Abstract
A critical literature on mulitnational corporate social responsibility has developed in recent years. Many authors addressed the issue in the Third World countries. This paper reviews the literature, focusing on the relationship between the multinational corporations (MNCs) and Third World governments in fulfilling the social responsibility, based on the underlying ethical imperative.
There is a growing consensus that both corporations and governments should accept moral responsibility for social welfare and individual interests in their economic transactions. A collaborative relationship is proposed where the MNCs share information based on global experiences and offer input into host government developmental policies, and aid their implementation. The government, in turn, provides a reasonable regulatory environment. This calls for ongoing interactions among officials at all levels of the two institutions, with the local corporate subsidiary playing a pivotal role. The desired conduct of the parties is reinforced by international organizations and other constituents, representing common human concerns across cultures. These relationships are examined and an agenda for policy and action by the MNCs and the Third World governments is developed.
The accelerated growth in the number of multinational corporations (MNCs) and their worldwide scope, with concentration of economic and political power draws attention to corporate social responsibility. Furthermore, a meeting of the United Nations Conference on Trade and Development (UNCTAD) in 1987, with delegates from 141 developed and developing countries concluded with a major agreement.
Similar content being viewed by others
References
Amba-Rao, S. C.: 1987, ‘Industrial Hazards, Social Responsiveness and the Transformational Imperative of Multinational Corporations: A Conceptual Model’,The Proceedings, S. W. Decision Sciences Institute Conference, March, Houston.
Amba-Rao, S. C.: 1989, ‘Wither Bhopal: Technological Hazards and Social Responsiveness in the Third World’,Social Development Issues 12(2) Winter, 11–22.
Amba-Rao: 1992, ‘Business Social Policy for the Third World: Response of the Multinational Corporate Management’, in Bauzon K. E. (Ed.),Development and Democratization in the Third World: Myths, Hopes, and Realities (Taylor and Francis, New York).
Anderson, R. O.: 1985, ‘Does Industry Have A Global Environmental Conscience?,EPA Journal January/February, 8–9.
Anshen, M., Ed.: 1974,Managing The Socially Responsible Corporation (Macmillan Publishing Co., New York).
Ashford, N. A. and C. Ayers: 1985, ‘Policy Issues for Consideration in Transferring Technology to Developing Countries’,Ecology Law Ouarterly 12(4), 871–905.
Baer, W.: 1988, ‘Industrial Structure of Latin American and Multinationals’, in Tavis, L. A. (Ed.),Multinational Managers and Host Government Interactions (University of Notre Dame Press, Notre Dame, Indiana), pp. 41–58.
Bandura, A.: 1977,Social Learning Theory (Prentice-Hall, Inc., Englewood Cliffs, New Jersey).
Barnett, R. and R. Muller: (1974),Global Reach (Simon and Schuster, New York).
Beijing Review: January 23–29, 1989, “Cigarette Industry Lights Up,” 43.
Berleant, Arnold: 1982, ‘Multinationals, Local Practice, and the Problem of Ethical Consistency’,Journal of Business Ethics 1, 185–193.
Blake, R. B. and D. A. Carroll: 1989, ‘Ethical Reasoning in Business’,Training and Development Journal June, 99–104.
Boal, K. B. and N. Perry: 1985, ‘The Cognitive Structure of Corporate Social Responsibility’,Journal of Management 11(3), 71–82.
Bommer, M., C. Grato, J. Gravander, and M. Tuttle: 1987, ‘A Behavioral Model of Ethical and Unethical Decision Making’,Journal of Business Ethics 6, 265–280.
Brandt, R.: 1959,Ethical Theory, Prentice-Hall, Englewood Cliffs, New Jersey, 40–45.
Brandt, R.: 1983, ‘Ethical Relativism’, in T. Donaldson and P. Werhane (Eds.),Ethical Issues in Business, second edition (Prentice-Hall, Inc., Englewood Cliffs, New Jersey), pp. 40–45.
Brenner, S. and E. Molander: 1977, ‘Is the Ethics of Business Changing?’,Harvard Business Review 55(1), 55–71.
Brooke, J.: 1988, ‘Waste Dumpers Turning to West Africa’,New York Times July 17, A1.
Business Roundtable: 1988,Corporate Ethics: A Prime Business Asset, New York.
Cavanagh, G. F., D. J. Moberg and M. Velasquez: 1981, ‘The Ethics of Organizational Politics’,Academy of Management Review 63, 363–374.
