Critical Issues and the Way Forward
Edited by Leonidas C. Leonidou, Constantine S. Katsikeas, Saeed Samiee and Constantinos N. Leonidou
Chapter 3: Trade-offs and institutional contradictions in formulating responsibleinternational business strategies
Recent approaches to the study of institutions view these broadly as constraints to human actions and interactions. The presumed homogenization of institutions across countries is challenged not only by idiosyncratic and historical patterns of change but also by active resistance to the forces of globalization within various countries. Thus, multinational enterprises (MNEs) cannot simply assume that global and/or standardized strategies or even principles undergirding such strategies would be applicable when conducting business across borders. This chapter identifies the various trade-offs faced by MNEs in conceptualizing and enacting corporate social responsibility (CSR) strategies in their transnational operations. Such trade-offs pertain to the pursuit of instrumental vs. non-market objectives, legal compliance vs. adherence to broader societal norms and engaging in voluntary as opposed to obligatory CSR. Further, MNEs face various institutional contradictions in their cross-border operations that may impose conflicting demands as well as lead them to suboptimal choices. The development of socially responsible strategies would call for analysis of various institutional disparities and contradictions as well as decision-makers’ perspectives and choices.
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