Establishing socially responsible workplaces: Need perceptions and institutional forces acting on MSE owners in Tanzania

Published date01 September 2016
Date01 September 2016
DOIhttp://doi.org/10.1002/cjas.1372
Establishing socially responsible workplaces:
Need perceptions and institutional forces acting
on MSE owners in Tanzania
Katharina Poetz*
University of Copenhagen
Abstract
Small businesses are increasingly expected to contribute to
sustainable development. Drawing on needs theory and in-
stitutional theory, this paper investigates drivers of and bar-
riers to socially responsible workplaces that can fulf‌ill the
existence, relatedness, and growth needs of people working
in these organizations. The f‌indings generated from an in-
depth study of small enterprises in Tanzania indicate that
ownersand employeeschanging needs contribute to work-
place creation but nevertheless often remain unfulf‌illed. The
resulting tensions pose a challenge for sustainable develop-
ment in Africas emerging economies. This is discussed with
regard to solutions that leverage the normative common
ground between traditional values and Western notions of
corporate social responsibility (CSR), taking into account
the pressures exercised by regulatory and mimetic institu-
tional forces. Copyright © 2016 ASAC. Published by John
Wiley & Sons, Ltd.
Keywords: CSR, Africa, workplace, needs theory, institu-
tional theory
Résumé
De plus en plus, les petites entreprises sont censées
contribuer au développement durable. À partir de la théorie
des besoins et de la théorie institutionnelle, le présent article
examine les facteurs qui favorisent ou entravent la mise en
place de milieux professionnels socialement responsables
et capables de satisfaire lexistence, le rapprochement et
les ambitions des employés. Les résultats obtenus après
une analyse profonde de petites entreprises basées en
Tanzanie révèlent que même si les besoins changeants des
propriétaires et des employés contribuent à la création de
lenvironnement professionnel, ces besoins restent souvent
insatisfaits. Les tensions qui découlent de cette insatisfaction
constituent des obstacles au développement durable au sein
des économies émergentes dAfrique. Les résultats sont
analysés par rapport aux solutions qui mettent à contribu-
tion le lieu commun normatif entre les valeurs
traditionnelles et la notion occidentale de responsabilité
sociale des entreprises (RSE) et tiennent compte des
pressions exercées par les contraintes réglementaires et les
forces institutionnelles mimétiques. Copyright © 2016
ASAC. Published by John Wiley & Sons, Ltd.
Mots-clés : RSE, Afrique, milieu professionnel, théorie des
besoins, théorie institutionnelle
Corporate Social Responsibility (CSR) encompasses
the economic, legal, ethical and discretionary (philan-
thropic) expectations that society has on organizations at a
given point in time(Caroll & Buchholtz, 2014, p. 34).
Today, organizations are expected to contribute to the three
pillars of sustainable developmentthat is, social equality
and the well-being of all people, environmental protection,
and economic growth (World Commission on Environment
and Development, 1987). To further our understanding of
how they meet these expectations, this paper addresses an
important element of the social dimension of CSR: the
well-being of the people working for an organization. In line
with recent research interest in CSR at the workplaces of
small organizations in developing countries (Amaeshi
et al., 2015; Nasrullah & Rahim, 2014), I take a closer look
at the creation of workplaces in these organizations.
The processes underlying the creation of socially res-
ponsible workplaces (e.g., DuBrin, 2011, p. 104) that allow
people to fulf‌ill their needs for physical well-being, f‌inancial
security and safety, aff‌iliation, and individual fulf‌illment
This research was funding by the University of Copenhagen, the Danish De-
velopment Research Council (grantnumber 11-077LIFE) and Solar Fonden.
*Please address correspondence to: Katharina Poetz, Department of Food
and Resource Economics (IFRO), University of Copenhagen, Rolighedsvej
25, 1958 Frederiksberg C, Denmark. Email: katharina.anna.poetz@univie.
ac.at
Canadian Journal of Administrative Sciences
Revue canadienne des sciences de ladministration
33: 197212 (2016)
Published online 22 February 2016 in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/CJAS.1372
Can J Adm Sci
33(3), 197212 (2016)Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd. 197
(Alderfer, 1972) have been paid scant research attention.
Although many aspects of CSR at the workplace are
governed by regulations and standards to ensure that some
of peoples basic needs are met, such as adequate f‌inancial
compensation and protection from health hazards, regulatory
frameworks vary across countries. How and why different
organizations worldwide comply with regulations and make
voluntary efforts to further enhance employeeswell-being,
both for ethical reasons and as a foundation for their contri-
bution to economic performance goals, are questions that
need to be addressed (Nasrullah & Rahim, 2014). Specif‌i-
cally, there is a lack of microlevel insight into what shapes
CSR at the workplacethat is, how (a) peoples existential,
social, and personal development needs (Alderfer, 1972) and
(b) institutional forces, such as regulations as well as cultural
norms and prevailing business practices (Scott, 2007),
inf‌luence the creation of socially responsible workplaces.
