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How are multinational companies dealing with tough social issues?

Research can help show businesses how to support sustainable development

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Atlas: Research for a better world

Each month the Elsevier Atlas Award recognizes research that could significantly impact people's lives around the world.

January 2016 winner (free access)

The social responsibility of international business: From ethics and the environment to CSR and sustainable development
Ans Kolk
Journal of World Business, Volume 51, Issue 1, January 2016, Pages 23–34

Read the story about the award-winning research

Multinational companies have a big impact on the world, not just on the economy but also on the environment and society. From oil spills to child labor, companies’ activities – and mistakes – can impact people and the planet. This means they also have a responsibility, but are they living up to it?

Prof. Ans Kolk, from the University of Amsterdam Business School in the Netherlands, says multinational companies are increasingly seen to have a responsibility to support sustainable development.

“For humanity, these are big issues, so everybody will be looking to companies and what they can do to help address these problems,” said Prof. Kolk. “And there is a special role for multinationals, not only because they want to make profit and earn incomes in these areas, but also because they want to make a contribution.”

Research should also reflect and shed light on this shift, she says: more effort needs to be made to get sustainable development topics into the mainstream international business journals. This would help companies see more clearly how they are connected to business decisions, corporate reputation and, ultimately, performance.

In her Atlas award-winning article in the 50th Anniversary Special Issue of Journal of World Business, Prof. Kolk looks back over 50 years of research, uncovering how the field has changed and pinpointing areas that will need more attention in the future.

For the article, Prof. Kolk focused on three main areas of social responsibility: the environment, ethics, as well as poverty and sustainable development. She tracked changes in the way researchers have approached these three broad topics, providing context and explaining what was affecting the changes at the time.

“Corporate social responsibility (CSR) has been around for decades as a concept, and there has been a lot of research on it since the 1960s,” explained Prof. Kolk. “The Journal of World Business was turning 50 so I looked at the journal’s articles related to CSR since 1965, and compared it to other main publications to get a picture of how the field overall has changed. I also indicated areas we should focus on more – or less. This was pretty funny for me – I was born in 1965 so I was looking at how CSR has developed over my whole lifetime.”

In the last 50 years, society’s expectations have shifted significantly, putting more pressure on companies to “do the right thing”. With the emergence of the internet and digital technology, civil society organizations had better access to companies and more power to make a difference. Rather than waiting to be attacked, companies should better prepare themselves and proactively address their impacts on the world.

One way to help companies move in this direction is to focus research more on the way issues like human rights, inequality and the impending energy transition are connected to international strategy and on how business can operate in settings characterized by social dislocation and weak states.

“Research on CSR has been dispersed in more specialist journals, but to really show the impact these issues are having on multinational companies – and vice versa – we need to be addressing them in the mainstream business journals,” explained Prof. Kolk.

To make this happen, Prof. Kolk believes research needs to be more interdisciplinary and focus on what matters most, including the way multinational companies impact people’s wellbeing. International business journals also need to be more flexible and take a “braver approach” to CSR by publishing more unconventional, even exploratory work.

A conversation with Prof. Ans Kolk

We talked to author Prof. Ans Kolk from the University of Amsterdam in the Netherlands to find out how research on corporate social responsibility has changed over the last 50 years, and what might be coming in the future.

Listen to the interview
In this podcast Prof. Ans Kolk talks about how research being published on the way multinational companies deal with environmental, social and ethical issues has changed in the last 50 years, and how it’s likely to change in the future. Listen now.

What is corporate social responsibility (CSR)?
The interesting thing about CSR is that it has been around for a long time and there has been a huge variety of definitions. The way I approach it is I look at the issues companies are confronted with – social, environmental, ethical issues. Multinational companies are faced with a wide variety of issues, for example, climate change, child labor and human rights, and they often operate in situations where the state is very weak, for example in conflict areas.

What is this paper about?
It’s an overview article to give an insight into how the different dimensions of CSR have developed over a period of 50 years. The initial reason for the article is because the Journal of World Business is celebrating its 50th anniversary. I looked at how the journal has approached CSR over the years, how much attention the various articles have paid to it, and I compared it to other main publications in the field. I also indicate which areas we should focus on more – or less – so it’s also a reflection of where the field is and where it’s going.

What has changed over the 50 years?
Rules and regulations have changed a lot over such a long period, so that also means that how companies operate in this situation has changed a lot. Societal expectations have also developed tremendously over the years. Issues like climate change weren’t so obvious in the 1960s; this is really an issue that has emerged in recent years. The emergence of the internet has meant that activism on these different issues and campaigns against companies have gotten a very different dynamic – nowadays it’s much easier to wage a campaign against a multinational company than it was in the 1950s when we didn’t have email and there was no social media. The nature of the multinational firm has also changed tremendously. In the 1950s American multinationals started to internationalize to the UK; now multinationals are operating in all countries, and we are talking about global offshoring.

What effect has civil society had?
Non-governmental organizations and activist organizations have become much more active and much more visible, and they can sometimes instigate consumer campaigns like boycotts. This has created very different dynamics for how companies need to respond to these types of issues – they need to have processes in place, strategies about how to deal with these types of issues. Companies can wait until they’re attacked or they can develop a strategy for how to do this. In the end, societal and environmental issues also affect the performance of firms in a positive or negative way.

How has CSR been covered in international business journals?
I think there has been a lot of attention to it, and my article also shows that. The only thing is that it has been very dispersed – there’s the issue of what I would call mainstreaming. There have been a lot of specialized journals paying attention to more specific aspects of CSR, be it the environment, more social issues or the ethical issues, but the real challenge is getting CSR into the mainstream business journals. We’ve seen an increase of articles on these topics over the years, especially in the past decade, but it’s an issue of attaching CSR to the big decisions companies make, not just as an add-on or a specific issue.

One of the reasons it’s difficult to get it into the best journals is because there isn’t a lot of data available, especially on the most difficult topics. Academia increasingly pays attention to having sophisticated data and large databases, and if there’s no such data available, it becomes much more difficult to get it published.

How do you expect CSR to change in the coming years?
I’ve been studying climate change and energy issues for almost 20 years now. Following the Paris agreement on climate change, as weak as it may be, there will be more and more attention paid to the energy transition. Then related to the Sustainable Development Goals, I think there will be more attention on human rights, perhaps for specific industries like the extractives industry. Issues related to development, poverty and inequality are still as prominent as ever, but I think they will increasingly be on the agenda for international business.

There are huge problems with regard to migration, social dislocation, conflict, war and fragile states. For humanity, these are big issues, so everybody will be looking to companies and what they can do to help address these problems. And there is a special role for multinationals, not only because they want to make profit and earn incomes in these areas, but also because they want to make a contribution.

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About Journal of World Business

The Journal of World Business publishes cutting-edge research that reflects important developments in the global business environment and advances new theoretical directions and ways of thinking about global phenomena. The journal covers a variety of conceptual and theoretical traditions, including those drawn from social and behavioral sciences. Topics include strategic management, organizational behavior, cross-cultural management, leadership, ethics, social responsibility and sustainability, and innovation, technology and entrepreneurship.

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