Journal of Business Ethics

, Volume 136, Issue 3, pp 503–522 | Cite as

Seeking Legitimacy Through CSR: Institutional Pressures and Corporate Responses of Multinationals in Sri Lanka

Article

Abstract

Arguably, the corporate social responsibility (CSR) practices of multinational enterprises (MNEs) are influenced by a wide range of both internal and external factors. Perhaps, most critical among the exogenous forces operating on MNEs are those exerted by state and other key institutional actors in host countries. Crucially, academic research conducted to date offers little data about how MNEs use their CSR activities to strategically manage their relationship with those actors in order to gain legitimisation advantages in host countries. This paper addresses that gap by exploring interactions between external institutional pressures and firm-level CSR activities, which take the form of community initiatives, to examine how MNEs develop their legitimacy-seeking policies and practices. In focusing on a developing country, Sri Lanka, this paper provides valuable insights into how MNEs instrumentally utilise community initiatives in a country where relationship-building with governmental and other powerful non-governmental actors can be vitally important for the long-term viability of the business. Drawing on neo-institutional theory and CSR literature, this paper examines and contributes to the embryonic but emerging debate about the instrumental and political implications of CSR. The evidence presented and discussed here reveals the extent to which, and the reasons why, MNEs engage in complex legitimacy-seeking relationships with Sri Lankan host institutions.

Keywords

Corporate social responsibility Community initiatives Developing country Government Political behaviour Legitimacy Multinational enterprises 

Abbreviations

CSR

Corporate social responsibility

GOSL

Government of Sri Lanka

MNE

Multinational enterprise

SADP

Sustainable Agricultural Development Project

SLA

Sri Lanka Apparel

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Copyright information

© Springer Science+Business Media Dordrecht 2015

Authors and Affiliations

  1. 1.University of HuddersfieldHuddersfieldUK
  2. 2.Norwich Business SchoolUniversity of East AngliaNorwichUK

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