Relation Between Legitimacy and Adoption of CSR Practices

Abstract

The interest to incorporate CSR in operational business has in recent time grown within companies. For MNCs, this means that CSR needs to be incorporated in all subsidiary units around the world. It is a complicated procedure since subsidiaries are legally autonomous units which operate in widely spread geographical areas with regional variations in the value and perception of CSR. It is, therefore, especially important for MNCs to understand the underlying reasons behind how subsidiaries adopt their MNCs’ CSR practices and what role their respective society plays in the adoption. In order to gain a more extensive understanding of these reasons, it was considered essential to study the relationship between the adoption of CSR practices and the legitimacy MNCs gain from society. The study was, therefore, conducted in a deductive manner with regard to the theory about adoption of practice and the legitimacy theory. The study’s findings showed that the factors affecting the adoption of CSR practices were societies’ view on CSR, the internal relationship within the MNC, and the creation of CSR practices. These factors had both direct and indirect connections to the legitimacy MNCs gain from society. The two factors which had a direct connection with legitimacy were societies’ view on CSR, and when parent companies and subsidiaries create CSR practices together. The two factors which had an indirect connection to legitimacy were the internal relationship between parent companies and subsidiaries, and when parent companies create CSR practices alone. Findings further showed that MNCs gain legitimacy from both local societies and the global society.