Corporate Social Responsibility (CSR) Practice and Implementation Within the Institutional Context: The Case of the Republic of Korea

Abstract

Corporate social responsibility (CSR) has become a popular paradigm in the lexicon of today’s businesses. CSR generally involves voluntary actions by firms to reduce their environmental impacts, make their products safer or healthier, or contribute to the communities in which their operations and facilities are located. The question of whether “doing good and doing well” converge has waxed and waned over recent decades. Although an increasing number of significant studies into CSR have been developed and analysed from different scholarly perspectives, a few fundamental questions remain unanswered. Firstly, for firms, is there a clear line indicating exactly where CSR stops being profit maximizing and starts becoming purely philanthropic? If so (or not), under what conditions do a firm’s managers (or decision makers) give great discretion in determining where this line lies? Also, what drives firms to engage in CSR? Lastly, are there any important characteristics or attributes from businesses in newly industrialized non-Anglo-American countries that can be compared to businesses in Asian countries? With Korean institutional environment and industry survey data, we adopt an institutional perspective to explore CSR practice and development in the Korean business context. In particular, social legitimacy, globalisation, and the recent movement towards corporate sustainability management are considered from different theoretical CSR perspectives. We find that these institutions (high regulative pressure, unique normative setting, and critical cognitive-cultural environment) obviously affect Korean firms in their adoption, implementation, and practice of CSR simultaneously. Also we find that governmental regulatory legislations and policy obviously have an effect on a firm’s CSR practice and implementation. Importantly, governmental legislation and incentives can play an important role in CSR implementation and practice. It is also worth noting that CSR practice is not static but is dynamic, with regulatory legislations and norms.