With the increasing social consciousness of consumers, corporate social responsibility (CSR) has become a critical issue for most firms. For instance, polls by Epstein-Reeves1 in 2010 showed that more than 88% of consumers thought companies should try to achieve their business goals while improving society and the environment, and 83% of consumers thought companies should support charities and nonprofits with financial donations. Under such a circumstance, a company’s reputations and sales could be significantly damaged by the misconduct of its suppliers, a case in point being Mattel, a toy company. Because its independent oversea vendor in the upstream supply chain outside of their direct hierarchical control manufactured the toys using lead paint, millions of toys had to be recalled, and sales also declined (Hoyt, Lee, and Tseng 2008; Tang 2008). Another case was Sodexo. An Escherichia coli outbreak among nearly 11,000 German pupils happened (FAZ 2012) because of contaminated frozen strawberries from its supplier. In both cases, one member which did not realise the CSR’s importance eventually destroyed the CSR implementation and hurt the entire supply chain. While a downstream firm’s CSR strategy could be thoroughly damaged by its suppliers, the following factors compound the difficulty when the firm is a multinational one. First, owing to the globalisation tendency most suppliers of the multinational firms are located in developing countries overseas (Laudal 2011). While the long distance makes it hard to supervise the supplier’s production activities, cultural and other differences will make the problem even more complex – an acceptable CSR practice in one country may be strongly disapproved in another country. Second, unlike other clauses in a contract which are derived from legal principles and the law, CSR clauses are usually based on frameworks that provide companies with scorecards and guidelines to measure the effectiveness of their proposed CSR policies and evaluate the CSR ideas propounded. A CSR clause is more likely to be a simple lip service because it has no actual legal implications and therefore is not a contract clause in the strictest sense. Third, how to measure CSR is another problem. Different from any other corporate activities, CSR deals with issues like environmental pollution, child labour and product safety. Those issues are often outside of the traditional boundaries of a business and cannot be measured by using traditional indicators such as return on investment (Mellahi 2013).