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This article contributes to literature on corporate social responsibility (CSR) exhibited by industrial clusters in developing countries. The authors conceptualize and empirically investigate the role of donor-funded CSR initiatives aimed at promoting collective action by clusterbased small-and medium-sized enterprises (SMEs). A case study of the Sialkot football-manufacturing cluster in Pakistan indicates that donor-funded support of CSR initiatives in industrial clusters in developing countries may be short-lived, due to the political economy of aid, the national context of CSR implementation, tensions within SME networks, and negative perceptions of CSR by the cluster-based SMEs themselves. The findings and implications of this analysis can inform both research and policy making in this area.

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In October 2005 Jawwad Chaudhry, Director Musterhaft and Chairman LGC, was reflecting upon the performance benefits and sustainability of the Lahore Garments Consortium (LGC) Guarantee Limited. LGC consisted on eight woven garment manufactures and exporters. The CEOs of Musterhaft and Cotton Web were two particularly active members of LGC. Members of the consortium benefitted from joint purchases, joint skill development and joint marketing. Variations in the size of the firms in terms of number of machines, employees, product quality and target markets were some of the factors influencing the ability to develop consensus and a shared vision among consortium members.

Jaffer Brothers Limited (JBL) was an established, seventy-year old, private-sector business group in Pakistan involved in diversified businesses operating across Pakistan. JBL group of companies was 100 per cent owned by the Jaffer family, and it was one of the few business groups in Pakistan with no public holdings in the group companies. In 2007–2008, JBL engaged a Pakistani consultant to prepare its corporate strategic plan in consultation with the management team of JBL. The company’s strategic plan for 2020 identified the strategic vision and path which the management team had chosen for 2020. In 2013–2014, Fahim Azam was the country general manager of JBL, and there was a branch structure in the projects and machinery (P&M) division with three branches, namely Karachi (South), Lahore (Central) and Islamabad (North), all of which were reporting to Fahim. With the change of market situation such as an expansion of markets and demands across Pakistan, development of linkages with Chinese principals, opportunities offered by China Pakistan Economic Corridor (CPEC) as well as the increasing operational complexity and diversity of operations and markets, JBL decided to restructure the P&M division and introduced four strategic business units (SBUs) under the leadership of Fahim Azam. These SBUs included projects, machinery sales, machinery support (service, maintenance) and rental and power system. In 2017, the JBL P&M division was passing through a transition phase, and each SBU was required to develop and finalize its own vision and mission statement while also developing a strategic plan for 2030. Fahim was thinking about the many challenges associated with the bottom-up process of developing Vision 2030 for the division. He had a feeling that it was an issue of change management as the team was used to the old system of operations. JBL’s P&M division faced challenges related to the lack of integration of the SBUs and the lack of strategic thinking of the employees in each SBU.