Multinational firms are increasingly being asked to make-up for the diminished response capacity of governments and aid agencies. But what’s the best way to help?
Multinational firms with a direct presence in a nation are better able than traditional aid providers to sense areas of need following a disaster, seize response opportunities, and reconfigure resources for fast and effective responses:
- aid arrives significantly faster when contributed by locally active corporations and affiliates
- the long-term recovery of a nation will be greater when locally active corporations and affiliates account for a larger share of disaster aid
- the positive effect of corporate involvement on the speed of aid provision and a nation’s recovery from disaster becomes greater when a firm’s aid leverages its core expertise rather than contributing general resources
The researchers tested their predictions with “a proprietary dataset comprising information on every major natural disaster and aid donation in the world from 2003 to 2013, as reported in the International Disaster Database by the Centre for Research on the Epidemiology of Disasters.” 3,523 sudden natural disasters were considered.
Critics believe that multinational firms:
- engage in CSR primarily to secure government favors, forestall activism, or mollify local communities (Banerjee, 2008).
- often use CSR for symbolic or political purposes rather than trying to understand and effectively respond to societal problems (Marquis & Qian, 2013; Mellahi, Frynas, Sun, & Siegel, 2015).
- may not target the areas of greatest need, with the result that CSR is socially suboptimal or even crowds out other sources of aid (Cavallo & Daude, 2011)
On the other hand, proponents believe that, at least in the context of disaster aid, strategic CSR may indeed be a win-win proposition (McWilliams & Siegel, 2011).
Instructions to access the full report of: Masters of Disasters? Corporate Disaster Aid
Academy of Management Journal
Luis Ballesteros, Mike Useem, and Tyler Wry