Social Responsibility in the Context of Multinational Enterprises: Exploring Perceptions and Expectations of Local Employees of Subsidiaries in a Developing-Country

Abstract

Purpose: This paper seeks to explore perceptions of local employees regarding MNE subsidiaries’ attitudes in relation to local customs, values, and belief systems prevalent in the settings in which they operate.Design/methodology/approach: A qualitative research design was used as the methodological grounding for the study. In-depth, semi-structured interviews were conducted in Ghana with a total of 20 participants (16 males and 4 females). Interviews were audio-taped, with permission of the participants. A convenience sampling method was used, and all 20 participants were recruited via initial personal visits by the researcher and subsequent follow-up visits and phone call. Interviews were transcribed via thematic analysis. The views of participants were organized into four major themes: relevance of CSR (business ethics) to local employees; local employees’ attitude towards firms’ (un)ethical behaviour; educating managers and employees of foreign-owned companies; and attractiveness of company and ability to draw resources.Findings: Our interpretive research in the Ghanaian context suggests that most of the participants appreciate the salient role of cooperation between companies and traditional authorities in identifying and resolving potential tension that could evolve out of non-compliance with local socio-cultural values and belief systems. In respect to this, the findings from the present study reinforce the insights of Kjonstad and Willmott (1995) that reliance on rule-based approaches to business ethics is deficient, as it has been found to be ineffective or at best, less ‘empowering’ when it comes to influencing organizations in their ethical behaviour. The findings further suggest that inadequate information about local customs, values and belief systems, partly explains the seeming ‘irresponsible’ posture of foreign-owned companies towards aspects of local socio-cultural values and belief systems. Thus, as scanty information is available to the companies and their managers, few are able to either integrate them into their core CSR practices and/or encourage employees to uphold them in their processes.Research limitations/implications: Findings are based on a single-country investigation. This limitation, combined with a relatively small sample size (20 participants, across firms that belong to 6 industry-groupings), may have implications that the results might not be readily generalizable. Moreover, as the present study employed an interpretive methodological approach, the findings could have been impacted by self-evaluation (i.e., self-narratives from participants), resulting in socio-cultural preferences and response biases, on the part of the participants.Practical implications: Although results of this study is based on single-country (Ghana) study, given similarities in socio-cultural characteristics across developing-countries, this study is likely to have wider relevance and applicability in developing-countries, as a whole.Originality/value: The present study explored relatively unexplored ground by investigating the perceptions of local employees regarding MNE subsidiaries’ attitudes in relation to local customs, values, and belief systems, prevalent in the settings in which companies operate. Most importantly, these initial attempts at exploring the perceptions of local employees regarding MNE subsidiaries’ attitudes in relation to local customs, values, and belief systems, can hopefully be further explored and validated through future research directed at this topic.

Keywords: Business ethics, Culture, Developing-countries, Local employees, corporate social responsibility (CSR), Multinational enterprises (MNEs)

Paper type: Research paper