Environmentally responsible management of MNE subsidiaries: stakeholder perspective

Abstract

Purpose – The aim of this paper is to empirically analyze the extent of the impact stakeholders' pressure has as a determinant of multinational enterprises' MNEs' local environmentally responsible management (ERM), aiming to contribute to the interlocution with stakeholders and ERM strategy establishment of MNE subsidiaries. Design/methodology/approach – To identify key stakeholders, ordinary least squares (OLS) regression analysis was used. The data were collected from 300 foreign subsidiaries established by Korean MNEs from August to December 2012. Findings – The results show the parent company (as a major internal stakeholder) and government, NGOs and media (as external stakeholders) are major factors that promote ERM by subsidiaries. Stakeholder theory provides a comprehensive understanding about stakeholders' pressure as a force to engage overseas subsidiaries with environmental responsibility. Originality/value – The research contributes to environmental and international business literature by investigating antecedents of ERM of overseas subsidiaries. A stakeholder perspective is used as an overarching theory in order to develop an ERM framework.