Best practice example of CSR and S&E engagement in emerging economies: analysis of a case study based in China
| Date | 07 January 2019 |
| Published date | 07 January 2019 |
| Pages | 133-154 |
| DOI | https://doi.org/10.1108/JABS-08-2017-0120 |
| Author | Gaston Fornes,Belen Lopez,Melanie Bierens de Haan,Javier Blanch |
| Subject Matter | Strategy,International business |
Best practice example of CSR and S&E
engagement in emerging economies:
analysis of a case study based in China
Gaston Fornes, Belen Lopez, Melanie Bierens de Haan and Javier Blanch
Abstract
Purpose –The paper analyses social and environmental engagement, stakeholders’ relations and
corporate social responsibility (CSR) strategies/optionsalong with their underlying mechanisms of firms
operatingin China.
Design/methodology/approach –It does this through the analysisof a unique case study using data
collected from internal members and external stakeholders of the company framed within stakeholder
theory.
Findings –Within the Aguinis and Glavas (2012) framework, the results show that the company’s
resources and values canact as a mediator, their high visibility and scale canact as a moderator, and
their self-regulation can act as a predictor in weak institutional contexts. Also, the findings show that
employees’ perceptions of visionary leadership can act as a mediator, and that the alignment in the
vision/values/beliefsof the chief executiveofficer with those of the shareholderscan act as moderators.
Originality/value –The paper intends to contribute to the literature on CSR in China by analysing a
specific type of investor, the socially responsible investor, neglected in the CSR literature, and by
studying multilevel (individual/organisational/institutional) social and environmental engagement,
stakeholders’relations and CSR strategies/optionsin an evolving institutional environment.
Keywords China, CSR, Emerging markets, Sustainable and responsible investors
Paper type Case study
Introduction
The literature on corporate social responsibility (CSR) has been shifting from asking
existential questions on “whether firms should engage in societal challenges to whether
and how communities benefit from organisational interventions in addressing seemingly
intractable challenges” (Wang et al., 2016, p. 539), such as the environment, wellbeing
and health, education and energy. This direction is bringing new challenges to
companies, in particular in the management of risks, in the definition of boundaries of
social activities, in the prioritisation of different stakeholders, and in dealing with the
complexities of different institutional environments[1] for multinational corporations
(MNCs). Among the institutions surrounding CSR, two main sources are leading this
variation: the evolution over time of the views on CSR within a national context, and the
evolution of CSR in different institutional environments, mainly emerging economies
(Jamali and Karam, 2018;Tung, 2014). It is within the latter that China’s rapid economic
development and its associated social and environmental (S&E) impacts have led to
questions about whether its firms’ S&E engagement, relations with different
stakeholders, and CSR strategies have evolved along similar paths to those seen in
more developed markets or whether they differ significantly because of China’s unique
institutional settings.
Gaston Fornes is based at
the University of Bristol,
Bristol, UK and ESIC
Business and Marketing
School, Madrid, Spain.
Belen Lopez is based at the
ESIC Business and
Marketing School, Madrid,
Spain. Melanie Bierens de
Haan is based at the
University of Bristol School
of Sociology Politics and
International Studies,
Bristol, UK. Javier Blanch is
based at the ESIC Business
and Marketing School,
Madrid, Spain.
Received 15 August 2017
Revised 31 March 2018
7 July 2018
Accepted 16 October 2018
DOI 10.1108/JABS-08-2017-0120 VOL. 13 NO. 1 2019, pp. 129-150, ©Emerald Publishing Limited, ISSN 1558-7894 jJOURNAL OF ASIA BUSINESS STUDIES jPAGE 129
In this context, scholars are seeking to improve their understanding of the effects of
institutional forces (a CSR predictor[2]Aguinis and Glavas, 2012), such as government
regulations and certifications, on the extent and types of CSR options available to
companies operating in China. This is relevant in this country, as, in spite of the market-
oriented reforms, the institutional frameworks are constantly changing, many economic
activities are still under state control, and firms’ strategic options are conditioned by their
capabilities and industry environment along with the frameworks in which they operate
(Peng, 2002;Warner, 2014). In particular, domestic institutions (formal and informal) such
as the legal and regulatory frameworks, ownership patterns, leaders’ influence,
relationships (guanxi) or government participation in firms have an important effect on the
firms’ decision-making process (Buckley et al., 2007;Cardoza et al.,2015;Chang et al.,
2014) and, therefore, affect the CSR predictors and outcomes[3](Carroll and Buchholtz,
2014;Carroll, 1991), an effect that could be positive or negative (Child and Rodrigues,
2005;Fornes and Mendez, 2018).
However, scarce attention has been devoted to extending the knowledge and
understanding of CSR in this area despite a growth in the scholarly literature on the
management of Chinese companies. For example, Deng’s (2011) comprehensive review
showed that most studies on Chinese business tend to focus mainly on internal factors of
the firm (such as management, finance and technology) and also on market-related
determinants, but very few focus on S&E/CSR engagement/strategies and/or stakeholder
relations in China’s companies. Similarly, Wang et al. (2016) found that CSR-related studies
in the Chinese context only started to appear in the Academy of Management Journal in
2011; also, Chinese scholars have been advancing the concept of CSR since 2006 and its
association/relation with sustainable development since 2008 (Yang and Guo, 2014). This
has resulted in a body of literature on CSR in China that is still in its infancy, and as a
consequence, it is relatively fragmented, not clearly connected, and covering dispersed
areas[4].
This leaves an important gap in the literature: the need to understand S&E engagement,
stakeholder relations and CSR strategies/options along with the underlying mechanisms
(Aguinis and Glavas, 2012) of firms operatingin China. This study aims at reducing this gap
by gaining a better understanding of CSR-related performance and behaviour of firms, in
particular sustainable and responsible investors (SRIs)[5], operating within the evolving
Chinese S&E regulations and government policies (Nee and Opper, 2012). To this end, the
study uses a case study design and method; the qualitative research adopts a stakeholder
theory (Freeman, 1984)[6] approach to identify topics impacting China-based firms’ CSR
options and stakeholders’ engagement at three levels: individual, organisational and
institutional. The researchfocuses on the following questions:
Q1. How do individual motivations underpin CSR activities in China? Are they profit
driven, a reflection of benevolent managerial/firm values, or a commitment to tackle
broader socialchallenges (Koh et al.,2014)?
Q2. How do mechanisms (mainly moderators[7] and/or mediators[8]Aguinis and
Glavas, 2012) act for the engagementof different stakeholders in China? What is the
influence (if any)on individual employees and work teams (Wang et al., 2016)?
Q3. How do predictors for CSR strategies work in companies operating in China’s
changing institutional environment? What is the influence (if any) of the government
and other institutions?(Kim and Moon, 2015)
Based on previous studies, the premises are that, influenced by a Chinese institutional and
business environment in which the regulations and certifications are young but evolving
(Nee and Opper, 2012;Wang and Juslin, 2009), on average the relations with stakeholders
and the stakeholders’ salience are low but growing (institutional level) (Moon and Shen,
2010), that companies engage in CSR activities mainly looking for financial returns
PAGE 130 jJOURNAL OF ASIA BUSINESS STUDIES jVOL. 13 NO. 1 2019
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