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International Business- Article Review

You are asked to review the below academic article by completing the journal article review template provided. You are not allowed to edit the questions in the template or create your own. Your submission will not be assessed unless the correct template is used.

Note: on all written assessments, a +/-10% margin from the word limit is allowed. However, a deduction of 1% will be made from the final mark for each 1% beyond the 10 % margin. So, for a 500 word-limit assessment, no penalties are incurred up to 550 words. However, every 1% beyond the 550 words will incur a 1% deduction in marks.

Article: Mishra, P & Schmidt, G B 2018, ‘How can leaders of multinational organizations be ethical by contributing to corporate social responsibility initiatives? Guidelines and pitfalls for leaders trying to do good’, Business Horizons, vol. 61, iss. 6, 833-843.

Your review should:

• identify the key concepts and theories related to your chosen article;

• demonstrate a grasp of the author’s main arguments in the article;

• discuss the practical implications of the reading; you should consider why the topic of the article is interesting and important for managers of multinational enterprises in the contemporary global business world and how the understanding of the article would benefit the managers; and

• present these by using an effective academic writing style.

Some tips for this assessment

• When reviewing an academic article, it is critical to focus on what the authors are arguing rather than simply the subject that they are talking about.

• Use your own words and avoid direct quotations as quotations do not explain your thinking or judgements. Summarising in your own words and paraphrasing are essential skills for academic writing. To summarise means to reduce a text to its main points and its most important ideas. Paraphrasing means putting it into your own words.

The criteria against which the assessment will be graded are:

• evidence of critical reading and understanding of the article;

• reflection on the practical implications of the article for managers the multinational enterprises; and

• presentation which includes a clear writing style, good grammar and spelling and appropriate referencing (This course uses the Harvard (or RMIT-Harvard) citation method unless otherwise stated (see: http://www.lib.rmit.edu.au/easy-cite/ for more information the referencing style).

Article Review Template

Part A: Student and article information (This part is excluded from the word count)
Your name	Student ID
Number of words
Title of the selected article
Part B: Use your own words and sentences to complete each section (the questions are excluded from the word count)
Objectives: What does the article set out to do?
Subject and theories/concepts: What is the article about? What is its subject? What are the central concepts and/or theories discussed in the article?
Findings/main arguments: What are the key findings or main arguments of the author?
Practical implication: Why is the subject of the article interesting and important for managers of multinational enterprises in the contemporary global business world and how would the understanding of the article benefit the managers?
Part C: List of references (The references should be in alphabetical order according to the last name of the first author. This part is excluded from the word count)

International Business: Journal Article Review Template (Assessment 1)

Assessment Task 1: Academic article review (500 words, 10%)

• Assignment type: Individual, written
• Value: 10%
• Link to the CLOs: 1, 2, 3
• Length: 500 words
• Due date: 19:00, Friday, Aug 14 (Singapore Time)

Note: on all written assessments, a +/-10% margin from the word limit is allowed. However, a deduction
of 1% will be made from the final mark for each 1% beyond the 10 % margin. So, for a 500 word-limit
assessment, no penalties are incurred up to 550 words. However, every 1% beyond the 550 words will
incur a 1% deduction in marks.

Your review should:

• identify the key concepts and theories related to your chosen article;

• demonstrate a grasp of the author’s main arguments in the article;

• discuss the practical implications of the reading; you should consider why the topic of the article
is interesting and important for managers of multinational enterprises in the contemporary
global business world and how the understanding of the article would benefit the managers;
and

• present these by using an effective academic writing style.

Some tips for this assessment

• When reviewing an academic article, it is critical to focus on what the authors are arguing rather
than simply the subject that they are talking about.

• Use your own words and avoid direct quotations as quotations do not explain your thinking or
judgements. Summarising in your own words and paraphrasing are essential skills for academic
writing. To summarise means to reduce a text to its main points and its most important ideas.
Paraphrasing means putting it into your own words.

The criteria against which the assessment will be graded are:

• evidence of critical reading and understanding of the article;

• reflection on the practical implications of the article for managers the multinational
enterprises; and

• presentation which includes a clear writing style, good grammar and spelling and
appropriate referencing (This course uses the Harvard (or RMIT-Harvard) citation method
unless otherwise stated (see: http://www.lib.rmit.edu.au/easy-cite/ for more information the
referencing style).

You are asked to review one of the below academic articles by completing the journal article
review template provided. You are not allowed to edit the questions in the template or create your
own. Your submission will not be assessed unless the correct template is used.

Article 1.
Mishra, P & Schmidt, G B 2018, ‘How can leaders of multinational organizations be ethical by
contributing to corporate social responsibility initiatives? Guidelines and pitfalls for leaders trying to do
good’, Business Horizons, vol. 61, iss. 6, 833-843.

Article 2.
Bashir, N, Papamichail, K N & Malik K 2017, ‘Use of Social Media Applications for Supporting New
Product Development Processes in Multinational Corporations’, Technological Forecasting and Social
Change, vol. 120, 176-183.

Article 3.
Kim, C & Park, D 2015, ‘Emerging Asian MNCs’, Asia Pacific Business Review, vol. 21, iss. 4, 457-463.

How can leaders of multinational
organizations be ethical by contributing to
corporate social responsibility initiatives?
Guidelines and pitfalls for leaders trying to
do good

Paresh Mishra *,1, Gordon B. Schmidt 1

Purdue University, Fort Wayne, 2101 E. Coliseum Boulevard, Fort Wayne, IN 46805, U.S.A.

Business Horizons (2018) 61, 833—843

Available online at www.sciencedirect.com

ScienceDirect
www.elsevier.com/locate/bushor

KEYWORDS
Corporate social
responsibility;
Multinational
enterprises;
Greenwashing;
Transformational
leadership;
Participative
leadership

Abstract Corporate social responsibility (CSR) is a laudable goal for multinational
enterprises (MNEs) because of the significant positive impact they can bring to the
society and environment around the world. However, there are significant challenges
to the practice of CSR in MNEs. This article discusses two major barriers to CSR that
are especially significant for MNEs: leaders’ attitudes and cultural variance. We then
apply insights from Rest’s ethical decision-making and cross-cultural research to
offer guidance to leaders of MNEs to implement CSR in their organizations. We
present a multistep process by which leaders first reflect on and clarify what goals
they want to accomplish in the realm of CSR and then how to build consensus for those
goals and modify them to incorporate the values and beliefs of local constituents.
# 2018 Kelley School of Business, Indiana University. Published by Elsevier Inc. All
rights reserved.

