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The Embeddedness of Responsible Business Practice: Exploring the Interaction Between National-Institutional Environments and Corporate Social Responsibility

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Abstract

Academic literature recognizes that firms in different countries deal with corporate social responsibility (CSR) in different ways. Because of this, analysts presume that variations in national-institutional arrangements affect CSR practices. Literature, however, lacks specificity in determining, first, what parts of national political-economic configurations actually affect CSR practices; second, the precise aspects of CSR affected by national-institutional variables; third, how causal mechanisms between national-institutional framework variables and aspects of CSR practices work. Because of this the literature is not able to address to what extent CSR practices are affected by either global or national policies, discourses and economic pressures; and to what extent CSR evolves as either an alternative to or an extension of national-institutional arrangements. This article proposes an alternative approach that focuses on an exploration of links between disaggregated variables, which can then be the basis for imagining new national-institutional configurations affecting aspects of CSR. It illustrates this approach with an exploration of the importance of development aid policy for CSR practices in global supply chains.

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Notes

  1. This description paraphrases the European Commission’s definition of CSR, which is: ‘a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.’ See http://ec.europa.eu/enterprise/policies/sustainable-business/corporate-social-responsibility/index_en.htm, accessed 15 April 2011.

  2. Gjolberg (2009b) remedies this by also looking at general proxies for amongst others political culture.

  3. Witt and Redding (2011) perform interviews with business representatives to gauge CSR across countries, but their questions focus on respondent’s values and preferences, not on strategic processes.

  4. We share this point with Kang and Moon (2011) who offer an interesting analysis of developments with regard to variation across countries of corporate governance models and CSR. However, their analysis is based on discussion of developments in both, using secondary analysis, rather than empirically revealing the connections between both.

  5. Own research, April 2012, based on measurement of business participation in private regulatory organizations using policy documentation of the websites of the Better Sugar Cane Initiative, Business Social Compliance Initiative, Common Code for the Coffee Community, Electronics Industry Citizenship Coalition, the Ethical Trading Initiative(s) in the UK and Scandinavia, Fair Labor Association, Fair Wear Foundation, Initiative Clause Sociale, Made-By, Responsible Jewellery Council, Social Accountability International’s Corporate Involvement Program.

Abbreviations

CME:

Coordinated market economy

CSR:

Corporate social responsibility

GIZ:

Gesellschaft für Internationale Zusammenarbeit

GTZ:

Gesellschaft für Technische Zusammenarbeit

IDH:

Initiatief Duurzame Handel

LME:

Liberal market economy

SLME:

State-led market economy

QCA:

Qualitative comparative analysis

VoC:

Varieties of capitalism

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Acknowledgments

Funding for this paper was provided by the Robert Schuman Centre for Advanced Studies at the European University Institute and the EU 7th Framework Politics, Economics and Global Governance: the European Dimensions (PEGGED) program, Grant Agreement no. 217559. An early draft of the paper was presented at the Society for the Advancement of Socio-Economics (SASE) conference in Madrid, 23-25 June 2011. I thank Brian Burgoon, Gregory Jackson, Daniel Kinderman and Jette Steen Knudsen for comments on and discussion of my ideas. Final thanks go out to the editors and reviewers of Journal of Business Ethics for their insightful comments.

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  1. European University Institute and Leiden University, Via dei Rocettini 9, 50014, San Domenico di Fiesole, Italy

    Luc Fransen

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Fransen, L. The Embeddedness of Responsible Business Practice: Exploring the Interaction Between National-Institutional Environments and Corporate Social Responsibility. J Bus Ethics 115, 213–227 (2013). https://doi.org/10.1007/s10551-012-1395-2

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