The Legitimacy of Institutional Theory: The Case of CSR Reporting in Cross-Cultural Settings

34 Pages Posted: 20 Sep 2014

See all articles by Shayuti Mohamed Adnan

Shayuti Mohamed Adnan

Universiti Malaysia Terengganu (UMT) - Faculty of Management and Economics

Chris van Staden

Auckland University of Technology - Faculty of Business & Law

David Hay

University of Auckland - Business School

Date Written: September 18, 2014

Abstract

This paper puts forward an argument that cultural factors interact with the institutional structures of organizations; and thus influence their CSR reporting system. Observations on 403 annual reports, corporate websites and CSR stand-alone reports of 203 companies in China, Malaysia, India and the UK support the argument. The results show that in China, both the quality and quantity of CSR disclosure increase significantly with the existence of CSR board committees, where the culture is one of collectivism, rather than of individualism. The paper also demonstrated that government-owned companies in Malaysia provide CSR disclosure of a quality higher than non-government owned companies. A similar relationship does not apply to companies in other countries. The results testify to institutional theory — that CSR reporting is influenced by the organizational settings of a country and the culture of a country. For policy makers, it is suggested that CSR reporting policy should be drafted in a way that suits the local culture.

Suggested Citation

Mohamed Adnan, Shayuti and van Staden, Chris and Hay, David, The Legitimacy of Institutional Theory: The Case of CSR Reporting in Cross-Cultural Settings (September 18, 2014). Available at SSRN: https://ssrn.com/abstract=2498257 or http://dx.doi.org/10.2139/ssrn.2498257

Shayuti Mohamed Adnan (Contact Author)

Universiti Malaysia Terengganu (UMT) - Faculty of Management and Economics ( email )

Kuala Terengganu, 21030
Malaysia

Chris Van Staden

Auckland University of Technology - Faculty of Business & Law ( email )

3 Wakefield Street
Private Bag 92006
Auckland Central 1020
New Zealand

David Hay

University of Auckland - Business School ( email )

12 Grafton Rd
Auckland, 1010
New Zealand

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