Sustainability through state-driven corporate social responsibility? the case of outsourcing firms in Malaysia

Abstract

Offshore outsourcing (OO) of business activities from North to South does not only relocate investment and jobs, it has also brought about new business demands on suppliers activities and their social and environment impact. The objectives of the study are firstly, to explore whether social corporate responsibility (CSR) practices of Malaysian firms (herein whether the government policy and support matter in CSR practices of the contracting refer to as contracting firms) matter in foreign (sub) contracting, and secondly, to examine firms. The focus is on Malaysian contract manufacturers or subcontractors in the electrical and electronics industry. The findings of the study indicate, firstly, that the level of CSR practices is positively influenced by the degree of foreign (sub) contracting, and to a lesser extend, by the size of the company's workforce and the degree of foreign ownership. Secondly, that the government plays an important role shaping the perception, rhetoric and organization of CSR activities by firms; nevertheless, most contracting firms do not recognize any support for CSR upgrading from the government or local institutions. Moving ahead, if the contracting firms want to compete successfully for OO contracts, the government, public institutions and private sectors need to work to together to translate rhetoric and strategizing into CSR business practices and performance.