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From altruistic to strategic CSR: how social value affected CSR developmenta case study of Thailand
Patnaree Srisuphaolarn Department of Commerce and Accountancy Thammasat University Bangkok Thailand NOTE: affiliations should appear as the following: Department (if applicable); Institution; City; State (US only); Country. No further information or detail should be included Acknowledgments (if applicable): This research was conducted under the research grants by the Center of Excellence, Kasetsart University for the first phase and the Business Research Center of Thammasat Business School for the second phase of study. The author would like to express her thankfulness to two anonymous reviewers for their constructive comments that improve the manuscripts tremendously. She would also like to thank Assistant Professor Dr. Nuttapol Assarut for his valuable comments that help clarify the author thoughts. Biographical Details (if applicable): Patnaree is teaching Introduction to International Business, Cross Cultural Management and Comparative Business System at Thammasat Business School. Her research interests include internationalization of services business (health care services), innovation in services and social innovation. She received her Ph.D. from Hitotsubashi University, Tokyo, supported by the Japanese Government Scholarship. Structured Abstract: Purpose - This paper investigates the adoption and evolution of corporate social responsibility (CSR) in Thailand and scrutinizes the mechanisms that drove the direction of CSR activities to their current forms. Design/methodology/approach - Qualitative data were collected through in-depth interviews with executives of fourteen companies, and open-ended questionnaires filled out by three organizations, all of which the public perceives as highly socially responsible. Additional data were collected from two CSR seminars, official company websites, and a database provided by the Stock Exchange of Thailands library. Findings - The study reveals two key findings. One is the pattern of CSR development in Thailand that emphasizes social and environmental issues, which are less relevant to the business core activities. The other is that Thai social and religious values are important antecedents of CSR strategy and implementation. Corporations communicate CSR implicitly and execute a two-stage public relations strategy indirectly. Originality/value - This paper reveals a unique interpretation of CSR in developing economies where agrarian social values and informal networks still dominate. Most extant literature assumes that CSR in developing countries mimics western patterns. This paper asserts that it is instead an adaptation of western concepts to local culture in the case of Thailand, which affected the whole CSR processidea generation, implementation, and communication. Keywords: Social values, CSR pattern, implicit CSR, public relations strategy. Article Classification: Research Paper

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From altruistic to strategic CSR: how social value affected CSR developmenta case study of Thailand Introduction Although the concept of corporate social responsibility (CSR) is not new, it was not until recently that CSR became an important concept in many organizations. The concept has been promoted to wider audiences by governments and international organizations such as Hong Kong Special Administration Region, International Finance Corporation (IFC), United Nations Development Programme (UNDP), CSR Europe, and World Business Council for Sustainable Development (WBCSD). Key players that helped introduce the concept in emerging countries were multinational enterprises (MNEs), whose missions include being good corporate citizens in host countries (Jamali and Mirshak 2007, Perrini 2006). MNEs relate local CSR activities to corporate CSR policies in home countries (Husted and Allen 2006). Empirical studies on CSR activities suggest that different patterns and factors influence appropriate CSR activities in each country, both developed and less developed. Factors influenced by CSR activities and communications include national business systems, levels of economic development, economic freedoms, and levels of corruption (Chapple and Moon 2005; Baughn et al., 2007). Matten and Moon (2008) found that business systems in Europe make communication of CSR less explicit in comparison to American companies. This is because many activities regarded as at a companys discretion to express responsibility to society in the U.S. are actions that comply with laws and regulations in Europe. Similar phenomena are found in China. Conversely, studies of CSR activities in Nigeria reveal that economic development stages relate to patterns of CSR (Amaeshi et al., 2006; Baughn et al., 2007). Economic development stages reflect the different needs of people in the country. Governments failure to fulfill basic infrastructure needs offers MNEs the opportunity to fill the gaps to express good corporate citizenship (Eweje 2006). In short,

different social needs lead to different interpretations of CSR definitions, CSR contents, and the ways to communicate them. Among numerous empirical studies that support country-specific CSR, few elaborate on the mechanisms that explain why and how CSR developed into its modern form (Haslam 2007, Welford 2005, Maignan and Ralston 2002, Oneil 1986). This is essential to understand how societys expectations lead to better CSR strategy, especially the public relations strategy of how to report CSR. In defining CSR, Dahlsrud (2008) concludes that: the challenge for business is not so much to define CSR, as it is to understand how CSR is socially constructed in a specific context and how to take into account when business strategies are developed. (p.6)

It is worth investigating the interpretation of CSR, the phenomena that affect the changes in CSR patterns, and the key players that influence the changes. Understanding better the mechanisms that shape present CSR patterns in emerging markets leads to appropriate CSR strategies of MNEs for the benefit of both companies and host countries. Thailand was chosen as a case study for this paper because the country is a representative of emerging markets with high MNE presences. Since the first National Economic and Social Development Plan was launched in 1954, Thailand relies heavily on direct foreign investment and international trade, especially exportation. In Thailand, CSR is embraced well such that within a few years after formal introduction from an affiliated organization of the Stock Exchange in 2007, CSR became part of the mission in most companies. Recently, there are movements to include small and medium enterprises into the CSR developing program via ISO 26000, introduced by Thailands Ministry of Industry. A study of CSR in Asia regarding the penetration of CSR by domestic and international companies suggests that among seven

countries, only Thailand showed a prominent lead of domestic companies in CSR activities (Chapple and Moon, 2005). In other words, local companies are active in this matter. In addition, CSR in Thailand reflects a striking characteristic. Thai CSR is gearing toward social and environmental issues with little attention given to CSR influences on employees and the marketplace (Chapple and Moon 2005). Employees and the marketplace are two major stakeholders among others in western CSR standards (e.g. CSR in Europe). Amaeshi et al. (2006) ask whether CSR is western mimicry or an indigenous influence. This paper scrutinizes further the mechanisms that underlie the development of CSR patterns as they are today, specifically to what extent western standards influence and to what extent indigenous forces influence CSR. CSR Development The CSR concept developed from two sources at different times but converged as a business norm after the millennium. One source was CSR as business ethics and the other was CSR as part of sustainable development programs promoted by the United Nation (United Nation, 1992). The idea that a company should take responsibility rather than simply achieve economic goals was raised through discussions on business ethics since the 1950s (Carroll 1999). An assumption underlying this argument emphasizes proper means to make and manage profits so that the company gains legitimacy for existence in society (Wood 1991). Puntasen (2008) and Collier and Esteban (2007) argue that Adam Smith describes morality in his Wealth of Nations but it was omitted when mathematical tools were introduced to verify economic theories. Most economists were induced into a world of measuring. Ethics, which are not measured easily, became less prioritized. One of the representative models of this CSR-as-business-ethics concept is the CSR Pyramid, which demonstrates that a company has four responsibilities beyond the three basic responsibilities toward economic outcomes of legal compliance, business practices, and responsibility

