Institutional Logics Perspective of Corporate Social Responsibility in Developing Countries: A case of Brazil

Abstract

Corporate social responsibility (CSR) has become an important aspect of sustainable development in today’s globalized society, and yet many doubts remain about the underlying motivation behind CSR implementation. Corporations have great responsibility to society’s development due to the sheer magnitude of their power and their comprehension of the consequences of their actions. Yet a review of the literature has shown there is considerable variation in the way companies adopt CSR within a contextual setting, without a full and clear understanding of the forces that explain this diversity. Furthermore, most CSR studies have focused on the stable political-economic context of developed countries. Thus, this thesis aims to address the call for a better understanding of CSR, especially in the unstable economies typical of developing countries, such as Brazil. The main investigation refers to the following research question: What forces influence diversity in CSR practices in Brazil? In this thesis, CSR practice can be understood as the ethical way in which companies go about their business and their institutional relationships, while reducing negative social and environmental impacts towards global sustainable development (Robert, Broman, & Basile, 2013; Roberts, 2003). To address the research problem, this study draws on Roberts’ (2003) ethical view of CSR motivation and uses an institutional logics perspective as the analytical framework. In particular, the research examines the different aspects of institutional logics and forces to understand how and why companies adopt CSR practices. The methodology employs an exploratory sequential mix-method approach and the research design makes use of the collection and analysis of qualitative data from interviews as the basis of the quantitative second study. The first study built on the identified literature review research gap and aimed to exploring the forces influencing the diversity of CSR practices. The second study was applied to examine the key factors found in the first study, determining the CSR patterns of behaviour and leadership rationale. The participants in the qualitative study were selected purposively from companies with acknowledged corporate social responsibility (CSR). The participants in the quantitative study were managers and top executives with good knowledge of CSR from the largest 500 companies in terms of revenue operating in Brazil in 2018. This comprehensive approach customised to the Brazilian context is original in the CSR literature. The major conclusions provide a higher-order explanation and conceptual tool by which to theorize how the coevolution of organisations and institutions happens, as they mutually shape one another. By focusing not only on shifts in institutional logics, but by identifying the coexistence of different logics into different patterns of behaviour, the empirical research provides an innovative perspective into the academic debate. The reason behind these patterns of corporate behaviour can be justified by higher-order institutional logics common to each specific group of stakeholders in the institutional field. For instance, the groups of stakeholders in the first and second patterns are operating under the same short-term and self-oriented rationale. The groups of stakeholders in the third and fourth patterns are working under the same long-term and system-oriented rationale. This thesis argues that companies can be classified under the four patterns or versions of CSR depending on these two possible rationales: system-oriented companies or self-oriented companies. The second major conclusion elucidates the reason behind the company system-oriented or self-oriented rationale by investigating two determining factors: the maximization-optimization mechanism of success and the short-term-long-term reward system preference. The conclusion is that ‘self-oriented’ companies perceive themselves as isolated ‘individuals’ competing against others in a zero-sum world. This rationale justifies the companies’ search for maximization as the success mechanism and the preference for an instant gratification reward system. Since the concern lies only with individual preference, it is linked to an egotistic values leadership style and short-term thinking. The ‘system-oriented’ companies perceive themselves as being part of a larger system, interacting with each other in a symbiotic world. This rationale justifies the companies’ search for optimization of the system as the success mechanism, and future benefits as a normal reward system. Their concern lies with the health of the system and is linked to an altruistic values leadership style and long-term thinking. Taken as a whole, the findings from this thesis make a significant contribution to the current body of knowledge on CSR practices, in particular in non-stable economies such as the Brazilian context. A range of theoretical and management implications arise from the findings that will assist scholars and practitioners interested in promoting CSR practices, particularly in developing countries.