Skip to main content
Log in

Three lenses on the multinational enterprise: politics, corruption, and corporate social responsibility

  • Introduction
  • Published:
Journal of International Business Studies Aims and scope Submit manuscript

Abstract

Scholars who analyze multinational enterprises (MNEs) recognize the complex relationship between international business (IB) and society. However, compared with other IB topics, research on politics, corruption and corporate social responsibility – ‘three lenses’ on the MNE – remains somewhat embryonic, with unresolved issues regarding frameworks, measurement, methods, and theory. This presents unique opportunities for integration and extension of disciplinary perspectives, which we explore in this article. We provide an introduction to potential linkages across these three lenses, an agenda for additional theoretical and empirical research, and a review of the papers in the JIBS Focused Issue.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Notes

  1. Three of the examples that begin Boddewyn (1988) include corruption (aerospace company bribing officials), politics (steel industry coalition to lobby for protection) and CSR (promoting ‘Buy American’).

  2. The eight questions are: (1) What is corruption? (2) Which countries are the most corrupt? (3) What are the characteristics of countries with high corruption? (4) What is the magnitude of corruption? (5) Do higher wages for bureaucrats reduce corruption? (6) Can competition reduce corruption? (7) Why have there been so few (recent) successful attempts to fight corruption? (8) Does corruption adversely affect growth?

References

  • Baron, D.P. (1995) ‘Integrated strategy: market and nonmarket components’, California Management Review 37 (3): 47–65.

    Article  Google Scholar 

  • Baron, D.P. (2001) ‘Private politics, corporate social responsibility and integrated strategy’, Journal of Economics and Management Strategy 10 (1): 7–45.

    Article  Google Scholar 

  • Bartlett, C.A. and Ghoshal, S. (1989) Managing Across Borders: The Transnational Solution, Harvard Business School Press: Boston, MA.

    Google Scholar 

  • Baysinger, B. (1984) ‘Domain maintenance as an objective of business political activity: an expanded typology’, Academy of Management Review 9 (2): 248–258.

    Google Scholar 

  • Blumentritt, T.P. (2003) ‘Foreign subsidiaries’ government affairs activities: the influences of managers and resources', Business and Society 42 (2): 202–233.

    Article  Google Scholar 

  • Blumentritt, T.P. and Nigh, D. (2002) ‘The integration of subsidiary political activities in multinational corporations’, Journal of International Business Studies 33 (1): 57–78.

    Article  Google Scholar 

  • Boddewyn, J. (1975) ‘Multinational Business–Government Relations: Six Principles for Effectiveness’, in P. Boarman and H. Schollhammer (eds.) Multinational Corporations and Governments: Business–Government Relations in an International Context, Praeger: New York, pp: 193–202.

    Google Scholar 

  • Boddewyn, J. (1988) ‘Political aspects of MNE theory’, Journal of International Business Studies 19 (1): 341–363.

    Article  Google Scholar 

  • Boddewyn, J. (1993) ‘Political resources and markets in international business: beyond porter's generic strategies’, in A. Rugman and A. Verbeke (eds.) Research in Global Strategic Management, Vol. 4, JAI Press: Greenwich, CT, pp: 162–184.

    Google Scholar 

  • Boddewyn, J. and Brewer, T.L. (1994) ‘International business political behavior: new theoretical directions’, Academy of Management Review 19 (1): 119–143.

    Google Scholar 

  • Bonardi, J.P. (2004) ‘Global and political strategies in deregulated industries: the asymmetric behaviors of former monopolies’, Strategic Management Journal 25 (2): 101–120.

    Article  Google Scholar 

  • Brewer, T. (1992) ‘An issue-area approach to the analysis of MNE-government relations’, Journal of International Business Studies 23 (2): 295–309.

    Article  Google Scholar 

  • Campos, J.E., Lien, D. and Pradhan, S. (1999) ‘The impact of corruption on investment: predictability matters’, World Development 27 (6): 1059–1067.

    Article  Google Scholar 

  • Coen, D. (1997) ‘The evolution of the large firm as a political actor in the European Union’, Journal of European Public Policy 4 (1): 91–108.

