Putting Back de S in CSR A Multilevel Theory of Social Change in Organizations

Putting the S Back in Corporate Social Responsibility: A Multilevel Theory of Social
Change in Organizations
Author(s): Ruth V. Aguilera, Deborah E. Rupp, Cynthia A. Williams and Jyoti Ganapathi
Source: The Academy of Management Review, Vol. 32, No. 3 (Jul., 2007), pp. 836-863
Published by: Academy of Management
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? Academy o? Management Review
2007, Vol. 32, No. 3, 836-863.
PUTTING THE S BACK IN CORPORATE SOCIAL

RESPONSIBILITY: A MULTILEVEL THEORY OF
SOCIAL CHANGE IN ORGANIZATIONS
RUTH V. AGUILERA
DEBORAH E. RUPP
CYNTHIA A. WILLIAMS
JYOTI GANAPATHI
University of Illinois at Urbana-Champaign
We provide a multilevel theoretical model to understand why business organizations

are increasingly engaging in corporate social responsibility (CSR) initiatives and
thereby exhibiting the potential to exert positive social change. Our model integrates
theories of organizational justice, corporate governance, and varieties of capitalism to
argue that organizations are pressured to engage in CSR by many different actors,
each driven by instrumental, relational, and moral motives. We conclude by high
lighting empirical questions for future research and discussing some managerial
implications.
Economie progress, through a fair and open theoretical model to explore why corporations
world trading system is essential to tackle pov around the world might trigger positive social
erty and ensure a safer more secure world for change by engaging in corporate social respon
everyone now and for future generations. The
challenges remain of ensuring that the benefits sibility (CSR) initiatives. These initiatives in
of that progress reach all sectors in all countries clude actions within the firm, such as changing
and are not at the expense of the environment (Sir methods of production to reduce environmental
Stephen Timms, U.K. Minister for CSR, Royal In impacts or changing labor relationships both
stitute for International Affairs, March 1, 2004).
within the firm and across the firm's value
Corporate Responsibility at Chiquita is an inte chain, as well as actions outside the firm, such
gral part of our global business strategy. It com as making infrastructure investments in local
mits us to operate in a socially responsible way
everywhere we do business, fairly balancing the
communities or developing philanthropic com
needs and concerns of our various stakeholders? munity initiatives. Although it is still contested
all those who impact, are impacted by, or have a whether corporations have social responsibili
legitimate interest in the Company's actions and ties beyond their wealth-generating function
performance (Statement on Corporate Responsibil (Friedman, 1962; Henderson, 2001), there exist
ity link on Chiquita web site, www.chiquita.com).
today increasing internal and external pres
Social change is at the core of social science sures on business organizations to fulfill
inquiry. In this paper we develop a multilevel broader social goals (Davies, 2003; Freeman,
Pica, & Camponovo, 2001; Logsdon & Wood,
2002). We further illustrate that because busi
The first three authors contributed equally and are listed ness organizations are embedded in different
alphabetically. Partial support for this project was provided national systems, they will experience diver
by the Center for International Business Education and Re gent degrees of internal and external pressures
search (CIBER), the Center for Human Resource Manage
ment (CHRM), and the Research Board at the University of
to engage in social responsibility initiatives
Illinois. We thank Timothy Fort, the three anonymous AMR (Logsdon & Wood, 2002; Matten & Crane, 2005;
reviewers, John Dencker, Anna Marshall, Richard McAdams, Windsor, 2004).
the Vermont Garden Club, the participants of the Sociology The definition of CSR that we are using refers
Junior faculty group, the Public Law Brown Bag at the Col to "the firm's considerations of, and response to,
lege of Law, the ILIR Research Seminar at the University of
Illinois, and the CSR-mini conference at The Ohio State issues beyond the narrow economic, technical,
University for their insightful comments on earlier versions and legal requirements of the firm to accom
of this paper. plish social [and environmental] benefits along
_836_
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2007 Aguilera, Rupp, Williams, and Ganapathi 837
with the traditional economic gains which the some closure on the long-running debate (Mar
firm seeks" (Davis, 1973: 312).1 Orlitzky, Schmidt, golis & Walsh, 2003; McWilliams & Siegel, 2000,
and Rynes (2003) provide a "breakthrough" in 2001; Roman, Hayibor, & Alge, 1999; Ullmann,
the CSR literature with meta-analytic evidence 1985; Wood & Jones, 1995) about whether it is in
showing a significant positive effect of corpo an organization's financial best interest to en
rate social/environmental performance on cor gage in CSR. Therefore, an important new line
porate financial performance, and Mackey, of inquiry within this field is no longer whether
Mackey, and Barney (2005) theorize with a sup CSR works but, rather, what catalyzes organiza
ply and demand model that investing in socially tions to engage in increasingly robust CSR initi
responsible initiatives will maximize the market atives and consequently impart social change.
value of the firm. These studies should bring Our model addresses an important gap in the
existing organizational literature by proposing
a multilevel theoretical framework of CSR,
1 CSR definitions have proliferated as the idea has which, following the advice of CSR scholars
gained traction in society and as scholars have increasingly
(Margolis & Walsh, 2001; Waddock, Bod well, &
studied its antecedents and consequences. We have
Graves, 2002), seeks to turn our attention to new
adopted a definition that is quite general and "transpos
able" to different levels of analysis and, thus, useful for our research questions. We examine CSR at the mi
theoretical model. The definitions cover a wide spectrum of cro (individual), meso (organizational), macro
views. For example, a recent survey by The Economist on (country), and supra (transnational) level, draw
corporate social responsibility (Economist, 2005) synthesizes
ing on theories from psychology, sociology, and
the CSR concept as "the art of doing well by doing good,"
although with certain skepticism. Henderson criticizes the legal studies, as well as such other disciplines
notion of CSR as insufficiently defined but still uses as a as ethics and international business. Specifi
working definition running business affairs "in close con cally, we present a framework that identifies (1)
junction with an array of different 'stakeholders', so as to the multiple actors (e.g., employees, consumers,
promote the goal of 'sustainable development'. This goal
management, institutional investors, govern
supposedly has three dimensions, 'economic', 'environmen
tal' and 'social'" (2001: 15). His definition is, for the most part, ments, nongovernmental organizations [NGOs],
consistent with Wood's (1991) process-oriented stakeholder and supranational governmental entities) that
definition of CSR. Finally, Waddock and Bodwell's definition push organizations to act in a socially responsi
centers around the stakeholders, "as the way in which a
ble or irresponsible manner and (2) the instru
company's operating practices (policies, processes, and pro
cedures) affect its stakeholders and the natural environ
mental, relational, and moral motives that lead
ment" (2004: 25). each actor to push for positive social change, as
TABLE 1
CSR Motives at Multiple Levels of Analysis
Level
Transnational
Intergovernmental Corporate Interest

Motives Individual Organizational National Entities Groups and NGOS
Instrumental Need for control Shareholder interests Competitiveness Competitiveness Power (obtain
(short term) scarce resources)
Relational Need for Stakeholder interests Social cohesion Social cohesion Interest alignment,
belongingness Legitimation/collective collaboration,
identity (long term) and quasi
regulation
Moral Need for meaningful Stewardship interests Collective Collective Altruism
existence Higher-order values responsibility responsibility
Interactions Upward Insider downward Compensatory Compensatory Multiplicative
hierarchical hierarchical
Outsider upward
hierarchical
838 Academy of Management Review July
shown in Table 1. We then discuss how actors' cess hinges on economic profitability, environ
motives within and across levels combine to mental sustainability, and social performance
encourage (discourage) CSR. (Hart & Milstein, 2003); giving greater visibility
In addition, we provide a unique theoretical to CSR rankings (e.g., 100 Best Corporate Citi
model to address cross-national comparisons zens); incorporating emerging global standards
and discuss the key variables that will shape of expected responsible conduct into their man
CSR across countries. While there exist rich agement systems (e.g., the UN's Global Com
case studies describing CSR practices in indi pact); and introducing accountability initiatives
vidual countries (Gill & Leinbach, 1983; Kapelus, (e.g., SA 8000 and AA 1000) into their production
2002; Wokutch, 1990) and studies analyzing the processes and global supply chains (Waddock
role of multinational corporations (MNCs) in et al., 2002). Over half of the Fortune Global 500
CSR (Donaldson & Dunfee, 1999; Dunning, 2003; MNCs produce a separate CSR report annually
Hooker & Madsen, 2004; Logsdon & Wood, 2002; (Williams, 2004), and most have senior execu
Snider, Paul, & Martin, 2003), little attention has tives with responsibility for CSR efforts (Econo
been paid to nations' institutional and cultural mist, 2005).
effects on CSR efforts (Maignan, 2001, and Maig One premise in our analysis is that, in either
nan & Ralston, 2002, being the main exceptions). case (reactive or proactive CSR initiatives), cor
In this paper we discuss how regulations, busi porations are being pressured by internal and
ness practices, and employee attitudes toward external actors to engage in CSR actions to meet
CSR might differ across borders. In sum, while rapidly changing expectations about business
research to date has been fruitful in pushing our and its social responsibilities (Clark & Hebb,
knowledge of CSR forward, we hope to show 2004; Cuesta Gonzalez & Valor Martinez, 2004;
that the theoretical model developed here will Economist, 2005). Another premise is that orga
shed light on how social change might be trig nizational practices such as CSR are exposed to
gered or precluded, and we point to important decoupling effects so that some companies in
contributions for researchers, managers, and troduce CSR practices at a superficial level for
policy makers. window-dressing purposes, whereas other com
panies embed CSR into their core company
CSR AND SOCIAL CHANGE strategy (Weaver, Trevi?o, & Cochran, 1999). We
further assume that companies' responses to
Much that has been written on CSR focuses on changing social expectations?in particular,
corporate social irresponsibility and the public's their serious implementation of CSR initiatives
reaction to it (Aman, 2001; Cropanzano, Chrobot into their strategic goals?have the potential
Mason, Rupp, & Prehar, 2004). For example, in not only to change their corporate culture but
1996 it was alleged that Royal Dutch Shell sup also to impart true social change.
ported the Nigerian military in its execution of As one example among many of a corpora
the writer Ken Saro-Wiwa and a number of other tion's serious pursuit of CSR initiatives leading
Ogoni community members for their political to positive social change, we would point to the
organizing against Shell. The public outcry re Chiquita company, which has implemented liv
lated to this event, and the contemporaneous ing wage standards for all of its farm workers in
environmental controversy over Shell's decision every country in which it harvests fruit, and
to discard the Brent Spar oil drilling platform in which has introduced state-of-the-art environ
the North Sea, caused Shell to change its social mental practices throughout its supply chain
outlook and relationships with host countries (Taylor & Scharlin, 2004). We assume that efforts
and consumers. In response, Shell reevaluated such as Chiquita's, which are being replicated
its operating principles to establish clearer hu by numerous other global companies in every
man rights guidelines and issued its first social sector?from extractives to apparel to pharma
report. ceuticals to automotives and other heavy indus
Although this example represents reactive so try (Global Compact, 2005)?can have positive
cial change, there are also an increasing num impacts on the lives of individuals working for
ber of examples of proactive social change, such Chiquita, on communities in which Chiquita op
as corporations engaging in "triple bottom line" erates, and on ecosystems on which Chiquita
thinking, which suggests an organization's sue depends. Thus, we seek to develop an analytic
framework to understand, more systematically, eration of instrumental, relational, and morali

