Localisation versus globalisation of CSR strategies : parent-subsidiary relationship and subsidiary contributory role : a multiple case study of MNEs and their subsidiaries

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Localisation Versus Globalisation of CSR strategies:

Parent-Subsidiary Relationship and subsidiary

contributory role

A multiple case study of MNEs and their subsidiaries

BART J. P. SONNEVELDa

a_{Amsterdam Business School, University of Amsterdam}

Student ID: 5970008

MSc: Business Administration – Track International Management Date: 03-25-2016

Supervisor: Drs. Erik Dirksen Second reader: Dr. Ilir Haxhi

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Statement of originality

This document is written by Bart Sonneveld who declares to take full responsibility

for the contents of this document.

I declare that the text and the work presented in this document is original and that

no sources other than those mentioned in the text and its references have been

used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of

completion of the work, not for the contents.

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Abstract

This study integrates insights from the international business political behaviour and multinational strategy literature streams to explore the relation between headquarters-subsidiary relations as well as subsidiaries’ contributory role in the multinational enterprises’ (MNEs) network and the degree to which corporate social responsibility (CSR) strategies are localised or globalised within subsidiaries. I propose that subsidiary’s functioning within the whole organisation matters to whether the CSR strategy of that subsidiary is more localised or globalised. Specifically, I explore whether high contributory subsidiaries and subsidiaries with more decision-making autonomy have their CSR responsiveness more tailored to the host-country context. I also speculate that high contributing subsidiaries tend to play a prominent role in the assimilation of CSR knowledge by headquarters (HQ) and fellow subsidiaries as to enhance the global CSR strategy. The study is based on case studies of nine global MNEs serving various industries. The study’s results reveal that the Strategy, International Business (IB) and partly the Political Behaviour streams of literature are helpful in exploring subsidiary contributory role in relation to the stimulation of global vs. local CSR strategies. For 5 out of 9 MNEs in the sample high contributory subsidiaries tend to tailor their CSR responsiveness to the local context more than other subsidiaries in the organisation. Subsidiaries with higher responsive CSR strategies appear not to be characterised by higher levels of autonomy. The findings further provide support for all high contributing subsidiaries being influential in the localisation versus globalisation of other subsidiaries’ CSR strategy. This paper contributes to the discourse of CSR strategies in the MNE context by exploring subsidiaries’ endowments and role within the MNE in the context of local versus global CSR. The headquarters-subsidiary dyad remains a relatively little addressed topic within the CSR and MNE literature. A future agenda can be to explore the configuration of CSR strategy between different continents, the role of regional HQs and how culture might influence managers’ decision-making.

Keywords: CSR, Subsidiary Contributory Role, Subsidiary Autonomy, Parent-subsidiary

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Acknowledgements

First of all I wish to acknowledge the support given by my supervisor E. Dirksen. During the first phases he provided some constructive and clarifying remarks on how to proceed, and allowed me to work very independently in the course of the past 9 months. I would like to express my great appreciation to all beneficent interviewees that cooperated and assisted me in providing the necessary information. A special thanks goes to the directors and others who helped me to get in contact with the right interview candidate within their company. Furthermore, the support, comments and meaningful insights provided by my girlfriend have been of great help. Additionally I would offer my special thanks to my dad who provided me with great support and facilitated the contact of various companies. Finally I want to express my gratefulness to various friends and acquaintances that provided me various significant contact details.

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Introduction

The notion of CSR and its various denominations are widely discussed in the IB management literature. Yet, literature on the management of CSR by MNEs is still in its infant stage (Rodriguez et al., 2006). Little empirical research has paid attention to how MNEs manage CSR strategies in the multinational context, which is why MNEs (and their subsidiaries) often fail to respond adequately to pressures and issues in the host countries (Husted & Allen, 2006; Logsdon & Wood, 2005). As the on-going globalisation of markets has increasingly put attention to MNEs’ negative and positive effects of their global operations (Jamali, 2010), CSR is becoming increasingly important to MNEs (Yang & Rivers, 2009).

So far, only a handful of studies have attempted to empirically explore CSR strategy in the MNE context (Cruz & Boehe, 2010; Husted & Allen, 2006; Jamali, 2010; Kolk et al., 2010; Muller, 2006; Park & Ghauri, 2015). Some other management scholars’ contributions found solely upon assertions and conceptualisations and lack the needed empirical evidence (Hah & Freeman, 2014; Tan & Wang, 2011; Yang & Rivers, 2009). Especially subsidiary’s role within the MNE network in managing CSR strategies is where current research falls short. In analysing the standardisation or localisation of CSR activities of MNE subsidiaries, only Jamali (2010) has looked at contingencies like the resources owned by subsidiaries, the strategic role that the subsidiary plays in the MNE network and the nature of subsidiary competence. In the relation between the headquarters and the subsidiary considering CSR strategies, only a few studies (e.g. Cruz & Boehe, 2010; Cruz & Pedrozo, 2009) have shed some light on potential challenges MNEs face in managing their CSR strategies. Yet, prior research did not widely investigate the link between CSR strategies of MNEs, the parent-subsidiary relationship and the role of subsidiaries’ strategic role within the MNE network.

This exploratory study attempts to fill this gap by building partially further upon Jamali (2010) approach of cross-fertilizing insights from the business-society and international business political behaviour as well as integrating multinational strategy literature streams to discuss

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relevant contingencies that affect subsidiaries’ CSR strategy and the globalisation or localisation of these strategies. The purpose is to gain better insights into parent-subsidiary relations and subsidiaries’ “contributory role” (Birkinshaw et al., 1998) in the MNE network and how these relate to the localisation versus globalisation of MNE subsidiaries’ CSR strategies. This study therefore aims to explore the connection between subsidiary’s contributory role as well as parent-subsidiary relationship and the globalisation or localisation of CSR strategy within subsidiaries.

This study contributes to the discourse on CSR by exploring the diffusion of CSR strategies in light of the international business political behaviour and strategy literature and subjecting the parent-subsidiary relationship to a closer scrutiny. Linking the role of organisational context in the diffusion of CSR strategies with the strategic relevance and role of subsidiaries, I hope to clarify the nature of the link between MNEs’ subsidiaries CSR strategies, subsidiary role and the HQ-subsidiary relations.

