\n<\/p>\n
HONG KONG SAR \u00a0<\/p>\n This task likely becomes even more complicated for \u00a0<\/p>\n In light of this, new research conducted by a team, \u00a0<\/p>\n While prior research tended to focus on the effect of CSR at \u00a0<\/p>\n Titled Parent \u00a0<\/p>\n Local Stakeholder buy-in is crucial for companies that operate \u00a0<\/p>\n Only when these stakeholders are satisfied that a company’s \u00a0<\/p>\n The problem for some multinational organisations is because \u00a0<\/p>\n This can be addressed to a certain degree by parent \u00a0<\/p>\n The researchers further found that this effect varied \u00a0<\/p>\n “We find that the manufacturing subsidiaries of \u00a0<\/p>\n He adds that the stakeholders of manufacturing operations \u00a0<\/p>\n “In another words, they don’t rely much on the \u00a0<\/p>\n The higher stakes mean local stakeholders of manufacturing \u00a0<\/p>\n On the other hand, the stakeholders of sales subsidiaries \u00a0<\/p>\n Press The study also found that a multinational company tends to Having a free and open media allows multinational companies \u00a0<\/p>\n The other key factor that researchers looked at was how \u00a0<\/p>\n “If a local stakeholder sees that a subsidiary walks \u00a0<\/p>\n Looking at the bigger picture, Prof. Makino says the \u00a0<\/p>\n “In particular, senior corporate executives should seek \u00a0<\/p>\n Lastly, he says multinational companies should seek to \u00a0<\/p>\n “This more direct route is preferable to having \u00a0<\/b><\/p>\n Reference:<\/b><\/p>\n Guoliang \u00a0<\/b><\/p>\n This
\n–\u00a0Media OutReach<\/a>\u00a0– 10 December 2020 –\u00a0In
\nthe post COVID-19 world, managing a corporate social responsibility (CSR)
\nprogramme that makes a meaningful difference, balances the views and concerns
\nof diverse stakeholders, and is cost effective can be a difficult tightrope to
\nwalk even for companies looking at their home market.<\/p>\n
\nmultinational organisations operating in far flung locales and across diverse
\ncultures, and as companies are increasingly being assessed on their willingness
\nto demonstrate a commitment to helping fight the pandemic and to provide relief
\nto affected stakeholders.<\/p>\n
\nincluding at The Chinese University of Hong Kong (CUHK) Business School, found
\nthat CSR activities conducted by the parent organisation of a multinational
\ncompany can positively influence the ability of overseas subsidiaries to
\noperate in their respective markets.<\/p>\n
\nthe corporate group level, the new study; conducted by Shige
\nMakino<\/a>, Professor of Management at CUHK Business School, in collaboration
\nwith Prof. Frank Jiang Guoliang at Carleton University and Prof. Jae C. Jung at
\nthe University of Missouri — Kansas City; dives down to how it affects
\nsubsidiaries across different countries.<\/p>\n
\nFirm Corporate Social Responsibility and Overseas Subsidiary Performance: A
\nSignaling Perspective<\/a>, the study cross-referenced and
\nanalysed the financial information, foreign domestic investment and CSR
\nactivities of 196 Japanese firms between 2002 and 2014 across three databases.<\/p>\n
\nStakeholder Buy-in<\/b><\/p>\n
\nacross diverse borders. A company operating in different jurisdictions must
\ndeal with local stakeholders in each of its markets, and these can include
\ngovernment and public and private sector organisations, not to mention the
\nwider community. Altogether they influence crucial parts of subsidiary
\noperations, such as through granting of permits and licenses, as well as
\nforming key suppliers or customers.<\/p>\n
\nsocial and environmental practices align with their own, would they be willing
\nto grant access and support the subsidiary’s local operations.<\/p>\n
\nthey are able to deploy vast resources to expand in new markets quickly, they
\nsometimes lack the local track record needed to build a working relationship
\nwith regional stakeholders.<\/p>\n
\ncompanies providing information such as its social and environmental stance,
\nits commitment to building a positive working environment and to product
\nquality, and to maintain development in a sustainable way. Such so-called
\nlong-range “signaling” can give the stakeholders of a local
\nsubsidiary information that is conducive to building the foundations of a good
\nworking relationship, especially when the subsidiary is not yet a known entity
\nin that particular market.<\/p>\n
\ndepending on the activity of the subsidiary.<\/p>\n
\nmultinational organisations tend to have more diverse stakeholders, and that
\nmeans they are both more incentivised to learn about the CSR values of
\ncompanies that operate there and have better means to do so,” says Prof.
\nMakino.<\/p>\n
\ntypically range from labour unions, to local suppliers and environmental
\nnon-government organisations, all of which are highly invested in how
\nmultinational companies operate from an ecological, economic and social point
\nof view.<\/p>\n
\nmessaging from corporate headquarters,” he says. Manufacturing units also
\ntypically have bigger environmental footprints, and they generate more skilled
\nand higher-paying jobs, meaning they have a bigger impact on local economies
\nand communities.<\/p>\n
\nsubsidiaries are likely to find the CSR messaging communicated by a faraway
\ncorporate headoffice insufficient. Because these stakeholders are more
\norganised, they also have the means to find out more about the company
\noperating in their jurisdiction.<\/p>\n
\nconsist mainly of consumers, who are typically more receptive to CSR signalling
\non a corporate level, Prof. Makino says.<\/p>\n
\nFreedom and Local Information<\/b><\/p>\n
\nbe better able to communicate its group-wide CSR values when the countries
\nwhere their subsidiaries operate have a high degree of press freedom.<\/p>\n
\nto not only communicate to its stakeholders its CSR values, it also makes
\nstakeholders more receptive and for the message to be understood, says Prof.
\nMakino.<\/p>\n
\nlocal information about a subsidiary (once a company has established broad
\noperational presence in-country) interacted with the CSR messaging from the
\ncorporate parent. It found that availability of information on a local
\nsubsidiary diminished the “halo” effect of parent CSR reputation.<\/p>\n
\nthe talk, then that information is likely to be more actionable to them than a
\npress release put out by executives sitting on another continent,” the
\nprofessor says. When a company has operated long enough in a market for there
\nto be a track record, this localised information provides a better way for
\nstakeholders to judge the social, environmental and ethical values of the
\ncompany, he adds.<\/p>\n
\nfindings mean that CSR signalling from a parent firm can be a source of
\ncompetitive advantage for overseas subsidiaries, one corporate managers should
\nactively exploit.<\/p>\n
\nto fine tune the amount, quality and ways group-wide CSR information could be
\naccessed in order to build trust and support with stakeholders in places where
\nits subsidiaries operate,” he says.<\/p>\n
\ntailor their CSR messages to the individual markets rather than adopt a
\none-size-fits-all approach. “Each market is different, so by tuning their
\nCSR messages to specific markets, multinational companies can provide a more
\naccurate way for stakeholders in specific countries to learn directly about the
\nvalues of their subsidiaries that operate there.”<\/p>\n
\nstakeholders try to speculate about the values of local subsidiaries from the
\nactions and words of a corporate head office, which could be located thousands
\nof miles away.”<\/p>\n
\nFrank Jiang, Jae C. Jung, Shige Makino, Parent Firm Corporate Social Responsibility and
\nOverseas Subsidiary Performance: A Signaling Perspective<\/a>, Journal of World Business<\/i>, Volume 55,
\nIssue 6, 2020
\narticle was first published in the China Business Knowledge (CBK) website by
\nCUHK Business School: https:\/\/bit.ly\/3otZ7zj<\/a>.<\/p>\n