Corporate Social Responsibility and Corporate Control: The Anglo-Iranian Oil Company, 1933–1951

Abstract

A new conceptualization of corporate social responsibility (CSR) is presented as a means of asserting and maintaining corporate control in the face of political, economic, and social challenges. The Anglo-Iranian Oil Company (AIOC) applied different strategies to maintain control of its Iranian assets in the face nationalist demands—political and covert mechanisms, market based, resource access controls, and CSR programs. This paper investigates the third, and least explored, strand of their strategy. It identifies managerial strategies for CSR engagement with respect to three corresponding interest groups: politicians and diplomats, shareholders, and local employees, drawing on a variety of previously unused archival sources. From prior studies it is unclear whether the AIOC's CSR programs, for example, in employment and housing, were motivated by social improvement, its business agenda, or responses to legislative pressures from the Iranian government. A detailed examination of CSR policy and private correspondence between AIOC's senior executives about their negotiations with the Iranian government shows that they engaged in and reported voluntary CSR activities to strengthen their reputation and negotiating position but refused to compromise on aspects of CSR that threatened the existing managerial hierarchy of control. This interpretation is supported by a content analysis of the company's annual reports in the years before and after nationalization, revealing a choice of topics and language intended to support its self-presentation as a socially concerned employer. The results of this study have wider implications for understanding CSR reporting as a corporate strategy to enhance negotiating and bargaining positions.