Evidence of Corporate Social Responsibility (CSR) Practices in Pakistan and Afghanistan

Multicultural Education Volume 11, Issue 10, 2025 _______________________________________________________________________________________ 25 Evidence of Corporate Social Responsibility (CSR) Practices in Pakistan and Afghanistan Pervez Akhta, Iqbal Shah, Sajjad Ali, Fayaz Ali Shah Article Info Abstract Article History Received: July 09,2025 This study was carried out in a sample of 20, 10each business firms of Khyber Pakhtunkhwa-Pakistan and Afghanistan.Reason for selection of firms from Khyber Pakhtunkhwa in Pakistan is the resemblance of culture in the areas selected for study in Pakistan and Afghanistan. The attitudes and knowledge of managers of firms towards CSR in these two countries was compared in order to find how well the management of thesefirms is cognizant with the CSR phenomena and the ways corporate social responsibilityis practiced for the benefits of the societyin both countries.Senior levelManagement was interviewed through anopenand close ended pre-structuredquestionnaire.The research methodology was qualitative. Miles and Huberman (1994) 3-stage process approach was used for data analysis.The study revealed that the CSR practices were more planned and effective in the firms of Pakistan as compared to the Management of firms in Afghanistan. Thus, the impact of CSR efforts in firms of Pakistan was high on the welfare of the society as compared to the impact of CSR on Afghani society. Accepted: October 11,2025 Keywords : Corporate Social Responsibility (CSR), Management, Leadership, sustainability, society welfare DOI: 10.5281/zenodo.17329346 Introduction Corporate social responsibility is the duty of the firms for the benefits of the society. The philosophy of CSR is that since businessesbenefit from the people therefore they should also serve the humanity. CSR got popularized as a subject in 1930s. It studies the management of businesses by the companies for the wellbeing of the people (Baker, 2003). Donaldson and Davis (1991) opined that the businesses should do CSR as their moral obligations. Carroll (1991) expected the firms to respect the Public Laws. More specifically his model of CSR spelled out economic, legal, ethical and discretionary obligations of business towards the society. Most of the research on the CSR has been dominated bywestern nations due to the favorable business conditions prevailing there. Jamil (2007) in his studies also described this domination by the Western countries. Blowfield and Frynas (2005) attributed the global CSR discussions to the European and North American countries. With all that the CSR concept is now getting popularity in South Asia. The CSR efforts though remain on lowest side in countries like Afghanistan due to the law and order situation and political instability prevailing there.Afghan understanding of the term corporate social responsibility is growing but is CSR is still prevalent in large scale organizations in Afghanistan. This research emphasized on the level of understanding of CSR by the managers of the firms in Pakistan and Afghanistanin order tofind how effective these efforts are with respect to CSR. The comparative study helped to understand the specific characteristics of the two different economies which resulted into practicing of corporate social responsibility more effectively in one region as compared to other. Objectives; i) To know the level of CSR practical efforts and understanding of CSR and ii) To find out the difference ofCSR activities in the firms of Pakistan and Afghanistan. LITERATURE REVIEW CSR is the social and environmental concerns of the firms in their business process (Macel, 2003). Peloza and Shang (2011) attributed CSR in businesses to the beneficial relationship between firms and their stakeholders. Lin and Muller(2013) stated that CSR increases the credibility of the businesses. Burke&Logsdon(1996) attributed competitive edge of the firms to CSR. Lindgreen and Campell (2009) also while talking on the importance of CSR said that it have now become essential for firms to respond positively and effectively to the requirements of the stakeholders and the society. Tang, Hall and Rothenberg (2012) concluded that the firms with CSR engagement strategies will be more successful as compared to the firms lacking CSR strategies. Thus, it is now imperative for the businesses to design their business processes and activities in such a way that interests of the society are properly represented. It is important for the firms while practicing CSR to also develop effective communication strategies and good relationship with the customers. It will promote positive image of the firms among their