pressures on companies to engage in such CSR ty-based motives that various actors might act
initiatives. upon in putting pressure on firms to engage in
CSR. Such an approach provides a powerful
THEORETICAL FRAMEWORK framework by which to study the complex net
work of factors that may lead organizations to
We argue that at each level of analysis (indi be more socially responsible and, if successful,
vidual employee, organizational, national, to impart social change.
transnational) actors and interest groups have Third, our model takes a different approach
three main motives for pressuring firms to en from existing CSR theories in that it considers
gage in CSR: instrumental (self-interest driven), the antecedents of CSR. More specifically, we
relational (concerned with relationships among examine the factors that might lead various ac
group members), and moral (concerned with eth tors at various levels of analysis to push firms to
ical standards and moral principles). Cropan engage in CSR. This represents a unique treat
zano, Rupp, Mohler, and Schminke (2001) pre ment of CSR in that the majority of the existing
sented a similar needs model that synthesized models look at the consequences of CSR.
several decades of research and theory on em Last, we add value to the existing theoretical
ployee justice perceptions. models by transposing theoretical constructs
We seek both to refine and expand the multi from the individual level to the organizational,
ple needs theory in two important ways. First, national, and transnational levels. This gives us
our exploration is more focused: we are looking the flexibility to integrate the existing theories
not at general justice perceptions but more spe and research at each level of analysis while still
cifically at intentional actions taken by the firm using a comparable framework of analysis.
in the name of social responsibility and the im Considering one level and set of actors at a
pact of those actions on employees' justice per time, we discuss the antecedents of CSR and
ceptions. Second, our model is more expansive: then turn to their interactions.
we move beyond employee perceptions to theo
rize that the needs and motives of top manage Antecedents of CSR at the Individual Level
ment, consumers, national governments, and
transnational entities to encourage firms to en We start our analysis at the individual level?
gage in CSR can also be understood using this specifically, by examining why employees
multiple needs framework. might push corporations to engage in CSR initi
Our model makes several contributions to the atives. Surprisingly, employees as the unit of
CSR literature. First, the field of organizational analysis have received scant attention in the
justice, which to date has resided almost exclu CSR literature.2 Our individual-level frame
sively in the microorganizational behavior liter work, summarized in Table 1, draws from the
ature and organizational psychology literature, research on employee justice perceptions (Cro
has much to offer CSR in considering the re panzano, Byrne, Bobocel, & Rupp, 2001; Cropan
sponsibilities of firms, the degree of firm ac zano, Rupp, Mohler, & Schminke, 2001). In this
countability (Cropanzano et al., 2004), and how part of the model we argue that employees' per
firms' treatment of people, both internally and ceptions of the firm's external CSR are a special
externally, affects a variety of actors (Masterson,
2001). This analysis allows for a more socially
centered treatment of CSR, as opposed to the 2 Exceptions to this lack of research attention to employ
ees include both Wood (1991) and Swanson (1995), who take
more economic approach often taken (Friedman,
a multilevel approach to studying corporate social perfor
1962; Henderson, 2001).
mance (CSP), where they consider principles of CSP at insti
Second, the organizational justice literature tutional, organizational, and individual levels of analysis.
has recently experienced a shift from instrumen The "individuals" in these models are individual managers
tal, socioeconomic models to models that con or executives, who have discretion over a firm's socially
responsible (or irresponsible) actions. In more recent work,
sider principled moral obligations of organiza
Logsdon and Wood (2004) have extended the micro level of
tional actors (Cropanzano, Goldman, & Folger, analysis to consider more explicitly the instrumental and
2003). Using the multiple needs theory as a moral motivations of employees to engage in behaviors con
framework allows for the simultaneous consid sistent with global business citizenship.
aspect of their more general justice perceptions CSR efforts. That is, employees judge the social
and that these CSR perceptions shape the em concern embedded in their organization's ac
ployees' subsequent attitudes and behaviors to tions (procedural CSR), the outcomes that result
ward their firm. Although our model does sug from such actions (distributive CSR), and how
gest that a firm, armed with the knowledge that individuals both within and outside the organi
employees' perceptions have such effects, will zation are treated interpersonally as these ac
be pressured and motivated to be more socially tions are carried out (interactional CSR). These
responsible (and ultimately lead to social judgments are similar to the self-focused judg
change via serious firm engagement in CSR), ments of distributive (Adams, 1965), procedural
the heart of our theoretical argument lies in pre (Thibaut & Walker, 1975), and interactional (Bies,
dicting how employees react to the firm's past 2001) fairness studied in the justice area but in
socially responsible or irresponsible actions. this case are focused on the organization's im
Forty years of justice research indicates a con pact on the broader social milieu (as opposed to
sistent effect of employee justice perceptions on simply how the employee is treated). Upon form
a far-reaching set of outcomes (Colquitt, Conlon, ing these distinct CSR judgments, employees
Wesson, Porter, & Ng, 2001). Indeed, the per reciprocate socially (ir)responsible actions
ceived fairness of the working environment has through their subsequent attitudes and behav
been shown to affect both employee well-being iors, as shown in Figure 1.
(e.g., job satisfaction, stress, health, emotion) Following the work of justice scholars (e.g.,
and organizationally relevant outcomes, such as Degoey, 2000), we view employee judgments of
employee commitment, turnover, absenteeism, CSR as socially constructed and as social con
job performance, citizenship behavior, and tagions that are communicated from one em
counterproductivity. In effect, when fairness is ployee to another, eventually spreading to
perceived, employees are happy and work groups and entire organizations and shaping
harder. However, under unjust conditions, em the organizational-level climate for CSR. Just as
ployees reciprocate through lowered perfor self-focused justice judgments create a "fairness
mance and vengeful behaviors (Ambrose, Sea climate" within groups (e.g., Liao & Rupp, 2005),
bright, & Schminke, 2002; Aquino, Tripp, & Bies, employee perceptions of CSR, we propose, will
2001; Tripp, Bies, & Aquino, 2002). Some authors combine to create an organizational climate for
argue that revenge is not necessarily a bad out CSR, which contributes to a firm's overall social
come in that it is often socially motivated, and, reputation.
thus, the risk of revenge can serve as a social There is empirical research showing that an
barometer and motivate organizations to strive organization's social actions matter to its em
to be more fair (Bies & Tripp, 1998). ployees, although more work is needed in this
We believe that an organization's social ac area. For example, in two studies Greening and
tions (positive or negative) provide employees Turban (2000; Turban & Greening, 1997) found
with critical information to use in judging the that job applicants' perceptions of a firm's cor
fairness of the organization. Although much re porate social performance influenced their de
search in this area has focused on self-focused sire to work for the firm. These authors used both
perceptions (i.e., "How fairly am J treated?"), re social identity theory to demonstrate that indi
cent studies have taken a more deontic ap viduals prefer to work for socially responsible
proach, considering how individuals react to firms, because doing so bolsters their self
others' being treated (un)justly (Cropanzano et images, and signaling theory to show that em
al., 2003). In effect, one can argue that an orga ployees use a firm's social reputation to judge
nization's CSR efforts define its level of social what it would be like to work for the organiza
justice. Just as fairness heuristic theory (Lind, tion.
2001) predicts that fairness is used as a heuristic Research also indicates that employees' per
for trust, so do we propose that CSR is a heuris ceptions of a firm's social policies will impact
tic for fairness. their willingness to participate in, contribute to,
Using the classic typology provided by the and initiate social change initiatives. For exam
organizational justice literature (Colquitt, 2001), ple, Ramus and Steger (2000) found that when
we propose that employees make three distinct employees perceive their employing organiza
judgments about their employing organization's tion to be strongly committed to environmental
FIGURE 1
Actors' Mechanisms to Influence Social Change
Actor Multiple motives Mechanisms
and relationships
Pressure to increase level of
CSR; employee
Employee participation and leadership
perceptions of
Employees distributive,
Organizational commitment;
procedural,
interactional job satisfaction, employee
citizenship, performance
Insiders Direct strategic decision

s"
Stakeholders
Outsiders Exercising voice through
MOTIVES collective action
See Table 1
Law enactment, law
Domestic enforcement, "bully pulpit,"
education on best practices i
Governments
N. IGOs
'Bully pulpit," policy papers
Campaigns, boycotts,
NGOs and
multiparty dialogues
research on economic rationality (Sullivan,

