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Received: 12 August 2021    Revised: 28 December 2021    Accepted: 30 December 2021

DOI: 10.1111/beer.12414

ORIGINAL ARTICLE

Rethinking corporate social responsibility under contemporary

capitalism: Five ways to reinvent CSR

Rebecca Chunghee Kim

College of International Management,

Ritsumeikan Asia Pacific University,
Beppu, Japan
Correspondence
Rebecca Chunghee Kim, College of
International Management, Ritsumeikan
Asia Pacific University, Beppu, Japan.
Email: chunghee@apu.ac.jp
Funding information
Japan Society for the Promotion of
Science, Grant/Award Number: 20K01902
Abstract
Skepticism toward CSR is increasing. Management research on CSR tends to focus on
positive outcomes from the practice of CSR, such as enhanced financial performance
and best practice business cases. Less attention is devoted to why CSR is under siege.
This paper argues that CSR is intimately connected with the way that capitalism is
practiced, and that poor CSR outcomes are often the result of five “shortcomings” of
contemporary capitalism: runaway self-­interest, quarterly focus, elite orientation, vol-
ume orientation, and one-­pattern capitalism. To evidence this, I employ a two-­stage
approach: a “diagnostic” stage that investigates current challenges facing capitalism
and how they affect CSR, and a “clinical” stage that identifies potential solutions
based on a qualitative data set collected in Asian business contexts. The proposed
solutions suggest ways that researchers, practitioners, and policymakers can concep-
tualize, design, and implement CSR programs that better fulfill CSR’s promise to busi-
ness and society. Based on these results, I conclude with ideas on how CSR research
can be strengthened by exploring the under-­researched linkages among CSR, modern
capitalism, and global institutional contexts.

KEYWORDS
Asia, capitalism, corporate social responsibility, shortcomings

1  |  I NTRO D U C TI O N Dunning, 2003; Horiguchi, 2021; Orlitzky, 2013; Rangan et al., 2015).

The purpose of this study is to explore the relationship between
CSR and contemporary capitalism. More specifically, I elucidate
how some of the ways that capitalism is practiced lead to CSR prac-
tices and outcomes that fail to fulfill CSR’s promise to business and
society.
Is CSR simply a management fad? Ask business leaders this ques-
tion and many will answer Yes. Skepticism toward CSR is increas-
ing for two main reasons. Some question its practical legitimacy:
Is its economic impact positive? Others question its moral legiti-
macy: Is it genuine or just another marketing tool? (Banerjee, 2007;
What underlies these attacks on CSR, and how can researchers and
business leaders effectively respond to them?
Management research on CSR tends to focus on positive out-
comes from the practice of CSR, such as enhanced financial perfor-
mance and best-­practice business cases. Less attention is devoted to
why CSR is under siege and may be unsustainable. Part of the prob-
lem is that few businesses publicly share the challenges or problems
that come with CSR. The resulting undue focus on CSR’s positive
effects works against efforts to address its weaknesses, which are
real, and to “reinvent” CSR in ways that could unlock more of its
potential benefits.

This is an open access article under the terms of the Creat​ive Commo​ns Attri​bution License, which permits use, distribution and reproduction in any medium,
provided the original work is properly cited.
© 2022 The Authors. Business Ethics, the Environment & Responsibility published by John Wiley & Sons Ltd.

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346   wileyonlinelibrary.com/journal/beer
 Business Ethics, Env & Resp. 2022;31:346–362.
KIM
In order to understand CSR, it is necessary to understand and
consider the realities of the economic system under which it is prac-
ticed: contemporary capitalism. Roth et al. (2020) point out that CSR
is both shaped by and supportive of capitalism. Schneider (2020)
observes that the failures of CSR are linked to shortcomings of cap-
italism. In this paper I identify five such shortcomings—­problematic
forms of capitalism that businesses often practice which result in
ineffective CSR. For each, I propose “solutions,” or alternative ap-
proaches to CSR, based on real-­life business examples and inter-
views with business leaders and stakeholders. A second goal of this
study is to challenge what has become a mantra of much CSR-­related
research: that CSR is a means to maximize corporate profit. Rather
than trying to link CSR and financial performance—­the focus of much
CSR research—­I hope to shift discussion of CSR back toward its orig-
inal goal, which is to benefit business and society. In his book Social
Responsibilities of the Businessman (1953), Howard Bowen, the “fa-
ther” of modern CSR, argues that corporations have a fundamental
moral duty to act in a responsible way toward society. CSR practices
can thus define the parameters of business's role in society and ethi-
cal behavior toward stakeholders (Bowen et al., 2013; Kaplan, 2015).
Adopting this viewpoint, the solutions I propose are less about CSR
as corporate marketing and a way to improve the bottom line, and
more about creating true value for business and society.
This paper is inspired by two commonplace observations, which
lead to the two overarching research questions I seek to answer. The
first observation is that CSR is under siege. While CSR has gained fame
as a buzzword, it has lost credibility as its economic impact is difficult
to measure, opportunistic managers are incentivized to distort infor-
mation they provide to the public concerning their companies’ CSR
(Meier & Cassar, 2018; Orlitzky, 2013), and corporate CSR programs
have been ineffective in delivering the benefits that CSR promised to
society (Aguinis & Glavas, 2012; Schneider, 2020; Wang et al., 2020).
This leads to the first overarching research question: What is the fun-
damental reason that CSR is under siege in contemporary capitalism?
The second observation is that capitalism has serious problems
of its own. While capitalism is widely considered the best instrument
that humans have devised for producing and distributing wealth
(Baker, 2005; Bishop, 2000), business misbehavior, bankruptcies, and
scandals are regularly found in capitalist economies, and sustained
inequality, societal exclusion, business and political corruption, in-
stitutional collapse, environmental destruction, and distortion of
competition are chronic byproducts of the capitalistic system (Adler,
2014; Markovits, 2019; Mukherjee, 2016; Piketty, 2020; Rocha
et al., 2021; Smith, 2015). The aim of “maximizing shareholder value”
has been criticized as not being competitive, sustainable, inclu-
sive, democratic, or ethical (Fridenson & Takeo, 2017; Reich, 2007;
Vogel, 2005; Young, 2003). These are precisely the problems that
CSR is intended to address, through a rebalancing of the power of
the market with democratic and accountable government and a
strong civil society (Henderson, 2020). Yet CSR practiced under a
capitalist system is inevitably influenced by the same forces that
result in capitalism's well-­documented problems. This leads to the
second research question: Assuming that CSR cannot be decoupled
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from capitalism, how then can CSR be changed or “reinvented” so
that it produces better results?
To examine these questions, I have employed the “management
clinic approach” taken by Badawy (1976). Badawy investigated the
relevancy of management education by first conducting a “diag-
nostic” analysis of troubled management education and then using
a “clinical” approach to develop proposals for making management
education more relevant. Similarly, I first conduct a literature review
to “diagnose” the influence of problematic aspects of capitalism on
the practice of CSR, and then proceed in the findings section of the
paper to explore Asian capitalism for potential ways to “reinvent”
CSR in ways that better serve the needs of society.
I have chosen Asia as the empirical backdrop for my analysis not
because Asian CSR is superior to Western CSR but because cap-
italism and business practices take different forms in present-­day
Asia. For example, highly-­coordinated capitalism is found in Japan,
state-­led capitalism is found in Korea, and authoritarian capitalism is
found in China (Witt & Redding, 2014). Accordingly, we can expect
CSR to also vary across Asia. For instance, CSR practices in Korea
tend to be more normative than strategic, lying at a crossroads be-
tween implicit and explicit CSR behavior (Kim et al., 2013). In Japan,
CSR is driven by the goal of social cohesion, and complements the
stakeholder value system of corporate governance (Kang & Moon,
2011). Thus, focusing on CSR in Asia offers a lens for understanding
how CSR dynamics are influenced by different economic systems
and institutional pressures. This broadens the canvas for rethinking
CSR, and can provide fresh insights to global researchers and busi-
nesspeople, especially regarding the interaction between CSR and
capitalism. I wish to also make it clear that the aim of this paper is not
to criticize or confront capitalism. Rather, my purpose is to illuminate
links between capitalism and CSR in order to better understand why
so many CSR activities fall short of their purported purpose.