(Carroll 1999). It is the forth responsibility that Carroll states is at the discretion of the company to do what is good for society, such as philanthropic CSR (see development of CSR and corporate social performance in Wartick and Cochran 1985, Wood 1991). Business ethics reflect the owners or executives personal values toward society (See more in Zsolnai 2007, Fassin 2008). CSR as part of sustainable development programs started in the early 1990s, initiated by a Swiss industrialist shortly prior to the Earth Summit held by the United Nation. The conference called for cooperation to reduce environmental destruction and pursue business growth while considering environmental impacts (United Nation, 1992). This concept focuses more on a commitment from the manufacturing sector. Thus, it led to attempts to set the new industrial standard of ISO 26000, dued for enforcement in 2010. This view is relatively closed to the continuous improvement concept - kaizen, which focuses more on the production process (Visser 2010). Later research suggests that CSR should not be an extra expense unless it generates benefits for the business. Porter and Kramer (2006) propose that integrating CSR into the value chain is a source of competitive advantage. Kotler and Lee (2005) propose six CSR initiatives that include socially responsible business practices as a way to do well by doing good. In line with this doing-well-by-doing-good concept, empirical research explores the effects of CSR on financial performance. They aim to increase the motivation of business practitioners to get involved in CSR activities and justify resource allocations to activities less related to the main objectives of the business (Balabanis, Phillips, and Lyall 1998, McWilliams and Siegel 2001, Amaeshi and Adi 2007). Different CSR development paths in different contexts After a series of business scandals in U.S. and European industries, companies are under pressure to pay more attention to corporate governance and CSR. In short, it is

necessary to increase the publics trust in corporations and increase operational transparency and availability, especially in the U.S. (Auger, Devinney, and Louviere 2007). This leads to the necessity of increasing communication with the public about company decision-making via annual reports and websites. Corporate governance focuses on transparency of business processes and performance while CSR focuses on extra business activities. Currently, separation of annual and CSR reporting is the norm for large international corporations. CSR specialists are hired, CSR departments are established, and CSR communication strategies are planned. The situation is different in Europe. Matten and Moon (2008) found that European companies tend to communicate CSR less explicitly than U.S. counterparts. They argue that business systems explain the difference. In Europe, CSR is part of legislation; there is no need to communicate activities as extensively as American corporations do. In addition, research regarding CSR in Africa suggests that stages of economic development contribute to CSR activities in developing countries like Nigeria (Amaeshi et al., 2006). However, a survey of CSR activities in Asia showed no single pattern of CSR in seven Asian countries - India, South Korea, Thailand, Singapore, Malaysia, the Philippines, and Indonesia. One explanation lays in national factors such as national business systems rather than economic development, economic sectors, or social development (Chapple and Moon 2005). Baughn et al. (2007) suggest that economic development, economic freedom, and level of corruption have positive relationships with CSR. This implies that a society has specific expectations different from one society to another, and cultures, historical backgrounds and business practices influence these expectations (Lorenzo-Molo, 2009). Multinational corporations wanting to express responsibility as good corporate citizens in host countries should have a thorough understanding of what determines CSR activities that a specific society embraces. Corporate Social Responsibility in Thailand.

The term Corporate Social Responsibility first appeared in Thai media in 2003 described as a new trend of global standard (Prachacart Turakij 2005). Three years later, the Thailand Research Fund published a report concerning CSR development in business organization management processes (Yodprutikarn et al., 2006). Using CSR forerunners as sources of qualitative data, the report describes how a company could become socially responsible and points out that there are two types of CSRs: the in-process type integrates CSR into every production process and activity used to make a profit; the after-process type deals with how to manage the profit gained for the sake of society. This in-process and afterprocess CSR, later on, become influential concepts for companies that would like to catch up on CSR. Inspired by the 2004 Tsunami in the southern part of Thailand, the Stock Exchange of Thailand established the Corporate Social Responsibility Institute (CSRI) in 2007. Since a tsunami is evidence of environmental destruction, institute executives asserted that a business should extend operations to link with community, society, and the environment (Assawapiriyanon 2007). In the same month, Thai Industrial Standard Institute and Kenan Institute Asia published a working draft of ISO 26000, discussing guidelines for manufacturers to respond with new industrial standards for CSR (Kenan Institute Asia 2008). These are some examples of attempts made by the formal public sector to transplant CSR from the west to Thailand, forces both from International and domestic organizations to introduce and diffuse CSR to Thai businesses and push them toward implementation. Since then, the term CSR is heavily visible and audible to the public. As corporate image-building activities via donations and other societal marketing programs were commonly found in daily mass media in Thailand during the 1990s, critics questioned whether Thai companies could distinguish between CSR and public relations/societal marketing, and whether Thai CSR is related to sustainability (Business Thai 2007; Business Thai 2008; Prachachart Turakij 2005). Thailand is no exception to

experiencing diversity in interpreting the imported concept of CSR and thus, diversity in materialization of the concept. There are confusions about how to measure CSR performance, how to report performance formally, and other issues because Thai companies tried to catch up with American standards, which were developed under different contexts and public expectations.