* Corresponding author
E-mail addresses: mishrap@ipfw.edu (P. Mishra),

schmidtg@ipfw.edu (G.B. Schmidt)
1 Authors contributed equally and are listed alphabetically

https://doi.org/10.1016/j.bushor.2018.07.011
0007-6813/# 2018 Kelley School of Business, Indiana University. Pu

1. Globalization: A love/hate
relationship

Globalization is one of the most hotly debated
topics in the social sciences. This is not surprising
because it is a complex phenomenon with multiple
and competing narratives, ideologies, and world-

http://crossmark.crossref.org/dialog/?doi=10.1016/j.bushor.2018.07.011&domain=pdf

https://doi.org/10.1016/j.bushor.2018.07.011

http://www.sciencedirect.com/science/journal/00076813

mailto:mishrap@ipfw.edu

mailto:schmidtg@ipfw.edu

https://doi.org/10.1016/j.bushor.2018.07.011

834 P. Mishra, G.B. Schmidt

views. More importantly, it is a force that brought
about profound changes in economies, govern-
ments, cultures, technologies, organizations, peo-
ple, families, and the environment–—and not always
in positive ways. Whether we love globalization for
the opportunities it brings or hate it for the dis-
ruptions it causes, it is undeniable that the world we
live in today is historically the most globalized
world ever, and we are on a relentless path toward
even more globalization.

Seemingly trivial and routine decisions that we
make today in our personal and professional lives
impact the lives of people on the opposite side of
the planet. The shoes or shirts that we buy at some
fashion store in the U.S. may have ripple effects in
the lives of thousands of people working in a sweat-
shop in Bangladesh where these products might
have been manufactured. A manager’s decision to
upgrade all the computers in his office with the
latest models every 2 years may impact the lives of
factory workers manufacturing and assembling
these gadgets across different parts of Asia or the
environment and health of millions of people living
in certain regions of China, India, Nigeria, and
Ghana that have become the dumping grounds of
the developed world’s electronic waste (Kiddee,
Naidu, & Wong, 2013).

The globalized world has made each one of us
into the metaphorical butterfly of Edward Lorenz’s
(1995) Butterfly Effect; in a dynamically intercon-
nected system like the Earth’s ecosystem, the mere
flapping of the wings of a butterfly in Brazil can
cause a tornado in Texas a few days later. In the
dynamic interconnectedness of the globalized
world, a seemingly minor action of a human being
has the potential to influence the lives of thousands
of people around the globe. If a single human
being’s action can impact so many lives around
the world, one can only imagine the potential scale
of the impact generated by a multinational enter-
prise (MNE).

The size of many MNEs today is mind-boggling.
Some have annual revenues that surpass the annual
GDP of the vast majority of countries; the world’s
largest 100 economies in 2016 consisted of only
31 countries but 69 corporations (Green, 2016).
The annual revenue of Walmart, the largest corpo-
ration on this list, was higher than the annual GDP
of all but just nine countries of the world. Thus, if
the magnitude of the impact of a human being’s
action can be equivalent to that of a butterfly
creating a tornado, then the impact potential of
an MNE could be even larger than a cataclysmic
Geostorm–—borrowing the name of a 2017 science
fiction disaster film–— spread across the entire
world.

The immense scale of impact of MNEs is not just
hypothetical. Research published by Heede (2014)
showed that just 90 large companies contributed
66% of the total humanity-caused global warming
emissions between 1751 and 2010. According to a
report by The Economics of Ecosystems and Biodi-
versity (TEEB) that is part of the United Nations
Environment Program, the monetary cost of the
environmental damage caused by businesses was
estimated at $4.7 trillion per year (Fellow, 2013).
Globalization contributed to the acceleration and
intensification of global climate change that affects
us all. This Great Acceleration, as it has been
termed, is changing the Earth’s geology and eco-
systems at such grand scales that scientists say a
new human-induced geological epoch called the
Anthropocene epoch as begun (Barnosky et al.,
2012).

Because of MNEs’ high potential for global im-
pact, it is critically important that every MNE con-
ducts its business with the utmost sensitivity and
responsibility. In other words, the importance of
ethics in the global business landscape is more
important than ever.

The purpose of our article is to make a case for
corporate social responsibility (CSR) as the primary
means of conducting responsible business in to-
day’s globalized world. We first discuss the mean-
ing of CSR and its varied manifestations. Next, we
discuss the role of leadership in CSR. Then we
identify the key drivers and barriers that influence
leaders’ approach to CSR in MNEs. We classify these
factors as either generic, which would apply to
MNEs across the world, or culture specific, which
would be relevant only in certain regions of the
world. Based on this analysis, we offer a few
suggestions for leaders of MNEs to help them over-
come some of the unique challenges that come
from implementation of CSR strategies in the glob-
al environment.

2. What is CSR?

CSR is a complex topic. It rests on the idea that all
businesses have a responsibility toward the larger
society. It is a form of self-regulation that tries to
eliminate or at least minimize the harm it may
otherwise cause through its business processes. It
is also the eagerness with which business organiza-
tions consider the interests of the larger society
their responsibility and proactively attempt to do
good for the society and environment.

Researchers have proposed numerous defini-
tions of CSR that can vary significantly, in part
because CSR is a dynamic concept and thus its

Guidelines and pitfalls for leaders trying to do good 835

meaning varies by time, context, and culture.
What may be seen as good and responsible in
one country or in one era may seem reprehensible
in another.

However, despite the plethora of definitions of
CSR, there is a general agreement about its core
aspects. Drawing on the work of Carroll (1999),
McWilliams and Siegel (2001), and many other re-
searchers, we conclude that CSR refers to all those
organizational actions that are meant to further the
good of society and environment, and go beyond the
company’s legal obligations. There are two key
components within the construct of CSR. First,
while businesses perform a wide variety of actions,
CSR refers only to a subset of those actions that are
explicitly aimed toward the betterment of society
and the environment. Second, CSR only refers to
those society- and environment-friendly actions
that an organization is not legally mandated to
perform. In other words, CSR is associated with
voluntary actions. While paying environmental tax
may help the environment, it would not be consid-
ered CSR because businesses are legally obligated to
pay their taxes.

