Determinants of corporate social responsibility (CSR) practices of listed corporations in Bangladesh: an empirical study

Corporate social responsibility (CSR) has emerged as an ‘inescapable priority’ for corporations. CSR considers business management practices of corporations in terms of responsible behaviour towards internal and external stakeholders and society at large. Developing countries have been largely neglected in CSR literature. CSR practices in such countries are eclectic, ad hoc, unevenly applied and limited to few businesses, but they are gaining popularity among corporations aspiring to be considered good corporate citizens. This is especially important because the business epicentre is shifting from industrialised nations to developing Asia. The main objective of this research is to understand the challenges and prospects of CSR practices of national and multi-national corporations (MNCs) conducting business in a developing country, Bangladesh, and to guide businesses in incorporating appropriate CSR practices in their activities. The thesis asks: (i) what are the perceived determinants that influence CSR practices of listed corporations in Bangladesh? (ii) how do the perceived determinants influence the organisational readiness and managerial practices of CSR?; and (iii) to what extent do listed corporations practise CSR? This thesis argues that CSR should be conceptualised as ‘a corporation’s responsible behaviour that covers economic, legal, ethical, philanthropic and environmental issues of business and society’. It uses the experience of Bangladesh, specifically in pharmaceutical businesses listed on the Dhaka Stock Exchange (DSE), to propose an operational framework of CSR practices in the developing country context which will make it possible to: (i) examine a developing country’s existing CSR domains; (ii) explore practical issues of CSR practices; (iii) identify a list of perceived determinants that influence the adaptation of practices; (iv) suggest necessary modifications; and (v) develop a custom-built, country-specific CSR framework. This research has classified major theoretical CSR models and frameworks into two schools of thought: (i) academic, emphasising the nature of global issues of CSR practices and (ii) institutional, focusing on how global issues of CSR can be measured. Fourteen models of CSR practices were examined in order to identify any gaps in them and explain the operation of CSR in a developing country context, using Bangladesh as a case study. It is argued that present CSR models and practices of developed countries cannot be replicated in developing countries without a prior comprehensive examination of the different contextual factors of the latter. Macro-environmental conditions and country-specific characteristics act as determinants which influence the nature and extent of CSR practices in developing countries. A country’s CSR practices are influenced positively by level of economic development, democratic practices, and socio-cultural and religious beliefs of the citizens; they may be inhibited by the regulatory regime, corruption and the lack of a level-playing field between national corporations and MNCs. CSR issues for Bangladesh are not delineated according to the needs of the country, for example, workplace health and safety, women’s rights, consumers’ rights, anti-corruption, disaster management, job creation and industry establishment standards. Rather they – and government policy – focus on philanthropic responsibilities of corporations, ignoring other aspects of CSR.