RESTORING LEGITIMACY IN THE AFTERMATH OF CORPORATE SCANDALS: A MULTIPLE CASE-STUDY ANALYSIS ON CSR INITIATIVES

Corporate scandals undermine integrity and reputation, in that generating a legitimacy gap. Through a multiple-case study analysis, this paper provides qualitative evidence on the CSR initiatives undertaken by Multinational Enterprises (MNEs) in response to CSR-related scandals, in order to restore their legitimacy to operate. We consider four scandals in the apparel industry that “hit the headlines”, namely Walmart, Moncler, Nike, and H&M. We classify CSR initiatives according to the dimensions of corporate behaviour framed by Sethi (1975) and interpret them through the lens of the legitimacy theory. Our findings show that all MNEs undertook several CSR initiatives, primarily acting on ethical norms, operating strategies and social accountability. They tended to issue or revise code of conducts, develop new relational approaches with the suppliers, and publish the CSR report, while neglected or made limited reference to the external assurance of CSR reports. Some MNEs also accepted investigations by Non-Governmental Organizations (NGOs) on their initiatives. Besides such common behaviours, some differences arise, especially with respect to the MNEs attitude towards the refusal or admission of their responsibility in the scandals. Our study confirms previous arguments suggested by CSR literature by providing evidence that MNEs shape both the internal and external environment to make it more favourable to ethical behaviours, and rely on social and environmental accountability to pursue legitimacy, even in a peculiar situation like a corporate scandal. The study contributes to the scant but growing literature on CSR in the aftermath of corporate scandals.