protection, they are more likely to generate
1989), Thibaut and Walker's (1975) control model,
ideas for making the firm's practices more envi
and aclassic formulations of social exchange the
ronmentally friendly. Further, the existence of
published environmental policy by an organizaory (Adams, 1965; Blau, 1964; Foa & Foa, 1980). In
fact, many authors have argued that procedural
tion predicts employees' willingness to attempt
self-described environmental initiatives. justice concerns are inherently self-interested
(Lind & Tyler, 1988; Tyler, Degoey, & Smith, 1996;
Turning to the application of the justice frame
work to CSR, we examine how instrumental, Tylerre & Lind, 1992),3 and it has been demon
lational, and morality-based motives will push strated empirically that the presence of control
improves individuals' reactions to decisions
employees to influence CSR, and how these
made about them, owing to expectations that
three types of concerns map onto individuals'
process control leads to the maximization of out
basic psychological needs for control, belong
ingness, and meaningful existence, as shown comes in in the long run (Folger, Cropanzano, Tim
Table 1. merman, Howes, & Mitchell, 1996; Rasinski, 1992;
Instrumental motives. Instrumental models Roberson, Moye, & Locke, 1999).
(Tyler, 1987) posit that we are motivated to seek We extend this logic into the realm of CSR by
control because control can serve to maximize arguing that employees may view a socially
the favorability of our outcomes. This ego-based engaged organization as one that is concerned
or self-serving concern for justice stems from the
psychological need for control. That is, fair pro
3 We state this with caution, however, in that the control
cesses allow individuals to more accurately need and subsequent outcomes may not always be self
foretell an organization's actions. Indeed, de interested. This research focuses on instrumental motives
cades of research support the instrumental mo but does not claim that all individuals do is instrumentally
tives of employees. This evidence stems from motivated.
about all people, both internal and external to gitimate members of valued social groups. In
the organization. The logic is that if an organi organizations they often rely on their justice per
zation has a general concern for fairness (e.g., ceptions to deduce if they have such standing
respect and care for the environment, for work and, thus, if their needs for belongingness are
ing conditions), employees may deduce that being met (Lind, 2001). Employees desire that
chances are conditions will be fair for them, thus organizations act in a socially responsible man
satisfying their need for control. Therefore, em ner not only because CSR gives them a general
ployees seek and promote CSR in order to max sense of the organization's concern for treating
imize their own outcomes. aii people fairly but also because CSR initia
Relational motives. Relational models (Tyler tives require employees and management to
& Lind, 1992) show that justice conveys informa work together toward a greater good, providing
tion about the quality of employees' relation employees with additional experiences with
ships with management and that these relation which to judge both management's social con
ships have a strong impact on employees' sense cerns and relational quality.
of identity and self-worth. The relational need Morality-based motives. A third major psycho
for justice is inextricably linked to the psycho logical need is the need for meaningful exis
logical need for belongingness. It is the employ tence. Most individuals share a basic respect for
ee's attachment to others from which self human dignity and worth?and this morality
identity is drawn (Tajfel & Turner, 1979). Justice based concern for justice drives our attraction to,
is generally seen as a mechanism for bringing dealings with, and reactions to organizations.
people together, while injustice tends to pull Here concern is shifted from what serves one's
them apart. economic self-interest or group standing to what
A great deal of empirical evidence supports one views as ethically appropriate (Cropanzano
this notion. For example, we know that when et al., 2003). In this sense one is drawn to what
employees feel they are treated fairly by their one feels is just, independent of how actions
organization (by both the organization as a affect one personally. Empirical evidence shows
whole and individuals in management posi that individuals are concerned with fairness,
tions), they are more likely to trust the organiza even when there is no apparent economic ben
tion (Konovsky & Pugh, 1994), to feel supported efit for doing so and the recipient of the just or
by it (Masterson, Lewis, Goldman, & Taylor, 2000), unjust act is a stranger (Kahneman, Knetsch, &
and to perceive high-quality social exchange re Thaler, 1986; Turillo, Folger, Lavelle, Umphress,
lationships with the organization/management & Gee, 2002), suggesting that virtue may be its
(Rupp & Cropanzano, 2002). Together, this re own reward (Cropanzano, Byrne, Bobocel, &
search shows that when organizational authori Rupps, 2001; Folger, 1998). It is important to note,
ties are trustworthy, unbiased, and honest, em however, that even though universal justice
ployees feel pride and affiliation and behave in norms may exist, individual differences come
ways that are beneficial to the organization into play as well. Greenberg (2002) found that
(Huo, Smith, Tyler, & Lind, 1996; Tyler & Degoey, employee theft was most likely in situations
1995; Tyler et al., 1996). where no corporate ethics program was in place
In our conceptualization of CSR, CSR fosters and employees were low in moral development.
positive social relationships, both within and This highlights the notion that the moral actions
between organizations and communities, and, of the firm interact with the moral concerns of
therefore, relational needs become highly rele employees in influencing their behaviors within
vant. Indeed, Clary and Snyder (1999) note that the organizational context.
CSR allows for the creation and strengthening What this means for CSR is that employees
of social relationships, as well as the reduction will seek to work for, remain in, and get at
of negative feelings associated with an alleged tached to organizations whose organizational
bad relationship between an organization and strategies are consistent with the employees'
its community. moral or ethical frameworks, and this prefer
What we posit, then, is a chain reaction ence may, at times, supersede employees' in
caused (or not caused) by an organization's CSR strumental and relational motives (Folger, Cro
efforts. That is, as explained above, employees panzano, & Goldman, 2005). Moral motives will
have a psychological need to belong?to be le also have the potential to influence employees'
participation in various CSR initiatives, mean control are most salient). Conversely, when a
ing they desire to be involved not only with situation involves matters of serious conse
initiatives seen as directly affecting themselves quence, individuals are likely to respond with
or groups they identify with but also with causes strong emotions, and such emotions engage
they feel are fundamentally just and relevant to needs and motives that are much more moral/
the establishment of a moral community. For ethical in nature (i.e., meaningful existence).
example, Barbi?n (2001) presents evidence that Furthermore, evidence for morality-based jus
many individuals are willing to take less pay in tice motives is shown to be especially strong in
order to work for a socially responsible firm. In dialogues involving social issues (Bobocel, Son
light of the discussion of these three individual Hing, & Zanna, 2002; Skitka, 2002).
level motives, we suggest the following. We posit that organizations' socially respon
Proposition la: Individual employees' sible or irresponsible acts are of serious conse
needs for control, for belongingness, quence to employees. We are reminded of the
and for a meaningful existence will strong case being made by deonance research
lead them to push firms to engage in ers (Folger et al., in press) that, because of the
social change through CSR. close link between injustice and immorality, em
ployees' responses to corporate irresponsibility
may involve strong emotions and behaviors,
Interactions Among Employee Motives: An which could transcend any short-term economic
Upward Hierarchy interests. Therefore, we propose that the needs
There has been a great deal of debate in the for control, belongingness, and meaningful ex
justice literature about the existence of and in istence are ordered in an upward hierarchy such
terplay between instrumental and morality that employees will exert the most pressure on
based justice motives (with relational motives organizations to engage in CSR when their
falling somewhere in between), and no consen needs for meaningful existence are paramount,
sus to date on how such motives interact. Some followed by belongingness and control. Put dif
research suggests, however, that meaningful ferently, the relationship between the motives is
existence motives and needs may be especially an additive one, yet deontic motives carry
salient in CSR contexts. For example, Lerner greater weight in determining the total "CSR
(2003) shows that in situations of minimal impor motivation" held by each employee. Table 2 ex
tance, when little is at stake and when individ emplifies how this relationship could be sum
uals have the time and cognitive resources to marized if we were to write an equation to con
think calculatively, they are likely to be most ceptually capture it. It is important to note that
concerned with their self-interest (i.e., needs for individual differences exist in the extent to
TABLE 2
The Interplay of Motives Within Each Level
Level Relationship Pressure Placed on Firm to Engage in CSR
Employee Upward hierarchy = 1 (control) + 2 (belongingness) + 3 (meaningful existence)

