Corporate social vs. developmental responsibility: corporate citizenship in the restructuring of China’s pharmaceutical industry

Abstract

ABSTRACT This paper examines the changing dynamics of China’s pharmaceutical industry since the early 1980s, focusing on the interplay between its developmental and social utilities. Two groups of pharmaceutical companies – globally established multinational companies and local Chinese companies – are compared in particular respect to business strategies, differentiated markets, and social and developmental contributions. Both Chinese and multinational companies have been required to establish and advance multi-dimensional corporate citizenship by respecting legal and regulatory codes, business ethics, developmental functions, and, not least importantly, corporate social responsibility pertaining to the particular public nature of pharmaceutical products. At least in public propaganda, the pharmaceutical industry’s social function has been prioritized to its developmental utility. However, prevalent corporate opportunism, erratic administrative environments, as well as immediate developmental concerns have often coalesced to render the industry’s corporate social responsibility frequently ineffectual. In particular, the developmental utility of local Chinese companies has often served a convenient pretext for ignoring their social responsibility. This was particularly evident when the Chinese authority dealt with serious corporate scandals such as the toxic capsule scandal in 2012 and the GlaxoSmithKline bribery case in 2013.