Theorizing Transnational Corporations as Social Actors: An Analysis of Corporate Motivations

Abstract

An increasing number of firms are engaging in social and environmental initiatives beyond their core business activities. While much has been written about why business should spend resources on social and environmental causes, relatively few studies have systematically addressed the question of why certain companies actually do engage in such activities. A notable exception is literature on the ‘business case’ for corporate social responsibility, which argues that good social and environmental performance will positively affect a company's financial results. The evidence on this link, however, is mixed. Even if there is an economic rationale, it is not clear why some companies engage in social activities while others do not. And, why do many more companies today ‘see’ the business case than in the past? This paper maps out the theoretical terrain exploring this question and categorizes the various existing explanations for corporate social engagement.