Corporate Social Responsibility (CSR) in International Joint Ventures (IJVs)
This article aims at investigating organizational characteristics. It then develops a framework that relates to CSR practices of IJVs. It uses a regression analysis to produce a framework that facilitates a better understanding and identification of aspects that power CSR in local markets. The research findings indicate that consumers, competitors, and NGOs are the main people who determine responsible behaviors. The findings also indicate that there are considerate differences in line with CSR that is related to formative characteristics of IJVs. The article begins by explaining how IJVs have been pursued and how they are important for multinational companies. It later covers CSR and connects it with IJVs. Although the introduction is long and elaborately covers CSR and IJVs, the introduction does not define to the reader what CSR or IJV are. The article assumes that readers are familiar with the two concepts and is only through deeper reading the readers may understand the definition of the two concepts.
Barry, (2015) mentions that companies should be moral and be accountable for their activities. According to this author, it would be sensible designing CSRs that acknowledge that firms are actively responsible for their actions. While this article emphasizes that foreign members of IJVs should be upon aspects that trigger implementation of local CSR practices, in theory, the article admits that implementation CSR practices are not easy since there are challenges. For instance, the author mentions that it is unclear determining IJVs stakeholders who determine the implementation and incentives leading to managerial choices of pursuing CSR practices in local markets. The author also mentions that IJVs represent the interaction between foreign and local firms and this results in uncertainty if it is foreign parents that bring CSR initiative into IJV.
The theoretical background of the article covers two theories; institutional and stakeholder theory. The institutional theory focuses on the processes by which structures and rules are established. Deng, (2011) points that such rules and structures are normally established as authoritative guidelines for social behaviors. The article mentions that there is a need to differentiate CSR management and orientation depending on the foreign market and the demands of the local stakeholders. This is true considering that the demands of the local people are different. Problems affecting one local community may be different from problems faced by other communities. It becomes vital if the CSR of a company is adjusted to meet the needs of the local community largely. By modifying their CSR structures to meet demands of the local people, this enables foreign companies to gain local legitimacy (Barry, 2015).
According to stakeholder theory, the sustainability of organizations and their survival depends on their ability to generate wealth, value and satisfy their stakeholders. The article classifies stakeholders into two categories; primary and secondary. Falling under primary stakeholder is consumers and employees. The article mentions that primary stakeholders enable an organization to realize its mission in production and operation. This statement holds very much true. Stakeholders are those people who are interested in the ability of an organization in delivering the desired outcomes and maintaining the viability of products and services provided by an organization (Deng, 2011). The stakeholders enable the firm to achieve its mission and vision. An organization is normally accountable to a wide range of stakeholders and most importantly, its workers and consumers who may ease or harden the execution and realization of the firm’s vision and mission (Yamaguchi, 2011). Thus, it is vital for a firm to take into consideration the interests, needs, and preferences of its consumers and employees.
In every research, it is vital to justify the formulated hypotheses. This is exactly what seen in this article as it has eleven hypotheses with corresponding justification. Before formulating a hypothesis, the article gives an elaborate explanation that guides a reader to understand the rationale for having that hypothesis. This is done for nine hypotheses though the approach changes for the tenth and eleventh hypotheses. A concept of ownership type is discussed leading to the formulation of hypotheses ten and eleven. It could be better if the last two hypotheses each had a separate explanation as previously done to the nine hypotheses. A reader is forced to go through the section ownership type to differentiate evidence that supports the two hypotheses. Additionally, under this section, the author only mentions WOS (wholly-owned subsidiaries) once in the last sentence of the section. Much of the information under this section supports hypothesis ten while hypothesis eleven is not well supported.
Two important things in academic research are reliability and validity of the research. The concept of reliability is that any significant results should exceed a one-off finding and should display a behavior of repeatability (Litwin, 2016). Once research has been done, it may be repeated by other researchers. The question is how likely are the results to resemble results of the original research. This is the concept of reliability and when the results are almost similar, this reinforces the findings and ensures that more researchers will accept the hypothesis.
This article uses Cronbach’s alpha which is a common method for measuring internal consistency (reliability). Using Cronbach’s alpha is appropriate to this study as the study uses multiple Likert questions. According to Yamaguchi, (2011), the thumb rule when using Cronbach’s alpha is to have values more than 0.70 as this indicates that the findings are reliable. In this research, almost all the findings recorded a Cronbach’s alpha of more than 0.70 (except for the variable competitors). It can be concluded that they were reliable as they met the minimum reliability threshold.
The weakness with this article is the failure to indicate its validity. It could have been better if the author explained what was done to ensure the research was valid. Litwin, (2016) points that it is not always for reliable results to be valid. Most findings of this research are reliable though it cannot be concluded that they are valid unless the author explains what strategies he adopted to ensure the research was valid. These strategies will be evaluated alongside the provided results to see any relevance and ascertain that indeed the results are valid.
The other weakness with this research is related to the sample size. The article states that 1531 firms participated in the research although it is not stated how this sample size was arrived at. This leaves readers to wonder how the sample size was calculated. Did the author use a simple calculator such as www.surveysystem.com/sscalc.htm or how did he arrive at this sample size? Also, the author fails to give the statistical power for this sample size and the impact of this power on the research findings. Probably if the sample could have been improved, this could have made the competitor variable to attain a 0.70 Cronbach’s alpha thus improving the reliability of the study. The obtained findings may have been affected by the sample size.
Results and discussion
The results and discussion are well explained. The only problem is positioning of Tables and Figures. In the section “results of Stage One of the Analysis” it could be better if Table 1 and Table 2 were inserted under this section instead of taking this Tables to the appendix. This could facilitate quick interpretation instead of reading the content and then scrolling to the appendix to relate figures with explained content. This is also seen under the section “results of Stage Two of the Analysis” where the author fails to insert Table 3 and 4. The trend spreads to the discussion section where Figure 1 and 2 are not inserted but placed in the appendix. The Tables of this article are full of numbers that can be easily forgotten and thus misinterpreted unless they are placed alongside the author’s arguments.
The conclusion is clearly formulated and highlight the research findings. It mentions that the topic IJVs in relation to CSR activities has not been fully exhausted as there is few research covering the topic. However, the author believes that his study may spur the new focus on the topic. The article contributes to stakeholder theory as it identifies core elements that promote CSR behaviors in IJVs. It gives managerial relevance which is based on the improved understanding of the functions of stakeholders for IJVs in emerging markets. Overly, I believe the conclusion has been well covered.