Socially Responsible International Business
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Socially Responsible International Business

Critical Issues and the Way Forward

Edited by Leonidas C. Leonidou, Constantine S. Katsikeas, Saeed Samiee and Constantinos N. Leonidou

Acting in a socially-responsible manner has become a crucial success factor for many international firms due to the highly complex, competitive, and volatile global environment in which they operate. This book will contribute new ideas, contemporary knowledge, and original research to the area of socially-responsible international business, and offers challenging directions for future research. Topic covered range from global environmental influences on acting in a socially-responsible way; foreign buyer reactions to responsible business and international market targeting to development of socially-responsible international business strategies.
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Chapter 3: Trade-offs and institutional contradictions in formulating responsibleinternational business strategies

Gopalkrishnan R. Iyer

Abstract

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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