Stakeholders and corporate philanthropy of non-economic nature in a developing country of intense Islamic beliefs, values and norms: an institutional framework

Abstract

The widespread use of Corporate Philanthropy (CP) in the US and the UK has resulted in a significant body of literature on the phenomena and its use. However, the literature generated around CP is criticised for being of an economic nature and for being biased toward the context of developed Western countries. This thesis suggests that the context of developing countries is important in relation to the non-economic nature of CP, due to the existence of intense religious beliefs and values. However, there has been little attempt to explicitly examine how the institutional pressures within this context shape the CP of a non-economic and more precisely of an altruistic nature, and how firms act in response to these influences. This thesis leverages institutional theory by proposing that stakeholders – including communities, competitors, NGOs and politicians – may impose coercive and mimetic pressures encouraging isomorphic field-level CP of a non-economic nature in a context of intense Islamic beliefs, values and norms. However, the way in which firms perceive and act upon these pressures may differ depending on specific factors related to the firm itself, including the identity of the firm, the competitive position of the firm, and shareholder pressures. These differences between firms result in the adoption of different CP strategies as decided by each firm, expressing its appropriate responses to field pressures. This study uses a qualitative methodology using data collected from 27 of the key personnel responsible for CP decisions (shareholders and managers) in the Kuwaiti banking sector. Questions were developed to assess the relationships between institutional pressures at the field and organisational levels of analysis. Data was collected through multiple sources such as in-depth interviews, documentation, and archival records. The contributions of the thesis are in relation to: a) the institutional theory; b) gaining more understanding of CP in developing countries; C) offering a robust understanding of altruistic CP influenced by an Islamic context; and d) practical implementations of CP in Islamic banks.