Paradox in CSR Practice: Suggesting Ambidexterity Capability for MNEs

Despite extensive corporate responsibility activities (CSR), MNE Subsidiaries often fail to meet stakeholders expectations; not only that they often violate laws, regulations, thus the paradoxical conditions arise from the simultaneous application of CSR and the violations of institutional standards, leading to lowering legitimacy. To demonstrate it, we illustrate a case called Grameenphone from Bangladesh that has such a paradoxical condition and argue that the lack of organizational ambidexterity capability (i.e. balancing between social and economic goals) causes this paradox and lowering legitimacy. Balancing between the two goals depends on the nature of governance, management and organizational structure, which ensures its effectiveness in practice. We argue that ambidexterity is possible when firm’s ownership and management realizes CSR philosophy, which typically optimizes both social and economic goals, and orients its entire functions and operations towards it. We conceptualize ambidexterity capability by three key eclectic components (ROS): realizing CSR, orienting CSR, and synchronizing CSR in governance and operation. Thus, the synchronization would support the legitimacy earning process because it would take into account the multiple stakeholders expectations. MNE subsidiary therefore should develop a governance mechanism that is compatible to the complex organizational and ownership structure across the global operations and supporting ROS mechanism. Developing compatible organizational culture and employee mind-set would help ensure consistency between CSR operation and CSR orientation and can reduce tensions and avoid conflicts with the stakeholders.