Studies on the CSR strategies in the MNE context have mostly been applying two theoretical lenses, that is institutional theory (e.g. Husted & Allen, 2006) and stakeholder theory (e.g. Park & Ghauri, 2015). Yet the empirical evidence of these studies is fragmented and inconsistent (Jamali, 2010), suggesting that more research is needed to advance our understanding of MNEs’ subsidiaries CSR strategies and the contingencies influencing the globalisation versus localisation of these strategies. As Jamali (2010) explains, the configuration of the CSR strategy to local responsiveness or integration pressures has unfortunately not received systematic attention in this literature, and the potential determinants of specific subsidiary strategies remain largely unexplored. The international business political behaviour literature, however, has made considerable steps in examining the political strategies of MNEs and their subsidiaries in coordinating their activities, using multiple theoretical lenses (Blumentritt & Nigh, 2002; Luo, 2006). In fact, studies have made significant steps in identifying contingencies that influence the management of global political imperatives by subsidiaries as

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well as the degree of standardization and localization of MNEs’ political strategies (Jamali, 2010). Likewise, much of the recent literature on international and multinational strategy have highlighted the increased strategic role played by subsidiaries in the MNE network as contributors to development of firm-specific advantages (FSAs) (Birkinshaw et al., 1998; Rugman & Verbeke, 2001), from where interesting frameworks have emerged to understand the parent-subsidiary relationships. Therefore, it could both be very useful to integrate the insights of localisation and standardisation of MNEs political strategies with the insights from the international strategy literature on subsidiaries’ strategic role in pursuit of identifying factors within the organisational context that mould the localisation or standardisation of CSR strategies in international markets.

The article is structured as follows. First, I review the theoretical concepts of and approaches to CSR. Then I delineate the various theoretical lenses used by studies to explain CSR strategies within the MNE context, after which I discuss the strategic role and relevance of subsidiaries. Next, I present the propositions, followed by the research methodology and the findings of the cases. In the section following, I discuss the findings in light of the relevant literature. Finally, managerial implications and indications for future research are discussed.

Theoretical framework & proposition development

What is CSR?

Corporate Social Responsibility is probably the most comprehensive, bourgeoning and, at the same time, the most meaningless concept in the literature of IB and Business Ethics (BE) (Keinert, 2008). Numerous papers repeatedly dealt with the difficulty in defining the CSR concept as it “means something, but not always the same thing, to everybody” (Votaw, in Carroll, 1999, p. 280). As Carroll (1999, p. 280) continues, “to some it conveys the idea of legal responsibility or liability; to others, it means socially responsible behaviour in an ethical sense”. Also, the academic literature frequently renamed CSR into, for instance, ‘corporate citizenship’,

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‘sustainable development’, ‘Triple Bottom Line’, ‘business ethics’, ‘corporate social performance’, corporate social accountability (Keinert, 2008; van Marrewijk, 2003), among others, which only further augment the haziness of the CSR concept. Although academics have enriched, expanded and broadened the concept of CSR, the contributions are hardly conducive to arriving at clear meaning of the CSR concept. Moreover, the persistent difficulty in defining the concept of CSR impedes the possibility to compare results across the various studies on CSR, hampers our ability to grasp the theoretical strategic implications of CSR (Hah & Freeman, 2014) and, most importantly, causes the scant attention to CSR strategy in the MNE context (Jamali, 2010; Rodriguez et al., 2006).

Despite the many definitions of CSR, it can be said that CSR encompasses an internal and external dimension (Tencati et al., 2004). Responsibilities of the firm that belong to the internal dimension include, for instance, the management of resources and the impact of firms’ activities on the environment, whereas the external dimension encompasses the constituencies outside the organisational surroundings, such as communities and society, but also customers, competitors and suppliers. This approach parallels the general consensus of opinion among scholars that the notion of CSR is concerned with the relationship between a corporation and the different participants in the society in which it operates (Crowther & Rayman-Bacchus, 2004; Keinert, 2008; Werther & Chandler, 2010). Besides the relationship with shareholders, organisations now also have to address the interests of other stakeholders as they exist within society and so therefore have responsibilities to that society (Crowther & Rayman-Bacchus, 2004). From this perspective, CSR to some extent redefines the role and obligations firms have to their various stakeholders in society and within the organisation (Keinert, 2008); it is an extension of corporate management where a firm’s fiduciary responsibilities are extended beyond its shareholders and includes its broader constituencies (Sacconi, in Hah & Freeman, 2014). CSR is thus the impetus for firms to include social and environmental concerns into business decisions

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and operations, and increase interaction with stakeholders (van Marrewijk, 2003), thereby going beyond the firm’s interests and legal compliance (McWilliams and Siegel, 2001).

The perspective of CSR largely parallels and complements the stakeholder theory (Snider et al., 2003). According to the stakeholder model, besides shareholders’ needs, businesses are also deemed responsible for addressing the needs of other constituencies concerned by corporate activity (Keinert, 2008). These so-called “stakeholders” all have a stake in a firm’s profit-seeking activities, can affect or are affected by achievement of organisation’s objectives and have an interest or ownership in the organisation (Garriga & Melé, 2004; Werther & Chandler, 2010). For example, stakeholders in the internal environment, like employees, shareholders and executives might have conflicting interests, not to mention the interests of constituencies in the external environment, like those of suppliers, consumers, but also the natural environment, society and communities (Tencati et al., 2004). Firms’ competitive advantage and survival depends on how they interact with the different and often heterogeneous stakeholder groups (Werther & Chandler, 2010), and, as such, business ought to address and balance stakeholders’ interests, not only those of shareholders. This viewpoint positions CSR decision-making in continuous dialogue with a firm’s stakeholders (Garriga & Melé, 2004; Waddock & Boyle, in Muller, 2006), and thus compares well to a firm’s strategic approach to establish initiatives toward its stakeholders (Werther & Chandler, 2010; Yang & Rivers, 2009). Therefore, in the light of this study, I define CSR according to its role of strategic relevance to firms in relation to stakeholders, namely CSR is “a view of the corporation and its role in society that assumes a responsibility among firms to pursue goals in addition to profit maximization and a responsibility among a firm’s stakeholders to hold the firm accountable for its actions” (Werther & Chandler, 2010, p. xii).

Global & local CSR

Only a handful of studies have attempted to describe the globalisation versus localisation of CSR strategies in the MNE context (e.g. Cruz & Boehe, 2010; Husted & Allen, 2006; Jamali, 2010;

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Muller, 2006; Park & Ghauri, 2015; Tan & Wang, 2011), suggesting the need for increasing our knowledge in relation to management of CSR in MNEs (Chapple & Moon, 2007; Muller, 2006). Although issues of local responsiveness and global integration have received considerable attention in the IB literature (Bartlett & Ghoshal, 1989; Prahalad & Doz, 1987), the role of CSR, however, remains underexposed (Muller, 2006), despite managers’ growing recognition and demand for incorporating CSR in strategic decision-making (Muller, 2006). Chapple and Moon (2007) note here that there is indeed a lack of theoretical understanding as to how to address the tension of global versus local. Correspondingly, the lack of empirical studies to support current theories is what causes inconsistency in perspectives on what defines global and local CSR.

Unfortunately, there is no explicit theory that distinguishes between global and local CSR (Husted & Allen, 2006). Muller (2006), for instance, defines global CSR as strategies that are globally coordinated and integrated, while local CSR strategies are more decentralised and stimulated by local responsiveness required by host–country stakeholders. Husted and Allen (2006), however, suggest that the community demanding it defines whether the CSR strategy is global or local. A local CSR strategy deals with standards and needs of the local community. In contrast, a global CSR strategy deals with corporations’ obligations based on standards about that are held by all societies (Husted & Allen, 2006; Jamali, 2010;). For example, global issues are those that transcend national boundaries like environmental protection (Gnyawali, in Husted & Allen, 2006). Local CSR issues, on the other hand, concern those issues that are in accordance to the needs and circumstances of local communities (Reed, 2002).

