time, pay determination, rec-



Spring 2006 Mohan: Global Corporate Social Responsibilities 23

ognition of employee unions, consultative structures, and redundancy provisions,
were defined by local legislation.

Furthermore, many practices, though designed to be managed transnationally,
could not be implemented in the global operations, as these did not appear to 'fit'
with the cultural or institutional contexts of the subsidiaries. XA's units did not
find employee counseling, bullying and grievance procedures, or the Customer
Listening Forums promoted by the HQ to 'fit' with the local business environ-
ment.

The above analysis of empirical findings across global and local CSR prac-
tices in these two MNCs reveals a fine-grained interplay of global, national-home
country, host country level environmental factors, and firm's strategic choices and
design for the management of CSR in global operations.

Hansen's (2003) typologies for configuration of cross-border management of
responsibility in MNCs (i.e., Decentralised, International compliance, Centralised,
and Globally integrated) are not evident as neat distinct types in this study. This
fine-grained analysis on the other hand reveals these configurations to coexist as
mosaic-like patterns within each MNC. The evidence suggests that within the
typically decentralized functions, some CSR practices were much centralized,
while some otherwise centrally controlled CSR practices, were not included in
the international operations.

It is evident from this study that only select CSR practices were globally man-
aged in these TNCs. The 'hybrid strategy' of uniform globally applicable credos,
and well defined local policies and codes to implement 'hypemorms' suggested
by Logsdon and Wood (2002) appears to be in place in these MNCs but only for
select CSR practices. Thus, MNC's strategy for global management of CSR as
'globally integrated,' or 'multi-domestic' may not be firm level strategic orienta-
tion. The strategies vary across CSR practices. Thus, strategic CSR orientation
may be described as a practice level orientation, varying from practice to prac-
tice, with some CSR practices of the MNC managed through a hybrid strategy,
while, centralized or decentralized, global or multilocal approaches are followed
for some other CSR practices.

This study suggests that the normative prescriptions for increased global CSR
benefit from the recognition that global management of CSR requires strategic
and systematic design for global management of CSR practices. Furthermore, the
study suggests global CSR requires supportive environmental factors throughout
the MNC's multilevel environment, i.e., the regulatory, normative and cognitive
elements of the institutional environments at multiple levels of the MNC need to
collectively support CSR practices for their global management.

Conclusion

This research looks within the MNC, and across its multilevel context, to report
empirical and analytical findings of global management of CSR practices in two
MNCs, across four stakeholder dimensions.



24 Journal ofBusiness Strategies Vol. 23, No. 1

This paper contributes to the understanding of global CSR, of which there
was only scant existing discussion (Freeman, 1997; Wood and Pasquero, 1997;
Logsdon and Wood, 2002). The current CSR management discussions are thus
taken into the realm of international business, cross-border managerial issues,
MNC design, and the heterogeneity and multiplicity of contexts in global opera-
tions.

These rigorous, empirically grounded and theoretically validated findings, have
advanced the existing discussions of design and cross border management (Wal-
ter, 1975; Hawkins and Walter, 1981; Hansen, 2002; Post et aI., 2002; Logsdon
and Wood, 2002). These fine-grained findings reveal that global CSR management
results from the interplay of firm's strategic choices, internal design processes, as
well as the influences of regulatory, normative and cognitive environment across
multiple levels of the MNC context - global, national, home country, local host
country, and sectoral level.

The present study provides an account of global CSR management in MNCs
of UK origin; future cross-country comparative studies would further extend this
understanding. Similarly, future studies could include MNCs from other sectors
in order to compare and contrast global CSR management approaches. The pat-
terns, determinants and consequences of global CSR management identified in
this exploratory study may be further extended through larger sample studies and
large scale surveys.

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32 Journal ofBusiness Strategies Vol. 23, No. I

Anupama Mohan obtained her Ph.D. degree at Warwick Business School, UK.
Her research is across international business management, organization theory
institutional theory, and strategy. She researches and teaches in business schools
across Europe. Her work focuses on international dimensions of corporate re-
sponsibilities, transnational management of corporate responsibilities in global
corporations, CSR in developing countries, and globalization and poverty.


	Global Corporate Social Responsibilities Management in MNCs