The Evolution of Corporate Social Responsibility in Saudi Arabia

Abstract

This thesis explores the evolution and development of Corporate Social Responsibility (CSR) in Saudi Arabia, examining the how and why and the factors driving its future. This study is the first comprehensive analysis of this topic, providing a fresh look at CSR, a topic that has so far been predominantly explored in the context of Western countries. Using institutional theory as a framework, the research investigates the logics, practices, and prospects of CSR in Saudi Arabia by drawing on the premises of institutional theory from a historical perspective. The research methodology is primarily qualitative and interpretive, allowing for an abductive approach to discover facts and data patterns and build historical interpretations of the evolution of CSR. The empirical core of the thesis is based on four case studies, augmented by data from the annual reports of these four companies and 12 semi-structured interviews with professional experts from the public and private sectors. Additional data sources such as CSR and sustainability reports, governmental documents, media sources, and professional reports, are also used to enrich data sources and generalize the main findings. The study finds that institutional pressures have facilitated CSR evolution in Saudi Arabia in response to various factors, including the power of the state in granting privileges to members of the ruling family, and religious scholars and actors who contribute to the successive of governmental plans. Furthermore, Islam and Western business practices have also played a role since the establishment of modern Saudi Arabia in 1932, while Saudi culture emphasizing collectivism and uncertainty avoidance has acted as an umbrella for institutional developments. Regulative and cultural cognitive pressures have emerged earlier than normative pressure, with the social and political contexts of Saudi Arabia prioritizing political and cultural stability in the early stages of the country’s foundation, followed by regulations and finally professional and educational developments. Second, CSR activities in Saudi Arabia have evolved since 1954, considering social aspects despite the absence of the CSR concept until 1994. The ethical perspective of CSR emerged during the 1970s and disappeared with the emergence of philanthropic donations in the early 1980s until the early 2000s when Saudi corporations began to consider the environmental perspective. This is explained in light of the evolution of institutional pressures, with regulative and cultural cognitive pressures that emerged early emphasizing social and philanthropic activities, while normative pressure that emerged in the early 2000s encourages environmental and humanitarian concerns. Third, the thesis identifies the logics of social responsibility, nationalism, and corporate responsiveness that emerged early in the 1950s in response to regulative and cultural cognitive pressures, the logic of business ethics in the 1970s, and the logics of sustainability, and corporate citizenship in the 2000s in response to the emergence of normative pressures. Lastly, the study reveals that Saudi experts understand the importance of the voluntary adoption of CSR and the social responsibilities that have evolved voluntarily in Saudi Arabia. The overall perception of CSR in Saudi Arabia is positive, with a strong belief that the future of CSR will be driven by the governmental goals represented in Vision 2030 (the Saudi government’s blueprint for economic development), explained by the dominance of institutional theory in Saudi Arabia.