IDEAS home Printed from https://ideas.repec.org/a/wly/corsem/v30y2023i4p1782-1793.html
   My bibliography  Save this article

Enacting institutional drivers towards strategic corporate social responsibility: The sensemaking process in multinational companies

Author

Listed:
  • Gregoria A. Yudarwati
  • Marianne D. Sison
  • Ignatius A. Putranto
  • Putu Wiratsari

Abstract

Following sensemaking process, this study examines how CSR policy makers of multinational companies (MNCs) interpret institutional drivers, assign meanings on them, and enact them to reduce uncertainties in conducting CSR initiatives. Based on a case study towards Australia MNCs, this study reveals the sensemaking process towards two ecological changes: (1) the communities' expectations and culture and (2) different regulatory and governance standards between home and host countries. Local communities in host countries were believed of having power to express their expectations and demands to the companies. Nevertheless, the communities may not really hold power over the companies. Sensemaking process, however, is about “believing is seeing”, which tends to follow a self‐fulfilling prophecy and self‐validating prophecy. When the corporate leaders selected the interpretation, they created a story to make sense of what happened and to carry on the current activities. They then decided to act upon their interpretations by enacting CSR initiatives. When it came to formulating the CSR policy, they followed the top‐down processing by following the home country's standards that had been applied in many different host countries. Meanwhile, when it came to its implementation, they followed the bottom‐up processing to gain acceptance from the communities. This study asserts that their sense making choices, that is, how they provide meanings and reasonings to their institutions and how their rationalities are enacted, shape their companies' CSR initiatives.

