Institutional drivers for corporate social responsibility in the utilities sector.
| Autor | Pinheiro, Alan Bandeira |
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Introduction
The relationship between consumers and companies has changed over the years, given several reasons, such as more conscious and demanding clients, institutional pressures, new consumption needs, among others (Mittelbach-Hormanseder, Hummel & Rammerstorfer, 2020). In this perspective, organizations have given more attention to corporate social responsibility (CSR) disclosure. Although a company is an institution that seeks profit, the big companies do exert a huge influence on the society actions. Thus, they possess a significant economic, financial, technological, political and cultural power, and they must use part of their resources in an altruistic way (Roberts, 1992) and contribute to promote a sustainable development of the planet (Barbieri & Cajazeira, 2013).
According to Campbell (2006), differences in CSR disclosure can be explained through the institutional environment of each country, which is composed of political, economic, sociological, cultural and labor issues (Soares, Pinheiro, de Abreu & Marino, 2018). Thus, the national business system (NBS) of each country is useful for understanding CSR actions of the companies, since it has influence in the business success (Matten & Moon, 2008; Cassely, Revelli, Larbi & Lacroux, 2020). The particularities of each country, such as economic development (Coluccia, Fontana & Solimene, 2018), culture (Tran & Beddewela, 2020), level of corruption (Baldini, Maso, Liberatore, Mazzi & Terzani, 2018), life quality of the population (Berry, Guillen & Zhou, 2010) affect managerial decisions and define strategies in CSR.
Studies from Jamali & Neville (2011) highlight that the practices of disclosure in CSR are conditioned to the institutional environment of the country, through its NBS. It is believed that developed nations have greater stimulus and pressures from stakeholders for transparency on their social and environmental actions. Developed nations have stronger institutional characteristics (Wanderley, Lucian, Farache & de Sousa Filho, 2008) than emerging or underdeveloped nations. Thus, emerging and undeveloped countries have weak government promotion to CSR (Jamali, 2007).
Brammer, Jackson & Matten (2012) believe that, although CSR is a widespread topic in the business literature, the institutional environment of companies in CSR has been neglected. Then, corporate social performance (CSP) needs to be understood in a multidisciplinary way in relation to the factors that are not linked to the company, but that affects it (Graafland, 2019). However, some institutional variables have not been researched usually, such as political, financial, educational and labor system, resulting from the NBS.
Many studies have investigated the characteristics of companies (size, financial performance and risk) and the internal context of corporate governance (Tilt, 2016). There is a need to investigate CSR through the countries' institutional environment (Zafalon, Padgett & Yahiro, 2020). Therefore, the present study seeks to reduce this gap. In addition, the approach of more than one country offers additional evidence on the determining factors in the disclosure of CSR information, assisting managers and policymakers in decisionmaking (Garcia-Sanchez, Cuadrado-Ballesteros & FriasAceituno, 2016).
The country's choice is initially justified by its importance in the global economy. Currently, companies from emerging countries, represented by the BRICS (Brazil, Russia, India, China, and South Africa), compete with developed countries for space in the global economy by proposing a reduction in market prices. In this situation, Brazil is the ninth largest economy in the world, based on data from gross domestic product (GDP), while the UK is the fifth largest economy. That first country has a GDP of US$2.14tn and the UK has US$2.94tn (International Monetary Fund, 2018). In addition, the UK was the first country in the world to support "The Prince's Accounting for Sustainability Project" (A4S), which aims to make sustainable decision-making business as usual. There are few studies comparing different cultural and institutional environments, especially in emerging countries like Brazil.
The differences between Brazil and the UK are not limited only by these performance indicators. Thus, it should be understood how their political, financial, educational and cultural systems, i.e. their NBS, affect the disclosure of CSR in their companies in the public utility sector. Inthis way, executives should understand how the dynamicsofthe institutional environment affects organizational practices of sustainability. Therefore, the following question was formulated for the research: what is the influence of the institutional environments from Brazil and the UK in the disclosure of CSR for companies operating in the public utility sector?
