Institutional Theory as a Driver of CSR: An Integrative Framework

Abstract

The paper uses institutional theory as a lens to explain CSR activities of organizations. The article, in particular, focuses on three specific areas in CSR: CSR as a substitute for institutional mechanisms, CSR focus of multinational corporations and CSR reporting. The rationale for examining these three areas using institutional theory is explained. The paper then proceeds to verify the correctness of propositions of institutional theory, as applied to the focus areas. The study finds that CSR focus substitutes rather than complements existing institutional mechanisms, which is contrary to theory. The role of multinationals as institutional entrepreneurs straddling different institutional environments is verified. The study suggests that institutional mechanisms enable homogeneity as well as heterogeneity in CSR reporting.