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1 - The social regulation of the economy in the global context

Published online by Cambridge University Press:  05 May 2015

Kiyoteru Tsutsui
University of Michigan, Ann Arbor
Alwyn Lim
University of Southern California


Publisher: Cambridge University Press
Print publication year: 2015

The global expansion of corporate social responsibility (CSR) in recent decades has been spectacular. Although much debate continues on the content and efficacy of CSR, the notion that corporations are accountable for the social and environmental consequences of their activities has become widely accepted in the worlds of business, government, and civil society. Global CSR frameworks such as the United Nations Global Compact (UNGC) and the Global Reporting Initiative (GRI) include thousands of business participants across multiple countries and industries and attract wide support from governments and civil society organizations. Corresponding to the rising global profile of CSR, scholarly attention to CSR has grown tremendously (Haufler Reference Haufler2001; Hoffman Reference Hoffman2001; Hoffman and Ventresca Reference Hoffman and Ventresca2002; Vogel Reference Vogel2005; Prakash and Potoski Reference Prakash and Potoski2006; May, Cheney, and Roper Reference May, Cheney and Roper2007; Potoski and Prakash Reference Potoski and Prakash2009; Soule Reference Soule2009; Smith et al. Reference Smith, Bhattacharya, Vogel and Levine2010; Utting and Marques Reference Utting and Marques2010; Crouch and Maclean Reference Crouch and Maclean2011; Lindgreen et al. Reference Lindgreen, Kotler, Vanhamme and Maon2012). Building on this literature, this volume examines two key issues in contemporary CSR activities.

The first is the global nature of contemporary CSR efforts. Many CSR debates and activities today assume that CSR entails global problems that require global solutions. Through what historical and institutional processes have we come to accept this global approach to CSR? How did different actors engage in the politics of legitimation and contestation in the evolution of CSR in international society? How have global and national forces combined to construct specific fields of CSR, such as cross-national supply chains, sustainability, and conflict minerals?

Second, the global expansion of CSR ideas and practices exerts considerable pressure on corporations to take a position. What factors shape their reaction to this growing call for CSR action? Why have some corporations joined the global CSR movement while others have resisted or rejected it? If corporations participate in this CSR movement, do they gain anything from their efforts, or do they become targets of further criticism? What impact do these global pressures ultimately have on actual CSR outcomes?

This volume addresses these questions using rich historical data, innovative discourse analysis, in-depth interviews, and sophisticated quantitative methods. In this chapter, we discuss our perspective on CSR as social regulation of the economy, present the analytical framework that guides all the chapters, and summarize the research presented in this volume.

Corporate social responsibility as social regulation of the economy

In this section, we introduce our perspective on the emergence and impact of CSR. We see the essence of contemporary CSR as the social regulation of the economy, which involves attempts by various actors to interpret, guide, and control economic processes that increasingly span national boundaries. A case in point is the emergence of global CSR frameworks. The process began in the early 1970s, when government representatives deliberated an international Code of Conduct for Transnational Corporations (Sagafi-Nejad Reference Sagafi-Nejad and Dunning2008) amid other similar efforts such as the OECD Guidelines for Multinational Enterprises. Efforts to institutionalize the Code of Conduct as a legally binding UN initiative, however, were unsuccessful because the governments of developed countries subsequently defeated those efforts. Nevertheless, those early efforts in international forums like the UN set the precedent for future CSR frameworks with a global scope (Kell and Levin Reference Kell and Levin2003; Kell Reference Kell2005). From the 1970s on, other international organizations introduced variants of global CSR frameworks, such as the 1976 OECD Guidelines for Multinational Enterprises, the 1977 International Labour Organization (ILO) Tripartite Declaration, the 1999 Global Sullivan Principles, and the 2003 UN Norms on the Responsibilities of Transnational Corporations. Because of the difficulty all international organizations faced in adopting legally binding frameworks and implementing them, most contemporary CSR frameworks rely on voluntary commitment by corporations and naming-and-shaming efforts by civil society (see chapters in Part I for details of this history). Thus, rather than binding laws, social pressures have been the driving force in contemporary CSR developments.

