**Abstract**

Performing CSR programs in developing countries has distinctive challenges form their practices in developed countries. The majority of companies face the higher expectation of public to the positive social change of their CSR program, particularly in form of community development. Many companies, both multinational as well as local companies, have tried challenge themselves to make the social innovation through their CSR initiatives. However this is not easy. The companies are always in dilemma of how to achieve better company performance with confronting to the institutional aspects as well as challenged by the culture of the local communities where the CSRs are conducted. This chapter tries to elaborate the institutional and cultural challenges of CSR implementation in Indonesia.

**Keywords:** institutional theory, culture, corporate social responsibility
