Seeking legitimacy through CSR: Institutional Pressures and Corporate Responses of Multinationals in Sri Lanka

Arguably, the corporate social responsibility (CSR) practices of multinational enterprises (MNEs) are influenced by a wide range of both internal and external factors. Perhaps most critical among the exogenous forces operating on MNEs are those exerted by state and other key institutional actors in host countries. Crucially, academic research conducted to date offers little data about how MNEs use their CSR activities to strategically manage their relationship with those actors in order to gain legitimisation advantages in host countries. This paper addresses that gap by exploring interactions between external institutional pressures and firm-level CSR activities, which take the form of community initiatives, to examine how MNEs develop their legitimacy-seeking policies and practices. In focusing on a developing country, Sri Lanka, this paper provides valuable insights into how MNEs instrumentally utilise community initiatives in a country where relationship-building with governmental and other powerful non-governmental actors can be vitally important for the long-term viability of the business. Drawing on neo-institutional theory and CSR literature, this paper examines and contributes to the embryonic but emerging debate about the instrumental and political implications of CSR. The evidence presented and discussed here reveals the extent to which, and the reasons why, MNEs engage in complex legitimacy-seeking relationships with Sri Lankan institutions

Law versus science

Laws and legal systems can have a constraining effect on scientific research and harm the public interest. The overt use of the law against research often has a smaller impact than the indirect effects of laws. Examples from three areas — defamation, euthanasia, and intellectual property — illustrate how laws can hinder research. When researchers are threatened with legal action for defamation, this can discourage research in their topic area. Laws against voluntary euthanasia have an indirect effect on research, such as by making it difficult to study euthanasia where it is illegal and hindering research into methods of do-it-yourself euthanasia. Copyright protection is so excessive that it inhibits creative work building on previous ideas, while patents of pharmaceutical drugs enable such huge profits that research into non-patentable alternatives is neglected. Options for responding to legal constraints on research include acquiescence, law reform, and resistance