The Corporate Social Responsibility of Ukrainian Agroholdings: the Stakeholder Approach Revisited

Abstract

The agricultural sector in Ukraine and other transitional and developing countries is distinguished by the prominence of agroholdings, i.e., large-scale industrialized corporations, that offer extensive support to their stakeholders through the corporate social responsibility (CSR) initiatives. The stakeholder approach as a part of business ethics scholarship explains stakeholder salience in terms of the turbulence of the business environment. Drawing on the Luhmannian theory of complex social systems, the present paper shows this turbulence to be a relative concept that makes sense primarily in relation to the limited ability of dominant formal institutions, such as the function systems, to process the complexity of the societal environment. In line with this argument, the Ukrainian agroholdings are shown to direct their CSR efforts to stakeholders whose salience arises out of the transition-specific institutional shortcomings, such as the imperfections of land and labor markets. Paradoxically, the Ukrainian institutional environment has been conducive not only to the rise of agroholdings but also to the emergence of societal expectations which the agroholdings must face. The broader business ethics implication of the argument is the functional equivalence of the discretionary CSR activities and the quality of the dominant formal institutions, such as the function systems.

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Notes

  1. 1.

    In 2005–2014, some of the listed agroholdings merged while some were delisted due to poor performance. As a result, only 13 companies from primary agriculture of Ukraine are publicly listed today (see Table 5 in the Appendix).

  2. 2.

    Among other things, this conclusion suggests that future research should make the case for business ethics of a corporate entity or organization as a whole rather than stick to the narrow context of contractual hazards associated with individual transactions (Williamson 1981, 1991).

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Correspondence to Taras Gagalyuk.

Appendix

Appendix

Table 5 Some characteristics of Ukrainian agroholdings with listings on international stock markets in 2016

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Gagalyuk, T., Valentinov, V. & Schaft, F. The Corporate Social Responsibility of Ukrainian Agroholdings: the Stakeholder Approach Revisited. Syst Pract Action Res 31, 675–698 (2018). https://doi.org/10.1007/s11213-018-9448-9

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Keywords

  • Agroholdings
  • Corporate social responsibility
  • Environmental turbulence
  • Stakeholder management
  • Social systems theory