Our view of CSR contrasts most directly with previous research that highlights internal firm characteristics to understand why corporations engage with CSR. Since corporate practices are the central focus of CSR, it is not surprising that many scholars emphasize internal firm characteristics in their analyses (Carroll Reference Carroll1991). Many such studies seek to link firms’ financial performance and CSR adoption (see Pava and Krausz Reference Pava and Krausz1995 and Margolis and Walsh Reference Margolis and Walsh2003 for excellent surveys of these studies). Although this internalist approach to CSR highlights important factors that shape individual corporations’ CSR practices, exclusive focus on internal characteristics could mask the role of broader environmental factors in CSR politics. Although some scholars may view CSR as a new means for individual corporations to incorporate externalities into their decision-making process, this approach does not address why CSR became part of such calculations at the firm level. Indeed, recent research reveals that internal firm factors such as financial performance are only weakly correlated with CSR practices (Margolis and Walsh Reference Margolis and Walsh2003). The lack of a “market for virtue” (Vogel Reference Vogel2005) also substantially weakens the oft-touted argument that CSR practices can be financially beneficial for corporations. Furthermore, a simple aggregation of corporate actions fails to explain the institutionalization of CSR in the form of voluntary frameworks (Sikkink Reference Sikkink1986; Bartley Reference Bartley2007; Sagafi-Nejad Reference Sagafi-Nejad and Dunning2008; Lim and Tsutsui Reference Lim and Tsutsui2012). Although internal firm factors are undoubtedly critical in understanding why individual corporations choose to engage with CSR, they may be less adequate for explaining patterns of CSR engagement across corporations, industries, and countries.

If internal firm factors cannot fully account for the emergence and impact of CSR, what alternative explanations can aid in understanding contemporary developments such as the prevalence of voluntary CSR frameworks? We argue that CSR developed as a result of efforts by various social actors to monitor and control the consequences of corporate and economic activities. We posit that external pressures exerted by trade and investment relationships, government actions, social movement activism, and taken-for-granted models of appropriate organizational behavior work at both global and national levels to push corporations to engage in, co-opt, or react against CSR activities. This approach has a theoretical and empirical basis in various long-standing traditions in social science research that see economic activities as embedded in social structures.

Based on historical and anthropological evidence and political-economic developments in early twentieth-century Europe, Polanyi (Reference Polanyi1944) argued that economic practices were embedded in social arrangements, particularly government actions that created the conditions for economic activities to flourish. Polanyi noted that it was political actions, not merely capitalist expansion, that established international free trade or the international gold standard. These government actions resulted in economic consequences that threatened existing social arrangements, thus prompting severe domestic reactions. This notion of embeddedness was also influential in sociological (Granovetter Reference Granovetter1985; Krippner Reference Krippner2001) and political science (Ruggie Reference Ruggie1982, Reference Ruggie, Held and Koenig-Archibugi2003) perspectives on the social bases of economic and organizational practices. In particular, neo-institutionalism in organizational studies (Meyer and Rowan Reference Meyer and Rowan1977; DiMaggio and Powell Reference DiMaggio and Powell1983; Brunsson Reference Brunsson2002) argues that “control” over organizational practices stems from wider institutional sources and highlights external factors such as the coercive role played by powerful organizations, the mimetic effect of organizations conforming to taken-for-granted ideas, and the normative influence of professional organizations. Faced with these external pressures, organizations often forgo internal efficiency considerations and adopt practices that make them appear legitimate to their external constituents in the organizational field. Since the 1980s, the stakeholder perspective in management studies (Freeman Reference Freeman1984, Reference Freeman1994, Reference Freeman1999; Post, Preston, and Sachs Reference Post, Preston and Sachs2002) has also theorized beyond firm-level conceptions of CSR by situating corporations’ CSR practices in the context of relationships with their stakeholders. Here, it is external actors that directly affect or are affected by the firm’s activities that participate in regulating corporate behavior. In management studies, the stakeholder perspective is discussed only within a narrow “shareholder versus stakeholder” debate (see Walsh Reference Walsh2005 for an extensive discussion on this point), but we also see the perspective as the starting point for including many other external influences, including norms, government action, and social movements, into the analysis of corporate engagement with CSR.

Therefore, our central argument is that CSR developments can be more fully accounted for by viewing CSR as a core component of the social regulation of the economy, whether that regulation stems from government policies, taken-for-granted organizational models, or stakeholders of the corporation. We posit that CSR research should devote more attention to situating corporations’ CSR practices within this wider global, social, and political context in which corporations operate. This would enable us to more adequately explain many features of contemporary global CSR, such as its emergence, norms, frameworks, and impact on corporations. With this approach in mind, we now explain the more specific analytical framework that we derive from applying the social regulation perspective to the study of CSR.

Analytical framework of this volume

The analytical framework we employ emphasizes two themes that integrate the different chapters of the volume. Our first theme focuses attention on the institutional and economic contexts in which corporations operate – the broader external contexts that encourage or hinder the emergence and impact of global CSR. Our second core theme highlights how global and national dynamics shape CSR ideas and practices differently and how developments in CSR may congeal at the transnational level and yet differ regionally or nationally in their local impact.

