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Corporate Social Responsibility in Challenging and Non-enabling Institutional Contexts: Do Institutional Voids matter?

Journal of Business Ethics volume 134, pages 135–153 (2016)Cite this article

Abstract

The extant literature on comparative Corporate Social Responsibility (CSR) often assumes functioning and enabling institutional arrangements, such as strong government, market and civil society, as a necessary condition for responsible business practices. Setting aside this dominant assumption and drawing insights from a case study of Fidelity Bank, Nigeria, we explore why and how firms still pursue and enact responsible business practices in what could be described as challenging and non-enabling institutional contexts for CSR. Our findings suggest that responsible business practices in such contexts are often anchored on some CSR adaptive mechanisms. These mechanisms uniquely complement themselves and inform CSR strategies. The CSR adaptive mechanisms and strategies, in combination and in complementarity, then act as an institutional buffer (i.e. ‘institutional immunity’), which enables firms to successfully engage in responsible practices irrespective of their weak institutional settings. We leverage this understanding to contribute to CSR in developing economies, often characterised by challenging and non-enabling institutional contexts. The research, policy and practice implications are also discussed.

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Notes

  1. ‘Western capitalist institutions’ is cautiously used here to signal the dominant views of capitalism—either liberal or coordinated market economies—which tend to reflect western views of capitalism and markets (see Varieties of Capitalism literature for instance—Hall and Soskice 2001). This view of western capitalist institutions, which has also informed some recent major works on CSR—e.g. Matten and Moon (2008), Campbell (2007), tends to be the yardstick for assessing the institutional conduciveness of CSR in non-western developing economies (e.g. Jamali and Neville 2011).

  2. It is worthwhile to differentiate what we mean here by “challenging and non-enabling institutional contexts” from “controversial industry sectors”. The latter was a theme of a recent special issue of this Journal (Lindgreen et al. 2012). Although our “challenging and non-enabling institutional contexts” may share some common characteristics with “controversial industry sectors”—given that both would pose some challenges to the normal practice of CSR—in our case, the “national business system” (i.e. the business environment) (Whitley 1999; Matten and Moon 2008) is the source of the challenge and not necessarily the nature of the business of the firm or the sector, as in the special issue.

  3. Institutional voids here represent situations where important institutional arrangements needed to support markets (often ‘western capitalist institutions’) are either absent or too weak to perform in the same manner as seen in developed western economies. However, institutional voids may further create an opportunity for substitution by other institutional arrangements or a deviation by outliers from the institutional normative constraint (Mair and Marti 2009; Lepoutre and Valente 2012).

  4. Fidelity Bank Plc began operations in 1988 as a merchant bank and converted to commercial banking in 1999 before becoming a universal bank in February 2001; Fidelity Bank, today, is a result of the merger with the former FSB International Bank Plc and Manny Bank Plc in December 2005 (Fidelity Bank 2014). The bank maintains presence in the major cities and commercial centres of Nigeria and is reputed for integrity, professionalism, quality, stability of its management and staff training (Fidelity Bank 2014).

  5. Some of the CSR activities of Fidelity Bank include the Creative Writing Workshop, the Fidelity Helping Hands Programme, as well as their several educational projects. Fidelity Bank has consistently won awards, both nationally and internationally, with these successful CSR programmes.

  6. For more details see Aguinis and Glavas (2012).

  7. It is important to note that the ‘black swan’ analogy (i.e. using the existence of one black swan to falsify the statement “All swans are white”) and the ‘logic of a situation’ are credited to Popper (1959, 1963) as justification for the use of single case studies in science. In addition, single case studies are recognised in the extant management literature as credible sources of insights (for more details see: Gibbert 2006; Gibbert et al. 2008; Gibbert and Ruigrok 2010).

  8. Both interview respondents lead the CSR activities of the company and are responsible for its strategy formulation, in direct working relationship with the CEO.

  9. The questioning guide followed during the interview and focus group discussions is provided in Appendix 1.

  10. These include managing environmental and social risks in clients’ businesses; contributing to greenhouse emissions reduction; being guided by the International Bill on Human Rights; empowering and creating opportunities for women; timely reporting and transparent disclosures; collaborating with partners on CSR; leading by example in environmental and social footprints management; as well as doing good and doing well (Fidelity Bank 2014).

