World scientific research journal
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THE ROLE OF CORPORATE GOVERNANCE IN UZBEK BUSINESSES
Corresponding author:
Qudratilloh Nosirjonov
,
Student of Millat Umidi University, Tashkent, Uzbekistan,
nosirjonovqudratilloh@gmail.com
Abstract:
CSR is Corporate Governance in which corporate objectives have to
be directed towards the creation of value in pro-social and environmental manners.
This paper concerns the relevance of CSR to Uzbek firms and discusses its ability to
generate revenue, and comply to appropriate standards. Here, it is also necessary to
declare the objectives of the paper, which is to outline the key points of CSR’s
development and its significance and discuss its current and potential threats and
opportunities for businesses in the context of Uzbekistan, with the emphasis made on
the absence of research gaps in the existing literature. Using the principles of
qualitative research, this article analyses the viewpoints of the main stakeholders,
defines the obstacles that hound the advancement of a valid and successful framework
of CSR in the companies of Uzbekistan, and provides practical recommendations to
attain this goal.
Introduction
CSR has in the recent past gained recognition in the global corporate world as a
major concept in governance, but this concept is not synonymous with simple words.
It captures the essence of the staff’s accountability within the business, comparable
stocked parties, the community, and ecology. Through CSR strategies, organisations
show that, while pursuing profit, financial objectives can also be used to promote
community well-being. CSR studies have evidenced the fact that CSR strategies have
positive impact on corporate image, stakeholder confidence and corporate longevity
all over the world.
To some extent CSR already provokes interest in Uzbekistan as a part of
corporate governance system that has become important, and necessary in the context
of the country’s current economic reforms and globalization of the business area. The
pressure for CSR is present due to Uzbek companies’ need to become more
competitive on the international market and respond to the demands of their
stakeholders and correspond to the goals outlined by the country’s leadership. The
Uzbek government has also attempted to push for CSR implementation by Uzbek
companies primarily due to its membership to the United Nations Sustainable
Development Goals (SDGs) (Press release, 2023).
Nevertheless, the event of CSR as a concept in Uzbekistan is rather problematic.
Challenges in corporate responsibility include the following, most companies can be
overwhelmed by resources in the production of corporate responsible products and
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Volume-38_Issue-1_April-2025
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services, there are barriers to corporate responsible production such as legal
frameworks, and most people lack knowledge concerning the importance of corporate
responsibility. On the other side, CSR holds the promise of great benefits for
Uzbekian businesses – in fact, it allows them to outweigh the negative. Measures and
programs, for example, employees’ welfare, environmental management, and social
responsibilities cultivated by organization are the leading factors to the development
of competitive advantage while supporting societal development.
The purpose of this article is to consider CS social responsibility as the essential
value for Uzbek companies and focusing on the concept as the key to change. An
assessment of the gaps in the current literature and farther analysis of them is the
purpose of this article in this context to provide practical recommendations for CSR
implementation in Uzbekistan. Contend like, how CSR policies are implemented and
coordinated to fit the business goal, the impact of government policies, and problems
faced by local companies will be addressed in detail. Furthermore, solving these
problems, this article enriches the existing debate regarding CSR and its applicability
in young emergent countries, such as Uzbekistan.
Literature Review
Existing Literature on CSR
In CSR people, on the other hand have received a lot of emphasis with different
methods and studies showing many views on the CSR given by scholars all over the
world on the general principles, the ways on how it should be done, and the effects
that it has.
1.Carroll’s CSR Pyramid (1999)
The Carroll’s pyramid of CSR is acknowledged as one of the most frequently
referred to frameworks in the field. The pyramid categorizes CSR into four levels.
First, interpreting and performing economic, legal, ethical, and philanthropic
responsibilities of corporations are provided. Carroll goes further explaining that
while business have straight-forward economic responsibilities to ensure their
sustainability, legal and ethical responsibilities should equally be met for
organizations to command public confidence. Philanthropic responsibilities are thus
voluntary, yet they increase the company’s reputation and the goodwill of the
respective stakeholders. Carroll has given a good background in defining CSR and
his work also acknowledges the fact that the whole concept of CSR is very complex.
2.Creating Shared Value (CSV) by the Michael Porter and Kramer (2011).
Porter and Kramer go a little further with the continuum and provide the concept
of Creating Shared Value (CSV). Criticizing the view that emphasises that CSR
should be treated as cost, they state that it should be considered as a subject that
generates value for business and society. Their studies show that it is possible for
firms to solve society problems including poverty, health, and education, and at the
same time, it is possible to achieve business growth. For example, supplier
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development within regions is not only advantageous to communities but also serve
as a more secure source of supplies for the firm.
3.Corporate Social Responsibility in Developing Countries by Visser (2008).
The work of Visser owns CSR trends and issues related to developing countries.
He acknowledges the fact that although many MNEs implement universal CSR
patterns, domestic ventures in upcoming markets act as bypassed by complexities.
Some of the barriers that lie in the adoption and implementation of CSR include, fund
constraint, lack of experience, and cultural disparities. Similarly, Visser who agrees
with this view also cautions that the implementation of CSR strategies cannot be a
blanket one since conditions vary from country to country.