Research Questions After reviewing the literature, the present author developed two main research questions: (1) what are the specific characteristics of Thai CSR? and (2) how has the concept of CSR developed in Thailand? The former question addresses how business practitioners interpret CSR, and the key factors influencing such interpretation; the latter investigates key phenomena and the responses of the key players to those phenomena that shape CSR development. A discussion of the results answers whether there is a prominent difference between CSR patterns in Thailand and western counterparts. In doing so, multinational companies benefit from a deeper understanding of the Thai context so that they can serve this emerging market better. Methods and results The study consisted of two phases to trace the development path of the CSR concept, and add companies with international presences to recheck the CSR pattern found earlier. The first was conducted in 2009 and the second in 2011. In the first phase, the author chose a list of thirty companies considered highly socially responsible using a questionnaire survey and a review of CSR award winners during a 2005 to 2008 competition. Five-hundred twelve openended questionnaires were distributed in Bangkok metropolitan areas asking respondents to give the names of companies that they perceive as highly socially responsible and the reasons supporting their choices. These companies were approached for an in-depth interview session

based on semi-structured question lists sent to the companies prior to the interview. Eight companies responded to our request and the interviews took place during the last week of June to early August, 2009. In the second phase, nine companies responded to a request for interview and to fill out the open-ended questionnaires. Six interviews took place and three questionnaires were completed in July. Each interview took approximately one and a half hours except for one company that took three hours. The data were transcribed and analyzed by a content analysis method. A list of the companies and details are shown in Table 1. Respondent companies included a British-based, multinational company, a joint venture between Norwegian and Thai companies, listed and non-listed local companies serving both local and international market, and Thai conglomerates serving foreign markets with a production base outside of Thailand. [Insert Table 1 here] To understand the key players, key phenomena, and key factors that shaped the distinguished pattern of Thai CSR and how it developed, additional data were collected from three sources: three CSR seminars, official company websites of both listed and non-listed companies highly engaged in CSR, and a database provided by the Stock Exchange of Thailands library regarding company profiles, rules, and regulations of governed-listed companies. The twenty-seven members of the CSR club (some of whom were respondents) publishing data under Form 56-1 - as required by the Stock Exchange of Thailand as an official report of company performance for investors and the base for Annual Reports of most companies - were investigated carefully. Initial findings: The link between Business Ethics, Corporate Governance and CSR

CSR Club was founded in September 2009 by active, listed companies (CSRI) extending the concept of CSR to other listed companies and their supply chains. It was supported by the Stock Exchange of Thailand, the Securities and Exchange Commission, and the Corporate Social Responsibility Institute.

Reviewing secondary data of rules and regulation announced by the Stock Exchange of Thailand, the author found a development of concept of CSR from business ethics and corporate governance. As one of the key influences that drive contemporary CSR, the Stock Exchange of Thailand is active in raising the bar for listed companies to meet international standards. It initiated the Internal Control measure in 1995 to ensure transparency in reporting and to protect stockholders, and appointed a committee in 2001 to study corporate governance and communicate with the public (Stock Exchange of Thailand, 2002). Corporate Governance has been the urgent agenda for the nation after the 1997 financial crisis. Experts assert that weak governance was the cause; there was reckless lending by financial institutions, overusing short-term foreign currency denominated loans to finance long-term investments, expropriation of company funds by directors, managers or large shareholders, shady and risky business deals, and poor financial reporting and audits (Persons, 2006). Supported by the foundation of the National Corporate Governance Committee in 2002, the Stock Exchange of Thailand issued the Corporate Governance Principle and set up the Corporate Governance Center to support implementation of Corporate Governance by listed companies in July of the same year. Four years later, the Stock Exchange of Thailand revised the Corporate Governance Principle to comply with the 2004 OECD Principle of CG, and the World Bank CG-ROSC (Report on the Observance of Standards and Ccodes). According to the revised principle, listed companies must reveal a clear policy toward society and the environment; they must report clearly rights of shareholders, a policy to treat shareholders equally, roles of company toward stakeholders, disclosure of company performance and transparency, and the extent of the committees responsibilities. It also suggests that companies clarify who the stakeholders are and their legal rights. Stakeholders include customers, employees, suppliers, shareholders and investors, creditors, community

within which the organization is situated, government and governmental bodies, and society (Stock Exchange of Thailand, 2006). Prior to promotion of corporate governance, the Stock Exchange of Thailand issued a Code of Conduct in 1995 and revised it in 2000 and 2008 accordingly. The code emphasizes company responsibility toward stakeholders, including society and the environment; it suggests laws and regulation compliance and employee responsibilities to society and the environment (Stock Exchange of Thailand, 2008). Besides the Stock Exchange of Thailand, the author found the name of international organizations or industrial standards introduced as benchmarking or guiding principles regarding social and environmental responsibility, business ethics and codes of conduct, and sustainable development in many companies Forms 56-1; they include Global Compact, the World Business Council of Sustainable Development, Dow Jones Sustainability Index, CSRDIW (Corporate Social Responsibility-Department of Industrial Work), SHE (Safety, Health, and Environment), and the U.S. Foreign Corrupt Practices. The Thai companies and the CSR concept prior to the 2007 boom Reviewing Form 56-1 as early as 2004, the author found the phrases responsibility to society and environment, carry business with responsibility to society and environment, and similar phrases in corporate governance reports and in mission and vision statements under the section of business ethics or codes of conduct. Companies in the early 2000s placed social responsibility as a part of good corporate citizenship. Though many companies reported activities related to present-day social responsibility activities, the term social responsibility was first printed as a separate section on Form 56-1 later in 2006. Some companies like Unique Mining, Banpu Corporation, Siam Cement Group (SCG), PTT (the former Petroleum Authority of Thailand), and Bangchak
2 2

Comprehensive Listed Company Information Database, Stock Exchange of Thailand.


Petroleum, published CSR reports or Sustainability Reports in 2007 to publicize CSR activities. Some companies like Phatara Securities set up separate units to explore CSR since 2005. The period between 2005 and 2007 enjoyed a significant leap for CSR in annual reports. It is clear that the CSR concept is not foreign to Thai companies. Before CSR was widely known in 2007, there were already some forerunners that conducted strategic CSR by integrating CSR into every process of their business activities. (Yodprutikarn 2006, The Stock Exchange of Thailand Database, 2011). Some companies like SGC, PTT, Bangchak, and CPF (Charoen Pokphand Foods) even placed corporate social responsibility or likewise statements into company philosophies since the foundation period. Others like Kasikorn Bank, Bangkok Bank, Siam Commercial Bank put CSR into mission and vision statements. However, they treated the concept as taken-for-granted, and did not promote it to outsiders. Putting these forerunners aside, most of the companies were engaging in donationbased CSR. Setting a so-called social tax budget is common practice for Thai enterprises. Donations to religious causes, offering scholarships, fund-raising for hospitals, help-thevictims-of-disasters donation programs, and similar donations are demanded implicitly from big corporations by the surrounding communities, if not the public. This reflects the social values of an agrarian society where bilateral patronage is crucial in a relatively collectivist society. Thus, CSR existed but was not planned or reported systematically. CSR activities could be found within Human Resources Departments, Public Relations, or elsewhere in the organization, but were not company-wide. The CSR Boom and CSR concept development The 2007 CSR boom enacted dramatic change from a focus on donations to higher involvement. Business media introduced CSR as a new global business practice, with the perception that CSR is related to corporate governance, business ethics, and sustainable


