The social value creation of MNEs – a literature review across multiple academic fields Open Access

The purpose of this paper is to investigate how different academic fields engage with the topic of social value creation in the context of multinational enterprises (MNEs). While recent studies attempt to provide a more clear-cut conceptualisation of social value (Sinkovics et al., 2015; Sinkovics et al., 2014), for the purposes of this review we will adopt a very general definition to capture a broader range of scholarly engagement with the topic (Sinkovics et al., 2019). More specifically, we regard any positive societal or environmental outcome that arises from the activities of MNEs as social value. Although there are a number of practical and theoretical reasons why such an investigation would be useful, the main motivation behind this particular study stems from the urgent need to take stock and take action.

The socio-ecological challenges facing society are producing immediate impacts that can already be felt today. They are no longer possibilities of a distant future. A fairly recent approach to assessing global sustainability identifies nine planetary boundaries that define a safe operating space for humanity (Rockstrom et al., 2009a; Rockstrom et al., 2009b). Research results demonstrate that several of these safe boundaries have already been exceeded, including biodiversity loss and climate change (Steffen et al., 2015). This has serious implications for the future of humanity and, as firms cannot be separated from human beings, for future business models as well as global value chains (Elkington and Braun, 2013; Linnenluecke et al., 2016). The youth climate strikes in over a 100 countries have demonstrated that the new generation not only feels this urgency but is also prepared to take action (Taylor et al., 2019). As a consequence, the self-interest of MNEs is bound to move closer to the needs of society. The question is simply, can the required transition take place proactively, under optimal terms for humanity, or will it be reactive and effectuated in haste?

George et al. (2016) emphasise that global problems cannot be solved in isolation. They highlight the need for coordination and collaborative efforts to address these grand challenges. Grand challenges can be defined as the formulation and operationalisation of global problems. While there are many attempts to formulate global challenges, the 17 Sustainable Development Goals (SDGs) and the (currently) 232 indicators can be seen as the most universal and widespread (George et al., 2016). As the wealth of some of the world’s largest MNEs exceeds that of emerging and smaller nations (Inman, 2016), they are well positioned to contribute meaningfully to these collaborative efforts. However, such contributions are not merely a question of financial means, but most importantly a question of capability (Wettstein, 2012). There is ample evidence that, when they do not develop capabilities to identify and address internal and external constraints on their contributions to grand challenges, MNE initiatives often fail or produce unintended negative consequences (Sinkovics et al., 2016; Sinkovics et al., 2015; Sinkovics et al., 2014).

When it comes to the research side of grand challenges, the most critical question is no longer the recognition that these problems exist, but how to facilitate the transformative change necessary to hedge against their negative impact (Fazey et al., 2018). Buckley, Doh, and Benischke (2017) suggest that international business (IB) as a discipline is uniquely positioned to make a contribution. An important prerequisite is a rapid upscaling of research in this area (Fazey et al., 2018). A recent literature review on social responsibility dimensions (both positive and negative) in 14 IB journals, uncovered that, while the number of publications related to responsibility has increased steadily since 2006, research related to grand challenges is still relatively under-represented in these journals (Sinkovics et al., 2019). However, this does not mean that IB scholars are not working on the topic. It merely means that they may have published their research in other journals whose remit is closer to the social responsibility agenda.

It is to this end that in this paper we do not limit our search to specific journals. The aim is to investigate how different academic fields engage with the topics of social value creation in the context of MNEs. We deem such an effort necessary in order for research on grand challenges to be fast-tracked. This is because these topics are multifaceted and different fields may have different approaches and underlying assumptions. As Sinkovics et al. (2019) point out, literature reviews can provide a good starting point for scholars new to an area of research, or inspiration for new research ideas for scholars already familiar with the topic. The rest of the paper is structured as follows. First, we provide a brief conceptual background and an overview of the methods employed in this research. Subsequently, we present the findings, organised according to the field from which they emerged. We designate the succeeding section to a discussion of potential future research avenues. The conclusion section highlights what we deem as the main take-away message and discusses the limitations of the study.

Early efforts to conceptualise the interface of business and society define social responsibility as the obligations businessmen have towards meeting the ‘objectives and values’ of our society (Bowen, 1953). Both market and non-market strategies characterise the behaviour of MNEs (Devinney, 2011), as they increasingly participate in cross-border foreign direct investment (FDI) inflows and disaggregated global production. To this end, within the business and management literature(s), various concepts are used to account for the heterogeneous nature of non-market strategies; examples include business ethics (Chakrabarty and Bass, 2015; Hartlieb and Jones, 2009), corporate governance (Bondy et al., 2008; Cohen et al., 2002), sustainability (Brandi, 2017; Ciliberti et al., 2009), philanthropy (Brammer et al., 2009; Mithani, 2017) and business and human rights (Wettstein, 2010; Windsor, 2006). Not only do studies in this area consider the relationships MNEs have with global workers, the environment and the communities in which their operations occur, but they also situate the MNE as a political actor (Scherer et al., 2006) creating both economic and social value.

However, studies addressing social value creation in MNEs are not limited to business and management. They can be situated across various bodies of literature, such as IB, business ethics, development studies, economic geography, environmental studies, human rights law, to name just a few. The present literature review accounts for this variation by not limiting the search to specific journals. We used the Web of Science database to perform the search. In light of the heterogeneous nature of the definition of social value creation, our search string included a wide range of key words: TS[¹] = (“multinational corporation” OR “multinational enterprise” OR “transnational corporation” OR “transnational enterprise” OR “multinational compan*” OR “transnational compan*” OR “MNE” OR “TNC” OR “MNC” OR “TNE” OR “global value chain” OR “global production network” OR “GVC” OR “GPN” OR “lead firm” OR “global supply chain”) AND TS = (“social value” OR “social performance” OR “corporate social responsibility” OR “CSR” OR “ethics” OR “ethical” OR “human rights” OR “philanthropy” OR “altruism” OR “social innovation” OR “inclusive growth” OR “doing good” OR “stakeholder” OR “social responsibility” OR “social issue” OR “societal impact” OR “poverty reduction” OR “environmental sustainability” OR “triple bottom line” OR “millennium development goal” OR “MDG” OR “sustainable development goal” OR “SDG” OR “sustainable development” OR “economic development” OR “poverty reduction” OR “social upgrading” OR “corporate citizenship”).

