International Business and Corporate Wrongdoing: A Review and Research Agenda

Part of the The Academy of International Business book series (AIB)


It is not uncommon for multinational companies (MNCs) to be accused of corporate wrongdoing in connection with their international operations. However, there is very little international business (IB) research on MNCs’ wrongdoing , possibly because most IB scholars are interested in why MNCs exist, how they grow and how they are managed, and in the gains from international expansion for the MNCs or for other constituents in the home and host countries. In this chapter, we reverse this perspective and propose a novel agenda for further research in IB on the negative impacts generated by MNCs and their subsidiaries on the natural environment and on different constituents’ human rights.


Corporate wrongdoing Human rights International business (IB), Multinational enterprises (MNCs) 


  1. Armstrong, J. S. (1977). Social irresponsibility in management. Journal of Business Research, 5(3), 185–213.CrossRefGoogle Scholar
  2. Armstrong, J. S., & Green, K. C. (2013). Effects of corporate social responsibility and irresponsibility policies. Journal of Business Research, 66(10), 1922–1927.CrossRefGoogle Scholar
  3. Baucus, M. S. (1994). Pressure, opportunity and predisposition: A multivariate model of corporate illegality. Journal of Management, 20(4), 699–721.CrossRefGoogle Scholar
  4. Baucus, M. S., & Baucus, D. A. (1997). Paying the piper: An empirical examination of longer-term financial consequences of illegal corporate behavior. Academy of Management Journal, 40(1), 129–151.CrossRefGoogle Scholar
  5. Baucus, M. S., & Near, J. P. (1991). Can illegal corporate behavior be predicted? An event history analysis. Academy of Management Journal, 34(1), 9–36.CrossRefGoogle Scholar
  6. BBC News. (2015). Volkswagen: The scandal explained.
  7. Castellani, D., & Zanfei, A. (2007). Multinational firms and productivity spillovers: The role of firms heterogeneity. In G. Benito & H. Greve (Eds.), Progress in international business research. Amsterdam: Elsevier.Google Scholar
  8. Chatterji, A., Durand, R., Levine, D., & Touboul, S. (2016). Do ratings of firms converge? Implications for managers, investors and strategy researchers. Strategic Management Journal, 37(18), 1597–1614.CrossRefGoogle Scholar
  9. Chatterji, A. K., & Toffel, M. W. (2010). How firms respond to being rated. Strategic Management Journal, 31, 917–945.Google Scholar
  10. Chirayath, V., Eslinger, K., & De Zolt, E. (2002). Differential association, multiple normative standards, and the increasing incidence of corporate deviance in an era of globalization. Journal of Business Ethics, 41, 131–140.CrossRefGoogle Scholar
  11. Chiu, S.-C., & Sharfman, M. (2016). Corporate social irresponsibility and executive succession: An empirical examination. Journal of Business Ethics. Scholar
  12. Cyert, R. M., & March, J. G. (1963). A behavioral theory of the firm. Englewood Cliffs, NJ : Prentice-Hall.Google Scholar
  13. Delios, A. (2017). The death and rebirth (?) of international business research. Journal of Management Studies, 54(3), 391–397.CrossRefGoogle Scholar
  14. DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147–160.CrossRefGoogle Scholar
  15. Donaldson, T. (1996). Values in tension: Ethics away from home. Harvard Business Review, 74, 48–62.Google Scholar
  16. Donaldson, T., & Dunfee, T. W. (1994). Toward a unified conception of business ethics: Integrative social contracts theory. Academy of Management Journal, 19(2), 252–284.Google Scholar
  17. Earle, J. S., Spicer, A., & Sabirianova Peter, K. (2010). The normalization of deviant organizational practices: Wage arrears in Russia, 1991–98. Academy of Management Journal, 53(2), 218–237.CrossRefGoogle Scholar
  18. Fiaschi, D., Giuliani, E., & Nieri, F. (2015). BRIC companies seeking legitimacy through corporate social responsibility. UNCTAD Transnational Corporation, 22(3), 5–42.CrossRefGoogle Scholar
  19. Fiaschi, D., Giuliani, E., & Nieri, F. (2017). Overcoming the liability of origin by doing no-harm: Emerging country firms’ social irresponsibility as they go global. Journal of World Business, 52(4), 546–563.CrossRefGoogle Scholar
  20. Fiaschi, D., Giuliani, E., & Salvati, N. (2016). The challenge of measuring corporate social irresponsability. Discussion Paper del Dipartimento di Economia e Management - Università di Pisa, no 206. Google Scholar
  21. Gilbert, D. U., Rasche, A., & Waddock, S. (2011). Accountability in a global economy: The emergence of international accountability standards. Business Ethics Quarterly, 21(1), 23–44.CrossRefGoogle Scholar
