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Profit-Seeking Corporate Social Responsibility in Developing Countries: The Risk of Conflating CSR and R&D
Open accessAbstract
Strategic corporate social responsibility (CSR) has drawn praise for representing the "sweet spot" between communities’ needs and firms’ resources, capabilities and efforts. But what if the concept is pushed to its limits? A firm can initiate CSR projects not just to help communities, but to directly realize profit from them. In this conceptual paper, we ask how CSR is understood and functions when the intent of CSR projects is to conduct a form of research and development (R&D). The intended innovations are not science-based, but socially oriented; they seek to determine how to profitably meet the needs of poor people in developing countries. We develop our argument from conversations with managers and teaching cases that explain how executives believe CSR helps firms (learn how) to profitably serve new potential customers – whether through developing new markets or new products and services with a social purpose. Using CSR as a form of "living R&D" allows firms to make mistakes and to avoid short-term shareholder pressures. But there are very real risks to what in essence is unregulated experimentation on poor people, and we highlight some of them. Our argument highlights the ways in which such innovation and profit-oriented CSR challenge thinking on both CSR and R&D, and we make practical recommendations for how to ensure that intended beneficiaries are not harmed, but can instead benefit.
Overview
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TL;DR
This conceptual paper argues that firms in developing countries may use CSR as a form of “living R&D” to experiment toward profitable new markets and products for poor communities. It warns that conflating CSR with R&D obscures serious risks to communities and calls for R&D-like structures and safeguards for participating parties.
Key findings
- Managers and teaching cases show CSR being used to support profit-seeking experimentation: the CSR label removes expectations of profitability and creates a “living lab.” Examples include Microsoft South Africa’s Biz4Afrika, which served almost a thousand small businesses through a network of 42 supporting companies in an environment with about 30% unemployment, and Danone’s Danimal yoghurt, distributed via “Danimamas” and “Daniladies.”
- The paper identifies two key insights: managers link CSR and innovation in an intended virtuous cycle, and CSR is being conflated with R&D. Table 1 contrasts them: CSR has secondary benefit to the firm, primary benefit to community, no expectation of profits, and no protection of participating parties; R&D has primary benefit to the firm, secondary benefit to community, delayed profits, tolerance for failure, and protection of participating parties.
- The authors highlight risks of unregulated experimentation on poor people. A postscript to the Danimal case reports that after its champion left Danone in 2010 the project was discontinued, traders sold less healthy snacks or expired yoghurt, and there is no evidence on what happened next; customers included children, babies, and people with HIV/AIDS.
- Recommendations include extending R&D-type organizational mechanisms to socially-oriented innovation, offering tax or financial benefits, protecting firms from short-term shareholder expectations, increasing tolerance for failure, and developing safeguards and “radical transparency” for communities.
Methods
- Design: conceptual paper developed primarily from prior literature, supported by teaching cases and conversations with managers.
- Data/sample: a 2008 practitioner workshop at the Gordon Institute of Business Science in South Africa; published teaching cases such as Microsoft South Africa and Danone/Danimal; one quoted Namibian agro-processing CEO; other executives informally and off the record; cases from Southern Africa compared with cases from India.
- Analysis: the authors build a theoretical argument from recurring patterns across cases and interviews, present Figure 1 on a virtuous cycle between CSR and innovation, and use Table 1 to compare CSR and R&D.
Limitations
- The paper states that it is theoretical and that its engagement with empirical cases is “impressionistic and anecdotal”; it calls for more systematic evidence as an essential next step.
- The paper states that only one executive was willing to be quoted, while other executives shared insights informally and off the record, often because projects had “not yet” succeeded.
- Evident from the text: there is no systematic sample or empirical testing, reliance on teaching cases and informal conversations limits generalizability, and the authors note there is no evidence on what happened after the Danimal project was discontinued.
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0 Valid · 15 Not valid · 23 Not checked · 70 Own results and interpretations
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In the paper
“But for at least some firms and some scholars, the notion of CSR and innovation to profitably reach previously underserved markets were linked.”
§ Profit-Seeking Corporate Social Responsibility in Developing Countries: The Risk of Conflating CSR and R&D > 3. What has been happening in the field
hedgedstates an association- Asserted: passes — The authors put it forward as true.
- Checkable: passes — It can be checked against evidence.
- Load-bearing: passes — The paper’s conclusions depend on it.
- Based: passes — The paper gives a reason why it holds.
A result the paper reports from its own data — it cites no other source for it, so there is none to check. The quote shows it is in the paper.
In the paper
“we support our theorizing with evidence that CSR is in fact framed as a vehicle for profit generation, and also some of the issues around such a framing.”
§ Profit-Seeking Corporate Social Responsibility in Developing Countries: The Risk of Conflating CSR and R&D > 1. Introduction
plain- Asserted: passes — The authors put it forward as true.
- Checkable: passes — It can be checked against evidence.
- Load-bearing: passes — The paper’s conclusions depend on it.
- Based: passes — The paper gives a reason why it holds.
- Rests on an assumption not shown here.