To make sure that we did not miss any studies in ethics journals that focussed on MNEs, we performed the following search using ISSN numbers[²]: (IS=(0007-6503 OR 0045-3609 OR 0167-4544 OR 0925-6733 OR 0962-8770 OR 1052-150X OR 1511-6670 OR 1535-3958 OR 1746-5680 OR 1747-1117 OR 1817-7417 OR 2041-2568 OR 2196-7083 OR 2210-6723) AND TS=(“multinational corporation” OR “multinational enterprise” OR “transnational corporation” OR “transnational enterprise” OR “multinational compan*” OR “transnational compan*” OR “MNE” OR “TNC” OR “MNC” OR “TNE” OR “global value chain” OR “global production network” OR “GVC” OR “GPN” OR “lead firm” OR “global supply chain”). This search yielded 30 new papers. The search was conducted in November 2017, which represents the cut-off point for inclusion. The two search strings identified 565 papers in total. We excluded book chapters and other non-relevant papers. We used the following inclusion criteria for the final selection: the paper should explicitly mention MNEs (domestic large corporations were excluded); the paper should explicitly mention the direct social/environmental impact of MNEs (e.g. impact on workers, impact on environment, impact on communities, impact on government policies, etc.). After cleaning the sample, 466 papers were left.

We subsequently imported the articles in PDF format, as well as the corresponding bibliographic information (author, title, journal name, year of publication, Web of Science identification number, etc.), into the NVivo software. The bibliographic information was linked to each PDF through the source specification sheet. To be able to conduct a cross-disciplinary analysis, we added an additional attribute to the source specification sheet, which we named “research field”. To define the research fields, we adapted Harzing’s (2017) journal classifications. Table I provides an overview of the disciplinary areas and the number of articles identified in each area. We subsequently read through the 466 articles and coded them. Table II lists the main themes and the number of articles in each theme. Table III provides more detailed information about the themes and sub-themes that emerged through the coding process performed using NVivo.

The analysis yielded 15 overarching themes, with disparate studies being classified as “other” (Tables II and III). The main themes were spread across 37 fields (Table I). However, a matrix query across themes and research fields determined that 89 per cent of the results (415 articles) were contributed by 13 fields. Not surprisingly, the field with the largest number of articles in our sample is the field of business ethics (144 articles), followed by IB and general management and strategy, with 58 and 47 papers respectively. In the categories of environmental studies, geography, organisation studies/behaviour/HRM/industrial relations, and planning and development there were 32, 23, 20, and 17 studies respectively. The fields of law, economics, and accounting and finance (A&F) each yielded 15 studies. In the fields of operations research/management science/production and operations management, international relations, and marketing our search identified 12, 9 and 8 papers, respectively.

However, it is important to remember that our specific search strategy limited the results to the context of MNEs, thus excluding research on large domestic corporations and on small and medium-sized enterprises (SMEs). Furthermore, studies that did not explicitly mention the term MNE (or related search terms) were not captured by the search. These results nevertheless suggest that, while journals in the field of business ethics are in the lead in social-value-related research, we are seeing an encouraging increase in this area within IB journals, as well as in general management and strategy journals. A temporal analysis revealed that, from 2008 onward, there has been a steady increase in publications on social-value-related topics in each of the aforementioned 13 fields.

Table IV presents the distribution of the 16 main themes that emerged from the analysis, across the 13 fields. The theme that receives most of the attention within this sub-sample is related to dimensions of responsibility and social value creation in global value chains (GVCs) or supply chains. However, a more in-depth analysis shows that only 4 of the 88 papers on this topic are published in IB journals. Other themes that are comparatively under-represented in IB journals are related to stakeholder management, MNEs and development, international law, sustainability, ethics, and corporate irresponsibility (Table IV). The remainder of this section looks into each of the 13 fields in more detail.

Research within IB most notably explores the transfer of corporate social responsibility (CSR) practices from headquarters to subsidiaries, the role of institutional influences on CSR uptake and outcomes, CSR as a form of legitimacy and way to overcome the liability of foreignness, conflict and corporate irresponsibility, and the relationship between CSR and human resource management (HRM).

In terms of the transfer of social value creation practices from MNE headquarters to subsidiary firms, research explores the determinants of CSR adoption in subsidiaries (Park and Choi, 2015). Evidence suggests that, when there is higher regulatory distance between the subsidiary and its headquarters, the subsidiary will disclose more on its remuneration policies to gain legitimacy (Riaz et al., 2015). Furthermore, research shows that peer conformity to CSR shapes CSR behaviour in subsidiaries (Durand and Jacqueminet, 2015), and when implementing CSR in developing markets, local CSR engagement is more effective in creating positive development outcomes than global standards (Morgenroth and Luiz, 2017). Furthermore, studies exploring environmental management practices in subsidiaries (Tatoglu et al., 2014) find that, when subsidiaries have a shared level of absorptive capacity, it facilitates consensual knowledge on environmental issues (Pinkse et al., 2010).

When considering the role of the MNE in its institutional environment, institutional pressures, rather than stakeholders and the strategic consideration of social issues, are found to guide CSR decision making (Husted and Allen, 2006). Findings also indicate that, when the quality of institutions is high, the impact of FDI on local firms’ CSR uptake diminishes (Nyuur et al., 2016), and when MNEs and their subsidiaries experience high country distance, there is a greater propensity for weakening consumer loyalty and trust, which affects corporate reputation (Swoboda et al., 2017). In the context of emerging market multinationals (EMNEs), evidence suggests that high institutional distance has a positive impact on their equity participation (Gaffney et al., 2016).

