Reputation of multinational companies

Abstract

Purpose The purpose of this paper is to use stakeholder theory as the theoretical reference framework to study the influence of internationalization (geographic international diversification) and social performance on multinational companies’ (MNCs) reputation. Design/methodology/approach The authors confirm the research hypotheses using a sample of 113 US MNCs in the chemical, energy and industrial machinery sectors during the period 2005-2010. Findings This study contributes to the literature in three ways. First, it incorporates literature on internationalization to study the possible connection between geographic international diversification and social performance in MNCs. Second, it sheds light on the debate between corporate social responsibility (CSR) and the reputation of MNCs in a very diverse transnational context in which MNCs must meet the needs of stakeholders at both local and global levels. Third, it incorporates the mediating role of social performance in the relationship between geographic international diversification and the firm’s reputation. Originality/value Prior studies have hardly analyzed this relationship, which becomes especially relevant for MNCs, since their implementation of advanced CSR practices in the different markets in which they operate will gain them a good reputation, not only in specific local contexts but also globally, benefitting the organization as a whole and enabling it to gain internal consistency (improvement in internal efficiency), transparency and legitimacy.

Can multinational companies foster institutional change and sustainable development in emerging countries? A case study

“…Emerging markets show a greater need for CSR due to their weak institutions (Preuss, Barkemeyer, & Glavas, ). In developing countries, either governments are unable to provide basic services for social needs (Aguilera‐Caracuel, Guerrero‐Villegas, & García‐Sánchez, ; Eweje, ; Sá de Abreu & Barlow, ) or they lack enforcement, the preponderance of formal institutions being diminished in favour of MNCs (Joutsenvirta & Vaara, ; Scherer, Palazzo, & Baumann, ). MNCs can fill these voids through substitution (Boddewyn & Doh, ; Hiss, ; Jackson & Apostolakou, ).…”

Are Reshoring Decisions Influenced by External Stakeholders and Country‐Level Environmental Regulation?

“…foreign directors) on the board and governance structure are significant for MNEs for several reasons. First, MNEs operating in global environments are experiencing greater pressure from external stakeholders (including organizational stakeholders) than are local firms and, as a result, their decisions are more exposed to external stakeholder influences (Aguilera‐Caracuel, Guerrero‐Villegas and García‐Sánchez, 2017; Kang, 2013). Thus, we argue that a decision such as reshoring is likely to be affected by external stakeholders such as foreign directors.…”

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

“…Multinational companies (MNCs) have been facing increasing pressures from both publics at home and host countries to do business in a more responsible way (Aguilera‐Caracuel et al, 2017; Burritt et al, 2020). They operate in multiple, diverse, and possibly conflicting institutional forces (Aguilera‐Caracuel et al, 2017; Jain & De Moya, 2013; Marano & Kostova, 2016; Sharma, 2019).…”

“…Multinational companies (MNCs) have been facing increasing pressures from both publics at home and host countries to do business in a more responsible way (Aguilera‐Caracuel et al, 2017; Burritt et al, 2020). They operate in multiple, diverse, and possibly conflicting institutional forces (Aguilera‐Caracuel et al, 2017; Jain & De Moya, 2013; Marano & Kostova, 2016; Sharma, 2019). The main concerns circle around the relationship between head office and subsidiaries located in other countries which might have very different cultures, regulatory requirements and other institutional settings.…”