This research investigates how top management team national diversity (TMTND) and corporate social responsibility (CSR) institutional uncertainty affect strategic CSR focus in foreign-owned subsidiaries. The paper develops a theoretical framework based on institutional theory and upper echelon perspectives to test a sample of MNE subsidiaries. Survey data were collected from subsidiaries in Thailand and Taiwan. Non-symmetric analysis suggests that while TMTND plays an important role in establishing a CSR focus, it is not conducive in itself to high-performance outcomes. Performance is measured by market share, sales growth, and profitability for each subsidiary. The results also show that there are notable differences between the subsidiaries located in Thailand and Taiwan as to what extent CSR strategic focus and top management team national diversity are relevant for high-performance outcomes. The study demonstrates that the links between CSR, TMTND, and subsidiary performance are much more complex than previously assumed.
This is a preview of subscription content, access via your institution.
Buy single article
Instant access to the full article PDF.
Tax calculation will be finalised during checkout.
Subscribe to journal
Immediate online access to all issues from 2019. Subscription will auto renew annually.
Tax calculation will be finalised during checkout.
Contrarian case analysis is undertaken to show that there are cases in the sample that are counter to linear or theoretical assumptions. For instance, Table 5 shows that there are some subsidiaries that perform high, even though they report little CSR. Contrarian case analysis is often done before fsQCA is conducted to show that fsQCA is relevant.
Aguilera, R. V., & Jackson, G. (2003). The cross-national diversity of corporate governance: Dimensions and determinants. Academy of Management Review, 28(3), 447–465.
Aguilera, R. V., Rupp, D. E., Williams, C. A., & Ganapathi, J. (2007). Putting the S back in corporate social responsibility: A multilevel theory of social change in organizations. Academy of Management Review, 32(3), 836–863.
Aguinis, H., & Glavas, A. (2012). What we know and don’t know about corporate social responsibility: A review and research agenda. Journal of Management, 38(4), 932–968.
Ahworegba, A. H. (2018). The dilemma of institutional duality and multinational firms 1967–2017: Implications and future research. Multinational Business Review, 26(2), 145–172.
Albinger, H. S., & Freeman, S. J. (2000). Corporate social performance and attractiveness as an employer to different job seeking populations. Journal of Business Ethics, 28(3), 243–253.
Alcácer, J., Cantwell, J., & Piscitello, L. (2016). Internationalization in the information age: A new era for places, firms, and international business networks? Journal of International Business Studies, 47, 499–512.
Andersson, U., Forsgren, M., & Holm, U. (2007). Balancing subsidiary influence in the federative MNC: A business network view. Journal of International Business Studies, 38(5), 802–818.
Andersson, U., Cuervo-Cazurra, A., & Nielsen, B. B. (2014). From the editors: Explaining interaction effects within and across levels of analysis. Journal of International Business Studies, 45(9), 1063–1071.
Ando, N., & Paik, Y. (2013). Institutional distance, host country and international business experience, and the use of parent country nationals. Human Resource Management Journal, 23(1), 52–71.
Blau, P. M. (1977). Inequality and heterogeneity: A primitive theory of social structure (Vol. 7). New York: Free Press.
Bouquet, C., & Birkinshaw, J. (2008). Weight versus voice: How foreign subsidiaries gain attention from corporate headquarters. Academy of Management Journal, 51(3), 577–601.
Buckley, P. J., Doh, J. P., & Benischke, M. H. (2017). Towards a renaissance in international business research? Big questions, grand challenges, and the future of IB scholarship. Journal of International Business Studies, 48(9), 1045–1064.
Buzdugan, S., & Tuselmann, H. (2018). Making the Most of FDI for development: “New” Industrial Policy and FDI Deepening for Industrial Upgrading. Transnational Corporations, 25(1), 1–22.
Chang, S. J., Van Witteloostuijn, A., & Eden, L. (2010). From the editors: Common method variance in international business research. Journal of International Business Studies, 41(2), 178–184.
Christmann, P., & Taylor, G. (2001). Globalization and the environment: Determinants of firm self-regulation in China. Journal of International Business Studies, 32(3), 439–458.
Colakoglu, S., Tarique, I., & Caligiuri, P. (2009). Towards a conceptual framework for the relationship between subsidiary staffing strategy and subsidiary performance. The International Journal of Human Resource Management, 20(6), 1291–1308.
Crilly, D. (2011). Predicting stakeholder orientation in the multinational enterprise: A mid-range theory. Journal of International Business Studies, 42(5), 694–717.