As long as the above two conditions are met,
perhaps any action could be designated as CSR. CSR
actions may be directed inside the firm (e.g., mak-
ing the production process more environmentally
friendly), across the firm’s value chain (e.g., pro-
curing goods only from certified fair trade suppli-
ers), and outside the firm (e.g., creating
infrastructure for local communities). The avenue
of social good can also vary and includes environ-
mental (e.g., only using sustainable materials in
production), worker welfare (e.g., paying a living
wage), and charity work (e.g., donations into a
community).

A popular way of conceptualizing CSR is through
the idea that organizations should be pursuing not
only the financial bottom line but also the triple
bottom line, which includes social and environmen-
tal performance along with the traditional financial
considerations (Norman & MacDonald, 2004).

CSR actions can vary widely across MNEs. They
may include making charity donations, supporting
of local communities, using ecofriendly materi-
als, volunteering organizational time and resour-
ces to social causes, and even safeguarding
human rights in areas with unstable governments.
As MNEs spread across many different countries,
CSR also spans many countries. This raises the
inevitable question: Should MNEs opt for a CSR
strategy that is homogenous across the world or
should they tweak their CSR approach to the
idiosyncrasies of the different countries in which
they operate?

3. Global versus local strategies of CSR

Arthaud-Day (2005) identified four different CSR
strategic orientations that MNEs take. In the multi-
national orientation, companies seek to take up
social responsibilities that conform to local culture,
custom, and religion. A Western MNE operating in a
developing country may decide to be more accom-
modating to child labor, realizing that children may
engage in labor to contribute financial support to
their poor families.

The second orientation is the global approach to
CSR, which focuses on hypernorms, or universal
principles that are valued in all cultures
(Arthaud-Day, 2005). According to Donaldson and
Dunfee (1994), who coined the term, MNEs should
pursue hypernorms by providing quality health and
safety standards for all employees, by respecting
fundamental human rights of all people and by
instituting systems that minimize all forms of envi-
ronmental pollution.

The third approach is the international approach,
which involves exporting domestic CSR philosophies
and practices from where the organization is head-
quartered to other countries without making any
effort to adapt them to the circumstances in foreign
countries. This is not often a recommended ap-
proach because it can result in a version of moral
imperialism, where the morals of one country are
imposed on other countries. It can also be ineffec-
tive as citizens of other countries might resent or
even resist the attitudes and actions imported from
far-off lands (Arthaud-Day, 2005).

The final approach offered by Arthaud-Day (2005)
is the transnational approach, where organizations
recognize that global and local approaches to CSR
need not be mutually exclusive, and that local
perspectives should be taken into consideration
even while implementing global universals.

4. The necessity of a balanced
approach

In this article, we take the position that the trans-
national approach is the ideal approach for MNEs
because it provides a counter to the universal/local
dichotomy. Effective CSR is not about universal
versus local values, but about marrying the univer-
sal ethical values with the local ones. It’s about
recognizing the universal values and acting accord-
ing to them, but in a way that doesn’t disrespect the
values and traditions of the local culture. This often
would include engaging workers across the MNE in
discussing and creating those applications of

836 P. Mishra, G.B. Schmidt

universal values. So to some degree, it’s about
giving the universal values a local color in the
practice of CSR, helping to motivate agreement
and action across the MNE.

The primary reason the transnational approach is
most suitable for implementing CSR in MNEs is
because MNEs operate in a global environment that
is dynamic. Thus, the company’s approach to im-
plementing CSR also needs to be dynamic. A dynam-
ic approach recognizes the fact that in a global
environment, new factors will periodically emerge
that may necessitate changing the nature and ex-
tent of CSR responsibilities practiced by an MNE.
MNEs cannot afford to be stuck in the other ap-
proaches described by Arthaud-Day (2005) because
they are relatively static and assume that the so-
cial, political, economic, and legal environment
within which the company operates will always
be in line with either universal, ethnocentric, or
local values.

5. Role of leaders in CSR

MNEs–—like other forms of business
organizations–—are legal entities that have a
legal standing in the eyes of law. However, it’s
the leaders running the MNEs who make all the
important decisions on behalf of these organiza-
tions. Therefore, leaders play a crucial role in
how and even whether MNEs engage in CSR.

Leadership refers to the process of influencing a
group or an organization to realize certain objec-
tives. When CSR is viewed as an organization’s goal
to further the good of society and environment
beyond its legal obligations, the importance of
leadership in CSR becomes obvious. Even when
CSR is defined in terms of realizing the goal of
fulfilling the triple bottom line, the role of leader-
ship is undeniable.

Perhaps the most important reason why the role
of leadership is critical to MNEs is that the basic
structure and system of all MNEs–—unlike those
of nonprofit organizations or democratic
governments–—are geared toward maximizing prof-
its. As discussed in the introduction to this article,
the actions of MNEs may have huge societal and
environmental impact, which causes us to advocate
for MNEs to take up social responsibilities. However,
since the systems within MNEs weren’t specifically
created to do good for the society and environment,
without leadership intervention, there may be little
to no practice of CSR in MNEs. Leadership matters in
CSR. Effective CSR in MNEs is only possible with
responsible and effective leadership in these orga-
nizations.

Stated differently, leaders are the actual drivers
of CSR in MNEs. Their attitudes and behaviors can
significantly influence the extent and nature of CSR
practiced at any MNE. Unfortunately, research that
combines leadership and CSR is in its infancy
(Strand, 2011). Leadership and CSR are large inde-
pendent bodies of literature in the business disci-
pline, but there are very few studies that examine
the role of leadership in CSR. The good news is that
the studies that have investigated the intersection
of leadership and CSR help in the identification of
some significant global and local factors that can
prevent leaders from implementing CSR in MNEs.
We list these barriers to CSR, and later suggest ways
to overcome them.