None of the sources cited for this claim could be matched to a paper in Crossref, so there is nothing to check it against.
In the paper
“Evidence of how firms were using CSR to integrate business and social goals were seen mainly in teaching cases (Barnard & Marks, 2014;Faivre-Tavignot & Dalsace, 2014;Hawarden & Barnard, 2010).”
§ Profit-Seeking Corporate Social Responsibility in Developing Countries: The Risk of Conflating CSR and R&D > 3. What has been happening in the field
What the sources say
- Not matchedcites Barnard & Marks, 2014
Couldn’t be matched to a paper in Crossref, so it can’t be checked.
- Not matchedcites Faivre-Tavignot & Dalsace, 2014
Couldn’t be matched to a paper in Crossref, so it can’t be checked.
- Not matchedcites Hawarden & Barnard, 2010
Couldn’t be matched to a paper in Crossref, so it can’t be checked.
plain- Asserted: passes — The authors put it forward as true.
- Checkable: passes — It can be checked against evidence.
- Load-bearing: unclear — It is unclear whether the paper’s conclusions depend on it.
- Based: passes — The paper gives a reason why it holds.
- Rests on an assumption not shown here.
- Not matched
A check of a cited source is scheduled, or we don’t hold its full text yet; the claim is checked once it runs.
In the paper
“This created major problems in the impoverished communities where people had earned a living selling Danimal yoghurt.”
§ Profit-Seeking Corporate Social Responsibility in Developing Countries: The Risk of Conflating CSR and R&D > The conflation of CSR with R&D
What the sources say
- Not checked yetcites Ismail, Kleyn & Ansell, 2012
A check is scheduled.
plainstates a causeSingle case- Asserted: passes — The authors put it forward as true.
- Checkable: passes — It can be checked against evidence.
- Load-bearing: passes — The paper’s conclusions depend on it.
- Based: passes — The paper gives a reason why it holds.
- Not checked yet
The paper states this without a source or data behind it here, so there is nothing to check it against. The quote shows it is in the paper.
In the paper
“Our point is precisely that firms seem to be conflating these two very different activities, and moreover, that there are clear explanations for why that is happening.”
§ Profit-Seeking Corporate Social Responsibility in Developing Countries: The Risk of Conflating CSR and R&D > The conflation of CSR with R&D
hedgedstates an association- Asserted: passes — The authors put it forward as true.
- Checkable: unclear — It is unclear whether it could be checked against evidence.
- Load-bearing: passes — The paper’s conclusions depend on it.
- Based: unclear — It is unclear why the paper says it holds.
27 more claims
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Percentages, sums and reported differences re-computed from the paper’s own numbers.
Each contradiction between two passages listed here was confirmed by an independent check.
Rated minor: it would not touch a result — a value no result rests on, a p-value that stays on the same side of the significance level, or a conflict that is clerical, resolved elsewhere in the paper, or outside its own findings.
In the paper
§ Profit-Seeking Corporate Social Responsibility in Developing Countries: The Risk of Conflating CSR and R&D > Concerns about community benefits from CSR
“(Austin, Dávila & Jones, 2017;Doh, Husted & Marano, 2019)”
§ Profit-Seeking Corporate Social Responsibility in Developing Countries: The Risk of Conflating CSR and R&D > References
“Doh, J., Husted, B. W., & Marano, V. (2018). Corporate social responsibility in emerging markets.”
Rated minor: it would not touch a result — a value no result rests on, a p-value that stays on the same side of the significance level, or a conflict that is clerical, resolved elsewhere in the paper, or outside its own findings.
In the paper
§ Profit-Seeking Corporate Social Responsibility in Developing Countries: The Risk of Conflating CSR and R&D > The conflation of CSR with R&D
“(see for example Kantor, 1999)”
§ Profit-Seeking Corporate Social Responsibility in Developing Countries: The Risk of Conflating CSR and R&D > References
“Kanter, R. M. (1999). From spare change to real change: The social sector as beta site for business innovation.”
Rated minor: it would not touch a result — a value no result rests on, a p-value that stays on the same side of the significance level, or a conflict that is clerical, resolved elsewhere in the paper, or outside its own findings.
In the paper
§ Profit-Seeking Corporate Social Responsibility in Developing Countries: The Risk of Conflating CSR and R&D > 2. Literature review
“Sibley and Walker's 1977 analysis of bridge failures”
§ Profit-Seeking Corporate Social Responsibility in Developing Countries: The Risk of Conflating CSR and R&D > References
“Sibly, P.G. & Walker, A.C. (1977). Structural accidents and their causes.”
Rated minor: it would not touch a result — a value no result rests on, a p-value that stays on the same side of the significance level, or a conflict that is clerical, resolved elsewhere in the paper, or outside its own findings.
In the paper
§ Profit-Seeking Corporate Social Responsibility in Developing Countries: The Risk of Conflating CSR and R&D > Different understandings of CSR
“(Du, Bhattacharya, & Sen, 2010;Porter & Kramer, 2006)”
§ Profit-Seeking Corporate Social Responsibility in Developing Countries: The Risk of Conflating CSR and R&D > References
“Du, S., Bhattacharya, C. B., & Sen, S. (2011). Corporate social responsibility and competitive advantage: Overcoming the trust barrier.”