It is unclear, however, what constitute a community. As Donaldson and Dunfee (1994, p. 262) define, a community is “a self-defined, self-circumscribed group of people who interact in the context of shared tasks, values or goals and who are capable of establishing norms of ethical behaviour for themselves”. From this perspective, this definition very much parallels the context of stakeholders, in which different stakeholder groups represent different communities. Although stakeholders vary in their demands, needs and interests and are affected by the actions

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of corporations, it is quite possible that within a particular stakeholder group people perform similar tasks and share similar values or goals. As such, local CSR encompasses not only the standards within a local community, but also the standards of various different stakeholder groups. Subsidiaries therefore have to configure their CSR strategies to make them responsive to various diverging standards of different communities and stakeholders. As divergence in definitions impedes the further advancement of empirical studies on CSR in the MNE context, this study attempts to shed more clarity and distinguishes local CSR from global CSR based on the community and stakeholders demanding it. Moreover, local CSR within this context does not necessarily have to pertain to a specific country or region. Different divisions can be located in the same country, yet have different pressures to deal with. To illustrate, local government regulations can impose the same rules on both subsidiaries while the stakeholder and industry demands vary significantly for each subsidiary.

Globalisation versus localisation of CSR strategies

In the IB literature the stakeholder approach has often been used to increase understanding of the CSR activities across MNEs’ subsidiaries (e.g. Clarkson, 1995; Hah & Freeman, 2014; Jamali, 2010; Park & Ghauri, 2015). The principal idea behind this approach is MNE’s need and moral requirement to obtain legitimacy as a way to satisfy the demands of (salient) constituencies in the MNE environment. In this multinational environment, firms continuously face various home-country, host-country and internal pressures that have an impact on how MNEs adopt an effective CSR strategy (Muller, 2006). As the CSR strategy should satisfy the expectations of stakeholders in home and host countries, MNEs iteratively deal with the tension whether to adopt globally, integrated CSR strategies that satisfy the demands from the global levels, or whether subsidiaries should stimulate locally responsive CSR strategies that satisfy the host-country stakeholder groups (Muller, 2006; Hah & Freeman, 2014). While global strategies may be more proactive, efficient, and integrated, they often lack ownership and legitimacy at local level; decentralized strategies, on the other hand, are locally responsive, but may be fragmented and

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more based on a case-by-case analysis (Muller, 2006; Jamali, 2010). Table I depicts an overview of both strategies’ advantages and disadvantages.

TABLE I

Global vs. local CSR in MNEs

Advantages Disadvantages

Global CSR Upward harmonization of CSR standards internationally Globally integrated and standardized strategy

Policies, processes, and structures consistent across cultures

Insensitivity to local needs

Reduced ownership and legitimacy

Compliance based strategies that are tailored to end of pipe controls

Approaches that live up to minimum host requirements

Local CSR National responsive and adapted to local context

Tailored to local differences and preferences

Fragmented inconsistent and reactive strategies

Lack of clear responsibility

Approaches that live up to minimum global requirements

High coordination and control necessary

(Husted & Allen, 2006; Muller, 2006)

Hah and Freeman (2014) & Yang and Rivers (2009) both apply the stakeholder theory to explore how MNE subsidiaries operating in a foreign country organize their CSR activities towards the local host–country stakeholders when pursuing legitimacy. Unfortunately, the authors’ research contributes only conceptually and lacks further empirical evidence. More recently, however, Park and Ghauri (2015) investigated the key stakeholders influencing the CSR activities of foreign subsidiaries and find empirical evidence that consumers, ‘internal managers and employees’, competitors and non-governmental organizations are the determinants influencing the likelihood that MNE subsidiaries in emerging markets adapt their CSR activities to the local environment.

Yet several other studies (Hah & Freeman, 2014; Husted & Allen, 2006; Husted & Allen, 2006; Yang & Rivers, 2009) also highlight other push and pull forces influencing the adoption of MNE subsidiaries’ CSR strategy. These studies likewise draw upon the institutional theory to understand how MNEs organise their CSR activities in overseas locations with the objective of achieving legitimacy. The institutional theory traditionally relates back to the concept of institutional isomorphism by DiMaggio & Powell (1983), which explains that MNE subsidiaries are subject to normative, coercive, and mimetic pressures in the host country as to gain external

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legitimacy (Tan & Wang, 2011). These pressures arise due to institutional differences (or similarities) between regulatory, cognitive, and normative institutions of the host country and the home country (Eden & Miller, 2004). In adopting local or global CSR, MNE subsidiaries thus not only face the challenge of effectively managing diverging stakeholder expectations, but they also have to deal with isomorphic pressures in the host country, causing dilemmas referred to as ‘institutional duality’ (Hillman & Wan, 2005).

Institutional logics is a new approach in institutional theory and differs from institutional isomorphism by highlighting that individuals and organizations can respond to institutional pressures in relatively non-deterministic ways when contending logics co-exist (Thornton & Ocasio, in Tan & Wang, 2011). An institutional logic is a value and belief system by which a particular social world works (Friedland & Alford, 1991). As Tan & Wang (2011) explain, overseas subsidiaries are surrounded by divergent institutional logics, which often define ethical behaviour in various fundamentally different ways. Ethical expectations in the home country are therefore in many situations different from those in the home country. Tan & Wang (2011) integrate both the institutional isomorphism and institutional logic approach to identify what factors shape subsidiaries’ ethical strategies, thereby endorsing the perspective that subsidiaries’ ethical strategies are not only driven to respond to host-country stakeholders concerns, but also shaped by institutional isomorphic pressures and differences in institutional logics. Through a theoretical framework, Tan & Wang (2011) propose subsidiaries have the option of four different CSR strategies they are likely to adopt based on the CSR ingrainedness1_{of their}

respective parent company and the local ethical pressure in the host country. Whereas CSR ingrainedness pushes subsidiaries to maintain internal consistency within the MNE, ethical expectations and pressures, on the other hand, shape subsidiaries’ ethical strategies in a foreign host country. As such, high levels of local ethical pressure in a particular host country would pose a great challenge to the subsidiary to maintain its internal legitimacy (Tan & Wang, 2011).

1_{Tan & Wang (2011, p. 387) define CSR ingrainedness as “the degree to which a corporation prioritizes CSR in its strategy and}

systematically and routinely incorporates CSR into its daily practices”.