First, we make a distinction between two broad sets of factors that are salient in corporations’ external environments: institutional and economic factors. On the one hand, there are social-institutional factors such as the impact of norms, taken-for-granted notions of appropriate behavior, and established patterns of rules and meanings on organizational behavior. Sociological approaches such as organizational neo-institutionalism (Meyer and Rowan Reference Meyer and Rowan1977; Powell and DiMaggio Reference Powell and DiMaggio1991) and world society theory (Meyer et al. Reference Meyer, Boli, Thomas and Ramirez1997; Meyer Reference Meyer2000) emphasize these factors. On the other hand, we cannot ignore political-economic factors such as patterns of economic transactions, configurations of power and conflict dynamics among economic actors, and the intersection of state and corporate interests. These factors play a central role in world-system theory (Wallerstein Reference Wallerstein1979) and varieties of capitalism approaches (Hall and Soskice Reference Hall and Soskice2001).

Second, we give equal weight to the global level of analysis and national determinants of CSR. Although national boundaries and domestic factors serve as important constraints on organizational behavior, we argue that factors at the global and transnational level, especially in the post-World War II era (Meyer Reference Meyer2010), are also powerful shapers of CSR developments. Thus, we make a second set of analytical distinctions, this time regarding how factors at separate levels of analyses may impact the development of CSR ideas and practices. On the one hand, there are factors that operate at the domestic, nation-state level that push organizational action in specific directions, most notably factors associated with domestic business environments and the extent of state coordination or intervention in the national economy (Vogel Reference Vogel1989, Reference Vogel2005; Hall and Soskice Reference Hall and Soskice2001). On the other hand, we also emphasize the autonomy of global factors in shaping domestic organizational behavior, whether it is the power of global norms and institutions (Meyer et al. Reference Meyer, Boli, Thomas and Ramirez1997) or economic transactions and dependence relations that span national borders (Wallerstein Reference Wallerstein1979).

In sum, we argue that studies of contemporary CSR ideas and practices require an analytical framework that enables them to examine institutional and economic contexts at both national and global levels. Our framework reflects recent scholarship that analyzes global governance and corporate responsibility concerns in these multicausal and multilevel contexts (Flohr et al. Reference Flohr, Rieth, Schwindenhammer and Wolf2010; Dashwood Reference Dashwood2012). Figure 1.1 summarizes some of the key factors in each of the four domains of the analytical framework that we derive by crossing the two contextual dimensions (institutional/economic, global/domestic) that encompass many contemporary developments in CSR. We note that this framework is a heuristic device and that, in reality, all those factors are often closely intertwined.

Social-Institutional Factors Political-Economic Factors
Global Level
  • Normative pressures

  • Global norms

  • International organizations (IGOs/INGOs)

  • Transnational social movements

  • Global CSR frameworks

  • International treaties

  • Regional networks and collaborations

  • World society theory

  • Foreign economic penetration

  • Cross-national economic transactions

  • Arm’s-length/short-term vs. embedded/long-term relationships

  • Economic dependence

  • Race-to-the-bottom vs. ratcheting up

  • Trade, foreign investment, debt

  • World-system theory

Domestic Level
  • Cognitive receptivity

  • Rationalization of business environment

  • Predominance of rules, standard operational procedures

  • Reduction of organizational uncertainty

  • Transparency vs. corruption

  • Democracy, human development

  • Organizational institutionalism

  • National economic system

  • Government orientation to economic planning

  • Liberal vs. coordinated economies

  • Government-business relationships

  • Coercion vs. collusion between state and business actors

  • Varieties of capitalism

Figure 1.1 Corporate social responsibility in the context of the social regulation of the economy

A growing body of research on CSR has recognized these various contextual factors as salient for explaining the ascendancy of the contemporary CSR movement across various countries. For social-institutional factors operating at the global level, Delmas and Montiel (Reference Delmas and Montiel2008) examine the diffusion of voluntary international management standards in the chemical industry over 113 countries and find that the level of international nongovernmental organizational (INGO) activity in a country, but not trade-related factors, puts pressure on chemical firms to adopt the International Organization for Standardization (ISO) 14001 standards. In their study of cross-national CSR adoption in ninety-nine countries, Lim and Tsutsui (Reference Lim and Tsutsui2012) also find that countries’ nongovernmental links encourage corporations in those countries to adopt frameworks like the UNGC and GRI but that corporate commitment to CSR is ceremonial in developed countries and more substantive in developing countries. Hirschland (Reference Hirschland2006) surveys the role that non-state actors like businesses and NGOs play in shaping global public policy and finds that these non-state groups are increasingly active in world business forums, global CSR policy circles, and socially responsible investment networks, thus resulting in the construction of many transnational CSR initiatives and code-making and monitoring regimes. Likewise, Segerlund (Reference Segerlund2010) examines the emergence and subsequent development of global CSR in a variety of intergovernmental settings and finds that NGOs were crucial entrepreneurs in constructing transnational standards for corporate behavior, mainly through multistakeholder processes that involve voluntary agreements established between NGOs and transnational corporations. This line of research demonstrates that social-institutional factors at the global level shape the emergence of global CSR frameworks as well as its diffusion across the globe.