Organizational Insider downward = 3 (shareholder interests) + 2 (stakeholder interests) + 1 (stewardship interests)
hierarchy
Outsider upward = 1 (shareholder interests) + 2 (stakeholder interests) + 3 (stewardship interests)
hierarchy
National Compensatory = (competitiveness) + (social cohesion) + (collective responsibility)
Transnational Multiplicative0 = (power) X (collaboration) X (altruism) (ordering depends on actor)
Note: Formulas are only conceptual and meant to illustrate the ordering of motives within a level. Weights are only meant
to show relative ordering; they are not absolute. A higher value indicates that more weight is placed on the motive in
determining total pressure placed on the firm to engage in CSR.
a The multiplicative metaphor cannot be stretched too far, however, since two negative motivations, perhaps to undermine
discussions and to disrupt networks, will not create a positive pressure on organizations or IGOs (if that is the arena) to
engage in CSR.
which such needs are ordered (Cropanzano et hand, the decision-making power is given to
al., 2003). What this suggests is that those who those actors with the resources to exercise their
place the most value on human worth and a power (Pfeffer, 1992). This suggests that manag
greater good are the most likely to fight for CSR. ers wanting the firm to become involved in CSR
activities will need to have the power to put CSR
Proposition lb: An upward hierarchi
on the agenda and to align the activities with
cal ordering of motives among indi
the firm's strategic goals. The politics of deci
vidual employees will lead to stronger
sion making are thus a key factor in this process
pressure on firms to engage in social
of change within the organization?one that
change through CSR.
may be affected by the motives of the TMT for
instigating CSR efforts.
Antecedents of CSR at the Organizational Outsider groups usually exercise their influ
Level ence on the firm through voice. For example,
consumers exercise their voice individually
In this section we explore the pressures that
through their purchasing power (Waddock et al.,
firm insider groups, chiefly owners (sharehold
2002), such as a willingness to pay more for
ers) and managers, and outsider groups, chiefly
certain goods and services (Smith, 1990). Yet
consumers,4 exert on firms to adopt socially re
consumers' purchasing decisions can ultimately
sponsible initiatives. We frame our model become consumer movements utilizing classic
around two assumptions. First, although the
social movement strategies, such as boycotts, as
firm's main goal is to survive by means of
in the case of the anti-genetically engineered
achieving competitive advantage in the eco
food and crops campaigns in the EU or the anti
nomic market, different mechanisms exist to Nike activists in the 1990s in the United States
sustain firm survival and efficiency. Second,
(Kozinets & Handelman, 2004). Marketing empir
firms do not operate in a vacuum. Rather, they
ical research has demonstrated that companies
are embedded in national and industry institu
are sensitive to their CSR image and are becom
tional settings that enable their strategic deci
ing increasingly aware of the positive relation
sions (Aguilera & Jackson, 2003). Hence, in this
ship between the firm's CSR actions and con
section we also compare organizational actors
sumers' reaction to the firms' products, as well
across national settings.
as the negative effects when CSR efforts are
Actors at the organizational level possess dif
deleterious or not perceived as legitimate
ferent mechanisms to influence social change
(Creyer & Ross, 1997; Sen & Bhattacharya, 2001).
depending on whether they are insiders or out We turn our attention to the other side of the
siders (see Figure 1). Insiders, such as the top
equation?that is, what are the motives for con
management team (TMT), have the most direct
sumers as a stakeholder group to pressure firms
power to influence the firm's engagement in
to engage in CSR? Thus, below we extend the
CSR by developing corporate strategy and allo
employee multiple needs model to the organiza
cating resources to different firm programs and
tional level of analysis in order to examine in
practices. Organizational studies have shown
sider and outsider groups' instrumental, rela
that a firm's decision-making process is a polit
tional, and moral motives for pressuring firms to
ical process where, on the one hand, there is a
engage (or not) in CSR, as summarized in Table
negotiation among members of the dominant 1.
coalition (Cyert & March, 1963) and, on the other
Instrumental motives. The corporate gover
nance literature divides the corporate world into
two ideal-type national models (Aguilera, 2005).
4 We recognize that consumers primarily act as individu
als and so can be evaluated at the individual level, just as The Anglo-American model (exemplified by the
employees often act collectively through labor unions, even United States) is characterized by dispersed
though we have looked at them as individuals in the prior ownership expecting short-term returns, strong
section. Here we categorize consumers as an outsider stake shareholder rights, arm's-length creditor financ
holder group at the organizational level, since that is how
ing through equity, active markets for corporate
they are treated in the stakeholder view of the firm, while
control, and flexible labor markets. The Conti
recognizing their high resource interdependence with the
focal firm (Frooman, 1999). See also Harrison and Freeman nental model (exemplified by Germany and Ja
(1999). pan) is characterized by long-term debt finance,
ownership by large blockholders, weak markets perceive the role of the firm and CSR (Maignan,
for corporate control, and rigid labor markets. 2001). Yet, in general, consumer motives to be
We argue that short-term shareholders within concerned with CSR are conceived as relational
the Anglo-American model may have some in or moral, as discussed below.
strumental motives to push for CSR (see Table 1) Relational motives. Organizational-level ac
when CSR initiatives are directly related to tors' relational motives to pressure firms to en
greater competitiveness of the firm, such as by gage in CSR efforts can be observed by adopt
protecting a company's reputation (Bansal & ing a stakeholder theory of the firm (Clarkson,
Clelland, 2004; McWilliams & Siegel, 2001). Con 1995; Rowley & Moldoveanu, 2003). Generally
versely, owners in the Continental model, such speaking, stakeholder theory (Donaldson &
as banks, the state, or employees, will tend to Preston, 1995; Freeman, 1984; Jones, 1995) ac
set longer-term expectations for profitability counts for the diversity of stakeholder interests
and include a broader set of constituents in their and their competition for firm resources. When
strategic thinking, such as promoting long-term the owners have stakeholder wealth-maximiz
employee welfare or investing in research and ing interests, they will act to ensure the well
development of high-quality products (Hall & being of the different groups engaged in a rela
Soskice, 2001). These owners might also have tionship with the firm. For example, German
instrumental motives for persuading the firm to owners might be in favor of investing in suppli
engage in CSR efforts when those efforts are ers' R&D because it is likely to lead to long-term
compatible with long-term profitability. For ex benefits for the firm, or a Japanese firm might
ample, Bansal and Roth (2000) provide qualita prefer to borrow from a domestic bank in order
to develop long-term trust that will lead to a
tive evidence that some Japanese firms' ecolog
ical responsiveness is motivated by long-term future safety net. Thus, managers in the Conti
competitiveness. We categorize this as an in nental model are likely to encourage the firm to
strumental motive. engage in CSR when stakeholders' interests will
With the emergence of the shareholder rights be fulfilled, since they are driven not only by
movement in the late 1980s (Davis & Thompson, short-term profit maximization but primarily by
1994), institutional investors became particu relational motives such as long-term growth, the
larly active owners (relative to other types of need for social legitimation, and achieving bal
owners), especially within the Anglo-American ance among stakeholders (Aguilera & Jackson,
model. Investments made by institutional inves 2003).
tors tend to be large, so they cannot move in and Even in a shareholder wealth-maximizing
out of firms without paying a price. Therefore, framework, firms seek social legitimation in or
institutional investors tend to exercise voice der to survive. Legitimation is seen as a rela
rather than exit. Among institutional investors, tional motive since it refers to a concern for how
mutual funds and investment banks operate as a firm's actions are perceived by others. Firms
shareholder value-maximizing owners?em within a given industry are confined by the spe
phasizing short-term profitability supported by cific norms, values, and beliefs of that industry,
growth strategies such as mergers and acquisi some of which are enacted into law. Firms have
tions, as opposed to internal development of relational motives to engage in the CSR prac
new products and R&D expenditures. Pressures tices of their industry in order to be seen as
to show short-term returns make these owners legitimate by complying with industry norms
predisposed to support investing resources in and regulations, as well as instrumental mo
socially responsible initiatives only when there tives to preempt bad publicity, institutional in
is an immediate association with profits, such vestor disinvestment, and penalties due to non
as enhancing short-term competitiveness. Con compliance (Kagan, Gunningham, & Thornton,
sumers as outsider organizational actors might 2003). Thus, organizational actors are likely to
have some instrumental motives for pushing engage in CSR to emulate their peers in order to
firms to engage in CSR?for instance, when en preserve their social legitimacy (Schuman, 1985)
vironmental stewardship creates products that by preventing negative perceptions, and to en
are perceived as healthier. The intensity of con sure the organization's long-term survival
sumers' instrumental motives is likely to vary (Meyer & Rowan, 1977; Zucker, 1977) and social
across countries contingent on how consumers license to operate (Livesey, 2001). This specific
TMT relational motive is empirically validated The U.S. Paper Campaign in 2000 to end pro
in Bansal and Roth's (2000) study of why compa duction of paper from endangered forests and
nies "go green" and in Bansal's (2005) mimicry increase sales of recycled paper, which focused
arguments. on Staples as a central target, is a good example
In contrast to mutual fund owners, discussed of how members in this consumer activist group
above, some public pension funds, labor funds, build a collective identity to achieve their goals.
and socially responsible investment (SRI) funds This relational motive or strong collective iden
have a much longer time horizon than do mutual tity among group members is developed not
funds and investment banks and, consequently, only around CSR issues but also more broadly
exhibit stronger relational motives. These inves on an ideological basis. Following Kozinets and
tors emphasize long-term stakeholder interests Handelman (2004), we argue that in more radical
and social legitimacy by investing in firms that varieties of consumer movements, such as the
meet high labor or environmental standards or anti-Nike activists (Holt, 2002; Shaw, 1999) or the
that are responsive to the communities in which anti-genetically engineered food and crop activ
they operate and the people they employ (John ists (Schurman, 2004), the relational dynamics
tend to be even more salient.
son & Greening, 1999). The case of "noisy" pen
sion fund activists, such as CalPERS, is illustra Moral motives. Stewardship theory (Davis,
tive of how some public pension funds have Schoorman, & Donaldson, 1997) suggests that
acted as catalysts for CSR initiatives in corpo organizational actors bring their personal mo
rations by conducting a highly public screening rality-based values into the firm, which might
go beyond economic interests or self-fulfillment.
of corporations that might lead to brand damage
Hence, moral motives to pressure companies to
and deterioration of firm reputation (Clark &
Hebb, 2004). Johnson and Greening (1999) have
engage in social change via CSR initiatives
may come from organizational actors whose de
shown that pension funds' long-term orientation
ontic motives are particularly salient. Organiza
is positively associated with higher corporate tional actors within firms, such as TMTs, make
social performance. Similarly, SRI funds exhibit
decisions based on their cognitive biases and
a broader range of concerns than short-term
personal values (Cyert & March, 1963), which
profit maximization, combining analysis of
will diffuse to the overall organizational values
firms' social and environmental performance and business ethics. In addition, Hartman (1996)
with more traditional financial analysis in con argues that what is desirable and valuable?
structing their investment portfolios (Lydenberg,
and what constitutes a good life in an organiza
2005). We construe these motives as signifi tion?is contingent on the conditions of the com
cantly relational, being aimed at promoting the munity and the autonomy of the decision
interests of suppliers (e.g., using nontoxic mate makers.
rials), customers (e.g., offering environmental Logsdon and Wood (2002) have posited that
products), employees (e.g., having adequate la organizational actors operating in a global busi
bor conditions), and other stakeholders in the ness context may have moral motives (and, in
firm, and not merely seeking short-term share deed, duties) to engage in "small experiments"
holder returns.
to try to bring about a fairer world and to correct
Social movement researchers have turned the imbalances of wealth, gender, race, and re
their attention to the cultural frames, identity, ligion, among others. When organizational ac
and meaning of group members and the use of tors act according to stewardship interests by
