Wide differences in the focus and form of corporate social responsibility (CSR) exist among countries due to the different institutional embeddedness of CSR practices. The purpose of this paper is to seek to explain them within the framework provided by institutional theory by identifying important pressures driving CSR practices. Further, it intends to extend theory by proposing a conceptual model that relates institutional pressures, CSR practices, reputation and financial performance of corporates in a developing country like India.
Drawing upon the extant literature on the constructs, the paper describes their evolution through decades and weaves relationship between them. Institutional theory provides the framework to develop hypotheses.
The model has its roots in Scott’s institutional theory – linking regulative, normative and cognitive pressures to CSR practices. Reputation mediates the relationship between CSR and financial performance.
The conceptual model can serve as a foundation for subsequent empirical research. An understanding of relationship between constructs in the model will help corporates to strategize CSR initiatives. At the organisational level, insight into managerial perceptions of CSR practices will help to identify the need for training, if there is a gap between what organisation intends and what managers perceive.
The authors have proposed for the first time an integrative model that will help to understand the antecedents as well as consequences of CSR practices in a developing country within a theoretical framework.
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