Multinational Enterprises and the Challenge of Sustainable Development
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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.
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Chapter 12: Sustainable Development and Corporate Social Responsibility of Multinational Enterprises in China

Maria Lai-Ling Lam


Maria Lai-Ling Lam 1. INTRODUCTION When many China operations are becoming critical to global supply chain management and under the scrutiny of international organizations, foreign multinational enterprises (MNEs) in China will need to comply with the corporate social responsibility (CSR) requirements demanded by their customers in the global supply chain. Foreign MNEs are increasingly pressed by the Chinese government and international NGOs to take voluntary responsible actions within their social and environmental policies in China (OECD, 2000; Asia Monitor Resource Center, 2006; Welford, 2006). Foreign MNEs are expected to be good models to Chinese enterprises because they are capable of increasing awareness of CSR and improving the CSR practices of their affiliated companies and suppliers in China by being self-regulated (Business Roundtable, 2000; Christmann and Taylor, 2001; Meyer, 2004; Murdoch and Gould, 2004; Tateisi, 2004; World Business Council for Sustainable Development, 2005; China Finance Economic Company, 2006; China Entrepreneurs Survey System, 2007; Wood and Kaufman, 2007). These foreign MNEs can use CSR programs as their ‘soft competitive advantages’ in China and help the Chinese government develop a harmonious society. Some subsidiaries of wellknown MNEs can overcome the liability of being outsiders and reduce their vulnerability to social criticism by carrying out philanthropic programs encouraged by the Chinese government. MNEs can have sustainable development (i.e. achieve economic progress while improving social and environmental welfare) and earn net benefits in both the short and long term in China if MNEs can manage their relationships with many stakeholders in China in socially responsible...

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