Corporate society themselves, can contribute to its

Corporate social
responsibility is a form of corporate self regulation integrated into a
business model. It is also called as corporate conscience, citizenship, social
performance or sustainable responsible business. The goal of CSR is to embrace
responsibility for the company’s actions and encourage positive impact through its
activities on the environment, consumers, employees, communities, stakeholders
and   members of the public sphere. Corporations
are more aware of their role towards the society. They are expected to be
responsible bodies with a sense of duty towards common resources and the
environment and there is a growing realization that they, as an integral part
of this society themselves, can contribute to its development. This paper introduces CSR’s changing meaning and it
explains why there has been a recent increase in CSR. This paper focuses on the
evolution of CSR in India and its current scenario.

Key Words: Corporate Social
Responsibility, sustainable development, evolution

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 Introduction

 

Companies, businesses and society are more connected and
interactive today than ever before. Corporations are more aware of their role
towards the society. They are expected to be responsible bodies with a sense of
duty towards common resources and the environment and there is a growing
realization that they, as an integral part of this society themselves, can
contribute to its development. Consumers’ and citizens’ campaigns can make all
the difference. Corporate Social Responsibility or CSR constitutes the
foundation of the tripartite relationships among companies, society and the
nation. Corporate Social Responsibility (CSR) is expected to be integral to
business today. It has also become the password to not only overcome
competition but to ensure sustainable growth. It has been supported by the
shareholders and stakeholders, by and large, encompassing the whole community.
CSR in reality is the alignment of business operations with social values. It
takes into account the interests of stakeholders in the company’s business
policies and actions. It focuses on the social, environmental, and financial
success of a company–the so-called “triple bottom line”–with the
aim to achieve social development while achieving business success. More
importantly, CSR is the point of convergence of various initiatives aimed at
ensuring socio-economic development of the community as a whole in a credible
and sustainable manner.
Although India is a favorable business destination for western investors it is
to be tremendously challenging for any business to remain competitive here in
the long term. Unless poor people have equity in the growth of economy, India
can never achieve the title of super economy. Here comes the critical role of
corporations. Corporate social responsibility is one such niche area of
corporate behavior & governance that needs to get aggressively addressed
& implemented tactfully in the organizations. At the same time CSR is one
effective tool that synergizes the efforts of corporate & the social sector
agencies towards sustainable growth & development of the societal
objectives at large.

 

CSR Concept& Definitions:

 

     Corporate Social Responsibility
(CSR) is a concept whereby companies integrate social, environmental and health
concerns in their business strategy (policy) and operations and in their
interactions with stakeholders on a voluntary basis. The social responsibility
of business encompasses the economic, legal, ethical, and discretionary
expectations that society has of organizations at a given point in time.

 

The European
Commission’s definition of CSR is:
“A concept whereby companies integrate social and environmental concerns
in their business operations and in their interaction with their stakeholders
on a voluntary basis.”

According to CSR
Asia, “CSR
is a company’s commitment to operating in an economically, socially and
environmentally sustainable manner whilst balancing the interests of diverse
stakeholders.

             

    Today the concept of CSR has undergone
radical change. It has integrated social as well as environmental issues into
their missions and decisions. Companies take keen interest in informing about
their CSR activities to their stakeholders as well. Across the globe, business
enterprises have undertaken CSR initiatives in the areas of water conservation,
healthcare, rural welfare, environment protection, poverty alleviation,
education, community investment projects, culture and heritage, bio-diversity,
disaster management and relief, culture and heritage, green environment,
product responsibility, governance, waste management and gender equality. while
proposing the Corporate Social Responsibility Rules under Section 135 of the
Companies Act, 2013, the Chairman of the CSR Committee mentioned the Guiding
Principle as follows: “CSR is the process by which an organization thinks
about and evolves its relationships with stakeholders for the common good, and
demonstrates its commitment in this regard by adoption of appropriate business
processes and strategies. Thus CSR is not charity or mere donations. CSR is a
way of conducting business, by which corporate entities visibly contribute to
the social good. Socially responsible companies do not limit themselves to
using resources to engage in activities that increase only their profits. They
use CSR to integrate economic, environmental and social objectives with the
company’s operations and growth.”

