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Multinational Corporate Power, Influence and Responsibility in Global Supply Chains

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Stephen Chen at The University of Newcastle, Australia
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This paper examines the question of how to determine the extent of a multinational corporation (MNC)’s corporate social responsibility for actions by its suppliers. Drawing on three theories of power and influence from the organization and management literature—resource-dependence theory, social exchange theory and social network theory, this paper presents a conceptual framework for analysing the extent of power and influence of an MNC in a global supply chain based on a consideration of (i) economic and non-economic exchanges and (ii) direct and indirect exchanges in the MNC’s industry network. The paper also shows how the legal concept of complicity can be incorporated by considering the knowledge links of the MNC to other organizations in the industry network. Finally, the paper demonstrates how the concepts can be integrated to construct a power assessment grid which can be used to assess the extent of responsibility of an MNC for the actions of its suppliers and other parties in the industry, as well as a map of power and knowledge relationships between organizations in the industry which can be used for further analyses using social network analysis techniques.
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Multinational Corporate Power, Influence and Responsibility
in Global Supply Chains
Stephen Chen
1
Received: 20 April 2015 / Accepted: 18 January 2016 / Published online: 28 January 2016
ÓSpringer Science+Business Media Dordrecht 2016
Abstract This paper examines the question of how to
determine the extent of a multinational corporation
(MNC)’s corporate social responsibility for actions by its
suppliers. Drawing on three theories of power and influ-
ence from the organization and management literature—
resource-dependence theory, social exchange theory and
social network theory, this paper presents a conceptual
framework for analysing the extent of power and influence
of an MNC in a global supply chain based on a consider-
ation of (i) economic and non-economic exchanges and (ii)
direct and indirect exchanges in the MNC’s industry net-
work. The paper also shows how the legal concept of
complicity can be incorporated by considering the knowl-
edge links of the MNC to other organizations in the
industry network. Finally, the paper demonstrates how the
concepts can be integrated to construct a power assessment
grid which can be used to assess the extent of responsibility
of an MNC for the actions of its suppliers and other parties
in the industry, as well as a map of power and knowledge
relationships between organizations in the industry which
can be used for further analyses using social network
analysis techniques.
Keywords Corporate social responsibility Global
supply chain Influence Power Social network analysis
Social exchange theory Resource-dependence theory
Introduction
This paper examines the question of how to determine the
extent of a multinational corporation (MNC)’s corporate
social responsibility for actions by its suppliers. This
question is of particular importance currently because, as
has been extensively documented by researchers in several
fields, including supply chain management (Cohen and
Mallik 1997), strategic management (Kotabe and Murray
2004) and international business (Buckley 2011), global
value chains are increasingly prevalent in many industry
sectors (Gereffi et al. 2005). At the same time, the global
activities of many MNCs have come under increasing
scrutiny and auditing by various stakeholders such as
consumers, shareholders, trade unions, non-governmental
organizations (NGOs), government agencies and interna-
tional organizations. This requires a consideration of the
responsibilities of an MNC beyond traditional ‘‘arms-
length’’ relationships to consideration of their responsibil-
ities in the global value chain and stakeholder networks
(Phillips and Caldwell 2005).
An approach that many large MNCs have adopted to
ensure environmental and social responsibility in their
supply chains is the employment of corporate codes of
conduct. A code of conduct is a document stating a number
of social and environmental standards and principles that a
firm’s suppliers are expected to adhere to (Mamic 2005).
Often they are derived from local and international con-
ventions, standards, and principles, such as the UN Global
Compact, the Global Sullivan Principles, Social Account-
ability 8000, ISO 14001, Global Reporting Initiative, and
the ILO Declaration on Fundamental Principles and Rights
at Work. In many large MNCs, the codes are also sup-
ported by sophisticated managerial systems for policing
and enforcing the standards outlined in the codes.
&Stephen Chen
Stephen.chen@newcastle.edu.au
1
Faculty of Business and Law, University of Newcastle,
Callaghan, NSW 2308, Australia
123
J Bus Ethics (2018) 148:365–374
https://doi.org/10.1007/s10551-016-3033-x
Content courtesy of Springer Nature, terms of use apply. Rights reserved.
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