Corporate Social Responsibility: The Role of Governance

Abstract

Not only does corporate social responsibility (CSR) benefit the company’s relationship with its employees and consumers but it is also an important element in corporate strategy (Porter and Kramer 2002). However, CSR theory has ignored the implications of differences in government. Most studies on CSR have been conducted in the United States (US), a society that is typically characterized as being individualistic. The governing philosophy promotes individual freedom and choices; therefore, the government’s involvement in social issues, community and corporate behavior is minimal. This view contrasts with many other types of government philosophies particularly those that take more of a totalitarian viewpoint. Totalitarianism often has very negative connotations, however, its formal definition describes it as single-party regime which centralizes its power and exerts control over its citizenry in order to promote a particular ideology (Brzezinski 1956). The more control a government exerts the more likely that CSR behaviors become compulsory by corporations, so that the opportunity to gain competitive advantage is minimized. Issues of community governance may addresses inconsistencies seen in previous CSR cross culture research. This study examines how perceptions of CSR are affected when government mandates responsible behavior by corporations.