MNEs are found to acquire legitimacy and a social license to operate when they are able to create local sustainable benefits for the communities in which they operate (Gifford and Kestler, 2008), offer socially valuable goods (Darendeli and Hill, 2016), engage with the local community (Reimann et al., 2012), and participate in CSR-based activities (Husted et al., 2016; Selmier et al., 2015). Other studies suggest that firms can overcome their liability of foreignness in new markets by engaging in philanthropic activities (Mithani, 2017). However, Sinkovics et al. (2014) point out that, with some notable exceptions, MNEs tend not to be well equipped to understand local constraints. This is in line with London and Hart’s (2004) emphasis on the importance of MNEs developing capabilities that facilitate their social embeddedness. Similarly, Sinkovics et al. (2015) propose that, to create genuine social value, a business needs to be able to alleviate a social constraint or, if the process of alleviation is lengthy (some issues take generations to resolve), address a significant symptom of the constraint. For example, Pinkse and Kolk (2012) examine the impact of climate change on MNEs as they seek to overcome the institutional failures associated with the phenomenon in the global context.

The few studies in our sample that consider corporate irresponsibility and the relationship between MNEs and conflict contribute the following insights. Driffield et al. (2013) find that companies with less concern about CSR are more likely to invest in conflict regions. When MNEs face local stakeholder pressure they are more likely to respond directly to conflict, whereas when they experience international stakeholder pressure, they are more likely to respond indirectly to conflict (Oetzel and Getz, 2012). From a context perspective, evidence suggests that, when there is a high level of perceived corruption, the philanthropic activity of an MNE decreases (Luo, 2006). Finally, Srikantia (2016) relates the violent destruction of sustainable communities to the process of globalisation.

Contributions to HRM explore CSR and its relationship with global talent management. Results suggest that MNEs that practice CSR will experience higher levels of employee engagement and retention (Kim and Scullion, 2011). Furthermore, studies exploring the relationship between sustainability and HRM report on how corporate sustainability objectives can be embedded within an organisation and transferred between two different foreign-located firms (Wehling et al., 2009).

The field of business ethics places notable attention on a wide range of areas, including the implementation of social value across GVCs, development impacts of MNEs, the social value outcomes of business-NGO (non-governmental organisations) relationships and institutional dynamics, conflict resolution, and corruption.

The UN global compact has been instrumental in establishing guidelines for MNEs on human rights, labour, corruption, and the environment (Williams, 2004). This has subsequently facilitated international decision making on human rights (Jackson, 2000) and the use of ethical standards in the institutionalisation of ethics across global supply chains (Krueger, 2008). In the area of governance, codes of conduct and certifications are implemented as MNE-led management processes aimed at coordinating suppliers (Lim and Phillips, 2008; Mamic, 2005; McClintock, 1999; Yu, 2008) and regulating sustainability and ethical trade in GVCs (Reed, 2009; Wahl and Bull, 2014). However, early critical perspectives highlight the limitations of codes of conduct in terms of embedding social activities in supplier firms (McClintock, 1999). This has led to calls for the need to go beyond superficial CSR codes (Lim and Phillips, 2008). Findings also suggest that management systems do not strongly predict CSR performance (Mijatovic and Stokic, 2010). Similarly, the existence and implementation of formal codes of ethics is not found to be a sufficient condition for the preservation of corporate reputations. Only in combination with good and honest relationships with suppliers do they seem to have the desired effect (Bendixen and Abratt, 2007). A balanced combination of monitoring and trust in buyer-supplier relationships also seems to foster upstream responsibility (Bostrom, 2015). The identification of locally appropriate responses in host markets (Lund-Thomsen and Nadvi, 2010), the creation of shared responsibility (Hemphill and Kelley, 2016), and the adoption of voluntary governance mechanisms geared towards shared value (Soundararajan and Brown, 2016) are also identified as necessary conditions for positive outcomes. However, to identify locally appropriate responses, MNEs need to understand the prevailing complexities in a given emerging or developing market (cf. Wang, 2005).

The field of business ethics contributes the most papers on MNEs’ interaction with NGOs, civil society groups (Burchell and Cook, 2013; Collins, 2009), and the local communities in which they operate (Imbun, 2007). Investigations include the role of civil society in driving the CSR agenda in firms (Mzembe and Meaton, 2014) and as watchdogs of MNEs (Tuokuu and Amponsah-Tawiah, 2016). Evidence points to cooperative approaches being more effective than confrontational approaches in ensuring the responsibility of firms (Egels-Zanden and Hyllman, 2006). Furthermore, cooperative methods for addressing social and environmental challenges are found to be more achievable when the two parties share capabilities or are willing to mitigate each other’s weaknesses (de Lange et al., 2016). Despite this, NGOs can suffer from ‘NGO capture’, limiting their ability to ensure MNE compliance to codes of conduct through a need to appease MNEs (Sethi and Rovenpor, 2016). Nevertheless, public–private regimes that are characterised by non-hierarchical compliance mechanisms are regarded as more effective in keeping MNEs accountable for upholding human rights (Kobrin, 2009). Furthermore, partnerships with NGOs can help firms gain legitimacy (Skippari and Pajunen, 2010) and minimise instability (Lucea, 2010) in host countries.

Another stream of research explores the impact of institutional characteristics on the implementation of ethical behaviour (Alas and Wei, 2008; Bondy et al., 2012; Jamali, 2010b; Miska et al., 2016; Pedersen and Gwozdz, 2014; Samy et al., 2015; Zhao et al., 2014). Investigations include how institutional dynamics shape work-related values (Alas and Wei, 2008), the role of the state in the global integration of CSR (Miska et al., 2016) and the impact of institutional voids on corporate social irresponsibility (Zhao et al., 2014). Tan (2009) argues that, in order for the CSR performance of an MNE to improve, the legal framework and ethical culture of its institutional environment needs to be strong. Scherer et al. (2006) discuss the ability of MNEs to create a framework of rules and regulations for the global economy. However, as MNEs operate across porous borders, it is proposed that greater restrictions be placed on them to ensure they conform with international standards on human rights (Palmer, 2001).