customers which will 26 result into beneficial and valuable relationship between the firms and their customers. Barnett (2007) stated that the firm’s value is positively related with its relationship with customers and CSR strategies. Servaes and Tamayo (2013) also projected a direct relationship between the firm’s value and CSR. Schuler and Cording (2006) stated that the firm’s CSR strategies must be consistent with its reputation. (Jenkins, 2005), (Kaufman et al., 2004), (Christian Aid, 2005),(WBCSD, 2000) identified developmental agencies, trade unions, international NGOs and business associations respectively as the major influencers of CSR in the least developed countries. The role of media has also been identified as great source of dissemination of CSR activities. Prietoet al., (2006) has attributed CSR mainly to philanthropy and charity in the firms of Pakistan.Afridi, Riaz, and Ali (2008) saw the applications of CSR the applications of CSR in Pakistan Telecom Industry and stated that it is getting popularity in this industry. Awan, Kamal and Rafique (2012) found CSR at moderate level in Pakistan. Sameer and Jamali (2016) on CSR in Afghanistan found that the current businesses’ CSR agenda is very limited in Afghanistan. However, there is a great potential in mobile technology to practice CSR for the poor. KaifiBelal,Heesam and Daniel (2015) in his study on Afghan-Americans’ understanding of CSR concluded that Afghan-Americans have an overall commitment to CSR. Similarly, Azizi, Sameer and Jamali (2016) in their analysis on CSR in Afghanistan had identified limited CSR in Afghanistan Businesses. The Literature reviewed in the study clearly indicated that the CSR efforts in Pakistan are more planned, sustainable and hence more effective as compared to the limited CSR efforts in Afghanistan. This study aims to investigate the factors or limitations to limited CSR in Afghanistan. SCIENTIFIC APPROACH TO STUDY: The study design was qualitative. Descriptive cum Case Study Research approach was applied to the existing CSR strategies of the firms in Khyber Pakhtunkhwa-Pakistan and Afghanistan. Bickman and Rog (1998) also supported descriptive approach to narrate the existing state of affairs of phenomena. Two hundred (200) operationallarge scale industries in Khyber Pakhtunkhwa-Pakistan and 35 large scale industries in Telecom and Mineral sector in Afghanistanformed the population. Data was collected from a sample of 20 firms randomly, taking 10eachindustrial units from Khyber Pakhtunkhwa-Pakistan and Afghanistan by interviewing the managers of the firms. DATA ANALYSIS I. Analysis of individual cases of the Pak and Afghan Business Units This provided a brief review of the firms which formed basis for in-depth cross-sectional study. Background of firms The firms studied for CSR varied in terms of finances, personnel and the scale of business. The volume of businessvaried from Rs. 1,000 million to Rs. 10,000 million. The number of employees ranged from 05 to 2000. Similarly, the management also varied largely in terms of level and discipline of education, training in CSR and membership in the society. The following figure shows the management profile of the firms of two countries: Figure 1 Management Profile of Pakistan and Afghan Firms (Figures in percentage) Company/SubStratum No of Firms/Managers Managers with Business Education Managers trained in CSR Managers having Society Membership Pakistani Firms 10 80% 80% 80% Afghani Firms 10 40% 40% 20% It can be seen that the management profile of the firms in Khyber Pakhtunkhwa-Pakistan is much stronger than the management profile of the Afghani firms. Review of Individual Sector Industries (Pakistan) with respect to research questions. 1. CSR in Pakistan Industry Total10 firms were analyzed in the large scale firmsof Khyber Pakhtunkhwa for the Management’s understanding of CSR concept and their practical efforts undertaken for implementation of CSR.The managers in Pakistan had a good idea of CSR. The Management of the firms was different from the ownership and was highly qualified. a) Analysis on Research Question 1 The question was related to the Manager’s attitude towards CSR. For this purpose it was investigated that how many managers are business educated. Moreover, how many firms had dedicated CSR Units? The study revealed that in Pakistan 04 firms (40%) of the firms had dedicated CSR units, having separate budget allocations for CSR. They had developed programs for the welfare of the employees and the society. b) Understanding of CSR 27 The managers of firms in Pakistan were more qualified and skilled therefore had good understanding of CSR. Their support to society in terms of health and education facilitation wasconsistent with the findings of (Baker, 2003) and(Donaldson & Davis, 1991). They were of the opinion that firms have important obligations towards the society and taking care of their employees was termed as their most important obligation towards the society.Investment on employees was termed as beneficial for the firms as motivated employees are more productive employees and contribute more to the firms. 