Guest editorial

Guest editorial

Article Type: Guest Editorial From: International Marketing Review, Volume 32, Issue 5.

Welcome to the special issue of International Marketing Review on International Marketing and Corporate Social Responsibility (CSR). We are pleased to announce that nine research papers have been chosen for publication in the special issue after our in-depth blind review process. We believe that all of them address important aspects in this special issue pursuant to the theme below.

Special issue background

As globalization has intensified, the increase in foreign direct investment (FDI) keeps pace with the trends in global markets. Despite the recent economic slump and subsequent fluctuations of development activities in some markets, the stock value of FDI has been continuously proliferating and also influenced a wide range of industrial sectors such as chemical, machinery, electronics, precision instruments and telecommunications, banking and many others.

The primary reason for the upsurge in FDI is perhaps because it offers a variety of benefits to host economies. That is, FDI undertaken by multinational enterprises (MNEs) triggers host economies’ acquisition of foreign knowledge and technology, functions as a facilitator to secure the necessary capital for economic growth, provides employment opportunities and improves balance of payments (Park, 2011; Park and Ghauri, 2011). These series of positive effects play a springboard role for host countries in evolving into better economies. A typical example can be found from China. Since Teng Hsiaoping pursued economic reform, China has attracted huge amounts of FDI and thus often been referred to as a black hole of foreign investment and world factories, which has helped the country to achieve remarkable economic development and become the second largest economy in the world.

However, general consensus on the role of FDI is still lacking and some scholars (e.g. Ziegler, 2005) possess skeptical attitudes toward foreign investment. They tend to bring the dark side of FDI into relief, constantly warning of the adverse effect of FDI and even emphasize it as a primary factor in deteriorating the economic growth of developing countries. Their explanations can be summarized by the following: in cases where the volume of foreign investment is excessive it is plausible that the local economy can be severely controlled by MNEs, which causes considerable damage to host country sovereignty. This situation will also fuel local firms’ competition against MNEs, which will eventually cause the former to lose the race and subsequently aggravate local employment. In addition, when most of the profits earned from local markets are transmitted to home countries and only a small fraction is re-invested into host economies, this countervails the positive effects from initial foreign investments and the enhancement of balance of payments. Again, this will possibly result in draining national wealth, reducing foreign-exchange reserves, enforcing local governments to incur foreign debt and causing a vicious circle of poverty.

Of course, one may presume that the explanations above are rather excessive and exaggerated. Or some may cynically doubt the descriptions and argue that Ireland, China and Vietnam should turn into sub-Saharan African countries if the contentions are true. However, a problem is that no one denies that there is a dark side of FDI and thus we cannot merely ignore the drawbacks stemming from foreign investment undertaken by MNEs. Due to this reason, some governments have always been somewhat ambivalent toward FDI. We attempt to find a remedy to this situation from CSR. When MNEs possess reciprocal business mindsets, sharing business profits and fruits with local economies and putting forth efforts to contribute to local societies it can cause a lessening of the negative voices of concern of foreign penetration into local markets.

In addition, MNEs’ ethical behaviors will significantly influence corporate brand image and subsequently affect international marketing activities (also, CSR activities per se can also be used as a valuable international marketing strategy, see Torres et al., 2012). In other words, MNE CSR and international marketing are not two idiosyncratic entities but they are mutually associated in that absence of corporate citizenship gives rise to lethal adverse effects on both national and corporate brands, which results in international marketing strategies in foreign markets and development of an endless chain. In contrast, MNE CSR, such as consistent solicitudes for the disadvantaged and society restoration of corporate profits, will play a detonator role in spreading positive word-of-mouth about desirable business practices, enhancing customer loyalty and escalating purchase intensions (Luo and Bhattacharya, 2006).

Despite these facts, it is hard to find scholarly attention paid to the discussions linking international marketing, MNE CSR behavior and its influence on success/failure in foreign markets. Many major questions have thus remained unanswered with respect to the nature and consequences of CSR activity for MNEs’ marketing strategies. We argue that this special issue, split into two parts, with the following nine papers, brings together theoretical and empirical advancements connecting CSR and international marketing issues and greatly extends our current understanding on the topic.

