Research On The Mechanism Of Corporate Social Responsibility To Overcome Liability Of Foreignness

Under the background of economic globalization,more and more Chinese enterprises are engaged in international business.Due to the unfamiliarity with risks and institutional differences,transnational business also brings about the increase of operation costs.Affected by the identity of foreignness,stakeholders of the host country often misunderstand or even reject the transnational enterprises,which further increases the overseas operation cost and also results in the lack of legitimacy.Moreover,Chinese enterprises are not active in fulfilling their social responsibilities in transnational activities,and some of them even neglect their social responsibilities,which aggravates the contradiction with stakeholders in the host country.Based on liability of foreignness theory,organizational identity theory and stakeholder theory,this paper aims to find the source of liability of foreignness and explore the mechanism of corporate social responsibility in overcoming liability of foreignness,to help multinational corporations to obtain organizational legitimacy in the host country.Firstly,from the perspective of organizational identity,this paper identifies the source of liability of foreignness in the host country.Secondly,this paper puts forward three mechanisms of corporate social responsibility to overcome the liability of foreignness,including information releasing mechanism,identity shaping mechanism and network relationship building mechanism.On this basis,I give four research hypotheses and confirm a research model.In the research design,I select confirmatory case study method to introduce Sinosteel Corporation and Haier.Then,I will analyze their liability of foreignness and corporate social responsibility to verify the theoretical model.The research shows that the liabilities of foreignness of Chinese enterprises come from the harm of unfamiliarity,the harm of discrimination and the harm of relationship,which are mainly manifested in the ambiguity of identity,the negative image of the coumtry of origin and absence of relation network,which reduce the legitimacy.On the one hand,organizational identity ambiguity makes the host country stakeholders lack objective and clear understanding of the enterprise under the absence of information.In addition,the country of origin leads to the stereotyping of Chinese enterprises,thus implicating the evaluation of other Chinese enterprises.On the other hand,multinational corporations have a low degree of social involvement in the host country,and their relationship networks are defective.Within the organization,due to cultural and management differences,employees' sense of organizational identity is reduced.Through information release mechanism,identity shaping mechanism and network relationship construction mechanism,corporate social responsibility can help enterprises to clarify the organizational identity,meet the identity expectations and enhance the organizational identity,so as to be accepted by stakeholders and obtain the legitimacy in the host country.The research results have practical guiding significance for Chinese enterprises to solve the liability of foreignness and carry out social responsibility.