When MNEs Export Social Responsibility

IN ORDER TO MEET INCREASING DEMANDS FOR RESPONSIBILITY, MULTINATIONAL ENTERPRISES (MNES) NEED TO MAKE SURE THAT THE PRACTICES THEY ADOPT ARE ACTUALLY IMPLEMENTED IN THEIR UNITS. ANNE JACQUEMINET, IN AN ARTICLE IN ORGANIZATION SCIENCE, FINDS THAT A UNIT'S VALUES PLAY A GREAT ROLE AND THAT THERE IS A STRONG IMITATION EFFECT OF OTHER UNITS' BEHAVIOR

Before embracing an academic career, Anne Jacqueminet used to be a CSR consultant and she’d often ask herself why some units of diversified MNEs implement the CSR practices adopted by the parent company, while others don’t. In a study forthcoming in Organization Science, the Assistant Professor at Bocconi’s Department of Management and Technology has now designed a model that answers her question.
 
Implementation is understudied because data are difficult to collect. Having had the unique chance to study the introduction of practices regarding biodiversity preservation, gender diversity and health and safety in 99 sub-units of an MNE active in electricity production and environmental management, Professor Jacqueminet singles out three determinants of a unit implementation:

• obedience to the pressures from the headquarters
• imitation of other units’ behavior
• perceived consistency of the practice with the unit values.

 
«I find that value consistency», Prof. Jacqueminet says, «doesn’t only have a direct effect. It also conditions the role of the coercive pressures from headquarters and of mimetic pressures from peers, as it makes those pressures more or less salient and influences their impact on the unit’s judgement of the practice’s legitimacy. Peers pressure turns out to be more effective than a parent firm’s, but the most important result is that the combination of the three effects is much stronger than the sum of the single effects. In fact, pressures for implementation in the absence of value consistency are at best ineffective, if not detrimental».
 
Parent firms have to understand units’ perceptions in order to influence them. «Value surveys and CSR surveys are commonplace in MNEs», Prof. Jacqueminet continues, «but managers should proceed to the next level, making a strategic use of them in order to promote implementation (as opposed to simple adoption) of new practices». The analysis shows that there can be strong variance in the evaluation of a single practice across units, but not within-unit. Within-unit variance can be about the evaluation of different topics, confirming the relevance of the unit values. The imitation effect is stronger across units operating in the same industry and different country than across units of the same country, but different industry.
 
Different practices show different degrees of implementation. Health and safety concerns are strong in the industry and such practices are easily implemented, while biodiversity preservation («is it our job?») and gender balance («too difficult in our sector») are more problematic. In any case, the influence of a unit’s values is evident.
 
Mapping the units’ values in order to raise awareness where needed, as well as highlighting virtuous examples of other units and stimulating emulation through resource allocation and incentives are promising actions headquarters could adopt in addition to top down enforcement if they want to maximize the chances of implementation and to satisfy the emerging demand for transparency.
 
Anne Jacqueminet, “Practice Implementation Within a Multidivisional Firm: The Role of Institutional Pressures and Value Consistency”, in-press on Organization Science, published online before print 8 Jan 2020, DOI: 10.1287/orsc.2019.1284.

by Fabio Todesco