Do-no-harm versus do-good social responsibility: Attributional thinking and the liability of foreignness

Donal Crilly, Na Ni, Yuwei Jiang

Research output: Journal article publicationJournal articleAcademic researchpeer-review

66 Citations (Scopus)

Abstract

Research summary: The efforts of multinational corporations to be socially responsible do not always engender positive evaluations from overseas stakeholders. Drawing on attribution theory, we argue that two heuristics guide stakeholders in evaluating firms' social performance: foreignness and the valence of firms' social responsibility. We provide evidence from a field study of secondary stakeholders and an experimental study involving 129 non-governmental organizations. Consistent with attribution theory, the liability of foreignness is minimized when firms engage in "do-good" social responsibility (focused on proactive engagement creating positive externalities) but is substantial when firms engage in "do-no-harm" social responsibility (focused on attenuating negative externalities). In online supporting information, Appendix S1, we demonstrate that these evaluations have consequences for whether stakeholders subsequently cooperate, or sow conflict, with firms. Managerial summary: There is no guarantee that efforts to be socially responsible will improve multinational corporations' relations with overseas stakeholders, such as customers, governments, and activists. In a field study and an experiment, we unpack when foreign firms suffer from harsh stakeholder evaluations. Foreign firms especially suffer from harsh evaluations when they conduct "do-no-harm" CSR rather than "do-good" CSR. Stakeholders attribute the motive for foreign firms' do-no-harm CSR to managerial interests and shareholder pressures, perceiving a wedge between managers and owners (who may be unmotivated to reduce the negative impacts of their business activities) and local stakeholders (who bear the social costs). A practical implication is that foreign firms gain more from highlighting do-good rather than do-(no)-harm CSR initiatives.
Original languageEnglish
Pages (from-to)1316-1329
Number of pages14
JournalStrategic Management Journal
Volume37
Issue number7
DOIs
Publication statusPublished - 1 Jul 2016

Keywords

  • attribution theory
  • corporate social responsibility
  • international
  • liability of foreignness
  • stakeholders

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

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