  22. Giuliani, E., & Macchi, C. (2014). Multinational corporations’ economic and human rights impacts on developing countries: A review and research agenda. Cambridge Journal of Economics, 38(2), 479–517.CrossRefGoogle Scholar
  23. Giuliani, E., Macchi, C., & Fiaschi, D. 2013. The social irresponsibility of international business: A novel conceptualization. In R. van Tulder, A. Verbeke, & R. Strange (Eds.), In International business and sustainable development (pp. 141–171). European International Business Academy (EIBA)/Emerald.Google Scholar
  24. Giuliani, E., Santangelo, G. D., & Wettstein, F. (2016). Human rights and international business research: A call for studying emerging market multinationals. Management and Organization Review, 12(3), 631–637.CrossRefGoogle Scholar
  25. Grappi, S., Romani, S., & Bagozzi, R. P. (2013). Consumer response to corporate irresponsible behavior: Moral emotions and virtues. Journal of Business Research, 66(10), 1814–1821.CrossRefGoogle Scholar
  26. Harris, J., & Bromiley, P. (2007). Incentives to cheat: The influence of executive compensation and firm performance on financial misrepresentation. Organization Science, 18(3), 350–367.CrossRefGoogle Scholar
  27. Herzig, C., & Moon, J. (2013). Discourses on corporate social ir/responsibility in the financial sector. Journal of Business Research, 66(10), 1870–1880.CrossRefGoogle Scholar
  28. Jonsson, S., Greve, H. R., & Fujiwara-Greve, T. (2009). Undeserved loss: The spread of legitimacy loss to innocent organizations in response to reported corporate deviance. Administrative Science Quarterly, 54, 195–228.CrossRefGoogle Scholar
  29. Kang, C., Germann, F., & Grewal, R. (2016). Washing away your sins? Corporate social responsibility, corporate social irresponsibility, and firm performance. Journal of Marketing, 80, 59–79.CrossRefGoogle Scholar
  30. Keig, D. L., Brouthers, L. E., & Marshall, V. B. (2015). Formal and informal corruption environments and multinational enterprise social irresponsibility. Journal of Management Studies, 52(1), 89–116.CrossRefGoogle Scholar
  31. Kolk, A., & van Tulder, R. (2010). International business, corporate social responsibility and sustainable development. International Business Review, 19(2), 119–125.CrossRefGoogle Scholar
  32. Kostova, T., Dacin, M. T., & Roth, K. (2008). Institutional theory in the study of multinational corporations: A critique and new directions. Academy of Management Review, 33(4), 994–1006.CrossRefGoogle Scholar
  33. 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.CrossRefGoogle Scholar
  34. Kostova, T., & Zaheer, S. (1999). Organizational legitimacy under conditions of complexity: The case of the multinational enterprise. Academy of Management Review, 24(1), 64–81.Google Scholar
  35. Kotchen, M., & Moon, J. J. (2012). Corporate social responsibility for irresponsibility. The B.E. Journal of Economic Analysis & Policy, 12(1), 1–21.CrossRefGoogle Scholar
  36. Lall, S., & Narula, R. (2004). Foreign direct investment and its role in economic development: Do we need a new agenda? European Journal of Development Research, 16, 447–464.CrossRefGoogle Scholar
  37. Lange, D., & Washburn, N. T. (2012). Understanding attributions of corporate social irresponsibility. Academy of Management Review, 37(2), 300–326.CrossRefGoogle Scholar
  38. Life Magazine. (1996). Six cents an hour.
  39. Luo, Y., & Tung, R. L. (2007). International expansion of emerging market enterprises: A springboard perspective. Journal of International Business Studies, 38(4), 481–498.CrossRefGoogle Scholar
  40. Mani, M., & Wheeler, D. (1998). In search of pollution havens? Dirty industry in the world economy, 1960 to 1995. Journal of Environment and Development, 7(3), 215–247.CrossRefGoogle Scholar
  41. Marano, V., & Kostova, T. (2016). Unpacking the institutional complexity in adoption of CSR practices in multinational enterprises. Journal of Management Studies, 53(1), 28–54.CrossRefGoogle Scholar
  42. Martin, K. D., Cullen, J. B., & Johnson, J. L. (2007). Deciding to bribe: A cross-level analysis of firm and home country influences on bribery activity. Academy of Management Journal, 50(6), 1401–1422.CrossRefGoogle Scholar
  43. McWilliams, A., & Siegel, D. (2001). Corporate social responsibility: A theory of the firm perspective. Academy of Management Review, 26(1), 117–127.Google Scholar
  44. Meyer, K. E. (2004). Perspectives on multinational enterprises in emerging economies. Journal of International Business Studies, 35(4), 259–276.CrossRefGoogle Scholar