Suggested Citation

  • Gregoria A. Yudarwati & Marianne D. Sison & Ignatius A. Putranto & Putu Wiratsari, 2023. "Enacting institutional drivers towards strategic corporate social responsibility: The sensemaking process in multinational companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(4), pages 1782-1793, July.
    • Handle: RePEc:wly:corsem:v:30:y:2023:i:4:p:1782-1793
    DOI: 10.1002/csr.2454
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/csr.2454
    Download Restriction: no
    File URL: https://libkey.io/10.1002/csr.2454?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Davide Secchi, 2009. "The Cognitive Side of Social Responsibility," Journal of Business Ethics, Springer, vol. 88(3), pages 565-581, September.
    2. Barbara Wisse & Rob Eijbergen & Eric F. Rietzschel & Susanne Scheibe, 2018. "Catering to the Needs of an Aging Workforce: The Role of Employee Age in the Relationship Between Corporate Social Responsibility and Employee Satisfaction," Journal of Business Ethics, Springer, vol. 147(4), pages 875-888, February.
    3. Jamali, Dima & Karam, Charlotte & Yin, Juelin & Soundararajan, Vivek, 2017. "CSR logics in developing countries: Translation, adaptation and stalled development," Journal of World Business, Elsevier, vol. 52(3), pages 343-359.
    4. Samuel Adomako & Mai Dong Tran, 2022. "Stakeholder management, CSR commitment, corporate social performance: The moderating role of uncertainty in CSR regulation," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1414-1423, September.
    5. Xiaodong Li & Xiaojiang Gao‐Zeller & Tracey E. Rizzuto & Fan Yang, 2019. "Institutional pressures on corporate social responsibility strategy in construction corporations: The role of internal motivations," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(4), pages 721-740, July.
    6. Juan Jose Duran & Nuria Bajo, 2014. "Institutions as Determinant Factors of Corporate Responsibility Strategies of Multinational Firms," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 21(6), pages 301-317, November.
    7. Reimann, Felix & Ehrgott, Matthias & Kaufmann, Lutz & Carter, Craig R., 2012. "Local stakeholders and local legitimacy: MNEs' social strategies in emerging economies," Journal of International Management, Elsevier, vol. 18(1), pages 1-17.
    8. Karl E. Weick, 2020. "Sensemaking, Organizing, and Surpassing: A Handoff," Journal of Management Studies, Wiley Blackwell, vol. 57(7), pages 1420-1431, November.
    9. Ana Nave & João Ferreira, 2019. "Corporate social responsibility strategies: Past research and future challenges," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(4), pages 885-901, July.
    10. Xiaohua Yang & Cheryl Rivers, 2009. "Antecedents of CSR Practices in MNCs’ Subsidiaries: A Stakeholder and Institutional Perspective," Journal of Business Ethics, Springer, vol. 86(2), pages 155-169, March.
    11. James Hine & Lutz Preuss, 2009. "“Society is Out There, Organisation is in Here”: On the Perceptions of Corporate Social Responsibility Held by Different Managerial Groups," Journal of Business Ethics, Springer, vol. 88(2), pages 381-393, August.
    12. Robert Salomon & Zheying Wu, 2012. "Institutional distance and local isomorphism strategy," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 43(4), pages 343-367, May.
    13. Eliza Sharma, 2019. "A review of corporate social responsibility in developed and developing nations," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(4), pages 712-720, July.
    14. Thomas Maak & Nicola M. Pless & Christian Voegtlin, 2016. "Business Statesman or Shareholder Advocate? CEO Responsible Leadership Styles and the Micro-Foundations of Political CSR," Journal of Management Studies, Wiley Blackwell, vol. 53(3), pages 463-493, May.
    15. Kim, Changsu & Kim, Jungkeun & Marshall, Roger & Afzali, Hajir, 2018. "Stakeholder influence, institutional duality, and CSR involvement of MNC subsidiaries," Journal of Business Research, Elsevier, vol. 91(C), pages 40-47.
    16. Thomas M Maak & Nicola M Pless & Christian Voegtlin, 2016. "Business Statesman or Shareholder Advocate? CEO Responsible Leadership Styles and the Micro-Foundations of Political CSR," Post-Print hal-01480535, HAL.
    17. Nan Zhou & Heli Wang, 2020. "Foreign subsidiary CSR as a buffer against parent firm reputation risk," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(8), pages 1256-1282, October.
    18. Timo Busch & Marcel Richert & Matthew Johnson & Sven Lundie, 2020. "Climate inaction and managerial sensemaking: The case of renewable energy," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(6), pages 2502-2514, November.
    19. Roger Leonard Burritt & Katherine Leanne Christ & Hussain Gulzar Rammal & Stefan Schaltegger, 2020. "Multinational Enterprise Strategies for Addressing Sustainability: the Need for Consolidation," Journal of Business Ethics, Springer, vol. 164(2), pages 389-410, June.
    20. Amy J Hillman & William P Wan, 2005. "The determinants of MNE subsidiaries' political strategies: evidence of institutional duality," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 36(3), pages 322-340, May.
    21. Sally Maitlis & Scott Sonenshein, 2010. "Sensemaking in Crisis and Change: Inspiration and Insights From Weick (1988)," Journal of Management Studies, Wiley Blackwell, vol. 47(3), pages 551-580, May.
    22. Karl E. Weick & Kathleen M. Sutcliffe & David Obstfeld, 2005. "Organizing and the Process of Sensemaking," Organization Science, INFORMS, vol. 16(4), pages 409-421, August.