Political-economic factors at the global level are also prominent in explaining CSR developments. Mosley and Uno (Reference Mosley and Uno2007) study the impact of economic globalization on collective labor rights in developing countries and find that, whereas foreign investment inflows seem to encourage worker rights, trade competition has the opposite effect. Examining the impact of trade relations between countries, Prakash and Potoski’s (Reference Prakash and Potoski2006) study of 108 countries finds that specific bilateral trade linkages encourage the adoption of ISO 14001 standards. Greenhill, Mosley, and Prakash (Reference Greenhill, Mosley and Prakash2009) find similar results in their analysis of the trade-based diffusion of labor rights in ninety developing countries. In research on global supply chains, Esbenshade (Reference Esbenshade2004); Ngai (Reference Ngai2005); Locke, Amengual, and Mangla (Reference Locke, Amengual and Mangla2009); and Fransen (Reference Fransen2012) reveal how labor and factory violations by firms’ suppliers in overseas locations prompted industry attempts to institute voluntary factory-monitoring regimes, although those regimes have not been entirely successful in addressing further criticisms. Bartley (Reference Bartley2007) examines the role of political conflict and contestation between states, NGOs, and corporations in the often-compromised construction of transnational private regulation initiatives in the apparel and forestry industries after specific controversies in those industries in the 1980s and 1990s. Clearly, these global-level political-economic factors circumscribe the expansion of global CSR.

At the domestic level, social and institutional factors in specific countries’ business environments can have powerful effects on shaping businesses’ cognitive receptivity to CSR practices. Once institutionalized, standard rules and procedures allow corporations to tackle CSR concerns with appropriate responses to organizational uncertainty on a routine, taken-for-granted basis (Howard-Grenville and Hoffman Reference Howard-Grenville and Hoffman2003; Howard-Grenville Reference Howard-Grenville2006; Campbell Reference Campbell2006, 2007). Galaskiewicz’s (Reference Galaskiewicz, Powell and DiMaggio1991, 1997) classic studies of corporate philanthropy in the Twin Cities of Minneapolis-Saint Paul find that business leaders’ ties with the local community and local nonprofit organizations facilitated the institutionalization of corporate public service activity, leading to greater corporate prosocial actions (cf. Marquis, Glynn, and Davis Reference Marquis, Glynn and Davis2007). In his study of the American chemical and petroleum industries, Hoffman (Reference Hoffman1999, Reference Hoffman2001) finds that, partly due to growing pressure from environmental activists, firms based in the United States began in the 1980s to cooperate with the government to develop norms to signal their social responsibility, thus leading subsequently to more proactive and strategic forms of environmental management in the 1990s. Delmas and Terlaak (Reference Delmas and Terlaak2002) compare the institutional structures of four developed countries and find that negotiated agreements between regulators and firms to voluntarily reduce pollution are more likely to be implemented in environments where regulators are able to commit to regulatory continuity. These processes operate in countries in which a culture of consensual policy making exists, especially in France, the Netherlands, and Germany, but not in the United States, which is characterized by a greater degree of fragmentation and open access in policy making. Kollman and Prakash (2002) examine variations among the adoption of global environmental management systems in the United Kingdom, the United States, and Germany. Focusing on the ISO 14001 and the European Union’s Environmental Management and Audit Scheme, they find that varying corporate perceptions and responses to these standards were largely shaped by domestic factors, such as how leading firms promoted and disseminated information about those schemes, as well as varying domestic stakeholder responses. In contrast to the United Kingdom and Germany, in the United States, the lack of promotion, as well as lukewarm responses from government and environmental groups, resulted in lower rates of adoption of the ISO 14001 standard. In a similar study, Delmas (Reference Delmas2002) finds that cultural elements in European countries, such as the quality of relationships between industry and government agencies, encouraged more corporations to adopt ISO 14001, whereas in the United States adoption was slower due to a lack of cooperation between those institutions. These studies point to how local social and institutional environments shape corporate CSR activities.