Citations
Cites
Corporate Social and Financial Performance: A Meta-Analysis
Orlitzky, M., Schmidt, F. L., & Rynes, S. L. (2003) · Organization Studies · doi:10.1177/0170840603024003910 · Cited by 7,641
Corporate Social Responsibility: a Theory of the Firm Perspective
McWilliams, A., & Siegel, D. (2001) · The Academy of Management Review · doi:10.5465/amr.2001.4011987 · Cited by 7,567
Corporate Social Responsibility: Evolution of a Definitional Construct
Carroll, A. B. (1999) · Business & Society · doi:10.1177/000765039903800303 · Cited by 6,316
Corporate Social Responsibility Theories: Mapping the Territory
Garriga, E., & Melé, D. (2004) · Journal of Business Ethics · doi:10.1023/b:busi.0000039399.90587.34 · Cited by 3,968
What We Know and Don’t Know About Corporate Social Responsibility: A Review and Research Agenda
Aguinis, H., & Glavas, A. (2012) · Journal of Management · doi:10.1177/0149206311436079 · Cited by 3,558
Individual and Corporate Social Responsibility
BÉNABOU, R., & TIROLE, J. (2010) · Economica · doi:10.1111/j.1468-0335.2009.00843.x · Cited by 2,237
The link between competitive advantage and corporate social responsibility
Oana, V. (2006) · Harvard business review · Cited by 1,859
Exploring the Locus of Profitable Pollution Reduction
King, A., & Lenox, M. (2002) · Management Science · doi:10.1287/mnsc.48.2.289.258 · Cited by 1,198
How effective are fiscal incentives for R&D? A review of the evidence
Hall, B., & Van Reenen, J. (2000) · Research Policy · doi:10.1016/s0048-7333(99)00085-2 · Cited by 1,012
Wang, H., Tong, L., Takeuchi, R., & George, G. (2016) · Academy of Management Journal · doi:10.5465/amj.2016.5001 · Cited by 923
Research works printed but not linked: 5
- Altman, D. G., Rego, L., & Ross, P. (2009). Expanding opportunity at the base of the pyramid. People and Strategy, 32(2), 46.
- Journal of Comparative International Management H. Barnard and K. Pattit Vol. 25, No, 1, 58-81 (2022)
- Prahalad, C. K. (2006). The Fortune at the Bottom of the Pyramid. Pearson Education India.
- Rajak, D. (2006). The Gift of CSR: Power and the Pursuit of Responsibility in the Mining Industry, in Visser, W. et al. (eds.), Corporate Citizenship in Africa: Lessons from the Past; Paths to the Future. Greenleaf Publishing, Sheffield.
- Windsor, D. (2001). Corporate Social Responsibility: A Theory of the Firm Perspective: Some Comments. Academy of Management Review, 502-504
Cited by
Balon, V., Yogi, K. S., & Reddy, K. S. (2022) · Sustainable Technology and Entrepreneurship · doi:10.1016/j.stae.2022.100023 · Cited by 73
Does corporate social responsibility and environmental governance drive green innovation?
Khurshid, A., Hongbin, Y., Cifuentes‐Faura, J., & Saleem, S. F. (2024) · Corporate Social Responsibility and Environmental Management · doi:10.1002/csr.2942 · Cited by 50
Mou, W., Rasoolimanesh, S. M., & Chuah, S. H. (2024) · Journal of Hospitality and Tourism Insights · doi:10.1108/jhti-07-2023-0446 · Cited by 22
Shaikh, M. K., Ali, A., & Qadeer, T. (2024) · Advances in logistics, operations, and management science book series · doi:10.4018/979-8-3693-0363-4.ch009
Metadata
- Authors
- Barnard, H., & Pattit, K.
- Affiliations
- University of Pretoria (ZA)
- Venue
- Journal of Comparative International Management
- Published
- 2022-06-30
- Volume
- 25
- Issue
- 1
- Pages
- 61-83
- ISSN
- 1481-0468 (ISSN-L)
- 1718-0864
- OpenAlex
- W4283787503
- Cited by
- 4
- References
- 67
- Citations by year
- 2024: 3 · 2022: 1
- FWCI
- 0.83
- Type
- journal article
- Language
- en
- Open access
- diamond
- doi.org
- Locations
- Journal of Comparative International Management (publishedVersion)
- Érudit (Université de Montréal) (submittedVersion)
- UpSpace Institutional Repository (University of Pretoria) (submittedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Organizational Behavior and Human Resource Management › Corporate Social Responsibility and Sustainability
- Social Sciences › Business, Management and Accounting › Strategy and Management › Corporate Social Responsibility Reporting
- Social Sciences › Business, Management and Accounting › Business and International Management › Innovation and Socioeconomic Development
- Keywords
- research and development, developing countries, poverty reduction, shareholder pressure, new market development
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