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Corporate Social Responsibility in India. Trends, Issues and Strategies

©2016 Textbook 278 Pages

Summary

Corporate Social Responsibility (CSR) – the commitment of organizations to balance financial performance with contributions to the quality of life of their employees, the local community and society at large – is gaining worldwide value as a business tool and social effort. The review of literature suggests that many studies have been undertaken globally to understand CSR as a subject of management but there have been very few studies undertaken to understand the other dimension of CSR which is beneficiary (community) aspect of CSR, especially in India. Here, the authors make an attempt to understand the CSR concept from both the dimensions of CSR i.e. management and beneficiaries of CSR (community). The authors try to understand the issues covered by the management and their implementing strategies in order to meet community needs. Also, the authors try to study the requirements and satisfaction of the community in the area where the corporates implement CSR.
This type of attempt is the first one in India to study the community awareness and ist knowledge about CSR as well as the organisations working in the community. The present study also tries to measure the impact of CSR activities undertaken by the organizations in a way to have the sustainable development at village level. In this context, the present study plays a significant role in the field of Research Methodology, the field of management as well as social science, especially from the social work perspective. To meet the study objectives, both primary and secondary data were used. The primary data was collected in Karnataka, India by selecting nine organisations, three of each from Govt., Private and Multinational companies; those were recognised as leaders in implementing CSR activities. To understand the impact of CSR on community, 450 community respondents were also interviewed with the help of structured questionnaire. Secondary data for the study was obtained from Karmayog. CSR Ratings of the 500 largest Indian companies and other similar studies, other available articles, books, companies’ annual reports and related publications were reviewed in the study.

Excerpt

Table Of Contents


Chapter-6: Emerging Trends of Corporate Social Responsibility ... 144
6.1 Introduction ... 144
6.2 CSR Level and Trends at National Level ... 145
6.3 Trend in Study sites ... 150
Chapter-7: Issues concerning to Corporate Social Responsibility ... 161
7.1 Introduction ... 161
7.2 Issues at National level ... 163
7.3 Issues at Study area ... 166
Chapter-8: Strategies in CSR Implementation ... 181
8.1 Introduction ... 181
8.2 CSR Strategies at National Level ... 183
8.3 Strategies at study area ... 185
Chapter-9: Impact of Corporate Social Responsibility on Community... 201
9.1 Introduction ... 201
9.2 Health ... 202
9.3 Education ... 204
9.4 Employment ... 205
9.5 Empowerment ... 206
9.6 Environment ... 208
9.7 Infrastructure ... 209
Chapter-10: Summary, Conclusions and Suggestions ... 212
10.1 Summary ... 212
10.2 Conclusions ... 219
10.3 Suggestions ... 227
10.3.1 General Suggestions ... 227
10.3.2 Suggestions to Government ... 228
10.3.3 Suggestions for all CSR implementing organisations ... 229
10.3.4 Suggestions for Public Sector Organisations ... 230
10.3.5 Suggestions for Academicians and Researchers ... 230
References ... 232
Appendix-I: Interview Schedule for Management ... 244
Appendix-II: Community Beneficiaries Interview Schedule ... 257
Appendix-III: Abbreviations ... 270