6. Barriers to effective CSR in MNEs

CSR literature has identified many barriers to ef-
fective CSR. However, not all of these factors are
relevant for MNEs. The cost/benefit ratio of a CSR
initiative may be very relevant for small and
medium-sized enterprises (SMEs) that have limited
financial capacity but are of little to no relevance
for MNEs that have the advantage of economies of
scale (Laudal, 2011; McWilliams & Siegel, 2001). In
this short review of barriers, we focus primarily on
psychological factors that are likely to influence the
extent of CSR practiced in MNEs.

6.1. Leader’s attitude about CSR

CSR would not be possible in any organization with-
out the firm’s leadership having favorable attitudes
toward CSR. Leaders will commit to CSR only when
they truly believe in its value. However, a leader’s
conception of CSR, especially those in charge of
large MNEs, is not always positive. This is because
they usually had their education and training in the
tradition of a free-market economy in which the
prevailing view is that CSR is not the responsibility
of any business organization (Ghoshal, 2005). Peter
Drucker, who is considered the father of modern
management, once asserted in an interview: “CSR is
a dangerous distortion of business principles. If you
find an executive who wants to take on social
responsibilities, fire him fast” (Banerjee, 2007, p.
51).

While the proponents of CSR contend that busi-
nesses have social and environmental responsibili-
ties, the opponents vehemently argue against
businesses having such responsibilities. In a debate
on what constitutes the social responsibility of
business (Friedman, Mackey, & Rodgers, 2005), John
Mackey, the founder and CEO of Whole Foods,

Guidelines and pitfalls for leaders trying to do good 837

talked about his business not depending on the
invisible hand and embracing the new form of capi-
talism that worked consciously for the common
good. However, the Nobel Prize-winning economist
Milton Friedman argued in the same debate that the
one and only one social responsibility of businesses
was to increase profits. Reiterating views from his
book Capitalism and Freedom, Friedman (1962)
argued that as long as businesses don’t engage in
any fraudulent activities, the pursuit of profits was
all that mattered. Similar disagreements have also
been expressed by others. Jack Welch, the former
CEO of General Electric (GE), criticized GE’s later
foray into green and socially responsible business
practices, emphasizing that the main social respon-
sibility for a company should always be to win
(Singh, 2011).

6.2. Cultural influences on CSR

The topic of CSR gets muddled when we discuss its
relevance in the context of global business environ-
ments because values, norms, and practices vary
dramatically across nations and cultures. When
customers and consumers of a country are well
informed about societal and environmental mat-
ters, they are likely to put pressure on MNEs to
engage in responsible business practices. The cul-
ture, traditions, and values of the national origin of
the MNEs–—as well as the host country–—can influ-
ence the level of CSR practiced by the MNEs. The
culture of the country of origin may influence the
style of functioning of MNEs and how much emphasis
they place on human welfare and environmental
issues. The culture of the host country can also
influence CSR tremendously.

Waldman et al. (2006) found that cultural factors
strongly influence the CSR values of leaders. Spe-
cifically, they found that leaders coming from cul-
tures with high levels of institutional collectivism
demonstrated positive attitudes toward CSR. They
also found that MNEs in high power distance cultures
had lower concern for stakeholders such as employ-
ees, customers, and the environment. Strand (2011)
reported that leaders from feminine cultures tend
to demonstrate stronger CSR performance than
those from masculine cultures.

Although it is not clearly known why certain
cultures may be associated with low CSR, it is
possible that numerous mechanisms are at play.
Leaders from high power distance cultures may be
more removed from the difficulties faced by em-
ployees and customers, and consequently have
less empathy for them. Also, employees tend to
not express their voice freely in high power dis-
tance cultures, which may place less pressure on

leaders to act responsibly. Since masculine cul-
tures tend to give economic growth a higher pri-
ority and care for people and the environment a
lower priority (Hofstede, 1983), leaders in these
cultures may feel less normative pressure to en-
gage in CSR.

CSR can also be controversial in nature as people
with different values may not agree on what corpo-
rate behaviors are responsible; there are prominent
examples of organizations that have engaged in
what has been termed greenwashing, taking corpo-
rate actions that look environmentally responsible
to the public but in fact have little positive impact,
being little more than public relations stunts
(Banerjee, 2007). CSR is a major concept in inter-
national business and an area almost all organiza-
tional leaders need to engage in.

7. Why do MNEs act irresponsibly?

To understand why MNEs act unethically or irre-
sponsibly, it is critical to understand the factors
that influence moral decision making. We apply
Rest’s theory of individual ethical decision making
to explain the causes behind the moral and immor-
al decisions that occur in global business organiza-
tions. Rest (1986), in his landmark treatise on
moral development, identified four distinct com-
ponents of ethical decision making. In order for
people to act morally in any particular situation,
first and foremost, they have to interpret the
situation from a moral dimension. In other words,
they have to be morally sensitive to how their
action might affect other people or the environ-
ment positively or negatively. Second, they have to
figure out the morally right course of action (moral
judgment). They next need to have the intention
(or moral motivation) to act in consonance with
their judgment. Finally, they would need to have
sufficient ego strength, perseverance, and imple-
mentation skills to follow through on their inten-
tions (moral character). According to Rest, people
may behave unethically because of lapses in any of
the above stages.

Applying Rest’s model into the global business
environment, when leaders of MNEs do not behave
ethically, it is either because (1) they fail to
recognize how their actions affect people and
the environment around the world, (2) they lack
the capacity to make moral decisions, (3) they
don’t feel attracted by the possible outcomes of
making a moral choice, and/or (4) they don’t have
the character strength to carry through their mor-
al intentions in the face of obstacles and chal-
lenges.

838 P. Mishra, G.B. Schmidt

8. Solutions

As seen previously, there are significant challenges
for leaders in MNEs who are trying to be ethical.
These challenges help illustrate why CSR initiatives
are often more talk by top leaders than organiza-
tional actions. While such talk can be valuable as it
can serve an aspirational function (Christensen,
Mackey, & Whetten, 2014), most people place
greater value on the actions taking place. In this
next section, we offer a four-step process to help
leaders manage these challenges and help their MNE
engage in CSR. Depending on the context of the
organization, its employees, stakeholders, and cus-
tomers, some of these steps will be more or less
relevant and more or less difficult to accomplish.
We offer them as a generic model for considering
the issues that can arise and initial solutions that
can help such issues.