Chamberlain, N. W.: 1982,Social Strategy and Corporate Structure (Macmillan Publishing Company, New York).
Chapman, G. O.: 1988, ‘An Application of Doctrine to Economic, Political, and Social Policy’, in Tavis, L. A. (Ed.),Multinational Managers and Host Government Interactions (University of Notre Dame Press, Notre Dame, Indiana), pp. 269–276.
Clasen, E. A.: 1967, ‘Marketing Ethics and the Consumer’,Harvard Business Review January–February, 79–86.
Cross, F. B. and B. J. Winslett: 1987, ‘Export Death: Ethical Issues and the International Trade in Hazardous Products’,American Business Law Journal 25, 487–521.
Dickie, R. B. and L. S. Rouner: 1986,Corporations and the Common Good, University of Notre Dame Press, Notre Dame, Indiana.
Donaldson, T.: 1982,Corporations and Morality, prentice-Hall, Inc., Englewood Cliffs, New Jersey.
Donaldson, T.: 1985, ‘Multinational Decision-Making: Reconciling International Norms’,Journal of Business Ethics 4, 357–366.
Donaldson, T.: 1989,The Ethics of International Business, Oxford University Press, New York.
Doz, Y. L.: 1980, ‘Strategic Management in Multinational Companies,’Sloan Management Review Winter, 27–46.
England, G. W.: 1975,The Manager and His Values: An International Perspective, Ballinger Publishing Co., Cambridge.
Epstein, E. M.: 1989, ‘Business Ethics, Corporate Good Citizenship and the Corporate Social Policy Process,’Journal of Business Ethics 8, 583–595.
Ferrell, O. C., M. Zey-Ferrell and D. Krugman: 1983, ‘A Comparison of Predictors of Ethical and Unethical Behavior Among Corporate and Agency Advertising Managers’,Journal of Macromarketing 3, Spring, 1927.
Fink, S.: 1986,Crisis Management (Amacom, New York).
Fleming, J. E.: 1987, ‘A Survey and Critique of Business Ethics Research, 1986’, in Frederick, W. C. (Ed.),Research in Corporate Social Performance and Policy 9, 1–23.
Fletcher, J.: 1966,Situation Ethics: The New Morality (Westminster Press, Philadelphia), pp. 95.
Forsyth, D. R.: 1980, ‘A taxonomy of Ethical Ideologies’,Journal of Personality and Social Psychology 39(1), 175–84.
Frederick, W. C.: 1986, ‘Toward CSR3: Why Ethical Analysis is Indispensable and Unavoidable in Corporate Affairs’,California Management Review 28, 126–141.
Frederick, W. C.: 1991, ‘The Moral Authority of Transnational Corporate Codes’,Journal of Business Ethics 10, 165–178.
Frederick, W. C., K. Davis and J. E. Post: 1988,Business and Society, Sixth Ed., McGraw-Hill Book Co., New York.
Freeman, R. E. and Jr. D. R. Gilbert: 1988,Corporate Strategy And the Search for Ethics, Prentice-Hall, Inc., Englewood Cliffs, New Jersey.
Friedman, M.: 1970, ‘A Friedman doctrine: The social responsibility of business is to increase its profits’,The New York Times Magazine 32, September 13.
Fritzsche, D. J.: 1985, ‘Ethical Issues in Multinational Marketing’, in Laczniak, G. R. and Murphy, P. E. (Eds.)Marketing Ethics: Guidelines for Managers, Lexington Books, Lexington, Kentucky, 85–96.
Fritzsche, D. J. and H. Becker: 1984, ‘Linking Management Behavior to Ethical Philosophy — An Empirical Investigation’,Academy of Management Journal 27(1), 166–175.
Gladwin, T. N. and I. Walter: 1980,Multinationals Under Fire: Lessons in the Management of Conflict, John Wiley & Sons, New York.
Goodpaster, K. E.: 1980, ‘Ethical Imperatives and Corporate Leadership’, in K. R. Andrews (Ed.),Ethics in Practice, Harvard Business School Press, Boston, 212–228.
Haegg, C.: 1984, ‘The OECD Guidelines for Multinational Enterprises: A Critical Analysis’,Journal of Business Ethics 3, 71–76.
Hay, R., and E. Gray: 1974, ‘Social responsibilities of business managers,Academy of Management Journal 17, 135–143.
Hegarty, W. and H. Jr. Sims: 1978, ‘Some Determinants of Unethical Decision Behavior: An Experiment’,Journal of Applied Psychology 63(4), 451–7.
