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The extent of corporate social responsibility of a multinational enterprise along a global production system or chain is contested. Legal approaches highlight ownership, causation, and awareness. The stakeholder approach broadens responsibility but fails to address the directness of linkages. Adopting a social network perspective to examine international production within modern global factory systems, we argue that the extent of responsibility of the lead firm is impacted by all activities and participants in the chain. The full extent of responsibility is likely to be determined by whether indirect partners are exclusive or non-exclusive. Global factory systems, while contributing to geographical, ownership, and task fragmentation, significantly amplify linkages, interactions, and awareness implying a concomitant increase in corporate social responsibility when viewed from a social network perspective.
Our discussion has used the concept of social network analysis to address the question what is the scope of social responsibility of a contemporary networked MNE? The answer that emerges is that it is lead firm in an international production process who is assumed to carry responsibility for the actions of other participants in a networked production system, irrespective of ownership patterns or the directness of linkages. The rationale for such a view is that networked production systems operate as purposeful systems under an implicit social contract that carries an obligation to avoid harmful impacts on society. In modern global production systems this obligation falls primarily on the lead firms that orchestrate global factory systems. How these operations are structured, including the degree of geographical dispersion, externalisation of ownership, and depth of linkages, does not, certainly in the minds of influential stakeholders, negate this obligation. International production systems increasingly operate as networks subsuming a set of interrelated nodes (Borgatti & Li, 2009). Within such networks responsibility is attributable to connection rather than causality. We have considered the two key questions of when does an entity become part of a network, and when can connection to an issue be assumed? The answer to the first part is when that entity is part of a directed international production process. It is not necessary that the participant organisation be exclusively involved in a process, it may be part of multiple unrelated production processes. Contribution in contemporary networked production systems, particularly those coordinated by lead firms within global factory systems, means much more than just supply relations. We have argued that such chains are characterised by co-creation in the pursuit of value, flexibility, resilience and innovation. In response to the second part we suggest that connection levels are much higher than traditional global value chain analyses suggest. Information and resource exchanges are multidirectional and dependence is increasingly reciprocated.