8.1. Step #1: Determine organizational
meaning of what is good and craft a
connected vision for the organization

People can often disagree on what constitutes an
ethical action based on their own moral values.
While people can often agree that profit to share-
holders, support to the community, and environ-
mental well-being are worthy things to strive for,
how these balance and what is seen as beneficial to
each category varies widely (Eabrasu, 2012).

With such potential for disagreement based on
individual values, it is crucial for leaders to define
what they mean when they talk about doing good in
relation to the environment, community, and share-
holders. The assumption that people agree with
each other’s implicit and unstated definitions is
not well founded (Eabrasu, 2012). Such definitions
help define nuanced visions for the mission of the
organization.

8.1.1. Intellectual stimulation
One way in which leaders might consider definitions
of what is good and ethical is through the lens of
transformational leadership known as intellectual
stimulation. Leaders who engage in intellectual
stimulation-related behaviors encourage others to
think for themselves and to question long-held
assumptions (Robertson & Barling, 2013). This also
can be seen as aligning with Rest’s (1986) compo-
nents of being morally sensitive, considering how
one’s actions may affect others, and moral judg-
ment determining the morally right course of ac-
tion. In defining the goals of CSR for an organization,
leaders can engage in reflections and question

assumptions coming with clear definitions of what
good is. When this is clearly defined by the leader,
that definition can be better explained to others in
the organization.

Defining clearly what the good is for an organi-
zation can also be important in making sure the
complexity of organizational CSR goals is consid-
ered. Organizations do not want to miss important
concerns or drawbacks when goals are being con-
sidered. During the 2008 economic crisis, the three
biggest banks in Iceland collapsed due to bad loans
and investments. All three banks were heavily in-
volved in CSR initiatives with mission statements
and annual reports touting humanitarian and cul-
tural donations. They were all devoted to
helping the local community through donations
(Sigurthorsson, 2012). This proved to be a narrow
view, as only donations were viewed as counting as
CSR actions, and not other ways of helping the
community. This view may have in part led them
to ignore the moral consequences of investing com-
munity money in risky investments, which ultimate-
ly led to the banks collapsing. By not fully and more
broadly considering what doing good for the com-
munity meant and should entail, their actions in the
long run hurt the well-being of the community.

Clearly defining the philosophy of how the orga-
nization will balance environmental, social, and
economic good is also beneficial. Organizations
are often seen as hypocritical or engaging in green-
washing because when different values come into
conflict, decisions are made favoring initiatives that
some employees or some in the public might not
prefer. It is important for firms to make clear how
various aspects of the organization’s goals interact
with each other and which parts of the CSR vision
are action focused and which are more future aspi-
ration focused (Christensen et al., 2014).

8.1.2. Compelling vision
Once organizations have defined the idea of good,
organizations need to create a compelling vision.
Vision statements help define an ideal future state
(Kopaneva & Sias, 2015). The vision should be one
that is clear and understandable, but also one that
appeals to the goals and values of employees,
customers, and stakeholders. The vision here is
probably most resonant when it fits with transfor-
mational leadership that articulates a compelling
and clear vision. Robertson and Barling (2013)
wrote about this specifically in relation to environ-
mental sustainability; they advocated for an envi-
ronmental transformation leader presenting a
mission that inspires followers to look beyond in-
dividual needs to the collective good of environ-
mental stability.

Guidelines and pitfalls for leaders trying to do good 839

8.2. Step #2: Discuss and gain feedback
from employees, stakeholders, and
customers on what is good and revise CSR
vision accordingly

Even with a compelling vision, leaders need to gain
feedback from employees, stakeholders, and cus-
tomers on possible CSR initiatives. While the previ-
ous steps should help clarify the vision and specific
components of the CSR plan, there is always the
chance an important area was missed. Members of
all three groups may disagree on some aspect of the
mission due to individual differences in values or
conflicting cultural norms. A CSR initiative focused
exclusively on an individual initiative might not
seem compelling in a collectivist culture. No leader
or leadership team can create a perfect vision; the
feedback of others helps it improve and find more
acceptance.

8.2.1. Participative leadership
Too often, organizations try to avoid criticism or
differences of opinion. This can, in part, lead to a
top-down approach in which leaders communicate a
vision and expect blind obedience to that vision.
This may seem to work in high power distance
cultures, in which people accept that individuals
such as leaders and managers have much more
power and influence (Hofstede, 1983), but may
not be truly supportive. Participation brings out
more opinions regarding what should be done. Ad-
ditional moral standpoints do not prevent imple-
mentation of moral solutions, rather (Eabrasu,
2012) they help to give more depth and moral
nuance. Eabrasu (2012) argued that such discussions
and disagreements can lead to moral empowerment
of workers, stakeholders, and customers as they
feel included and invested in the process. This
has the potential to strengthen the scope and power
of the CSR initiative.

Discussions with employees regarding the orga-
nization’s vision for CSR can also help fill an aspira-
tional function. Christensen et al. (2014) argued
that discussing important CSR issues helps people
aspire to reach those goals. The talk itself gives a
vision for what the organization might become. This
vision can help compare the current organizational
state to a desired future state. This may help
motivate workers to consider their own goals and
potential role in a CSR initiative. Thus, the discus-
sion itself can start the groundwork for acceptance
and implementation of the CSR initiative.

It is also important to note that talking to em-
ployees helps them to understand the vision of the
organization better and in more depth. Kopaneva
and Sias (2015) found there is a significant lack of

congruence between official organization mission
statements and what employees described as the
mission. Employees often did not mention major
themes and had a significantly more narrow vision of
what the organization looked to accomplish in the
present and future. This is a concern for any CSR
initiative as employees are the ones who are doing
the day-to-day work on the CSR initiative. An inac-
curate understanding of the vision can lead to
wasted effort and hinder success.

Including employees in the creation of a CSR
vision and the form of CSR undertaken should also
help in the creation of a CSR vision that employees
feel passionate about. One major argument for CSR
initiatives from a business perspective is that they
can help to recruit and retain talented people who
want to make a difference (Sprinkle & Maines,
2010). Discussing CSR definitions and visions with
current workers and giving them input is likely to
help strengthen such benefits with current employ-
ees.