development. Every company was eager to know about the concept and how to implement it. This raised the level of awareness among practitioners that a mere donation could be regarded as pseudo-CSR. Those inactive in CSR were in the stages of catching up and revision, looking for best practices from domestic forerunners in CSR such as SCG, PTT, and international consulting companies. Those involved in CSR started sharing experiences to revise their communication strategy to include a wider audience. Consequently, this increased awareness - if not pressure - to develop a CSR project. The big corporations that embraced the concept became more active in turning CSR from vision to action; they incorporated it into corporate long-term policy. Supported by inhouse research, rounds of meetings were conducted to ensure clear directions. Internal public relations tools were used to assure awareness and approval of instituting CSR organizationwide. High-ranking executives, consumers, and shareholders were active in endorsing CSR plans. One company stated that every new employee learned and practiced CSR until it became a part of the companys DNA, with the first lessons learned from the company CEO. Almost all respondents emphasized employee involvement and tried to set a social contribution mindset as a corporate value. The decision to be more active in CSR could take a top-down approach from the Board of Directors, or a bottom-up approach by the Corporate Communication Department. The Board of Directors could also be influenced by a higher authority such as the Ministry of Finance, who is the biggest shareholder of the specific companies, or could be inspired by the goal to catch up with international standards, an engagement with World Business Council of Sustainable Development, for example. As demonstrated in the initial findings, companies in Thailand have been seeking legitimacy to operate in society as a good corporate citizen. Thus, there is at least one distinguishing project to represent their CSR position in society by carrying that project on a long-term basis. With a code of conduct set by the Stock Exchange


of Thailand to have a clear policy regarding the role of business toward society and environment, most CSR activities deal with social and environmental issues. The pattern of CSR in Thailand Figure 1 illustrates how patterns developed since the CSR Boom. [Insert Figure 1 Here] [Insert Table 2 Here] Reactive CSR As mentioned above, most respondents revealed that before 2007 they conducted CSR mostly in the form of donations and contributions to nearby communities, although in a relatively passive manner. The companies responded to requests for donations to the extent that the annual budget provided for them. In some companies, projects initiated by individuals were conducted to serve communities but were limited to small-scale, regional, or branch-specific projects. The motives at this CSR stage were for ethical reasons if not selfactualizations. The former was the case where a large business was perceived as a highincome earner; thus, it was expected to help less privileged people. The latter was the case where individuals had special skills or knowledge; thus, he/she desired to share them with the community (e.g. skills in traditional musical instruments, sports, computer operations, etc.). Activities were receiver-initiated; the author names this stage reactive CSR, where main activities centered on donations and societal marketing. Turn-key CSR During the era of responsive CSR, some companies started to engage in turnkey CSR. Instead of giving away money or goods, companies pursued CSR strategies that relied on utilization of company competencies to increase CSR involvement and ensure higher efficiency of project implementation; in most cases, non-profit organizations that run goodcause activities lack management skills and tend to rely on altruistic appeal. They generally


do not treat their units as cost-centers, relying too heavily on incoming revenue, not operational efficiency. Businesses could fill this gap. For example, Thai Life, a life insurance company, used its integrated marketing communication competencies to assist the Thai Red Cross to achieve a target number of organ donors. In Thailand, there are people who believe that donating organs results in being reborn without that specific organ. Thus, the target was far from attainable. The company helped to turn the audiences perceptions away from negative attitudes and toward a better understanding of the necessity of becoming donors. A CSR club member, Phatara Securities reported in its Form 56-1 that it helped manage the Andaman Coast Coral Restoration Project by utilizing its managing skills in project operation, accounting and bookkeeping, and fund raising. PTT also revealed the key success factors for its forest restoration project; its primary input was managing skills, matching experts to the local community and monitoring project outcomes for continuous improvement. CPF and Krungthai Bank (KTB) pursued similar strategies contributing to community and education development. During the time of CSR Boom, companies entered a trial-and-error period to fine tune their CSR direction. After restructuring policy and organization, directions were clearer in each company. The different directions of the CSR movement in each company were based on historical background, experiences in conducting CSR, business impacts on environments, reach to sources of knowledge outside the companies, and levels of collaboration with third parties, private companies, governmental bodies, and communities. According to most of extant literature, CSR is discretionary. The problem was deciding in what direction companies shaken by the CSR Boom opted to further CSR strategies. Analyzing the content of the interviews, the author found three distinguished patterns of CSR development. Possible are combinations of multiple CSR patterns in a single company.


[Insert Table 3 here] Issue-based CSR Issue-based CSR suggests strategies in which companies develop special projects fully dedicated to help solve or preempt social/environmental problems. In this stage, the companies do not merely donate but become involved in extending their business competencies to help solve social/environmental problems. These projects target underprivileged children, strengthen family bonding, promote education (scholarships, building schools, opportunities to use student capabilities, etc.), increase forest areas, sponsor research on energy-saving products, and many others. While the companies initiate specific units to drive these projects, cooperation from government and non-government entities is prominent; however, it is a company-initiated activity. Hence, the companies are still the givers and communities are the receivers. Since companies focus on a specific social/environmental issue and run projects long-term, the author names this pattern of social contribution as issue-based CSR. Examples of issue-based CSR include the following cases: TRUE, a cable channel operator, worked with content providers so modern programming could be broadcast for free into rural schools, supporting their primary project Plook Panya - enhancing knowledge. BEC, an entertainment company, provided opportunities to orphans and underprivileged children to enjoy world-class shows; teenagers engaged in the world-class sporting events. By using special computer-assisted programs, AIS, a mobile phone company, hired employees with hearing and sight disabilities to work as call-center staff, making those people feel self-sufficient and economically independent in addition to their primary project of Sarn Rak - enhance the family bond. Another mobile phone service provider, DTAC, used its mobile network to initiate hotlines for agricultures and aquacultures. DTAC sent