Dahms, S. (2019a). The influence of competences and institutions on the international market orientation in foreign-owned subsidiaries. European Journal of International Management, 13(3), 354–380.
Dahms, S. (2019b). Foreign-owned subsidiary knowledge sourcing: The role of location and expatriates. Journal of Business Research, 105, 178–188.
Dahms, S., Cabrilo, S., & Kingkaew, S. (2020). The role of networks, competencies, and IT advancement in innovation performance of foreign-owned subsidiaries. Industrial Marketing Management, 89, 402–421.
Doh, J. P., Littell, B., & Quigley, N. R. (2015). CSR and sustainability in emerging markets: Societal, institutional, and organizational influences. Organizational Dynamics, 2(44), 112–120.
Fainshmidt, S., Wenger, L., Pezeshkan, A., & Mallon, M. R. (2019). When do dynamic capabilities lead to competitive advantage? The importance of strategic fit. Journal of Management Studies, 56(4), 758–787.
Feurer, S., Baumbach, E., & Woodside, A. G. (2016). Applying configurational theory to build a typology of ethnocentric consumers. International Marketing Review, 33(3), 351–375.
Fiss, P. C. (2011). Building better causal theories: A fuzzy set approach to typologies in organization research. Academy of Management Journal, 54(2), 393–420.
Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50.
Fransen, L., Kolk, A., & Rivera-Santos, M. (2019). The multiplicity of international corporate social responsibility standards. Multinational Business Review., 27(4), 397–426.
Gammelgaard, J., McDonald, F., Stephan, A., Tüselmann, H., & Dörrenbächer, C. (2012). The impact of increases in subsidiary autonomy and network relationships on performance. International Business Review, 21(6), 1158–1172.
Garcia-Castro, R., & Francoeur, C. (2016). When more is not better: Complementarities, costs and contingencies in stakeholder management. Strategic Management Journal, 37(2), 406–424.
Gaur, A. S., Delios, A., & Singh, K. (2007). Institutional environments, staffing strategies, and subsidiary performance. Journal of Management, 33(4), 611–636.
Gilmore, E., Andersson, U., & Memar, N. (2018). How subsidiaries influence innovation in the MNE value chain. Transnational Corporations, 25(1), 73–100.
Gjølberg, M. (2009). Measuring the immeasurable?: Constructing an index of CSR practices and CSR performance in 20 countries. Scandinavian Journal of Management, 25(1), 10–22.
Gong, Y. (2006). The impact of subsidiary top management team national diversity on subsidiary performance: Knowledge and legitimacy perspectives. Management International Review, 46(6), 771–790.
Greckhamer, T., Furnari, S., Fiss, P. C., & Aguilera, R. V. (2018). Studying configurations with qualitative comparative analysis: Best practices in strategy and organization research. Strategic Organization. https://doi.org/10.1177/1476127018786487.
Hair, J. F., Sarstedt, M., Pieper, T. M., & Ringle, C. M. (2012). The use of partial least squares structural equation modeling in strategic management research: A review of past practices and recommendations for future applications. Long Range Planning, 45(5), 320–340.
Halkos, G., & Skouloudis, A. (2016). National CSR and institutional conditions: An exploratory study. Journal of Cleaner Production, 139, 1150–1156.
Hambrick, D. C., & Mason, P. A. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Review, 9(2), 193–206.
Hambrick, D. C., Davison, S. C., Snell, S. A., & Snow, C. C. (1998). When groups consist of multiple nationalities: Towards a new understanding of the implications. Organization Studies, 19(2), 181–205.
Harzing, A. W., Baldueza, J., Barner-Rasmussen, W., Barzantny, C., Canabal, A., Davila, A., et al. (2009). Rating versus ranking: What is the best way to reduce response and language bias in cross-national research? International Business Review, 18(4), 417–432.
Harzing, A. W., Pudelko, M., & Sebastian Reiche, B. (2016). The bridging role of expatriates and inpatriates in knowledge transfer in multinational corporations. Human Resource Management, 55(4), 679–695.
Henisz, W. J., & Delios, A. (2001). Uncertainty, imitation, and plant location: Japanese multinational corporations, 1990–1996. Administrative Science Quarterly, 46(3), 443–475.
Hillman, A. J., & Wan, W. P. (2005). The determinants of MNE subsidiaries’ political strategies: Evidence of institutional duality. Journal of International Business Studies, 36(3), 322–340.
