Terrence R. Guay

Corporate Social Responsibility, Public Policy, and NGO Activism in Europe and the United States: An Institutional-Stakeholder Perspective

abstract Corporate social responsibility (CSR) is an increasingly pervasive phenomenon on the European and North American economic and political landscape. In this paper, we extend neo‐institutional and stakeholder theory to show how differences in the institutional environments of Europe and the United States affect expectations about corporate responsibilities to society. We focus on how these differences are manifested in government policy, corporate strategy, and non‐governmental organization (NGO) activism towards specific issues involving the social responsibilities of corporations. Drawing from recent theoretical and empirical research, and analysis of three case studies (global warming, trade in genetically modified organisms, and pricing of anti‐viral pharmaceuticals in developing countries), we find that different institutional structures and political legacies in the US and EU are important factors in explaining how governments, NGOs, and the broader polity determine and implement preferences regarding CSR in these two important world regions.

Non-governmental organizations, shareholder activism, and socially responsible investments: Ethical, strategic, and governance implications

In this article, we document the growing influence of non-governmental organizations (NGOs) in the realm of socially responsible investing (SRI). Drawing from ethical and economic perspectives on stakeholder management and agency theory, we develop a framework to understand how and when NGOs will be most influential in shaping the ethical and social responsibility orientations of business using the emergence of SRI as the primary influencing vehicle. We find that NGOs have opportunities to influence corporate conduct via direct, indirect, and interactive influences on the investment community, and that the overall influence of NGOs as major actors in socially responsible investment is growing, with attendant consequences for corporate strategy, governance, and social performance.

Globalization and Corporate Social Responsibility: How Non-Governmental Organizations Influence Labor and Environmental Codes of Conduct

Concerns over the potential negative spillovers from globalization have resulted in increasing demands for multinational corporations (MNCs) to adhere to international standards and codes of responsibility. Nongovernmental organizations (NGOs) have been important advocates for development and adoption of these standards and codes. In this paper, we provide a brief review of the emergence of NGOs and their influence on debates about globalization, and a specific assessment of NGO efforts to promote stronger labor and environmental policies of multinational corporations. We examine the role of NGOs in development and enforcement of twelve international agreements and codes of conduct addressing labor issues and environmental practices. We use findings from these cases and insights from international business and other managerial theory to develop propositions that explain the circumstances under which NGOs have more or less influence in developing and enforcing international codes.

The role of multinational corporations in transnational institution building: A policy network perspective

In this article, we provide a critique and re-specification of international business and institutional literature related to the interactions of multinational corporations (MNCs) and institutions. Drawing from research in economic sociology and political economy, we offer a novel perspective on MNCs’ influence on transnational institution building. We argue that MNCs seek to influence institutional development by creating or participating in policy networks within transnational social and economic systems. We describe different types of policy networks, the relative position that MNCs occupy within them, and the power MNCs yield by virtue of their position and influence within those networks. We provide examples to illustrate how MNCs exploit these network relationships to influence emergent institutions and to advance convergence in institutional policies. The policy network perspective is an effective and useful mode of analysis to understand the range of interactions among MNCs and the institutional fields in which they operate.

The transformation and future prospects of Europe’s defence industry

Europe’s defence industry has evolved by transforming itself from a collection of nationally oriented firms to one dominated by two giants. Stimuli external and internal to the European Union (EU) are responsible for this development. After describing the evolution of this sector since the end of the Cold War, the authors present four factors that played key roles: developments within the United States’ defence industry; the impact of technology and defence economics; general economic restructuring within the EU together with nascent defence industrial policy; and progress towards the creation of a European Security and Defence Policy. While the evolution required all four factors, the EU played a critical and under–appreciated economic and political role in the changes that have transformed the European defence industry, and is now positioned to continue to shape this process.