short messages regarding crops and marketing tips on three areas - rice growing, farming, and marine farming - to its members for free. It provided two-way communication via local radio stations that volunteered as partners. For this program on agriculture tips clinic, disk jockeys were former scholarship recipients funded by the company. CPF and Betagro used their technologies to raise poultry and meat production efficiency. KTB used financial expertise to initiate a KTB lecture series to increase public financial literacy. GHB initiated a project to build homes for disaster victims and underprivileged people via Habitat for Community Thailand, a non-government organization. SCB enhanced pre-college student skill development in creativity and teamwork. EGAT (Electric Generating Authority of Thailand) and KTB sponsored schools in local areas and created a role model school for benchmarking. Recipient-based CSR Recipient-based CSR suggests strategies in which the company assists communities initiate projects to solve problems and increase well-being. In this stage, companies function as assistants or coaches while the communities are the project initiators and drivers. Examples include SCGs mini-dam building and water source preservation project, PTT 84s sub-district community development, Bangchaks project system find your solution community development, and KTBs community school development. These are extended projects from prior issue-based projects. All of these companies reached the same conclusion after a period of involvement in prior projects. The best way to reach the goal of social and economic development is to enhance community realization of its own ability to change; it is better if companies position themselves as supporters and coaches. To solve a drought problem in summers and a flood problem during rainy seasons, SCG initiated a project to build a series of small dams along small creeks in a village where the company plant was located. Instead of flowing down the hill quickly and drying up, the water was stored shortly at each step to increase accumulation. As a result, small plants grew


and the eco-system was restored. This is still an issue-based CSR. However, when the community realized that this could help increase their well being, they approach SCG to extend the project to other villages. This is the start point of recipient-based CSR. Another project involved making natural water resources, cannels and rivers, cleaner by educating people who live near the water resources. The company started the project but community members who became change agents carried it out. Village meetings resumed, products and services that supported sustainable development were created, and community members started to be confident and proud. Again, this project has been extended to other villages. On top of that, new related projects have been initiated by the community. This is an excellent example in Thailand because economic and social development strategies have been especially centralized and hierarchical since the 1950s. People in rural areas generally hold prejudices that they are inferior to educated people in Bangkok and other large cities. Though the project was started as issue-based community development CSR, it turned out to be a total human development program; CSR is related to social innovation.

Integrated CSR Since most respondent companies engage in international marketing or production, they learned how to integrate CSR and company competitiveness. In this stage, companies pursue CSR via international standard process innovation catch-up and product innovation to introduce more environmental or user-friendly products. Example is SCG eco-value product. SCG develops products that are ecologically and user friendly. Some examples of these products include radiant-reducing paper for industrial and home uses and home-building materials that reduce temperatures in buildings and lower energy needs for air conditioners. PTT, Bangchak, CPF (Chareon Pokaphand Foods), Betagro, and Bangkok Bank are representatives of the manufacturing sector from which clear examples could be raised. Thai


Life created a new product to serve under-protected traffic police and soldiers on duty; the company offers these policies for free. As part of corporate governance, the company takes production processes seriously, complying strictly to laws and paving new ways for greener production processes. In this stage, company views their operation as a means to enhance their CSR to achieve the better society creation, integrating CSR into their daily operation. Analysis and Discussion Interpretation and implementation of CSR Analyzing the interviews and CSR patterns that emerged until 2011, companies interpret CSR as the responsibility of a good corporate citizen to pay it forward to society via efficient resource management, namely management tools. It is an extension of Corporate Governance to create guidelines regarding company roles toward stakeholders outside the company, rapidly gaining legitimacy to implement - if not strategize - CSR. A CSR boom enhances greater involvement by employees, customers and shareholders in generating and implementing CSR projects. [Insert Table 4. here.] When CSR is interpreted in this way, doing good is accepted as the primary concept underlining CSR. Since doing good is universal for Thai society, collaboration at multiple levels and stages of CSR implementation is possible. Companies in the same industry, many that are direct competitors, could collaborate to implement a CSR project initiated by the principal company, as seen in the case of the DTAC agricultural hotline, which drew cooperation from other mobile phone service providers such as TRUE and AIS. If the CSR project is convincing as a project dedicated to social and environmental development, other companies or organizations tend to join without the hesitation of not-invented-here syndrome. Since nationalism promoted since the 1950s announced Thais duties toward the


nation, religion, and the King, any activities dedicated to these three institutions are regarded as good deeds and gain legitimacy for support automatically. Knowledge sharing is also highly observed; companies put best practices as their CSR and are proud to be societys role model. The author also found that although companies run various CSR projects, they secure a remarkable one as a principal project and extend other projects from it. This secures CSR positioning to communicate to a target audience. Since companies view CSR as a company function or product, they do not mind outside participation; it is regarded as publicity and promotion of the principal companies CSR. In addition, high collaboration between businesses, government bodies, and nongovernment bodies was observed in the same or different industries with the principal business that initiated the project. Although most companies focus on education and community development including environment restoration, these are generally not the companies expertise. Thus, companies need to bring in expertise, which involve government bodies such as the Office of Education Commission (pre-college education) and Forestry Department (forest restoration process), and non-governmental bodies that specialize in community development such as Population and Community Development Association (PDA) and Habitat for Community Thailand. One respondent stated that CSR is better use of existing scattered national resources via company management skills. Most respondents revealed that CSR is a learning process. Getting involved in projects rather than merely giving away money or material support, the company learns how the entire process has been done inefficiently prior to involvement; they realize that what the business could best contribute to the society is management skill - how to get things done efficiently - which is every firms core competence. More involvement drew the company to learn more about a projects key success factors such as participant and target community


