Corporate Social Responsibility in third world countries in multinational companies: the case of KIOTIS in Madagascar.

Through this case the main purpose of this dissertation is to understand how to balance the various stakeholders' claims (primary versus secondary) in order to implement effective corporate social responsibility in developing countries?

Objectives

Companies have focused on primary stakeholders, such as customers & shareholders. However demands for socially responsible behavior have driven many businesses to consider other secondary stakeholders with indirect connection to the company such as locals or NGOs. By analyzing KIOTIS' CSR strategy and how it is implemented we are going to evaluate the different economical and social impacts and the importance of working with the appropriate local contacts in developing countries.

Key words: Corporate Social Responsibility, Corporate Social Responsibility in developing countries, Corporate Social Responsibility stakeholders balance

Literature review

Corporate Social Responsibility

The new rise of the importance of corporate social responsibility (CSR) has made the positioning of the multinational companies towards it a powerful image vehicle. As said by Amnesty International (1998) Multinational companies have a responsibility to use their influence to try to stop violations of human rights by governments or armed political groups in the countries in which they operate. The silence of powerful business interests in the face of injustice is not neutral. This statement explains the big and still growing interest of companies for CSR. Since the second half of the 20th century a long debate on CSR has been taking place. ()Society and business, social issues management, public policy and business, stakeholder management, corporate accountability are just some of the terms used to describe the phenomena related to corporate responsibility in society Garriga and Mel. (2004). There

is a jungle of definitions for CSR but they all agree on one thing: CSR is a crucial theme for todays economy and society because sustainable development has to meet the needs of the present without compromising the ability of future generation to meet their own needs (Brundtland commission, 1987).

Corporate Social Responsibility in developing countries

What apparently often happens is that

patterns of global CSR (are) being diffused to

developing countries, but also being diluted along the way in view of specific subsidiary endowments and host market characteristics. Jamali, D. (2010). In addition, Idemudia, U. (2010). argued that structural and systemic deficiencies inherent

in CSR practices limit the effectiveness of CSR as a vehicle for conflict prevention and reduction. , showing some limits of the CSR in developing countries. According to some researches, CSR reporting is fairly generic, and the specific context

seems to bear little influence on the type of CSR activities. Kolk & Lenfant. (2010) but highlighting the context in which they are evolving seems to be determinant to assess effective CSR activities. CSR offers real possibilities to developing countries governments and enables to create a new balance between these last ones and companies. Public policies and institutions would benefit from the implementation of CSR, indeed, it would allow the governments to demobilize resources and to benefit from partnerships (United Nation, 2007).

Corporate Social Responsibility stakeholder balance

Orlitzky, Schmidt et Rynes (2003) but also Ngok Evina (2011), believe that taking into account every stakeholders interest positively influence the social and financial performances of a company. Most of MNCs are either developing their manufactures abroad or working with foreign suppliers or use raw material from those countries in an economical perspective; in line with stakeholder theory, firms will listen primarily to those stakeholders who pose the greatest threat to their operations, not those best placed to contribute towards development aims. Frynas. (2005). There is a real need of cooperation between all the actors but MNCs are caught in the middle and face pressure from both sides since they have to balance different stakeholders with

sometimes diverging interests. The practice of the social responsibility within the company implies obligations not only towards shareholders, but also towards the customers. (Daud & Nol, 2007).

Methodology

My epistemological approach is more an inductive qualitative approach using interviews, because an inductive research moves from a particular situation to make or infer a broad general theory. I am going to conduct different interviews of Kiotis project managers, but I will also interview to different parties involved in Madagascar, such as the locals, a team of consultants working for the Environment Department, the Mining Department Secretary and also taskforces from several NGOs established there. I will thus also have a chance to study the field. In our case, stakeholder balance management in CSR is still under construction and the main field of our research is subjective because dealing with the appreciation of the social and environmental, which are less tangible aspects. The CSR subject has already been studied a lot and still is.

References

Amnesty International. (1998). Human Rights http://www.amnesty.org/en/library/info/ACT70/001/1998

Principles

for

Companies.

Brundtland, G.H. (1987) Our Common Future, World Commission on Environment and Development, Brussels.
Daude B., et Nol C. (2007), La responsabilit de lentreprise analyse selon le paradigme de la complexit , Revue Management et Avenir, n10, p. 39-56. Frynas, J. (2005). The false developmental promise of Corporate Social Responsibility: evidence from multinational oil companies. International Affairs, 81(3), 581-598. doi:10.1111/j.1468-2346.2005.00470.x Garriga E., and Mel. (2004). Corporate Social Responsibility Theories: Mapping the Territory. Journal of Business Ethics, 53 (1-2), 51-71. Doi:10.1023/B:BUSI.0000039399.90587.34 Idemudia, U. (2010). Rethinking the role of corporate social responsibility in the Nigerian oil

conflict: The limits of CSR. Journal of International Development, 22(7), 833-845. doi:10.1002/jid.1644 y Jamali, D., Mirshak, R. (2010). Business-Conflict Linkages: Revisiting MNCs, CSR, and Conflict. Journal of Business Ethics, 93(3), 443-464. doi:10.1007/s10551-009-0232-8 Kolk, A., & Lenfant, F. (2010). MNC Reporting on CSR and Conflict in Central Africa. Journal of Business Ethics, 93241-255. doi:10.1007/s10551-009-0271-1 Ngok Evina, J. (2011). Sensibilisation des entreprises la RSE et son impact sur la performance financire : une tude empirique. Revue Sciences de Gestion, n 82 p. 77 97 Orlitzky M., F. L. Schmidt, S. L. Rynes (2003), Corporate Social and Financial Performance: A Meta-analysis , Organization Studies, 24(3): 403-441. United Nations. (2007). Sustainable Development. Innovation briefs. Issue 1, February, 2007.

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