5
LIST OF TABLES
Table 1: Basic Profile Study Organisations ... 106
Table 2: Vision of Study Organisations ... 107
Table 3: Structure and Products of Study Organisations ... 108
Table 4: Major CSR activities of Study Organisation ... 109
Table 5: Profile of Study Plants or Units ... 110
Table 6: Profile of CSR Managers ... 111
Table 7: Distribution of Respondents by Age ... 112
Table 8: Distribution of Respondents by Gender ... 113
Table 9: Distribution of Respondents by Education Level ... 113
Table 10: Distribution of Respondents by Marital Status ... 113
Table 11: Distribution of Respondents by Number of living Children... 114
Table 12: Distribution of Respondents by Religion ... 114
Table 13: Distribution of Respondents by Caste ... 115
Table 14: Distribution of Respondents by Family Size ... 115
Table 15: Distribution of Respondents by Employment Status ... 116
Table 16: Distribution of Respondents by Type of Water Supply ... 116
Table 17: Distribution of Respondents by Source of Lighting to Household ... 117
Table 18: Distribution of Respondents by Source of fuel for cooking ... 117
Table 19: Distribution of Respondents by Type of House ... 118
Table 20: Distribution of Respondents by Type of Toilet ... 118
Table 21: Distribution of Respondents by Land Availability ... 119
Table 22: Distribution of Respondents by Income of the Family ... 119
Table 23: Distribution of Respondents by Family Received Credit ... 120
Table 24: Distribution of Respondents by Amount of Credit ... 120
Table 25: Distribution of Respondents by Rate of Interest ... 121
Table 26: Distribution of Respondents Aware of Concept CSR by Age ... 123
Table 27: Distribution of Respondents Aware of Concept CSR by Gender ... 124
Table 28: Distribution of Respondents Aware of Concept CSR by Marital Status ... 125
Table 29: Distribution of Respondents Aware of Concept CSR by Type of Family ... 126
Table 30: Distribution of Respondents Aware of Concept CSR by Religion ... 127
Table 31: Distribution of Respondents Aware of Concept CSR by Caste ... 128
Table 32: Distribution of Respondents Aware of Concept CSR by Education Level ... 129
Table 33: Distribution of Respondents Aware of Concept CSR by Occupation ... 130

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Table 34: Distribution of Respondents Aware of Concept CSR by Social Status ... 131
Table 35: Distribution of Respondents Aware of Concept CSR by Type of Organisation ... 132
Table 36: Distribution of Respondents knowing the organization name by Age ... 133
Table 37: Distribution of Respondents knowing the organization name by Gender ... 134
Table 38: Distribution of Respondents knowing the organization name by Marital Status ... 135
Table 39: Distribution of Respondents knowing the organization name by Type of Family ... 136
Table 40: Distribution of Respondents knowing the organization name by Religion ... 137
Table 41: Distribution of Respondents knowing the organization name by Caste ... 138
Table 42: Distribution of Respondents knowing the organization name by Education ... 139
Table 43: Distribution of Respondents knowing the organization name by Occupation ... 140
Table 44: Distribution of Respondents knowing the organization name by Social Status... 141
Table 45: Distribution of Respondents knowing the organization name by Type of Organisation ... 142
Table 46: Distribution of companies based on Karmayog corporate social responsibility rating of
500 largest companies in Indian-2010 ... 147
Table 47: Comparison of ratings: 2007 ­ 2010, as per the results of the Karmayog corporate
social responsibility ratings of the 500 largest Indian companies ... 148
Table 48: Number of years the organisation have been working in community as part of CSR ... 151
Table 49: Trend in budget allocation (Rupees in Lakhs) ... 153
Table 50: Distribution of respondents those observed change in CSR strategy by type of
organisation ... 154
Table 51: Distribution of respondents those observed change in CSR strategy by type of CSR
unit head ... 155
Table 52: Distribution of respondents those observed change in CSR strategy by Age of
Organisation ... 156
Table 53: Distribution of respondents those observed change in CSR strategy by organisations
directly or with collaboration ... 157
Table 54: Distribution of respondents those observed change in CSR strategy by type of area the
organisation working ... 158
Table 55: Distribution of respondents those observed change in CSR strategy by management
skill course ... 159
Table 56: Distribution of organisations based on current issues covered v/s priority area to be
considered under CSR ... 165
Table 57: Number of orgnisations working on different issues in community ... 167
Table 58: Distribution of respondents those mentioned about Health related activities by type
of organisation ... 169
Table 59: Distribution of respondents those mentioned about Education related activities by
type of organisation ... 172
Table 60: Distribution of respondents those mentioned about Community empowerment
activities by type of organisation ... 174