involvement. It is a matter of trust whether the project works and yields good results. Thus, gaining community understanding and cooperation is essential. After the project yields a positive outcome, more initiatives are proposed by people from the community; an inside-out development starts. They conclude that their primary CSR direction is to upgrade peoples management skills and turn people toward efficiency, if not the locus of control over their own destiny. CSR is also an internal human resource development tool. Bangchak put engagement in CSR activities as a performance index for each employee. Many respondents revealed that incorporating CSR into company corporate values by getting people more engaged in CSR activities enhances relationships among employees from different departments or divisions. By extending hands to others, employees take part in company activities more readily. Many respondents revealed they would like to vote for their own companies as highly socially responsible ones since they are proud that the companies are devoted to society. This is evidence that embedding the extending a helping hand ethic into every level of organizational culture ensures success of CSR implementation, if not publicity by the employees (Webley and Werner, 2008). The nature of the business is related to how companies use resources for CSR projects. Resource extract companies like petroleum or mining businesses focus on environmental issues of nearby communities, especially forestry restoration; mobile phone companies use their infrastructure and technology to pool and diffuse customized knowledge and general or area-specific education. Entertainment businesses use their wide-audience reach to encourage public participation. Agricultural businesses use their knowledge and technology to develop community skills career development. These cases could be treated as examples of strategic CSR in a wider definition, rather than mere integration into products. Most respondents emphasized that their CSR policy excludes relatedness to core products to


prevent misunderstandings that they are conducting pseudo-CSR; knowledge sharing and catching up with international standards make the company learn more about CSR in domestic and international domains. Explicit publication of CSR and adoption of strategic CSR are increasingly acceptable. An observation by a western author revealed that Thai businesses place heavy emphasis on social and environmental issues but less emphasis on employees and business partners. The role of business toward employees and business partners is governed by business ethics and codes of conduct as seen from the revision of Form 56-1. Influenced by the Eighth National Economic and Social Development (1997 to 2002), emphasizing the importance of human resources development, many listed companies reported lengthy descriptions of policy and implementation regarding how to develop human resources, including setting up employee-friendly working environments (e.g., AIS, DTAC). However, since most companies treat this issue under business ethics or corporate governance, they only reported employee-related activities as CSR recently. When asked how each CSR project was initiated, most respondents revealed that the starting point was analysis of real and contemporary social demands. DTAC asserted that CSR is a human-related concept; basic human needs concerns food, shelter, medicine, and clothes. Thailand has long been regarded as a primary rice exporter. Thus, the agricultural sector was chosen as the primary target. Similar processes were found in KTB, True, and SCB primary education projects. CPF, SCB, PTT, Bangchak, Krungthai and Betagro are among many companies that started the project inspired by the Kings speech or royal projects. In Thailand, King Bhumipol is an influential figure; his Sufficient Economy philosophy diffused during the 1997 financial crisis influenced the thinking processes of many respondents, especially


concerning idea generation and screening. DTAC provides an example of using sufficiency economy philosophy in both processes. DTAC executive stated that the philosophy announced in Sufficient Economy serves as a good idea selection and idea initiative criterion. DTAC CSR projects proved successful internationally; the company was approached and funded by the World Bank and USAID to extend its Epidemic Alert project via mobile phone networks to other parts of the world. At its business forum, DTAC shared its secret to success with other Telenor partners in fourteen countries. Further analysis suggests that these companies realized various social and economic development tasks that could not be fulfilled timely by governments with unstable development policies. Almost all respondents deal with education, especially youth development. Uneven income distribution still exists; it is perhaps even widening. Education is viewed as the only means to upgrade economic and social status. Respondents stated firmly that youths are the hope of the nation, and deserve full opportunity support. Many emphasized the importance of emotional intelligences as well as Thai values in educating the new generation. While Thailand CSR is dedicated primarily to education and environment, CSR in Africa is concerned with infrastructure construction. From these cases, one conclusion can be reached: though a renowned economist insists that it is the job of government to deal with social issues, where there is governmental failure, businesses as corporate citizens can take part as an extended form of CSR to resolve that failure. [Insert Table 5. here.] The driving mechanism of Thai CSR

Sufficient Economy Philosophy origin is traced to Buddhism. King Bhumipol is known as a serious practitioner of Buddhism, and has applied the teachings into practice, supporting all the royal projects aimed to upgrade the standard of living of Thai people. For more details, see


It is clear that CSR in Thailand is directed toward solving social problems, if not creating a better society and dealing with environmental issue. Little relatedness is made to company core businesses when it comes to implementing a CSR strategy. Many focus on how to manage profits, returning a portion to society. Some integrate CSR into every business process, implying that CSR includes accountability such as developing products from which consumers and society better benefit. One factor that could explain this phenomenon is the social values in Thai society, based on Buddhist values. In Thailand, there is a saying Pid Thong Lang Pra (putting the gold leave at the back of the Lord Buddha Image). This means do good things even though nobody sees. The implication of this saying is to do good things and do not announce them; doing good is a personal virtue, not something to be advertised. Once advertised, it loses its virtue. Since Thai businesses perceive CSR as Business Ethics, Codes of Conduct, and corporate governance, they place CSR campaigns under doing good. With Thai CSR directed toward social and environmental issues, CSR is interpreted as a helping hand from people in a stronger position helping the weaker ones. This is why most of the companies in this study emphasized that they carry the projects merely for the sake of a better standard of living and select projects that have little or no direct relatedness to their products. The public could perceive business-related CSR activities as an advertisement in disguise, which could damage rather than build the corporate image. Thus, social value affects the interpretation of CSR and hence the corporate value towards CSR implementation. In addition, high levels of collaborations among parties, including knowledge sharing, are observed widely in Thai CSR. This contradicts normal business practices where commercial secrets are involved. There is a tendency to hoard knowledge in collective societies. This ensures Thai business practitioners interpret CSR as non-business efforts, social causes in which everyone should take part, including competitors.