The study is part of an ongoing seven-­year research project fo-
cusing on comparative CSR and creating shared value (CSV). The
primary data sources for this article are 81 in-­depth interviews I
conducted with practitioners and corporate executives involved in
the planning and execution of domestic and international CSR/sus-
tainability strategies, experts on the subject of CSR, and corporate
stakeholders.
2  |  LITE R AT U R E R E V I E W
The following literature review is organized around five “shortcom-
ings” of capitalism that help explain CSR’s failure to live up to its
promise of benefitting business and society.
2.1  |  Runaway self-­interest leads to CSR as
window dressing
Adam Smith, the “father of capitalism,” described how individuals
pursuing their own self-­interest …
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348      KIM
are led by an invisible hand to make nearly the same
distribution of the necessaries of life, which would
have been made, had the earth been divided into
equal portions among all its inhabitants, and thus
without intending it, without knowing it, advance the
interest of the society, and afford means to the multi-
plication of the species.
(Smith, Theory of Moral Sentiment (6th edition), Part
IV, Chap. I, 2006 [1790], p. 165)
Smith's famous maxim lies at the heart of the idea that capitalism
and the good of society are not just compatible, but form two wheels
of the same cart. As long as pursuit of self-­interest is constrained by
broader society, it can indeed work in socially responsible ways. Yet,
in recent decades, pushed by the ideas of Milton Friedman, who con-
troversially wrote that “there is one and only one social responsibility
of business—­to use its resources and engage in activities designed to
increase its profits so long as it stays within the rules of the game”
(1970), and the movie Wall Street, which popularized the phrase “Greed
is good,” social responsibility has often become dissociated from busi-
ness, or positioned as an enabler of profit-­making rather than a goal
in itself. This has produced a “moral deficit” and an amoral if not anti-­
moral “greed is good” utilitarian school of economics (Collier,  2018;
Graafland & Wells, 2021). The effect of this regime on CSR is that eth-
ics often loses out to greed, and CSR tends to serve profitability.
The argument that pursuit of self-­interest benefits society is
grounded in the idea that competition among profit-­seeking firms in
free markets results in an “efficient” allocation of scarce resources
and distributional outcomes that benefits society at large. This is
the compelling moral justification for capitalism: as long as business
creates the greatest good for the greatest number of people, it is
justifiable (Henderson & Ramanna, 2015). Yet, when one looks at the
real world, and at the many examples of corporate malpractice and
business scandal that occur under capitalism, it is difficult to make
the case that capitalism creates the greatest good for the greatest
number of people. Consider Enron, WorldCom, Tyco, BP, Shell, Wells
Fargo, Olympus, and Nomura, to name just a few of the major cor-
porations that have become engulfed in scandal (Banerjee, 2007;
Mukherjee, 2016; Schwartz, 2013; Tanimura & Okamoto, 2013;
Young, 2003). Such examples as these have fueled a continuing de-
bate on the question of whether capitalism itself is immoral as a sys-
tem, whether it inevitably leads individuals and firms to behave in an
immoral manner (Bishop, 2000; Godfrey & Mahoney, 2014).
One outcome of the pursuit of self-­interest by individuals and
firms is that it encourages business leaders to take a utilitarian
view of CSR, to see it as a means to tackle organizational inertia,
to raise company image and social reputation, or to conceal uneth-
ical activities (Illia et al., 2013; Marques & Mintzberg, 2015; Pope
& Wæraas, 2016). This often leads to CSR activities that not only
fail to contribute to societal goals, but that are unethical, such as
“window dressing” CSR in China (Lin, 2010), “greenwashing” by
Volkswagen (Dans, 2015) and BP (Delmas & Burbano, 2011), and
bribery by Samsung (Chun, 2017). The Enron scandal is illustrative.
Enron had given millions to charity and topped CSR-­related rank-
ings. It had received the Environmental Protection Agency's Climate
Protection Award and the Council on Economic Priorities's Corporate
Conscience Award. Nonetheless, Enron became a much-­cited exam-
ple of how not to do business when it was revealed that company
executives used accounting loopholes, special-­purpose entities, and
inaccurate financial reporting to hide billions of dollars in debt from
failed deals and projects. CSR window dressing did nothing to stop
Enron's stock price from plummeting from over $90 to less than
$1 per share, to prevent the corporation from going bankrupt, or
to keep several of its executives out of prison. And it certainly did
nothing to bolster public confidence in corporate CSR. My point is
not to denigrate the use of CSR as a form of reputation insurance or
a branding strategy (Koh et al., 2014; Vallaster et al., 2012). It is to
point out that CSR may be misused by opportunistic corporate man-
agers to mislead the public in ways that may (or may not) benefit the
company but that impose costs on society.
If CSR is to truly benefit business and society, it cannot be
thought of as a marketing tool, as a strategy to increase profit, or as
“window dressing” to divert public attention from negative informa-
tion. For CSR to be successful, entrepreneurs and managers must
devise and implement holistic agendas that integrate ethical frame-
works into their business strategies and practices (de los Reyes et al.,
2017; McVea & Freeman, 2005; Murray, 2013). In other words, CSR
must be genuine. CSR that is not built on a strong ethical stance is
not true, or successful, CSR.
2.2  |  Quarterly capitalism leads to quarterly CSR
Barton (2011) argues that one of the greatest weaknesses, or mis-
uses, of modern-­day capitalism is a short-­term operational and fis-
cal approach, which he terms “quarterly capitalism.” The pressures
on CEOs and managers to meet quarterly earnings targets are
strong, and undoubtedly contribute to efficiency and productivity.
However, focusing on quarterly earnings consumes an extraordinary
amount of senior executives’ time and attention, and excessive focus
on short-­term financials can adversely affect the long-­term health
and sustainability of the business itself.
The tyranny of short-­termism (Govindarajan & Srivastara, 2020;
Kotler, 2015) negatively affects the sustainability of companies and
the broader economic system. Investors are also obsessed with
short-­term results (Henderson, 2020; Kramer, 2020). Many manag-
ers say that pursuing any goal other than short-­term financial returns
is not only to betray their fiduciary duty, but to risk losing their job.
Thus, replacing the focus on quarterly results with a commitment to
longer-­term planning and sustainability is a major challenge facing
capitalism.
Short-­term CSR strategies are often prevalent in a quarterly-­
capitalism context. Quarterly capitalism naturally leads to a corre-
sponding quarterly approach to CSR, with corporations embracing
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CSR as a PR tactic to earn positive media coverage and relieve public
pressure (Reich, 2007). Short-­term CSR, however, is utterly incapable
of authentically addressing issues such as the climate crisis, poverty,
and economic inequality. Addressing these issues in any meaningful
way requires a long-­term commitment and long-­term strategies—­
over decades, not quarters. Serious corporate engagement with
and pursuit of the United Nations Sustainable Development Goals
(SDGs), for example, is difficult if not impossible under a quarterly-­
capitalism mindset (Kim,  2018; De Oliveira et  al.,  2018). Many
leading corporations have acknowledged this and re-­
positioned
themselves as long-­term social contributors or creators of shared
value and sustainability by adopting programs and campaigns like
“Good Food, Good Life” (Nestlé), “Our Planet, Our Health” (Danone),
and “Sustainable Living Plan” (Unilever) (Pfitzer et al., 2013; Porter &
Kramer, 2011). But these examples are the exception, not the rule;
CSR gets short shrift in most boardrooms (Paine, 2014).