On domestic political-economic factors, scholars have examined the impact of different national economic systems and government orientations to economic activity. Matten and Moon (Reference Matten and Moon2008) compare American and European corporate approaches to CSR, arguing that more explicit, strategic, and voluntary CSR practices stem from economic systems like the United States where neoliberal government policies promote weaker social solidarity and welfare institutions. Building on Matten and Moon’s argument, Jackson and Apostolakou (Reference Jackson and Apostolakou2010) compare the CSR policies of European firms in different national economic systems and find that CSR practices in liberal economies substitute for more institutionalized forms of stakeholder participation, whereas CSR in coordinated economies takes more implicit forms. Kinderman’s (Reference Kinderman2012) study of Business in the Community, a leading business-led CSR coalition in the United Kingdom, shows how the development of CSR in the United Kingdom was coterminous with the evolution of neoliberal government policies, with members of the British business elite employing CSR to preempt or decrease further government regulation. Marens (Reference Marens2012) reaches similar conclusions in his study of the evolution of CSR in the United States, finding that business claims to social responsibility developed as a result of the weakening of American organized labor and trade unions and the rise of free market liberalism after World War II.

Integrating these four core factors but emphasizing some factors more than others, the chapters in this volume seek to explain the rise of the global CSR movement and its consequences for corporations and CSR outcomes. The authors employ the theories, concepts, and tools of social science disciplines such as sociology, political science, and management and organizations to focus on empirical analyses with reliable and replicable data. We do not start from strong normative positions on CSR; we do not see it as an inherently positive force in the contemporary world nor as an evil plot advanced by capitalists. As discussed earlier, CSR emerged through certain historical processes, and its impact should vary across different social and economic contexts. Thus, to understand the emergence, diffusion, and consequences of CSR, researchers would benefit greatly from social scientific methods that enable them to systematically examine the cross-national historical processes and social and economic contexts in which the CSR developments took place. The contributors to this volume employ various methods ranging from in-depth interviews and historical analysis to multidimensional scaling and longitudinal multivariate regression. We now briefly introduce the chapters.

Four parts of the volume

Contributions to this volume are organized into four main parts that examine (I) the history and current state of efforts to address CSR concerns, (II) global and transnational mechanisms of CSR field formation, (III) varied corporate responses to growing global pressures to address CSR, and (IV) the impact of global pressures on actual CSR outcomes. Parts I and II address the first key issue, discussed at the outset, of the emergence and global spread of CSR, and Parts III and IV examine the second core issue of corporations’ response to growing pressures to take CSR seriously. Although each chapter emphasizes different aspects of the contrast between institutional and political-economy factors and the interaction between global and local levels identified in Figure 1.1, the importance of integrating all these factors in empirical analyses is evident throughout the volume. Finally, a concluding chapter comments on the research presented in this volume and maps future directions in global CSR research.

Part I: Legitimation and contestation in global corporate social responsibility

Part I examines the broader historical context in which CSR evolved and traces the development of global CSR ideas, their legitimation as organizational practice, the contested status of their institutionalized forms, and their relationship with contemporaneous national CSR activities.

In Chapter 2, John W. Meyer, Shawn M. Pope, and Andrew Isaacson chart the evolution of global CSR concerns by examining the legitimation of the transnational corporation in the post-World War II era. Despite growing cross-national interactions, international society in this era lacks a strong central authority that could lend legitimacy to various international actors. Even so, intergovernmental organizations and INGOs gained legitimate standing in international society as entities for the public good. Transnational corporations, on the other hand, lacked public standing as legitimate actors in international society. This, they argue, is a problem that plagued cross-societal economic actors throughout history. With the growing economic might of transnational corporations, however, the legitimacy problem intensified in the past few decades. Consequently, corporations have been pressed by transnational social movements critical of neoliberal economic models to transform themselves into “good citizens.” CSR emerged in this context as an attractive approach for corporations (and also for some civil society actors), and many have committed to global CSR norms in order to earn the “good citizens” label.