Another strand of research in this field addresses social value from an employee perspective. While earlier studies argue that neither managers nor shareholders should exercise moral judgment on the grounds that they are not free agents (Dobson, 1992), managers who lead the way on ethics can enhance employees’ commitment to ethical behaviour (Nygaard et al., 2017), as corporate values impact on the personal behaviour and values of employees (Cambra-Fierro et al., 2008). Ethics hotlines are novel examples of organisational mechanisms whereby employees can report corporate wrongdoings (Calderon-Cuadrado et al., 2009). Evidence also indicates that firms are able to overcome moral silence within their workforces by moving beyond compliance and embracing organisational cultures based on integrity (Verhezen, 2010).

When looking at the relationship between MNEs and socio-economic development, CSR is argued to have a positive impact by bringing employment to developing countries (Sargent and Matthews, 1999), helping to solve community problems (Forcadell and Aracil, 2017), and improving the administrative and legislative functions of the market environment (Garcia-Rodriguez et al., 2013). Lozano and Boni (2002) emphasise the role of MNEs in the economic social and cultural development of countries, through the nature of their activities. They furthermore investigate the recommendations of three supranational organisations, namely, the International Labour Organization and the Organisation for Economic Co-operation and Development, and conclude that there is a need for application and control mechanisms to maximise their impact.

An emerging theme is the contribution of MNEs to conflict or peace. MNEs respond through “direct-indirect” or “unilateral-collaborative” interventions to minimise the investment risk created through conflicts in host markets (Getz and Oetzel, 2009). Studies highlight the role of standards, albeit a limited one, in facilitating conflict resolution (Koerber, 2009), and draw attention to the role of external factors such as trade unions and NGO partnerships in innovatively tackling community-level conflict (Kolk and Lenfant, 2013). However, as demonstrated by Shell’s presence in the Niger delta, although MNEs may seek to facilitate peace, profit-making objectives can contribute to the deterioration of stakeholder relationships and therefore undermine conflict resolution (Idemudia, 2014b).

Furthermore, studies on corporate irresponsibility primarily focus on corruption. To minimise corruption practices, firms adopt anti-corruption codes (Lindgreen, 2004) and tools to promote transparency (Halter et al., 2009). From an institutional perspective, the level of corruption at the national level impacts on a firm’s investment commitment (Luo, 2011). Additionally, there seem to be cultural variations in the way consumers respond to business irresponsibility (Williams and Zinkin, 2008). In the area of tax avoidance, findings show that MNE subsidiaries known for their CSR activities pay more taxes than subsidiaries less known for their CSR activities (Muller and Kolk, 2015).

General management and strategy comprise the third-largest number of papers in our sample. Topics range from the transfer of CSR practices to subsidiaries, to the institutional impact on social value creation, to stakeholder management, to corruption.

In terms of the strategic transfer of CSR to emerging markets, non-business actors influence the CSR strategies of subsidiaries (Ljung and Pahlberg, 2015). Yin and Jamali (2016) explore the nature and process of MNE subsidiaries’ strategic CSR practices in China. They develop an analytical framework encompassing strategic CSR orientations, the strategic CSR process, the different economic and social value outcomes and the relevant firm-context contingencies.

In terms of the drivers of social value creation in MNE subsidiaries, findings suggest that increasing stakeholder pressure from the country of origin may lead to socially irresponsible practices in subsidiary firms (Surroca et al., 2013). Furthermore, regarding the challenges of implementing CSR strategies in subsidiaries, MNEs encounter difficulties in defining corporate ethics and facilitating organisational learning aimed towards responsible business behaviour (Cruz and Pedrozo, 2009).

Strategies for creating social value differ across institutional contexts (Filatotchev and Nakajima, 2014), prompting calls for a non-standardised approach to implementing CSR (Kim et al., 2013). MNEs face varying institutional forces, with the overall impact dependent on their relative importance to the firm (Marano and Kostova, 2016). Applying Hofstede’s cultural dimensions framework, Pedrini et al. (2016) find that institutional contexts characterised by power distance, individualist/collectivist, and uncertainty avoidance negatively impact efforts towards CSR and environmental practices. Research also explores the implementation of CSR in contexts characterised by limited statehood and weak formal institutions. Firms are able to manage the associated risks of operating in these environments by interacting with public governance structures (Hanekom and Luiz, 2017), and forming relationships with non-state actors (Azizi and Jamali, 2016).

Although investing in cooperative stakeholder relationships can be costly for firms (Garcia-Castro and Francoeur, 2016), it can enhance a firm’s brand equity and financial performance (Wang and Sengupta, 2016) and research finds that, when partnered with NGOs, MNEs are able to facilitate social and environmental outcomes (Perez-Aleman and Sandilands, 2008). Joutsenvirta and Vaara (2009) investigate the subtle meaning-making processes of social actors surrounding socially contested corporate action. Based on their findings, they propose that, in CSR debates, corporate representatives tend to apply legalistic frames, highlight their expert knowledge and attempt to disassociate from political disputes.

In this field, studies investigating firm-level corruption find that high levels of formal and informal corruption may lead to high levels of corporate social irresponsibility (Keig et al., 2015). Conversely, a strong CSR performance can reduce the risk of corporate corruption (Lopatta et al., 2017). Firm-level corruption can furthermore lead to ‘legitimacy shocks’ and therefore negatively affect the firm (Schembera and Scherer, 2017). However, in emerging markets consumers are less likely to punish corrupt firms as they tend to be characterised by price sensitivity and place less importance on the ethical behaviour of a firm (Iriyama et al., 2016).