The other factor is interpretations of the term responsibility. Some respondents perceived that responsibility carries a negative meaning and is used to show corrective measures after a negative consequence. Thus, many companies use the term for society or social contribution to represent the term corporate social responsibility, instead of directly translating the term into Thai. Religious influences made born-to-be CSR people who have positive attitudes about doing good. Revealed in the interviews were implicit messages that they are less focused on maximizing profit without balancing social costs. In short, they opt to optimize profit instead. As arguments in the west suggest, CSR should be repositioned as an ethically-neutral concept to draw acceptance from business practitioners who are part of the camps that support economic goals; this is not the case in Thailand (Amaeshi and Adi, 2007). There is no resistance to the concept of doing well by doing good in this Asian country. As one respondent demonstrated, CSR trends offer new business opportunities. Thus, doing well is not necessarily cannibalized by doing good in the case of Thai companies. This explains why in the early 2000s there were few Thai companies engaged in strategic CSR (Kraisornsuthasinee and Swierczek, 2009). In summary, the mechanism that drove the direction of CSR in Thailand toward society/community and environmental areas is social value. Since direct relatedness to products is avoided, being a good corporate citizen could only materialize by doing good to society and the environment. In addition, social value affects the companies public relations strategies; each publicized only the CSR projects related to the companys main theme of CSR, reporting fewer activities than they had done. Companies tend to preserve their budget to conduct CSR project rather than using that budget for promotion of their CSR. Taking care of employees and business partners as well as customers was put under a corporate governance frame of thinking. Hence, CSRs in Thailand are different from those in Europe or the United States because the focus of CSR is placed heavily on only the two areas of


society/community and environment; little emphasis is placed on the workplace and marketplace in self-reports such as annual reports or official websites. This finding supports Matten and Moons (2008) that there is a difference in the communication styles between U.S. corporations and companies elsewhere. The implicit CSR in Thailand exists because of religious virtues, not because it is embedded in law. It is discretionary rather than legal obligation that expresses social responsibility. Recent literature emphasizes the importance of stakeholders and their involvement in corporate governance and CSR (Zollo et al., 2009; Spitzeck and Hansen 2010). This study suggests a well-knit integration and collaboration among a broad set of stakeholders - local communities, government agencies, the public, and the corporations - throughout the entire CSR process (i.e. idea generation, implementation, and communication). Since the conversation on mainstream CSR moves toward strategic CSR, this case study expresses a similar direction, CSR as a source of innovation for both products and processes as well as social innovation even though the initial concept was rather different (Porter and Kramer 2006). The integrated CSR mentioned in this paper could be benchmarked with corporateshared values as proposed by Porter and Kramer (2011), where social rather than economic needs should be addressed.

Conclusion, Implication, limitation, and future research The conclusion of this study is threefold. First, CSR in Thailand differs from American and European CSR in that business ethics prevails; high levels of collaboration are prominent. Second, though superficially, Thai CSR is directed toward social and environmental issues, with the ultimate aim of human development. Third, though strongly based on business ethics, Thai companies came to the same conclusion as western academia


with regard to strategic CSR; however, Thai strategic CSR focuses on social innovation through company products and services. Therefore, implication from this study lies basically on communication strategy. Since Thai social values do not support explicit CSR public relations strategies, MNEs from western societies should be careful in planning CSR activities and communications. In accordance with the respondent companys policies, only activities carried out for a period of time and whose benefits were obvious are publicized. The communities engaged in the project are testimonials to the companys sincerity to contribute to society. It can be more easily understood as a two-stage CSR public relations strategy where a narrow range of public relations was first made to the concerned community and a wider range followed once the project was sustainable and substantial. Companies with good CSR records could further integrate CSR without concern that the public would perceive their going green as image washing (Ginberg 2004). The responding companies generally insisted that they conduct CSR for the sake of social contribution; the only business return is immunity that protects their businesses in times of economic downturns. The companies could gain this positive and unintended consequence through a strong grounding of recipient-based CSR records. For MNEs that implement CSR in developing countries, a hybrid model demonstrated by DTAC is an excellent example. While it preserves the general concept from its Norwegian business partner, DTAC blends that guideline with local social values. Except Thailand, countries in South East Asian share a similar historical background during the colonization period; hence, resistance to western ideas still exists (Higgins and Debroux, 2009). If CSR is introduced as a western standard, it will not take hold in the host country without difficulties. Considering social values as the primary factor in managing CSR reduces tensions and gains more cooperation.


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Tables and Figures Table 1. List of Respondent Companies Year founded Business Form

Company Name Electronic Generating Authority of Thailand (EGAT) Port Authority of Thailand

Business Area

Utility provider Port management

1898 1951 1953

SOE SOE SOE SOE turned PLC in 2001 SOE turned PLC in 1992 PCL SOE turned PLC in 1994 PCL PCL LTD PCL PCL PCL (JV of Telenor, Norway in 2000) PCL (British-based) LTD PCL PCL

Government Housing Bank Banking Service, specialized in (GHB) housing loan PTT (Petroleum Authority of Thailand) Petroleum refinery and distribution Bangchak Petroleum Siam Cement Group (SCG) Krungthai Bank (KTB) Siam Commercial Bank (SCB) Bangkok Bank Thai Life Assurance (Thai Life) Advanced Info System (AIS) True Corporation (True) Petroleum refinery and distribution Conglomerate business Banking service Banking service Banking service Insurance service Telecommunication (mobile phone service provider) Telecommunication and contents providers

1978 1985 1913 1966 1907 1944 1942 1990 1990

Total Access Communication Telecommunication (mobile phone (DTAC) service provider) BEC Tero Tesco-Lotus Charoen Pokphand (CPF) Betagro Entertainment service Large-scale retailer Conglomerate (based on agricultural product) Meat, poultry production

1989 1994 1998 1978 1960

Source: Complied from companies official websites by author. Note: SOE = State-owned Enterprise; PCL = Public Company Limited; LTD = Limited Company.


Table 2. Characteristics of Thai CSR.

Characterists/ CSR Pattern Turn-key CSR Issue-based CSR Recipient-based CSR

Integrated CSR

Companys Role

Reactive CSR Be timely responsive to request of donation Reduce/relief immediate social problems Reduce/relief social problems Improve standard of living, environments

Improve standard of living, environments



Companys resources, especially implicit assets knowledge, expertise, and competency. Company initiated, independent project (s)

Company and community collaboration

Company products and process


Short-term need fulfillment

More effective/efficient project management

Well-being, better standard of living

Further area development by community initiatives

Companys Role


Assistant to the project

Project initiator and manager


Greener product/ process; product that contribute to better society Producer and contributors via products

Parties involved

Representatives of the two organizations (receiver/donor) Benefit recipient group and company with company as main actor

Benefit recipient group and company with company as main actor

Group and company with high interaction

Company and society as a whole

Source: Summarized by author


Table 3. Examples of Company CSR activities in each pattern

Company/ CSR pattern Turn-key Issue-based Recipient-base


EGAT Clean port at Laem Chabang and ASEAN

scholarship, contest, donation

Creek-spy (to monitor Community discharged water development--basically quality), bird-watching forestry restoration and eco tourism

Integrated Process innovation catching up, product innovation initiated

Port Authority of Thailand

scholarship, contest, donation


scholarship, contest, donation, support

House building for disaster victims and underprivileged


scholarship, contest, donation Forestry-restoration


Education development


scholarship, contest, donation

Over-supplied seasonal produce as sales premium, Royal project on substitute energy, Lemon Farm to support local farmers

Community relationship management, forestryrestoration, recycling of used cooking oil

Find your solution Project system

Housing for Elderly Process innovation catching up, product innovation initiated Process innovation catching up, production innovation initiated


Table 3. Examples of Company CSR activities in each pattern (Continued).

