Reframing Corporate Social Responsibility in Developing Countries: A Context-Driven Perspective

Introduction

Over the past three decades, corporate social responsibility (CSR) has grown from a narrow, often marginalised notion into a complex and multi-faceted concept that is central to today’s corporate decision making (Cochran, 2007; Dahlsrud, 2006) This has given rise to a number of studies on CSR (Carroll and Shabana, 2010). Many of these have focused on Western assumptions on the nature and management of CSR. These studies have failed to articulate the perspectives of communities within which these businesses are being conducted, especially in Sub-Saharan Africa. This study examines the level of socially responsible investments within Sub-Saharan Africa, particularly the Niger Delta region of Nigeria. CSR is becoming a theme for organisations that are serious in their approach to business excellence. Expectations of stakeholders not only relate to direct transactions between parties, but there is an expectation that management participates in the debate on societal problems (e.g. pollution, poverty, health and unemployment) and to think proactively about the effects of business on society at large (Banerjee et al 2003; Vaaland et al 2008).

There is much debate over what constitutes corporate social responsibility and what can be defined as CSR (Haigh and Jones, 2006; Kok et al, 2001; Dahlsrud, 2006). This has given rise to different epistemological perspectives in the study of CSR: McWilliams, Siegel and Wright (2006) identified a number of theoretical perspectives on CSR; Friedman (1970) identified agency theory; Preston (1995) stakeholder theory; Jones (1995) stewardship theory; Hart (1995) a resource-based view of the firm; Jennings and Zandbergen (1995) institutional theory; Baron (2001) theory of the firm; Waldman et al (2004) strategic leadership theory. Our study concerns networks of stakeholders, who face potentially conflicting demands, and translate the demands into CSR objectives and policies (Lindergreen and Swaen, 2010). From these considerations, stakeholder theory holds there is more than just a relationship between an agent who has fiduciary responsibility to a principal; there are third parties to whom the corporation owes morally significant non-fiduciary obligations (Lantos, 2001). Graves et al (2001) suggest that ‘these duties exist because, like stockholders, these other stakeholders also make investments in enterprises, employees invest their time and intellectual capital, customers invest trust and repeated business, communities provide infrastructure and education for future employees as well as tax support and so on’. Lantos (2001) delineated four different distinctions of stakeholder groups: first, is the systemic/macro-environmental level i.e. larger societal factors, including the entire business system, plus society at large, which consists of institutions and forces such as economic, legal, political, technological, natural, media and socio-cultural forces. The second is the corporation micro-environment i.e. its immediate environment, consisting of exchange relationship partners (e.g. suppliers and distributors) plus competitors, customers, the local community and the financial community. The third level is found within the business organisation, notably superiors, subordinates, other employees and trade unions. Fourthly, there are a significant number of business decision makers, such as peers, family, friends etc.