    23. Kristin Hah & Susan Freeman, 2014. "Multinational Enterprise Subsidiaries and their CSR: A Conceptual Framework of the Management of CSR in Smaller Emerging Economies," Journal of Business Ethics, Springer, vol. 122(1), pages 125-136, June.
    24. Valentina Marano & Tatiana Kostova, 2016. "Unpacking the Institutional Complexity in Adoption of CSR Practices in Multinational Enterprises," Journal of Management Studies, Wiley Blackwell, vol. 53(1), pages 28-54, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Figueira, Sandra & Gauthier, Caroline & Torres de Oliveira, Rui, 2023. "CSR and stakeholder salience in MNE subsidiaries in emerging markets," International Business Review, Elsevier, vol. 32(5).
    2. Kalpana Tokas & Kartik Yadav, 2023. "Foreign Ownership and Corporate Social Responsibility: The Case of an Emerging Market," Global Business Review, International Management Institute, vol. 24(6), pages 1302-1325, December.
    3. Pisani, Niccolò & Kourula, Arno & Kolk, Ans & Meijer, Renske, 2017. "How global is international CSR research? Insights and recommendations from a systematic review," Journal of World Business, Elsevier, vol. 52(5), pages 591-614.
    4. Khojastehpour, Morteza & Shams, S.M. Riad, 2020. "Addressing the complexity of stakeholder management in international ecological setting: A CSR approach," Journal of Business Research, Elsevier, vol. 119(C), pages 302-309.
    5. Sven Dahms & Suthikorn Kingkaew & Eddy Ng, 2022. "The Effects of Top Management Team National Diversity and Institutional Uncertainty on Subsidiary CSR Focus," Journal of Business Ethics, Springer, vol. 177(3), pages 699-715, May.
    6. Roger Leonard Burritt & Katherine Leanne Christ & Hussain Gulzar Rammal & Stefan Schaltegger, 2020. "Multinational Enterprise Strategies for Addressing Sustainability: the Need for Consolidation," Journal of Business Ethics, Springer, vol. 164(2), pages 389-410, June.
    7. Stefan Gröschl & Patricia Gabaldón & Tobias Hahn, 2019. "The Co-evolution of Leaders’ Cognitive Complexity and Corporate Sustainability: The Case of the CEO of Puma," Journal of Business Ethics, Springer, vol. 155(3), pages 741-762, March.
    8. Pei Sun & Jonathan P. Doh & Tazeeb Rajwani & Donald Siegel, 2021. "Navigating cross-border institutional complexity: A review and assessment of multinational nonmarket strategy research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(9), pages 1818-1853, December.
    9. Kristin Hah & Susan Freeman, 2014. "Multinational Enterprise Subsidiaries and their CSR: A Conceptual Framework of the Management of CSR in Smaller Emerging Economies," Journal of Business Ethics, Springer, vol. 122(1), pages 125-136, June.
    10. Yanyan Li & Yu Gao & Shanxing Gao, 2023. "Organizational slack, entrepreneurial orientation, and corporate political activity: From the behavioral theory of the firm," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-12, December.
    11. Chahine, Salim & Daher, Mai & Saade, Samer, 2021. "Doing good in periods of high uncertainty: Economic policy uncertainty, corporate social responsibility, and analyst forecast error," Journal of Financial Stability, Elsevier, vol. 56(C).
    12. Eduardo Duque-Grisales & Javier Aguilera-Caracuel, 2021. "Environmental, Social and Governance (ESG) Scores and Financial Performance of Multilatinas: Moderating Effects of Geographic International Diversification and Financial Slack," Journal of Business Ethics, Springer, vol. 168(2), pages 315-334, January.
    13. Raiswa Saha & Shashi & Roberto Cerchione & Rajwinder Singh & Richa Dahiya, 2020. "Effect of ethical leadership and corporate social responsibility on firm performance: A systematic review," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 409-429, March.
    14. Riaz, Zahid & Ray, Sangeeta & Ray, Pradeep Kanta & Kumar, Vikas, 2015. "Disclosure practices of foreign and domestic firms in Australia," Journal of World Business, Elsevier, vol. 50(4), pages 781-792.
    15. Xu, Kai & Hitt, Michael A. & Brock, David & Pisano, Vincenzo & Huang, Lulu S.R., 2021. "Country institutional environments and international strategy: A review and analysis of the research," Journal of International Management, Elsevier, vol. 27(1).
    16. Qiaowen Zhang & Annalien de Vries, 2022. "Seeking Moral Legitimacy through Corporate Social Responsibility: Evidence from Chinese Manufacturing Multinationals," Sustainability, MDPI, vol. 14(9), pages 1-21, April.
    17. Felix Reimann & Johan Rauer & Lutz Kaufmann, 2015. "MNE Subsidiaries’ Strategic Commitment to CSR in Emerging Economies: The Role of Administrative Distance, Subsidiary Size, and Experience in the Host Country," Journal of Business Ethics, Springer, vol. 132(4), pages 845-857, December.
    18. Yoo Jung Ha, 2021. "Foreign multinational enterprises and eco-innovation in local firms: the effect of imitation," Asian Business & Management, Palgrave Macmillan, vol. 20(4), pages 488-517, September.
    19. Eero Vaara & Andrea Whittle, 2022. "Common Sense, New Sense or Non‐Sense? A Critical Discursive Perspective on Power in Collective Sensemaking," Journal of Management Studies, Wiley Blackwell, vol. 59(3), pages 755-781, May.
    20. Yang, Na & Zhang, Yuan & Yu, Lu & Wang, Jue & Liu, Xiaming, 2022. "Cross-border mergers and acquisitions, regional cultural diversity and acquirers’ corporate social responsibility: Evidence from China listed companies," International Review of Economics & Finance, Elsevier, vol. 79(C), pages 565-578.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:corsem:v:30:y:2023:i:4:p:1782-1793. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://doi.org/10.1002/(ISSN)1535-3966 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.