    Article  Google Scholar 

  • Cowles, M. (2001) ‘The transatlantic business dialogue and domestic business–government relations’, in M. Cowles, J. Caporaso and T. Risse (eds.) Transforming Europe: Europeanization and Domestic Change, Cornell University Press: Ithaca NY, pp 159–179.

    Google Scholar 

  • Djankov, S., La Porta, R., Lopez-de-Silanes, F. and Shleifer, A. (2002) ‘The regulation of entry’, The Quarterly Journal of Economics 112 (1): 1–37.

    Article  Google Scholar 

  • Djankov, S., La Porta, R., Lopez-de-Silanes, F. and Shleifer, A. (2005) ‘The law and economics of self dealing’, NBER Working Paper no. 11883.

  • Doh, J., Rodriguez, P., Uhlenbruck, K., Collins, J. and Eden, L. (2003) ‘Coping with corruption in foreign markets’, Academy of Management Executive 17 (3): 114–127.

    Article  Google Scholar 

  • Dunning, J.H. (1992) Multinational Enterprises and the Global Economy, Addison-Wesley: Wokingham.

    Google Scholar 

  • Dunning, J. (1993) The Globalization of Business, Routledge: London.

    Google Scholar 

  • Eden, L. and Lenway, S. (2001) ‘Multinationals: the Janus face of globalization’, Journal of International Business Studies 32 (3): 383–400.

    Article  Google Scholar 

  • Eden, L. and Molot, M.A. (2002) ‘Insiders, outsiders and host country bargains’, Journal of International Management 8 (4): 359–433.

    Article  Google Scholar 

  • Fagre, N. and Wells, L.T. (1982) ‘Bargaining power of multinationals and host governments’, Journal of International Business Studies 13 (Fall): 9–24.

    Article  Google Scholar 

  • Feddersen, T. and Gilligan, T. (2001) ‘Saints and markets: activists and the supply of credence goods’, Journal of Economics and Management Strategy 10 (1): 149–171.

    Article  Google Scholar 

  • Giraudo, J.P. (2005) ‘Charitable contributions and the FCPA: Schering plough and the increasing scope of SEC enforcement’, The Business Lawyer 61 (4): 135–154.

    Google Scholar 

  • Grosse, R. (1996) ‘The bargaining relationship between foreign MNEs and host governments in Latin America’, International Trade Journal 10 (4): 467–499.

    Article  Google Scholar 

  • Grosse, R. and Behrman, J. (1992) ‘Theory in international business’, Transnational Corporations 1 (1): 93–133.

    Google Scholar 

  • Habib, M. and Zurawicki, L. (2002) ‘Corruption and foreign direct investment’, Journal of International Business Studies 33 (2): 291–307.

    Article  Google Scholar 

  • Hart, S. (1995) ‘A natural resource-based view of the firm’, Academy of Management Review 20 (4): 986–1014.

    Google Scholar 

  • Henisz, W. (2000) ‘The Institutional environment for multinational investment,’ Journal of Law Economics and Organizations 16 (2): 334–364.

    Article  Google Scholar 

  • Hillman, A. (2003) ‘Determinants of political strategies in US multinationals’, Business and Society 42 (4): 455–484.

    Article  Google Scholar 

  • Hillman, A. and Hitt, M.A. (1999) ‘Corporate political strategy formulation: a model of approach, participation and strategy decisions’, Academy of Management Review 24 (4): 825–842.

    Google Scholar 

  • Hillman, A. and Keim, G. (1995) ‘International variation in the business–government interface: institutional and organizational considerations’, Academy of Management Review 20 (1): 193–214.

    Google Scholar 

  • Hillman, A. and Keim, G. (2001) ‘Shareholder value, stakeholder management, and social issues: what's the bottom line?’ Strategic Management Journal 22 (2): 125–139.

    Article  Google Scholar 

  • Hillman, A., Keim, G. and Schuler, D. (2004) ‘Corporate political activity: a review and research agenda’, Journal of Management 30 (6): 837–857.

    Article  Google Scholar 

  • Hillman, A. and Wan, W. (2005) ‘The determinants of MNE subsidiaries’ political strategies: evidence of institutional duality’, Journal of International Business Studies 36 (3): 322–340.