As long as companies play the short-­
term, quarterly results-­
focused game of quarterly capitalism, their CSR initiatives will in-
evitably reflect this. The resulting narrow and ad-­hoc CSR programs
can do very little to address the great social, economic, and environ-
mental challenges of our day.
2.3  |  Capitalism for the elite leads to elitist CSR
One of the fundamental drawbacks of global capitalism is that it
produces uneven development and income inequalities, as the rich
get richer and the poor get poorer (Amin, 1997; Bower et al., 2011).
Markovits (2019) calls the “only the rich can win” phenomenon, which
perpetuates itself across generations, “snowball inequality”: elite work-
ers acquire highly-­skilled jobs, displacing middle-­class workers from
the center of economic production, and then use their high incomes
to give their children an elite education, which ensures that the next
generation of the elite class will be better prepared than their middle-­
class counterparts to dominate high-­skilled industries—­a compounding
feedback loop that increases economic inequality. Markovits argues
that this phenomenon hurts the elite class as well, as their lives become
dominated by work, at the sacrifice of a healthier and better-­balanced
lifestyle. Thomas Piketty's writings (2014, 2020) about the long-­term
evolution of sustained inequality, and our inability to find ways to re-
verse it, have captured worldwide attention and praise. Under contem-
porary capitalism, economic inequality feeds and is fed by a wide range
of discriminatory practices based on such things as race, religion, and
status which, like economic inequality, are self-­perpetuating.
In his book on inequality in America, Saving Capitalism, Reich
(2016) argues that capitalism should be for the many, not the few. In
recent years, billionaires and large corporations have become carica-
tures of capitalism's failures (Lane, 2019), as many feel that capitalism
has left them behind and only benefits the elites. Ostry et al. (2019)
call for an economic system for inclusive growth that delivers a more
equitable, humane, and democratic distribution of wealth. Kotler
(2015, pp. 41, 42) warns against viewing capitalism as a system that
pits the “heartless rich” against the “idle poor.” To do so, he argues, is
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to deal in inaccurate stereotypes: in reality, most poor people are not
“idle” and most rich people are not “heartless.” As these examples
show, the quest for a redefined and “enlightened” capitalism that is
more equitable, sustainable, prosperous, and of course profitable,
is being pursued by numerous scholars and think tanks (Hanauer &
Beinhocker, 2014; Henderson, 2020; O’Toole, 2019).
Elitist capitalism gives rise to elitist CSR initiatives and outcomes
driven by the well-­off and people in positions of power. Trying to
implement a CSR agenda created exclusively by management lead-
ers or a CSR department is misguided. As the actions of businesses
affect a broad array of stakeholders, including employees, NGOs,
and the local community, representatives of these groups should be
consulted and involved in the conception and design of CSR pro-
grams (Illia et al., 2015). Elite-­designed CSR is likely to be viewed
with skepticism by many stakeholders, who are apt to doubt the
sincerity of the initiatives or may interpret them as indications the
company is hiding something.
Slick corporate communications and glossy CSR and sus-
tainability reports, which investors rarely read (Govindarajan &
Srivastara, 2020; Kramer, 2020), are likely to be regarded as irrele-
vant. They are often deceptive, and may ignore the issues or paper
over the problems that most concern stakeholders (Illia et al., 2013;
Reynolds & Yuthas,  2008). Another manifestation of an elitist ap-
proach is the publicizing of cherry-­picked CSR success stories and
examples of “best-­practice” CSR. While the CSR best-­practice ap-
proach is commendable for showing how corporations can act
responsibly—­the case studies of Patagonia (O’Rourke & Strand, 2017)
and Nestle (Pfitzer et al., 2013) are good examples—­it can also have
the effect of signaling that there is a best way—­an elite way—­to prac-
tice CSR. The particular resources a company can apply to CSR and
the needs of stakeholders vary greatly from company to company,
and so the idea that there is a best way to practice effective CSR is
simply wrong. For a firm to develop its own successful CSR program,
it must be free from an obsession with “best practices.”
In short, elitist capitalism often results in “elitist” CSR initiatives,
communications, and outcomes, designed by exclusive groups or
CSR departments, which miss the mark because they do not incor-
porate, reflect, and respond to the needs of non-­elite stakeholders.
2.4  |  Volume-­oriented capitalism leads to volume-­
oriented CSR
Economies of scale, one of the most powerful engines driving capi-
talism, means that size matters: the larger the company, the larger
the volume of production, and the greater the cost savings and re-
sulting profits. This utilitarian concept began as a solution to the
pressing problem of how to allocate resources for production. It has
been argued that pursuing economies of scale maximizes the ex-
pected utility of individuals and produces the greatest benefits for
society (Harsanyi, 1996). Obviously, capitalism provides advantages
of scale in the output of goods and services. And maximizing profit is
perhaps the singular normative principle embodied in contemporary
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350      KIM
competitive capitalist economies (Henderson & Ramanna, 2015).
However, there is a limit to the value of volume, and the value of
maximizing profit; today's world demands that firms move beyond
maximizing economic value to also creating social value that benefits
stakeholders (Meyer & Kirby, 2012; Porter & Kramer, 2011; Rocha
et al., 2021). Investors already know how profitable corporations
are—­that knowledge is baked into the stock price. Investors want
companies to surprise them with unexpected value and multiple
competitive advantages that will allow them to outperform market
expectations (Zenger, 2016).
The “bigger is better” dynamic is often reflected in a corre-
sponding volume-­
oriented approach to CSR, with corporations
evaluating their CSR efforts by the yardstick of how much money
is spent, and the public, influenced by Forbes’ ranking of companies’
charitable donations, holding a similar view. Many large companies
spend large sums on philanthropic initiatives because they view it as
closely related to their corporate visual identities, communications,
and branding (Gautier & Pache, 2015; Lii & Lee, 2012; Pérez & del
Bosque, 2012). This is a serious misunderstanding of what genuine
CSR is. It is not the amount of money spent on CSR that counts; it is
the effect that the CSR activities have on society.
Under a system of volume-­oriented capitalism aimed at maxi-
mizing profits, CSR tends to be co-­opted into the single objective
of maximizing shareholder value. In fact, the most popular claim
made for CSR among managers is that companies can do well by
doing good, that is, that engaging in CSR is profitable. Despite
some inconclusive results (e.g., Husted & Allen, 2007; Marques &
Mintzberg, 2015; McWilliams & Siegel, 2000), there is considerable
support from academic research for a positive relationship between
CSR and financial performance (e.g., Cochran & Wood, 1984; Kaul &
Luo, 2018; Torugsa et al., 2012; Wang et al., 2015).
Whether profit-­focused CSR is desirable or not is a different
question, however, and there have emerged numerous critics who
argue that it is not. Meier and Cassar (2018), for example, insist that
companies should not employ CSR instrumentally as a way to in-
crease profits, as doing so threatens to destroy the very benefits
CSR is intended to achieve. Johnston et al. (2021) implore companies
to view CSR as a necessary internal social cost, not as a tool of strat-
egy, asserting that CSR should not be judged based on whether it is
profitable or not. CSR scholarship's heavy focus on the financial im-
pact of CSR has meant that limited attention has been given to CSR’s
social impact (Wang et al., 2020). This risks missing the point of CSR’s
existence in the first place. Orlitzky (2013) argues that it is important
to measure CSR outcomes in terms of the benefits they bring to mul-
tiple stakeholders, by means other than simple cost-­benefit analysis
or the volume of resources devoted to CSR initiatives.