The five papers included in part one of this special issue

The first paper by Zaheer Khan, Yong Kyu Lew and Byung Il Park explores the role of CSR in a developing economy (i.e. Pakistan) and addresses how MNEs’ CSR marketing activities are legitimized in the country. Drawing on institutional theory, it provides a well-integrated conceptual framework helping to identify how regulative, normative and cognitive institutional pillars affect CSR marketing at an international level. As such, it suggests the importance of integrative CSR strategies, incorporating regulatory, economic and socio-cultural as well as various stakeholders’ perspectives. Further, it highlights the criticality of MNEs adaptive marketing practices in a host country, which resonates with the concept of adaptation and standardization challenges in international marketing. Khan and his colleague’s seminal work also shows that MNEs CSR marketing legitimacy hinges upon the adaptation to local norms, leading to the importance of the normative pillar of institutionalization in developing countries.

The second paper authored by Ans Kolk, Willemijn Dolen and Leiming Ma examines how Chinese consumers perceive the underlying components of CSR found in western countries; whether Chinese consumers’ CSR expectations are different from foreign firms; and whether the expectations are disparate across regions within China. This paper points out that most previous studies on consumers and CSR have generally concentrated on western contexts and neglected other economies, such as China, which is rapidly emerging in the global arena and subsequently attracting huge scholarly attention in academia. It uncovers that western CSR constructs can be applicable to China, but consumers across all regions perceive two rather than four components: one combining economic and legal responsibilities (labelled "required CSR") and another combining ethical and philanthropic responsibilities ("expected CSR"). In addition, consumers anticipate more ethical behaviors and operations toward local Chinese firms rather than foreign firms, particularly for required CSR.

Byeong-Joon Moon, Lee Lee and Chang Hoon Oh attempt to explore the relationships among consumers’ corporate associations, consumer-corporate connections and corporate brand loyalty, with a particular focus on the moderating role of national culture. According to their experiments undertaken for Americans and South Koreans owning different cultural characteristics, the positive impact of CSR associations on social self-concept connections is more powerful in collectivist than individualist cultures, whereas the positive effect of personal self-concept connections on his/her loyalty to the corporate brand is stronger in individualist than collectivist cultures.

The main objective of the fourth paper by Ceren Altuntas and Duygu Turker is to investigate whether corporate foundations around the world adopt a global or local CSR approach. In light of this question, this paper is eager to scrutinize CSR approaches of corporate-owned foundations to the tri-dimensional CSR research model of Arthaud-Day (2005) and attempts to analyze the perspective, content and organizational strategic orientation. By using content analysis, the authors find that although a general compatibility is found between the subsidiaries and main branches of the corporate foundations on the conceptual level, the practices of CSR activities, targeted stakeholders or the content domains are dissimilar at the operational level. However, local governance is still not entirely independent particularly in terms of received funds. From these outcomes, they argue that the internationalization strategy of the corporate foundations is at the beginning stage of transnationalization.

The fifth paper written by Verena Gruber and Bodo Schlegelmilch starts developing the idea that CSR initiatives may function as a conduit for tapping into the vast consumer markets of developing countries. Under this premise, the paper examines how MNE subsidiaries in Africa pursue CSR and whether their initiatives are aligned with their own global CSR agendas or tailored to local idiosyncrasies. Through triangulation method (i.e. a secondary data analysis with in-depth interviews with CSR managers in African regional headquarters), it sheds light on critical essentials that a more locally embedded CSR approach must occur to address the specific institutions (i.e. culture, norms, regulation, etc.) apparent in national contexts. In addition, it also provides an important implication for MNEs and emphasizes that international firms need to make considerable adaptations to their global CSR agendas to improve initiatives that fit the local environment.

The four papers included in part two of this special issue

The first paper by four authors (i.e. Ruey-Jer Jean, Zhiqiang Wang, Xiande Zhao and Rudolf Sinkovics) notes that extant empirics simultaneously examining drivers and outcomes of CSR initiatives in supply chains are sparse. It also points out that answers for the question, how different institutional contexts may shape CSR initiatives in supply chains are still not clear. In light of this fact, it tries to illuminate the drivers and performance outcomes of CSR initiatives in supply chains particularly in two different institutional contexts: Mainland China (transition economies) and Taiwan (market economies). From statistical analyses on data collected from Chinese and Taiwanese manufacturing sectors, it finds a positive influence of CSR initiatives in supply chains on customer satisfaction in both research contexts. However, the level of the influence of different drivers on CSR initiatives is not the same in those economies, in that both regulatory and efficiency forces are vehicles to promote CSR initiatives in China, whereas competitive advantage plays a pivotal role in stimulating the phenomenon in Taiwan.