Complementing the social-institutional approach of Meyer et al., Chapter 3 by Peter Utting lays more emphasis on political-economy factors. He takes stock of existing multistakeholder CSR initiatives, including various global CSR frameworks, and examines the recent rise of civil regulation efforts around CSR and the potentials and challenges that organizational actors face in making them effective. He finds that the rise of the late-twentieth-century CSR agenda was largely accompanied by significant variations in regulatory approaches and outcomes challenging previous assumptions about the unidirectional shift from “hard” to “soft” regulation in global CSR and the inherent “progressive” trajectory of CSR norms and practices. He explains these variations by examining factors associated with the political economy of regulatory change – power relations, contestation, coalitions, and alliances – in case studies of the Roundtables on Sustainable Palm Oil and Responsible Soy, Fairtrade International, the UNGC, and the OECD Guidelines for Multinational Enterprises. Utting also offers a sobering picture that, despite the rapid growth of global CSR initiatives, only a tiny portion of all the major corporations in the world are members of these global initiatives.

In Chapter 4, Daniel Kinderman examines the extent to which global CSR frameworks shape national-level CSR organizations – business groups at the national level that address social or environmental causes. Those domestic CSR organizations are often rooted in national traditions, institutions, and cultures that vary across countries. He finds that national CSR associations were already successfully consolidated in several countries in the 1970s and 1980s and were relatively autonomous from global CSR frameworks that struggled to be institutionalized during the same time period. From a political economy perspective, it is not surprising that corporations would engage more with domestic business-led CSR organizations than alternative global frameworks over which they have less control. However, Kinderman also finds that the establishment of national CSR associations is strongly correlated with country memberships in INGOs. This suggests an important global-domestic dynamic whereby global nongovernmental linkages may have first encouraged the growth of national CSR associations before pushing CSR concerns up to the level of global CSR frameworks.

Part II: Social construction and field formation in global corporate social responsibility

Building on the analyses of macro-historical processes in Part I, Part II examines the formation of specific subfields of global CSR in the areas of conflict minerals, supply chain CSR, and sustainability.

In Chapter 5, Virginia Haufler examines institutional variation in the transnational regulation of corporations that deal in “conflict commodities,” precious materials whose international trade is directly related to regional and national conflict. Her study includes a detailed historical account of field construction surrounding conflict commodities and asks why global efforts to address conflict commodities shifted from a single regulatory institution to multiple regulatory initiatives that combine public and private efforts. Haufler argues that state power, institutional competition, transnational activism, and industry structure were prominent factors that led to a single institution regulating the diamond industry (the Kimberly Process) in the early period (1998–2006) but that produced multiple subsequent initiatives for other conflict minerals as these factors changed in the later period (2006–2012). Although all these factors help to explain institutional variation, Haufler’s chapter shows that industry consensus and industry structure were more important for the earlier field formation of conflict diamonds because the transnational diamond trade was dominated by more visible firms that were susceptible to activist targeting. Institutional competition and state power, on the other hand, were more salient for the subsequent regulation of other conflict minerals. In this later period, several initiatives developed, leading powerful states to “forum shop” and activist organizations to partition their attention across multiple industry-led initiatives.

In Chapter 6, Jennifer Bair and Florence Palpacuer examine the development and diffusion of supply chain CSR – a field-in-formation that focuses on multinational corporations’ accountability for the actions of their overseas subsidiaries and subcontractors. To account for the development of supply chain CSR over two decades, they compare various explanations of institutional development with an emphasis on the varieties of capitalism perspective. Their research finds two phases in the evolution of supply chain CSR: an early period of field emergence leading to the establishment of multistakeholder initiatives (1989– 1999) and a later period of field population and development dominated by business-led CSR initiatives (1999–present). In the first period, the emergence of supply chain CSR reflected an institutional context that shaped the role of business in society and the relationship of the private sector to other social actors. This led to different trajectories of supply chain CSR in the United States and Europe. In the second period, supply chain CSR reflected corporate responses to civil society groups’ growing concern about the private governance model, with large retailers from both the United States and Europe creating business-led CSR initiatives.

In Chapter 7, Klaus Weber and Sara B. Soderstrom examine “sustainability” as a cultural category that is often ambiguously defined by practitioners and scholars. They investigate its implicit theorization in public discourse and the degree of consensus about the concept in the national media of six countries, linking differences and similarities in discourse to the institutional diversity of national political economies. Although they find evidence for a core global repertoire of concepts around sustainability, their analyses also reveal wide country-level variation in the extensiveness and content of the public understanding of sustainability, which they attribute to specific domestic processes rather than broad dimensions of capitalist variety. They conclude by reflecting on how cross-national differences in the understanding of sustainability may hinder global-level policy coordination despite consensus around common sustainability themes.