 

Benefits
of CSR

1.      Win new business.

2.      Increase customer retention.

3.      Develop and enhance relationships
with customers, suppliers and networks.

4.      Differentiate yourself from your
competitors.

5.      Improve your business reputation
and standing.

6.      Provide access to investment and
funding opportunities.

7.       

Evolution
of Corporate Social Responsibility

          The evolution
of corporate social responsibility in India refers to changes over
time in India of the cultural norms of corporations’ engagement of corporate social
responsibility (CSR), with CSR referring to
way that businesses are managed to bring about an overall positive impact on
the communities, cultures, societies and environments in which they operate.1 The fundamentals of CSR rest on the fact that not
only public policy but
even corporate should be responsible enough to address social issues. Thus
companies should deal with the challenges and issues looked after to a certain
extent by the states. Among
other countries India has one of
the oldest traditions of CSR.But CSR practices are regularly not practiced or
done only in namesake especially by MNCs with no cultural and emotional
attachments to India. Much has been done in recent years to make Indian Entrepreneurs aware of
social responsibility as an important segment of their business activity but
CSR in India has yet to receive widespread recognition. If this goal has to be realized
then the CSR approach of corporate has to be in line with their attitudes
towards mainstream business- companies setting clear objectives, undertaking
potential investments, measuring and reporting
performance publicly.

 

 

 Phases of Evolution

           The history of CSR in India has its
four phases which run parallel to India’s historical development and has
resulted in different approaches towards CSR. However the phases are not static
and the features of each phase may overlap other phases.

The First
Phase

           In the first phase charity and philanthropy were the main drivers of CSR.
Culture, religion, family values and tradition and industrialization had an
influential effect on CSR. In the pre-industrialization period, which lasted
till 1850, wealthy merchants shared a part of their wealth with the wider
society by way of setting up temples for a religious cause. Moreover,
these merchants helped the society in getting over phases of famine and
epidemics by providing food from their godowns and money and thus securing an integral
position in the society. With the arrival of colonial rule in India from the
1850s onwards, the approach towards CSR changed. The industrial families of the
19th century such as Tata, Godrej, Bajaj, Modi, Birla, Singhania were strongly inclined
towards economic as well as social considerations. However it has been observed
that their efforts towards social as well as industrial development were not
only driven by selfless and religious motives but also influenced by caste
groups and political objectives.

The Second
Phase

            In the second phase, during
the independence movement, there was
increased stress on Indian Industrialists to demonstrate their dedication
towards the progress of the society. This was when Mahatma Gandhi introduced the notion of
“trusteeship”, according to which the industry leaders had to manage
their wealth so as to benefit the common man. “I desire to end
capitalism almost, if not quite, as much as the most advanced socialist. But
our methods differ. My theory of trusteeship is no make-shift, certainly no
camouflage. I am confident that it will survive all other theories.”
This was Gandhi’s words which highlights his argument towards his concept of
“trusteeship”. Gandhi’s influence put pressure on various
Industrialists to act towards building the nation and its socio-economic
development. According to Gandhi, Indian companies were supposed to be the
“temples of modern India”. Under
his influence businesses established trusts for schools and colleges and also
helped in setting up training and scientific institutions. The operations of
the trusts were largely in line with Gandhi’s reforms which sought to abolish
untouchability, encourage empowerment of women and rural development.

The Third
Phase

          The third phase of CSR (1960–80) had
its relation to the element of “mixed economy”, emergence of Public Sector Undertakings (PSUs)
and laws relating labour and environmental standards. During this period the
private sector was forced to take a backseat. The public sector was seen as the
prime mover of development. Because of the stringent legal rules and
regulations surrounding the activities of the private sector, the period was
described as an “era of command and control”. The policy of
industrial licensing, high taxes and restrictions on the private sector led to
corporate malpractices. This led to enactment of legislation regarding
corporate governance, labour and environmental issues. PSUs were set up by the
state to ensure suitable distribution of resources (wealth, food etc.) to the
needy. However the public sector was effective only to a certain limited
extent. This led to shift of expectation from the public to the private sector
and their active involvement in the socio-economic development of the country
became absolutely necessary. In 1965 Indian academicians, politicians and
businessmen set up a national workshop on CSR aimed at
reconciliation. They emphasized upon transparency, social accountability
and regular stakeholder dialogues. In spite of such attempts the CSR failed to
catch steam.

