Corporate social responsibility of multinational companies in Pakistan

Abstract

Despite the growing interest of scholars, research on Corporate Social Responsibility (CSR) and the role of the subsidiaries of foreign multinational companies (MNCs) in the context of developing countries is scant. This research identifies the relevant concerns and knowledge gap in the literature, particularly, the lack of understanding of the behaviour of the subsidiaries of MNCs? in the context of developing countries. To address this knowledge gap this research examines the CSR of the subsidiaries of foreign MNCs in the context of a developing country (i.e. Pakistan).
This research is embedded in an interpretive paradigm in which reality is subjective and social actors construct the social world. In addition, a framework is proposed that recognises the complexity of the social context within which MNCs operate, and the study presents a synthesis of interrelated theories and concepts to examine the CSR of MNCs in the context of Pakistan. Using the interpretive qualitative case study approach, empirical data were collected from different stakeholders of subsidiaries of foreign MNCs operating in Pakistan through semi-structured interviews and supplemented by annual CSR reports of MNCs.
The findings highlight the usefulness of the framework and reveal that most of the MNCs operating in Pakistan are involved in philanthropic activities. These philanthropic CSR activities are the result of stakeholder legitimacy and urgency attributes. In addition, the weak legal institutional environment, the limited role of NGOs and the relatively strong social and cultural (particularly religious) institutional environment result in narrow CSR perceptions leading to mainly charity-based philanthropic activities. The findings of this research also suggest that MNCs integrate a global CSR orientation with local CSR expectations. There is however, only limited diffusion of a contemporary global CSR agenda due to the lack of systematic stakeholder engagement, lack of awareness about contemporary CSR issues, a lack of government power to implement laws, and a lack of interest of the parent companies and non-governmental organisations (NGOs).
This research fills the gaps in literature through the proposed framework of the study and empirical evidence collected from a developing country context. In addition, this research suggests future research options and offers suggestions for managers of MNCs, representatives of NGOs and regulatory authorities.

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ORCID for D. Baden: orcid.org/0000-0002-2736-4483

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