Research Gap
As useful and enlightened as these before-mentioned studies may appear to be,
a number of vital research gaps still keeps going in the literature including an
understanding of the practical strategies of CSR in Uzbekistan. Theoretically we have
frameworks like Carroll’s pyramid of corporate social responsibilities as well as
Porter and Kramer’s creating shared value, but these do not take into consideration
the specific socio-economic and cultural context of emerging markets like
Uzbekistan.
The lack of participation of the government and lack of its policy in the
management of CSR in Uzbekistan has not received much attention in the literature.
Thus, whereas Visser describes and discusses a number of problems that business
organizations experience in developing countries, he does not address the question of
how corporate action might interface with governmental action. The second gap is
that there is very little research done to explore how Uzbek companies perceive CSR
and how they manage to practice it. Many of the previous works do not capture the
local firms hence providing a skewed perspective on the issue in question when
compared to multinational firms.
Secondary research with primary research conducted for this article show that
majority of Uzbek firms fail to implement CSR in their operations due to low
awareness, resource constraints and lack of knowledge (Ataniyazova, Friedman and
Kiran, 2022). Furthermore, it is equally significant to observe that the international
structures for CSR may heavily focus on the aspects of environmental conservation
and social justice, however, Uzbek firms might continue to give primacy to the
aspects of economic development neglect the rest. To fill these gaps and complex
approaches to CSR implementation, which take into consideration the context of
operations.
Methodology
The present this study used a qualitative research approach as a way of
examining CSR activities in Uzbekistan. Some of the advantages of using qualitative
research will include the following. In this study the as I mentioned has been used
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qualitative research is particularly appropriate because this type of research offers rich
insight into the event of interest such as the reasons behind CSR, the difficulties
encountered, and the consequences of CSR.
Data analysis involved the conducting of thematic analysis to decipher specific
themes that appeared in the course of the research general and new themes that can
only be deduced from data analysis. This approach allows not only to define CSR in
the context of Uzbekistan, but also to reveal the peculiarities that distinguish it from
international experience.
This study targets industries that bear large social and environmental footprints
including production industries for agriculture, manufacturing and energy. These
sectors are significant in Uzbekistan’s economy and provide valuable lessons about
CSR experiences.
Results and Findings
In this study, the authors uncover a multifaceted picture of CSR in Uzbekistan –
a picture that shows both positive development and continuing difficulties.
Opportunities
Among the opportunities distinguished, the increase in the awareness of Uzbek
businesses on CSR is considered to be one of the main ones. The listed large
companies functioning in Uzbekistan have implemented the modern system of CSR
based on the «best practices» of the international level, including well-known
companies as Coca Cola and Nestlé. Some of the activities include; community
development, environmental management and employee welfare.
Another factor that came out of the study was stakeholder engagement as
important for the implementation of CSR. Organizations that incorporate their
employees, customers, as well as members of the society into CSR practices
registered high regard and cooperation. For instance, the partnership of a textile
business with peasants living in rural areas on the project of sustainable agriculture
that revolved around cotton boosted the living standards of the peasants and at the
same time underlined the beneficial image of the business.
Challenges
However, there existing factors which limit the CSR adoption in Uzbekistan as
discussed below. One major challenge here is that there is little or no legislation to
protect such consumers and little or no means for enforcing it either. Although the
government has developed and adopted policies seeking to enhance corporate
governance, most of the policies are not well implemented.
Constraints on resources and knowledge are also large threats, most evidently
for SMEs involved in the supply chain management. While MNCs can devote
resources and even establish specific CSR teams and budgets, SMEs lack necessary
resources to seriously invest in CSR.
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Furthermore, the populace’s appreciation of CSR is still weak in Uzbekistan,
which means that firms’ ethical pressures remain discreet. As per Dr. Zufar Ashurov
(2017), it is also necessary to continue the work aimed at the popularization of CSR
as the positive experience of executing activities between organizations and the
population.
Findings in Relation to Research Gap.
The following is a statement of research gap which this study has been able to
affirm: International theories of CSR focus on environmentalism and issues of social
justice. However, Uzbek businesses have mainly functional orientations towards
profitability. This dilemma underlines all the more the importance of country-specific
CSR approaches consistent with the sociopolitical-economic development of the
country in question.
For instance, Zamira Ataniyazova, Barry A. Friedman & Prabha Kiran. (2022),
proved that it is more appropriate to focus on CSRs that are carried out at the
community level- education and health care supporting for instance rather than
adopting general global program models. These findings can help drive home the fact
that CSR strategies require adjustments to the cultural contexts in which they will be
implemented.
Conclusion
CSR is not an option but a strategic management approach that improves
competitive advantage, fosters stakeholder confidence and upbringing of common
good. Therefore, CSR is both a threat and opportunity for Uzbekistan companies. The
key factors which restricting CSR adoption include resource constraints, lack of
regulatory enforcement, and low public awareness despite the obvious advantages.
This article also emphasizes that CSR activities must fit the Central Asian
specific context, specifically of Uzbekistan. Filling these gaps is imperative to carry
out a workable CSR strategy that is in tune with local needs as well as international
best practice. Further research should be made to advance CSR on the national level:
a) to define peculiarities of CSR in Uzbekistan to develop specific local frameworks
for its implementation, b) to determine potential and prospects of public-private
partnership in promoting the idea of CSR and disseminating effective practices in
Uzbekistan.
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https://scientific-jl.com/wsrj
Volume-38_Issue-1_April-2025
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