2.5  |  One-­pattern capitalism leads to one-­
pattern CSR
Most nations have become part of an integrated system of global
capitalism in which the success of American capitalism has been
replicated (Reich, 2007). Within this broader pattern, however, are
found significant differences from country to country in how busi-
ness is conducted. The varieties of capitalism (VoC) model of Hall
and Soskice (2001) makes a core distinction between the political
economies of nations in liberal market economies (LMEs), such as
the United States and the UK, where firms coordinate their activities
primarily via hierarchies and competitive market arrangements, and
the political economies of nations in coordinated market economies
(CMEs), such as Germany, where corporations depend more heavily
on non-­market relationships to coordinate their activities with other
actors and build core competencies.
Vogel (2019) describes Japan's “ambivalent” version of share-
holder capitalism, which does not converge on the US model of
shareholder capitalism but preserves the characteristics—­
some
would say strengths—­
of traditional Japanese business models,
such as prioritizing stakeholders over shareholders and long-­term
growth over short-­term profits. Other Asian countries likewise ex-
hibit strong tensions between the free-­market capitalism model and
more closed Asian cultural dynamics. The Asian variety of capital-
ism that grafts traditional Confucian values onto Western capitalism
has been a driving force of Asian economic development (Lee, 2013;
Vogel, 1991). East Asian markets in particular feature network cap-
italism with unique institutional linkages, such as Japanese keiretsu
(e.g., Mitsubishi and Mitsui) and Korean chaebol (e.g., Samsung and
Hyundai Group) (Bae et al., 2002; Cutts, 2000; Gerlach et al., 1992).
Familial capitalism and crony capitalism are other versions of
East Asian capitalism that have been described by scholars (e.g.,
Carney, 2008; Steier, 2009). As these examples show, different na-
tions practice different forms of capitalism, which are culturally and
institutionally diverse.
Much unsuccessful CSR can be traced to ignoring the diversity
among capitalist systems and business environments in which com-
panies operate. Research has shown that multinationals’ ignorance
of host country issues is a key factor in the failure of many CSR ini-
tiatives (see, e.g., Preuss et al., 2016; Strike et al., 2006). Ignoring
diversity may also lead to unethical or misguided CSR, as in cases
where corporations compete based a single universal criterion, such
as the size of philanthropic donations, which disregards institutional
dynamics and company size (Kim et al., 2013). Millennials tend to
be philanthropic (Moldavskiy, 2016) and may have praise for entre-
preneurs like Tim Cook, who donated $2 million in Apple shares to
an unnamed charity (Hamilton, 2020). This is a way of applauding
big-­business leaders and encouraging others to make similar finan-
cial contributions. Large donations, however, can focus attention on
money-­based global rankings and divert attention from the more im-
portant actual effect of CSR activities. Corporations and business-
men may boast about how much they spend on CSR, but that does
not necessarily mean they are socially responsible.
There are numerous ethics-­and CSR-­related rankings around
the globe which recognize such things as “most ethical,” “most re-
spected,” and “most admired.” Although these may boost company
reputation (Dowling & Moran, 2012) and raise employee morale
(Branco & Rodrigues, 2006; Redington, 2005), they do not literally
KIM
mean, for example, that the No. 1 company is better than the No. 2
company in terms of its ethical or CSR performance. It is perhaps
more insightful to view these rankings as a form of peer review for
professional managers, which provides a window on how executives,
board members, and business experts define corporate excellence
(Paine, 2003).
For instance, Google was ranked No. 1 in Forbes’ 2018 list of
World's Most Reputable Companies for Corporate Responsibility
(Valet,  2018), and the Lego Group topped the same list in 2019
(Valet, 2019). While Google and Lego should be lauded for their
accomplishments, their scores on this ranking scheme are no guide
to how their CSR initiatives are actually affecting the world. When
firms become slaves to widely used global ranking schemes, their
CSR starts to all look the same. Counteracting the push toward
sameness that global rankings exert, however, is an opposing pull to-
ward variety that comes from differences in institutions and national
business systems. Matten and Moon (2008), for example, distinguish
between explicit CSR in the United States (CSR as an explicit element
of corporate policy) and implicit CSR in Europe (CSR as an implicit el-
ement of company policy and regulations). Matten and Moon (2020)
point out that CSR is dynamic, not static; it changes in response to
changing government regulations and shifting generational views
and concerns about what is right and wrong or good and bad. The
above clearly shows that one-­pattern CSR risks missing the point.
The type of CSR that is most effective for a particular firm is CSR
that makes use of the particular assets and competencies that the
firm possesses and that matches the particular business practices,
consumer expectations, form of capitalism, and institutional dynam-
ics of the location where it is carried out.
Figure 1 summarizes the above “diagnostic” analysis, presenting
each of the five “shortcomings” of capitalism and the corresponding
weaknesses in CSR initiatives that result from those shortcomings.
I next turn to the “clinical” stage: identifying potential solutions,
or ways to “reinvent” CSR so that it is more effective and provides
greater value to both companies and society.
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3  |  M E TH O D S
In response to the scarcity of empirical research on failed CSR ini-
tiatives, this exploratory study was designed to identify systematic
linkages between CSR failures and characteristics of contemporary
capitalism. By “exploratory,” I wish to emphasize that this research
is not intended to lead to generalizable results; rather, it is intended
to diagnose the nature of a problem and to search for themes and
relationships through extensive data analysis without destroying the
meaning of the data through intensive coding (Cornelissen, 2017;
Eisenhardt & Graebner, 2007). This kind of research approach is es-
pecially appropriate for exploration of new topic areas, such as the
influence of characteristics of capitalism on CSR outcomes.
The study emerged from an ongoing seven-­year (2013–­2020)
research project focusing on comparative CSR and CSV. Following
Badawy (1976), I divided the investigation into two phases. The first
was a diagnostic literature review, via which I identified five “short-
comings” of capitalism that often lead to five corresponding weak-
nesses in CSR (see Figure 1). The second was a solution-­oriented
clinical phase employing qualitative data analysis, the purpose of
which was to identify ways of “reinventing” CSR as a way forward—­
that is, reducing the negative influence of capitalism's shortcomings
so that CSR is able to more effectively achieve its goal of benefitting
business and society. Data used in the clinical analysis included re-
sults from a series of interviews conducted with CSR practitioners
and experts as well as a variety of secondary data sources.
The primary data collected for the study consisted of 81 face-­
to-­face interviews conducted in Asia during the period August 2013
through March 2020. Interviewees were selected who could share
critical and diagnostic views on CSR in contemporary capitalism.
Participants were initially identified via referrals through business
networks, advisors, and other researchers, and then vetted and
selected on the basis of their experience, expertise, and openness
regarding CSR. The persons interviewed were practitioners and
corporate executives involved in the planning and execution of
F I G U R E 1  Capitalism-­C SR issues at a
glance (diagnostic analysis)
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352      KIM
domestic and international CSR strategies, experts on the subject of
CSR, corporate stakeholders, and academics. Of the 81 interviews,
25 were conducted in Japan, 17 in Korea, 18 in India, and 21 with
managers and stakeholders of Japanese firms in Vietnam. Four ad-
ditional interviews were conducted in Malaysia and Singapore. With
the exception of a small number of on-­line interviews held with
persons in Korea and India, I visited each interviewee between one
and four times. The interviews were conducted mainly in English,
although a few were done in Korean or Hindi. Follow-­up interviews
(some by email) were held with several key informants over the re-
search period to corroborate emerging findings and ensure that in-
formation was kept up-­to-­date. All interviews were conducted under
the condition of confidentiality and anonymity.
The interviews were open-­ended, to allow informants to discuss
the subject freely. I began by asking interviewees to share their per-
sonal perceptions, views, and experiences regarding corporate so-
cial responsibility in Asia. I then proceeded to ask five more specific
questions, as follows.
