Social responsibilities of MNCs in downsizing operations

Abstract

Purpose -This paper aims to contribute to the understanding of the social aspects of corporate social responsibility (CSR) by studying a case of organizational downsizing. Design/methodology/approach -The paper uses a theoretical framework consisting of stakeholder theory and legitimacy theory together with the concept of social contract. Textual analysis methods are used to analyse and interpret the empirical data, which consist of mass media articles. Findings -The main finding is that key stakeholders, especially employees and their representatives and the multinational corporation (MNC) itself perceive social aspects of CSR differently. The economic dimension dominates the social aspect in the corporate representatives' argumentation. Accounting information is used as a rhetorical tool to legitimise the downsizing actions rather than for purposes of accountability and transparent informative content.Research limitations/implications -The research is based on a detailed analysis of a specific context. This may limit the wider applicability of the findings. Even so, it adds insights to the academic literature on the varying conceptions of the social responsibilities of corporations, perceived not only by the firm itself, but also by different stakeholders. Originality/value -The paper contributes to the literature on CSR by investigating understandings of corporate social responsibility in a case where the economic and social responsibilities of a firm are publicly debated. The study also links the theoretical debate on corporate social responsibility to a context with a complex range of political and social factors affecting the construction of the social and economic responsibilities of a firm.

An Empirical Analysis of the Determinants of Greenhouse Gas Voluntary Disclosure in Australia

“…This authority continues to the extent that the benefits of companies to society outweigh their costs. As a result companies should always consider the unwritten social contract in their decision makings (Mäkelä & Näsi, 2010). Moreover, one responsibility of companies is to consider the influences of their activities on all the members of society (not only investors).…”

“…One factor affecting a company's response in order to legitimise its activities is the development of awareness and concern in society about climate change. As companies are dependent on community's expectations, if legitimacy gap happens, it could have irretrievable economic impacts on companies (e.g., loss of investors and customers or even discontinuity of operations) (Mäkelä & Näsi, 2010). According to Guthrie and Parker (1989), legitimacy theory implies that companies tend to create similarity between the social values of their operations and societal norms.…”

Demand for CSR: Insights from Shareholder Proposals

“…Indeed, while different forms of stakeholder engagement have been studied in sustainability accounting research (see for e.g. Deegan and Blomquist 2006;Archel et al 2009;Mäkelä and Näsi 2010), shareholders' engagement through proposals has been under researched thus far. Our study aims to extend our knowledge of stakeholder engagement and demands for CSR by examining a key stakeholder group, the shareholders.…”

Death metaphors and factory closure

“…Downsizing, in the form of employee layoffs and the closures of factories or sites belonging to companies, is currently a commonly used management practice, both in many different countries and across industry sectors (Bergström and Diedrich 2011;Clair and Dufresne 2004;Datta et al 2010;Gandolfi and Hansson 2011;Mäkelä and Näsi 2010). Closures are different to many other forms of organizational change because they involve the definite 'ending' of an organizational entity.…”