Hegarty, W. H. and H. P. Jr., Sims: 1979, ‘Organizational Philosophy, Policies and Objectives Related to Unethical Decision Behavior: A Laboratory Experiment’,Journal of a Applied Psychology 64(3), 331–8.
Hunt, S. and S. Vitell: 1986, ‘A General Theory of Marketing Ethics’,Journal of Macromarketing 6(1), Spring 5–16.
International Council for Equality of Opportunity Principles, Inc.: 1984, ‘The (Sullivan) Statement of Principles,’ Philadelphia.
Jameson, K. P. and Rivera, J. M.: 1988, ‘The Mexican Case: Communication Under State Capitalism’, in Tavis, L. A. (Ed.),Multinational Managers and Host Government Interactions, 204–238.
Jones, E. E.: 1985, ‘Major Developments in Social Psychology during the Past Five Decades’, in G. Lindzey and E. Aronson (eds.),The Handbook of Social Psychology (Random House, New York), pp. 47–107.
Johnson, H. L.: 1985, ‘Bribery in International Markets: Diagnosis, Clarification and Remedy’,Journal of Business Ethics 4, 447–455.
Kim, K. S.: 1988, ‘The Korean Case: Culturally Dominated Interactions’, in Tavis, L. A. (Ed.)Multinational Managers and Host Government Interactions, University of Notre Dame Press, Notre Dame, Indiana, 173–203.
Kolde, E. J.: 1982,Environment of International Business, Kent Publishing Company, Kent, Ohio.
Kohlberg, L.: 1981,The Meaning and Measurement of Moral Development, Clark University Press, Worcester, Massachusetts.
Laczniak, G. R.: 1983, ‘Business Ethics: A Manager's Primer’,Business 33, 23–29.
Laczniak, G. R. and J. Naor: 1985, ‘Global Ethics: Wrestling with the Corporate Conscience’,Business, July–September, 3–10.
Lall, S.: 1983,The New Multinationals: The Spread of Third World Enterprises, Wiley, Chichester, U.K.
Lane, H. W. and D. G. Simpson: 1984, ‘Bribery in International Business: Whose Problem Is It?’,Journal of Business Ethics 3, 35–42.
Laya, J. C.: 1988, ‘Economic Development Issues’, in Tavis, L. A. (Ed.),Multinational Managers and Host Government Interactions, University of Notre Dame Press, Notre Dame, Indiana, 31–40.
Lecraw, D. J.: 1983, ‘Performance of Transnational Corporations in Less Developed Countries’,Journal of International Business Studies Spring, 15–33.
Lecraw, D. J.: 1984, ‘Bargaining Power, Ownership, and Profitability of Transnational Corporations in Developing Countries’,Journal of International Business Studies 15(1), Spring/Summer 27–43.
Lee, K. H.: 1981, ‘Ethical Beliefs in Marketing Management: A Cross Cultural Study’,European Journal of Marketing 15(1), 58–67.
Lewis, P. V.: 1987, ‘Economic Parley Termed a Success’,New York Times 5, 3.
Longnecker, J. G., J. A. McKinney and C. W. Moore: 1988, ‘The Ethical Issue of International Bribery: A Study of Attitudes Among U.S. Business Professionals’,Journal of Business Ethics 7, 341–346.
Luthans, F., R. M. Hodgetts and K. R. Thompson: 1984,Social Issues in Business, Fourth Edition (Macmillan Publishing Co., New York).
Luthans, F. and R. Kreitner: 1985,Organizational Behavior Modification and Beyond: An Operant and Social Learning Approach (Scott Forsman, Glenview, IL).
Mathews, M. C.: 1988,Strategic Intervention in Organizations, Sage Library of Social Research, Vol. 169, Sage Publications, Newbury Park, California.
Moffett, M.: 1990, ‘Mexico Driving Ban Puts a Dent in Smog’,Wall Street Journal (March 13), A14.
Murray, E. A., Jr.: 1986, ‘Ethics and Corporate Strategy’, in R. B. Dickie, and L. S. Rouner (Eds.),Corporations and the Common Good, University of Notre Dame Press, Notre Dame, Indiana, 91–117.
Najafizadeh, M. and L. Mennerick: 1989, ‘The Impact of Science and Technology on Third World Development: Issues of Social Responsibility’,Social Development Issues 12(2), Winter 1–10.
Naor, J.: 1982, ‘A New Approach to Multinational Social Responsibility’,Journal of Business Ethics 1, 219–225.