Company/ CSR pattern Turn-key Recipient-base Integrated



scholarship, contest, donation

Community development

Issue-based Community relationship management, forestryrestoration Forestry and water sources preservation; eco tourism Eco-value products


scholarship, contest, donation

School development, education


scholarship, contest, donation

KTB lecture series, education standard upgrading Primary to high school students skill development

Bangkok Bank

scholarship, contest, donation

Art museum, Thai traditional music promotion

Loan for environmental friendly innovation

Thai Life Disaster relief, e.g., flood, tsunami, etc.

scholarship, contest, donation

Thai Red-Cross organ donation Project

Awareness of family bond

Life insurance plan for specific occupation*, awareness of family bond


scholarship, contest, donation


scholarship, contest, donation

Awareness of family bond


Table 3. Examples of Company CSR activities in each pattern (Continued).

Company/ CSR pattern Turn-key Recipient-base Integrated Issue-based Rural area education development


Reactive scholarship, contest, donation


scholarship, contest, donation Every doing good

epidemic alert via mobile network project (for international implementation)

Agricultural news hotlines, epidemic alert via mobile network project


scholarship, contest, donation

Agricultural news hotlines, Every day doing good Research and Development fund on T-5 electric bulb


scholarship, contest, donation

Royal project rural area occupation development

Contract-farming, community development,


scholarship, contest, donation

Contract-farming, community development, education development

Process innovation catching up, production innovation inprocess Process innovation catching up, production innovation initiated

Source: Summarized by author. Note: * Traffic police, soldier working in highly dangerous areas, and doctors in rural areas.


Table 4. Interpretation of CSR in Thai companies. Company Electronic Generating Authority of Thailand (EGAT) Port Authority of Thailand Government Housing Bank (GHB) PTT (Petroleum Authority of Thailand) Bangchak Petroleum Siam Cement Group (SCG) Krungthai Bank (KTB) Siam Commercial Bank (SCB) Bangkok Bank Thai Life Assurance Advanced Info System (AIS) True Corporation Total Access Communication (DTAC) BEC Tero Tesco-Lotus Charoen Pokphand (CPF) Betagro Key words regarding CSR from Executive viewpoints

Co-habitat (between business and society) n/a Pay it forward to society, ability to share, accountability towards one's own duty Balance of economic, social and environmental management to achieve a sustainable society. Company as a part of society need to fulfill this task Social benefit Company credo, mission, DNA. "Investment" of social capital, not expenditure; co-habitat and sustainability Pay it forward to society n/a Showing of gratitude to the society/country as a nation Pay it forward to society Pay it forward to society "Thing that you can do everyday (doing good)" Corporate culture (doing good) A part of society (corporate citizenship) "Everyday is CSR" Contribution to others for the sake of society sustainability

Source: Transcribed and paraphrased by author.


Table 5. Summary of Specify Characteristics of Thai CSR

Key concepts

The concept of CSR Concept of doing good Concept of responsibility Role of top leaders CSR initiatives

Description Corporate citizenshippay it forward to society Business Ethicsextend the helping hands to the weaker Efficiency in resource management. Doing good deed is a personal asset, and is not to pronounce to the world. Corrective action to negative consequences caused by the company. Role model and are socialized by employees and shapes corporate culture. Buddhism teachings, the King's speech, the Royal Projects, current social problems from media, company value, company competences. Top executives, P.R./CSR Dept., community members, employees, customers, and shareholders

sources of inspiration parties involved in idea generation Collaboration pattern as source of information

Government agencies, local communities, employees, and other companies In-house CSR team, company executive board, in planning process third-party consultant institute (Thai Pat Institute) Employees, customers, suppliers/business partners, NGO/NPO (e.g. Habitat and PDA.), companies in the same industries/competitors, the general in implementing process public Role of public relations in "Soft sales" rather than "hard sales" of the company CSR CSR activities Source: Compiled from interview data by author.


Figure 1. The Development and Direction of CSR Patterns in Thailand.

CSR Boom


Reactive CSR

Turn-key CSR

Issue-based CSR

Recipientbased CSR

Integrated CSR
CSR linked to companys core competencies

CSR treated as irrelevant to the organization

CSR treated as relevant to organization operations

Learning & continuous adjustment

Social Value

Source: Summarized by author


Appendex I. List of CSR Club Members

No. 1 2 3 4 5

Company Name East Water Kasikorn Bank Siam Commercial Bank* Total Access Communication* True Corporation*

6 Bangchak Petroluem* 7 Thai Vegetable Oil CPF (Charoen Pokphand 8 Foods)* 9 SE-Education 10 PTT Chemicals PTT Exploration and 11 Production 12 SCG* 13 Siam City Cement 14 Bangkok Metro 15 EGCO 16 Phatara Securities Somboon Advance 17 Technology 18 19 20 21 22 Muang Thai Life Assurance Minor International Bumrungrad Hospital Amata Unique Mining Services

Business Area Utility services Banking services Banking services Mobile phone services Mobile phone services Petroleum refinery and distribution Vegetable oil producer Ago-industrial conglomerate Printing House and Retailing Petroleum-related products Petroleum exploration Conglomerate Cement production and distribution Transportation service Electricity generating house Securities trading house Automotive parts Life assurance Conglomerate Health service provider Industrial estate Coal mining Jewelry production and export Petroleum refinery and distribution Coal mining Business Newspaper Printing House and newspaper


under CPF group President of the Club

EGAT as biggest shareholder Kasikorn Bank's group

Kasikorn Bank's group

23 Pranda Jewelry 24 PTT* 25 Banpu 26 Prachachart Turakij 27 Matichon Group

Source: Complied by author. Note: *Companies that are this studys respondents to interviews or questionnaires.