How and why do MNCs communicate their corporate social responsibility in developing countries? Evidence from Bangladesh

Abstract

A growing body of literature is devoted to understanding the drivers of companies’ corporate social responsibility strategies in developing countries. However, little is known about how institutions and stakeholders located at both international and local levels collectively shape the corporate social responsibility communication of MNC subsidiaries in their host countries. Drawing upon the framework proposed by Lee, this study addresses this gap in the context of Bangladesh. A series of semi-structured interviews as well as secondary data from annual reports and company websites are used to identify the roles that parent companies, international institutions and international stakeholders play in shaping local subsidiary corporate social responsibility communication. Contrary to the expectations derived from the literature, the findings show that despite the presence of institutional voids and limited pressure from local stakeholders, MNC subsidiaries engage in corporate social responsibility activities and employ corporate social responsibility communication, albeit instrumentally, in order to acquire business benefits.

Uncovering the Extent of Social Responsibility of Private Commercial Banks: A Comparative Study on CSR Activities during COVID Pandemic

“…A study carried out among 10 local subsidiaries reveals that despite the institutional gaps and the difficulties of local stakeholders, the subsidiaries of multinational companies are involved in various corporate social responsibilities. (Roy & Quazi, 2022).…”

Dazed and Confused: The Impact of Multinational Firms on Local Labor Markets

“…Institutions matter, in this sense, because they reduce transaction costs, and for that reason MNCs will tend to choose to develop and expand their resources in a developing country that has minimal State intervention, which increases the capacity of the management process of the MNCs firms. It is noteworthy which the costs to adapt to different cultures can be minimized when there is a convergence in the labor practices [17] .…”

“…3 of 2006, which concerning on the Regulation of Investment Climate Improvement Package, trying to reverse the post Asian crisis measures of increasing the labor rights [12,16] . It is relevant to note which both countries continued to be strongly regulated by the State, even though the labor's rights were flexibilized, where flexibilization is perceived as foreign investment attraction in terms of competitiveness, but not reduced State intervention, to improve the environment of the private sector, which includes the MNCs [17] . In Indonesia, the opening of the economy and the structural reforms were reversed due to the financial crisis of 1997-1998, giving power to unions and prioritizing the labor, though those measures are not enforced.…”

“…The bargain between the labor rights and the firm's interests, though, can put in peril the fragile political institutions of the country [25] and, the government prioritizes, in the short run, the workforce interest, as it provides the legit the government needs. This institutional equilibrium can be reversed, when MNCs can provide establishment advantages overcoming the voters [17] .…”

CSR Web Communication by Controversial Enterprises in the Context of Stakeholder and Legitimacy Theories

“…The fact is that the application of socially-responsible behavior by enterprises can be a source of benefits not only for society but in the event of effective communication, it can also become a source of valuable benefits for the enterprises themselves. Thanks to effective CSR communication, enterprises strengthen their legitimacy (Roy & Quazi, 2021;Sorour et al, 2020) and image (Guan et al, 2021;, increase their reputation (Jelinkova & Vancova, 2020;Vrontis et al, 2020), build a competitive advantage (Ageeva et al, 2019;Ramya et al, 2020)…”