Leading Responsibly to Safeguard Employee Rights in MNCs: Unpacking the Justice and CSR-Driven Pathways

Abstract

Human rights abuses and labor issues in local subsidiaries of multinational corporations (MNCs) are major concerns, particularly in developing countries. However, the question of whether and how MNCs’ leadership addresses these concerns has not gained much attention from management scholars. To bridge this gap, we build on stakeholder theory and propose that responsible leadership has a positive influence on employee rights. Further, corporate social responsibility (CSR) and organizational justice climate mediate this association between responsible leadership and employee rights. The present work also hypothesizes that leader conscientiousness serves as a boundary condition for the interrelations among responsible leadership, CSR, justice climate, and employee rights. Our results, based on two-source and time-lagged survey data from senior managers and employees of 283 subsidiaries of MNCs, support the proposed relationships. The findings have important implications that can help MNCs address concerns related to labor rights in their foreign subsidiaries, particularly in developing countries.