The first question was: Is capitalism under siege in Asia? The pur-
pose of this question was to learn how interviewees view capital-
ism, particularly the way it is practiced in the Asian context versus
in Western countries, where there is greater emphasis on maximiz-
ing shareholder value. The second question was: Is profitable CSR
or CSV possible in the Asian institutional context? The purpose of this
question was to learn how interviewees perceive CSR in the Asian
institutional context: for example, as a response to regulative, nor-
mative, or cultural-­cognitive pressures (Scott, 1995), or as an ele-
ment of business strategy or a way to survive? The third question
was: Is the relationship between business and society collaborative and
well-­balance, or is it antagonistic? The purpose of this question was
to better understand how Asian companies view and manage their
relationship with stakeholders and the community. The fourth ques-
tion was: What are main values that your company considers important?
The purpose of this question was to understand what Asian firms
view as most important given the particular institutional context
of their home country; for example, profitability, survival, or other
goals that might not be as prominent for Western companies. The
final question was: Do you have concerns about, or confidence in, the
outcomes from your CSR/CSV activities? The purpose of this question
was to get interviewees to talk about the difficulties or challenging
aspects of their CSR efforts in the particular institutional context in
which they operate.
The interviews described above were supplemented by a variety
of secondary data sources. Building on my experience as a former
CSR consultant, I organized and observed CSR-­related events, de-
livered speeches, and conducted a broad range of interactive dia-
logs with scholars, business practitioners, and policy makers in the
US, the UK, Japan, Austria, India, Malaysia, China, and South Korea
throughout the research period. Participation in these activities al-
lowed me to gain access to archival data and company reports, as
well as to get introductions to potential interviewees. This compre-
hensive data collection approach helped me to form a broad un-
derstanding of CSR under different varieties of capitalism. At the
same time, however, it became painfully obvious that exploring CSR
failures was a difficult undertaking, as most business practitioners
are eager to share their CSR successes but hesitant to discuss their
failures.
4  |  FI N D I N G S
The findings from the data analysis are organized by “solutions” to
ineffective CSR, with each solution corresponding to one of the
shortcomings of capitalism and associated CSR failures identified in
the diagnostic phase of the research (Section 2).
4.1  |  Problem (CSR as window dressing) to solution
(base CSR on a sound ethical foundation)
On May 6, 2020, Samsung heir and Vice Chairman Jay Y. Lee,
who was embroiled in a bribery scandal, apologized to the nation:
“Samsung disappointed people and caused concern because we
failed to strictly uphold the law and engaged in unethical practices
such as union sabotage and controversial succession plans. I prom-
ise that this will not happen again. Samsung will carefully listen to
various values of our society” (Jin & Yang, 2020). This rare apology
by a major business leader might be seen as a positive sign, repre-
senting a conglomerate's acknowledgement that the rules of the
capitalist game have changed, moving beyond profit maximization.
Yet the reality is that a majority of Koreans saw this as little more
than a show, even as they ironically expressed the hope that it would
not be just another case of meaningless rhetoric designed to defuse
a crisis. Samsung has actually spent more money on philanthropy
than any other Korean conglomerate, but many people question
the company's sincerity (Bae & Park, 2011). This example illustrates
how a cynical public may regard CSR as window dressing or a way of
diverting public attention away from poor financial results or man-
agement wrongdoings (Illia et al., 2013; Koehn & Ueng, 2010). The
lesson: CSR without a clear ethical foundation causes people to be
cynical, and damages business in the Korean institutional context.
Under Asian capitalism, there is a tendency for virtue and co-
operation to be considered a higher goal than profit. Especially in
the East Asian institutional environment, where the influence of
Confucianism is strong, people tend to react negatively to the idea of
an economic system that encourages maximization of profits, since
profit for one person implies loss for someone else (Allinson, 2011).
Therefore, “show me ethical stewardship” is more critical for busi-
ness survival in Asia than “show me the money” (Chen et al., 2018;
Kim et al., 2020; McGinn & Zoltners, 2015; Wu & Wokutch, 2015).
One CSR expert in Korea opined:
In the recent impeachment case of ex-­President Park
Geun-­hye, you can see that it was an indictment of not
only the leader’s incompetence but also of her immo-
rality. Normative leadership is crucial. When leading
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corporations follow globally popular CSR trends as a
business strategy without any strong ethical stance, it
is just wordplay and show in Korea.
(Interview with professor and former CEO of CSR
consulting company, Korea)
The recent impeachment and removal from office of the President
of the Republic of Korea and the hardships suffered by major chaebols
highlight the risk for leaders of being seen as unethical (Chun, 2017).
While government corruption was a major cause of Park Geun-­hye's
impeachment, the Korean public has also been highly critical of the
role that large chaebol family conglomerates played in that corruption.
Mr. Huh Chang-­soo, one of Korea's most prominent corporate
chiefs as head of the GS Group chaebol, testifying before the National
Assembly during ex-­President Park's impeachment trial, stated: “It's a
South Korean reality that if there is a government request, it was hard
to say ‘no’ to the government. We had to make philanthropic contri-
butions to two non-­profit foundations at the heart of the scandal”
(Park & Lee, 2016). This illustrates the risk that firms face when they
practice CSR—­in this case philanthropy—­that is insincere. It also sug-
gests that deeper institutional change is needed so that firms will not
find themselves caught between the public's expectations of ethical
behavior and government pressures to act unethically.
Delving into the shadowy side of the chaebol system, Kim
et al. (2018) argue that, beyond the question of effective CSR prac-
tices, a sound ethical stance is critical for a corporation's survival in
Korea. The Korean Air (KAL) “nut rage” scandal clearly shows that
the Asian market punishes unethical business practices and busi-
nesspeople regardless of their CSR activities. While the traditional
values of loyalty to employer and social harmony remain strong
(Hasegawa & Noronha, 2009; Low et al., 2014), immoral actions by
business leaders are not tolerated or forgiven.
The risks associated with unethical business practices are further
heightened in Asia by the “culture of shame” which prevails in the
region (Chun, 2017). The “reputational penalty” that firms suffer in
Asia when they act unethically is heavier than it is for firms that act
unethically in the US business context (Tanimura & Okamoto, 2013).
In Asia, having unethical behavior exposed means losing reputation,
“face,” and honor, which is viewed as a more severe punishment
than a prison sentence. The development of CSR has proceeded in
step with, and been influenced by, the legacies of ancient inherited
ethical frameworks as well as modern CSR frameworks in the Asian
institutional context (Kim & Moon, 2015). Horiguchi (2021) argues
that the Japanese public tends to be suspicious of the integrity of
CSR activities and of business's sincerity in addressing social issues,
as ethically questionable business practices often exist alongside
explicitly articulated CSR policies and practices. In other words, the
public does not find CSR happy talk convincing when it is not accom-
panied by real changes in the mindset of business.
The way to avoid ineffective window-­dressing CSR in a “runaway
self-­interest” capitalist environment is clear: perform CSR that is
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ethical. A survey of business leaders around the world found that
strong ethics is among the most important leadership competen-
cies (Giles, 2016). Leaders’ demonstrations of strong ethical behav-
ior provide their companies with a measure of safety in the global
market. Approaching CSR purely as a business strategy, without an
accompanying ethical stance, can weaken public trust in business-
people and in companies, especially in the Asian institutional envi-
ronment but also elsewhere in the world.
4.2  |  Problem (quarterly CSR) to solution (pursue
coherent, long-­term CSR to win public trust)
Businesses depend on public trust for their legitimacy and survival
(Barton, 2011; Mayer, 2018). People today give trust based on com-
petence (delivering on promises) and ethical behavior (doing the
right thing and working to improve society). Trust in business has
reached new lows because, even when people believe that busi-
nesspeople are competent, they do not believe that they are ethi-
cal (Edelman Trust Barometer, 2020). This surge in public distrust of
business has exacerbated frictions between companies and society,
leading many scholars to explicitly call for corporate endeavors to
restore trust in business. Porter and Kramer, in “Creating Shared
Value” (2011), argue that business is caught in a vicious circle and
that companies are widely perceived to be prospering at the expense
of communities.