Part III: Corporations’ reaction to global corporate social responsibility pressures

Part III examines how corporations react to global CSR pressures. Parts I and II established that global CSR initiatives have expanded exponentially in the past few decades and exert a great deal of pressure on corporations to engage with them. Whereas some corporations engaged proactively in establishing CSR initiatives, the vast majority of corporations respond reactively to CSR pressures. The chapters in Part III examine the diverse spectrum of corporate reactions, including joining the CSR movement by becoming members of some of the CSR initiatives, resisting the pressures by not participating in those initiatives, and finding an alternative approach to deal with CSR pressures.

In Chapter 8, Shawn M. Pope examines the various motives for and external pressures on companies that participate in global CSR frameworks, examining data on roughly 500 leading transnational corporations. He discusses two prevalent approaches to explaining CSR adoption: functional explanations that link CSR adoption to corporations’ purposive action (e.g., through cost-benefit calculations, reputation management, or responses to social movement pressure) and institutional explanations that emphasize the appropriateness and legitimacy pressures of CSR adoption regardless of its utility (e.g., through corporate participation in world business forums or the impact of national and world institutional environments). His fixed-effects models find broad support for institutional factors pushing CSR participation.

Complementing Pope’s large-N quantitative analyses, Chapter 9 by Satoshi Miura and Kaoru Kurusu employs in-depth interview data on Japanese corporate signatories to the UNGC to examine the organizational motives for CSR framework participation and the perceived impact of participation on corporate signatories. They focus on the importance of meanings that member corporations attribute to their participation in the Global Compact. Using a signaling approach that distinguishes between possible motivations on inward-external and reactive-proactive dimensions, their analysis finds that, although Japanese corporations often have multiple motives for participating in the Global Compact, the proportion of new corporate signatories with outward and reactive orientations to CSR has increased over time, suggesting increasingly stronger external pressures on Japanese corporations to signal their commitment to CSR.

In Chapter 10, Edward T. Walker examines an alternative response by corporations: corporate resistance to external CSR pressure in the form of firm-sponsored pro-corporate advocacy efforts in civil society. He compares corporate grassroots mobilization efforts in the United States, Norway, Germany, and France by examining how political regime types shape the scale of the interest group system and the channels of corporate influence in politics. He finds that statist systems without corporatist bargaining, such as France, are least likely to facilitate corporate mobilization, whereas liberal polities like the United States have an exceptionally high amount of corporate grassroots campaigning. By engaging in these corporate grassroots activities, corporations are proactively countering CSR pressures, demonstrating their “good citizen” side, and discouraging support for tighter governmental regulations. His comparative analysis reveals that the state–society relationship in a country shapes the ways in which corporations engage in grassroots activism as well as CSR efforts.

Part IV: The impact of global corporate social responsibility pressures on corporate social responsibility outcomes

In Part IV, the focus turns to the consequences of global CSR pressures on corporations’ practices. The ultimate goal of global CSR movements is to reform corporate behavior and improve corporate practices on the ground. Recognizing this, the chapters in Part IV analyze those factors that lead to varied practical CSR outcomes.

In Chapter 11, Ion Bogdan Vasi examines this question in the area of environmentalism. He conducts quantitative analyses of an original dataset of large US firms’ participation in various global and national CSR initiatives to determine the perceived and real impact of those initiatives on firms’ environmental performance. He finds that industry analysts are more likely to perceive firms that adopt one or more CSR initiatives as “green” corporations. However, his analyses also reveal that actual superior environmental performance is only associated with firms that participate in the Global Compact framework or that employ GRI standards. He suggests that these frameworks lead to better corporate environmental performance than others because of their links to a broad coalition of economic and nongovernmental actors, reporting requirements, and provision of stakeholder support services.

Chapter 12 by Tim Bartley and Doug Kincaid examines the impact of CSR initiatives on labor issues. Their analysis on apparel, textile, and footwear industries in Indonesia finds major contradictions between voluntary labor standards for global supply chains and their practice “on the ground.” Using longitudinal, firm-level, quantitative data, as well as qualitative interview data, they find that corporate commitment to labor standards fails to address capital mobility and employment stability in those industries and that dominant modes of trade undermine the practical application of those standards. Their study shows that even when brands and retailers engage in subcontractor monitoring to improve factory conditions, companies’ demand for short production deadlines at low cost countervails any actual or potential CSR improvements for their suppliers and subcontractors. They suggest that CSR based on risk management may be less successful in translating standards into practices than a “patient capital” approach that supports improvements in domestic sociopolitical conditions that are favorable to collective action. This approach requires strong buyer commitments to stabilizing orders and bearing upswings in cost in order to reap future rewards in productivity or price premiums.

