Political behavior, social responsibility, and perceived corruption: a structuration perspective

Abstract

This study unites the three lenses – political behavior, corporate social responsibility, and corruption – and evaluates the way in which multinational enterprises (MNEs) manage political and social forces in a foreign emerging market. Using the theory of structuration as the conceptual foundation, we propose that an MNE's propensity to cooperate with the host government is positively related to its philanthropic contribution and resource accommodation, whereas its propensity to be assertive with the host government is positively associated with its emphasis on ethics and organizational credibility. We argue that when perceived corruption in the business segment increases, an MNE's propensity to cooperate and be assertive with the government decreases, its focus on ethics heightens, and its philanthropic contribution diminishes. As to the three-way interactions, when perceived corruption in the business segment increases, MNEs that focus more on ethics have a greater propensity to use arm's length bargaining to deal with the government, whereas those focusing less on ethics have a greater propensity to use social connections to deal with the government. Our analysis of sample MNEs in China generally supports these propositions.