Monday, January 21, 2013

Dared to Care: Organizational Vulnerability, Institutional Logics and MNCs’ Social Responsiveness in Emerging Markets

ZHANG Jianjun, LUO Xiaowei Rose
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Organization Science 24, 6 (2013) 1742-1764

A significant gap exists in our understanding of what explains multinational corporations‘ (MNCs)varying responses to social issues in emerging markets. Arguably, in a setting where both market institutions and regulations and norms of corporate social responsibility are underdeveloped, it is more difficult for corporations to take actions beyond those that serve their immediate economic interests. Proposing a social movement perspective on MNCs‘ responsiveness to social issues in emerging markets, we identify the mechanisms by which Internet activists grab firms‘ attention and force them to become more socially responsive. A perception of organizational vulnerability and a home-country institutional logic that is consistent with the demands of the Internet activism provide political opportunity structures that hasten the corporate response, but affect the magnitude of firm response differently. We test our framework in the empirical context of corporate philanthropic action following the 2008 earthquake in Sichuan province in China, which triggered an online campaign that questioned MNCs‘ donations to the disaster relief effort. Our study contributes to the literature on heterogeneous organizational responses to social movements, a better understanding of the antecedents for MNCs‘ social responsiveness in emerging markets, and research on MNCs.