Academic journal article
By Husted, Bryan W.
Management International Review , Vol. 45, No. 3
Multinational Corporations--Political Aspects
Free Trade--Political Aspects
Environmental Management--Political Aspects
Sustainable Development--Political Aspects
Environmental Law--Political Aspects
* This paper argues that a focus on the economic causes of environmental sustainability is inadequate and that national culture must also be included in a complete discussion of the phenomenon.
* It develops a model of the impact of culture based on Hofstede's work, finds support for the role of culture, and examines the implications of these results for business, education, and public policy.
* This paper presents evidence that power distance, individualism, and masculinity-femininity are related to a country's social and institutional capacity for sustainability.
The earth's environment is in crisis. The planet's current population of slightly over six billion people is expected to increase to over 11 billion by the year 2030 (Shrivastava 1995a). This demographic pressure will be accompanied by increased economic activity, trade and demands upon the earth's resources, which will only increase environmental stress. As a result, issues of environmental sustainability are quickly linked to globalization and international business. For example, some experts hold that MNEs from industrialized nations use free trade to export the ecological costs of production to developing countries, which are desperate for capital investment and willing to accept poor environmental performance in order to meet the economic demands of a burgeoning population (Faber 1992, Daly 1993). A variation of this argument is that, under free trade, domestic firms in developing countries are forced to compete with products from technologically advanced firms in industrialized countries and, hence, are under great competitive pressures to reduce costs. In order to achieve that goal, they neglect investments in pollution control equipment. In either case, the environment deteriorates over the long run and globalization, vis-a-vis international business activity, is perceived as one of the villains.
Consequently, the MNE has to play a significant role in promoting a more ecologically sustainable world. From the transfer of environmentally friendly technology to the education of employees and the community, the MNE can have a major impact on sustainability (Shrivastava 1995b). Evidence indicates that the MNEs with the highest market values are also those that apply high global environmental standards, rather than those that adopt local standards (Dowell/Hart/ Yeung 2000). Clearly, the ecological environment is one of the main issues to be considered on the MNE's agenda for corporate social performance (Gnyawali 1996).
Despite its vital role, the ability of the MNE to implement global environmental programs and standards depends upon local culture. The strategic choices of MNE executives are affected by profiles of national culture (Franke/Hofstede/Bond 1991). National culture also affects the success of technology transfer (Kedia/Bhagat 1988, Kostova 1999). Thus it is incumbent upon MNE executives to understand how culture affects issues related to environmental sustainability in the different countries in which they operate.
In addition, the public policy choices of a country are significantly influenced by culture (Vogel 1987). The willingness of a people and their politicians to pursue appropriate environmental policy often depends on the idiosyncratic cultural values of the country. The implementation of policy is also affected by culture. Political and other leaders need to grasp the role of national culture and its impact on sustainability in order to develop and implement effective public policy.
This study examines the relationship of culture to these global problems by helping to determine how work-related values may or may not support environmental sustainability. By understanding the role of these work-related values, MNE executives and policy makers will have an important tool for developing appropriate public and business policy to address the challenge of sustainable development. …