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Acknowledgments

This research study received funding from The British Academy, for which the authors are grateful. The authors also thank Fidelity Bank, Nigeria for the access granted. The authors also acknowledge support from Dr Judy Muthuri for her suggestions on the interview questions.

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Affiliations

  1. University of Edinburgh Business School, University of Edinburgh, 29 Buccleuch Place, Edinburgh, EH8 9JS, UK

    Kenneth Amaeshi

  2. Durham University Business School, Durham University, Queen’s Campus, Stockton, University Boulevard, Thornaby, Stockton-on-Tees, TS17 6BH, UK

    Emmanuel Adegbite

  3. Cranfield School of Management, Cranfield University, Cranfield, Bedfordshire, MK43 0AL, England, UK

    Kenneth Amaeshi & Tazeeb Rajwani

  4. Lagos Business School, Lagos, Nigeria

    Kenneth Amaeshi

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  2. Emmanuel Adegbite
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  3. Tazeeb Rajwani
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Corresponding author

Correspondence to Emmanuel Adegbite.

Appendix: Guide Followed during Interview and Focus Group Discussions

Appendix: Guide Followed during Interview and Focus Group Discussions

  1. (1)

    What role do you play in the company?

  2. (2)

    Do you have a CSR strategy/policy/programme? (Probe: since when)

  3. (3)

    Why is your company involved in CSR?

    1. (a)

      Probe: To what extent has the company achieved its CSR aims and objectives?

  4. (4)

    What do you consider as the benefits of having a CSR strategy/programme?

  5. (5)

    What is the focus of your CSR strategy? (Probe: issues, prioritising issues)

    1. (a)

      What would you consider as your flagship CSR initiative?

    2. (b)

      Probe why the focus on those issues, and why the issues are prioritised by the company.

  6. (6)

    Tell me more about the organisation of the CSR?

    1. (a)

      Probe: CSR department, budget, staff, strategy?, etc. For example: who in the organisation is responsible for its i/design and ii/implementation?

    2. (b)

      Probe if the company’s local CSR policy linked to the group’s global CSR strategy?

  7. (7)

    In your opinion, what are some of the factors that have contributed to making CSR possible?

    1. (a)

      Probe external factors.

    2. (b)

      Probe internal factors.

  8. (8)

    Which institutions (e.g. government, NGOs; capital market) do you consider as most important for you to achieve your CSR strategy?

    1. (a)

      Why do you consider these institutions important?

  9. (9)

    What institutions (governments; NGOs) do you engage in your CSR?

    1. (a)

      How have they been involved in your CSR strategy (probe roles)?

    2. (b)

      Why is it important for these institutions to involved in your CSR initiative?

    3. (c)

      More specific: Describe how your CSR strategy is linked to governmental policies (if at all any).

  10. (10)

    What are the challenges your company encounters in the design and implementation of CSR programme/strategy?

    1. (a)

      Probe internal and external challenges.

    2. (b)

      How have the challenges been addressed? OR how can the challenges be addressed?

  11. (11)

    Reflecting back on the entire CSR journey, what could you have done differently if you were to relive the CSR experience?

  12. (12)

    What do you see as the future of CSR in your company?

  13. (13)

    In your view what needs to be addressed at the (a) national, (b) industry and (c) organisational levels for CSR to be established in Nigeria?

  14. (14)

    Is there anything you would like to tell me that I have not already asked, and you would like me to know?

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Amaeshi, K., Adegbite, E. & Rajwani, T. Corporate Social Responsibility in Challenging and Non-enabling Institutional Contexts: Do Institutional Voids matter?. J Bus Ethics 134, 135–153 (2016). https://doi.org/10.1007/s10551-014-2420-4

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  • DOI: https://doi.org/10.1007/s10551-014-2420-4

Keywords

  • Corporate Social Responsibility (CSR)
  • Adaptive mechanisms
  • Institutional theory
  • Developing countries
  • Institutional voids
  • Nigeria