Exploring Antecedents and Outcomes of Corporate Social Responsibility in Saudi Arabia

Abstract

Corporate Social Responsibility (CSR) has gained increased attention among business practitioners, academics and policy-makers. It has been widely researched in developed Western countries and is a burgeoning area of research in developing countries. However, there has been limited research conducted in Saudi Arabia. This thesis investigates the drivers of CSR practices and their impacts on the performance of large companies in Saudi Arabia. It also examines the moderating effects of managers’ attitudes towards CSR on the relationships between CSR drivers and CSR practices. This exploration of CSR in the context of Saudi Arabia adopted stakeholder, stewardship, legitimacy, resource-based view and institutional theories as theoretical frameworks. Specifically, these theories helped to understand and explain how the interaction of multiple and complex contextual factors influence CSR adoption, practices and impacts on corporate performance. Using a mixed-methods approach comprising both quantitative and qualitative data, this study employed a survey and semi-structured interviews with CSR managers of selected companies. The results indicate that Saudi companies practice four CSR practices, labour responsibility, environmental responsibility, community responsibility and ethical business behaviour, which are driven by economic, competitor, social, regulatory and customer pressures. Religion was also identified as a driver of CSR adoption in Saudi Arabia. Managers’ attitudes towards CSR were found to play a significant role in moderating the relationships between the CSR practices and regulatory and customer pressures. Except for community responsibility, other CSR practices were not significantly associated with a significant positive impact on financial performance. CSR in general was viewed as a philanthropic and an ethical practice which is mainly associated with direct non-financial benefits such as enhanced business image and reputation. The study findings suggest that the drivers of CSR practice in Saudi Arabia are comprised of mimetic, coercive or normative pressures at the individual, organisational and institutional levels. Thus, policymakers, business owners, and managers should take into account these factors, including economic pressure, competitors’ pressure, regulatory pressure, customesr pressure, and societal pressure as well as managers’ attitudes when implementing CSR practices. This study also contributes to the CSR literature by indicating that factors such as social norms and traditions, culture, religion, and stakeholders’ values and beliefs that influence CSR practice in a setting like Saudi Arabia may vary from those in other contexts. Finally, the study advances, expands, and improves understanding of CSR theories as well as their application in different contexts.