Socially Responsible Enterprise in Cuba: A Positive Role Model for Corporate Social Responsibility?

• DOI: https://doi.org/10.13169/intejcubastud.6.1.0055
• Published date: 01 April 2014
• Date: 01 April 2014
• Pages: 55-86
• Author: Denise Baden,Stephen Wilkinson
• Subject Matter: business ethics,corporate social responsibility,Cuba,implicit CSR,institutional theory,market socialism,social and solidarity economies,socially responsible enterprise

IJCS Produced and distributed by Pluto Journals www.plutojournals.com/ijcs/

SOCIALLY RESPONSIBLE ENTERPRISE IN CUBA:

A POSITIVE ROLE MODEL FOR CORPORATE

SOCIAL RESPONSIBILITY?

Denise Baden

University of Southampton, UK

Stephen Wilkinson

International Institute for the Study of Cuba, UK

Abstract

This article examines the unique institutional environment of socialist Cuba, where

currently a process of controlled marketisation and expansion of private enterprise is

taking place. The article investigates business behaviour in Cuba with particular reference

to implicit assumptions relating to socially responsible enterprise, or ‘Corporate Social

Responsibility’ (CSR) as the term is understood in Western Liberal Democracies. It draws

upon a series of interviews with business practitioners and business commentators (both

Cuban and non-Cuban residents on the island). The interviews focused on the participants’

awareness of business ethics and socially responsible enterprise, and the cultural differences

in assumptions and expectations relating to the concept of CSR between the Cuban and

non-Cuban interviewees. We f‌ind that Cuba at this early stage of tentative marketisation

presents a positive role model of socially responsible enterprise. Both the highly regulated

State economy, and the embedded norms and values of social equity that have emerged

as a consequence of Cuba’s socialist revolution facilitate business social responsibility. The

relevance of this research to current debates in relation to CSR is discussed, and it is argued

that capitalist economies may similarly benef‌it from tighter regulatory control and by

cultivating more pro-social business norms that prioritise ethical over economic concerns.

Keywords: business ethics, corporate social responsibility, Cuba, implicit CSR, institutional

theory, market socialism, social and solidarity economies, socially responsible enterprise

Introduction

Both capitalist and socialist economies are faced with similar debates and

trade-offs to make between equality and economic freedom and growth (Scully

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56 ACADEMIC ARTICLE  DENISE BADEN AND STEPHEN WILKINSON

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2002). Capitalist economies such as the US and UK have tended to favour

economic freedom, with corporate social responsibility (CSR) seen as voluntary

self-regulation, whereas socialist economies have tended to prioritise equality

and strong State regulation, leaving less room for organisational freedom of

action. Just as in the West, we are debating how to address the incentives towards

unethical business activities that strong competition and prof‌it-focused mind-sets

can lead to; Cuba is trying to work out how to decrease the burden on the State

and raise f‌inancial wellbeing, without compromising the Cuban Government’s

social goals relating to justice, equity and sovereignty (Gabriele 2013).

In its restructuring of the economy, Cuba is learning from successes and

mistakes made in a variety of different types of economies, from the market

socialism of Vietnam and China to the free-market capitalism of the US, in

order to develop a distinctively Cuban model of socially responsible enterprise

(Alberto 2011; Wilkinson 2012). Bearing in mind the remarkable successes of

the Cuban State in achieving excellent health, education, and equality outcomes

despite their relative poverty (Lambie 2012), it is possible that capitalist

economies too can learn lessons from the Cuban model. Although Cuba has

had low fuel consumption through scarcity since 1990, necessity has had the

virtue of making Cuba something of an ecological example. In 2006, the World

Wildlife Fund (WWF) proclaimed Cuba as the only country in the world that is

developing in an ecologically sustainable fashion (Hails et al. 2006). Similarly,

Wilkinson (2008) applauds the Cuban tourism industry for managing to avoid

and ameliorate the exploitation and environmental degradation often associated

with the tourist industry in poor countries.

In this article, we explore the unique institutional environment in Cuba, and

how this informs business behaviour and the implicit assumptions relating to

CSR. Interviews were carried out with Cuban business practitioners, and business

commentators (such as magazine editors, business academics, ambassadorial

staff and journalists all either Cuban, or from Western nations, based in

Cuba) focusing on business ethics. The cultural differences in assumptions and

expectations relating to business ethics apparent between Cuban and non-Cuban

interviewees are discussed in the context of what they reveal about CSR in

Cuba. In addition, the differences in the way specif‌ic incidences are understood

by Cuban and non-Cuban interviewees are revealing in terms of how cultural

biases can distort and hinder understanding between members of different

political systems.

This article begins by reviewing the concepts of implicit and explicit CSR and

how they relate to institutional accounts of CSR. The economic and political

context relating to business in Cuba is then described. The methodological issues

relating to the research are discussed, and the key themes emerging from the

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SOCIALLY RESPONSIBLE ENTERPRISE IN CUBA 57

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interviews are presented in the results section. The relevance of this research

to current debates in relation to CSR is then discussed, and further research

areas suggested.

Terminology

Terminology relating to business social responsibility differs across contexts,

with the term CSR dominating the Western discourse, and Cubans referring

more to ‘socially responsible enterprise’, or ‘social and solidarity economies’

(Sagebien 2012). Even within contexts, a multitude of terms are often used

almost synonymously with CSR, although each with a slightly different focus,

such as business ethics, corporate citizenship, sustainability and others (Baden

and Harwood 2013). For simplicity, the term CSR will be used throughout

this article. Carroll’s commonly cited def‌inition of CSR allows for differing

perceptions and contexts claiming that CSR ‘... encompasses the economic,

legal, ethical, and discretionary expectations that society has of organizations at

a given point in time’ (Carroll 1979: 500).

Throughout this article, the socialist Cuban economy will be compared

with free-market capitalist economies. Although it is acknowledged that

geographically Cuba is in the West, for simplicity’s sake, the term ‘western’ will

be taken to be shorthand for a free-market capitalist economy.

Methodology and Rationale

The way in which the concept of business social responsibility is understood

and practised, and the role it plays in society differs greatly according to the

institutional context (Kostova and Roth 2002; Muthuri and Gilbert 2011; Tan

and Wang 2011). Scott (1987) def‌ines institutionalisation as

the social process by which individuals come to accept a shared def‌inition of social

reality – a conception whose validity is seen as independent of the actor’s own views

or actions, but is taken for granted as def‌ining the way things are and/or the way things

are to be done. (496)

Institutions can be both regulatory and cultural, for example, the political,

economic and regulatory processes of the society as def‌ined in the laws, but also

norms, values, habits and customs (Muthuri and Gilbert 2011: 470), or ‘what

is right to do around here’ (Marquis et al. 2007: 937). Cognitive elements such

as ‘culture, values, ideology and identity’ (Muthuri and Gilbert 2011: 470) also

provide a common understanding of responsible behaviour.

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