The Blessing and Tyranny of Brand Risk: Making CSR and Profitability Commensurable in MNCs' Supply Chains



Central to the Corporate Social Responsibility (CSR) field is the conceptual idea that companies can do well by doing good. Still, limited knowledge exists about how managers work to render CSR issues commensurable with profitability. Drawing on an in-depth study of how managers at a Swedish MNC extend their code of conduct to suppliers, this paper shows how managers use “brand risk” as a conceptual tool to make the disparate institutional logics of workers’ rights having intrinsic value and maximizing profitability commensurable. By introducing brand risk as a common metric, managers were able to conduct supplier risk assessments and decide what suppliers to audit. However, while the brand risk metric simplified decision making, it also transformed workers from ends to means. The consequence of this was that workers’ rights aspects that were hard to assimilate to the brand risk metric were considered irrelevant. The paper concludes with a discussion of how these findings contribute to new institutional literature and advances our understanding of MNCs’ supply chain practices.
Niklas Egels-Zandén is the Director of Centre for Business in Society at the School of Business, Economics and Law at University of Gothenburg, Sweden. His areas of research are corporate social responsibility, international business, strategic management and firm-stakeholder interaction, especially in relation to multinational corporations in developing countries. He has published in Journal of Business Ethics, Business Ethics: A European Review, Business Strategy and the Environment, Journal of Corporate Citizenship, Corporate Social Responsibility and Environmental Management, and Journal of Current Issues in Globalization.
Contact information: E.M. van Raaij