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Determinants and consequesces of corporate social responsibility and the role of management control systems: evidence from an developing counry, Nepal

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posted on 28.03.2022, 14:10 by Bedanand Upadhaya
Doing business in a responsible, ethical and more transparent manner is essential in order to remain competitive in the current global environment and to ensure the long-term survival of organisations. The traditional concept of profit maximisation or creating value for shareholders has been called into question by the social and environmental impacts of organisations. Organisations are under increasing pressure from their stakeholders to consider the impacts oftheir commercial and industrial activities. By ignoring stakeholder pressure, organisations may face penalties and consumer boycotts or worse, in having their licence to operate cancelled. In response to increased stakeholder pressure, organisations practise corporate social responsibility (CSR) to balance their obligations to be socially responsible, environmentally sustainable and economically competitive. However, achieving these goals simultaneously is often viewed as contradictory. While the prior literature on CSR mostly focuses on its ethical aspects or the relationship between CSR and performance, little is known about why and how CSR diffuses, the association between strategy and CSR, and the mediating role of management control systems (MCS) on adoption and implementation of CSR. Therefore, the aim of this study is to make an original and significant contribution by addressing these empirical gaps in the exiting literature. The format of this thesis is ‘thesis by publication’ consisting of three separate but interrelated comprehensive research papers. The purpose of paper one is to explore the determinants of CSR, by addressing the following two research questions. (i) Why and how was CSR diffused within the case organisation operating in a developing country? (ii) What factors influenced the diffusion of CSR within the case organisation? To address these research questions, the study draws on the diffusion of innovations theory (Rogers, 1995, 2003) and Abrahamson’s (1991) theoretical perspectives. Data were collected from a Nepalese airline company through semi-structured interviews and relevant documents to examine CSR diffusion. The findings of this study suggest that perceived benefit facilitates the diffusion of CSR within the organisation. The adoption of CSR is also seen as a proactive strategy to avoid any future risk associated with an organisation’s environmental impact. The findings reveal that organisations’ strategy, cultural values and beliefs, and top management support are important predictors of the adoption of CSR. The empirical findings of this study provide valuable insights into how CSR can enhance organisations’ performance if CSR is used in a strategic way. This study extends the diffusion of innovations theory by focusing on both the initial and post-adoption process (primary and secondary stage of diffusion) of CSR within a single airline company operating in a developing country, Nepal. The aim of paper two is to investigate whether adoption of CSR is associated with differentiation strategy and, if so, whether the association is mediated by organisational culture (in particular, innovation and respect for people dimensions of O’Reilly et al.’s (1991) organisational cultural profile), using survey data collected from 132 companies in Nepal. The results of the study suggest that adoption of CSR is directly linked to differentiation strategy, while further analyses reveal that the link is fully mediated by the innovation and respect for people dimensions of organisational culture. Overall, the findings highlight the important role of organisational culture, which is often cited as a decisive factor for the success or failure of implementing new management practices, including CSR. This study provides valuable insights into the role of organisational culture in general, and innovation and respect for people dimensions in particular on (re) aligning CSR into business strategy, which in turn may help organisations create value for shareholders as well as stakeholders. Paper three examines the association between CSR and organisational performance, and the mediating role of MCS on the association between these two. Drawing on the resource-based view (Barney, 1991) and Simons’ (1995, 2000) levers of control (LOC) framework (in particular, the use of interactive and diagnostic controls), hypotheses were tested by using the survey data collected from 120 companies operating in Nepal. This study finds that CSR is positively associated with organisational performance and further analyses reveal that MCS (in particular the use of interactive controls) partially mediate the relationship between CSR and organisational performance. The mediating role of interactive controls on association between CSR and organisational performance highlights the need for regular management attention and face to face dialogue between senior managers and subordinates. Even if the use of interactive controls can be seen as time consuming and costly, the findings suggest that the use of such controls is an important means for enhancing the performance effect of CSR. This study contributes to the management accounting literature by responding to the call for research in management accounting in the context of developing countries in general and research on the role of MCS on CSR in particular.


Table of Contents

Chapter One: Introduction -- Chapter Two: Literature review -- Chapter Three: Paper one -- Chapter Four: Paper two -- Chapter Five: Paper three -- Chapter Six: Conclusion


Theoretical thesis. Bibliography: pages 201-226

Awarding Institution

Macquarie University

Degree Type

Thesis PhD


PhD, Macquarie University, Faculty of Business and Economics, Department of Accounting and Corproate Governance

Department, Centre or School

Department of Accounting and Corporate Governance

Year of Award


Principal Supervisor

Rahat Munir

Additional Supervisor 1

Yvette Blount

Additional Supervisor 2

Sophia Su


Copyright Bedanand Upadhaya 2016. Copyright disclaimer: http://mq.edu.au/library/copyright






1 online resource (xiv, 243 pages) diagrams, tables

Former Identifiers

mq:70202 http://hdl.handle.net/1959.14/1261256