Making sense of CSR practices: a case of companies operating in Nepal

Responsible business practice in emerging economies is a relatively underrepresented topic. Despite the argument that the version of Corporate Social Responsibility (CSR) that exists in one country is not caused by its stage of development, the literature groups CSR studies in all developing countries as substitutionary. Where there is literature focussing on CSR activities in developing countries, it tends to be of MNCs in a developing country or CSR activities of a country that has MNC presence. The CSR literature is particularly underrepresented in conflict-ridden economies beyond a multinational facet.
This research undertakes a grounded theory methodology to understand CSR practices of companies operating in post-conflict Nepal. The aim of this research is to make sense of CSR practices in companies operating in Nepal. In making sense of CSR practices, this research undertakes an institutionalist approach and discusses business systems prevalent in Nepal.
While investigating CSR practices in companies operating in Nepal, it was found that non-financial reporting is a new concept in Nepal and CSR issues are philanthropic in nature. CSR issues are more likely to reflect issues in the government agenda. CSR perception and CSR activities are driven by the wider institutional environment. The findings partly reflect other work that found that the existence of ‘patriarchal companies ’and ‘a segmented business system ’in emerging economies results in limited enforcement of regulations including CSR policies. Weak political institutions have created a CSR paradigm that focuses on ‘political CSR’. The existence of a segmented business system in Nepal has created an environment where private companies are expected to contribute towards social issues. The economic, social and cultural challenges faced by Nepal as a community drives the CSR policy of companies operating in Nepal.
This research contributes to the existing CSR literature on two different levels. Firstly, one could argue that CSR as a terminology, does not encapsulate Nepali ethical business practice. Pursing societal issues are understood as their “Samajik Kartavya”. Similar to Confucianism in China, Samajik Kartavya are context driven and ingrained in the Nepali way of life arising from the culture-cognitive pillar. Fulfilling one’s Samajik Kartavya is a social obligation and not always voluntary, differing from the broader concept of CSR. Secondly, this research argues that companies in conflict- ridden economies such as Nepal should assume a governance role. Private companies have an authoritative role whereby they pursue issues on the government agenda and fulfil their economic responsibility. The regulatory role of the state cannot always be assumed to give rise to the coercive pressures that normally drive companies to adopt CSR. CSR prevails even when political institutions are near absent. This research argues that there is a need to study CSR as a standalone topic in an emerging economy because different economies have different societal institutions giving rise to different perception and meaning of CSR.