Drivers or passengers? A taxonomy of multinationals’ approaches to corporate social responsibility implementation in developing markets

Abstract

PurposeThe purpose of this study is to conduct a systematic literature review that illuminates the current state of knowledge regarding the specific approaches by which multinational corporations (MNCs) implement corporate social responsibility (CSR) on the subsidiary level in developing countries.Design/methodology/approachEven though substantial scholarly work has been made to outline MNCs' activities in developing countries, this literature remains fragmented. To support the field in its theoretical as well as empirical advancements, this study conducts a systematic review of this body of literature and content analysis of relevant articles using insights from strategic marketing literature (market driving/proactive and market-driven/reactive approaches).FindingsThe authors synthesize our findings by presenting a taxonomy of proactive/reactive CSR approaches in developing markets along with propositions that can guide future research in this area.Originality/valueAmong the key contributions of this study's literature review is the development of a taxonomy of proactive/reactive CSR, bringing together different and fragmented streams of research and viewing them from strategic marketing (“proactive/reactive”) perspective. The taxonomy and the two ensuing propositions can advance future CSR-related studies with MNCs in focus by providing both theoretical and empirical guidance.

MNE innovation in the pursuit of SDGs in emerging markets

“…Systemic innovation is thus a reflection of long-term orientations toward SDGs that are considered critical and closely linked to the purpose of the organization George and Schillebeeckx, 2022;Nonet et al, 2022). Furthermore, systemic innovation appears to imply a proactive stance by establishing new economic and social practices that change the order of business (see Tarnovskaya et al, 2022). Operational innovations could be viewed as complementary to systemic innovation since such initiatives are motivated by efficiency concerns (Utterback and Abernathy, 1975) rather than being directly linked to central sustainability missions.…”

Sustainability as the Source of Competitive Advantage. How Sustainable is it?

“…Achieving sustainable cooperative advantage via sustainability can be achieved only via decoupling of economic goals from social and environmental ones when the latter goals become central while profits follow as stakeholders 'reward' firms by prioritizing their goods and services. The literature talks about decoupling of economic and social/environmental goals in the context of different approaches to sustainability as well as in the context of de-growth (Tarnovskaya et al, 2022). It seems to me that a fruitful conclusion of this chapter is to come to similar ideas by dis-connecting sustainability from the established postulates of sustainable competitive advantage.…”

“…3 In their 2030 Agenda, the United Nations have developed the Sustainable Development Goals and the concept of sustainable development in alignment with the triple bottom line of environmental, social and financial performance (Elkington, 2018). Many companies have started sustainability initiatives not only as a response to the grand challenges outlined above but because the logic for performance accounting comprises a broader spectrum which also considers the mitigation of negative externalities (Tarnovskaya et al, 2022). According to the analysis of the literature concerning the impact of corporate sustainability on financial performance, 78% of studies in top-tier journals found a positive relationship between corporate sustainability and a firm's financial performance (Alshehhi et al, 2018).…”

Multinationals with a Proactive CSR Approach

“…Such MNEs take actions to comply with laws and standards at minimum levels but are not necessarily convinced about the importance of sustainability actions. In contrast to the reactive CSR approach seen among MNEs, recent studies have requested more research on how MNEs could take on proactive, leading roles in implementing and diffusing sustainability practices around the world (Tarnovskaya et al, 2022b). Some even claim it is our responsibility as international business scholars to investigate in more depth the role MNEs can play in implementing sustainability practices, particularly in an emerging market context (Ghauri, 2022).…”

“…In this study, we will build upon a very recent literature review (Tarnovskaya et al, 2022b) where the reactive CSR approach and different proactive approaches to CSR have been identified and analysed. We will use the conceptual insights from this study to empirically explore the CSR practices adopted by a global fashion MNE in the context of emerging markets.…”