When subsidiaries follow their parents’ CSR focus: the influence of organizational characteristics on CSR towards target groups

Abstract

Corporate social responsibility (CSR) of MNE subsidiaries in emerging markets has mainly been studied through aggregated CSR activities. Instead, this study disaggregates CSR engagement towards target groups into two foci – External and Internal CSR – depending on whether such engagement is outside or within the organization. We explored whether the odds of a wholly owned subsidiary matching its parent’s choice of target groups – for both External and Internal CSR – varied by which organizational cohort it belonged to, based on organizational characteristics. Results of logistic regressions indicate that age of a subsidiary, relative size of the subsidiary and region-of-origin of its parent influence the odds of the subsidiary following its parent’s External CSR focus; while age of a subsidiary, global presence of its parent, and industry type influence the odds of the subsidiary following its parent’s Internal CSR focus. Findings indicate that both through External and Internal CSR, MNE subsidiaries simultaneously pursue legitimacy and competitive advantage, through different primary stakeholder groups, to address both host country and global institutional contexts.

Keywords:

• Corporate social responsibility (CSR)
• multinational enterprise (MNE)
• subsidiary
• institutional theory
• stakeholders

Acknowledgements

We would like to thank the participants of the 5^th International Conference on Corporate Social Responsibility, Humboldt University, and the participants of the 2016 Midwest Academy of Management (MAM) Annual Meeting. They have provided valuable suggestions on previous versions of this article.

Disclosure statement

No potential conflict of interest was reported by the authors.

Data availability statement

The data that support the findings of this study are openly available in Forbes at https://www.forbes.com/global2000, Fortune at https://fortune.com/global500/, and Financial Times at https://www.ft.com

Notes

1 All currency conversions are based on the US Dollar per National Currency data of 2012 in the International Financial Statistics (IFS) dataset of the International Monetary Fund.