Ó Springer 2008
A Study of Management Perceptions of the Impact of Corporate Social Responsibility on Organisational Performance in Emerging Economies: The Case of Dubai
Belaid Rettab Anis Ben Brik Kamel Mellahi
ABSTRACT. Although a number of studies have shown that corporate social responsibility (CSR) activities often lead to greater organisational performance in western developed economies, researchers are yet to examine the strategic value of CSR in emerging economies. Using survey data from 280 firms operating in Dubai, this study examines the link between CSR activities and organisational performance. The results show that CSR has a positive relationship with all three measures of organisational performance: financial performance, employee commitment, and corporate reputation. These results reinforce the accumulating body of empirical support for the positive impact of CSR on performance and challenge the dominant assumption that, given the weak institutional framework in emerging economies, CSR activities drain resources and compromise firms’ competitiveness. KEY WORDS: corporate social responsibility, organisational performance, emerging economies, United Arab Emirates
Over the years, an enormous body of literature has emerged concerning the link between corporate social responsibility (CSR) initiatives and organisational performance (Margolis and Walsh, 2003; McWilliams et al., 2006). Although extant research has made some headway in understanding the association between CSR and organisational performance, it suffers from at least two important limitations that we seek to address in this paper. First, extant research on the impact of CSR on organisational performance has focused exclusively on
western developed economies. To date, scholars have not examined the strategic value of CSR in emerging economies. The limited body of research on CSR in emerging economies has focused almost exclusively on corporate citizenship, corporate irresponsibility, and motives for CSR in these countries (Blowﬁeld and Frynas, 2005; Frynas, 2005; Pedersen and Huniche, 2006). While these studies are valuable, they do not inform us of the strategic value of CSR in these countries. In this paper, we aim to close this gap by focusing on the strategic value of CSR in emerging economies, using ﬁrm-level data collected from ﬁrms operating in Dubai. Given that ﬁrms in emerging economies are embedded in different business systems from those of western ﬁrms, research on the association between CSR and organisational performance in emerging economies is warranted (Aguilera et al., 2007; Campbell, 2006). Compared with those in western countries, institutional legal frameworks in emerging economies are not yet well developed, which can limit the extent to which ﬁrms can beneﬁt from their CSR efforts. In addition, an extensive body of literature argues that managerial values and attitudes towards CSR in a given institutional context are likely to have a strong inﬂuence on the outcomes of such initiatives (Aguilera et al., 2007; Frynas, 2005; Hay and Gray, 1974; Hemingway and Maclagan, 2005; Pedersen and Huniche, 2006; Vitell and Paolillo, 2004). In this paper, we focus speciﬁcally on fast developing regions in emerging economies. Fast developing regions are quickly growing commercial and industrial hubs within emerging economies that have achieved high economic growth rates. We
Belaid Rettab et al. emphasise the focus on fast developing regions because we believe that there are signiﬁcant differences between regions within emerging economies in terms of economic growth, business environments, income levels, and management practices. Although differences between regions do exist in developed economies, we believe these differences are more prominent in emerging economies. For instance, there are considerable differences between Dubai and the rest of UAE in the way the...