As a result, reputation has become an extrinsic motivation to develop socially responsible activities Fombrun, Section five describes attempts to specify standards for MNCs that involve taking a position on two key debates in the broader literature: the debate over the purpose of the for-profit business corporation and debate about the moral agency of corporations.
More specifically, loss of reputation for MNCs may be one of the greatest problems it can face Levis,since MNCs are more visible and subject to greater stakeholder scrutiny Christmann, Improvement in reputation can result from implementing practices connected to CSR that can facilitate achievement of a sustainable competitive advantage Melo and Garrido-Morgado, The results show that the MNCs with the highest levels of social performance that can fulfil the expectations of stakeholders in both local and global contexts obtain a better reputation, as their stakeholders come to see them as responsible, consistent organizational entities.
For example, some studies show that investing in environmental issues can help firms to avoid penalties Aguilera-Caracuel et al. The right response to such pressures from these stakeholders can reduce the risks that affect the firm negatively e.
Stakeholder theory is especially relevant to MNCs, since they are in contact with a multitude of interest groups due to their operation in numerous countries and regions Jamali, Through these activities, MNCs can drive sustainability and economic development in developing countries Moon et al.
Section two summarizes attempts to promulgate global standards for MNCs in relation to human rights, labour, bribery, and the natural environment.
Second, reputation can vary for each specific interest group — for example, consumers, investors or the government Lewellyn,