The Historical Roots of Corporate Social Responsibility in Indonesia: The Institutionalization of Social Welfare in the Mangkunegaran Sugar Industry, 1861–1940

Abstract

Corporate Social Responsibility (CSR) is oen understood as a modern normative concept that was only adopted in Indonesia in the post-2000 period. This study challenges that assumption by tracing the historical roots of CSR-like practices through an examination of social welfare initiatives in the Mangkunegaran sugar industry between 1861 and 1940. Employing historical research methods, this study analyzes how welfare initiatives at the Colomadu and Tasikmadu sugar factories evolved from ad hoc responses into an institution-alized system. The findings demonstrate that the Mangkunegaran sugar enterprises imple-mented practices that can be categorized as “Proto-CSR,” driven by a Dual Logic: economic rationality aimed at maintaining labor productivity, and a moral-cultural obligation of the ruler rooted in Mangkunegaran leadership ethics to protect and care for the populace (kawula). This institutionalization culminated in the establishment of the Bevolkingfondsen (Population Fund), a formal financing mechanism that supported healthcare services, hous-ing improvements, and public sanitation. This study concludes that the Mangkunegaran welfare practices conceptually preceded the modern notion of Creating Shared Value (CSV). These findings contribute to the theoretical discourse on CSR by demonstrating that corporate social responsibility in Indonesia has deep indigenous and historical roots, rather than being merely an adoption of contemporary global management standards.