Institutional pressures for corporate social responsibility implementation: a study of Indian executives

Abstract

PurposeIndia has recently entered mandatory corporate social responsibility (CSR) spend era. It is important to unravel the pressures of CSR implementation in the Indian context to understand how a better fit between business strategy and CSR spend can be achieved. This study aims to validate a model that integrates pressures, CSR implementation and financial performance through reputation within the institutional theory framework.Design/methodology/approachIt is based on a questionnaire survey of 162 top-level and middle-level CSR managers in India and semi-structured interviews with eight top-level executives.FindingsThe study concludes that local community, government, peers and media are important institutional pressures of CSR implementation in India. Reputation partially mediates the relationship between CSR implementation and financial performance.Practical implicationsThe study findings can help managers to know which stakeholders (government, media, peers and local community) are exerting statistically significant institutional pressures and how CSR initiatives be designed to cater to their requirements. Though CSR spend is mandatory in India, a strategic orientation towards it would enable the firms to derive value for the stakeholders associated with the business.Originality/valueRelationship between pressures of CSR and CSR implementation has not yet been explored in the Indian context. Such a relationship tells us why is CSR taken up and influence of which of the pressure groups is considered important while implementing CSR. The study will help to understand the relationship between CSR–reputation–financial performance as perceived by Indian managers and to assess whether they perceive corporate reputation building as one of the most important outcomes of CSR.