Implementing Corporate Social Responsibility Policies in a Developing Country-A Study of Iran

Abstract

The scant literature on Corporate Social Responsibility (CSR) in developing countries where CSR is relatively underdeveloped, has recently suggested that CSR in developing countries is different and reflects specific social and political background. So far, empirical research on this topic has been scarce. The purpose of this thesis is to discover how CSR practices can be implemented in a developing country such as Iran by exploring the role of the economy, state and societal culture. Qualitative research and semi-structured interviews were conducted with managers of some of the largest publicly held companies listed on the Tehran Stock Exchange. The analysis of data established that in developing countries, such as Iran, markets are imperfect and incomplete with lack of competition and strong government interference. This thesis also revealed that good-law-on-the-books does not necessarily ensure economic development but rather economic development comes before the rule of law. Other mechanisms such as competition, trust, legal compliance level and government interference level are more influential. The results of these data also provided that stakeholders have very limited impact upon the decision-making process in Iranian companies and the attitude of the managing director is the most important driver of CSR policies. It was recognized that Western style of economic development may not happen in Iranian business environments. Business strategies that depend on influencing the strengths of the existing market environment outperform those that focus on overcoming its weaknesses. The interesting finding was that despite the strong agreement amongst the interviewees on weak performance of the government in all aspects and constant call for lowering its interference level, all of them believed that the government plays the most important roll in promoting CSR policies. Finally it was concluded that Iran is not still ready and does not have necessary economic and cultural level for promotion of CSR policies.