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Another study by Hah & Freeman (2014) draws upon Tan & Wang (2011) by articulating ethical approaches as ‘CSR strategies’. Whereas Tan & Wang (2011) focus solely on the institutional theory, Hah & Freeman (2014) incorporate the stakeholder theory to understand what forces are into play within the MNE internal and external environment. Similarly, Yang and Rivers (2009) integrate stakeholder theory with institutional theory to identify internal and external pressures for legitimacy in MNE subsidiaries. They posit that although MNEs’ subsidiaries will be less likely to tweak their CSR practices to the local environment, if the ties with headquarters are strong and the benefits to maintain internal legitimacy outweighs external legitimacy, great institutional distance between home country and the host country might cause a local CSR strategy to predominate over a global CSR strategy. Likewise, Husted & Allen (2006) report that MNEs’ CSR policies are influenced across subsidiaries as a result of pressures for institutional isomorphism.

While institutional theory and stakeholder theory are powerful tools to examine the interaction between an organization and its surrounding institutional and stakeholder environment, some studies do not explicitly explain why MNE subsidiaries adopt a specific global or local CSR strategy (Hah & Freeman, 2014). Muller (2006), for example, concludes that MNE subsidiaries in Mexico that perceive themselves to be autonomous in their overall activities appear to adopt a CSR strategy predominantly in accordance with home-country and international policies. Cruz and Boehe (2010) and Kolk et al. (2010), on the other hand, suggest MNE subsidiaries in Brazil and respectively China adopt a more local CSR strategy that suits the needs of the host country’s society in order to be locally responsive to specific economic conditions and cultural contexts. The findings (Table II summarizes the findings from key studies on CSR strategies within the MNE context) by Jamali (2010) suggest that subsidiaries of MNEs are tailoring their CSR strategies to reflect characteristics of the subsidiary in question as well as the nature of the specific market environment encountered. Subsidiary’s responses to adopt more globally or locally oriented CSR strategies was observed to be an outcome of several different

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dimensions of CSR, namely CSR motivations, CSR decision making and explicit CSR manifestations (Jamali, 2010).

TABLE II

Summary findings from key studies

Literature Findings

Husted and Allen (2006) MNE types place similar importance on global CSR issues (e.g., environmental conservation), but the multi-domestic and transnational MNEs place greater importance on country-specific CSR than do global MNEs

Cruz and Boehe (2010) Identify four central challenges faced by MNEs in adoption of headquarters’ CSR strategies to suit the local host country by French MNEs operating in Brazil under their corporate-wide shared values

Muller (2006) Autonomous foreign subsidiaries in Mexico are predominantly in accordance with home–country and international policies, instead of tailored to the host–country Jamali (2010) Global CSR strategies were implemented by MNE subsidiaries in Lebanon under the

guidance of their headquarters. CSR strategies by headquarters were diffused to the host country and diluted according to the specific subsidiary’s characteristics and host country’s market characteristics

Kolk et al. (2010) MNE subsidiaries operating in China mirror practices at home and bring in some of their own habits and traditions. However, the practices are also locally responsive

(Hah & Freeman, 2014)

Evidently, attention is growing to the local versus global debate of MNE’s CSR strategies, yet studies’ results remain mixed and the strategic relevance of CSR is often still overlooked (Park & Ghauri, 2015). The under-explored strategic implications of CSR for MNEs are not conducive for the structural approaches that are needed globally by businesses. Indeed, as Peng and Pleggenkuhle-Miles (2009) observe, MNEs worldwide are increasingly reformulating their strategies as to accommodate CSR issues, hence a wider picture of these implications would benefit organisations tremendously. Although studies have examined drivers of CSR strategies from multiple theoretical lenses (e.g. Hah & Freeman, 2014; Muller, 2006; Tan & Wang, 2011; Yang & Rivers, 2009), it is remarkable that only a few have applied a more strategic lens (e.g. Husted & Allen, 2006; Jamali, 2010) or attempted to relate CSR to MNEs’ localisation or globalisation of political strategies, which are based on strategic considerations (e.g. Jamali, 2010).

Husted and Allen (2006) tried to increase the understanding of the relationship of global and local CSR to international organisation strategy by examining how different MNE types

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CSR issues parallels the work of Bartlett and Ghoshal on organizational strategy. MNEs configure their strategies as a response to different pressures in the product markets (Prahalad & Doz, 1987). Pressures for integration and coordination between home-country’s parent company and the host-country’s subsidiary alternate pressures for local responsiveness in the host-country. For example, integration pressures arise from multinational customers and competitors, technological developments, access to raw materials, and the need to leverage investment and achieve economies of scale, whereas pressures for local responsiveness are due to different customer needs and tastes, market structure, and governmental requirements (Husted & Allen, 2006; Prahalad & Doz, 1987). Drawing upon these two dimensions (Bartlett & Ghoshal, 1989), many studies have created typologies of organisational strategy that highlight how MNEs are strategically organised to deal with these diverging pressures. Husted and Allen (2006) note here that the strategic importance of global or local CSR issues turns on the integration/localisation pressures within the product market. Although it is observed that pressures for CSR integration or localisation may not correspond neatly to the pressures in the product market, the findings do suggest CSR seems to conform to the MNE organization strategy established for product-market activities.

Yet, as suggested by Husted and Allen (2006), it is common practice for global MNEs to use strategies in which local market units have limited functions with small staffs and then find themselves unable to monitor and respond successfully to CSR issues. Even when MNEs try to adequately resource subsidiaries in the context of a local/global CSR strategy, it becomes difficult to monitor and control them because of physical and cultural distance (Jamali, 2010). It is here that issues of coordination and control (Jamali, 2010), the role of a subsidiary and the parent-subsidiary relationship (e.g. degree of autonomy) become salient.

HQ-subsidiary relationship & subsidiary role

While the concept of autonomy and parent-subsidiary relationship has been extensively covered by literature on MNE subsidiaries and their (strategic) roles (Cruz & Pedrozo, 2009), questions remain

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unanswered as to what levels of autonomy or other relational factors are associated with which kind of CSR strategy (Cruz & Boehe, 2010). Indeed, consistent with Cruz and Pedrozo (2009), studies didn’t shed much light on the relationship between headquarters and subsidiaries with regards to CSR strategies, explaining the vagueness surrounding the nature of the link between social and environmental practices at the subsidiary level and parent-subsidiary relations in the multinational context (Muller, 2006). In his study, Muller (2006) highlights the parent-subsidiary relationship by scrutinizing the perceived level of autonomy of seven subsidiaries in Mexico. By plotting the subsidiaries managers’ perception of their autonomy against the CSR performance of the subsidiary, each subsidiary’s indicative position within the spectrum was determined. From the results it was apparent that subsidiaries more tightly controlled by the parent company emerged as less proactive in terms of CSR (Muller, 2006).