2. CSR in Afghanistan Industry In Afghanistan10large scale firms were analyzed on their efforts for adaptation of CSR and understanding of the term CSR by the management. Interviews were conducted from the top Managementand it was found that only few managers were educated and skilled. Some of them were business graduates and had the knowledge of CSR. The Management was experienced; however, only two managers had training in CSR. Only one manager had membership in the society/associations. a) Attitude of managers towards CSR Most of the firms involved huge investments. However, none of the firms had its own independent CSR unit. Here administrative staff was conducting the CSR activities in addition to his other duties. The firms were not practicing CSR activities on regular basis neither they were having proper allocations for the CSR in their budget. Thus CSR was practiced on irregular basis. CSR activities included support in the form of education support to the children of the employees, donations and charities. b) Understanding/Knowledge of CSR TheManagers in Afghan firmshad little understanding of CSR. They only focused on their earnings and had little realization of their responsibilities towards society. However, they believed that they should take care of their employees, provide quality product and do some charity. II. Findings with respect to Research Questions (Cross-Sectional Analysis of the Pak-Afghan firms) RQ 1: Initiatives for CSR practices? Here the managers were asked 05 questions regarding the specific measures being taken for execution of CSR in their firms. (a) Results of Question 1, 2 and 3: i) Whether the firms has dedicated CSR unit? ii) Whether the firms have separate budget for CSR? iii) Whether the firms focus on regular trainings of managers on CSR? Following is the tabular depiction of firm’s measures taken for implementation of CSR:- Figure2 Country Firms withdedicated CSR unit Firms withdedicated CSR budget Firms with CSR capacity building program for Managers Pak firms 60% 80% 60% Afghan firms 0 10% 10% Finding 1: CSR is not independent function in Afghanistan firms, whereas, CSR is an independent function in the Pak firms Finding 2:80% of firms in Pak have independent budget allocations for CSR as compared to 10% dedicated budget allocations for CSR in Afghan firms Finding 3:The Management of Pak firmsis more trained in CSR as compared toAfghan firms’ management. Finding 4:ThePak firms’ management is taking more practical measures as for as having independent CSR unit, budget and training program is concerned as compared to Afghan firms (b) Results of IQ 4: How regulardoes firms perform CSR activities in a year? This question was regarding the sustainability of CSR efforts. The options were a) regular, b) at intervals, c) single timein a year and d) not at all. The figure below shows the responses of the firms: Figure3 Consistency of CSR activities per annum Country Regularity of CSR activities Firms with at interval CSR activities Firms performing CSR activities single time Firms with no CSR activities Pak firms 80% 80% 0 0 Afghan firms 20% 20% 0 0 Finding 5.Pakistani firms were performing CSR activities more regularly as compared to the Afghan firms (c) Results of Question 5: 28 This question was regarding producing evidence of some CSR activities performed in last year. Figure4 CSR activities beak-up last year CSR Activities Afghanfirms Pak firms CSR for Employees’ assistance √ √ Financial support to purchase Raw material √ √ Educational assistance √ √ Assistance in natural disasters √ Assistance in Sports √ Assistance in health √ Charity √ Total 4 6 Finding 6: The base of CSR activities was wider in Pak firms as compared to Afghan firms Finding 7: The CSR activities in Afghan firms mainly concentrated on their primary stakeholders like employees and the raw material suppliers.. Finding 8: CSR was more formal in the Pak firmsas compared to the firms in Afghanistan RQ 2: The Managers’ knowledge about CSR in Pak and Afghan firms. Interview Questions 1 and 2 under this Research Question were regarding the managers’ know how about CSR. The Question 3, 4 and 5 tested the understanding of managers regarding their rights to employees under CSR. Question 6 was related to the importance of financial strength required prior to practicing of