Marketing studies predominately address the relationship between consumers and social value creation in MNEs. Findings suggest that MNEs target social development initiatives in specific markets to enhance specific resource capabilities and therefore their overall competitiveness (Gupta, 2017). Sustainable export marketing strategies balance environmental and commercialisation objectives, and are impacted by various macro and micro environmental factors in a firm’s home and export markets (Zeriti et al., 2014). In the African context, Gruber and Schlegelmilch (2015) find evidence of the adaptation of CSR strategies by MNE regional headquarters to fit local settings. When located in emerging markets, firms can enhance their market position by using CSR to gain trust and legitimacy (Hadjikhani et al., 2016). Furthermore, despite weak formal institutions, MNCs use CSR programmes to enhance their brand value (Khan et al., 2015; Tarnovskaya and Biedenbach, 2016). Other studies detail the effects of company transgressions on the reasoning processes of consumers (Chang et al., 2017) and argue that, when located in bottom of the pyramid (BoP) markets, despite their unethical practices, MNEs are still able to retain consumer loyalty (Gupta and Srivastav, 2016).

Studies in this area are particularly concerned with social value creation with respect to employees and organisational behaviour. From an organisational culture perspective, studies explore the role of religious beliefs within organisations (Bell et al., 2012) and how having an ethical orientation improves firm profitability (Myer et al., 2016). From a GVC perspective, studies primarily focus on conceptualising employee relations in GVCs (Donaghey et al., 2014; Lakhani et al., 2013), and examine the negative impact financial crises have had in terms of increasing work intensification and job insecurity in global commodity chains (Taylor et al., 2014). Furthermore, researchers explore the role of international framework agreements (IFAs) in regulating labour representation (Dehnen, 2013; Helfen et al., 2016; Sobczak, 2007) and the importance of international law in advancing global rights (Compa, 2002), as voluntary regimes have shown to be inadequate at ensuring MNEs are not complicit in human rights violations (Simons, 2004). Although an underexplored area, there are studies that integrate the notion of CSR into international HRM (Shen, 2011) and, from a green HRM perspective, address how environmental sustainability can be achieved through the engagement of employees in related practices (Haddock-Millar et al., 2016). The role of external global production network (GPN) actors in facilitating certain outcomes for workers is also examined. More specifically, Plank and Staritz (2016) look into the impact of state policies on the social up/downgrading of workers in supplier firms. Chowdhury (2017) investigates the complicity of ‘elite’ NGOs in violating workers’ rights when partnered with MNEs, and Tsai and Shih (2013) focus on the role of labour unions in negotiating responsible outcomes for workers during organisational downsizing.

Studies in this area particularly focus on sustainability issues within supply chains. Firms create social value through environmental supply chain management (Wichmann et al., 2016) and responsible supplier selection (Griffis et al., 2014). Green supply chains (Mollenkopf et al., 2010) and environmental labelling through Fairtrade (Acquaye et al., 2015) exemplify how firms can achieve environmental sustainability. Golini et al. (2014) argue that operational competencies that go beyond production activities are key antecedents for environmental and social sustainability. Findings also highlight the influence of institutional pressures in driving social sustainability initiatives (Kauppi and Hannibal, 2017) and that of institutional distance on supply chain sustainability risks (Busse et al., 2016). Furthermore, research finds that CSR can help mitigate supply chain risks (Cruz, 2013a), whilst power is used to manage sustainability risks in supply chains between buyers and suppliers (Touboulic et al., 2014).

Studies published in journals associated with this field focus on corporate governance tools related to social value creation. Findings suggest that MNEs often use CSR reporting to legitimise the CSR activities of subsidiaries (Belal and Owen, 2015; Momin and Parker, 2013). Accounting protocols have also been found to serve as a legitimation tool for employee downsizing (Makela and Nasi, 2010). Other findings suggest that dividend policies in subsidiaries are not necessarily driven by CSR requirements, but rather the remittance demands of the parent company (Kim and Jeon, 2015). Stakeholders provide resistance to the hegemony of MNEs (Pupovac and Moerman, 2017), with the media being key in holding MNEs to account (Deegan and Islam, 2014; Islam and Deegan, 2010). Additionally, firms’ corporate responsibility communication seems to be driven by the institutional environments in which they operate (Lattemann et al., 2009). Therefore, for CSR reporting to be effective, there need to be strong regulatory measures in place (Lauwo et al., 2016). Beyond the aforementioned areas, more recent studies discuss the relationship between tax avoidance and CSR reporting, transparency in tax disclosures (Venter et al., 2017; Ylonen and Laine, 2015), and the voluntary disclosure of MNEs’ investments (Cannizzaro and Weiner, 2015).

Not surprisingly, studies on MNEs in this field tend to focus on sustainability issues and the environmental impacts of firms. When implementing corporate sustainability objectives, subsidiaries’ levels of self-determination seem to play an important role in their governance choices. Recognising these differences in corporate motivations and needs is important, because they shape the extent of corporations’ contributions to local communities and environments (Shah and Arjoon, 2015). When investigating global supply chains, Cruz (2013b) finds that socially responsible chains are more efficient than their less responsible counterparts. In a similar vein, Cruz (2013a) proposes that CSR can potentially be used as a risk mitigation strategy. However, despite the positive impacts environmental upgrading can have on individual firms, these benefits easily diminish when foreign buyers push standards down the chain and there is no financial or technical assistance (Achabou et al., 2017). Helin and Babri (2015) highlight the issue of the negotiability of ethics and sustainability when efficiency and contractual agreements are the primary shapers of the audit process. Findings like these make a striking call for the co-creation of standards and certifications between firms and NGOs to ensure positive sustainability outcomes (Vellema and van Wijk, 2015).