The study by Jamali (2010) is the first and only one that attempts to outline important contingencies affecting the localisation or globalisation of CSR strategies from a political behaviour perspective. More specifically, by adducing various theories in the international business political behaviour literature, Jamali (2010) argues that many of the contingencies identified within this literature are readily transferable to analyses of global vs. local CSR decision-making. These contingencies include resources owned by subsidiaries, the strategic role types that subsidiaries have and the local market strategic relevance, among others, which invariably influence the globalisation/localisation process. For example, firms face a wide range of potential risks and challenges in different countries, which often necessitate a localized strategy in dealing with them (Jamali, 2010). The findings by Jamali (2010) suggest that while global CSR is being diffused to various subsidiaries worldwide, along the way it is ‘diluted’ in view of specific subsidiary capabilities and host market characteristics. Namely, these capabilities and host market characteristics (i.e. contingencies) mould different degrees of coordination (globalisation) or differentiation (localisation) in subsidiaries’ CSR activities (Jamali, 2010).

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Issues of coordination and control have been extensively discussed and adduced within the strategy and international business political behaviour literature to explain the localisation vs. globalization in MNE political strategies, that is, the configuration of different degrees of coordination or differentiation in subsidiary political activities to deal with external and internal legitimacy pressures (e.g. Blumentritt & Nigh, 2002; Bouquet & Birkinshaw, 2008; Hillman & Wan, 2004). The debate on control and coordination is central to the parent-subsidiary relationship and literature on headquarters-subsidiary has widely examined formal coordination mechanisms within MNEs (Cruz & Pedrozo, 2010), such as the centralisation of decision-making at headquarters (e.g. O’Donnell, 2000) and, the counterpart, subsidiary’s decision-decision-making autonomy (e.g. Birkinshaw & Morrison, 1995; Gupta & Govindarajan, 1994). In general, headquarters tend to rely on centralised decision-making and control as to improve the efficiency of global operations (i.e. pressures for internal legitimacy & integration) (Cruz & Boehe, 2010). Sometimes, however, skills and capabilities of local managers in subsidiaries are needed to respond adequately to the needs of local markets to enjoy the potential benefits of being locally responsive. In this case, MNEs tend to loosen the formal coordination mechanisms by granting subsidiaries decision-making autonomy, which increases subsidiaries managers’ responsibility towards headquarters and the MNE network.

The treatment of the manager and capabilities of the subsidiary as a relevant unit of analysis and strategic decision-making within the MNE is a well-discussed approach in the strategy literature (Birkinshaw et al., 1998). Subsidiary managers are increasingly becoming active participants in the formulation and implementation of strategy (Birkinshaw et al., 1998) and undertake so-called ‘subsidiary initiatives’ within MNE networks (Rugman & Verbeke, 2001), changing the conceptualisations of subsidiaries’ role within the organisation. As Birkinshaw et al. (1998) outline, subsidiaries role is shifted from being the sole concern of the parent company to a collective responsibility for the corporate network.

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Past studies have examined the different (contributory) roles taken by subsidiary companies (Birkinshaw & Morrison, 1995; Gupta & Govindarajan, 1994; Jarillo & Martinez, 1990; Roth & Morrison, 1992). A central theme within this literature is the increasingly important strategic role played by subsidiaries as contributors to the development of FSAs (Birkinshaw et al., 1998). For example, subsidiaries can act as contributors or leaders of innovation projects (Bartlett & Ghoshal, 1986), but they also can provide outflows of valuable resources to other subsidiaries in the organisation (Gupta & Govindarajan, 1994). ‘Specialised contributor’ or ‘strategic leader’ are recurring terms in the literature to describe those subsidiaries that are perceived to contribute to the FSA development for MNEs’ competitiveness (Birkinshaw et al., 1998; Rugman & Verbeke, 1992). This means headquarter and other subsidiaries need to acknowledge and recognize the value of subsidiaries resources (Birkinshaw et al., 1998), even when these skills and capabilities are not present at the headquarters.

The term ‘contributory role’ refers to the extent to which the subsidiary has specialized resources that are recognized by the corporation as a whole and contribute to the FSA development of the entire MNE (Birkinshaw et al., 1998; Rugman & Verbeke, 1992). This term, however, is deliberately broad in scope because the nature of the subsidiary’s contribution to firm-specific advantage will vary enormously from case to case (Birkinshaw et al., 1998). This is especially evident when considering the boundedness of subsidiary resources. The degree to which subsidiary resources can effectively be transferred or leveraged depends on the stickiness of the resources in question (Szulanski, in Birkinshaw et al., 1998). More specifically, two types of FSAs can be distinguished: non-location-bound FSAs and location-bound FSAs (Rugman & Verbeke, 1992). Whereas non-location-bound FSAs reflect production-related assets and capabilities that can be exploited globally, location-bound FSAs can be defined as FSAs that benefit a company only in a particular location (or set of locations), and lead to benefits of national responsiveness (Rugman & Verbeke, 1992; 2001). For example, though evidence is anecdotal, some high contributing subsidiaries may be established solely to meet political ends in

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the host country, with no intention of ever transferring the latent expertise to other parts of the corporation, while other types of contributor subsidiaries' managers act without considering the parent approval or pressures to maintain legitimacy with other parts of the corporation, as they might be very autonomous (Birkinshaw et al., 1998) or do not rely heavily on parent company resources (Yang & Rivers, 2009).

As the parent-subsidiary relationship can be considered being a stakeholder that is part of the organisational context of an MNE (Yang & Rivers, 2009), maintaining well-established relationships with headquarters is an integral part within the stakeholder perspective. To subsidiaries, the HQ-subsidiary relationship constitutes the most salient contingency to their success. Indeed, acceptance and approval by parent company (or other subunits of the parent firm), that is, maintaining internal legitimacy, can be critical to the survival and growth of a subsidiary if it depends on the parent company for continuing access to vital resources such as capital, technology, and knowledge (Yang & Rivers, 2009). In such a case, internal legitimacy requirements may preponderate over the external legitimacy requirements to a subsidiary operating in the host country. Yang & Rivers (2009) argue here that subsidiaries relying heavily on their parent company for resources and internal legitimacy are less likely to adopt local CSR activities. On the other hand, subsidiaries with unique resources, knowledge and high level of upstream competence within the MNE network (i.e. subsidiaries with high contributory role) are likely to be less dependent on headquarters, and have more ‘subsidiary choice’ (Child, in Birkinshaw et al., 1998). In these cases, the role of the subsidiary is to a large extent open to subsidiary management to define for themselves (Birkinshaw et al., 1998). Birkinshaw et al. (1998) explain that this perspective works on the assumption that managers in subsidiaries better understand the local market and their local capabilities than head office, and, therefore, subsidiary management is considered to be in the best position to decide what role the subsidiary should play. Taken together, subsidiary’s contributory role is usually associated with the degree of autonomy in decision-making.