The importance of trust applies to CSR as well. Distrust of busi-
ness often causes CSR initiatives to be viewed as insincere and ma-
nipulative (Hsu, 2012; Iglesias et al., 2020). Trust cannot be gained
from short-­term ad-­hoc CSR programs. In contrast to the short-­term
perspective that often prevails in the US and Europe, Asian companies
tend to operate under a more long-­term perspective (Barton, 2011;
Vogel, 2019). This applies to CSR as well. Japan's NEC has developed
a long-­term, coherent CSR program that has been integrated into its
corporate management strategy. An NEC Advisor explained:
NEC “officially” formulated its CSR framework in
2004 by considering CSR as comprehensive corpo-
rate management. I myself designed this framework
from the beginning. We also initiated “Social Value
Creation” through ICT business as part of our mid-­
term management plan for 2013–­2018. Our ultimate
goal is to contribute to the sustainable development
of society and the NEC group. Why so much com-
prehensive and long-­term planning? The Group must
win the trust of customers, shareholders, investors,
suppliers, the community at large, employees, and all
other stakeholders. With short-­term CSR programs,
we can never ever gain people's trust.
(Interview with President of Institute for
International Socio-­Economic Studies, Japan)
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354      KIM
In Asian capitalism and the Asian institutional environment, it is
difficult for a company to gain public trust without a long-­term and
ethical management vision for sustainable growth. Asian markets
penalize firms that violate the trust of communities, which Kim and
Moon (2015) argue are the most important stakeholders in Asian busi-
ness. As employers and innovators, and with vast human and mone-
tary resources at their disposal, businesses are in a position to make
significant contributions to addressing social issues such as income
inequality, unemployment, and climate change. But this requires long-­
term engagement with the community. The results of coherent and
sustained CSR efforts are not likely to be seen during the next quarter;
they become evident over a period of years, or even decades. The head
of an Indian think tank stated:
I believe that the CSR work many Western multina-
tionals do in India is actually extremely limited. They
do not match their work with the Indian environment.
I think this is driven by the fact that the Western
enterprises and Indian enterprises have different
mandates, different ways of looking at things, and dif-
ferent time frames. MNCs’ short-­term CSR efforts are
not well trusted in the Indian context since in effect
they live outside of India.
(Interview with CEO, CSR-­C SV think tank, India)
In recent years, business has come under increasing public pressure
to engage with social problems and be a major contributor to address-
ing issues like income inequality, high unemployment, spiraling budget
deficits, and climate change. Governments and international organiza-
tions are also pushing businesses to engage in solving social problems
through initiatives like the United Nations’ Sustainable Development
Goals (SDGs). Corporations are being pressured to reconsider roles,
responsibilities, and expectations of business and to actively contrib-
ute to tackling global social challenges (Burritt et al., 2020; Kim, 2018;
MacDonald et al., 2018). Meaningful corporate efforts cannot be made
under a short-­term, “quarterly capitalism” approach. Long-­term CSR
programs not only help a company gain public trust, they also spur in-
novation and fuel sustainable economic growth.
4.3  |  Problem (elitist CSR) to solution (use CSR to
demonstrate inclusive leadership)
Until February 2020, many people viewed COVID-­19 as an Asian
story. But it soon became obvious that the pandemic is a true exam-
ple of globalization, and that an effective response requires global
coordination and inclusivity. Many firms have realized this and are
practicing inclusive leadership through CSR.
The Jack Ma Foundation and Alibaba Foundation, for example,
have sent millions of face masks and test kits to troubled nations
around the world (Flannery, 2020). Interestingly, Ma sent Japan-­made
masks to South Korea and Korea-­made masks to Japan along with his
wishes for reconciliation between these two nations which continue to
fight over decades-­old history (Park, 2020). Actions like this go beyond
philanthropy. They demonstrate inclusive business leadership by com-
bining goodwill with a view of all people and societies as global citizens.
Reinforcing the concept of inclusivity is business leaders’ use of
Twitter and other digital platforms to communicate worldwide. In
today's era of hypercapitalism and digital technologies, global in-
equalities are more intensely interdependent than ever before, and
images, texts, and sounds are transmitted instantaneously to the
four corner of the earth (Piketty, 2020). Instantaneous global com-
munications both spread awareness of inequalities and make pos-
sible the creation of inclusive transnational communities that can
work to address inequality (Strebel et al., 2020).
Asia has often been criticized for “crony capitalism,” for a lack of
public checks and balances on closely held family control of compa-
nies (Beck,  1998). Crony capitalism clearly has flaws and dangers,
but it is also indicative of a relative weak concern in Asian society
with the concept of equality; the rich and powerful are comfortable
being in control in Asia and making no pretense that they are trying
to be fair (Kim & Kim, 2013). At the same time, ironically, Asian val-
ues highlight inclusiveness, sharing, and harmony. Companies in Asia
are expected to implement strategies that consider all stakeholders,
not just shareholders (Amann et al., 2012; Kannabiran, 2009; Wu &
Wokutch, 2015). Asian CSR reflects this as well, building in inclusiv-
ity with community and stakeholders.
Japanese beer brewer Kirin, for example, consistently engages
with the public to promote a positive and healthful drinking culture.
The comments of a senior Kirin manager provide a sense of the goals
and challenges of this effort:
Japan has social problems—­
non-­
communicable dis-
eases, rising health care costs, an ageing society, the
disintegration of bonds between people, economic
disparity—­that are becoming more and more serious. We
are working, first and foremost, to help solve alcohol-­
related problems in the society. Doing this requires cul-
tivating an inclusive culture within the organization. We
have been working to develop this kind of culture for
many years. At the beginning, I have to confess that it
was really hard to communicate our direction. We are
still trying to find better ways to communicate with our
employees and our external stakeholders.
(Interview with Senior Manager, Group CSV Strategy,
Kirin Holdings, Japan)
Involving as many people and viewpoints as possible into CSR
planning and implementation—­
from initiation through communica-
tion through action and evolution—­is the key to CSR success (Bolton
et al., 2011). An inclusive process enables more company employees and
stakeholders to help create CSR solutions. IBM, for instance, provides
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funding and resources for CSR-­related activities through its On Demand
Community program, which encourages employees and retirees to vol-
unteer and contribute their skills to community causes (Mirvis, 2012).
This strengthens employees’ loyalty to IBM and broadens their perspec-
tive on business and the marketplace. This is the type of inclusivity-­driven
CSR approach that is welcomed in the Asian context of harmony and
modesty. Giles (2016) argues that the ability to establish a sense of be-
longing is one of the most important competencies a leader can have. A
strong case can similarly be made that CSR should be inclusive—­planned
and carried out in concert with stakeholders and the community.
4.4  |  Problem (volume-­oriented CSR) to solution
(make CSR about values, not just business strategy)
Many strategic management scholars emphasize CSR’s potential as
a means of maximizing profit, positioning CSR activities as an ele-
ment of business strategy (e.g., see Husted & Allen, 2007; Pfitzer
et al., 2013; Porter & Kramer, 2011). A business-­strategy approach
to CSR may be effective in some parts of the global market, but is not
likely to go over well in the Asian institutional context. A Japanese
government official explained:
If a Western company openly says that they are con-
ducting CSR or CSV activities in Japan as a business
strategy for profit, we will not trust them. We won’t
tell them this, as in Asia we usually don’t say bad
things about each other. However, we are likely to
think that the company is immoral and arrogant since
they do not respect our values but only appear to be
making use of us for their own material gain.
