CORPORATE SOCIAL RESPONSIBILITY: CONCEPTION TO REVOLUTION

DR. SAVITA
Assistant Professor in Commerce
Dev Samaj College for Women
Ferozepur City (PB)-!"##"
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DR. VISHAL KUMAR
Assistant Professor in Commerce
Dev Samaj College for Women
Ferozepur City (PB)-!"##"
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___________________________________________________________________________________________
ABSTRACT
Corporate social responsibility (CSR) can be defined as the "economic, legal, ethical, and
discretionary expectations that society has of organizations at a given point in time". The concept
of corporate social responsibility means that organizations have moral, ethical, and philanthropic
responsibilities in addition to their responsibilities to earn a fair retrn for investors and comply
!ith the la!. " traditional vie! of the corporation sggests that its primary, if not sole,
responsibility is to its o!ners, or stoc#holders. $o!ever, CSR re%ires organizations to adopt a
broader vie! of its responsibilities that incldes not only stoc#holders, bt many other
constitencies as !ell, inclding employees, sppliers, cstomers, the local commnity, local,
state, and federal governments, environmental grops, and other special interest grops.
Collectively, the varios grops affected by the actions of an organization are called
"sta#eholders."
Keywords: CSR, Corporate Soca! Respo"s#!ty, Soceta! $ar%et"&
_____________________________________________________________________________
William Ford Jr., the hairma! o" Ford Motor# om$a!% #aid& A 'ood om$a!% deli(er#
e)elle!t $rod*t# a!d #er(ie#, a!d a 'reat om$a!% doe# all that a!d #tri(e# to ma+e the
,orld a -etter $lae..
" bsiness doesn&t exist in isolation simply as a !ay of ma#ing money. Cstomers, sppliers and
the local commnity are all a affected by a bsiness. 'rodcts, and the !ay yo ma#e them, have
an impact on the environment. Corporate Social Responsibility (CSR) ta#es all this into accont
and helps the bsiness to create and maintain effective relationships !ith yor sta#eholders. (t
isn&t abot being )right on&, or monting an expensive pblicity exercise. (t means ta#ing a
responsible attitde, going beyond the minimm legal re%irements and follo!ing
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straightfor!ard principles that apply, !hatever the size of the bsiness. CSR is a fnction of
operating a bsiness that meets or exceeds the legal, ethical, commercial and pblic expectation
that society has of bsiness .Corporate social responsibility (CSR) is the obligations on the part
of corporate and bsiness hoses to ta#e sch actions that protect and improve the !elfare of the
society as a !hole and also safegard their o!n interest of profit. There has been a revoltionary
change in the attitde of the corporate sector to!ards the commnity they are operating in. CSR
emphasis the responsibility of companies to!ards sta#eholders consisting of consmers,
employees, o!ners, government, sppliers, competitors and society at large as against their
earlier focs on profit maximization alone.
Social responsibility of big bsiness hoses encompasses the sector li#e health, edcation,
employment, (ncome and %ality of life. (t shold be binding on the corporate sector to !or# on
the above aspects, !hich are thoght to be primary social indicators. +etter %ality of living
standards is directly related to improve bying capacity of masses. Corporate social
responsibility is closely lin#ed !ith the principles of )Sstainable development& and proposing
that enterprises shold be obliged to ma#e decisions based not only on the financial,economic
factors bt also on the social and environmental conse%ences of their activity. Corporate Social
Responsibility ths helps to define the contribtion of a company beyond economic vale and
creating employment, and !eighs this contribtion against the damage done by the company
throgh its prodcts and processes. Corporate Social 2esponsi,ility encompasses t(o aspects%
* 3'e steps ta1en ,y a company to neutralize4 minimize or offset t'e 'armful effects cause& ,y
its processes an& pro&uct-usage*
"* 3'e furt'er steps a company ta1es using its resources4 core competence4 s1ills4 location an&
fun&s for t'e ,enefit of people an& t'e environment*
The role of bsiness hoses in the development of social strctre of the contry and society has
ndergone a sea change. The corporate sector in (ndia very often blames the government for poor
governance and lac# of far sightedness. +t do the corporate sectors perform its dty to
contribte to the overall gro!th of the contry- .oes it have the right to blame the governance-
.oes it contribte to nation bilding- Thogh (ndia is one of the fastest gro!ing economies,
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socio0economic problems li#e poverty, illiteracy, lac# of healthcare etc. are still bi%itos and
the government has limited resorces to tac#le these challenges. This scenario has opened p
several areas for bsinesses to contribte to!ards social development. (ndia being a mixed
economy provides sfficient head room for both pblic and private sector. Today the (ndian
economy is represented by both pblic and private sector engaging in healthy competition to
promote the rapid development of contry.
