Corporate social responsibility and poverty alleviation in a developing country context

Abstract

Lebanon is a developing country in the Middle East that witnessed civil war and political instability since 1975. Lebanon is surrounded by Arab States that are facing turmoil and demonstrations by poverty stricken populations demanding economic and political reforms. Although Lebanon now is enjoying peace, and on the economic side it has accomplished major reforms and successes after the war, it is still politically unstable with weak state institutions. This resulted in underprivileged areas that are poverty stricken. The private sector is the leading power in the Lebanese economy and a major employer. Organizations in the private sector follow international business methods with the required codes of ethics and Corporate Social Responsibility (CSR) practices that enable them to become international players. The CSR practices in Lebanon vary from being philanthropic, up to helping alleviate poverty through providing microcredit to communities or to entrepreneurships. In addition, nongovernmental organizations (NGOs) established in Lebanon offer training and microcredit to entrepreneurs needed to establish or expand their businesses. In this paper, case studies on applying CSR by Lebanese business organizations and by small entrepreneurships are used to investigate the role of microcredit and philanthropic practices in poverty alleviation in a developing country. Semi structured interviews with NGO officials, entrepreneurs, and executives of large business organizations in Lebanon and published information were used to gather the information. The results of the case studies show that in a developing country, microcredit alone is not sufficient to provide sustainability in poverty alleviation, it should be accompanied by education and training. CSR practices should emphasize developmental projects that target the needs of underprivileged communities in Lebanon, in order to ensure sustainability.