Korean political sociologist Song Bok (1999) has written that
Confucianism also has an invisible hand. But it is not “the cold skele-
ton hand” of capitalism but, rather, a warm “human hand.” Confucianism
holds that humans seek “universal values,” including in (仁, benevolence);
hyo (孝, filial piety); choung (息, loyalty); and ye (禮, propriety). There is
little doubt that Confucianism influences individual, business, and com-
munity norms as well as nations as a whole in Asia. Thus it is not surpris-
ing that Asian CSR is closely related to a strong sense of duty, to ethical
leadership, and to respecting the values of others, with little overt em-
phasis on business strategy (Wu & Wokutch, 2015; Yin & Zhang, 2012).
A professor and director of a Korean NGO warned: “When you talk
about CSR as a strategy while neglecting its genuine value, you should
be very cautious. Koreans will not trust you. Eventually, the thinking will
return to the essence of CSR, which is values.” Similarly, a statutory au-
ditor in India noted: “CSR should not be discussed as a business strategy.
It should be closely related to our spirit and philosophy. If not, CSR defi-
nitely raises vocal debates in India.”
It is often observed that many Asian businesses emphasize values
as their main business driver rather than maximizing profit. Japan's
Sumitomo Group (2021) states that it has adhered to a business spirit
of trust, which it calls the “bedrock of integrity,” during the four cen-
turies of its existence. Korea's Samsung (2021) declares that “Strong
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values are the key to good business,” and states that its five core values
are people, excellence, change, integrity, and co-­prosperity. India's
Tata Group (2021) calls themselves “India's only values-­based cor-
poration,” and links its business activities to nation building with the
slogan “Spirit of humane business and nationalism.” While the values
promoted differ somewhat across nations and evolve across genera-
tions, it is clear that values hold a central place, and are crucial for both
business survival and prosperity, in Asian capitalism, Asian culture,
and the Asian institutional context (Horiguchi, 2021; Kim et al., 2013).
Values-­based CSR and business-­strategy CSR should not be seen
as mutually exclusive; companies do not need to choose one or the
other. What is important, especially in the Asian environment, is not
to perceive (or talk about) CSR solely as a way of earning profit. CSR
initiatives and programs may well contribute to profit, but only if
they are also values-­based.
4.5  |  Problem (one-­pattern CSR) to solution (match
CSR to firm's assets and capabilities and institutional
setting)
There is no “best” CSR. Social, business, and institutional condi-
tions vary from country to country, and so what works and produces
value in one business setting may differ from what works and pro-
duces value in another. CSR must be context-­driven if it is to suc-
ceed. It must fit the unique DNA in each corporation, and match
specific industries, nations, and forms of capitalism (see, e.g., Gifford
et al., 2010; Visser et al., 2007). An institutional comparative un-
derstanding of CSR is necessary (Chapple & Moon, 2005; Matten
& Moon, 2008; Witt & Stahl, 2016). Rather than playing follow-­the-­
leader and trying to replicate other firms’ CSR practices, companies
are well advised to build their own unique portfolio of CSR activities
that matches their particular business and institutional settings. CSR
is most effective when it complements a firm's unique business char-
acter and values and meshes well with local market and institutional
dynamics. The following example is illustrative of a good fit between
a company's CSR and local conditions.
Korean society is much more responsive than other
societies to good news and bad news about busi-
ness. This is mainly because of advanced information
and communications technology. People can com-
municate business performance at high speed and
respond immediately. Take the case of Ottogi, a small
food processing company. According to the company’s
CEO, Ottogi employs zero temporary workers, which
matches the employment policy of the current Moon
administration. For this reason, Ottogi was recently
nicknamed “God-­ttogi” and received tremendous pub-
lic acclaim. As a result, Ottogi has become the No. 1
ramyon (noodle) seller in the Korean market.
(Interview with CEO, CSR consulting firm, Korea)
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356      KIM
A good example of how “best practice” CSR may not fit a particular
national situation is gender-­related policy in Japan. One interviewee
described the discrepancy between policy and actual practice in Japan:
As a leading international consulting company, we
have rigorous policies from London headquarters in
relation to gender or LGBT issues, but it’s only “sym-
bolic” policy. When these policies come to Japan, they
are viewed differently [from the way they are viewed
in the UK], and they do not work well. Our Japan of-
fice is still quite behind on these issues. I think the
main reason is that the executives of my company
are senior Japanese males who were educated and
worked their entire careers under the idea that a gen-
der gap is natural. Hence, they are resistant to chang-
ing policies and norms.
(Interview with consultant, international consulting
company, Japan)
While MNCs and foreign investors have pushed for the adoption
of more advanced social policies in relation to CSR, these have been
relatively slow to develop in Japan (Jackson & Bartosch, 2017; Suzuki
et al., 2010). This is mainly due to country-­specific cultural understand-
ings and institutional traditions, and differences in firm-­stakeholder
relations. In contrast to Western practice, where explicit regulations
F I G U R E 2  Five solutions for “reinventing” CSR as a way forward (clinical proposals)
and written codes of conduct are employed to force change, in Asian
business settings greater deference is given to the underlying cul-
tural values of organizational members, such as social harmony and
cooperative behavior, which can hinder or slow down policy change
(Hasegawa & Noronha, 2009).
As the above examples show, “one size fits all” CSR often falls
short. Furthermore, things change: the meaning and dynamics of
CSR are different in the year 2020 from what they were in 2000
(Matten & Moon, 2020). In sum, business leaders, when they en-
vision and design CSR initiatives or programs, must not ignore the
variety that exists in institutional environments, in consumer expec-
tations, and in how capitalism is practiced in different markets.
5  |  D I S C U S S I O N
5.1  |  Summary of findings
The aim of this study is to explore linkages between CSR failures
and characteristics of capitalism. Five “shortcomings” of contempo-
rary capitalism were identified which tend to produce corresponding
weaknesses, or forms of ineffectiveness, in corporate CSR pro-
grams, and potential “solutions” are proposed based on analysis of
interviews with Asian business leaders and secondary data. The five
“solutions”—­ethical CSR, long-­term CSR, inclusive CSR, values-­oriented
CSR, and diverse and location-­specific CSR—­and their relationships to
the shortcomings of capitalism, are summarized in Figure 2.
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5.2  |  Theoretical contributions
The primary theoretical contribution of this research is to explicitly
place CSR within the context of capitalism, and to consider how dif-
ferent forms and characteristics of capitalism influence the concep-
tion and practice of corporate CSR. Existing discussions of CSR are
predominantly based on two major claims: (1) that it is about stake-
holder management built on either instrumental values (Jones, 1995;
Jones et al., 2018; Waldman & Siegel, 2008; Waldman et al., 2020) or
normative grounds and purposes (Freeman, 1994; Wijnberg, 2000),
and (2) that CSR is a strategic variable and therefore fundamentally
related to economic performance (e.g., Barney et al., 2011; Kaul &
Luo, 2018). Based on examination of CSR in Asia, I argue that CSR
goes, or must go, far beyond stakeholder management and economic
performance. It also involves broader issues such as authenticity,
values, relationship dynamics, and the legitimacy of business in the
eyes of the public. The realms of capitalism and CSR cannot be de-
coupled. Because capitalism is not monolithic but takes different
forms in different places, a single global solution to issues of CSR
and capitalism is inconceivable.
As an exploratory study, the aim of this research was not to pro-
duce generalizable results, but rather to search for themes and re-
lationships that help explain the influence of aspects of capitalism
on CSR outcomes. As such, the present study points to a number of
promising directions for future research on CSR.