Homberg, F., & Bui, H. T. (2013). Top management team diversity: A systematic review. Group & Organization Management, 38(4), 455–479.
Husted, B. W., & Allen, D. B. (2006). Corporate social responsibility in the multinational enterprise: Strategic and institutional approaches. Journal of International Business Studies, 37(6), 838–849.
Hyun, H. J., Oh, C. H., & Paik, Y. (2015). Impact of nationality composition in foreign subsidiary on its performance: A case of Korean companies. The International Journal of Human Resource Management, 26(6), 806–830.
Ioannou, I., & Serafeim, G. (2012). What drives corporate social performance? The role of nation-level institutions. Journal of International Business Studies, 43(9), 834–864.
Jackson, G., & Apostolakou, A. (2010). Corporate social responsibility in Western Europe: An institutional mirror or substitute? Journal of Business Ethics, 94(3), 371–394.
Jackson, G., & Ni, N. (2013). Understanding complementarities as organizational configurations: Using set theoretical methods. Configurational theory and methods in organizational research (pp. 129–158). London: Emerald Group Publishing Limited.
Jackson, G., & Rathert, N. (2016). Private governance as regulatory substitute or complement? A comparative institutional approach to CSR adoption by multinational corporations. Multinational corporations and organization theory: Post millennium perspectives (pp. 445–478). London: Emerald Publishing Limited.
Jamali, D. (2010). The CSR of MNC subsidiaries in developing countries: Global, local, substantive or diluted? Journal of Business Ethics, 93(2), 181–200.
Jamali, D., & Karam, C. (2018). Corporate social responsibility in developing countries as an emerging field of study. International Journal of Management Reviews, 20(1), 32–61.
Jamali, D. R., El Dirani, A. M., & Harwood, I. A. (2015). Exploring human resource management roles in corporate social responsibility: The CSR-HRM co-creation model. Business Ethics: A European Review, 24(2), 125–143.
Kawai, N., Strange, R., & Zucchella, A. (2018). Stakeholder pressures, EMS implementation, and green innovation in MNC overseas subsidiaries. International Business Review, 27(5), 933–946.
Kilduff, M., Angelmar, R., & Mehra, A. (2000). Top management-team diversity and firm performance: Examining the role of cognitions. Organization Science, 11(1), 21–34.
Kim, C., Kim, J., Marshall, R., & Afzali, H. (2018). Stakeholder influence, institutional duality, and CSR involvement of MNC subsidiaries. Journal of Business Research, 91, 40–47.
Kingkaew, S., & Dahms, S. (2019). Explaining autonomy variations across value-chain activities in foreign-owned subsidiaries. Thunderbird International Business Review, 61(2), 425–438.
Kock, N. (2013). Using WarpPLS in E-collaboration studies: descriptive statistics, settings. Interdisciplinary Applications of Electronic Collaboration Approaches and Technologies, 62, 1–17.
Kock, N. (2014). Stable P value calculation methods in PLS-SEM. Laredo, TX: ScriptWarp Systems.
Kogut, B., & Singh, H. (1988). The effect of national culture on the choice of entry mode. Journal of International Business Studies, 19(3), 411–432.
Kostova, T., & Roth, K. (2002). Adoption of an organizational practice by subsidiaries of multinational corporations: Institutional and relational effects. Academy of Management Journal, 45(1), 215–233.
Marais, M., Reynaud, E., & Vilanova, L. (2018). CSR dynamics in the midst of competing injunctions: The case of Danone. European Management Review. https://doi.org/10.1111/emre.12305.
McCloskey, D. (2002). The secret sins of economics. Chicago, IL: Prickly Paradigm Press.
McWilliams, A., & Siegel, D. (2001). Corporate social responsibility: A theory of the firm perspective. Academy of Management Review, 26(1), 117–127.
Mellahi, K., Frynas, J. G., Sun, P., & Siegel, D. (2016). A review of the nonmarket strategy literature: Toward a multi-theoretical integration. Journal of Management, 42(1), 143–173.
Misangyi, V. F., Greckhamer, T., Furnari, S., Fiss, P. C., Crilly, D., & Aguilera, R. (2017). Embracing causal complexity: The emergence of a neo-configurational perspective. Journal of Management, 43(1), 255–282.
Muellner, J., Klopf, P., & Nell, P. C. (2017). Trojan horses or local allies: host-country national managers in developing market subsidiaries. Journal of International Management, 23(3), 306–325.