Ta#!e': (recto" o) CSR I"tat*es + P,#!c Vs Pr*ate Sector
Sr-
No-
Ite. P,#!c Sector Pr*ate Sector
* Rral development 1 1
/ $ealth care 1 1
2 3dcation 1 1
4 5icrofinance 0 1
6 Child !elfare 0 1
7 .isaster management 0 1
8 Commnity development 1 1
9 :omen empo!erment 1 1
; 3nvironment protection 0 1
*< (nfrastrctre development 0 1
Sorces= Compiled from >armyog CSR rating /<<9
Ta#!e /: Re!at*e I.porta"ce o) CSR I"tat*es + P,#!c Vs Pr*ate Sector
Sr-
No-
Ite. P,#!c Sector Pr*ate Sector
* Rral development *4? 7;?
/ $ealth care *4? 44?
2 3dcation 42? 76?
4 5icrofinance 0 9?
6 Child !elfare 0 *8?
7 .isaster management 0 *;?
8 Commnity development *4? *9?
9 :omen empo!erment *4? *8?
; 3nvironment protection 0 2*?
*< (nfrastrctre development 0 7?
Sorces= Compiled from >armyog CSR rating /<<9
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"mong ten different CSR initiatives, health care, edcation and commnity development are
commonly prsed by companies across different sectors as against these, microfinance and
child !elfare and !omen empo!erment have not received sfficient attention by the (ndian
companies. There exist inter0sectoral differences !ith regard to the relative importance of
varios CSR activities practiced in (ndian companies. 3dcation and health care generally
received top priorities at the inter0sectoral level. The least priority area incldes infrastrctre
development and microfinance. The beneficiary analysis revealed that the employees and society
at large are the least focsed area among the corporate across different sectors of the indstry
most of the beneficiary belong to the people in the immediate vicinity. Since CSR in not
mandatory, companies shold be motivated by the government to set aside the part of their fnds
for socially responsible prodcts. Tax incentives, recognition etc. may be considered as
motivators in this regard.
CSR is not a ne! concept in (ndia. Corporate hoses li#e the Tata @rop, the "ditya +irla
@rop, and (ndian Ail Corporation, 5ahindra and 5ahindra to name a fe!, have been involved
in serving the commnity ever since their inception. 5any other organizations have been doing
their part for the society throgh donations and charity events. Today, CSR in (ndia has gone
beyond merely charity and donations, and is approached in a more organized fashion. (t has
become an integral part of the corporate strategy. Companies have CSR teams that devise
specific policies, strategies and goals for their CSR programs and set aside bdgets to spport
them. These programs, in many cases, are based on a clearly defined social philosophy or are
closely aligned !ith the companies& bsiness expertise. 3mployees become the bac#bone of
these initiatives and volnteer their time and contribte their s#ills, to implement them. CSR
'rograms cold range from overall development of a commnity to spporting specific cases
li#e edcation, environment, healthcare etc. The revie! of the leading companies revealed the
#ey isses in (ndia !hich companies are a!are of the need to tac#le= a hge and gro!ing
poplationB mass rbanization and a move a!ay from a traditional agricltral based economyB
and massive poverty alongside increasing and booming !ealth, !ith the specter of $(C,"(.S
alongside diseases of the !orld&s neediest people. "nd alongside these !as ho! best to balance
the needs and !ants of a gro!ing economy !ith the scale of the aforementioned isses.
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Dor example, organizations li#e +harat 'etrolem Corporation Eimited, 5arti Sz#i (ndia
Eimited, and $indstan Fnilever Eimited, adopt villages !here they focs on holistic
development. They provide better medical and sanitation facilities, bild schools and hoses, and
help the villagers become self0reliant by teaching them vocational and bsiness s#ills. An the
other hand @laxoSmith>line 'harmaceticals& CSR programs primarily focs on health and
healthy living. They !or# in tribal villages !here they provide medical chec#0p and treatment,
health camps and health a!areness programs. They also provide money, medicines and
e%ipment to non0profit organizations that !or# to!ards improving health and edcation in
nder0served commnities. " leading company 5ahindra and 5ahindra ltd. $as been set p a
specific obGective to promote 5edical relief to the poor and needy sections of the society. The
5ahindra grop on the occasions of its 7<
th
anniversary ndertoo# the sponsorship of 7<<<
Hanhi >ali, ma#ing 5I5 the single largest corporate donor for the Hanhi >ali programme.
This !as !hen the Hanhi >ali programmed sho!ed great potential to develop sccessflly as a
model for Corporate H@A civil society partnership. 5any CSR initiatives are exected by
corporate in partnership !ith Hon0governmental organizations (H@As) !ho are !ell versed in
!or#ing !ith the local commnities and are experts in tac#ling specific social problems. Dor
example, S"' (ndia in partnership !ith $ope Dondation, an H@A that !or#s for the betterment
of the poor and the needy throghot (ndia, has been !or#ing on short and long0term rebilding
initiatives for the tsnami victims. Together, they also started 3'e SAP 5a,s Center of 67P$ in
+angalore, a home for street children, !here they provide food, clothing, shelter, medical care
and edcation.
CSR has come a long !ay in (ndia. Drom responsive activities to sstainable initiatives,
corporate have clearly exhibited their ability to ma#e a significant difference in the society and
improve the overall %ality of life. (n the crrent social sitation in (ndia, it is difficlt for one
single entity to bring abot change, as the scale is enormos. Corporate have the expertise,
strategic thin#ing, manpo!er and money to facilitate extensive social change. 3ffective
partnerships bet!een corporate, H@As and the government !ill place (ndia&s social development
on a faster trac#.
