This paper investigates the relationship between organizational density and decoupling to illuminate the level of integration of CSR guidelines introduced by the United Nation Global Compact, UNGC. The author introduces the concepts of “mild decoupl...
This paper investigates the relationship between organizational density and decoupling to illuminate the level of integration of CSR guidelines introduced by the United Nation Global Compact, UNGC. The author introduces the concepts of “mild decoupling” and “extreme decoupling,” which include the degree of loose alignment between formal rules and activities. Using the data on Asian participants of the UNGC from 2000 to 2007, this article shows that density of the UNGC members at the global level determines whether a company becomes a decoupled participant that fails to communicate with the UNGC board and refuses to engage in the integrity measures. Meanwhile, local density influences on the degree of decoupling. These results suggest an institutional theory of decoupling: the increase in global density escalates decoupling in general, but the increase in local density decreases extreme decoupling. The implications of this study for the neo-institutionalism and organizational decoupling are discussed.