Abstract
Whilst MNEs are amongst those firms most exposed to the tensions and trade-offs between social, environmental, and economic aspects of sustainable growth, corporate social irresponsibility (CSI) can result from MNEs poorly managing such tensions. Though we are often reminded of firms’ past and present ‘irresponsible’ behaviors in the business press, we know little about the organizational implications of how MNE stakeholders remember corporate social irresponsibility. Drawing on behavioural theory rationales, we explore how the collective memory of CSI influences MNE corporate reputations. We theorize that collective memory is strongly ‘selective’ in its disposition, in that memory enables stakeholders to readily recall the social irresponsibility behavior of most salient MNEs. In contrast, we propose that firms which are considered less salient among their stakeholders are comparatively unavailable to stakeholders’ collective memory, thereby reducing corporate social irresponsibility’s risk to corporate reputation. Using a unique dataset of 1,518 company-year social irresponsibility events, our analysis confirms that, in practice, only some MNEs are penalized for their irresponsible behaviour, leading us to produce important insights towards social regulation research and the growing body of studies on the ‘dark side’ of international business.