O#ser*ato"s )ro. t0e I"da #ased N1O re&ard"& CSR Rat"& o) I"da2s 344 !ar&est
co.pa"es:
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*. 5ost companies are not doing any CSR
/. 5any companies are only ma#ing to#en gestres to!ards CSR in tangential !ays sch as
donations to charitable trsts or H@As, sponsorship of events, etc.
2. 5ost companies believe that charity and philanthropy e%als to CSRB very fe!
companies are sing their core competence to benefit the commnity.
4. 5ost companies se CSR as a mar#eting tool to frther spread the !ord abot their
bsiness. Dor instance, donation of a to#en amont to some case on prchase of a
particlar prodct. The fact that companies are hiring advertising agencies for their CSR
frther highlights this.
6. Anly 7 (ndian companies (from this stdy) pblish a Corporate Sstainability Report to
measre and assess the impact of their bsiness on the environment
7. Cery fe! companies openly state the processes follo!ed by them, the damage cased by
these processes, and the steps ta#en to minimize this damage.
8. Cery fe! companies state ho! mch they spend on CSR. There is no mention of the
amont spent in any of their balance sheets or annal reports. 5ost companies Gst list
and describe their CSR activities and seem to be spending minimal amonts on CSR.
9. Cery fe! companies are engaged in CSR activities in the local commnities !here they
are based.
;. Cery fe! companies have a clearly defined CSR philosophy. 5ost implement their CSR
in an ad0hoc manner, nconnected !ith their bsiness process.
*<. 5ost companies spread their CSR fnds thinly across many activities, ths some!here
losing the prpose of nderta#ing that activity.
**. 5ost companies appear relctant to themselves flfill their CSR nless it is mandatory by
la!.
(n (ndia, most of the corporate do not have a clear policy on social responsibility. @enerally
spea#ing, most companies seem either na!are or don&t care abot CSR. :hile developed
contries li#e 3ngland have separate ministries to loo# after the isse of corporate social
responsibility, in (ndia, the government does not have a clear policy on the isse. $o!ever, all
companies can be considered to be an p!ard learning crve !ith respect to CSR and it is
expected that the sitation !ill improve. 3nlightened bsinesses !orld!ide, small and large have
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begn to realize that responsible practices enhance profitability I ensre long0term srvival. Dor
those, !hich disrespect the environment or living beings, !e, as responsible citizens, need to
individally and collectively, re!ard or penalize them throgh or voices and or !allets.
" srvey !as condcted by AR@05"R@ for T3R(03rope in several cities of (ndia in /<<*. The
basic prpose of the srvey !as to captre perceptions and expectations (related to corporate
responsibility) of the follo!ing three sets of sta#eholders sch as general pblic, !or#ers
(s#illed, semis#illed and n0s#illed) and corporate exectives (head of corporate relation, labor
relations, !elfare dept. and manfactring dept. in 5HCs, large and medim sized (ndian
companies). The poll gathered that people believe that companies shold be actively engaged in
social matters. " maGority of the general pblic feels that companies shold be held flly
responsible for roles over !hich they have direct control. These inclde providing good prodcts
and cheaper prices, ensring that operations are environment friendly, treating employees fairly
!ithot any discrimination based on gender, race or religion and applying labor standards
globally. 5ore than 7<? of the general pblic felt that the companies shold also be held
responsible for bridging the gap bet!een the rich and the poor, redcing hman rights abses,
solving social problems and increasing economic stability.
Co"c!,so":
To conclde, the bsiness of t!enty first centry !ill have no choice bt to implement CSR. The
la! needs to be formlated to help in reinforcing CSR practices and the corporate hoses shold
be ans!erable to the government. The corporate social responsibility (CSR) shold not be
merely a statement of intent. (t shold be made complsory for the corporate operating in (ndia.
"ppointment of an independent social acconting committee to measre, monitor, evalate and
report the impact of CSR in annal report shold be mandatory. " certain percentage of profit
shold be earmar#ed for social development that shold reflect in the annal balance sheet of the
company. The corporate had increasingly begn to ponder over !hether there is more to bsiness
than Gst financial nmbers, leading to the emergence of concept of the "triple bottom line
impact". $ere a company basically tries to balance three critical aspects i.e., economic retrns,
social benefits and environmental sstainability.
Ro+e"eller #a%#, Thi!+ o" 'i(i!' !ot a# a d*t% -*t a# a $ri(ile'e..
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Re)ere"ces:
*. The importance of corporate social responsibility a !hite paper from the economist
(ntelligence nit sponsored by oracle.
/. CSR "SAC(A policy paper Jne /<<4
2. 5anagement Dorm= CSR pblished by "sian 'rodctivity Arg.
4. CSR "sia !ee#ly Col.6 !ee#2;
6. (mportance of corporate social responsibility in a .o!ntrn K!or#ing #no!ledge=
$ard!are bsiness social "gst 2, /<<;.
7. 'rabandha#= (ndian Jornal of 5ar#eting


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