Regional differences in CSR practices is an under-­explored re-
search area. The diversity of societies and institutional contexts in
which businesses implement CSR activities calls into question the
validity of a standardized global approach (Kim et al., 2013; Matten
& Moon,  2008; Visser et  al.,  2007). Future CSR-­related research
should look beyond the context of liberal market economies like
the US and the UK to more diverse national business systems and
institutional backgrounds, an area that remains neglected (Zaman
et al., 2020). As an example, the current study finds that firms in
Asia, where capitalism tends to be more stakeholder-­focused than
shareholder-­focused, pursue CSR that is more values-­centered than
strategy-­centered; this asks us to re-­think the prevalent approach
toward CSR research. Piketty (2020) points out that regional differ-
ence is critical and instructive for creating social and fiscal institu-
tions that can lead to more equitable forms of capitalism.
Alongside research on regional differences, examination of CSR
under different political-­
economic and institutional regimes is a
rich vein for CSR researchers to mine. How, for example, do Scott’s
(1995) three institutional pillars—­regulative, normative, and cultural-­
cognitive—­influence CSR practices and effectiveness? The links be-
tween different forms of capitalism and CSR deserve further study.
The above-­mentioned varieties of capitalism (VoC) framework pro-
vides a useful starting point, although its LME-­CME typology has
been criticized as over-­simplistic (see the discussion on the “lack of
applicability of VoC to Asian countries” in Witt & Reddings, 2013).
Related to the present study is VoC’s attention to the role that firms’
relationships with various stakeholder groups play in building core
competencies (Hall & Soskice, 2001).
|
      357
Of particular interest (and missing from VoC) are “values,” and
the importance placed on “values,” under different forms of capi-
talism. How relevant is Asian-­style stakeholder-­focused or values-­
based capitalism globally? Has its relevance grown as the world faces
unprecedented challenges like global warming, growing economic
inequality, and a global pandemic—­challenges that profit-­maximizing
capitalism appears unable to effectively deal with, and may even ex-
acerbate? Asia is forecast to account for 60% of global growth by the
year 2030 (Yendamuri & Ingilizian, 2019), yet international scholar-
ship does not fully take into account contributions that Asian capital-
ism and values—­and approaches to CSR—­might make to addressing
many of the far-­reaching problems that threaten our way of life.
Finally, research on how governments influence CSR is critical.
This is because, as vividly illustrated by the above-­quoted testimony
by the head of a Korean chaebol at the impeachment trial of the coun-
try's ex-­President, managers’ CSR decisions are strongly influenced
by the policies of, and pressures from, the government bodies that
oversee and regulate business. This topic is further discussed below.
5.3  |  Implications for practitioners and
policymakers
The five “solutions” for reinventing CSR that emerged from this in-
vestigation are meant to point toward ways that managers can make
their companies’ CSR efforts more effective. It would be naïve,
however, to suppose that these suggestions are a magic remedy for
CSR failures. First of all, as I have repeatedly stressed, there is no
“best” CSR for any company. The kind of CSR that is best suited for
a particular company depends on numerous factors, including what
it hopes to achieve, where it is to be carried out, the expectations
stakeholders have of it, the limits and pressures that governing insti-
tutions place on it, and the assets and capabilities that the company
can apply to it. Based as they are on research conducted in Asia, the
proposed “solutions” are likely to resonate more strongly in Asian
settings than in non-­A sian settings. All of this must be taken into
account by managers as they plan and implement CSR programs and
initiatives that they hope will avoid the pitfalls of CSR that is overly
influenced by the shortcomings of capitalism.
Perhaps more important is the question of how realistic it is to
expect managers to pursue CSR that is ethical, long-­term, inclusive,
values-­oriented, and diverse in the absence of significant changes in
government regulations or, more deeply, fundamental change in the
way capitalism operates. Normative goals such as these “solutions”
help point to a way forward, but they require institutional support.
This is where policymaking comes in. In order for business leaders to
develop and carry out CSR programs that better fulfill CSR’s prom-
ise to society, they need the help of a “visible hand”: government
policy that supports effective CSR. Delannon and Raufflet (2021)
emphasize that consideration of business–­community relations re-
quires the inclusion of government, as government can shape how
CSR programs are designed and carried out by business and the
community.
 |
358      KIM
The “visible hand” of government often leaves its fingerprints
on companies’ CSR initiatives, but not necessarily in ways that
are positive or helpful. Governments may use CSR intervention
as an indirect means for controlling business (Gond et al., 2011;
Schneider & Scherer, 2019). What is needed is a savvy visible hand
that shares the goal of promoting CSR as a means of addressing
social problems. What does such a savvy visible hand look like?
Knudsen and Moon (2017) point out that government plays a
crucial role in shaping the roles and responsibilities of business
through endorsement (providing political support), facilitation (via
incentives), partnering (via collaboration), and mandating (regula-
tion). Policymakers should understand that they are in a position
to strongly influence the CSR efforts of companies, and apply
these government levers in ways that pressure, or make it easier
for, companies to carry out effective CSR.
As for fundamental change in the way capitalism operates,
which Schneider (2020) and others argue is essential if CSR is to
fulfill its true purpose, this would seem to be a greater challenge.
One might take heart, however, from the recent writing of Thomas
Piketty (2020), who describes the fast transformations of Sweden in
the early 20th century and the US after the Great Depression from
economic systems characterized by pervasive inequality to systems
that were much more equal. Piketty argues that no one knows what
might produce fundamental change; it might come from an elec-
tion, a social movement, or growing awareness of the climate crisis.
Should the way that capitalism is viewed and practiced indeed shift
in a direction that focuses less on maximizing shareholder value and
more on “we are all in this together,” the path toward CSR that ful-
fills its promise to society would be made less steep.
6  |   CO N C LU D I N G R E M A R K S
Capitalism and CSR and interact, but the nature of the relationship
between the two has drawn only limited scholarly attention. This
has led to the present study. I have argued that the roots of many
less-­than-­successful CSR activities lie in “shortcomings” of capital-
ism: ways that business is practiced that have become unmoored
from the “capitalism” described by Adam Smith (who never used the
word “capitalism” himself), which works in ways that benefit busi-
ness and society. It is my hope that companies will increasingly pur-
sue CSR that is ethical, long-­term, inclusive, values-­oriented, and
well-­matched to a firm's particular characteristics and institutional
environment, for I believe that such CSR can help us to meet chal-
lenges that threaten our way of life. I hope as well that this paper will
stimulate further research on ways that CSR can restore its moral
legitimacy and fulfill its promise to business and society.
AC K N OW L E D G M E N T S
I would like to thank Steven Vogel and Hiroo Takahashi for their
helpful thoughts on an earlier draft manuscript. Further, I am in-
debted to two anonymous reviewers for their insightful comments
and guidance to improve the manuscript. The research is supported
in part from the APU Center for Inclusive leadership and Institute of
East Asian Studies, University of California, Berkeley.
PEER REVIEW
The peer review history for this article is available at https://publo​
ns.com/publo​n/10.1111/beer.12414.
DATA AVA I L A B I L I T Y S TAT E M E N T
The data that support the findings of this study are available from
the corresponding author upon reasonable request.
ORCID
Rebecca Chunghee Kim  https://orcid.org/0000-0002-7856-3511
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AU T H O R B I O G R A P H Y
Rebecca Chunghee Kim is Professor at Ritsumeikan Asia Pacific
University. She received her PhD in Management Research and
her MIM from the University of Strathclyde, where she was a
British Chevening scholar. She is particularly interested in com-
parative CSR and CSV, the Varieties of Capitalism and CSR, Asian
CSR, institutional dynamics of CSR-­HRM relationships and inclu-
sive leadership. She has published in leading management jour-
nals including Journal of Business Research, Journal of Business
Ethics, Asian Business & Management, European Journal of
International Management and Business Horizons.
How to cite this article: Kim, R. C. (2022). Rethinking
corporate social responsibility under contemporary
capitalism: Five ways to reinvent CSR. Business Ethics, the
Environment & Responsibility, 31, 346–­362. https://doi.
org/10.1111/beer.12414