Evolutionary governance choice for corporate social responsibility: a forestry campaign case in South Korea

Abstract

Firms select different governance types (e.g. internalisation, outsourcing or collaboration) for corporate social responsibility (CSR) activities. This paper examined how the choice of CSR governance type is influenced by social factors and organisational experiences and how changes in these factors affect the governance choice. These questions are especially meaningful in the context of developing countries with weak institutional environments and recent social change. With the unique phenomenon that is not readily explainable in terms of the extant theoretical groundwork on CSR governance choice, a case study of a South Korean forestry campaign by Yuhan-Kimberly was analysed. It was found that social circumstances triggered Yuhan-Kimberly's initiation of forestry projects, but the absence of social infrastructure limited the choice of governance type early on. Lack of experience also constrained the governance choice. Over time, environmental change and the accumulation of organisational knowledge caused the choice of governance to evolve. This study contributes to the CSR governance choice literature by exploring social and organisational determinants other than economic efficiency and by applying a dynamic perspective.

Keywords:

• corporate social responsibility
• developing countries
• forestry activities
• governance choice
• case study

Acknowledgements

This study was carried out with the support of ‘Forest Science & Technology Projects: Centre for Forestry Research on Climate Change (project number S210910L010100)’ provided by Korea Forest Service. It was also funded in part by the Institute of Management Research, Seoul National University.

Notes

1. The concepts of CSR and corporate sustainability are intertwined in that both refer to economic, social and environmental issues of management (Montiel 2008). The latter concept, however, was developed from that of sustainable development as private sectors participated in the discussion on how to contribute to sustainable development. Currently, some business projects are based on the solutions to social or environmental problems. Green entrepreneurship (Nikolaou et al. 2011) or Clean Development Mechanism (CDM) are examples (Gangale and Mengolini 2011).

2. The KFS is a government-affiliated organisation. Established in 1967, it has been planting and tending trees, proliferating forest resources, supporting forest management and caring for forests.

3. There are three employees who are in charge of the KKG campaign in the CSR Team.

4. The National Forestry Cooperative Federation is an association of forest landowners and forestry workers.

5. The Bank of Korea Economic Statistics System (http://ecos.bok.or.kr/EIndex_en.jsp).

6. In the Asian financial crisis of the late 1990s, Korea also experienced chain of bankruptcies and shortage of foreign exchange holdings caused by high level of foreign borrowing, unhealthy financial institutions and highly leveraged business practices (Cho 1998).