Gaining stakeholders’ feedback is also crucial to
the process. CSR initiatives can end up being a point
of conflict between the organization and its stake-
holders. Barnea and Rubin (2010) found that when
firm insiders and managers had less ownership (i.e.,
stock) in the organization, the organization tended
to have higher CSR ratings on their KLD social
responsibility index. When managers had ownership
of the organization, they were more likely to en-
gage in profit-focused actions, not CSR-focused
actions. Thus, there seemed to be a conflict be-
tween insiders who wanted to conduct CSR initia-
tives to improve their own reputation and have the
positive warm glow of doing good, and the profit
maximization focus of some stakeholders.

To reduce this problem and help secure more
stakeholder buy-in, MNE leadership should be in-
tentional about including as many stakeholders as
possible in the CSR vision creation process. Gilley,
Robertson, and Mazur (2010) discussed the impor-
tance of including stakeholders in the ethics code
creation process. They see stakeholder involvement
having importance for making sure ethics codes are
comprehensive enough and discovering ways to
create mutual value with stakeholders.

While Gilley et al. (2010) discussed this collabo-
ration with stakeholders with regard to creating
ethics codes, similar principles should apply in
crafting CSR visions. Stakeholders may interact with
relevant aspects of the CSR area that the organiza-
tion does not. Thus, if an organization wants to
engage in CSR related to environmental sustainabil-
ity, community members may know of areas in dire
need of help or areas that could be greatly benefit-
ed by cleanup programs. Community members may

840 P. Mishra, G.B. Schmidt

also see unanticipated consequences for CSR ac-
tions proposed by the organization. Stakeholders
may also want to be active participants in the CSR
initiatives rather than just passively informed of
company initiatives. Discussions with stakeholders
would allow the organization and stakeholders to
see areas for collaboration on the important CSR
issues. These areas for collaboration will likely
differ by stakeholder and might differ by the coun-
try or region the organization is in.

Finally, customers need to be part of the discus-
sion on the CSR vision of the organization. Custom-
ers are likely to be impacted by CSR initiatives in a
variety of ways: cost of products, products sold,
marketing of products, or organizational messages
to donate time or money to causes relevant to the
CSR mission. If customers do not agree with how the
organization defines good (Eabrasu, 2012) and how
the organization spends its profits, the market has
the potential to punish the organization by ceasing
to purchase from the company. This would hurt the
bottom line of company in terms of profits and
potentially threaten the company’s ability to stay
solvent. In short, a mismatch between CSR vision
and customer values could be disastrous.

Customers’ perceptions of the CSR issue can help
determine which elements of the stand made by the
organization might be seen as beneficial or detri-
mental. This could help create a more nuanced
approach in balancing fiduciary responsibility and
guide where the organization contributes to a CSR
mission (Weinzimmer & Esken, 2016). Customers
may have valuable knowledge and perspectives
on a social issue that help the organization’s vision
to be clearer and more focused.

While a mismatch could have major negative
repercussions, there are also great opportunities
for collaboration between customers and the orga-
nization on the CSR vision. Customers can share
similar values on topics like environmental sustain-
ability and can see the CSR initiatives offered by the
organization as a means to give back as well. Thus,
the CSR actions of the organization do not just lead
to a social good but to increased identification with
the organization.

Customer inclusion in determining the CSR vision
could also potentially create more dedicated cus-
tomers. People can be drawn to organizations that
are seen as doing good and thus when customers
feel they have had a say in the good an organization
does, they may feel more connected to that orga-
nization. Once feedback and discussion have hap-
pened with employees, stakeholders, and
customers, organization leaders need to compile
such information and revise the CSR vision. This can
be difficult as different groups might have different

goals and values, especially in companies that span
multiple countries and societal groups. Still, the
discussion helps the organization better see how
these important groups will react to and understand
a vision that has been presented. This feedback may
also lead the organization to modify the CSR vision
for the local needs of communities. Different parts
of a company may approach the goal of environ-
mental sustainability in different ways, but each
way may still help the overall CSR vision. This
discussion process also builds needed initial support
and understanding for the broader CSR vision.

8.3. Step #3: Determine appropriate
actions that help make goals a reality and
complete actions toward CSR

Once an organization has clearly defined its CSR
values and goals, it is crucial for it to make plans to
complete the needed actions to make them a reali-
ty. A common problem in organizations is a failure to
act on the CSR values they espouse (Banerjee,
2007). While the focus is often on organizations like
Enron or BP intentionally gaming the system, it is
possible that some greenwashing results from a
failure of well-intentioned, but ultimately unsuc-
cessful plans to act on laudable goals. While CSR
talk can be aspirational on its own (Christensen
et al., 2014), for CSR initiatives to have the most
impact leadership must plan actions carefully.

In order for CSR initiative to succeed, organiza-
tions may need to make significant changes to ex-
isting organization structures, leader and employee
actions, and involvement with stakeholders. With-
out making these changes, important parts of CSR
may not be successful. Changes might be made to
organizational structures so the organization better
fits CSR vision needs. The traditional organization
structure is focused heavily–—and often
exclusively–—on generating profit and shareholder
value. Traditional organizational structures with
stockholders also have potential concerns in that
focus is often placed on value to stockholders, not
other social goals that might be found in CSR ini-
tiatives. Actions interpreted as working against the
financial benefit of shareholders can potentially
generate legal action by disgruntled shareholders.

Organizations desiring to place profits and so-
cial goods on an equal footing have turned to new
methods of corporate organization. The benefit
corporation, allowed in various forms in 33 U.S.
states, requires a focus on stakeholders as well as
shareholders. B Lab is a nonprofit organization
focused on encouraging organizations to become
benefit corporations; it offers certification for
public benefit corporations and has

Guidelines and pitfalls for leaders trying to do good 841

already certified companies in 50 countries
(B Corporation, 2018). Such certification–—and
most U.S. state-related laws–—requires audits
for the organization and annual reporting to the
public on what the organization is accomplishing
related to its public goals (Kurland, 2017).

