Crossing the borderline in strategic corporate philanthropy: Dangote and the construction of cement roads in Nigeria

• Author: Augustine Ujunwa,Abel Ezeoha,Chibuike Uche
• DOI: http://doi.org/10.1111/beer.12249
• Published date: 01 January 2020
• Date: 01 January 2020

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  wileyonlinelibrary.com/journal/beer Business Ethics: A Eur Rev. 2020;29:70–81.

© 2019 John Wiley & Sons Ltd

1 | INTRODUCTION

Strategic CSR i s one of the several C SR innovation s that have

emerged since th e start of th e 20th centur y when the push fo r

firms to forge clo ser ties with their host societ ies became stronger.

At the forefront was C arroll (1991, p. 39) who framed CSR in ways

that called on ma nagers to “reconcile the ir obligations to their s hare‐

holders with those of other competing groups claiming legitimacy”.

Thereon, it be came clear th at the only way to sus tain CSR was to

strategica lly factor it into the firm's co re competences. It was in this

sense that str ategic CSR found its way a nd became dominant in C SR

literature. Am ong the firs t to conceptualize, i t was Baron (20 01, p.

9) who defined the co ncept as “simply a prof it‐maximization s trat‐

egy motivated by s elf‐interest and not by a conception of co rporate

social respons ibility”. The ide a that CSR can b e designed to ser ve

corporate self‐inter est quickly b ecame the foun dation of moder n

CSR pract ices. Distinct fro m other forms, strate gic CSR provides op‐

portuniti es for firms to align philan thropy with profit, an d to fuss so‐

cial welfare into pr ivate business goals (Jama li, 2007). This claim has

found merits i n a number of empiric al literature, most of w hich linked

it to improved firm p erformance (Falkenber g & Brunsæl, 2011).

While the ideol ogical merit of strategic CSR i s no longer a con‐

testable th esis, the contex tual applic ation is. Contex t specificit ies,

for instance, p lay a role in the choice and practic e of CSR in diffe r‐

ent countries (Bl asco & Zølner, 2010; Jamali, 2007; Jamali & Ca rroll,

2017; Jamali & Neville, 2011; Kim, A maeshi, Harr is, & Suh, 2013;

Renouard & Ezv an, 2018). Blasco and Zølner (2010, p. 217) f ind that

institutional context influences firms' choices of philanthropic en‐

gagements and how those choices are implemented. In developed

countries, for e xample, dif ferences in the r oles of business es and

the government s are clearly ma rked out; and fi rms have suffici ent

ground to innovate o n optimal CSR ch oices that elimi nate duplica‐

tion of social role s and create more v alue for shareho lders (Peloza

& Falkenberg, 20 09). In contrast, the fact t hat developing countries

are characte rized by weak institutio ns and dearth of socia l amenities

makes it diffic ult to separate business func tions from government's

social duties . In a country like Nigeria, for inst ance, firms helplessly

provide their own r oad, electricity, water supp ly and security. They

are equally exp ected to extend sa me to their host societ ies as a mark

of CSR (Amaes hi, Adegbite, & Rajw ani, 2016; Matten & Crane , 2005).

Burdened by the se responsibilities, it beco mes difficult for firms to

think of additio nal CSR commit ments, except fo r the concomit ant

Received: 11 Novemb er 2018 

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  Revised: 19 Septemb er 2019 

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  Accepted: 17 Octob er 2019

DOI: 10.1111/beer.12249

ORIGINAL ARTICLE

Crossing the borderline in strategic corporate philanthropy:

Dangote and the construction of cement roads in Nigeria

Abel Ezeoha1 | Chibuike Uche2 | Augustine Ujunwa3

1Department of Economics (and Department

of Banking & Fin ance), Ebonyi State

University, Abakaliki, Nigeria

2African Studies Centre, Leiden University,

Leiden, The Netherlands

3Monetary Policy Department, Central Bank

of Nigeria, Ab uja, Nigeria

Correspondence

Chibuike Uche, African Studies Centre,

Leiden Univer sity, Postbus 9555, 2300 R B

Leiden, The Netherlands.

Email: c.uche@ascleiden.nl

Abstract

Using the case of Nigeria's Dangote G roup and an explor atory researc h technique,

we critique CSR pr actices in a develop ing country contex t based on a three‐pil lar

model—traditional C SR, strategic CSR and strategic busine ss engagements. Our

paper makes a unique cont ribution by revealing how a co mpany can trans form its

strategic CSR into s trategic business engagement s that permit it to circumvent public

procurement laws and s ecure public contra cts at non‐comp etitive terms. We show

how, in weak institutional a nd regulatory contexts, str ategic CSR could be turned to

a tool for rent extra ction and profit maximization. We advo cate for regulatory meas‐

ures that impose ex ante an d ex post limits on t he extent to which fir ms can go in

integrating CSR into t heir normal busine ss operations. Based on the outcomes fr om

this importa nt African case s tudy, we illustrate and prop ose the strategic business

engagement model as a new framework for analys ing the social benef its of strategic

CSR practi ces in developing countries.