7
Table 61: Distribution of respondents those mentioned about Community infrastructure
development activities by type of organisation ... 176
Table 62: Distribution of respondents those mentioned about Environment related activities by
type of organisation. ... 178
Table 63: Percent distribution of organisations based on type of CSR Initiatives ... 185
Table 64: Respondents satisfaction by mode of implementation ... 187
Table 65: Respondents satisfaction by age of organization ... 188
Table 66: Respondents satisfaction by unit heading the CSR activities ... 190
Table 67: Respondents satisfaction by education qualification of CSR managers ... 192
Table 68: Respondents satisfaction by organization size ... 194
Table 69: Respondents satisfaction by gender of CSR head ... 196
Table 70: Respondents satisfaction by selection criteria of CSR issues ... 198
Table 71: Respondents satisfaction by type of organisation ... 199
Table 72: Respondents' opinion on effectiveness of organisation on health by type of
organisations ... 202
Table 73: Respondents' opinion on effectiveness of organisation on education by type of
organisations ... 204
Table 74: Respondents' opinion on effectiveness of organisation on employment by type of
organisations ... 205
Table 75: Respondents' opinion on effectiveness of organisation on empowerment by type of
organisations ... 207
Table 76: Respondents' opinion on effectiveness of organisation on environment by type of
organisations ... 208
Table 77: Respondents' opinion on effectiveness of organisation on infrastructure development
by type of organisations... 210
LIST OF GRAPHS
Graph 1: Trend of CSR implementation, 2007-2010. As per the results of the Karmayog CSR
Ratings of the 500 largest Indian companies ... 148
Graph 2: Percent distribution of organisations by years of Initiation of CSR Activities, 2008. ... 149
Graph 3: Years since the organisation started corporate social responsibility Initiative ... 150
Graph 4: Trend in budget allocation, 2008-09 to 2011-12 ... 152
Graph 5: Percent distribution of organizations based on Issues covered under CSR initiatives ... 163
Graph 6: Percent distribution of organization based on rational for selecting of CSR initiatives ... 164
Graph 7: Number of organisations working on health issues ... 168
Graph 8: Number of organisations working on educational issues ... 171

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Graph 9: Number of Organisations working on empowerment Issues ... 173
Graph 10: Number of Organisations working on infrastructure development ... 175
Graph 11: Number of Organisations working on Environmental Issues ... 177
Graph 12: Percent distribution organisations based on person responsible for CSR
implementation ... 183
Graph 13: Percent distribution of organisation based on stakeholder involved in implementation
process ... 184
Graph 14: Number distribution of organisations based on strategy ... 186
Graph 15: Number of organisation based on age of organisation ... 188
Graph 16: Number distribution of organisations based on type of unit heading the CSR activities .. 189
Graph 17: Number distribution of organisations based on qualification of unit head ... 191
Graph 18: Number distribution of organisations based on size of organisation ... 193
Graph 19: Number distribution of organisations based on gender of unit headed ... 195
Graph 20: Number organisation based on criteria of selection for CSR activities and type of
organisation ... 197
LIST OF FIGURES
Figure 1: Four Phases of CSR Development in India ... 18
Figure 2: Design of Research methods applied in study ... 98
Figure 3: Showing study area in Karnataka ... 100

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Chapter-1: Introduction
Chapter-1: Introduction
1.1 Background
Globalisation is the process that has come to dominate the world since the nineties of the last
century with the end of the cold war and the break-up of the former Soviet Union.
Globalisation opened up economies world over and offered scope for investment in any part
of the world and also brought the new opportunities to developing countries to participate
globally in socio-economic and cultural affairs. Greater access to markets of developed
countries and technology transfer hold out promise of improved productivity and higher living
standards. The process of globalisation has thrown up new challenges like growing inequality
across and within nations, volatility in financial market, environmental degradation and
competition among the corporations, to overcome these challenges the globalisation has given
rise to the practice and concept of Corporate Social Responsibility (CSR).
Corporate Social Responsibility (CSR) is commitment by organizations to balance
financial performance with contributions to the quality of life of their employees, the local
community and society at large is gaining worldwide value as a business tool and social
effort. Organizations are increasingly called upon to evolve beyond focusing on the financial
bottom line and consider the social and environmental impact of their business decisions,
particularly as globalization continues. Corporate social responsibility includes a broad range
of practices and activities, from charitable donations to cause branding to business strategies
addressing human rights and labor issues. How organizations demonstrate corporate social
responsibility and the rationale behind such practices may vary according to the industry,
sector and country in which organizations operate.
Corporate Social Responsibility (CSR) is defined as a strategy in which operating a
business in a manner that meets or exceeds the ethical, legal, commercial and public
expectations that society has of business. In the last twenty years, there has been a sea change
in the nature of the triangular relationship between companies, the state and the society
(Edenkamp, 2002). CSR has become increasingly prominent in the Indian corporate scenario
because organisations have realised that besides growing their businesses it is also vital to

