Responsive Corporate Social Responsibility: Insights Into Institutional and Agency Factors Influencing Japanese Multinational Enterprises

This manuscript investigates the factors influencing the selection of responsive corporate social responsibility (CSR) programmes in the subsidiaries of Japanese manufacturing multinational enterprises (MNEs) operating in Indonesia. With a significant and growing manufacturing sector funded by foreign direct investment—of which Japanese MNEs are a major participant—Indonesia offers a novel but significant focus given its low GDP per capita, ecological challenges and being one of the first nations in South‐East Asia to mandate CSR practices. Institutional and agency theories provide a multitheoretical lens for this responsive CSR study enabling a rich, robust framework for addressing both the external and internal drivers of CSR. This study uses a qualitative approach with a sample of four Japanese manufacturing MNEs. The data were collected by interviewing managing directors and CSR personnel of the subsidiary organisations and investigating the CSR practices in secondary data sources from websites and CSR reports from both the headquarter and subsidiary organisations. A proximity effect based on a combination of the size and location of the subsidiary operation was found to be important in determining responsive CSR activities. Personal preferences and connections with the community were also identified as key factors. Feedback loops were identified through MNE CSR reports and websites, which could influence other MNEs and community stakeholders seeking funding. This study's main contribution to the literature is the development of a conceptual framework that details both the internal and external factors influencing the decision‐making process of responsive CSR.