  45. Mishina, Y., Dykes, B. J., Block, E. S., & Pollock, T. G. (2010). Why ‘good’ firms do bad things: The effects of high aspirations, high expectations, and prominence on the incidence of corporate illegality. Academy of Management Journal, 53(4), 701–722.CrossRefGoogle Scholar
  46. Muller, A., & Kraussl, R. (2011). Doing good deeds in times of need: A strategic perspective on corporate disaster donations. Strategic Management Journal, 32, 911–929.CrossRefGoogle Scholar
  47. North, D. C. (1990). Institutions, institutional change, and economic performance. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  48. Palmer, D. (2012). Normal organizational wrongdoing. Oxford: Oxford University Press.CrossRefGoogle Scholar
  49. Perri, A., & Peruffo, E. (2016). Knowledge spillovers from FDI: A critical review from the international business perspective. International Journal of Management Reviews, 18(1), 3–27.CrossRefGoogle Scholar
  50. Pfarrer, M. D., Decelles, K. A., Smith, K. G., & Taylor, M. S. (2008). After the fall: Reintegrating the corrupt organization. Academy of Management Review, 33(3), 730–749.CrossRefGoogle Scholar
  51. Riera, M., & Iborra, M. (2017). Corporate social irresponsibility: Review and conceptual boundaries. European Journal of Management and Business Economics, 26(2), 146–162.CrossRefGoogle Scholar
  52. Ruggie, J. G. 2008. Promotion and protection of all human rights, civil, political, economic, social and cultural rights, including the right to development. Protect, Respect and Remedy: A Framework for Business and Human Rights. Human Rights Council.
  53. Scherer, A. G., & Palazzo, G. (2008). Globalization and corporate social responsibility. In A. Crane, A. McWilliams, D. Matten, J. Moon, & D. Siegel (Eds.), The oxford handbook of corporate social responsibility (pp. 413–431). Oxford: Oxford University Press.Google Scholar
  54. Sherman, L. W. (1987). Deviant organizations. In M. D. Ermann & R. D. Lundman (Eds.), Corporate and governmental deviance (3rd ed., pp. 52–62). New York: Oxford University Press.Google Scholar
  55. Shi, W., Connelly, B. L., & Sanders, G. W. (2016). Buying bad behavior: Tournament incentives and securities class action lawsuits. Strategic Management Journal, 37, 1354–1378.CrossRefGoogle Scholar
  56. Simon, H. A. (1955). A behavioral model of rational choice. The Quarterly Journal of Economics, 69(1), 99–118.CrossRefGoogle Scholar
  57. Spencer, J., & Gomez, C. (2011). MNEs and corruption: The impact of national institutions and subsidiary strategy. Strategic Management Journal, 32, 280–300.CrossRefGoogle Scholar
  58. Staw, B. M., & Szwajkowski, E. (1975). Scarcity-munificence component of organizational environments and the commission of illegal acts. Administrative Science Quarterly, 20(September), 345–354.CrossRefGoogle Scholar
  59. Strike, V. M., Gao, J., & Bansal, P. (2006). Being good while being bad: Social responsibility and the international diversification of US firms. Journal of International Business Studies, 37(6), 850–862.CrossRefGoogle Scholar
  60. Surroca, J., Tribo, J. A., & Zahra, S. A. (2013). Stakeholder pressure on MNEs and the transfer of socially irresponsible practices to subsidiaries. Academy of Management Journal, 56(2), 549–572.CrossRefGoogle Scholar
  61. Szwajkowski, E. (1985). Organizational illegality: Theoretical integration and illustrative application. Academy of Management Review, 10(3), 558–567.Google Scholar
  62. The Guardian. (2010). BP oil spill report—As it happened.
  63. The New York Times. (1981). The controversy over infant formula.
  64. The New York Times. (1985). The Bhopal disaster: How it happened.
  65. The New York Times. (1995). Shell game in Nigeria.
  66. Vardi, Y., & Wiener, Y. (1996). Misbehavior in organizations: A motivational framework. Organization Science, 7(2), 151–166.CrossRefGoogle Scholar
  67. Vernon, R. (1977). Storm over the multinationals: The real issues. Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
  68. Whiteman, G., & Cooper, W. H. (2016). Decoupling rape. Academy of Management Discoveries, 2(2), 115–154.CrossRefGoogle Scholar
  69. Zaheer, S. (1995). Overcoming the liability of foreignness. Academy of Management Journal, 38(2), 341–363.CrossRefGoogle Scholar
  70. Zavyalova, A., Pfarrer, M. D., Reger, R. K., & Shapiro, D. L. (2012). Managing the message: The effects of firm actions and industry spillovers on media coverage following wrongdoing. Academy of Management Journal, 55(5), 1079–1101.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2018

Authors and Affiliations

  1. 1.Department of Economics and ManagementUniversity of PisaPisaItaly

Personalised recommendations