Upper Echelons and the Transmission of Institutional Norms: Varieties of Capitalism and CSR

Abstract

Both national institutional context and the attributes of firms’ upper echelons (UE) are well known to shape corporate social responsibility (CSR) policies, practices, and outcomes. However, prior research has paid little attention into interdependencies between the two, and especially to the role played by the attributes of firms’ UEs in transmitting CSR norms internationally. In this study, we integrate the upper echelons perspective (UEP) and the varieties of capitalism (VOC) perspective to theorize upper echelons as critical to the transmission of CSR practices. Our theory suggests that representation among firms’ UEs from multiple VOCs tends lead firms to exhibit less nationally stereotypical patterns of CSR and instead to exhibit hybrid forms of CSR that reflect the diversity of their UEs. Additionally, we propose that this tendency towards CSR hybridization is moderated by the degree of critical mass, positional power, and long tenure among “alternate” VOC UE members. We test our hypotheses on a sample of 4,010 large firms from 68 countries between 2009 and 2018, and find evidence that largely confirms our hypotheses.