    Article  Google Scholar 

  • House, R.J, Hanges, P.M., Javidan, M., Dorfman, P. and Gupta, V. (2004) Culture, Leadership and Organizations: The GLOBE Study of 62 Societies, Sage: Thousand Oaks, CA.

    Google Scholar 

  • Husted, B. (1999) ‘Wealth, culture and corruption’, Journal of International Business Studies 30 (2): 339–360.

    Article  Google Scholar 

  • Johnson, S., La Porta, R., Lopez-de-Silanes, F. and Shleifer, A. (2000) ‘Tunneling’, American Economic Review 90 (1): 22–27.

    Article  Google Scholar 

  • Kim, W.C. (1988) ‘The effects of competition and corporate political responsiveness on multinational bargaining power’, Strategic Management Journal 9 (2): 289–295.

    Article  Google Scholar 

  • Luo, Y. (2001) ‘Toward a cooperative view of MNE–host government relation building blocks and performance implications’, Journal of International Business Studies 32 (3): 401–419.

    Article  Google Scholar 

  • Margolis, J.D. and Walsh, J. (2001) People and Profits? The Search for a Link Between a Firm's Social and Financial Performance, Lawrence Erlbaum Publishers: Mahwah, NJ.

    Google Scholar 

  • Marvel, H. (1977) ‘Factory regulation: a reinterpretation of early English experience’, Journal of Law and Economics 20 (1): 379–402.

    Article  Google Scholar 

  • Mauro, P. (1995) ‘Corruption and growth’, Quarterly Journal of Economics 110 (3): 681–712.

    Article  Google Scholar 

  • McWilliams, A. and Siegel, D. (1997) ‘Event studies in management research: theoretical and empirical issues’, Academy of Management Journal 40 (3): 626–657.

    Article  Google Scholar 

  • McWilliams, A. and Siegel, D. (2000) ‘Corporate social responsibility and financial performance: correlation or misspecification?’ Strategic Management Journal 21 (5): 603–609.

    Article  Google Scholar 

  • McWilliams, A. and Siegel, D. (2001) ‘Corporate social responsibility: a theory of the firm perspective’, Academy of Management Review 26 (1): 117–127.

    Google Scholar 

  • McWilliams, A., Siegel, D. and Teoh, S.H. (1999) ‘Issues in the use of the event study methodology: a critical analysis of corporate social responsibility studies’, Organizational Research Methods 2 (4): 340–365.

    Article  Google Scholar 

  • McWilliams, A., Van Fleet, D.D. and Cory, K. (2002) ‘Raising rivals' costs through political strategy: an extension of the resource-based theory’, Journal of Management Studies 39 (5): 707–723.

    Article  Google Scholar 

  • Moran, T. (1985) Multinational Corporations: The Political Economy of Foreign Direct Investment, Lexington Books: Lexington, MA.

    Google Scholar 

  • Murtha, T. and Lenway, S. (1994) ‘Country capabilities and the strategic state: how national political institutions affect multinational corporations' strategies’, Strategic Management Journal 15 (summer special issue): 113–129.

    Google Scholar 

  • Orlitzky, M., Schmidt, F. and Rynes, S. (2003) ‘Corporate social and financial performance: a meta-analysis’, Organization Studies 24 (3): 403–441.

    Article  Google Scholar 

  • Ring, P.S., Lenway, S. and Govekar, M. (1990) ‘Management of the political imperative in international business’, Strategic Management Journal 11 (2): 141–151.

    Article  Google Scholar 

  • Robertson, C.J. and Watson, A. (2004) ‘Corruption and change: the impact of foreign direct investment’, Strategic Management Journal 25 (4): 385–396.

    Article  Google Scholar 

  • Rodriguez, P., Uhlenbruck, K. and Eden, L. (2005) ‘Government corruption and the entry strategies of multinationals’, Academy of Management Review 30 (2): 383–396.

    Article  Google Scholar 

  • Rugman, A. and Verbeke, A. (1993) ‘Generic Strategies in Global Competition’, in A. Rugman and A. Verbeke (eds.) Research in Global Strategic Management, vol. 4, JAI Press: Greenwich CT, pp: 1–18.

    Google Scholar 

  • Russo, M. and Fouts, P. (1997) ‘A resource-based perspective on corporate environmental performance and profitability’, Academy of Management Journal 40 (3): 534–559.