The second paper by Amjad Hadjikhani, Joong Woo Lee and Sohee Park is based on a case study exploring CSR as a marketing strategy in foreign markets. It selects Samsung Electronics as the case to achieve a research objective, which examines how the MNE manages CSR activities to gain trust and legitimacy to smoothly penetrate into the Chinese local market and to support their core business activities. The authors indicate that the firm’s CSR strategy was proactive by carrying out large commitments in several long- and short-term projects towards the local society. They also inform us that investment in social issues (e.g. education, environmental problems and communities) function as a lubricant helping the firm’s market entry into the host economy.

Another qualitative experiment is undertaken by Misagh Tasavori, Pervez Ghauri and Reza Zaefarian. This third paper aims to address the international market expansion of MNEs to the base of pyramid (BoP) markets. By employing the corporate social entrepreneurship perspective, it verifies that for successful entry into the BoP markets, MNEs need to pursue a CSR strategy and the adaptation of marketing strategies. In addition, it suggests a necessity for MNEs to recognize the key environmental components (demand conditions and NGO expectations) and improve organizational attributes (management support, network orientation toward NGOs and availability of financial resources) to meet local conditions. The findings of this paper also confirm that active CSR activities undertaken by MNEs in countries with considerable BoP populations often significantly facilitate the attainment of legitimacy and cultivation of sustainable profitability.

The final paper by Pantelitsa Eteokleous, Leonidas Leonidou and Costas Katsikeas is a literature review encompassing and explaining all the important elements discussed above. The authors particularly provide the criticism that although CSR has long been regarded as a crucial issue for marketers, it has only recently attracted the attention of international marketing researchers. Moreover, they argue that theoretically, a third of the previous studies were not rooted in any theory. Although the remainder used various theoretical lenses, stakeholder theory is predominantly employed and others were significantly overlooked in the empirical experiments. According to the authors’ explanations, methodological problems are not an exception. The current literature is characterized by growing sophistication and rigor, but researchers still suffer from gaps in cementing in the areas, such as longitudinal research, sampling methods, geographic scope and statistical analysis.

We hope that the wide range of gaps indicated by the final paper in the second part of this special issue and would like to leave some unfulfilled issues as future research avenues on CSR and international marketing strategies. The guest editors want to thank all the reviewers and all the authors who submitted papers to the special issue. We particularly wish to give our many thanks to John Cadogan and Jeryl Whitelock, the editors-in-chief of International Marketing Review. We are highly indebted to them for their generosity and efforts that contributed immensely to bringing this special issue to this stage.

Professor Pervez N. Ghauri
University of Birmingham, Birmingham, UK

Professor Byung II Park
College of Business Administration, Hankuk University of Foreign Studies, Seoul, South Korea, and

Dr Chang Hoon Oh
Segal Graduate School of Business, Simon Fraser University, Vancouver, Canada

References

Arthaud-Day, M.L. (2005), "Transnational corporate social responsibility: a tri-dimensional approach to international CSR research", Business Ethics Quarterly, Vol. 15 No. 1, pp. 1-22

Luo, X. and Bhattacharya, B. (2006), "Corporate social responsibility, customer satisfaction, and market value", Journal of Marketing, Vol. 70 No. 4, pp. 1-18

Park, B.I. (2011), "Knowledge transfer of multinational enterprises and technology acquisition in international joint ventures", International Business Review, Vol. 20 No. 1, pp. 75-87

Park, B.I. and Ghauri, P.N. (2011), "Key factors affecting acquisition of technological capabilities from foreign acquiring firms by small and medium sized local firms", Journal of World Business, Vol. 46 No. 1, pp. 116-125

Torres, A., Bijmolt, T.H.A., Tribo, J.A. and Verhoef, P. (2012), "Generating global brand equity through corporate social responsibility to key stakeholders", International Journal of Research in Marketing, Vol. 29 No. 1, pp. 13-24

Ziegler, J. (2005), L’empire de la honte, Fayard, Paris