Social Risk and the Management of MNCs: From Risk Society to International Business Management

Jacob Taarup Esbensen

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    Abstract

    Multinational companies (MNCs) are increasing being exposed to risk that originate from local communities in the business environment where they operate. The response has been to implement systems for stakeholder engagement by including social issues into their risk management systems. However, these seem to be ineffective in mitigating local community grievances. In this paper I argue that social risk is to be defined in terms of how local stakeholders construct reality through a sensemaking and framing process which constitute at risk by its combined capability to influence organisational value creating activities. By utilizing a cross-disciplinary approach founded in a sociological conceptualization of risk I show that there is an alternative to identification and mitigation of social risk. I propose that MNCs could improve their performance by organizing their efforts using “intelligent” systems, which are based on the capability to identify frames and sensemaking processes. This paper show how social risk management can be conventionalised using distinct theoretical domains taking its outset in a sociological perspective on risk, linking International Business (IB) risk management practices, operationalised through Corporate Social Responsibility (CSR) systems, with communication theory and risk as frames of meaning constructed by community members and corporate decision makers.
    Original languageEnglish
    Publication date2015
    Number of pages17
    Publication statusPublished - 2015
    EventAIB 2015 Annual Meeting: Global Networks:Organizations and People - Indian Institute of Management, Bangalore (IIMB), Bengaluru, India
    Duration: 27 Jun 201530 Jun 2015
    Conference number: 57
    https://aib.msu.edu/events/2015/

    Conference

    ConferenceAIB 2015 Annual Meeting
    Number57
    LocationIndian Institute of Management, Bangalore (IIMB)
    CountryIndia
    CityBengaluru
    Period27/06/201530/06/2015
    Internet address

    Cite this

    Taarup Esbensen, J. (2015). Social Risk and the Management of MNCs: From Risk Society to International Business Management. Paper presented at AIB 2015 Annual Meeting, Bengaluru, India.