There is a notable strand within this literature attempting the interdisciplinary integration of concepts that might foster transformation such as organisational change, organisational strategy, and sustainability (Sroufe, 2017). For example, Schrader et al. (2012) emphasise that BoP solutions need to equally consider aspects of internal organisation, supply chain management, and sustainability outcomes. Other topics include the examination of how different corporate carbon management accounting approaches might converge to create an overarching carbon accounting system (Gibassier and Schaltegger, 2015), the role of corporations in and their impact on fresh water usage (Lambooy, 2011), the use of polyethylene terephthalate (PET) bottles to reduce the environmental impact of plastic in global supply chains (Accorsi et al., 2015), tackling e-waste to enable global environmental justice (Pickren, 2014), instruments for creating green supply chains (Rueda, Garrett, and Lambin, 2017), and the use of sustainability assessments to determine whether sourcing locally would be more sustainable than sourcing globally (Brunori et al., 2016). Further topics include the unintended negative consequences of new technologies such as genetically modified crops (Tait and Chataway, 2007) and the downstream exporting of hazardous products to developing countries (Jorgensen and Milanez, 2017).

Given that most studies associated with these three research fields adopt a GVC/GPN lens, we collapsed them into one overarching category. The GVC/GPN frameworks provide a holistic approach for analysing the social and economic impacts of geographically dispersed economic activities (Bridge, 2008; Bridge and Bradshaw, 2017; Horner, 2016; Mahutga, 2012; Stringer et al., 2014; Werner, 2016). Studies honing in on the role of the state look at a number of issues. For example, while Horner (2017) explores the role of the state in facilitating firm participation in GVCs, Alford (2016) describes the nature of trans-scalar governance deficits for precarious workers in the context of South African fruit sector. Under certain conditions, governments may be able to foster positive MNE development impacts by imposing trade barriers that encourage better cooperation between MNEs and local farmers (Ibanez, 2015).

Research on monitoring and certifications cover a range of topics. For example, Seidman (2005) compares different models of transnational monitoring. McQuilken (2016) documents the failure of ethical certifications to empower artisanal and small-scale workers in the gold-mining sector in sub-Saharan Africa. Smith and Barrientos (2005) propose that convergence between the ethical and fair-trade movements will depend on corporate culture, values, and strategies. Focussing on private standards and codes of conduct, Raj-Reichert (2013) looks at the self-regulatory nature of these governance programmes, while Pangsapa and Smith (2008) investigate environmental and labour standards, as well as CSR initiatives against the complexities of globalisation. Furthermore, evidence suggests that improving the capabilities of developing-country producers can foster compliance with sustainability requirements (Tolentino-Zondervan et al., 2016).

Studies interested in social upgrading investigate gendered patterns of consumption and production (Barrientos, 2014), the gendered and racial nature of disarticulation in economic and social upgrading (Christian, 2016a), and the creation of environmentally certified niches as a counter-measure to the negative impact of GVC/GPN participation (Klooster and Mercado-Celis, 2016). As an outcome of their investigation in the Bangladeshi garment sector, Alam and Natsuda (2016) observe that, although the industry has achieved functional upgrading, it still faces challenges with respect to social upgrading. Pipkin (2011) proposes that the nature of labour relations and local history play an important role in upgrading outcomes. Yeung (2009) demonstrates that regional development needs to be viewed against the context of the changing dynamics of GPNs.

Further topics include explorations on e-waste recycling in enabling environmental protection (Tong and Wang, 2004) and the unintended negative consequences of certain technologies on climate change adaptation (Carey et al., 2012). Sesan et al. (2013) warn that profit-driven business models at the BoP are not sufficient to meaningfully serve these markets. MNEs can contribute to local communities by providing electricity access (D'Amelio et al., 2016; Wilde-Ramsing, 2017), supporting biodiversity projects (Bek et al., 2013), funding sport and gender development (Hayhurst, 2011), and partnering in quad-sector development projects to tackle corruption (Gonzalez, 2016).

Other studies explore the notion of power in global organic value chains (Franz and Hassler, 2010) and examine the role of ethical campaigning in counteracting MNE power and authority (Hughes et al., 2008).

Studies in this category find that institutional conditions, such as an independent judiciary system and a good level of national security, have a positive impact on triple-bottom-line reporting (Urban and Hwindingwi, 2016). Furthermore, evidence suggests attitudes toward society, organisations and work are influenced individual’s cultural background as well as the institutional context (Alas and Edwards, 2011). Findings also imply that MNEs with a high level of social responsibility tend to avoid locating in countries with weak environmental regulation (Dam and Scholtens, 2008), and polluting firms tend to be located in countries with weak regulation (Dam and Scholtens, 2012). For private governance incentives on workers’ rights to be effective, the political motivations of the host governments must also align with protecting workers’ rights (Mosley, 2017).

Although globalisation has contributed to employment creation and greater labour mobility, it has also created negative outcomes (Maertens et al., 2011). The GPN framework offers an approach for analysing asymmetries in economic and social development (Henderson et al., 2002). Meanwhile, some critical voices suggest that the GVC approach may be used to extend neoliberal agendas in developing countries (Fernandez, 2015) and that firm upgrading does not necessarily lead to improved labour conditions (Knorringa and Pegler, 2006).

Studies in this area consider the relationship between firms and political systems (Butler, 2000; Halvorsen and Jakobsen, 2013). Findings highlight the role of state regulation and international law in ensuring human rights protection (Karp, 2009; Scheinin, 2012) and regulating CSR behaviour (LeBaron and Ruhmkorf, 2017). Research also finds that social compliance programmes aimed at improving workers’ rights have been shown to be ineffective in repressive countries with state-controlled unions (Anner, 2017).

