Why and under which conditions do companies voluntarily adopt high social and environmental standards? Christian R. Thauer looks inside the firm to illustrate the internal drivers of the social conduct of business. He argues that corporate social responsibility (CSR) assists decision-makers to resolve managerial dilemmas. Drawing on transaction cost economics, he asks why and which dilemmas bring CSR to the fore. In this context he describes a managerial dilemma as a situation where the execution of management's decisions transforms the mode of cooperation within the organization from a hierarchy to one in which managers become dependent on, and vulnerable to, the behavior of subordinates. Thauer provides empirical illustration of his theory by examining automotive and textile factories in South Africa and China. Thauer demonstrates that CSR is often driven by internal management problems rather than by the external pressures that corporations confront.

'Christian R. Thauer gives us a fresh take on the motives behind corporate social responsibility. Rather than altruism or shamming campaigns, Thauer develops a novel theoretical argument focusing on the self-interests of the firm. He backs up his claim with detailed case studies of companies across a range of developing economies and industrial sectors. The book offers both analytic and empirical bite.'

Abraham Newman - Georgetown University, Washington DC

'This is a valuable contribution to scholarship on corporate social responsibility (CSR), and undoubtedly will spur further research into intra-firm dynamics as explanations for CSR policies and practices.'

Susan Sell - George Washington University, Washington DC