The Fourth
Phase:

        In the fourth phase (1980 – 2013) Indian companies
started abandoning their traditional engagement with CSR and integrated it into
a sustainable business strategy. In the 1990s the first initiation
towards globalization and economic liberalization were undertaken. Controls and licensing system were partly done
away with which gave a boost to the economy the signs of which are very evident
today. Increased growth momentum of the economy helped Indian companies grow
rapidly and this made them more willing and able to contribute towards social
cause. Globalization has transformed India into an important destination in
terms of production and manufacturing bases of TNCs are concerned. As Western
markets are becoming more and more concerned about labour and environmental
standards in the developing countries, Indian companies which export and
produce.

Current Scenario of
CSR in India

             CSR is not a new concept in India.
Ever since their inception, corporate like the Tata
Group, the Group, and Indian Oil Corporation, to name a few have been involved in serving the community.
Through donations and charity events, many other organizations have been doing
their part for the society. The basic objective of CSR in these days is to
maximize the company’s overall impact on the society and stakeholders. CSR
policies, practices and programs are being comprehensively integrated by an
increasing number of companies throughout their business operations and
processes. A growing number of corporate feel that CSR is not just another form
of indirect expense but is important for protecting the goodwill and
reputation, defending attacks and increasing business competitiveness.

           Companies have specialized CSR teams that
formulate policies, strategies and goals for their CSR programs and set aside
budgets to fund them. These programs are often determined by social philosophy
which have clear objectives and are well defined and are aligned with the
mainstream business. The programs are put into practice by the employees who
are crucial to this process. CSR programs ranges from community development to
development in education, environment and healthcare etc.

          For example, a more comprehensive method of
development is adopted by some corporations such as Bharat
Petroleum Corporation Limited, Maruti
Suzuki India Limited. Provision of improved medical
and sanitation facilities,
building schools and houses, and empowering the villagers and in process making
them more self-reliant by providing vocational training and
a knowledge of business operations are the facilities that these corporations
focus on. Many of the companies are helping other peoples by providing them
good standard of living. Also, corporate increasingly join hands with non-governmental
organizations (NGOs) and use their expertise
in devising programs which address wider social problems.

        CSR has gone through many phases in India. The
ability to make a significant difference in the society and improve the overall
quality of life has clearly been proven by the corporate. Not one but all
corporates should try and bring about a change in the current social situation
in India in order to have an effective and lasting solution to the social woes.
Partnerships between companies, NGOs and the government should be facilitated
so that a combination of their skills such as expertise, strategic thinking,
manpower and money to initiate extensive social change will put the
socio-economic development of India on a fast track.

 Case Study of the corporate takeover in Kizhakkambalam

         An Indian garment manufacturing
company called Kitex has taken over the administration of a small village
called Kizhakkambalam by
winning the local body elections held in November, 2015. Mainstream political
leaders and environmental activists feel that this can lead to a dangerous
precedent because corporate body can have a hidden agenda in taking over the
administration of political bodies. Former Indian MP Sebastian Paul says that
“the company was at loggerheads with the former panchayat on issues like
environmental pollution so we don’t know what their vested interest is in
taking over the panchayat. They also employ a big segment of the population
there and also give out dole to locals. This model can be replicated.It is
setting a dangerous precedent.” Environmentalists like C.R.Neelakantan point
out that the Kitex group has become active in social service only after they
were involved in court cases connected with water and pollution.

Conclusion:

        The
concept of corporate social responsibility has gained prominence from all
avenues. Organizations must realize that govt. alone will not be able to get success
in its endeavor to uplift the downtrodden of society. The present societal
marketing concept of companies is constantly evolving and has given rise to a
new concept -corporate social responsibility. Many of the leading companies
across the world had realized the importance of being associated with socially
relevant causes as a means of promoting their brands.CSR plays a valuable role
in ensuring that the invisible hand acts as intended to produce the social good.

 

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