Table of Contents

Multinational Enterprises and the Challenge of Sustainable Development

Multinational Enterprises and the Challenge of Sustainable Development

Edited by John R. McIntyre, Silvester Ivanaj and Vera Ivanaj

Transnational corporations play a role in the design, diffusion, and consolidation of sustainable development in the context of globalization and multinational firms. In this timely book European and American contributors analyze this role and explore the complex and dynamic phenomena of economic, political, cultural and legal interactions involved.

Chapter 8: Multinationals’ Sustainable Supply Chains and Influence on Suppliers Inside and Outside the USA: A Comparative Approach

Bernd Philipp

Subjects: business and management, corporate social responsibility, management and sustainability, environment, corporate social responsibility, environmental management

Extract

Bernd Philipp MNES AND SUSTAINABLE SUPPLY CHAINS 1. A multinational enterprise (MNE) is defined as a company having at least one production unit abroad (Mucchielli, 1998: 18) or as a company that produces, in several national markets, goods and services adapted to these foreign markets (response to a specific local demand) (Meier and Schier, 2005). From a strategic point of view, MNEs possess or control companies or physical and financial assets in at least two world-economy countries. A comparative study of MNEs regarding their origin is possible because they can be distinguished according to their nationality. On the other hand, the distinction between a MNE’s national and international activities becomes increasingly difficult with the development of MNE localizations and branches abroad. Increasing sustainable development (SD) or corporate social responsibility (CSR) concerns not only affect MNEs considered as isolated units, but in fine their supply chains. This is true for market push (regulation or quasi-regulation) and market pull (sustainable consumerism) dynamics. In fact, regulatory constraints (or quasi-regulatory constraints such as ecological or social norms) are aimed not only at MNEs, but also at their supply chain links and suppliers. For example, there are repercussions from (quasi-compulsory) ISO14000 family certification regulations on MNEs’ outsourcing of partners and suppliers, reflecting the norms’ incentive character. Similarly, social constraints not only address ‘isolated’ MNEs and their branches or subsidiaries. Compliance with different social constraints, e.g. ILO principles or host-country regulations, is also required by MNEs’ 141 142 Multinational enterprises and sustainable development direct or indirect...

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