Responsible MNE-managers encounter intricate challenges in taking up international responsibility and developing cross-border business cases for sustainability. The intention–realization gap they face strongly hinges on the earlier adoption of specific business models and prevalent responsibility approaches. Responsible MNE managers find themselves confronted with a number of vital and decisive trade-offs that essentially boil down to an effective management of various distance variables related to (a) the portfolio of home and host countries in which their company operates, and (b) the stakeholders to engage with in following transition stages to more effective and material corporate responsibility. Embracing international initiatives can help to overcome a number of these trade-offs and turn sustainability risks into opportunities.
Rob van Tulder and Mihaela Roman
A key challenge to the operations of multinational corporations (MNCs) is the management of (real or perceived) risk. Extant international business research does not yet make sharp distinctions between various types of risk and thus also has difficulty in distinguishing between ‘normal’ risks and ‘sustainability’ risks. This chapter distinguishes three types of generic risks: operational, strategic and sustainability risks. We develop a qualitative benchmark/taxonomy that makes it possible to (quantitatively) assess the degree to which sustainability has become important in the risk assessments of MNCs. We explore the heuristic value of this benchmark through a longitudinal coverage of public statements of a sample of 70 MNCs spread over a variety of countries and sectors. MNCs identified an increasing number of risks – in particular, sustainability risks. But sustainability risks can also be treated as opportunities or mitigation strategy. This requires more empirical research for which this chapter provides the basic taxonomy.
Rob van Tulder and Eveline van Mil
Responsible governance increasingly poses a multi-sector, multi-level challenge for managers. It relates to the effective management of a large number of societal interfaces along which companies, government and civil society organizations have to develop distinct means, ways and principles for dealing with sustainability issues. Most sustainability issues supersede the boundaries of the archetypical roles and primary responsibilities of each of the societal spheres (state, market, communities) from which organizations tend to derive primary responsibilities. Hybrid organizational forms are maturing that have taken up these challenges, but these face sizable governance challenges as well. The corporate governance discourse consequently requires both broadening and nuance. The agenda for ‘responsible governance’ should thereby not only deal with traditional corporate governance issues – aimed at correcting improper or irresponsible behaviour – but should also consider how to address wider issues of sustainability, aimed at driving and stimulating positive responsible behaviour. This contribution shows that this challenge requires parallel insights from two angles: a macro and a micro point of view. We construct a societally founded taxonomy of organizational forms and conceptualize four tiers of responsible governance challenges for organizations to delineate an agenda for further research. The four tiers of governance can function as ‘threshold concepts’ to enhance management and professional education.