CSR approaches of MNEs in developing countries

TLDR: In this paper, the authors discuss how multinational enterprises (MNEs) can approach corporate social responsibility (CSR) in developing countries, and examine select literature to suggest six propositions regarding CSR approaches that can be adopted by MNEs.

Abstract: Purpose This paper aims to discuss how multinational enterprises (MNEs) can approach corporate social responsibility (CSR) in developing countries. Such countries face challenges of low social development, income differences and weak institutional framework. The society is also characterized by greater power distance and in-group collectivism. Managers of MNEs operating in developing countries have to find ways and means to deliver CSR which is in sync with the atypical socio-cultural-political-demographical needs of the country. They cannot just concentrate on strategic CSR to create positive externalities; rather, they have to provide generic social benefits to local communities. Design/methodology/approach The paper examines select literature to suggest six propositions regarding CSR approaches that can be adopted by MNEs. Findings Managers of MNEs will concentrate on those stakeholders who have power to punish or reward, and, apart from shareholders, these are likely to be local communities. Hypernorms operating in background will be linked to emergence of macro-social contract of societal expectation to provide some support to local community, whose specific forms will be community-specific microsocial contracts. These will aim at providing generic social goods to local community, through a variety of transactional and calculative activities, high on tokenism. Research limitations/implications This is a conceptual work. Empirical study is not done. Originality/value The mainstream CSR agenda is largely driven by concerns and priorities of developed countries. It aims at universalizing a set of conditions that do not exist in developing countries, and ignores the local realities and priorities. The paper fills a gap in explaining why the concept of global CSR has its limitations, and MNEs have to concentrate on alleviating local demands.