Narula, R. (2019). Enforcing higher labour standards within developing country value chains: Consequences for MNEs and informal actors in a dual economy. Journal of International Business Studies, 50(9), 1622–1635.
Neter, J., Wasserman, W., & Kutner, M. (1985). Applied linear statistical models. Homewood, IL: Irwin Press.
Nielsen, B. B., & Nielsen, S. (2013). Top management team nationality diversity and firm performance: A multilevel study. Strategic Management Journal, 34(3), 373–382.
Park, B. I., & Ghauri, P. N. (2015). Determinants influencing CSR practices in small and medium sized MNE subsidiaries: A stakeholder perspective. Journal of World Business, 50(1), 192–204.
Park, B. I., Chidlow, A., & Choi, J. (2014). Corporate social responsibility: Stakeholders influence on MNEs’ activities. International Business Review, 23(5), 966–980.
Pisani, N., Kourula, A., Kolk, A., & Meijer, R. (2017). How global is international CSR research? Insights and recommendations from a systematic review. Journal of World Business, 52(5), 591–614.
Podsakoff, P. M., & Organ, D. W. (1986). Self-reports in organizational research: Problems and prospects. Journal of Management, 12(4), 531–544.
Porter, M. E., & Kramer, M. R. (2006). The link between competitive advantage and corporate social responsibility. Harvard Business Review, 84(12), 78–92.
Ragin, C. C. (2008). Redesigning Social Inquiry: Fuzzy Sets and Beyond. Chicago, IL: University of Chicago Press.
Rao, K., & Tilt, C. (2016). Board composition and corporate social responsibility: The role of diversity, gender, strategy and decision making. Journal of Business Ethics, 138(2), 327–347.
Rathert, N. (2016). Strategies of legitimation: MNEs and the adoption of CSR in response to host-country institutions. Journal of International Business Studies, 47(7), 858–879.
Reimann, F., Ehrgott, M., Kaufmann, L., & Carter, C. R. (2012). Local stakeholders and local legitimacy: MNEs’ social strategies in emerging economies. Journal of International Management, 18(1), 1–17.
Reimann, F., Rauer, J., & Kaufmann, L. (2015). MNE subsidiaries’ strategic commitment to CSR in emerging economies: The role of administrative distance, subsidiary size, and experience in the host country. Journal of Business Ethics, 132(4), 845–857.
Rickley, M., & Karim, S. (2018). Managing institutional distance: Examining how firm-specific advantages impact foreign subsidiary CEO staffing. Journal of World Business. https://doi.org/10.1016/j.jwb.2018.05.002.
Rugman, A. M., & Verbeke, A. (2001). Subsidiary-specific advantages in multinational enterprises. Strategic Management Journal, 22(3), 237–250.
Salk, J. E., & Shenkar, O. (2001). Social identities in an international joint venture: An exploratory case study. Organization Science, 12(2), 161–178.
Schneider, C. Q., & Wagemann, C. (2010). Standards of good practice in qualitative comparative analysis (QCA) and fuzzy-sets. Comparative Sociology, 9(3), 397–418.
Sekiguchi, T., Bebenroth, R., & Li, D. (2011). Nationality background of MNC affiliates’ top management and affiliate performance in Japan: Knowledge-based and upper echelons perspectives. The International Journal of Human Resource Management, 22(05), 999–1016.
Shin, D., Hasse, V. C., & Schotter, A. P. (2017). Multinational enterprises within cultural space and place: integrating cultural distance and tightness–looseness. Academy of Management Journal, 60(3), 904–921.
Singh, S., Darwish, T. K., & Potočnik, K. (2016). Measuring organizational performance: A case for subjective measures. British Journal of Management, 27(1), 214–224.
Skouloudis, A., Isaac, D., & Evaggelinos, K. (2016). Revisiting the national corporate social responsibility index. International Journal of Sustainable Development & World Ecology, 23(1), 61–70.
Verbeke, A., & Greidanus, N. S. (2009). The end of the opportunism vs trust debate: Bounded reliability as a new envelope concept in research on MNE governance. Journal of International Business Studies, 40(9), 1471–1495.
Verbeke, A., Ciravegna, L., Lopez, L. E., & Kundu, S. K. (2019). Five configurations of opportunism in international market entry. Journal of Management Studies, 56(7), 1287–1313.
Voegtlin, C., & Greenwood, M. (2016). Corporate social responsibility and human resource management: A systematic review and conceptual analysis. Human Resource Management Review, 26(3), 181–197.