10
build trustworthy and sustainable relationships with the community at large. This is one of the
key drivers of CSR programs (Ramya Sathish, 2010). CSR is coming out of the purview of
`doing social good' and is fast becoming a `business necessity'. Corporate houses are
realising that what is good for community, environment and workers health is also good for
the business (Indu Jain, 2010). CSR also refers to the relationship of corporation with society
as a whole. CSR is therefore a dramatically expanding area of activity for management and
academics. The standard code for CSR is to contribute to protect and promote the interest of
community and society at large and the operations at the global level have helped to increase
the importance of CSR world over. Now the CSR activities will not remain limited to the
company itself, but also touch upon their economic partners and communities too.
The corporate sector has a pivotal role to play in ensuring private investment flows to
those rural areas that have been left out of the development process so far and also to work for
sustainable development of rural areas in general. Over the past few years, as a consequence
of rising globalization and pressing ecological issues, the perception of the role of corporates
in the border social context within which it operates, has been altered. Corporates considers
them as an integral part of society and accordingly act in a social responsible way that goes
beyond economic performance (KPMG and ASSOCHAM, 2008). As a result of this shift
from purely profit to profit with social responsibility.
1.2 Origin and History of Corporate Social Responsibility
1.2.1 Origin of CSR Concept
Although the concept of CSR has become increasingly recognized in the latest decades its
core idea can be traced through history. Already in the 18th century employers realized the
value of having an efficient workforce and that a lack of food, housing and healthcare had a
negative effect on the workforce. Medical facilities, housing and subsidized food that might
have been seen as philanthropic improvements was actually created out of self-interest
(Brown 2005). Thus in the 18th century people saw positive economic consequences of CSR
actions. The history of CSR highlights the ways in which business leaders and scholars have
struggled to define and conceptualize CSR. As America and Europe emerged from World
War II and confronted the emerging Cold War tensions, thinking about business and the
future course of the economic system in the West intensified. The preliminary research for
the envisioned project revealed a range of opinion and ongoing efforts to articulate business

11
responsibilities, to provide a philosophical foundation for those responsibilities, and to
develop effective ways of responding to or implementing those responsibilities. A few
selected examples of this evolution are offered below:
Dempsey and David: Although the term corporate social responsibility was not used,
Bernard Dempsey, in his 1949 Harvard Business Review (HBR) article "The Roots of
Business Responsibility," laid out a rationale for responsible business practice. Dempsey
provided a philosophical foundation for arguments in an HBR article two months prior by
Donald K. David, Dean of the Harvard Graduate School of Business Administration, titled
"Business Responsibilities in an Uncertain World." David called upon business leaders to
become engaged in public affairs beyond the immediate economic functions of business
which they regarded as its fundamental contribution to society.
Dempsey provided philosophical foundations arguing the responsibilities of
businessmen arose from four concepts of justice: exchange justice ­ the trust underlying
exchanges in the market; distributive justice the just relation between the government and
individuals; general justice acceptance of legal frameworks but beyond this to acceptance of
ethical obligations; and especially social or contributive justice ­ the obligation to contribute
to the well-being and progress of individuals and society. Dempsey and David asserted two
reasons why businessmen must respond to the obligations of contributive justice. (1) They
essentially argued that no man, and no business, is an island. All are in need of a community,
a well functioning community, in order to operate and thrive. (2) They argued that business
controls substantial resources and has great capacity to contribute to the progress of society
and the well-being of individuals within society. This echoes other arguments that business
power brings with it business responsibility.
David noted a priority in business obligations: first to make the business effective,
second to make the business organization itself a good and just society (a healthy organization
if you will), and third to operate in ways that respect and contribute to external communities
and organizations, in other words to be constructive. Included in their concept was a
responsibility to ensure that competition was fair, that the economic framework was
functioning with an eye toward justice, and that broader communities were healthy.

