Institutional legitimacy and norms-based CSR marketing practices: Insights from MNCs operating in a developing economy

The purpose of this corporate social responsibility (CSR) paper is to investigate specific social roles of multinational corporations (MNCs) in a developing economy, and how these MNCs’ CSR marketing activities are legitimized, from the institutional perspective.

Anchoring this study in institutional theory, the authors explore how formal and informal institutions affect the legitimacy of MNCs’ CSR marketing practices in the host country of Pakistan. The authors conducted interviews with top managers from 15 local MNCs undertaking CSR programs in various sectors, such as automotive, banking, consumer products, oil and gas, pharmaceuticals, and telecommunications.

The authors find that MNCs show commitment to CSR programs despite underdeveloped and very weak formal institutions, and that lots of these initiatives such as education, health, environmental protection, and civil society/religious organizations are oriented toward norms-based social CSR marketing, i.e. charitable and philanthropic work, civil society-led social media and religious groups also force MNCs to spend more on CSR marketing initiatives. MNCs follow headquarters’ global CSR marketing strategies and adapt their CSR programs to the host country’s norms, focussing on their product brand value related CSR marketing. However, the MNCs have not taken an integrated approach to CSR marketing, considering the overall institutional environment of the host country.

On the basis of very weak regulatory constraints on CSR marketing activities, MNCs have the propensity to develop normatively acceptable CSR marketing under very weak formal institutional pressures. The findings suggest the need for developing an integrative approach to the CSR strategies of MNCs, comprehensively incorporating regulatory, economic, and socio-cultural as well as various stakeholders’ perspectives.

The authors take the institution-based approach to MNCs’ CSR marketing in the context of the developing economy, which extends the extant MNC and international marketing literature. Particularly, MNCs’ CSR marketing legitimacy depends highly on the adaptation to local norms, leading to the importance of the normative pillar of institutionalization in developing economies.