The Managerial Sources of Corporate Social Responsibility The Spread of Global Standards Business and Public Policy Series

Why and under which conditions do companies voluntarily adopt high social and environmental standards? Christian R. Thauer looks inside the firm to illustrate the internal drivers of the social conduct of business. He argues that corporate social responsibility (CSR) assists decision-makers to resolve managerial dilemmas. Drawing on transaction cost economics, he asks why and which dilemmas bring CSR to the fore. In this context he describes a managerial dilemma as a situation where the execution of management's decisions transforms the mode of cooperation within the organization from a hierarchy to one in which managers become dependent on, and vulnerable to, the behavior of subordinates. Thauer provides empirical illustration of his theory by examining automotive and textile factories in South Africa and China. Thauer demonstrates that CSR is often driven by internal management problems rather than by the external pressures that corporations confront.

1. Introduction; 2. A theory of internal drivers of corporate social responsibility; 3. Corporate social responsibility: an inside-view approach and perspective; 4. Internal driver 1: the human resources dilemma; 5. Internal drivers 2 and 3: the technological specialization and foreign direct investment dilemmas; 6. Internal driver 4: the brand reputation dilemma; 7. Conclusion: internal drivers, corporate social responsibility and the spread of global standards.

Christian R. Thauer is Assistant Professor in International Relations at the Freie Universität Berlin and Visiting Fellow at the Jackson School of International Studies at the University of Washington. He was awarded the International Studies Association International Political Economy (ISA-IPE) Best Dissertation Prize 2010–11 for his award-winning thesis.