Firms are central to wealth creation and distribution, but their role in economic inequality in a society remains poorly studied. In this essay, we define and distinguish value distribution from value creation and value appropriation. We identify four value distribution mechanisms that firms engage in and argue that shareholder wealth maximization approach skews the value distribution toward shareholders and top executives, which in turn contributes to rising economic inequalities around the world. We call on organizational scholars to study the value (...) distribution role of firms and its consequences for society, and introduce the articles in this volume of the special issue on economic inequality, business, and society. (shrink)

An emerging body of research recognizes the importance of the past and history for corporate social responsibility scholarship and practice. However, the meanings that scholars and practitioners can ascribe to the past and history differ fundamentally, posing challenges to the integration of history and CSR thinking. This essay reviews diverse approaches and proposes a broad conceptualization of the relationship between the past, history, and CSR. We suggest historical CSR as an umbrella term that comprises three distinct theoretical perspectives. The “past-of-CSR” (...) perspective is concerned with the history of CSR and business ethics as a set of concepts and practices. The “past-in-CSR” perspective involves employing empirical historical research to substantiate and elaborate CSR concepts and theories. Finally, the “past-as-CSR” perspective seeks to understand the past as a living, yet contested, facet of current organizations, influencing contemporary perceptions of corporate and managerial responsibility. We then elaborate on conceptual issues and paths that may prove useful for future research. In all, this essay and the thematic symposium it precedes strive to deepen and broaden the salience of the past and history for thinking about business ethics and business responsibilities. (shrink)

Entrepreneurial agency—the individual power to change environments—is central to entrepreneurship research. Yet, from a social inequality perspective, beliefs in an entrepreneurial agency might differ based on the social class environments individuals are born into. Drawing on social cognitive theories, our findings across three data sets among students from Germany and entrepreneurs from the United States indicate that social class origins are associated with entrepreneurial self-efficacy (ESE) beliefs in adulthood. Exploring the underlying mechanisms, we find that students’ early entrepreneurial experiences in (...) education and practice are indicative of reproducing the class gap in ESE. When individuals collect mastery experiences such as social mobility or entrepreneurial success, their lower social class origins turn out to be associated with enhanced entrepreneurial agency beliefs. We discuss the implications for further research on social class, inequality, and entrepreneurship. (shrink)

We examine the extent to which host country income inequality influences multinational enterprises’ (MNE) expansion strategy for foreign production investment, depending on their specific strategic objectives. Applying a transaction cost framework, we predict that national income inequality has an inverted U-shaped relationship with foreign production investment. As inequality increases, MNEs accrue lower transaction costs arising from interactions with various local actors, leading to higher probability of investment. As income inequality increases further, its effect on location attractiveness will become negative, as (...) its attraction effect is increasingly offset by additional monitoring, bargaining, and security costs owing to the more fractious nature of high inequality societies. In addition, we suggest that the impact of income inequality is contingent on investment objectives: The inverted U-shaped relationship is stronger for efficiency-seeking investment but weaker for market-seeking and competence-enhancing investments. We find substantial support for our hypotheses through an analysis of 27 years (1986-2012) of data on Japanese MNEs’ overseas production entries. (shrink)