For organizations that want their CSR to be cen-
tral to their corporate mission, the benefit corpo-
ration concept can be very valuable (Benefit
Corporation, 2018). B Lab offers many tools for
helping to assess progress and impact related to
social goals and the certification creates a process
by which to monitor and sustain social initiatives.
While there certainly remains latitude to try to
game the system in such certifications due to lax
verification for some aspects, the certification pro-
cess itself offers a framework to work toward orga-
nizational CSR initiatives (Kurland, 2017). The legal
status offered in some states and countries also
helps offer protection against bottom-lined focused
stockholder lawsuits.

Leader and employee actions also are essential in
the action step. It has been recognized that leaders
are a key part of CSR initiative success (Christensen
et al., 2014). Leaders play an important role in
sensemaking for employees and framing organiza-
tion initiatives, helping subordinates make sense of
organizational events and concepts and how they fit
with them. Leaders often are responsible for advo-
cating for change and clarifying what workers need
to know and do (Yukl, 2012). When leaders engage in
transformational leadership behaviors such as in-
voking worker ideals and providing inspirational
motivation, an organization’s members are more
likely to have CSR-related values (Waldman et al.,
2006) and perform necessary CSR-related organiza-
tional behaviors (Robertson & Barling, 2013).

One potentially important area of leader action
is engaging in executive symbolism. Executive sym-
bolism is the idea that actions of top leaders can
have significant symbolic significance beyond the
action itself, signaling important information to
employees (Hambrick & Lovelace, 2018). Top lead-
ers can greatly impact workers’ perceptions of an
idea or initiative through leader actions. Hambrick
and Lovelace (2018) identified one major type of
these actions, theme-aligned symbolic action,
whereby a top leader performs an act intended to
demonstrate a theme. Theme-aligned symbolic ac-
tions could be particularly important for showing
top leader support of the CSR initiative. Such action
would help employees makes sense of how they
should see and act on an initiative, creating a
coherent narrative to believe in and follow.

Stakeholders may potentially be included more
in the CSR process if they have a connection with

the CSR mission. If an organization wants to help
homeless people in the local community, they will
need to connect with social service organizations
and other organizations that are knowledgeable of
the issue and the people involved. Consultation
with stakeholders in Step 2 should help set the stage
for stakeholders engaging in the process.

8.4. Step #4: Monitor progress, distribute
feedback, and revise as needed

An important last step of the CSR process is consis-
tent monitoring of how organization actions impact
the CSR vision and goals. Actions may not proceed as
intended and could even exacerbate a problem.
Gaining feedback helps to see what progress has
been made and what should be changed.

Audits and reports are a source of this feedback.
For benefit corporations, certification by B Lab
requires third-party audits and annual reports
(Kurland, 2017). Third-party audits have conditions
when companies are B Lab certified, but for other
companies a wide variety of methods could be
used. Companies could have stakeholders, expert
organizations, or even other organizations involved
in such audit processes. Companies might also
assess their own progress on social goals by bench-
marking with companies that adopt similar CSR
missions. Annual reports can also be used to com-
municate with employees, stakeholders, custom-
ers, and the community at large how well CSR
initiatives are progressing. Annual reports help
to educate those parties about how CSR activities
are progressing and even potentially clear up inac-
curate perceptions such groups might possess
(Shabana & Ravlin, 2016). There are many existing
standards for such reports, with benefit corpora-
tions having the B Impact Assessment and other
suggested formats including the Global Reporting
Initiative (GRI) and ISO 2600 (Wilburn & Wilburn,
2014).

One imperative for any organization or leader
who truly wants to accomplish CSR social goals is
to use audit and report information as feedback.
The information generated can be used to evalu-
ate where deficiencies exist in current processes
and where new progress can be made. When
feedback is applied and acted upon well, audits
and reports should show a clear trend toward
greater success in CSR initiatives and progress
toward CSR social goals. Feedback might, in fact,
lead to revision of initiatives and visions as social
needs and effectiveness of efforts are better
understood. Major revisions of visions will often
require reviewing the entire process outlined in
previous sections.

842 P. Mishra, G.B. Schmidt

9. Summary

MNEs should “develop both global corporate codes
of conduct and subscribe to global codes that have
been developed by independent international bod-
ies” (Carroll, 2004, p. 118), such as the UN Global
Compact and OECD Guidelines for MNEs.

In this article, we have described some of the
major challenges leaders and organizations face
when trying to do good through CSR visions and
initiatives. We offered a 4-step process that helps
to reduce the impact of such problems and create a
CSR vision that is clear and has the support of
important parties such as employees, customers,
and stakeholders. CSR will always be difficult to
create and sustain due to differences in values and
tensions between different parts of the triple bot-
tom line of economic, social, and environmental
needs. Leaders need to be intentional in their
processes of creating CSR visions and initiatives in
order to be successful. This article offers several
considerations that can help leaders be intentional
in the pursuit of the good, responsible outcomes for
which they strive, helping them to do the good they
strive for.

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How can leaders of multinational organizations be ethical by contributing to corporate social responsibility initiatives? …

1 Globalization: A love/hate relationship
2 What is CSR?
3 Global versus local strategies of CSR
4 The necessity of a balanced approach
5 Role of leaders in CSR
6 Barriers to effective CSR in MNEs
6.1 Leader’s attitude about CSR
6.2 Cultural influences on CSR
7 Why do MNEs act irresponsibly?
8 Solutions
8.1 Step #1: Determine organizational meaning of what is good and craft a connected vision for the organization
8.1.1 Intellectual stimulation
8.1.2 Compelling vision
8.2 Step #2: Discuss and gain feedback from employees, stakeholders, and customers on what is good and revise CSR vision a…
8.2.1 Participative leadership
8.3 Step #3: Determine appropriate actions that help make goals a reality and complete actions toward CSR
8.4 Step #4: Monitor progress, distribute feedback, and revise as needed
9 Summary
References

AssessmentTask 1: Literature Review Marking Rubric (10 marks)

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discussed. Most supportive
facts and information are
explained.

Article explained and
summarised in own words
clearly demonstrating solid
understanding of the article.
Main topic of the article
clearly is identified and
stated. Relevant arguments
/ theories are competently
discussed and explained.
Almost all supportive facts
and information are
explained accurately.

