Framework

Four guidelines where institutions are weak

The question it answers

When a multinational's leadership starts operating in a country with weak institutions, what responsibilities should it take on beyond complying with local law?

Origin
Hsieh, 2009; Vogel, 2005
Diagram type
Process by phase
Level of analysis
Firm
Topics
Supply chain & operationsEthics & corporate governance
Delivery lorry pulling a chain of linked glass boxes, icon for supply chain

Diagram

Four guidelines where institutions are weak

  1. Four guidelines
  2. Understand the institutional environment and its weaknesses
  3. Use internal culture to promote fair norms
  4. Build local capacity, aimed at the lowest earners
  5. Take part cautiously in promoting political and legal institutions

Pitfalls

Pitfall

Confusing it with voluntary CSR; Vogel shows voluntary codes cover little. The basis is the duty not to harm, not only a duty to help.

Sources

References

Listed A–Z by author surname, Harvard style. A source with a DOI links to https://doi.org/…; one without links to its page or says plainly that it has no DOI.

  1. Hsieh, N. (2009) ‘Does global business have a responsibility to promote just institutions?’, Business Ethics Quarterly, 19(2), pp. 251–273.doi:10.5840/beq200919213Source page
  2. Vogel, D. (2005) The market for virtue: the potential and limits of corporate social responsibility. Washington, DC: Brookings Institution Press.No DOIbrookings.eduSource page