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International Corporate Responsibility Series

Volume 3, 2007

Controversies in International Corporate Responsibility

Runa Sarkar
Pages 231-252
DOI: 10.5840/icr2007315

Policy Approaches to Induce Corporate Social Responsibility in Public and Private-Sector Firms in Developing Countries

Corporate social responsibility (CSR) concerns the realm of business behavior in which the firm tries to effectively manage its business and non-market environment interface. Coerced CSR refers to taking socially responsible action in response to or in anticipation of retaliation in some form (boycott, adverse publicity, introduction of regulatory laws, etc.) from interest groups who are not directly part of the market to which the firm caters. In contrast, strategic CSR or altruistic CSR refers to socially responsible activities undertaken out of enlightened self-interest. The focus of this paper is to understand whether the impact of coercion is different for government-owned organizations and privately owned firms in developing countries. Activities that are in response to or in anticipation of threats by interest groups are identified and compared across publicly and privately owned firms, against the backdrop of weak enforcement of fairly stringent environmental regulation. We then generalize our observations and attempt to distinguish the intensity of pressures felt by public and privately owned firms and their speed of response. As a result of this understanding, we attempt to suggest specific policy mixes for various types of industry, depending on whether they are dominated by the public sector or private sector.

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