that collective identity to pursue conscious stra instigating social and moral actions toward a
tegic efforts. In this regard, consumer groups better society, they are likely to inject CSR ini
and "market campaign" activists in CSR tend to tiatives in their firm strategies, leading to social
share a certain understanding of the world and change. For example, the majority owners at
of themselves that legitimates and motivates Ford share a sense of commitment to the world's
their collective action (McAdam, McCarthy, & scarce resources, and, consequently, they have
Meyer, 1996). We argue that the collective iden articulated a formal commitment to becoming
tity of consumers is a relational motive that will the world's largest recycler of automobile parts,
lead them to pressure companies to engage in in part to preempt future regulation?instrumen
CSR. tal motives?but also to actuate their concern
for the social good?moral motives (Howard to highlight the motives that influence internal
Grenville & Hoffman, 2003). and external social groups to demand higher
Consumers, as an outsider stakeholder group, CSR from firms. In practice, all organizational
also push for CSR out of morality-based motives or motives will be working simultaneously, yet
higher-order values. Donaldson and Dunfee (1999: some motives will be more salient than others.
246) discuss how the macrosocial contract in Although the specific manner in which these
cludes the mechanism by which stakeholders can motives are combined is ultimately an empirical
demand ethical obligations on firms via voice, question, it is still necessary to discuss how
consent, and exit. Existing case studies on con such processes might play out at this level. To
sumer activism indicate that there exists an in do so, we focus on the interactions of one key
creasingly mobilized social group of consumers, insider group?managers?and how these man
often referred to as the "ethical shopping move agers' motives are ordered hierarchically (see
ment" (Harrison, 2003), with the capacity to impact Table 2). We then briefly extrapolate from the
brand image and corporate reputation for the sake managerial interactions to outsider stakehold
of the greater good (or universal morality) and ers, such as consumers, and how they might
long-term sustainability. When consumers share prioritize their motives to push to trigger social
a common meaning frame, are organized in net change.
works, and have the capacity to damage corpora Managers are key insiders of the firm, and
tions?mostly by boycotting products (Davidson, they not only process the signals from owners'
Abuzar, & Worrell, 1995)?in the name of society's and consumers' multiple motives but have their
collective good, they are likely to influence the own multiple motives to engage in CSR. For
company to engage in CSR initiatives. For exam example, when Rom Rattray of Procter & Gam
ple, when Nike was accused of allegedly using ble (P&G) was asked about the firm's initiative
sweatshops in its offshore operations, consumer to produce less environmentally damaging, con
groups mobilized to boycott its products (Knight & centrated detergents, saving P&G millions of
Greenberg, 2002), influencing Nike to introduce dollars since 1992 by reducing both production
changes in its global labor practices. Research on and shipping costs, he stated that they were not
brand image shows that, given the choice, some doing this because it saved money but because
consumers will pay more for a product from a it was the right thing to do and saved money
"good" company (Sen, G?rhan-Canli, & Morwitz, (Mehegan, 1996), illustrating multiple manage
2001), as in the case of Ben & Jerry's ice cream, with rial motives. Previous empirical research has
variations in consumer perceptions about the im noted that variance in viewpoints often exists
portance of CSR across countries (Maignan, 2001; within TMTs on issues such as ecological re
Maignan & Ferrell, 2003). sponses (Bansal & Roth, 2000) or ethics programs
We have now argued that different actors (Weaver et al., 1999). Here we seek to conceptu
within the firm will not only pressure firms to alize the nature of the relationship among in
engage in CSR but that these communities will strumental, relational, and moral motives that
also have different motives to do so. These three will lead the TMT to push for positive social
motives lead the following proposition. change activities, such as increased resources
and effort directed at CSR initiatives.
Proposition 2a: Internal and external
We argue that, first and foremost, managers
organizational actors' (shareholders',
managers', consumers') shareholder will implement CSR initiatives when these
interests, stakeholder interests, and align with their instrumental interests of en
stewardship interests will lead them hancing shareholder value and increasing firm
to push firms to engage in social competitiveness and profitability so that man
agers can ensure firm survival and raise their
change through CSR.
compensation packages, which are generally
tied to profitability. Although existing research
Interactions Among Organizational-Level has demonstrated that firms' CSP leads to
Motives: Insider Downward Hierarchy and
higher profitability (Orlitzky et al., 2003), it is
Outsider Upward Hierarchy
important to highlight that this is not always
This discussion of organizational-level CSR going to be obvious to the TMT, particularly
motives addresses each motive separately so as when short-term versus long-term benefits seem
to conflict. Thus, TMTs will incorporate CSR in Jead to stronger pressure on firms to en
their organizational strategies only when doing gage in social change through CSR.
so is clearly associated with greater economic
Conversely, outsider organizational actors
opportunities, as in the case of green marketing
such as "ethical consumer groups" will have an
(Smith, 1990). We place the most weight on this
indirect effect on firms' decision making. We
motive and assume it is a necessary condition
propose that such outsider organizational actors
for action to take place. are primarily seeking to advance social benefits
From a relational perspective, managers have closely linked to moral motives, followed by re
external pressures from stakeholders and other lational and instrumental motives. Thus, these
companies in the organizational field, and these outsider actors will prioritize their motives in an
might push their company toward greater CSR. upward hierarchical ordering similar to the re
For example, managers might want to engage in lationships described above for employees as
CSR because doing so is presumed to enhance synthesized in Table 2. We offer the following
corporate legitimacy and, thus, to contribute to proposition.
corporate profitability, even if those practices
are merely "window dressing" (Meyer & Rowan, Proposition 2c: An upward hierarchi
1977). Managers will also justify CSR initiatives cal ordering of motives among out
when there are external pressures to avoid so sider organizational actors (i.e., con
cial sanctions (protests, negative press, dimin sumers) will lead to stronger pressure
ished reputation and image) that might damage
on firms to engage in social change
their relations with shareholders. through CSR.
We also know that TMTs have a powerful ef
fect on organizational values (Hambrick & Ma Antecedents of CSR at the National Level
son, 1984) and that they may act out of deo
Government action?both enacting laws and
nance?a moral obligation to "do the right
enforcing them?is an important factor influenc
thing." Stewardship scholars argue that manag
ing firms to implement CSR initiatives and so
ers might have broader interests than self
fulfillment (Davis et al., 1997) and that TMTs'
become agents of social change, as shown in
Figure 1. As one example, the governments of
characteristics?including values?play a criti
France, Germany, and the United Kingdom have
cal role in influencing organizational actions each passed laws requiring pension fund man
(Hambrick & Finkelstein, 1987).
agers to disclose the extent to which they con
Combined, this evidence suggests that TMTs sider the social and environmental records of
have multiple motives to develop CSR initia the companies in which they invest (Aaronson &
tives in the firm and, as with employees, that Reeves, 2002). These laws have encouraged pen
these motives can be conflicting. However, there sion funds and their investment managers to
will almost always be a hierarchy of motives. pay more attention to companies' social and en
We assert that for insider organizational actors vironmental performance, creating additional
(i.e., TMTs) to be strongly motivated to engage in pressures for companies to consider those is
effective, strategically managed CSR initia sues as well (Williams & Conley, 2005). The laws
tives, they will first need to see the instrumental governments pass to encourage CSR are
value of these initiatives and, thus, will be act uniquely powerful because they can achieve
ing from instrumental motives, followed by re broader coverage than voluntary initiatives,
lational and then moral motives. We therefore such as the UN Global Compact (substantive
argue that there is a downward hierarchical or human rights standards) or the Global Report
dering of insider organizational actors' motives, ing Initiative (social, economic, and environ
which are predictive of commitment to CSR and mental disclosure format). Moreover, laws set
which can be synthesized in an additive hierar social expectations about responsible corporate
chical fashion as illustrated in Table 2. behavior that are then reinforced by other ac
tors, such as consumers, NGOs, and institu
Proposition 2b: A downward hierarchi tional investors (Kagan et al., 2003).
cal ordering of motives among insider A cross-national comparison suggests that
organizational actors (i.e., TMTs) will government actions through promulgating and
enforcing laws help to create unique CSR cli et al., 2001). Thus, governments have an eco
mates that vary across countries (Campbell, nomic interest in having their flagship compa
2005). The governments of Belgium, Canada, nies exhibit high standards of CSR abroad,
Denmark, the Netherlands, and the United King thereby reducing the chance the companies will
dom have been particularly active in promulgat become targets for reprisal, negative publicity,
ing CSR statutes domestically and promoting or boycotts based on a poor record of CSR.
CSR discourse transnational^, and France, Fin Relational motives. The governments that
land, Germany, and South Africa have recently have been the most active in promoting CSR
enacted domestic CSR regulations (Aaronson & explicitly articulate a number of relational mo
Reeves, 2002; Cuesta Gonzalez & Valor Martinez, tives, clustering around the idea that companies
2004). In contrast, the U.S. government was en have responsibilities to promote social cohesion
gaged in promoting voluntary CSR initiatives in and to address problems of social exclusion
specific industries, such as apparel (the Apparel (Aaronson & Reeves, 2002). These governments
Industry Partnership) and extractives (the Vol recognize a partnership between companies
untary Principles on Security and Human Rights and the societies in which they are embedded,
in oil, gas, and mining), during the Clinton ad with a particular focus on incorporating the eco
ministration (Schr?ge, 2003) but has not promul nomically marginalized and socially disfavored
gated any specific CSR laws. into the mainstream (e.g., promoting "social in
Governments' motivations to establish high clusion"; European Commission, 2000; Goebel,
standards for CSR can be identified as instru 1993). These are also countries that recognize a
mental, relational, or moral. Defining and cate "social partnership" among labor, business, and
gorizing these motives leads to a greater under communities, as well as obligations for busi
standing of when governments might push ness to fully participate in that partnership
companies to engage in CSR initiatives. (Streeck & Yamamura, 2001). We see these ef
Instrumental motives. In developed countries, forts as strongly relational at their core, being
creating a competitive business climate domes concerned with developing effective relation
tically and encouraging economic development ships between multiple parties, particularly the
internationally in countries where the devel marginalized and socially insecure in relation
oped countries' flagship companies participate to the powerful and socially secure.
are major functions of governments' economic Moral motives. Inherent in the social partner
policies. Thus, governments have instrumental ship idea is an understanding that companies
reasons to promote CSR policies to the extent have a collective responsibility to contribute to a
those policies are understood to promote inter better society. In continental Europe, the United
national competitiveness. CSR increases com Kingdom, and Canada, where governments
petitive advantage by fueling innovation, en have been particularly active in encouraging or
hancing customer reputation, creating high requiring CSR efforts, there is a strong sense of
performance workplaces, and maintaining collective responsibility for social conditions
important intangible assets, such as community (Hofstede, 1980) and an identification of corpora
trust or employee goodwill (U.K. Department of tions as members of society with a responsibil
Trade and Industry, 2003). CSR is also recog ity to make positive contributions to better so
nized as a useful risk management strategy, cial conditions (Brown, 2003). As U.K. Chancellor
since it requires managers to communicate with of the Exchequer Gordon Brown has articulated
a range of stakeholders to identify longer-term it, corporate CSR efforts are part of the "building
social, economic, and environmental risks and blocks" of a new economic order that govern
to incorporate thinking about those risks into ments have a moral obligation to support and
strategic development (U.K. Department of develop in order to "advance social justice on a
Trade and Industry, 2004). To varying degrees, global scale" (Brown, 2003: 331). In calling for a