Transatlantic Merger Relations: The Pursuit of Cooperation and Convergence

Abstract The European Union (EU) and United States (US) are the world’s two largest and most influential legal jurisdictions for corporate mergers and acquisitions (M&A). The pressures of international economic competition have lead to a flurry of M & A activity in these locales in the post-Cold War period. Given the economic impact and, in many cases, political sensitivity of some M&As, it has become critical that transatlantic regulators reach similar decisions with regard to M&A approval, denial, or modification. Incongruent decisions lead to uncertainty in the marketplace, and the possible loss of global economic competitiveness and respect for regulatory processes and outcomes. In this paper, we explore the efforts made by the US and EU over the past two decades to enhance cooperation in merger policies and processes. We argue that, despite a couple of high-profile cases to the contrary, the US and EU have made great strides in reducing uncertainty in the M&A regulatory process by institutionalizing a series of formal agreements and working groups that have served to provide the foundation for a transatlantic merger environment that may serve as a model for cross-border regulatory cooperation in the twenty-first century.

Conclusion and Future Considerations

The primary purpose of this book has been to examine how well theories of European integration explain developments in a particular issue area. The case study selected was the European Union’s (EU) influence in defense industry matters. Chapter 3 presented the extent of the EU’s activities in this area, concentrating on the historical evolution of EU competence and the roles played by the European Commission, Parliament, and Council of Ministers, with a particular emphasis on events occurring since the mid-1980s. Chapter 1 outlined the traditional theoretical approaches used to understand European integration. Chapters 2, 4, 5, and 6 concentrated on different variables that may have helped to shape the integration process: the industrial structure, international environment, domestic and interstate politics, and interest groups. These variables are among those emphasized by the different integration theories as the principal lenses through which the EU’s institutional development can be discerned. In this chapter, we will determine the relative importance of each of these variables in explaining the integration of Europe’s defense industry.

Competition Policy in the 21st Century

This final chapter has three goals. The first is to review briefly this book’s objectives, theoretical approach, and empirical findings from previous chapters. The second is to raise and reflect upon some of the limitations that have been revealed by the study. These include words of caution with respect to the two-level game framework used to analyze European competition policy, some of the other business activities and market infractions that fall within the definition of competition policy but are not fully addressed in this book, and the impact of national antitrust regulators beyond the familiar arenas of Brussels and Washington. Finally, this chapter recommends additional areas for further research in the relationships between European competition policy and globalization.

Development of European Competition Policy

This chapter builds upon the theoretical and conceptual insights discussed in Chapter 1 to describe the gradual convergence of European competition policy since the European Coal and Steel Community (ECSC) became operational in 1952. The chapter focuses in particular on the domestic and international causes of policy change and recent initiatives to modernize merger review and anticompetitive practices. Important roles are identified for European Union (EU) regulators and national politicians. Within the EU’s institutional framework, the regulators and politicians act and react to the legal decisions by the European Court of Justice (ECJ) on individual cases and developments, while the Commission has sought to expand its powers in this key economic policy. The behavior of these central actors is also informed by significant changes in the international political economy — in particular the liberalization of trade and investment over the last three decades — that have altered the incentives for firms to merge, seek state aid, and engage in anticompetitive activity. The chapter highlights the national basis of some of the policies in the competition realm and discusses how the merger philosophies of individual European countries and Commission officials, as well as variation in state capacity, have shaped the development of EU competition policy.

The EU and Anticompetitive Practices

The process of globalization in recent decades has changed dramatically the nature of international business and the actors that shape it in at least four ways that are relevant to the themes of this book. First, firms have become huge in terms of global revenues and assets. This growth in size has been driven in large part by a second feature — a shift from a bifurcated global economy during the Cold War to an integrated global market and supply chain over the past quarter century that includes almost every country in the world. Third, globalization has been driven by technological innovation which allows firms that develop cutting-edge products to seize a first-mover advantage in many markets around the world, often leaving competitors scrambling to catch up. The rapidity of technological change and the fluidity of competition in international business in general combine to form the fourth development — how to regulate firms and markets to ensure fair competition. This is a challenge not just for the European Union (EU) but also for antitrust regulators around the world. With goods, services, and corporate strategies changing so quickly, how should governments respond to concerns that some companies may become so powerful as to inhibit competitors from having a chance at being successful, too? This is the question that is at the heart of regulating anticompetitive practices.