Institutional analysis of multinational corporations' corporate social responsibility policy and practice in Thailand : a case study of Toyota Motor Thailand

Abstract

In recent times, Multinational Corporations (MNCs) have become very powerful and have great influence to affect the socio-economic condition of the countries hosting their subsidiary companies. This paper introduces Toyota Motor Thailand (TMT) as a case study to answer the questions which have been debated on the topics of MNCs and Corporate Social Responsibility (CSR) in developing countries. These questions include: (1.) Whether CSR can help as a tool to elevate the standards and regulate MNCs in places where the government institutions are weak. (2.) Whether the globalization necessarily leads to irresponsibility. (3.) Whether the management of CSR in global firms is conducted in a way that aligns and converges with local practices into global forces, or the CSR policy is diverged to be more responsive to local institutional factors. Using a qualitative research methodology, the study focuses on the TMT’s environmental CSR policy that includes production externalities control, stakeholder management, and the firm’s contributions to Thai society. The cross comparison technique has been adopted along with the institutional framework of CSR by Dirk Matten and Jeremy Moon. This institutional framework has been used to analyze the globalization process of convergence & divergence in TMT’s CSR policy formation and implementation. The result shows that CSR policy formulation and implementation at TMT is considered a hybrid process with inclination towards global integration. Though the influence of institutional factors in Thailand remains significant, it appears limited when compared to the power of global influences and Toyota Motor Corporation (TMC)’s policy. The study also shows that convergence force induced by TMC led to improvements in corporate responsible practices.