developed country governments also acknowl new global consensus, Chancellor Brown called
edge that their flagship companies represent for the rejuvenation of "the earlier notion that an
the country internationally: Coca-Cola and Mc acceptable and sustainable international re
Donald's are the face of the United States inter gime requires a moral underpinning" (Brown,
nationally, just as British Petroleum is the face 2003: 322). This new consensus rests, impor
of the United Kingdom internationally (Freeman tantly, on a moral view of individuals as rights
bearers who deserve material and environmen Antecedents of CSR at the Transnational Level
tal conditions that permit human flourishing
Many legal scholars have argued that the es
(Nussbaum, 1992), while the specific intellectual
sence of the CSR concern is the global reach of
and political traditions and history of each MNCs in contrast with the domestic reach of
country will affect how that moral imperative is
structuring regulation (Aman, 2001), as well as
understood and articulated. In light of these the concern that mobile capital and production
three motives, we suggest the following. will flee jurisdictions with onerous regulation
(Sassen, 1996). Given the absence of global gov
Proposition 3a: Governments' interests ernment, globalization has produced a regula
in establishing competitive business tory vacuum, where no single state has the ca
environments, promoting social cohe pacity to regulate the totality of any global
sion, and fostering collective responsi company's activities.
bility for the betterment of society will Yet this concern may construe the category
lead them to push firms to engage in "regulation" too narrowly. Habermas (1989) has
social change through CSR. put forth the idea of a public sphere comprising
multiple strands of civil society discourse. In the
global sphere these discourses can articulate
Interactions Among Government Motives: A norms that are potentially transformative
Compensatory Relationship (Guidry, Kennedy, & Zald, 2000: 13) and, as such,
We assume that governments will most vigor have been understood as regulation in a world
ously advance CSR policies when they see in of global governance without government (Scott,
strumental value in promoting business compet 2004). Global CSR discourses provide a good
itiveness, but we also assume it does not matter example of both the multiplicity of voices in the
transnational public sphere and the potential
as much why governments act as long as they
transformative impact of "simple" articulations
act to exert social change. In other words, we
of norms (Barnett & Duvall, 2005). There are sev
conceptualize the relationship among govern
eral mechanisms by which transnational actors
ment motivations as having an additive and
pressure firms to engage in CSR, such as cam
compensatory nature. This suggests that the to
paigns, boycotts, or multiparty dialogues, as
tal government CSR motivation can be a func
shown in Figure 1.
tion of any combination of motivations and that
Among the transnational actors that push
no particular hierarchical ordering is presup firms to enact CSR policies are advocacy NGOs.
posed. These include NGOs with a broad social justice
While governments will have different rela or environmental mission, such as Oxfam or
tive priorities of motives, it is the total motiva Christian Aid, as well as NGOs whose work is
tion to pressure companies to enact CSR poli specific to CSR, such as AccountAbility or Sus
cies that matters, given the unique power of tainAbility. NGOs have become a powerful and
government to influence firms. For example, politically significant social force in the last few
neoliberal governments might allocate low pri decades (Hart & Milstein, 2003; Khagram, Riker,
ority to social cohesion because their political & Sikkink, 2002). Labor unions can be understood
agenda suggests that national competitiveness as a subcategory of NGOs, and our analysis will
will lead to greater economic prosperity, which treat them as such. There are also corporate
will, in turn, lead to greater social cohesiveness. interest groups engaged in CSR discourses, ei
Yet such a government might still enact CSR ther those with a specific CSR focus, such as the
policies if a link between CSR and competitive World Business Council for Sustainable Devel
ness is understood to exist. opment, or those with a broader pro-business
focus, such as the World Economic Forum's Cor
Proposition 3b: A compensatory rela porate Citizenship Project.
tionship of motives in governments Another category of actors at the transna
will lead to stronger pressure on firms tional level includes intergovernmental organi
to engage in social change through zations (IGOs), such as the EU, the Organization
CSR. for Economic Cooperation and Development
(OECD), and the UN. IGOs are simultaneously sion of CSR in ways that are consistent with
actors that press companies to consider CSR business interests, to build support for global
and the institutional arena in which the dis ization, and to forestall prescriptive government
courses (and conflicts) among business, civil so regulation (Conley & Williams, 2005).
ciety, and governments take place (Khagram et IGOs as transnational institutional actors
al., 2002). For example, the EU is convening on have the same instrumental motives to push for
CSR as do national governments: promoting
going discussions of CSR and developing norms
business competitiveness. The European Com
of responsible business conduct. Increasingly,
there have also been multiparty dialogues mission, which has identified sustainable de
among companies, NGOs, IGOs, unions, institu velopment as a key to becoming "the most com
tional investors (particularly SRI investors or ac petitive and dynamic knowledge-based
tivist pension fund investors), and governments economy in the world," identifies CSR as an
acting in the transnational public sphere important contribution to achieving that goal
(Cuesta Gonzalez & Valor Martinez, 2004; Wil (European Commission, 2002). It also is strongly
liams, 2004). These multiparty dialogues either motivated to encourage a level playing field
address specific CSR issues, such as food safety across countries, for both corporate governance
or extractive industry security arrangements, or and CSR, so that no member state is disadvan
address general expectations of corporate ac taged by having more protective social or envi
countability, such as the Global Reporting Ini ronmental legislation than any other. Another
tiative (GRI) multistakeholder process to de locus of intergovernmental CSR activity is the
velop a common framework for triple bottom OECD, which revised its 1976 Guidelines on
line reporting (Guay, Doh, & Sinclair, 2004). Multinational Enterprises in 1998 to include CSR
From these diverse quarters, multiple norms standards, using an explicit government, busi
of responsible corporate behavior are being ar ness, labor, and civil society (NGO) framework
ticulated at the transnational level, some with for the negotiations. These revisions emphasize
demonstrated transformative power. The GRI is that good corporate governance and responsi
a good example, with over 700 companies using bility are "a key part of the contract that under
its framework for comprehensive triple bottom pins economic growth in a market economy and
line reporting, including world-leading MNCs public faith in that system" (Witherell, 2002: 7).
(e.g.. Ford, GM, Shell, and BP). Again, we seek to Relational motives. Transnational NGOs act,
identify the instrumental, relational, and moral in significant part, through multiparty relation
motives of three sets of important actors that ships, partnerships with companies, informa
function at this level: NGOs, business interest tion networks, coalitions that coordinate strate
groups, and IGOs. gies, and as part of social movements (Hart &
Instrumental motives. We assume that NGOs Milstein, 2003; Khagram et al., 2002). Thus, the
are not acting from primarily instrumental mo act of aligning interests with others by estab
tives in their CSR engagement, and yet they lishing and maintaining collaborative relation
have survival needs and, thus, compete for lim ships is at the center of NGOs' modes of action.
ited resources, members, and influence. Estab This often involves shifting conceptual frames
lished, respected NGOs will resist upstarts of understanding and moral suasion in transna
(Zadek, 2001). We describe these instrumental tional multiparty dialogues, which can result in
interests as a power motive, recognizing that the the "quasi-regulation" of new norms that artic
purpose of seeking that power is not predomi ulate the social expectations for business (Scott,
nantly self-interested. Rather, power is a neces 2004). Given the centrality of partnerships to
sary condition for the NGOs to advance their NGOs' success, their relational motives can be
external goals, such as global human rights framed as instrumental as well.
(Amnesty International or Human Rights Watch), In evaluating motives at the IGO level, we
economic justice (Oxfam or Christian Aid), or recognize that both the EU and the OECD oper
environmental protection (Friends of the Earth). ate in geographic and political contexts where
We posit that business interest groups' motives social cohesion is highly valued, and one can
to engage in the transnational CSR discourse see relational motives explicitly identified in
are more strongly instrumental than are the mo their CSR policy initiatives. Lodge (1990) has
tivations of other NGOs, trying to shape discus hypothesized that a country's political ideology
shapes the relationship between business and dress such issues as global economic inequality
government, and he has further identified Eu or HIV/AIDS (Cuesta Gonzalez & Valor Martinez,
rope as predominantly collectivist in its ideol 2004).
ogy, while the United State is more individual
Proposition 4a: NGOs' need for power,
istic. Maignan and Ferrell (2003) have extended
for alignments/collaborations, and for
this analysis to consumers in France, Germany,
altruism will lead them to push firms
and the United States, finding significantly
to engage in social change through
higher concerns for companies' social responsi CSR.
bility in France and Germany than in the United
States. Thus, governments operating in IGOs in Proposition 4b: IGOs' interests in pro
Europe can be expected to care about establish moting competition, social cohesion,
ing policy frameworks that encourage social co and collective responsibility will lead
hesion among companies, employees, and the them to push firms to engage in social
communities in which they operate (Goebel, change through CSR.
1993; Roe, 2000), both as an implication of the
political framework in which the governments
Interactions Among Transnational Motives: A
operate and as a function of representing the
interests and views of their citizens. Multiplicative Relationship
Moral motives. We suggest that transnational A final question we wish to address concerns
NGOs (but not corporate interest groups) are interactions among these various motivations
more likely to be driven by altruism?trying to within actors at the transnational level. As the
make the world a better place (Egri & Herman, analysis has shown, whereas all of the different
2000; Spar & La Mure, 2003)?than by instrumen actors in the transnational space have a mixture
tal and relational motives, although both instru of motivations, the relative priorities are differ
mental and relational motives matter, as just ent for each. As an example, we have posited
discussed. Indeed, the public recognizes NGOs' that, for NGOs, altruism is generally their stron
altruistic motivations: polling data indicate that gest motivation (moral), followed by either the
NGOs are trusted more than either government need to establish collaborations and align inter
or companies to promote the public interest ests (relational) or the need to gain power to
(Zadek, 2001). Conversely, we see corporate in obtain scarce resources (instrumental). For cor
terest groups as having a more complex mix of porate interest groups that ordering is reversed:
motives. For example, the World Business Coun instrumental motives are the strongest (the
cil for Sustainable Development undoubtedly drive for power to promote business interests),
has business participants who care about un followed by either relational motives (establish
derlying social issues and leaders whose per ing and participating in business networks to
sonal values push toward social and environ enhance effectiveness) or moral motives (mak
mental obligation, yet they might also be ing the world a better place, consistent with
interested in building social capital (Logsdon & business interests). Some corporate interest
Wood, 2004). groups may lack altruistic motives altogether
We posit that governments participating in and may simply be acting to promote business
the CSR discourse in the transnational public interests (instrumental motives).
sphere via IGOs also exhibit mixed moral and In addition to recognizing that NGOs versus
instrumental motives. Increasingly, they pro corporate interest groups have different relative
mote universal standards of human rights and priorities among their motives, we must exam
ethics, against arguments that local standards ine the functional characteristics of the type of
should prevail, particularly when such local relationship among motives within these actors.
standards allow corruption or exploitation of the Here, we suggest that NGOs' CSR motivational
people involved in the production process (Da function is a multiplicative one, given the expo
vies, 2003). At the same time, by inculcating the nential power of working in networks and col
ories of corporate responsibility for the condi laborations that characterize this level of anal
tions of society and the world, governments can ysis. For example, as shown in Table 2, we
deflect some of their own responsibility to adopt would write an exponential equation to concep
global policies and financial programs to ad tually illustrate this value for NGOs.
In addition to capturing the power of networks THE INTERPLAY OF MOTIVES ACROSS