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Indeed, in their study, Birkinshaw et al. (1998) reveal that autonomy was positively related with subsidiary’s contributory role. Adducing the arguments of Birkinshaw and Morrison (1995) and Gupta and Govindarajan (1994), decision-making autonomy of the subsidiary appears primarily to be granted to subsidiaries as to be locally responsive and benefit from local opportunities. Consistent with Jamali (2010), as suggested in the international business political behaviour literature, the resource endowments of local subsidiaries are critical for benefiting from interactions of global MNEs and for translating good intentions into practical added value benefits and applications. Birkinshaw et al. (1998) explains that when a local country is strategically important or where the dynamism of local competitors, suppliers and customers is high, the expectation is that the subsidiary will have a correspondingly important role. Environmental pressures determine the contributory role of a subsidiary, that is pressures for local responsiveness and global integration (Jarillo & Martinez, 1990).

Therefore, both the degree of subsidiaries’ contribution and autonomy could affect the iterative decision-making process of the globalisation or localisation of CSR. More specifically, subsidiaries with unique resources and knowledge or/and more autonomy, are more likely to tailor the responsiveness of their CSR strategy to local issues. Taking into account the influence of each MNE’s unique organisational structure and governance in subsidiaries, I propose:

P1: Subsidiary’s strategic role within the MNE network matters in the

localisation or globalisation of the CSR strategy of that subsidiary. Specifically, subsidiaries with higher (lower) contributory role tend to have a relatively more localised (more globalised) CSR strategy.

P2: Subsidiaries that adopt a more locally responsive CSR strategy are

characterised by relative higher levels of discretion in decision-making.

Within the strategy literature several previous studies with respect to the conciliation of strong globalisation and localisation pressures and the relationships among MNE units are especially concerned with knowledge, resource, and capital flows among MNE units (Cruz & Boehe, 2010). Studies suggest that both knowledge inflows from subsidiaries and headquarters to a particular individual subsidiary and outflows from this subsidiary to the MNE network take

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place. This means subsidiaries may independently create proprietary knowledge and capabilities that can be at the disposition to other subsidiary units (Cruz & Boehe, 2010).

Therefore, subsidiaries contributing substantially to FSA development of the MNE, that is, considered to having unique resources, knowledge and high level of upstream competence, are more interesting for headquarters than other subsidiaries. In other words, high contributory subsidiaries can play a more significant role in strengthening the group’s CSR programs and activities, as both corporate and fellow subsidiary managers will benefit from leveraging the knowledge and capabilities developed in this subsidiary. In fact, HQ-managers who do not leverage knowledge or competencies in the market place might face higher opportunity costs (Mudambi & Navarra, 2004), which, in turn, withhold firms to arrive at a better competitive position within the market place. As such, more knowledge and insights of CSR strategy and practices of this type of subsidiary is transferred to headquarters as to strengthen the global CSR strategy and practices. These types of subsidiaries take the lead in CSR and serve other subsidiaries within the MNE with their knowledge and expertise. As such, they can influence the decision-making processes of local vs. global CSR within the MNE. Similar to Cruz and Boehe (2010) conclusion, I therefore posit:

P3: High contributory subsidiaries function as a nourishing source for CSR

activities and practices within the MNE. Specifically, priorities and patterns of localisation and globalisation of CSR strategies are likely to be influenced more by subsidiaries with a high contributory role.

The propositions are depicted in figure 1, which forms the conceptual framework of this study. Building further upon previous authors’ work (Amba-Rap, 1993; Jamali, 2010), the framework turns attention to the configuration of the various stakeholders and institutional actors within the MNE’s global environment in analysing the globalisation versus localisation of CSR activities (Jamali, 2010). The framework also highlights various important contingencies affecting the formation of subsidiaries’ CSR strategies. While the various pressures in the MNE environment have been documented, this framework in particular accentuates the subsidiary factors at play

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when exploring MNEs and their CSR strategies, including subsidiary contributory role, the level of autonomy and how these interact with the patters of localisation and globalisation of CSR strategy within the MNE.

MNE subsidiaries’ CSR strategies

Figure 1: Contingencies affecting the CSR strategies of MNEs and their subsidiaries in the global environment (adapted from initial illustration by Jamali, 2010).

Methodology

Research design

In exploring the HQ-subsidiary relations and how subsidiaries’ strategic role relates to the configuration of CSR strategies, I make use of a retrospective multiple-case study (Yin, 2009) with nine MNEs, ranging from service, product and manufacturing companies from primarily industries like chemical, medical, and transport. As very little studies have addressed the topic of CSR strategy and decision-making within the MNE context (Jamali, 2010; Rodriguez et al., 2006), a research approach exploratory in nature seems most adequate. I haven chosen 9 case studies, because this number suffice in comparing cases using the ‘cross-case analysis’ techniques

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(Eisenhardt, 1989; Miles & Huberman, 1994). Through such an analysis, I can identify the variables to be measured, but, moreover, the specific characteristics.

This study builds upon the process of building theory by Eisenhardt (1989), as this research approach is considered especially appropriate in new topic areas. I have followed the steps suggested by Eisenhardt as outlined in table III. As several authors note, case studies must be persuasive (Cruz & Pedrozo, 2009; Siggelkow, 2007). To foster persuasion, Siggelkow (2007) suggest three ways in which we can use case research: motivation, inspiration and illustration. Researchers can contribute purely theoretically by developing a new research questions, questioning existing theories and, correspondingly, motivating further research to refine conceptualisations. A case study becomes more persuasive when the inclusion of propositions, pinpointing to research gaps and beginning to fill them, which then leads to the provision of contributions to specific well-grounded theoretical fields (Cruz & Pedrozo, 2009; Siggelkow, 2007). The third valuable use of cases as suggested by Siggelkow is to employ them as illustration. In the case of illustration, examiners can illustrate the theoretical contribution through the case as they are getting closer to constructs and are being able to illustrate causal relationships more directly. For this study, I use the cases studies as an illustration and inspiration. Capitalising the data collected from documents and websites, and semi-structured interviews with employees of the MNEs, the case studies will show the theoretical contribution to the literature on CSR. I also state several propositions derived from integrating various literature fields to address a major research gap within the CSR and the MNE literature.

Data Collection

Selecting cases. The MNEs were selected based on both their global presence and well-established

market position, and their notable attention to and knowledge about CSR, which was either apparent from the presence of a specific CSR section on the website, their generally known

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reputation as a responsible company or their classification as a Responsible Care company3_.

Also, within the these types of industries companies are subject to various environmental regulations like generally applicable technology standards, taxes and levies that increase the price of energy use or greenhouse gas emissions. Policy attention on natural resource security is growing worldwide simultaneously with the recognition of an increasing dependence on certain raw materials (Wiedmann et al., 2015). As a result, companies are incited to introduce measures to reduce energy use so that, for instance, the reduction of emissions becomes profitable (Metz, 2010, p. 292). Thus the reduction of the material footprint is where all MNEs can benefit from. Besides regulations, companies within these industries are frequently eligible for R&D funding so that technologies can be developed and applied that, for instance, lessen the impact on the environment or aid certain groups and communities in society.