12
Dempsey added that "contributive justice is the first principle of economic
organization; it imposes a positive obligation upon every economic agent not only to
contribute positively to every community of which he is a member but to contribute positively
to the formation of necessary communities which do not exist." Both Dempsey and David
argued that the broad spectrum of business leaders, regardless of how they might articulate it,
believed in a fundamental obligation to create a just society beyond the immediate boundaries
of the business and within which business could operate effectively. They built on a rich
dialogue that preceded their writing by many years, and they foreshadowed future debates
about business responsibility.
Morrell Heald: He wrote the only comprehensive history on this topic "The Social
Responsibilities of Business: Company and Community 1900 - 1960" (published in 1970).
Heald focused not on the theory of social responsibility but on "how businessmen themselves
have defined and experienced it." In particular, he looked to their policies and practices to tell
the story. Heald notes that the "trusteeship concept" of business leadership and responsibility
was enunciated nearly a quarter century before World War II. Indeed, Andrew Carnegie
offered an even earlier statement of the trustee or stewardship concept in June 1889 in his
North American Review article titled "Wealth." In 1906, Yale president Arthur Hadley
advised business leaders to remember that they are also trustees of the public interest and to
align their sense of ethics and obligation accordingly. In the 1920s, the trusteeship concept
emerged boldly in the words and practices of Owen D. Young, chairman, and Gerard Swope,
president of the General Electric Company. In their eyes, shareholders were only one
constituency to whom business leaders were responsible, and as Young put it in 1926, the
public and employees ranked ahead of shareholders. Young and Swope envisioned and sought
to build partnerships and cooperation between business, labor, government and community,
not open hostilities. Well before World War II, the practices of giving (philanthropy) and of
community involvement were well established in community chest drives of the 1920s and in
dealing with labor and community issues associated with neighboring plants and in company
towns, although certainly not embraced by all business leaders. As the 1950s unfolded Head
describes business leaders moving beyond philanthropy to substantive cooperation and
outright leadership on a range of community initiatives. He developed extensive profiles of
business initiatives with higher education, working to become a good neighbor, and business
support for the arts.

13
Archie Carroll: He provided the most comprehensive overview of the evolving definition of
corporate social responsibility in the post World War II period. Carroll examines and
compares all of the main contributions from scholars from 1950 through the mid-1990s
including: Howard Bowen, Keith Davis, Clarence Walton, William Frederick, the Committee
for Economic Development, Prakash Sethi, Donna Wood, and many others. Carroll credits
Howard R. Bowen, 1953 author of the book Social Responsibilities of the Businessman, as
the "Father of corporate Social Responsibility" because his book dealt directly with the
concept of social responsibility. Bowen asserted that social responsibility "refers to the
obligations of businessmen to pursue those policies, to make those decisions, or to follow
those lines of action which are desirable in terms of the objectives and values of our society."
The past sixty years have been notable for the increasing attention given to the concept, for its
continuing evolution, and for the lack of consensus on what it means and even whether it is
legitimate. At one extreme, Carroll notes Milton Friedman's often cited 1970 New York
Times Magazine article arguing that CSR, as a matter of principle, is "fundamentally
subversive" of the true responsibilities of business which are enhancing profitability and
shareholder value. This point of view arises from the economic theory, articulated first by
Adam Smith, that a free market and pursuit of self-interest (later shareholder value) will result
in the greatest benefit for society overall. Other scholars have debated whether basic
economic and legal obligations fall within the concept of CSR or whether the domain for CSR
is "over and beyond" economic and legal obligations. In effect, what is the scope and
boundary of such responsibility? Still others bring differing views about what issues merit the
attention of business.
Carroll noted that business leaders themselves, under the auspices of the Committee
for Economic Development (CED) in 1971, articulated a definition, perhaps emerging in part
from the political, social and urban turmoil of the late 1960s. Essentially, "business functions
by public consent and its basic purpose is to serve constructively the needs of society to the
satisfaction of society". The CED report speaks to three overlapping levels of responsibility
ranging from core economic functions to anticipating emerging non-economic issues.
Carroll's own definition of CSR embraced a full range of responsibilities: economic, legal,
ethical and discretionary. Note that in Carroll's framework economic functions are at the heart
of the "corporate social responsibilities" of business. He later changed discretionary to
philanthropic, but in either case discretionary or philanthropic these responsibilities were seen

