Corporate Social Responsibility of Multinational Corporations in Foreign Countries: The case of the German Volkswagen Group in China

As the name indicates, Corporate Social Responsibility (CSR) is a business concept that ascribes social responsibilities to companies. This idea has a long history of several centuries, however it only attracted broad public attention recently. A universal definition of CSR, which would clearly specify the social responsibilities that corporations should comply with, does not exist to date. Which behaviour can be regarded as socially responsible? Generally, corporate social activities are to a great extent temporally and culturally determined, because they have to respond to the social sphere of the country they operate in. Especially Multinational Corporations face major challenges in implementing corporate social activities in foreign countries, since their inherent social understanding can be different. Nonetheless, CSR has a huge potential to improve living conditions of communities in developing countries, if CSR is responsive to local needs. It further has the potential to improve the competitive positioning of the corporation itself, if the social activities are incorporated into the business strategy. In short, CSR can create shared value, namely for the society and the corporation. The research about CSR of Multinational Corporations in host countries is still in its infancy with a very limited number of studies being available. Therefore, this dissertation investigates possible different expectations of the German and Chinese societies concerning CSR. Further, it analyses how successful the German multinational Volkswagen Group implements CSR in China. Prior to this dissertation, no comparable studies on this specific topic have been conducted. To examine the societal expectations of the German and Chinese society, self-administered questionnaires were conducted in Germany and China. A total number of 365 responses was obtained. To investigate the implementation of Volkswagen’s CSR in China, a comprehensive content analysis of Volkswagen’s official websites and annual reports from 2011-2016 was conducted, concerning their social activities in Germany and China. The first finding of this dissertation is that the German and Chinese societies define CSR differently, in the sense that they prioritise different CSR components. For the German society, Human Rights are the most important CSR component, whereas the Chinese society prioritises the environmental and economic components. Concerning Volkswagen’s social activities, eight thematic sectors were identified in which Volkswagen engages in Germany and China. A more detailed investigation of these sectors revealed that Volkswagen focuses on two specific sectors exclusively in China, which suggests an underlying strategy that Volkswagen follows in China. However, the comparison of the Chinese CSR expectations and Volkswagen’s activities revealed that Volkswagen is not responsive to societal expectations and needs in China. Neither does Volkswagen integrate CSR successfully into its business strategy. Thus, Volkswagen fails to create shared values in China. There are rather strong indications that Volkswagen’s CSR is responding to the interests of the Chinese government