(Adapted from Eisenhardt, 1989)

3 _{Responsible Care is the European Chemical Industry Council’s unique initiative to improve health, environmental performance,}

enhance security, and to communicate with stakeholders about products and processes. Responsible Care hereby commits companies, national chemical industry associations and their partners to act responsibly and operate in a sustainable way (CEFIC, 2016)

TABLE III Research design

Steps Activity Applicability on this study Covered in

Getting started Definition of research question

What role does the parent-subsidiary relationship play in the globalisation or localisation of CSR strategy within subsidiaries and to what extent does subsidiaries’ strategic role herein matter

Introduction

Selecting cases Specified population 9 MNEs from various industries Methodology Crafting instruments

and protocols

Multiple data collection methods

Semi-structured interviews Document, reports & websites

Methodology Entering the field Flexible and

opportunistic data collection methods

Leaving room for emergent themes during the interview and introduction of additional questions

Methodology

Analysing data Cross-case pattern research

Searching for patterns across cases Results Shaping propositions Iterative tabulation

of evidence for each construct

Presentation from data from interviews of all cases for each proposition

Results

Enfolding literature Comparison with conflicting and similar literature

Discussion of findings with the literature at hand

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With headquarters in the United Kingdom (UK), MNE 1 is one of world’s largest and leading business service companies in the world, providing products and services for primarily pest control, but also hygiene and work wear customers worldwide. With 2.4 billion4_{euro revenues}

and a workforce of around 29.000 employees end 2014, the group includes three primary divisions operating in 63 countries worldwide.

Listed on the Euronext Amsterdam and the Dow Jones sustainability index, the second MNE is a Dutch-based multinational science and chemical-oriented company operating in areas of health, nutrition and materials. The company employs more than 25.000 staff and consists of five main clusters, which aggregately report net sales of approximately 10 billion euro.

The third MNE is a Swedish-based international service organisation operating in 16 countries worldwide, serving 2.2 million customers with approximately 4,000 employees, and reporting combined sales of around 360 million euro6_{. While pest control is the backbone and}

foundation of the company, the organisation also offers services and insurances to create healthier environments and fireproof surroundings, and washroom and hygiene services provided in the Pacific region.

The fourth MNE is a global player and leader in the production of plastics, latex and rubber. The company was created through combining four operating business segments of another global chemical company. Headquartered in the US, the materials company employs more than 2100 employees in 27 countries worldwide and generated revenues of approximately 4.6 billion7_{in 2014.}

MNE 5 is a Dutch-based organisation that operates internationally in the fields of facility and personnel services through product & service systems and healthcare. With activities in 4 countries, 100 various subsidiary companies and a team of 40.000 employees, the company managed to yield a turnover in 2013 of around 1 billion euro. Besides the various subordinate

4_{On the website, the original stated revenues was reported in the British currency, namely 1.9 billion pound.}

6_{On the website, the original stated combined sales amount was reported in the Swedish currency, namely approximately 3,4}

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companies, the MNE has a great number of partnerships and joint ventures.

The sixth MNE concerns a leading technology company headquartered in the Netherlands with operating subsidiary divisions focused in the areas of healthcare, consumer lifestyle and lighting. With activities in approximately 100 countries and 105.000 staff, the company reported sales exceeding 21 billion euro in 2014.

MNE 7 is a UK-based leader in intermodal logistics solutions serving the chemical, polymer, food and mineral industries. The group includes 45 registered subsidiaries and has operations divided in generally 2 business portfolios. The 471 employees across 21 offices worldwide together with local partners and advanced equipment bolster their intermodal solutions. In 2015, the company reported a turnover of 291 million8 _euro.

MNE 8 is a global, leading healthcare organisation specialised in medicine, medical devices and services to help care for patients. With over 33.000 employees positioned across 50 countries worldwide, the company reported sales of approximately 5,9 billion euros in 2015. The company is one of the wholly owned subsidiaries of its group company. As each subsidiary operates completely independent from one another and because of its resemblance to MNEs in terms of size, turnover magnitude and global presence with corporate HQ as well as regional HQs, the subsidiary is treated as a MNE.

Featured in the Dow Jones Sustainability index, the ninth MNE with headquarters in the UK is a global leading merchant company specialised in agricultural commodities. 3859 employees divided over six types of business operations drive the company’s leading market position in the trading of sugar, coffee and molasses. With a foothold in around 60 countries, the company reported combined revenues of approximately 7,41 billion9_{euros in 2014. An overview}

of all cases can be seen in table IV.

Crafting instruments & protocols. I have used two data collection methods for the

MNEs: interviews with managers and employees involved with CSR strategy and decision-

8_{On the website, the original stated turnover was reported in the British currency, namely 225,3 million pound.} 9_{On the website, the original stated revenues was reported in the American currency, namely 8,16 billion dollars.}

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making and collection of public documents such as CSR reports, annual reports and factsheets, and information on the website. Several scholars have endorsed the strengthening effect of making use of a variety of data collection techniques (Yin, 2009). In most cases, I chose a representative or executive manager related to CSR either from a subsidiary located in the Netherlands or Germany, or from corporate headquarters. Examples include Safety, Health & Environment (SHE) director, circular economy manager, corporate CSR manager, or others responsible for the (strategic) sustainable development and communication of the associated knowledge at the subsidiary and/or headquarters. The respondents were approached by email and telephone, after which further contact, including practical and theoretical relevant information, took place by email.

TABLE IV Selected Cases

MNE Headquarters Company Size Sales in €* Industry MNE 1 Germany 29,000 employees, 63 countries 2,3 billion Chemical MNE 2 Netherlands 25,000 employees, 47 countries 10,0 billion Chemical MNE 3 Swedish 4,000 employees, 16 countries 0,4 billion Chemical MNE 4 US 2,100 employees, 27 countries 4,6 billion Chemical MNE 5 Netherlands 40,000 employees, 4 countries 1,1 billion Healthcare MNE 6 Netherlands 105,000 employees, 100 countries 21,4 billion Healthcare MNE 7 UK 471 employees, 14 countries 0,2 billion Transport MNE 8 Germany 33,000 employees, 50 countries 5,9 billion Healthcare MNE 9 UK 3860 employees, 60 countries 7,4 billion Commodities * Approximately

I conducted the documental research and interviews in the period between January and March 2016. With the exception of MNE’s 9 interviewee, which was done directly in the Dutch office in Amsterdam, all interviews were conducted either by phone or Skype. Each interview was between 30 and 60 minutes in duration. In the majority of interviews Dutch was the language of communication. Only the interviews of MNE 7 and 8 were conducted in English. To prepare the interviewee as well as possible and to utilise the time during the interview most efficiently, questions were sent to the interviewee approximately 1 week prior to the interview.

