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Theoretical perspectives underpinning CSR

In document Empirical evidence from Sri Lanka (Page 74-78)

Literature Review

2.6. Theoretical perspectives underpinning CSR

Theoretical perspectives underpinning CSR


CSR theories to construct a theoretical framework to use in analysing and explaining collected evidence; and, 6) most of all, this thesis considers the influences of the unique Sri Lankan historical, cultural and customary traditions on the country’s corporate CSR practices.

Theoretical perspectives underpinning CSR


Institutional theory is a well-established theoretical perspective in the areas of management accounting, political science, social and organisational change, accounting controls, and financial reporting, but relative to legitimacy theory and stakeholder theory, it has not been used much in the CSR literature (Gray et al., 2010). However, according to Campbell (2007), institutional theory inherently possesses the capability to help explain CSR compliance by firms. The new8 institutional theory emphasises the key role of social and cultural implications and pressures imposed on organisations which influence their structures and practices (For reviews of early institutional theory, see Scott, 2001.).

While accepting that other theories are employed by CSR researchers, it is important to emphasise that legitimacy, stakeholder, and institutional theories provide more insightful theoretical perspectives on CSR practices than other theories offer, especially when considering purely economic theories (Gray, Kouhy, & Lavers, 1995).

Although there is a considerable relationship between these three theories, most CSR studies have used one single theoretical perspective at a time. This approach restricts the explanatory power of empirical evidence, because “theory is always incomplete in the social sciences” (Gray et al., 2010, p. 9). Thus, this thesis responds to this gap by constructing a theoretical framework that integrates these three theories together in order to analyse and explain empirical evidence in Sri Lanka. The ideology of these mainstream CSR theories, their usage in the CSR literature, and the construction of this framework are discussed in Chapter Five.

8 “The roots of institutional theory run richly through the formative years of the social sciences, enlisting and incorporating the creative insights of scholars ranging from Marx and Weber, Cooley and Mead, to Veblen and Commons” (Scott, 2004). New institutional theory provides a way of viewing institutions outside of the traditional views of economics by explaining why so many businesses end up having the same organizational structure even though they evolved in different ways, and how institutions shape the behavior of individual members (See for reviews of early institutional theory, Scott, 2001.).

Deriving research questions from the literature review

60 2.7. Deriving research questions from the literature review

The topic of this thesis is derived from the broad area of CSR or social accounting.

Although the academic debate in this area has ranged over 60 years of history and has generated a plethora of literature, due to the unique diversity and vagueness of the concept, some CSR scholars still consider that CSR is in its infancy, and that more research studies are needed to develop it (Gray & Laughlin, 2012).

Throughout Chapters One and Two, the researcher highlighted the fact that the vast majority of extant CSR research has been focused on developed countries, and some scholars, consequently, have emphasised the great necessity to explore, understand and improve the CSR practices in developing countries (Frynas, 2006;

Jamali & Mirshak, 2007; Reed, 2002; Visser, 2008) (See section 1.2 in Chapter One for more details.). As a response, this thesis examines CSR practices from the perspectives of a developing country. The empirical evidence is drawn from Sri Lanka, representing a developing country (See section 1.5 in Chapter One for the reasons and justification for selecting Sri Lanka as the research site).

Much of the review is devoted to CSR studies related to the Sri Lankan context.

The literature review indicates that Sri Lankan CSR studies are limited and are empirically and methodologically focused in certain areas only. For example, these studies concentrate mainly on CSR disclosure practices. Methodologically, most of these studies employed content analysis as their technique, and/or applied a quantitative positivistic approach. When this doctoral research project was started, only a few Sri Lankan CSR research studies existed, most of them dated and brief. Thus, to understand “what is going on” in relation to CSR practices in Sri Lanka, and to describe the facts related to the status quo of CSR, the researcher derived the first research question: 1)What are the features of CSR practices in Sri Lanka, a developing country? Then the researcher derived the second research question: 2) To what extent are the Sri Lankan CSR practices different from CSR practices in New Zealand, a developed country? The aims of this latter question

Deriving research questions from the literature review


are to benchmark the status quo of CSR practices in Sri Lanka with a developed country, and to understand the extent of the importance of notable CSR findings in Sri Lanka. These two research questions regarding “what” open up further research questions as to “why.”

Adoption of in-depth interviews is rare in Sri Lankan CSR research, which restricts the understanding of deeply rooted reasons underpinning CSR practice.

Some Sri Lankan CSR studies adopted a case study method and concentrated on the 2004 Indonesian tsunami incident. Although rich data were collected through interviews, these studies considered very few companies that were subjected to international influence and the local indigenous companies were ignored. In responding to these gaps in the CSR literature, this thesis considers both local and international companies, relies mainly on in-depth interviews with corporate managers of cultural proximity, and focuses on both operational and disclosure practices of CSR. Most importantly, this thesis considers the influences of the unique Sri Lankan historical, cultural and customary traditions on the country’s corporate CSR practices. In considering these aspects, the researcher derived the third, fourth, and fifth research questions: 3) What is the nature of CSR practices, in terms of defining characteristics, perceived by Sri Lankan corporate managers?; 4) Why do Sri Lankan companies adopt CSR initiatives and why do these companies choose or not choose to disclose voluntary CSR information?; and, 5) Why has CSR practice developed in the way it now has in Sri Lanka?

Furthermore, it was found that none of the Sri Lankan CSR studies used mainstream CSR theories such as legitimacy theory, stakeholder theory, and institutional theory extensively in explaining their findings. In order to address this research gap, the researcher derived the sixth and final research question: 6) How do mainstream CSR theories such as legitimacy, stakeholder and institutional theories help to explain operational and reporting CSR practices in Sri Lanka? In addressing this

Chapter summary


research question, the researcher constructs a theoretical framework by integrating these three theories. This framework helps to discover the efficacy of mainstream CSR theories in explaining CSR practices in a developing country.

In document Empirical evidence from Sri Lanka (Page 74-78)