In Chapter 13, Brayden G King and Mary Hunter-McDonnell turn their attention to how corporate CSR activities might shape a different outcome: targeting by consumer and activist movements. They examine if corporations’ engagement with CSR activities shield them from criticisms (halo effect) or invite even greater scrutiny (liability effect). Analyzing data on consumer boycotts against US firms from 1990 to 2005, they find that firms that create a more reputable and socially responsible image are more vulnerable to activist targeting through both formal and informal means, indicating a liability effect. They argue that firms that build strong CSR reputations also increase expectations on their actual behavior and that activists target highly visible firms to draw public attention to their causes.

In the concluding chapter to the volume, Aseem Prakash reviews the preceding studies and draws together common themes to suggest future directions for global CSR research. He emphasizes the social regulation theme of CSR, noting its current status as a contested global norm and thus its openness to capture by various political actors and institutions. Prakash suggests that future research should account for how CSR programs form part of an expanding “regulatory tool kit” for global governance, one that moves beyond rigid “states versus markets” debates that impose unrealistic standards for the performance of CSR programs. Based on these observations, Prakash suggests that, in order to explain the growing diversity in global CSR’s dimensions, obligations, logics, and levels of application, CSR research should continue to assess the strengths and limitations of CSR programs while keeping in mind that they are imperfect governance tools.


CSR, seen in its global context, is the consequence of a multifaceted and often contrasting mix of processes that we have termed the “social regulation of the economy.” Following this perspective, three core ideas have emerged from the research contained in this volume. First, many central CSR concerns, issues, and frameworks are now conceptualized and managed at the global and transnational level (Hirschland Reference Hirschland2006; Segerlund Reference Segerlund2010; Smith et al. Reference Smith, Bhattacharya, Vogel and Levine2010; Crouch and Maclean Reference Crouch and Maclean2011; Lim and Tsutsui Reference Lim and Tsutsui2012), thus making it essential for scholars to understand both the regulation of corporations’ cross-national practices as well as the international frameworks that impact corporations’ domestic practices. Many existing and emerging CSR frameworks today surfaced specifically to manage CSR concerns that span national boundaries. Furthermore, the rapid expansion of CSR ideas and practices across countries has been possible because of the substantive affinity of CSR with other global progressive norms, such as ideas of human rights and environmental protection. On the one hand, there is a surprising consolidation of CSR norms at the global level, seen in the level of support for global CSR frameworks by international organizations. On the other, this broad consensus on the importance of corporations’ social and environmental practices may also mask regional differences in CSR concerns, gaps in the implementation of CSR practices, and issues of power and contestation in CSR field formation.

Second, many of the factors that shape the form, content, direction, and efficacy of CSR norms have multicausal origins and are subject to multilevel dynamics. By placing CSR ideas and practices in their various social and political contexts, this volume has explicitly recognized that both social-institutional and political-economic factors have powerful effects in shaping corporations’ conceptual understanding of and practical approaches to CSR. Thus, scholars attending to the emergence, consolidation, and impact of global CSR have the task of examining both institutional and economic factors. Furthermore, the research presented in this volume has also gone beyond simple global-domestic dichotomies to demonstrate how factors at both levels of analysis interact to produce given CSR outcomes, whether it is the final shape that a global CSR initiative takes or the implementation of global CSR frameworks “on the ground.”

Third, our approach to CSR has also emphasized the theories, concepts, and methodologies of social science fields such as sociology, political science, and management and organizations. Many previous approaches to CSR adopt a normative paradigm that recommends CSR ideas and practices in relation to factors that are internal to the corporation. Although internal firm factors will undoubtedly remain significant in understanding future directions in CSR, the current momentum in CSR scholarship, reflected in the studies included in this volume, has demonstrated the efficacy of examining CSR as an organizational practice shaped by social, historical, and political processes external to corporations. The authors in this volume have also introduced concepts such as legitimation, contestation, social construction, and field formation into the lexicon of CSR analysis while employing a diversity of research methodologies including quantitative analysis, multidimensional scaling, interviews with CSR practitioners, field research, and historical analysis.

The diversity of areas of CSR concern, accompanied by pressing needs for comprehensive global CSR solutions, suggests that the global CSR field will encompass much organizational and institutional dynamism in the near future. Given the evolution of other global regimes, such as global human rights and environmental institutions, that have seen the consolidation of progressive and rationalized rules at the transnational level, we believe that global CSR frameworks – their construction, elaboration, and implementation – will continue to be the prime locus of legitimation and contestation among actors seeking a social regulation of the global economy. Our hope is that the research presented in this volume will contribute to concretizing the parameters of this continuing dialogue.


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Figure 1.1 Corporate social responsibility in the context of the social regulation of the economy

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