Nielsen, R. P.: 1988, ‘Limitations of Ethical Reasoning as an Action (Praxis) Strategy’,Journal of Business Ethics 7, 725–33.
Nielsen, R. P.: 1989, ‘Changing Unethical Organizational Behavior’,Academy of Management Exective 3(2), 123–30.
Ottoson, G. E.: 1988, ‘A Model For Ethical Decision Making’, (July–August), 8–11.
Posner, B. Z., and W. H. Schmidt: 1984, ‘The Significance of Value Compatibility Between Managers and Third Organizations’, paper presented at the 25th annual meeting of the Western Academy of Management (April), Vancouver, Canada.
Post, J. E.: 1986, ‘Perfecting Capitalism: A Systems Perspective on Institutional Responsibility’, in Dickie, R. B. and L. S. Rouner (Eds.)Corporations and the Common Good (University of Notre Dame Press, Notre Dame, Indiana), pp. 45–60.
Poynter, T.: 1982, ‘Government Intervention in Less Developed Countries: The Experience of Multinational Corporations’,Journal of International Business Studies 13(1), 9–25.
Preble, J. F. and P. Miesing: 1984, ‘Do MBA and Undergraduate Business Students Have Different Business Philosophies?’,Proceedings of the National Meeting of the American Institute for the Decision Sciences, November, 346–8.
Preston, L. E.: 1987, ‘The Evolution of Multinational Public Policy Toward Business: Codes of Conduct’, Academy of Management Annual Meeting, August, New Orleans.
Preston, L. E.: 1988, ‘The Evolution of Multinational Public Policy Toward Business: Codes of Conduct’ in Preston, L. E. (Ed.),Research in Corporate Social Performance Policy (Jai Press, Greenwich, Connecticut), volume 10.
Preston, L. E. (Ed.): 1990a,Corporation and Society Research: International and Comparative Studies (Jai Press, Inc., Greenwhich, Connecticut).
Preston, L. E. (Ed.): 1990b,International and Comparative Corporation and Soceity Research (Jai Press, Inc., Greenwich, Connecticut).
Pruden, H. O.: 1971, ‘Which Ethics for Marketers’, in Wish, J. R. and S. H. GambleMarketing and Social Issues, John Wiley and Sons, Inc., New York, 98–104.
Response: Panel, 1988, ‘The Economic Regulatory Context’, in Tavis, L. A. (Ed.),Multinational Managers and Host Government Interactions, University of Notre Dame Press, Notre Dame, Indiana, 59–68.
Rest, J. R.: 1979,Development in Judging Moral Issues, (University of Minnesota Press, Minneapolis, MN).
Robin, D., M. Giallourakis, F. R. David and T. E. Moritz: 1980, ‘A Different Look at Codes of Ethics’,Business Horizons 32(1), January–February, 66–73.
Robin, D. P. and R. E. Reidenbach: 1987, ‘Social Responsibility, Ethics, and Marketing Strategy: Closing the Gap Between Concept and Application’,Journal of Marketing 51, January, 44–57.
Rugman, A. M., D. J. Lecraw and L. D. Booth: 1985,International Business: Firm and Evnironment, McGraw-Hill Book Co., New York.
Sethi, S. P.: 1975, ‘Dimensions of Corporate Social Performance: An Analytical Framework’,California Management Review 12, 58–64.
Sethi, S. P.: 1985, ‘The Human Error: Lesson From Bhopal’,New Management 3, 40–44.
Sethi, S. P. and P. Steidlmeier: 1990, ‘A New Paradigm of the Business/Society Relationship in the Third World: The Challenge of Liberation Theology’, in W. C. Frederick and Preston, L. E.Business Ethics: Research Issues and Empirical Studies (Jai Press Inc., Greenwich, Conn.), pp. 279–293.
Shrivastava, P.: 1987,Bhopal: Anatomy of a Crisis (Ballinger, Cambridge, Massachusetts).
Simpson, J. R.: 1982, ‘Ethics and Multinational Corporation vis-a-vis Developing Nations’,Journal of Business Ethics 1, 227–237.
Soto, H. D.: 1989,The Other Path: The Invisible Revolution in the Third World (Harper and Row, New York).
Stead, W. E., D. L. Worrell and J. G. Stead: 1990, ‘An Integrative Model for Understanding and Managing Ethical Behavior in Business Organizations’,Journal of Business Ethics 9, 233–242.