and collaborations to multiply the impact of LEVELS
NGO's actions, the multiplicative function, even
Distinguishing actors' instrumental, rela
though conceptual, brings an additional point
tional, and moral motives and then theorizing
into focus. If an entity has a negative motive to
be involved in the CSR discourse in the transna about their relative priorities and the functional
relationships among them allows us to uncover
tional space, such as to derail discussion or
effective mechanisms that encourage firms to
deliberately undermine consensus, the multipli
cative function would indicate that there would engage in CSR efforts and, thus, contribute to
positive social change. We argue that not only
be a negative pressure for CSR resulting from
do the three types of motives interact in different
that entity's actions.
ways within different levels of analysis but that
different motives interact across levels, which
Proposition 4c: The existence of a mul
may serve to increase or decrease the pressure
tiplicative relationship of motives
on organizations to engage in CSR. Although
among transnational actors will lead
examining every possible combination of mo
to stronger firm pressure to engage in
tives across levels is well beyond the scope of
social change through CSR, depend
this paper, we discuss three examples to illus
ing on the density and intensity of pos
trate the power and utility of the interplay of
itive NGO, governmental, and inter motives across levels in our model.
governmental action.
One question that might be asked is why we Example 1: Conflicting Motives Between
understand government's CSR motivation Employees and Organizations
within a domestic context to be additive and
compensatory, whereas we understand govern We have suggested that employees will place
ment, as any other organization, working in the the most pressure on organizations to engage in
transnational space to have a multiplicative re CSR when their morality-based motives are es
lationship among CSR motives. As noted, the pecially strong, whereas, at the organizational
multiplicative relationship takes account of the level, we have proposed that CSR pressure will
power of establishing and communicating be strongest when instrumental needs are high
through networks, which amplify the power of among insiders. This presents a paradox in that
ideas and may even create the actual or virtual an employee with high CSR-relevant morality
"space" for the creation of new norms. Govern needs will seek employment in a firm with cor
ments in a domestic context already have ac responding values. However, as we have ar
cess to, and in some cases a monopoly on, a full gued, such firms may not be the ones engaging
range of power to express and amplify ideas. in the strongest CSR efforts. Our model would
Government has full access to the media and so predict that the most social change would occur
can easily convey its framing of issues and when "moral" employees worked for "instru
norms, it has access to money, and it controls mental" organizations. The fact that employees
the policy development process. The additive/ may not desire to work for such a firm might
compensatory framework recognizes that the in hinder the extent to which this type of employee
tensity of CSR pressure will depend on govern initiated social change is possible.
ment's total motivation but that networking in
the domestic context may not give the govern
Example 2: Contradictory Yet Complimentary
ment access to any greater power than it al
Motives of Management and Consumers
ready controls. In the transnational space, how
ever, government loses its monopoly, and while Our model shows that the moral concerns of
it still has enviable resources, it does not enjoy consumers are most relevant in determining the
the same privileged communicatory position. amount of pressure they will place on firms to
Here, like other entities operating in this space, engage in CSR. The model also shows that this
persuasion is key, and collaboration and net is the opposite for firm insiders, whose actions
working are important ways to amplify an indi are strongly driven by instrumental motives to
vidual government's views. be socially responsible. This would imply that in
countries where there was a great deal of con ture their behavior (McAdams & Nadler, 2005).
sumer demand for socially responsible prod Once the focal point is created, consumers', in
ucts, firms would have incentives to produce stitutional investors', communities', and NGOs'
such products. We have not seen this unfold in expectations change, and these parties can cre
practice, however, to as great an extent as ate pressures for firms to meet the standards set
would be expected?certainly not in all indus out in the law. Kagan et al. (2003) found that this
tries where consumers indicate that a compa pressure was highly salient to companies,
ny's CSR profile is important in their purchasing whether enforcement was a realistic threat or
decisions (Sen & Bhattacharya, 2001). Why aren't not. Moreover, the laws and policies that gov
more companies acting to compete on the basis ernments enact send a strong signal about the
of CSR? importance of a subject?a signal that, with re
We propose that one reason for this phenom gard to CSR, is amplified by the business cul
enon is that firms' relational motivations within ture in the country, consumers' interests, insti
their industry group might at times outweigh tutional investors' actions, the corporate
their instrumental motivations. Bansal and governance regime, NGOs' effectiveness, and
Roth's (2000) qualitative study of U.K. and Japa the individualistic versus collectivist nature of
nese engagement in ecological responsiveness the country's underlying political and social
showed that a majority of firms in their sample philosophy.
were motivated by what we define as relational The combination of these factors is exempli
motives (e.g., legitimation within a given orga fied in the administration of Prime Minister
nizational field and compliance with the law), Tony Blair, where the United Kingdom became a
followed by instrumental motives (e.g., increas unique repository of observable CSR culture
ing firm competitiveness), with moral motives pressuring companies to engage in social
lagging significantly behind. Kagan et al.'s change (Aaronson & Reeves, 2002). As one exam
(2003) qualitative and quantitative study of ple, Tony Blair became a leader in the recent
firms' environmental performance in the United Extractive Industry Transparency Initiative to
States, Canada, Australia, and New Zealand encourage all companies in the oil, gas, and
demonstrated a range of attitudes toward envi mining industry to publish the payments com
ronmental performance, but, again, relational panies made to countries to obtain concessions
motives within the industry were particularly to extract oil, gas, or minerals (Danielson, 2004).
salient. We suggest that firms may not have In this case the instrumental motives of the U.K.
fully tapped these markets, although it would be government and two major U.K. companies were
instrumentally intelligent to do so, because they consistent with each other. The U.K. government
will be "persecuted by industry peers" for going realized that extractive industry revenue trans
beyond the industry's CSR standards (Bansal & parency?disclosure of the amount of money
Roth, 2000: 731), particularly in tightly integrated extractive companies pay to host countries?
industries and particularly where "non-CSR would help to promote government accountabil
firms" can mimic actual CSR by engaging in ity, political stability, and reduced poverty in
window dressing (Weaver et al., 1999), thus di many "resource rich yet poor" countries and that
luting the CSR first mover's competitive advan such political stability would be advantageous
tage. to two of its flagship companies, BP and Shell
(Williams, 2004). It also recognized, though, that
if BP and Shell alone acted to require host coun
Example 3: Amplifying Motives of
tries to disclose their revenue payments, they
Governments, NGOs, and Organizations
would be at a disadvantage with respect to
The standards established by laws, while not Chevron/Texaco or Exxon Mobil. Moreover,
immediately translated into action in any real these instrumental motives were amplified by
istic portrait of global organizational practice, strong, morally based NGO pressures (Global
have a particularly strong influence on estab Witness, a well-respected and established U.K.
lishing social expectations about responsible NGO) and by increasingly engaged U.K. institu
corporate behavior. The social expectations cre tional investors who recognized that host coun
ated by law are understood by some theorists to try stability would reduce the long-term risks of
create a "focal point" around which firms struc their extractive industry investments (Williams,
2004). The lack of U.S. NGO pressure for revenue evaluating their motivations and actions within
transparency or institutional investors request particular countries and within international or
ing this initiative helps to explain why the major ganizations, rather than treating them as a type
U.S. oil companies are much less involved in the of NGO. Other important actors that contribute
Publish What You Pay initiative (Williams, are private financial institutions, such as the
2004), despite its instrumental benefit. World Bank (which has a CSR initiative) and the
International Monetary Fund.
DISCUSSION AND CONCLUSION Second, as recognized above, organizational
practices such as CSR are exposed to decou
Our theoretical model illustrates the impor pling effects such that some companies intro
tance of taking into account multiple actors at duce CSR practices at a superficial level for
different levels of analysis to understand social window-dressing purposes, whereas other com
change, since interactions within and across panies embed CSR into their core company
levels can both facilitate and impede CSR. We strategy (Weaver et al., 1999). Our model does
contribute to theory by narrowing the micro not differentiate among degrees of CSR serious
macro divide (as recommended by Klein, Tosi, & ness or types of CSR, and this is something that
Cannella, 1999, and as begun by Logsdon & future research could refine.
Wood, 2004). In particular, we build from the Another potential limitation of our model is
employee domain of individual needs and that we have deliberately focused on the ante
transpose this construct to the organizational, cedents of CSR, and, therefore, our discussion of
national, and transnational levels. In addition, the model has been necessarily "front loaded."
our interdisciplinary approach provides the nec We have given theoretical attention to the be
essary tools to begin to connect the dots within ginning of the social change process?that is,
and across levels that previously were mostly how the multiple motives of multiple stakehold
unconnected within the organizational litera ers combine to push firms to engage in CSR.
ture. Future theoretical research should explore the
This discussion of CSR as an antecedent of extent to which multiple actors' pressures affect
social change shows that the power of the rela the intensity of CSR efforts, as well as their
tionship among actors is contingent on the en consequences.
vironment. We assume that when CSR practices Finally, using Dunning's (2003) analytic frame
are diffused around the world, there is not so work, we have not evaluated the relative effi
much isomorphism as defined by institutional cacy of "top down" influences on firm behavior,
analysts (DiMaggio & Powell, 1983) but, rather, a such as government regulation, versus "bottom
modification process, referred to as translation, up" influences, such as employee, consumer, in
whereby CSR principles and practices imported vestor, or NGO pressure. This is an important
from elsewhere are adjusted to the local condi issue to investigate if one views a need to "scale
tions in the process's implementation and, up" CSR efforts to extract the maximum benefit
hence, adapted to the different actors' motives for positive social change.
and relationships (Campbell, 2004; Djelic &
Quack, 2003). Future Research
It is important to point out some limitations of
our theoretical model so that future theory de Future empirical research is now needed to
velopment and empirical testing can expand on test the many propositions we have presented
our ideas. First, although our model considers here. This research could take the form of micro/
many actors, both internal and external to the employee-level research, which would seek to
firm, and at multiple levels of analysis, it is not test the linkages between employee perceptions
fully comprehensive. Suppliers are increasingly of CSR and such outcomes as participation in
important, and since their interests vary within CSR efforts, as well as commitment to and per
geographic regions, their varying motives will formance in both CSR and the employee's job in
differentially affect pressures for companies to general. It might also take the form of macroor
adopt CSR policies. In a fully specified theory, ganizational behavioral research, which makes
unions, particularly transnational labor organi cross-organizational and cross-national com
zations, would also be given separate treatment, parisons of CSR actors and motives and tests
how these variables differentially predict adop specific, measurable behaviors when studying
tion of CSR initiatives, intensity of adoption, and such broad subjects as a firm's social responsi
CSP. bility and on Weaver et al.'s (1999) observation
Future research should give attention to dif that a firm's CSR initiatives may range from
ferent types of CSR, as well as their differential window dressing to full integration into strate
effects in fostering social change. In particular, gic management, we also emphasize the impor
such research should address the question of tance of specifying both the range and the in
how pressures placed on firms' types of CSR tensity of CSR initiatives before beginning
might be contradictory. That is, a firm might be empirical testing.
pressured to engage in a number of CSR-related
activities, but also, at times, the collection of
Managerial and Policy Implications
activities called for may be internally inconsis
tent. For example, promoting underdeveloped One important managerial implication from
countries' agricultural development by donating our analysis is that how employees perceive the
genetically modified seeds (short-term humani firm and how their perceptions influence their
tarian aid) might contradict with trying to commitment to the firm and identification with
achieve long-term environmental sustainability. its goals may be positively affected by the firm's
Donaldson and Dunfee (1999: 232) discuss the CSR initiatives. CSR scholars have argued for
example of Levis Strauss, which created a moral the importance of employee participation in
conflict when it implemented a child labor pol CSR efforts (Maclagan, 1999), and it has been
icy forbidding the employment of any child un suggested that employees' participation in CSR
der the age of fourteen, since the effect of this planning, coordination, and decision making
policy was to increase poverty in the surround can contribute to their personal growth. This
ing communities. Given our framework, the suggestion is supported by recent surveys show
question becomes whether the antecedent mo ing that many companies have successfully in
tives affect how firms resolve such conflicts. corporated employee volunteerism in their
Last, of great value would be true multilevel larger employee development programs (Edel
research, which would empirically test how ac sten, 1999). Studies also indicate that employees
tors' motives at different levels interact to pre
perceive CSR involvement as developmental in
dict increased CSR and, consequently, positive nature, as well as a catalyst of enthusiasm, com
social change. For example, we think it would mitment, pride, and personal reward (Lukka,
be fruitful to conduct a multinational, multior 2002). Indeed, a recent survey of students from
ganizational study measuring aspects of orga top business schools showed that 50 percent
nizations' CSR efforts, as well as employees' said they would accept lower pay to work for a
knowledge of and participation in CSR activi socially responsive firm (Barbi?n, 2001). Last,
ties. CSR perceptions, motives, perceptions of Starbucks' low employee turnover within the re
social exchange relationships, job attitudes, tail food industry is attributed to its socially
and behavioral outcomes could be measured at responsible practices. This line of analysis sug
the employee level, and both firm and social gests that managers should not view CSR as an
performance could be measured at the organi external "add-on" but, rather, as an important
zational level. Such a study would allow for a management tool.
more thorough investigation of the mediating Another managerial implication is that as
variables explaining the social performance firms become increasingly global, CSR stan
firm performance link found by Orlitzky et al. dards within a firm can play a valuable medi
(2003), as well as the multiple needs model pro ating role in diverse cultures between universal
posed in the employee-level section. ethical principles ("hypernorms" in Donaldson
We do suggest that future empirical testing of and Dunfee's [1999] terms) and local norms.
our model use demonstrable corporate behav Donaldson and Dunfee (1999) describe an arena
iors as the dependent variable to measure the of "moral free space," where local norms are not
intensity of CSR engagement, instead of using in direct conflict with the hypernorms, either
corporate reputation or corporations' social and because the hypernorms do not address the is
environmental reports. Building on Clarkson's sue or because actions are "incompletely spec
(1995) argument that it is important to identify ified" by the hypernorms. When confronted with
a moral quandary in this "moral free space," ernments that use a bully pulpit nonregulatory
such as whether to sell a product in a host coun approach predominantly exhort the commercial
try that is prohibited for sale in the home coun benefits of CSR, in addition to the social cohe
try, a firm's well-articulated CSR policy can act sion and collective responsibility arguments
as a framework for decision making (Logsdon & they advance. Yet these government soft poli
Wood, 2004). This is consistent with Fort's (2001) cies may not be as effective as classical eco
goals to construct corporations as mediating in nomic theory would suggest they should be ow
stitutions whose organizational architecture, le ing to the importance of industry relationships
gal and ethical, needs to be carefully considered and firms' relational motivations. Here, industry
to promote ethical business behavior. self-regulation may be more effective than gov
There are a number of public policy implica ernment exhortation, so, in such instances, gov
tions to be drawn from our analysis as well. We ernments should work with industry self
have suggested that the relational motives regulatory groups to improve standards for an
within an industry might "blind" a firm to the entire industry, if the government is unwilling to
motives of consumers, particularly consumers' regulate.
greater willingness to purchase goods from so
cially responsible firms. Recognizing this order Conclusion
ing of motives, we assert that an effective ap
proach to encouraging more firms to engage in There exist many different ways to exert pos
serious CSR efforts needs to do one of two itive social change in society and many differ
things: undermine industry cohesion or pressure ent agents who have the explicit power to trig
the standards of entire industries upward. The ger such change. This special topic forum of
former is accomplished when effective NGOs AMR points to corporations as important and
"expand the field" of discourse within an indus necessary social change agents, and this paper
try and provide an exogenous shock to change has identified the many actors that place pres
the frame of discussion and potentially shift sure on corporations to impart social change.
norms of acceptable social conduct within the We have discussed the specific motives driving
entire industry, creating industry "laggards" CSR at four levels of analysis, and we have
and "leaders." This is precisely what occurred in drawn from distinct bodies of literature to de
the food industry in the EU (Brooks, 2000; Schur velop our model. We propose this model as a
man, 2004). starting point for future empirical research in an
The latter route?pressuring the standards of effort to systematize the analysis of CSR such
an entire industry upward?can happen in a that its potential contribution to positive social
number of ways: self-regulation, as in the Re change can be maximized.
sponsible Care Initiative in the chemical indus
try (in response to the Bhopal explosion; Gun
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Ruth V. Aguilera (ruth-agu@uiuc.edu) is an associate professor at the College of