By conducting a qualitative study of micro- to small-scale
enterprise (MSE) owners in Tanzania, I address this gap.
The research setting is highly relevant for advancing a
contextual understanding of what drives CSR at workplaces
of small organizations in Sub-Saharan Africa (SSA) (cf.
Hamann, Woolman, & Sprague, 2008; Idemudia, 2011; Visser,
2006). Overall, SSAs young emerging economies, notably
those in Eastern Africa such as Tanzania or Uganda, are facing
unprecedented economic growth (Economist, 2011b). A
gradually emerging middle class of business owners is also
starting to leverage advances in political stability, education,
private sector development, and communication technology
(McDade & Spring, 2005). Nevertheless, many emerging
economies in SSA struggle to leverage these developments
for the benef‌it of the broader population (Economist, 2011a).
To curb this problem, MSEs are increasingly expected to
provide the employment opportunities that lift local commu-
nities out of poverty, especially in rural areas (Acs & Virgill,
2010; Liedholm, 2002). By providing people with f‌inancial
safety, a sense of belonging, and participation in and
opportunities for learning and personal development, the
creation of socially responsible workplaces in MSEs is an
important stepping stone towards more inclusive develop-
ment. However, most MSEs face barriers to assuming CSR
in this regard. The overall productivity of organizations
remains low and is among other factors often attributed to a
persistent lack of resources in general (Jeppesen & Morsing,
2014; Muthuri, 2013), and technical expertise, management
skills, and good governance in particular (Zoogah & Nkomo,
2013). Collaboration and training are critical, yet recent
studies suggest that environmental conditions interfere with
the development of a unif‌ied and talented workforce
(Hamann et al., 2008; Muthuri, 2013; Zoogah & Beugré,
2013). Although many Africans are increasingly motivated
to cooperate with others in the quest for the good lifethat
a middle-class income offers, they often struggle with envi-
ronments that force them to put their own needs above
organizational goals (Zoogah & Beugré, 2013). In this vein,
research has highlighted institutional factors that are likely
to inhibit (e.g., weak regulatory frameworks, extended family
obligations) but may also drive (e.g., indigenous community
values) the creation of socially responsible workplaces
(Jeppesen & Morsing, 2014; Kamoche, 2011; Mangaliso,
2001; Muthuri, 2013). Despite these interesting dynamics,
insights into what drives workplace creation and need
satisfaction in MSEs in SSA are limited (Duarte & Houlihan,
2010; Visser, 2006). Existing work has mainly focused on
large f‌irms and multinationals entering SSA (e.g., Yang &
Rivers, 2009).
Tanzania in particular provides a relevant environment
for gaining insights into these dynamics. Although the situ-
ation of MSEs is in many ways comparable to that of small
businesses in other emerging economies in SSA (see also
Amaeshi et al., 2015), workplace creation and need satisfac-
tion take place in a unique economic, sociopolitical, and
cultural environment. Economically, the country has experi-
enced unprecedented growth rates averaging above 7% over
the past 10 years (World Bank, 2016). However, although
Tanzania is close to achieving middle income status (aver-
age per capita income increased to USD $948), this is still
signif‌icantly lower than the SSA average (World Bank,
2015). Despite market reforms and new policies to foster pri-
vate sector development and entrepreneurship, limited and
uneven improvements in regulatory reforms, lack of growth
in labour-intensive sectors, infrastructure gaps, and corrup-
tion continue to hamper business activities (World Bank,
2013). At present, Tanzania also struggles to absorb its
growing youthful labour force (World Bank, 2015).
Sociopolitically, Tanzania is a transition economy. The so-
cialist policies implemented after colonial independence in
the 1960s caused an economic crisis in the 1980s, which
was followed by the introduction of market reforms in the
1990s (Temu & Due, 2000). The resulting economic transi-
tion was peaceful and led to democratic consolidation
(Lituchy, Punnett, & Puplampu, 2013). More than 120 dif-
ferent ethnic groups as well as members of Christian,
Muslim, and indigenous religions continue to maintain dis-
tinct subcultures but coexist under relative ethnic stability
(Olomi, 2009). The comparatively low level of political
and ethnic conf‌lictsrelative to other emerging economies
in SSA such as neighbouring Kenya or Ugandahave, in
combination with economic opportunities, turned Tanzania
into a preferred country for donor-funded entrepreneurship
programs and private sector investments (e.g., Bekef‌i,
2006). Culturally, the political and ethnic stability has been
attributed to the legacy of the socialist policies implemented
by Tanzanias post-independence leader, Julius Nyerere. His
Ujamaa policies presumably extended traditional African
Ubuntu values of mutual respect and harmony beyond ethnic
and kinship ties, thereby contributing to a strong sense of
unity among all Tanzanians (Ibhawoh & Dibua, 2003).
Nevertheless, the policies discouraged entrepreneurship in
favour of employment in state-owned enterprises.
CSR AT MSE WORKPLACES POETZ
Can J Adm Sci
33(3), 197212 (2016)Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd. 198

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