Studies originating from this field focus on the role international law and transnational governance have on maintaining human rights and the responsibilities of MNEs (Lustig, 2014; Murphy, 2005; Neglia, 2016; Regan, 2016; Seck, 2016). The dispersal of global production activities makes it difficult to prevent human rights abuses committed abroad (Parella, 2014). Other studies investigate the effectiveness of instruments such as the Alien Tort Statute (Bu, 2015; Wu, 2001). Martin (2013) finds that there is increasing pressure on firm directors to incorporate human rights issues into their corporate governance frameworks. Beyond international regulation, national governments are integral to the governance of human rights, with existing studies examining the impact of domestic legislation on global supply chain transparency (e.g. UK Modern Slavery Act) (Sarfaty, 2015) and the shared responsibility both states and MNEs must take in addressing human rights (Karavias, 2015; Neglia, 2016).

The remaining 51 studies in our literature database were distributed across 23 research fields. Given the low number of studies in each field, we summarise the findings under this sub-section. Studies in the fields of medicine and health policy specifically focus on health-related impacts/interventions of MNEs. Within public and occupational health, studies investigate the health impact of MNEs (Singh et al., 2010), highlighting the need for regulatory frameworks and guidelines that will limit negative effects (Anaf et al., 2017; Baum et al., 2016; Yang et al., 2012). Medicine-based studies also highlight MNEs’ potential role in controlling disease and infection (Salcito et al., 2014), and tackling food allergens in food supply chains (Cantani, 2009), whilst also exploring the ethicality of drug-marketing efforts (Hartog, 1993). Additionally, studies within health policy and services investigate the positive and negative human rights impacts of MNEs (Salcito et al., 2015) and their role in contributing to deficient health development (Tausch and Heshmati, 2012).

Ecological studies examine the failings of GVC sustainability criteria to address the needs of smallholder farmers (Noor et al., 2017) and the negative by-products of biotechnology production and their impact on the environment (Mannion, 1995). However, biotechnology can also contribute towards addressing the problem of malnutrition (Monastra and Rossi, 2003). In chemistry, transformative business models are shown to incorporate green chemistry and nanotechnology so as to foster sustainability outcomes (Fiksel, 2001). Finally, a single study categorised under environmental science examines developments on the increased use of environmental reporting by resource-based south eastern MNEs (Dura et al.. 2017).

Within innovation research, studies explore the effect of FDI, through innovation, on the gross domestic product of a nation (Binh and Linh, 2013), and the use of innovation pathways to facilitate economic and social development in BoP markets (Hall et al., 2014). Engineering research offers perspectives on CSR through explorations of the ‘dark side’ of CSR and the negative impacts of CSR activities in the oil and gas industry (Buldybayeva, 2014), as well as the adverse effects MNE trade and governance have had in creating water insecurities in local communities (Vos and Hinojosa, 2016).

Criminological and sociological research investigate corporate irresponsibility by exploring evidence from international financial institutions (Rothe, 2010). In sociology-based studies, authors consider socio-economic development in light of “the post-Washington consensus” (Werner et al., 2014), discuss the limitations of CSR in addressing poverty (Hasan, 2013), and the contribution of FDI to economic inequality (Tausch and Heshmati, 2012).

Scholars within public sector management and education focus on the role of MNEs in driving governmental health policy (Powell and Gard, 2015), and highlight the positive contributions MNEs can make towards female participation in higher education (Clark, 1992). Finally, Lober (1997) examines business–environmentalist group collaborations aimed at addressing environmental issues regarding paper production by participating in governmental policy.

Within hospitality leisure, sport and tourism, two studies explore the uneven social and upgrading outcomes experienced by workers and communities in tourism-based GPNs (Christian, 2016b), and the positive contribution GPN actors – rather than international hotel firms – have on regional economic development (Niewiadomski, 2015). Communication studies examine corporate reporting in response to consumer criticism (Rim and Song, 2017), the impact of social media in empowering the public to speak out against MNE responsibilities (Yin et al., 2015), and the use of CSR to manage local cultures and deal with tensions (Mak et al., 2015). Similarly, within the field of management information systems and knowledge management, authors look at CSR from a marketing and consumer engagement perspective, by exploring its influence on brand management (Monfort and Villagra, 2016).

In the field of multidisciplinary sciences, a single study investigates the role of private food standards in creating a barrier for smallholder producers and hindering poverty alleviation (Lee et al., 2012). Similarly, within the field of biotechnology and applied microbiology, the role of foreign trade in economic development is examined (Luo, 2017). In agriculture, Amekawa (2009) examines the rise of public good agricultural practice standards and their potential to facilitate better social, economic, and environmental outcomes through the inclusion of ‘global south’ producers. Historical studies in entrepreneurship investigate the past employment practices of first-mover MNEs, describing the discriminatory treatment of host-country nationals (Chai et al., 2016). Within the field of ethics, research investigates the management of ethics in supply chains, and product design issues that present subsequent reputational risks (Gilbert and Wisner, 2010). Finally, in business history and social sciences, authors respectively explore what constitute the responsibilities of entrepreneurs (Sluyterman, 2012), and the impact of the state in light of the changing role of MNEs (Turner and Corbacho, 2000).

This paper has set out to take stock of research on the social value creation of MNEs across different fields. Although scholarly efforts have made broad inroads into the area, there remains space for extension through the synergising of key thematic areas. This section outlines some of these areas.

Across the different fields, compliance programmes for improving workers’ rights have been shown to be ineffective (Anner, 2017; Lim and Phillips, 2008). However, there is evidence that codes are integral to tackling corruption (Lindgreen, 2004) and, although proposals have been made for more trust-based mechanisms to be used to govern social value creation in supply chains, it is not recommended that this be in place of formal monitoring structures (Bostrom, 2015). In light of the limitations associated with formal management codes and certifications in generating positive development outcomes, IB research will benefit from empirical investigations that go beyond formal buyer-led compliance programmes to further explore how MNEs engage through non-hierarchical governance structures (Kobrin, 2009) and alternative forms of governance that bring about positive outcomes for developing-country producers.