Excellent explanation of the
article in own words
demonstrating outstanding
understanding of the article.
Main topic and relevant
arguments / theories are
discussed thoroughly and
clearly. Most salient facts
and information are
explained clearly and
accurately.

Reflection on practical
implication of the reading
(out of 3)

No or limited identification /
discussion of practical
implications of the reading
for managers of MNEs.

Practical implications are
identified but its discussion
is too general and does not
explicitly allude to
understanding of the article.

General reflection on the
practical implication of the
article. Connection between
the article and the
discussion of practical
implication is made.

Practical implications are
identified and discussed
competently. Connection
between the reading and
managerial implications are
made with supporting
evidence.

Insightful reflection on
practical implications of the
article. Relevant connections
between the reading and
managerial implications are
made clearly with
supporting evidence.

Clarity of writing and
writing technique
(out of 2)

Argument is unclear and/or
under-developed. Too
difficult to read due to too
many errors in expression,
grammar, or spelling.
Inappropriate referencing.

Argument is unclear and/or
under-developed. Spelling
and grammar require
editing. Some sentences
require rewriting for clarity
and/or paragraph structure
is poor in places. Writing
style may be choppy in
places and/or poor flow-on
from one idea to the next.
Lack of consistency in
referencing.

Arguments need further
development. Consistent
referencing with minor
errors of style or
presentation. Occasional
grammatical or spelling
errors. Frequent awkward
expressions. Perhaps some
unexplained jargon.

Makes and supports
persuasive arguments.
Clearly written and free
from grammatical errors.
Consistent academic writing
style, with well-structured
sentences and paragraphs.
Appropriate and correct
referencing.

Makes and supports
persuasive arguments.
Sophisticated, clear and
fluent writing. Correct
spelling and grammar used
effectively throughout.
Highly effective academic
writing style, with clear and
consistent links to
arguments in the thesis. Use
of academic conventions
such as referencing and
citation is both consistent
and appropriate.

Journal Article Review Template

Part A: Student and Article Information (This part is excluded from the word count)
Your name	Student ID
Title of the selected article	Understanding the rise of global protectionism
Author(s) of the article	Peter Enderwick
Part B: Use your own words and sentences to complete each section (the questions are excluded from the word count)
Objectives: What does the article set out to do?
This article sets out to create an understanding in the recent rise of global protectionism in the global economy.
Subject and theories/concepts: What is the article about? What is its subject? What are the central concepts and/or theories discussed in the article?
This article is about the recent rise of global protectionism and understanding how it is different from the traditional protectionism in terms of geography, applications, concerns and measures applied. It addresses the challenges of theorising determinants and provides insights on the correlation between globalisation and global protectionism despite the apparent incompatibility. Several countries such as Russia, China, France were taken in as examples to emphasise on the impacts of global protectionism.
Findings/main arguments: What are the key findings or main arguments of the author?
The article has three main findings. The first is that it foresees a decrease in the significance of economic patriotism as global economic activity and the expanding role of international agencies and multinational enterprises disintegrate the economic power of individual country (Park, 2018). This means that there will be a reduction in the control of the economy domestically which allows companies to use the chance to lift prices to extract greater profits (Adele and Fouda, 2012). However, by doing so it crashes the economic power of that particular country. The second finding is while the world economy is evolving, there is a rise in importance of foreign direct investments and offshore outsourcing. This shows that a wider scope of protection is required and global protectionism is a considerable choice compared to the traditional trade protectionism which restricts only the free movement of goods and services (Abboushi, 2010). The key strategic concern of the government is on national security instead of national defense in this modern society hence directing back to the recent rise in global protectionism. Finally, there are factors that promote global protectionism on three levels — international, national and unique cultural or historical level. On international level there is a rise of new competitors in the market which possibly includes China and India. This potentially elevate concerns in regards to national security (Abboushi, 2010). Following up will be national level, the level of competitive strength or weaknesses of an economy will be evaluated. A high cost economy with cost that do not reflect productivity is very vulnerable to overseas competition which probably requires protectionist measures (Cheong and Tongzon, 2018). As for unique cultural or historical level, past historical experiences or distinct social cultural traits can also encourage global protectionism.
Literature and contribution: What relationship does the article bear to other works in the literature? What contribution does the article make to the existing body of the literature? (You should refer to at least two other scholarly journal articles)
The articles share similar insights in regards to the topic on protectionism. The articles write about traditional trade protectionism and touches on anti-globalisation which indirectly refers to global protectionism. The articles also talk about economic nationalism which helps to deepen the

understanding with this topic. On top of that, it provide the literature with further researches and information which are more in-depth.

Practical implication: Why is the topic of the article interesting and important for managers of multinational enterprises in the cotemporary global business world and how would the understanding of the article benefit the managers?

Multinational enterprises (MNEs) have operations in several countries and the topic of this article talks about global protectionism which can greatly affect the businesses of MNEs. When protectionism is greatly fuelled, MNEs may have to choose between markets (Lenway, Rehbein and Starks, 1990). Understanding this article would allow managers to be resilient to changes, it will innovate them to create supply chains that can work at low cost or even seek ways that rely less on overseas suppliers (Lenway, Rehbein and Starks, 1990).

Part C: List of references (The references should be in alphabetical order according to the last name of the first author. This part is excluded from the word count)

Abboushi, S. (2010). Trade protectionism: reasons and outcomes. Competitiveness Review, 20(5), pp.384-394.

Adele, R. and Fouda, N. (2012). Protectionism and Free Trade: A Country‘s Glory or Doom?. International Journal of Trade, [online] 3(5), pp.351-355. Available at:
https://pdfs.semanticscholar.org/6d2a/14b98280f98e67f129c8dce66081614c7f64 [Accessed 16

Aug. 2019].

Cheong, I. and Tongzon, J. (2018). The economic impact of a rise in US trade protectionism on East Asia. Journal of Korea Trade, 22(3), pp.265-279.

Lenway, S., Rehbein, K. and Starks, L. (1990). The Impact of Protectionism on Firm Wealth: The Experience of the Steel Industry. Southern Economic Journal, 56(4), p.1079.

Park, S. (2018). U.S. Protectionism and Trade Imbalance between the U.S. and Northeast Asian Countries. International Organisations Research Journal, 13(2), pp.76-100.

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