Williams, C., Colovic, A., & Zhu, J. (2017). Integration-responsiveness, local hires and subsidiary performance amidst turbulence: Insights from a survey of Chinese subsidiaries. Journal of World Business, 52(6), 842–853.
Williams, K. Y., & O’Reilly, C. A. (1998). Demography and diversity in organizations: A review of 40 years of research. Research in Organizational Behavior, 20, 77–140.
Woodside, A. G. (2013). Moving beyond multiple regression analysis to algorithms: Calling for adoption of a paradigm shift from symmetric to asymmetric thinking in data analysis and crafting theory. Journal of Business Research, 66(4), 463–472.
Woodside, A. G. (2019). Accurate case-outcome modeling in economics, psychology, and marketing. Psychology & Marketing, 36(11), 1046–1061.
Wrona, T., & Sinzig, C. (2018). Nonmarket strategy research: Systematic literature review and future directions. Journal of Business Economics, 88(2), 253–317.
Wu, Z., & Salomon, R. (2017). Deconstructing the liability of foreignness: Regulatory enforcement actions against foreign banks. Journal of International Business Studies, 48(7), 837–861.
Yang, X., & Rivers, C. (2009). Antecedents of CSR practices in MNCs’ subsidiaries: A stakeholder and institutional perspective. Journal of Business Ethics, 86(2), 155–169.
Yin, J., & Jamali, D. (2016). Strategic corporate social responsibility of multinational companies subsidiaries in emerging markets: Evidence from China. Long Range Planning, 49(5), 541–558.
Young, S. L., & Makhija, M. V. (2014). Firms’ corporate social responsibility behavior: An integration of institutional and profit maximization approaches. Journal of International Business Studies, 45(6), 670–698.
Zaheer, S. (1995). Overcoming the liability of foreignness. Academy of Management Journal, 38, 341–363.
Zerbini, F. (2017). CSR initiatives as market signals: A review and research agenda. Journal of Business Ethics, 146(1), 1–23.
Preparation of this paper is supported in part by The Open University of Hong Kong, University, Thammasat University, and Bucknell University. The authors gratefully acknowledge support from the James & Elizabeth Freeman Chair in Management at Bucknell University.
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Appendix 1: Structural model and model fit
Appendix 1: Structural model and model fit
|Top management team national diversity and strategic CSR focus||0.102||0.069|
|CSR uncertainty and strategic CSR focus||− 0.153||0.013|
|Intra-organizational network strength and strategic CSR focus||0.045||0.260|
|Inter-organizational network strength and strategic CSR focus||0.316||< 0.001|
|A strategic CSR focus and subsidiary performance||0.308||< 0.001|
|Average path coefficient (APC)||0.136, P = 0.012||P < = 0.05|
|Average R2 (ARS)||0.330, P < 0.001||P < = 0.05|
|Average adjusted R2 (AARS)||0.293, P < 0.001||P < = 0.05|
|Average block VIF (AVIF)||1.38||Acceptable if < = 5, ideally < = 3.3|
|Average full collinearity VIF (AFVIF)||1.519||Acceptable if < = 5, ideally < = 3.3|
|Tenenhaus GoF (GoF)||0.528||Small > = 0.1, medium > = 0.25, large > = 0.36|
|Simpson's paradox ratio (SPR)||0.857||Acceptable if > = 0.7, ideally = 1|
|R2 contribution ratio (RSCR)||0.973||Acceptable if > = 0.9, ideally = 1|
|Statistical suppression ratio (SSR)||0.762||Acceptable if > = 0.7|
Nonlinear bivariate causality direction ratio|
|1.000||Acceptable if > = 0.7|
Standardized root mean squared residual|
|0.079||acceptable if < = 0.1|
|Standardized mean absolute residual (SMAR)||0.062||acceptable if < = 0.1|
Standardized chi-squared with 702 degrees|
of freedom (SChS)
|15.607||P < 0.001|
Standardized threshold difference count ratio|
|0.982||Acceptable if > = 0.7, ideally = 1|
Standardized threshold difference sum ratio|
|0.931||Acceptable if > = 0.7, ideally = 1|
About this article
Cite this article
Dahms, S., Kingkaew, S. & S. Ng, E. The Effects of Top Management Team National Diversity and Institutional Uncertainty on Subsidiary CSR Focus. J Bus Ethics (2021). https://doi.org/10.1007/s10551-020-04721-z
- Corporate social responsibility
- Top management team national diversity
- Institutional theory
- Upper echelon theory
- Foreign-owned subsidiaries