CSR. a) Results of Q 1 & 2: i) What do you know about CSR? Finding 1: Management of all the firms in the Pakistan was cognizant with the concept of CSR ii) What are the business obligations to society? Figure5 Duties of firms to society Afghan firms Pak firms Employees’ Care √ √ Clients’ Care √ Quality Product provision √ √ Helping society/social welfare √ Finding 2: Employees’ protection, standard goods provision and social welfare were regarded as most important duties to society in the twocountries’ firms Finding 3: Understanding of CSR was good among the management of the Pak firms as compared to little understating of the CSR concept in Afghan firms Results of IQ 3, 4 & 5: i) Is spending on employees worth value? ii) Does the firms have permanent work force? iii) What are the fringe benefits offered to employees other than pension? Summary of responses:- Figure6 Management Response Country Spending on employees is not worth value Spending on employees is worth value Permanent employees Contract employees Fringe benefits No fringe benefits Afghan firms 40% 60% 40% 60% 20% 80% Pak firms 0 100% 70% 30% 40% 60% Finding 4: Management of 100% firms in the Pak firms regarded spending on employees as revenue/benefit for the organization as compared to 60% firms in the Afghan firms Finding 5: The employment rate was more permanent in Pak firms as compared to Afghan firms Finding 6: Most of the firms in both the regions were not providing post-pensionary benefits to the employees. Results of IQ 6: Does a business require being profitable prior to practicing of CSR? Figure7 Country CSR strategies Afghan firms  60% firms responded in affirmative Pak firms  80% firms responded in affirmative 29 Finding 7: Most of the firms in both of the regions agreed on the profitabilityof first prior to undertaking CSR efforts Discussion of Findings a) Points of Similarity Management of firms of both of the regions was familiar with the CSR. The management knew their obligations towards the society. They had almost similar stance as far as their points of view and actions regarding the spending on employees and non-provision of post-pensionary benefits to the employees were concerned. Similarly, both types of organizations had allocated separate budget for the CSR activities. b) Points of Difference The Management of Pak firms was more qualified and trained in CSR as compared to the Afghan firms’ Management. Moreover, CSR had more permanent set up in the Pak firms than the Afghan firms. Due to the regular nature and broad base of CSR activities in the Pak firms, the CSR activities in the were more concentrated on the society’s welfare and hence had more impact on the society as compared to the CSR activities undertaken by the Afghan. Recommendations and Conclusion 1) The Afghan corporate sector needs to take more measures for practical implementation of the CSR in order to perform it effectively and on regular basis. 2)The Management of the Afghan firms needs to be more oriented and trained on CSR. 3) The CSR efforts in Afghanistan need to be more planned, budgeted, coordinated and focused on the welfare of the society. 4) Though the CSR efforts in Pakistan are of moderate level, however,the firms should publish reports on their CSR activities so that a positive image of the industry in the general public is developed and more people are able to benefit from its CSR activities. 6) Management in both the regions needs to focus on provision of Post-pensionary benefits to their employees so that their standard of living is maintained after completion of their services. Contribution of Research to Next Level: This research aimed at understanding the concept of CSR in two different regions of South Asia, Pakistan and Afghan. It was seen in this research and also confirmed from the previous research on the subject that CSR practices are more informal and on ad-hoc basis in this part of the world especially in Afghanistan. Further research is required to identify the reasons behind informal practicing of CSR in firms of Asia and in Pakistan. The factors in the general environment of the firms should be studied for the success of CSR. As, it was seen that the business environment in Pakistan was more conducive to business and CSR as compared to Afghanistan though the need for CSR in the later society was more as compared to Pakistan. 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Author Information PervezAkhta Program Officer/Assistant Professor, Pakistan Institute of Community Ophthalmology (PICO), HMC, Peshawar-Pakistan Sajjad Ali PhD Scholar, SarhadUniversity Peshawar Iqbal Shah Ontario State, Canada Fayaz Ali Shah Assistant Professor, Department of Management Sciences, Islamia College Peshawar.