Further work is required to examine the conditions under which MNE–NGO collaborations are successful, including the capabilities required for such collaboration. In addition, future research may wish to investigate the extent to which NGOs can actually participate in the strategy creation and implementation processes of partner firms.

Stakeholder theory is often drawn on by scholars examining the factors that influence social value creation in MNEs. Such work accounts for the role of governments and NGOs, although a limited number of studies also discuss the impact of consumer pressure. Beyond IB, research investigates the regulatory role of consumers (Seidman, 2005), with evidence suggesting that emerging-market consumers place less emphasis on the ethical behaviour of firms as such consumers are characterised by price sensitivity (Iriyama et al., 2016). Furthermore, research demonstrates the vulnerability of consumers as, despite unethical practices, firms are able to retain consumer loyalty when they are located in BoP markets (Gupta and Srivastav, 2016). However, how consumer characteristics shape social value outcomes warrants further investigation. Comparative studies would provide a nuanced understanding on the localisation and standardisation of social value creation in response to consumer preferences, for firms operating across international markets.

Although MNEs may respond to regulatory gaps in governance to a certain extent, state regulation and international law remains vital in ensuring human rights protection, regulating CSR behaviour, and facilitating social upgrading (Karp, 2009; LeBaron and Ruhmkorf, 2017; Plank and Staritz, 2016; Scheinin, 2012). Future research may wish to engage more with the role the state plays in driving MNEs’ social value creation.

Research results indicate that, to achieve positive sustainability outcomes, firms must enhance their absorptive capacity (Pinkse et al., 2010; Riikkinen et al., 2017). Other studies emphasise the importance of recognising and alleviating the root causes of social and environmental problems (Sinkovics et al., 2015; Sinkovics et al., 2014). This suggests that firms that are able to recognise and alleviate such root causes possess a distinctive set of capabilities that allows them to do so. Future research may wish to explore the conditions under which such capabilities can be developed.

Socially responsible international HRM that seeks to enhance employee working conditions can be a source of legitimacy in firms (Shen, 2011), and support the management of global talent. Evidence suggests that MNEs that practise CSR will experience higher levels of employee engagement and retention, thus contributing to their competitiveness (Kim and Scullion, 2011). When adopting green HRM approaches, firms can achieve environmental sustainability by engaging employees in related practices (Haddock-Millar et al., 2016). Furthermore, studies exploring the relationship between sustainability and HRM examine how corporate sustainability objectives can be embedded within an organisation and transferred between two different foreign locations (Wehling et al., 2009). Future research in IB may wish to further explore the conditions that hinder or facilitate the transfer of social value creation practices across locations of production, and how social value creation can be better embedded organisationally.

Environmental studies have widely explored the various practices firms adopt to minimise environmental impacts. Despite this, research on how MNEs integrate both environmental and social sustainability objectives into their subsidiaries and suppliers remains relatively underexplored within IB. Greater integration efforts will foster a more systems-based approach that considers the impact of certain MNE interventions on, not just labour outcomes but also environmental outcomes. This will subsequently broaden analyses that have dealt with the environmental aspects of sustainability in isolation, to address how firms manage their triple bottom line by balancing social, environmental, and economic objectives. Furthermore, as MNEs respond to varying environmental pressures from both domestic and international regulatory regimes, scholarly work in this area would build further lines of inquiry into the effect institutional dynamics have on firms.

When considering social value creation in MNEs, critical perspectives highlight the negative impacts of firm behaviour. Within IB journals, the primary focus is on corruption. However, future research would benefit from drawing on studies outside of business and management that, for example, have examined the negative health impacts of firm activities. By accounting for negative firm impacts, further knowledge on the firm-level factors that undermine social value creation could be gathered. This would build more holistic representations of responsible business behaviour, whilst providing more critical perspectives on the role MNEs could play in fostering equitable futures.

As MNEs participate more and more in complex, globally integrated production networks, the social and environmental challenges facing international governments and their respective communities are becoming increasingly apparent and pertinent for MNEs. These pressures have been heightened as multilateral institutions have established global agendas for business participation in human rights and sustainable development. Due to its intrinsic focus on global labour and production, IB scholarship is ideally situated to account for these new challenges and build future research streams looking at how MNEs might confront these challenges (Buckley et al., 2017; Rygh, 2019). However, as this study has shown, such endeavours must go beyond disciplinary silos, to account for the complex, systematic nature of the question of how global development goals can be achieved.

While IB journals represent the second-largest field home to publications related to the social value creation of MNEs (Table IV), it only accounts for 12 per cent of the sample. Although this can partially be explained by IB scholars also publishing in journals affiliated to other fields, the point can nevertheless be made that, if the IB discipline wishes to contribute more to the grand challenges debate, IB journals need to dedicate more space to social-value-related publications. Furthermore, as grand challenges related research is more difficult to conduct, may take longer and often requires non-mainstream research methods, universities may need to re-examine their performance management practices. Without significant systemic changes at journal and university management levels one could argue that researchers who are determined to contribute to the grand challenges agenda are often penalised for doing so within business and management studies (Mingers and Willmott, 2013; Willmott, 1995, 2011). Of course, one could argue that scholars can publish their work in business ethics and sustainability related journals. However, most of those journals do not tend to feature very high in journal rankings that many universities use to judge the academic standing of their researchers by (Tüselmann et al., 2016).

As is the case with most studies, this paper is not free from limitations. To focus the review on social value creation in the context of MNEs, the search was limited to studies explicitly mentioning MNEs (and synonyms) in their title, abstract or key words. Also, the list of key words targeted at identifying studies on social value creation did not include all of its facets. For example, “bottom of the pyramid”, “corporate political activity”, and “non-market strategies” did not feature among the search terms. Nevertheless, these themes emerged from the analysis. Future studies may wish to build on our insights and design even more elaborate search strategies. Such future research would be well advised to consider an iterative approach to database construction, to remedy any shortcomings of the initial search strategy.