How Do Domestic Regulatory Traditions Shape CSR in Large International US and UK Firms?
| DOI | http://doi.org/10.1111/1758-5899.12409 |
| Author | Jette Steen Knudsen |
| Published date | 01 May 2017 |
| Date | 01 May 2017 |
How Do Domestic Regulatory Traditions Shape
CSR in Large International US and UK Firms?
Jette Steen Knudsen
Fletcher School of Law and Diplomacy, Tufts University
Abstract
This article examines corporate social responsibility (CSR) pertaining to labor standards in apparel and tax transparency in
extractives and explores how domestic regulatory traditions shape CSR in large international US and UK firms. Reflecting their
more collaborative business-government traditions, British firms are more willing to join international CSR multi-stakeholder
initiatives with business-critical actors such as unions and civil society actors. The US has a more top-down regulatory
approach, which promotes hard law international CSR or encourages business-driven voluntary CSR initiatives. This article
makes three contributions. First, it argues that while corporations are the key actors in international CSR, their behavior reflects
their respective national business systems. Second, focusing on a range of international CSR initiatives, this article finds that
UK firms are more interested in adopting international (multi-stakeholder) CSR initiatives than US firms. Finally, the article
shows that the US and the UK governments play a key role in driving an international CSR agenda, and in doing this it high-
lights government agency more so than other research has.
The role of government in CSR
In recent years the role of business responsibility has chan-
ged in two key ways. First, the focus of CSR has shifted from
a local community orientation to the international level
(Gjølberg, 2009; O’Rourke, 2006; Vogel, 2008). Second,
whereas CSR traditionally has been defined as voluntary ini-
tiatives (McWilliams and Siegel, 2001), governments have
become more involved in CSR programs either through tra-
ditional mandatory regulation of business or through soft
law that encourages companies to pursue CSR initiatives
(Knudsen et al., 2015).
The purpose of this article is to focus on different national
regulatory traditions and explore their implications for inter-
national business responsibility. In doing so it moves
beyond a focus on one or two companies (see for example
Christopherson and Lillie, 2005) to explore more systemati-
cally how companies select which CSR initiatives to join. The
focus is primarily on multi-stakeholder initiatives but I also
consider initiatives led by business, by international govern-
ment organizations or by governments; second, I move
beyond a focus on the creation and strategies of specific
CSR initiatives (Christopherson and Lillie, 2005) and the
political processes that let to them (Bartley, 2007; Hughes
et al., 2007) to examine a wider range of CSR initiatives in
extractives and apparel firms. Finally, while globalization has
contributed to a ‘state governance deficit’(Bair and Pal-
pacuer, 2012; Bartley, 2007), which has led firms to adopt
private forms of CSR regulation, I highlight the key role that
national regulatory traditions can play in shaping CSR
programs.
I start by exploring if market pressures (related to a
company’s sector, size or international exposure) primarily
drive the CSR choices that companies make. Next, I con-
sider if CSR choices are primarily shaped by the domestic
regulatory context where companies have their home base.
Over the last 15 years or so a literature has emerged that
explores the role of governments and domestic institutions
in shaping CSR and that views CSR as reflecting the
domestic political-economic institutional environment
(Campbell, 2007). This perspective is sometimes referred to
in the literature as a ‘mirroring’perspective (Jackson and
Apostolakou, 2010; Jackson and Bartosch, 2016). In this arti-
cle I refer to this perspective as ‘domestic regulatory tradi-
tions’since the focus is on how domestic legal traditions
and business systems contribute to shaping CSR. An alter-
native perspective sees corporations as substituting for
missing public social responsibility (Matten and Moon,
2008).
While the US and the UK have a long history of business
responsibility (Brammer and Pavelin, 2005; Kaplan, 2014;
Kinderman, 2012; Maignan and Ralston, 2002), they have
different traditions for how business and government inter-
act that reflect distinct legal traditions (Aguilera et al.,
2006; Kagan, 2003). The article distinguishes between two
kinds of government drivers of CSR: (1) public regulation
where governments regulate company behavior through
mandatory policies (traditional coercive regulation enforced
through the legal system); and (2) public regulation where
governments attempt to support voluntary efforts by firms
(i.e. softer voluntary regulation such as endorsement, facili-
tation and partnering (Knudsen et al., 2015). I ask if the UK
government with its more consensus-oriented approach to
regulation promotes a different form of CSR compared to
the US government, which is known for a more top down
legalistic approach to government regulation. This article
Global Policy (2017) 8:Suppl.3 doi: 10.1111/1758-5899.12409 ©2017 University of Durham and John Wiley & Sons, Ltd.
Global Policy Volume 8 . Supplement 3 . May 2017 29
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