The purpose of this study is to examine the influence of characteristics of the institutional environmentonthe disclosure ofCSR.Toachieve this objective, the research analyzed, for ten years, 12 publicly traded companies based in Brazil and the UK. The independent variables represent the NBS of the countries studied, and the dependent variable is the CSP, measured through the environmental dimension (ED) (15 indicators) and the social dimension (SD) (16 indicators). The results show that certain institutional characteristics influence CSP, bringing academic and managerial implications.
Our findings make some contributions to the CSR debate in emerging and developed countries. The results confirm the institutional theory, by reinforcing that certain characteristics of the institutional environment can affect CSP. Moreover, this study expands the research that addresses the relationship between the NBS and the disclosure of CSR, bringing new empirical evidence and employing new variables to measure the institutional environment of countries.
In terms of structuring, the work is organized into five sections, starting with an introduction, followed by presentation of the research problem and objectives. Then, the theoretical foundation is presented, focusing on the following topics: institutional environment, organizational practices, CSR and evidence in CSR for emerging and developed countries. Section 3 is composed by a discussion that presents the research methodology applied as well as the data obtained. While, Section 4 presents the results of the work and the discussion based on the literature. Finally, the last section presents the conclusion and the limitations of the study, proposing suggestions for future research.
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Theoretical foundation
2.1 Institutional environment and organizational practices
In the late 19th century, studies on institutional theory in the field of social sciences began. In the following century, the theme was also applied in other areas of study, such as economics and politics, supported by the research of Westley Mitchel, Emile Durkheim and Max Weber (Carvalho & Vieira, 2003). Today, in the 21st century, the institutional theory has contributed to the studies of organizational practices. It is understood that organizational results are not only reflections of human capacities, but also due to the economic and political context in which institutions are installed.
In this sense, the institutions are understood as rules, norms and routines in a social environment (March & Olsen, 1989; North, 1990; Matten & Moon, 2008), which substantiate the formal elements. While, informal elements are constituted by the culture and behavioral factors of individuals (Deephouse, Newburry & Soleimani, 2016). Thus, the institutions compose the cognitive, regulatory and normative activities that oversee the society behavioral aspects (Scott, 1995).
The effect of the institutional environment in the firms allowed the observation of the organizations by another strand, different from the traditional concept. The companies, in the traditional concept, believed that their result was the rational and efficient reflection of the managers (Tolbert & Zucker, 1998). On the other hand, nowadays, the corporations are judged by their political, cultural, cognitive and symbolic processes (Quinello, 2007), since their work depends on the symbolic-normative structures of a reference context (Goulart, Falc~aoVieira & Carvalho, 2005). In this way, the institutional environment acts on organizational factors (Meyer & Rowan, 1977; DiMaggio & Powell, 1983; Scott, 1987).
In view of this, organizations have acted in various organizational fields (DiMaggio & Powell, 1983). Thus, it is up to the understanding of different suppliers, consumers, regulatory agencies and competitors for each organizational field. Dacin et al (2008) were dedicated to cross-national studies, i.e. the understanding of corporations within different organizational fields in different countries. It is understood that each country has a unique culture that affects its organizational practices.
In fact, organizations operate in different organizational fields; however, they resort to the process of institutional isomorphism (DiMaggio & Powell, 1983). This process corresponds to the company's ability to change to meet the characteristics of the institutional environment where it operates. As a result, they ensure their survival and obey the isomorphic pressures of each society (Tempel & Walgenbach, 2007).
2.2 Evolution of business efforts in corporate social responsibility
The organizations, which were institutions focused essentially on profit in the past, began to reflect on the impacts of their work in society (Barbieri & Cajazeira, 2013). Given this context, many companies have greater economic power than some countries and their decisions significantly influence the environment (Oliveira, 2013). Therefore, companies need to adopt CSR practices to comply with legal obligations and social altruism.
Several authors have contributed to the evolution of the CSR concept, among...
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