Institutional Origins of CSR in Korea: Legacies of the Developmental State

This paper contributes to understanding the corporate social responsibility (CSR) performance of large Korean firms (chaebol), which often underperform relative to their western counterparts, particularly in social welfare CSR (e.g., labor standards). This phenomenon is exemplified by Samsung Electronics’s slow, incomplete, and combative responses to accusations of child labor at its Chinese subcontractors; Samsung’s counterpart, Apple, was comparatively prompt, accommodating, and media-savvy in addressing similar accusations. From the comparative political economy approach, we rely on the ‘varieties of capitalism’ literature to explain these different responses. This paper suggests that the coordinated state-business relationship that characterizes Korea’s political economy can, at least partially, explain the chaebol’s approach to CSR. Beginning with the 1960s development era, proceeding thorough reforms triggered by the 1997 Asian financial crisis, and continuing to the present, the Korean state has coordinated with the chaebol on economic development and later, good governance, not social welfare CSR. Because this state-business relationship has prioritized creating national champions to capture world markets, Korean firms have failed to effectively respond to labor abuses occurring at their foreign suppliers.