Mandatory corporate social responsibility by Indian companies: A case of isomorphism due to social need or regulation?

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Abstract

The study proposes a framework to establish the isomorphic nature of corporate social responsibility (CSR) expenditure for Indian companies. Isomorphism in NIFTY-50 companies of India was analysed using the Herfindahl-Hirschman Index (HHI) and Shannon-Weiner Index (SWI). This was followed by a qualitative study of six organisations as a case study and an analysis of interviews with 29 managers of different organisations involved in CSR practices. NIFTY-50 companies were found to be isomorphic. A study of six group companies and the analysis of interviews of 29 CSR business managers, found that isomorphism in Indian companies can be termed as long-term social legitimacy-seeking behaviour. A company’s relationship with society shifts from seeking internal and external legitimacy to having a symbiotic relationship with society. In the long-term, the company uses its CSR to seek legitimacy at all levels (from the grass-root level community to the highest level of state actors). The study was done for the pre-COVID-19 financial years starting 2014–2015.

Keywords: Corporate Social Responsibility, CSR, Sustainable CSR, Isomorphism, Institutional Theory, NIFTY-50, India, Herfindahl-Hirschman Index, Shannon Wiener Index

Authors’ individual contribution: Conceptualization — C.K. and A.G.; Methodology — C.K.; Formal Analysis — C.K.; Data Curation — C.K. and A.G.; Writing — Original Draft — C.K.; Writing — Review & Editing — A.G.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G38, L29, M14

Received: 14.04.2024
Accepted: 11.06.2024
Published online: 13.06.2024

How to cite this paper: Kumar, C., & Ganguly, A. (2024). Mandatory corporate social responsibility by Indian companies: A case of isomorphism due to social need or regulation? Business Performance Review, 2(1), 33–47. https://doi.org/10.22495/bprv2i1p3