How Headquarters Can Lead Units to Adopt CSR

THE PRACTICES MUST BE BOTH IMPORTANT AND CONSISTENT WITH A SUBUNIT'S VALUES. OTHERWISE, THE RISK OF REJECTION IS HIGH, EXPLAINS ANNE JACQUEMINET IN TWO STUDIES

Assistant Professor at Bocconi’s Department of Management and Technology Anne Jacqueminet has published two studies that examine why adoption of Corporate Social Responsibility (CSR) practices at multinational companies can vary between headquarters and units. In her pre-academic experience as a CSR consultant, she found that units at companies sometimes did not “buy in” to the sustainability policies at headquarters. Her academic research discovers why.
 
“Practice Implementation Within a Multidivisional Firm: The Role of Institutional Pressures and Value Consistency” published in Organization Science in January 2020 looked at data from a large European utility to better understand the interplay between headquarters and units in CSR policy. She found that implementation is influenced by a combination of three factors inside the firm: obedience to the pressures from the headquarters; imitation of other units’ behavior; perceived consistency of the practice with the unit values.
 
“In terms of takeaways, I would suggest that putting pressure on sub-units to implement a practice is not enough,” she said. “Firstly, prior implementation by other sub-units, as it represents social proof of the practice’s legitimacy, has significant impact on a sub-unit’s adoption of the practice, suggesting that emulation is a strong lever for practice implementation. And second, the perceived consistency of the practice with sub-units’ values play such a crucial role in its adoption that there has to be an effort to educate or communicate that the practices are important for strategic reasons and will have an operational impact on the sub-unit.”
 
A follow-up paper “Ups and Downs: The Role of Legitimacy Judgement Cues in Practice Implementation” (with Rodolphe Durand, published in Academy of Management Journal) is a qualitative comparative analysis of the extent to which 65 subsidiaries of a multinational enterprise implemented three CSR practices. The study tries to map “different profiles of subunits that would increase or decrease implementation over time based on a number of conditions that we know are relevant together,” said Professor Jacqueminet.
 
In this paper, she expands the explanation beyond the boundaries of the firm. She finds that the endorsement of a CSR practice in the unit’s environment is actually more important than what headquarters says in driving the practice of implementation. “Headquarters should have an understanding of the context where the unit works and provide incentives”, she said.
 
Moreover, “what I found particularly interesting”, she said, “is what I called the interplay of two dimensions in the subsidiaries’ judgment of the CSR practice’s legitimacy. I saw that once value consistency and strategic importance are there, the units will increase implementation, but that, conversely, there is a risk over time that the practice will be gradually abandoned if units don’t perceive that the practice is both important and consistent with their values.”
 
Anne Jacqueminet, “Practice Implementation Within a Multidivisional Firm: The Role of Institutional Pressures and Value Consistency”, in Organization Science, Vol. 31, No. 01, 2020, DOI: https://doi.org/10.1287/orsc.2019.1284.
 
Anne Jacqueminet, Rodolphe Durand, “Ups and Downs: The Role of Legitimacy Judgement Cues in Practice Implementation”, in Academy of Management Journal, Vol 63, No. 05, 2020, DOI: https://doi.org/10.5465/amj.2017.0563.

by Jennifer Clark