Business, the Institute of Labor and Industrial Relations, and the Department of
Sociology at the University of Illinois at Urbana-Champaign. She received her Ph.D. in
sociology from Harvard University. Her research interests fall at the intersection of
economic sociology and international business, specifically in the field of compara
tive corporate governance.
Aguilera, Rupp, Williams, and Ganapathi 863
Deborah E. Rupp (derupp@uiuc.edu) is an assistant professor at the Institute of Labor

and Industrial Relations and the Department of Psychology at the University of Illinois
at Urbana-Champaign. She received her Ph.D. from Colorado State University. Her
current research focuses on organizational justice and assessment centers.
Cynthia A. Williams (cwilliam@law.uiuc.edu) is a professor of law and Mildred Van

Voorhis Jones Faculty Scholar at the University of Illinois College of Law. She received
her J.D. from the New York University School of Law. Her fields of research include
corporate law, securities, comparative corporate governance, new governance, and
CSR.
Jyoti Ganapathi (jganapat@uiuc.edu) received her master's in human resources and
industrial relations and is currently pursuing a Ph.D. in industrial organizational
psychology at the University of Illinois at Urbana-Champaign. She has worked within
the Indian CSR movement and is currently working with an Indian NGO on CSR
projects. She is also a columnist and writes traditional children's stories.

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Ruth V. Aguilera (ruth-agu@uiuc.edu) is an associate professor at the College of

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Cynthia A. Williams (cwilliam@law.uiuc.edu) is a professor of law and Mildred Van

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