Is corporate social responsibility the privilege of developed market economies? Some evidence from Central and Eastern Europe

Abstract

Developed market economies show a growing interest in Corporate Social Responsibility (CSR), attested by the sizeable theoretical and empirical literature on this issue. There is, however, less evidence of its existence in other geographical areas. Therefore, this paper proposes a framework for the study of this phenomenon in Central and Eastern European Countries (CEEC). This will be followed by an analysis of qualitative data obtained during semi-structured interviews with the representatives of 19 companies operating in four CEEC (Czech Republic, Slovakia, Romania and Bulgaria). The paper concludes that CSR should not be considered as the privilege of developed market economies, since a variety of responsible practices do exist in CEEC organizations. However, the study of their specificity appears to be more complex than an approach in terms either of a transposition of models or of legacy would lead us to believe. An evolutionary approach to institutions allows us to consider that the analysis of the CSR forms in the context of transition economies should take into account interactions between elements dependent on the past as well as imported standards and practices which have themselves been subject to change.

Keywords:

• Central and Eastern Europe
• corporate social responsibility
• evolutionary organizational change
• institutions

Notes

1. Quoted by Dunne (2007, p. 372).

2. For example, the French and English understanding of the term ‘social’ are very different. Whereas in English the term ‘social’ includes society, in France it is focused on labour relations. Moreover, the American–British definition of CSR based on voluntary actions of firms and self-regulation is not adapted to the history of continental Europe marked by traditions of a strong state regulation and a relatively high level of social benefits.

3. For example, recent studies of corporate social action within several US metropolitan areas examine this action as a dependent variable, located within the institutional and social structure of the local community and show that organizational conformity to these institutionalized practices yields systemic patterns that vary by community (Marquis, Glynn and Davis 2007). In a similar vein Guthrie (2003), following neo-institutional theory, argues that corporations make decisions about philanthropic activity in accordance with the signals from the institutional environment in which they are embedded. Bertoin Antal and Sobczak (2004) refer to the case of France and Anglo-Saxon countries to highlight how expectations about the agenda, procedures, roles and responsibilities in the business-society nexus are culturally embedded. Finally, in their study of CSR in Poland, Valentine, Godkin and Cyrson (2006, p. 82) argue that training in business ethics at the professional level ‘needs to be grounded in Polish ethical ideologies and not simply reflect the popular ethical values espoused by global firms immersed in western culture’.

4. In Europe, paternalism has its roots in the questioning of many industrialists of the nineteenth century of certain problems of capitalism. It resulted in an original model of management, based on the integration of business and extra-business spheres of life. It implied reciprocal duties: discipline and fidelity on behalf of the workers in return for the employer's protection (housing, welfare, charity to workers and their families).

5. In his book the nature and evolution of communist society in China, Walder (1986) studies the ‘institutional culture’ and the system of ‘organized dependence’ in which workers are dependent economically on their enterprise, politically on managers, and personally on their supervisors to a greater extent than in capitalist countries. The author shows how the specific aims and institutions of Chinese socialism have created a historically new pattern of social relations differing both from Marxian blueprint and from its capitalist counterpart.

6. This statement is in line with some arguments exposed in Veblen's evolutionary theory of institutions and its application to post-socialist transformation. According to this argument, anti-selection of an institution during a stage of institutional evolution does not mean its definite disappearance. It remains dormant, latent, up to the moment it is rediscovered. Then, if the institutional context permits, it may be reactivated and even become dominant (see Veblen 1899; Campbell and Pedersen 1996).

7. Boyer, Charron, Jurgens and Tolliday (1998) developed the concept of hybridization when studying the impact of the Japanese productive model on the automobile industry in the early 1990s. They showed that it generates ‘a complex interaction between productive models, strategic choices, and institutional and national contexts’ rather than being simply transplanted (Boyer et al. 1998, p. 3). Meardi and Tóth (2006) criticized this vision of hybridization because authors consider it only as a mix between home-country model and host-country constraints (a ‘push process’) and overestimate the original coherence of home-country models. According to Meardi and Tóth (2006), referring to Dörrenbächer (2002), hybridization is rather a ‘pull process’ which leads to real innovations, not just adaptation. In their opinion, such a conception implies a reintroduction of an analysis of the will of actors and to move away from a too mechanical vision of hybridization. For more details, see Meardi and Tóth (2006). Our own vision recognizes the impact of actors on institutions, but insists on the fact that they do not master the entire process of institutional evolution: the outcome is beyond their will in the long run and is often innovative when the situation is new (which is the case when practices considered as standard in a given environment are introduced in new contexts).