Steiner, G. A.: 1972, ‘Social Policies for Business’,California Management Review, Winter, 17–24.
Stone, C. D.: 1975,Where the Law Ends: The Social Control of Corporate Behavior, Harper and Row, New York.
Sturdivant, F. D. and J. L. Ginter: 1977, ‘Corporate Social Responsiveness,: Management Attitudes and Economic Performance,’California Management Review, Spring, 30–39.
Sturdivant, F. D. and H. Vernon-Wortzel: 1990,Business and Society: A Managerial Approach, Fourth Edition, Irwin, Homewood, Illinois.
Suter, G.: 1988, ‘Patterns of Similarity and Difference’, in Tavis, L. A. (Ed.),Multinational Managers and Host Government Interactions, University of Notre Dame Press, Notre Dame, Indiana, 253–255.
Tavis, L. A. (Ed.): 1982,Multinational Managers and Poverty in the Third World, University of Notre Dame Press, Notre Dame, Indiana.
Tavis, L. A. (Ed.): 1988,Multinational Managers and Host Government Interactions, University of Notre Dame Press, Notre Dame, Indiana.
Tavis, L. A. and W. P. Glade: 1988, ‘Implications for Corporate Strategy’, in Tavis, L. A. (Ed.),Multinational Managers and Host Government Interaction, 287–320.
Trotter, R. C., S. G. Day and A. E. Love: 1989, ‘Bhopal, India and Union Carbide: The Second Tragedy’,Journal of Business Ethics 8, 439–454.
Tsalikis, J. and D. J. Fritzsche: 1989, ‘Business Ethics: A Literature Review With a Focus on Marketing Ethics’,Journal of Business Ethics 8, 695–743.
Tsalikis, J. and O. Nwachukwu: 1988, ‘Cross-Cultural Business Ethics: Ethical Beliefs' Difference Between Blacks and Whites’,Journal of Business Ethics 7, 745–754.
Tuleja, T. F.: 1987,Beyond the Bottom Line (Penguin Books, New York).
Velasquez, M.: 1983, ‘Why Corporations Are Not Morally Responsible for Anything They Do’,Business and Professional Ethics Journal Spring, 1–18.
Vitell, S. and T. Festervand: 1987, ‘Business Ethics: Conflicts, Practices and Beliefs of Industrial Executives’,Journal of Business Ethics 6, 111–22.
Von der Embse, T. J. and R. A. Wagley: 1988, ‘Managerial Ethics: Hard Decisions on Soft Criteria’,SAM Advanced Management Journal Winter, 4–8.
Wall Street Journal: June 15, 1990, A1.
Walton, R. E. and R. B. McKersie: 1965,A Behavioraol Theory of Labor Negotiations, McGraw-Hill Book Co., New York.
Windsor, D. and L. E. Preston: 1990, ‘Corporate Governance, Social Policy, and Social Performance in the Multinational Corporation’, in L. E. Preston (Ed.),International and Comparative Corporation and Society Research, Jai Press Inc., Greenwich, Connecticut, 79–92.
Worrell, D. L., J. G. Stead and J. B. Spalding: 1985, ‘Unethical Decisions: The Impact of Reinforcement Contingencies and Managerial Philosophies’,Psychological Reports 57, 355–65.
Zenisek, T. J.: 1979, ‘Corporate social responsibility: A conceptualization based on organizational literature’,Academy of Management Review 4, 359–368.
Zey-Ferrell, M. and O. C. Ferrell: 1982, ‘Role-Set configuration and Opportunities as Predictors of Unethical Behavior in Organizations’,Human Relations 35(7), 587–604.
Zey-Ferrell, M., K. M. Weaver, and O. C. Ferrell: 1979, ‘Predicting Unethical Behavior Among Marketing Practictioners’,Human Relations 32(7), 557–569.
Author information
Authors and Affiliations
Additional information
Sita C. Amba-Rao professional interests involve Human Resource Management (HRM) and Organizational Development. She taught Business and Society, and her research on business social responsibility includes a publication on the Union Carbide accident in India. Amba-Rao had worked in Indian Industry. She will be conducting a field study in India on comparative HRM and managerial values.
Rights and permissions
About this article
Cite this article
Amba-Rao, S.C. Multinational corporate social responsibility, ethics, interactions and Third World governments: An agenda for the 1990s. J Bus Ethics 12, 553–572 (1993). https://doi.org/10.1007/BF00872380
Issue Date:
DOI: https://doi.org/10.1007/BF00872380