    Article  Google Scholar 

  • Shaffer, B. (1995) ‘Firm-level responses to government regulation: theoretical and research approaches’, Journal of Management 21 (3): 495–514.

    Article  Google Scholar 

  • Siegel, D.S. (2001) ‘Do British companies really need a minister to make them socially responsible?’ Parliamentary Brief 7: 7–8 (special supplement on Business and the Community).

    Google Scholar 

  • Siegel, D.S. and Vitaliano, D.F. (2006) ‘An empirical analysis of the strategic use of corporate social responsibility’, Department of Economics Working Paper #0602, January, Rensselaer Polytechnic Institute, Troy, NY.

  • Smarzynska, B. and Wei, S.-J. (2000) ‘Corruption and the composition of foreign direct investment: firm-level evidence’, NBER Working Paper No. 7969, National Bureau of Economic Research, Cambridge, MA.

  • Sundaram, A.K. and Black, J.S. (1992) ‘The environment and internal organization of multinational enterprises’, Academy of Management Review 17 (4): 729–757.

    Google Scholar 

  • Svensson, J. (2003) ‘Who must pay bribes and how much? Evidence from a cross section of firms,’ The Quarterly Journal of Economics 118 (1): 207–230.

    Article  Google Scholar 

  • Svensson, J. (2005) ‘Eight questions about corruption’, Journal of Economic Perspectives 19 (3): 19–42.

    Article  Google Scholar 

  • Treisman, D. (2000) ‘The causes of corruption: a cross-national study’, Journal of Public Economics 67 (3): 399–457.

    Article  Google Scholar 

  • Uhlenbruck, K., Rodriguez, P., Doh, J. and Eden, L. (2006) ‘The impact of corruption on entry strategy: evidence from telecommunication projects in emerging economies’, Organization Science 17 (3): 402–414.

    Article  Google Scholar 

  • Vernon, R. (1971) Sovereignty at Bay, Basic Books: New York.

    Google Scholar 

  • Waddock, S. and Graves, S. (1997) ‘The corporate social performance–financial performance link’, Strategic Management Journal 18 (4): 303–319.

    Article  Google Scholar 

  • Wei, S-J. (2000) ‘How taxing is corruption on international investors?’, Review of Economics and Statistics 82 (1): 1–11.

    Article  Google Scholar 

  • Wright, P. and Ferris, S. (1997) ‘Agency conflict and corporate strategy: the effect of divestment on corporate value’, Strategic Management Journal 18 (1): 77–83.

    Article  Google Scholar 

Download references

Acknowledgements

We thank all the participants in the JIBS January 2006 ‘Three Lenses on the MNE’ Focused Issue Workshop, especially the workshop rapporteurs (Jean Boddewyn and John Dunning) and the workshop discussants (Robert Grosse, Mansour Javidan, Abagail McWilliams, Luiz Mezquita, Gary Anders, and Martin Meznar), for their insightful comments and suggestions. We also deeply appreciate editorial support from Danielle Trojan and the sage advice of Arie Lewin. The helpful comments on our introductory paper by three anonymous reviewers are also gratefully acknowledged. Financial support for the workshop was provided by the School of Global Management and Leadership at Arizona State University, the School of Humanities and Social Sciences and the Center for Financial Technology of the Lally School of Management and Technology at Rensselaer Polytechnic Institute, the Darden Graduate School of Business at the University of Virginia, and the CIBER at Thunderbird, The Garvin School of International Management, and is gratefully acknowledged. Special thanks go to Joan Jankowski of the School of Global Management and Leadership at Arizona State University for coordinating the workshop. Lastly, we thank all the individuals who reviewed manuscripts for the special issue. A list of their names is provided at the end of this Focused Issue Section.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Lorraine Eden.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Rodriguez, P., Siegel, D., Hillman, A. et al. Three lenses on the multinational enterprise: politics, corruption, and corporate social responsibility. J Int Bus Stud 37, 733–746 (2006). https://doi.org/10.1057/palgrave.jibs.8400229

Download citation

  • Received:

  • Revised:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/palgrave.jibs.8400229

Keywords

Navigation