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Aggregately, a total of 71 number of documents were analysed, 89 pages of transcribed interviews generated and various website pages. For MNE 1, 11 pages of interview transcriptions were generated and 7 documents analysed. The interview was conducted with the SHE director Netherlands in charge of safety, health and environmental but also CSR activities within the Dutch subsidiary. For MNE 2, I transcribed 8 interview pages and analysed 7 documents. The interviewee is the corporate circular economy manager positioned at headquarters and responsible for a number of themes and activities within the sustainability team at head office and for the whole global sustainability strategy and implementation. For MNE 3, 12 pages of interview transcriptions were generated and the website and annual report 2014 were used as source of information. The interviewee is the quality manager of the Dutch subsidiary responsible for health, safety and environment in the Netherlands. For MNE 4, I have transcribed 12 interview pages and analysed 8 documents. I conducted the interview with the director of Benelux and global operations of one of the company’s two business portfolios. Positioned at the Dutch subsidiary, the interviewee is simultaneously responsible for all production sites worldwide in his business portfolio and managing director for businesses in the Benelux. For MNE 5, 7 pages of interview transcriptions were generated and 26 documents analysed. The interview was carried out with the project manager management consultancy. Together with the corporate CSR manager within the company they provide advice and guidance to all subsidiaries at the level of CSR. For MNE 6, 10 pages of interview transcriptions were generated and 16 documents analysed. The interview took place with the energy & environmental manager responsible at the site for waste management, energy policy, biodiversity and sustainability purposes.For MNE 7, 10 pages of interview transcriptions were generated and 3 documents analysed.The interviewee is the group QSSHE Manager positioned at headquarters and ultimately responsible for employees’ compliance to the various accreditation standards and legal applications, but also for contamination events, safety incidents, and accidents and the promotion of best practices throughout the organisation. For MNE 8, I have generated 7 pages

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of interview transcriptions and analysed 4 documents. I have conducted the interview including two SHE managers positioned at headquarters of one of the wholly owned subsidiaries of the group company. Both are working at the department for global environment, safety and sustainability. For MNE 9, I have transcribed 12 pages of interview material and analysed the website and annual report 2014. The interview was conducted with the group SHEQ & CSR manager of the Dutch subsidiary who is responsible within the whole group for health and safety, environment and quality, food safety and the CSR program. The profile for each interviewee is depicted in table V.

TABLE V

Profile of the interviewees in MNEs

MNE Interviewees Level

MNE 1 SHE director Netherlands Subsidiary

MNE 2 Manager circular economy Headquarters

MNE 3 Quality manager Subsidiary

MNE 4 Director Netherlands Subsidiary

MNE 5 MNE 6

Replacement CSR director Benelux Energy & environmental manager

Headquarters Subsidiary

MNE 7 Group QSSHE manager Headquarters

MNE 8 SHE manager Headquarters

MNE 9 Group SHEQ & CSR manager Subsidiary

I have chosen to develop a flexible, semi-structured process for the interviews for all cases. Because the phenomena contributory role and HQ-subsidiary relationship are unique and significantly different for each MNEs and no fine line exists between context and the phenomena (Yin, 2009), interviews are considered most applicable to elaborate theory. Semi-structured interviews allow for interviewee to introduce, for instance, new or other relevant questions or topics, creating a fuller and more comprehensive picture of the focal matters. However, allowing such flexibility can affect the reliability of the study and should be thus taken into consideration. Establishing a case study database and protocol could increase transparency, enhancing the extent to which subsequent researchers could arrive at the same insights (Gibbert

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et al., 2008). Besides a clear research framework, also the measure of theory triangulation is proposed to enhance the internal validity.

The interview guide comprised three sections to tackle issues on subsidiaries’ role, the HQ-subsidiary relationship and the localisation or globalisation of CSR strategy. The structured guide steered the discussions around predetermined themes, yet the semi-structured and flexible approach in the course of the interview left room for change in sequence and wording of questions, and in turn allowed the further exploration of areas significant to interviewees. Prior to addressing the propositions, I explored the nature of CSR activities to map the explicitness of CSR manifestations and how these relate to subsidiaries’ competences and the degree to which the CSR strategies are globalised or localised. For example, changes in the CSR strategy of subsidiaries that primarily focus on philanthropic types of CSR activities can be less impactful and far-reaching then changes in the CSR strategy of subsidiaries that approach CSR more systematically through practicing strategic CSR and linking CSR to their core competences. Decisions related to operations within business units would then also affect the MNE’s CSR. Questions that tackle the nature of subsidiary CSR activities included “What types of CSR activities are performed by the subsidiary?” and “How is CSR structured”?

In examining the localisation and globalisation of CSR strategy (i.e. the external and internal pressures affecting CSR strategy) and the parent-subsidiary relationship, questions were inspired by studies from Cruz and Pedrozo (2009) and Cruz and Boehe (2010). Questions were asked like “Does the company try to integrate CSR practices between headquarters and subsidiaries?”, “Are there overall guidelines for CSR provided by headquarters?” and “How are the top managers within subsidiaries engaged with CSR decisions at the global level?”. In examining subsidiaries’ strategic role, questions were inspired from Birkinsshaw (1997) and Birkinshaw et al. (1998). Examples of questions related to subsidiaries role but also decision-making autonomy were “How would you describe the relationship with the subsidiary/headquarters?” and “What determines the strategic autonomy levels of subsidiaries?”

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Questions regarding the way knowledge is assimilated by headquarters included “Is knowledge and expertise regarding CSR mainly centralised or more decentralised within the organisation?”, “Are local CSR initiatives / strategies taken up to the global level?” and “What factors play a role within this process?”. Besides the standard protocol questions, some additional questions were introduced during the interviews that were more attuned to the interviewee’s area of significance.

Data analysis

In addressing the purpose of this study, I draw upon the six-step approach ‘for constructing a theoretical narrative from text’ by Auerbach & Silverstein (2003) and Saldaña’s (2012) coding and categorizing manual. Auerbach & Silverstein (2003) step-by-step approach will aid in transforming the raw data from the interviews into usable concepts and theory. The six-step approach is not linear; in analysing the raw data I will switch continuously between different phases. As Auerbach & Silverstein (2003) put it, in phase 1 of the coding process, relevant text is to be selected and other text discarded, after which repeating ideas are identified and accordingly organized into more general themes in phase 2. In phase 3, these themes are transformed into general theoretical constructs. Yet, these actions happen alternately. Saldaña’s (2012) describes the identification of relevant text parts as looking for patterns, texts that share similar characteristics. These ‘codes’ can then be divided into major categories and subcategories, to then compared with each other and consolidated to progress toward conceptual assertions and theory (i.e. phase 3 of Auerbach & Silverstein, 2003), all happening alternately. Following a similar approach as Jamali (2010), the analysis was focused on discovering commonalities as well as divergences in the statements between the different cases, which fostered the comprehensiveness of the study’s results. For the codification of interview transcription data, I made use of Dedoose, a professional cross-platform app for analyzing qualitative and mixed methods research. In the next section, I turn to the presentation of the main findings.

Localisation versus globalisation of CSR strategies : parent-subsidiary relationship and subsidiary contributory role : a multiple case study of MNEs and their subsidiaries