Legitimacy as a Key Driver and Determinant of CSR in Developing Countries

Abstract

This paper aims to specify the conceptual limits of CSR in a developing country context. Taking organisational legitimacy theory as a departure-point, it is argued that two key shortcomings regarding the contribution of CSR towards development can be identified: First, a multinational company operating in a remote country mainly seeks to gain legitimacy from its primary stakeholders which are typically based in its home market (e.g. customers, media), leading to a bias towards short-term projects with a high visibility rather than longer-term capacity-building initiatives. Second, differing perceptions of legitimacy in the home and the host country can lead to a misjudgement of which kind of initiative would be deemed appropriate in the host country and, subsequently, a misallocation of resources occurs. Implications are presented regarding (a) the strategic alignment of a corporations engagement in CSR as well as (b) the conceptual limits of CSR in contributing towards (ecological) sustainability.