14
as voluntary. Carroll did not see these responsibility categories as mutually exclusive but
rather as something of a continuum, often pursued simultaneously. In his overview of the
evolution of the CSR concept, Carroll noted increasing attention among scholars and among
business practitioners to how the business responds to or acts on these responsibilities.
It is one thing to talk about responsibility; it is another to talk about what to do and
how to do it. The terms of preference for this framework became corporate social
responsiveness or corporate social performance (CSP), what Carroll called the "action phase
of management responding in the social sphere." Social auditing and social issues
management (SIM) are other concepts that developed in the 1970s and 1980s. The decade
1980s saw efforts to connect corporate social responsibility (as principles), corporate social
responsiveness (as processes), and social issues management (as policies) or to link
responsibility, responsiveness and business ethics. Stakeholder theory was formalized as a
corporate decision-making framework through the work of R. Edward Freeman in the 1980s.
During the same period the concept of corporate conscience was developed by Kenneth
E.Goodpaster at the Harvard Business School.
William Frederick: In the midst of these developments, William Frederick, writing in 1986,
challenged CSR scholars for failing to dig deeply into the underlying value conflicts between
business and changing societal expectations. Frederick described two waves. One he called
CSR and noted its focus on responsibility, the second he called CSR and noted its focus on
responsiveness (or how a business could respond to and manage issues with all the tools and
strategies that might entail). Neither was sufficient for Frederick. He urged business leaders
and CSR scholars to look deeper and deal with normative foundations and conflicts. He was a
strong proponent of connecting the field of business ethics with CSR. Anchoring
consideration of CSR in the moral foundations of business ethics led to a third approach or
CSR3 what he called corporate social rectitude. Indeed, Business ethics grew substantially as
a field from the 1980s through the 1990s. In the 1990s the term corporate citizenship gained
currency although the idea of the corporation as a good citizen reaches back many decades.
Most recently, corporate accountability has gained some visibility as think tanks, NGOs and
companies have focused on what processes are needed to assure companies are accountable to
stakeholders.

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While scholars from the 1970s into the 1990s wrestled with CSR concepts and
developed stakeholder theory, numerous business leaders had independently articulated
similar views on the purpose of business. As noted earlier, there are many examples of 20
th
century business leaders who shaped their companies' business practices accordingly. A
noteworthy example is J. Irwin Miller, Chairman and CEO of Cummins Engine Company,
who laid out a comprehensive view of CSR in a 1975 interview in Organizational Dynamics.
Although the interview was conducted in 1975, he began putting his philosophy of business
into practice in the 1930s. The Dayton Family, founders in 1906 and leaders well into the
1990s of the company that today is the Target Corporation, provides another exemplar of a
business philosophy intimately connecting business success with service to society.
Throughout this period scholars attempted to define, redefine, and clarify the concept of
corporate social responsibility that they saw being assumed by, imposed upon, and played out
by business. In addition, scholars sought to connect and integrate disparate principles and
activities into a more comprehensive conceptual model.
1.2.2 History of CSR
Universal History of CSR: The history of social and environmental concern about business
is as old as trade and business itself. Commercial logging operations for example, together
with laws to protect forests, can both be traced back almost 5,000 years. In Ancient
Mesopotamia around 1700 BC, King Hammurabi introduced a code in which builders,
innkeepers or farmers were put to death if their negligence caused the deaths of others, or
major inconvenience to local citizens. In Ancient Rome senators grumbled about the failure of
businesses to contribute sufficient taxes to fund their military campaigns, while in 1622
disgruntled shareholders in the Dutch East India Company started issuing pamphlets
complaining about management secrecy and "self enrichment". With industrialisation, the
impacts of business on society and the environment assumed an entirely new dimension. The
"corporate paternalists" of the late nineteenth and early twentieth centuries used some of their
wealth to support philanthropic ventures. By the 1920s discussions about the social
responsibilities of business had evolved into what we can recognise as the beginnings of the
"modern" CSR movement. In 1929, the Dean of Harvard Business School, Wallace B.
Donham, commented within an address delivered at North-Western University: 'Business
started long centuries before the dawn of history, but business as we now know it is new -
new in its broadening scope, new in its social significance. Business has not learned how to

16
handle these changes, nor does it recognise the magnitude of its responsibilities for the future
of civilisation.
Almost seventy five years later, these words ring just as true. Although today we face
some novel concerns about the role of business in society, from internet "spam" to genetically
modified foods, many of the issues under discussion are not very different to those being
raised in the 1920s. There is a danger that social and environmental concern about business is
an issue which, like sex, every new generation thinks that it has discovered. The interactive
timelines below provide details of the evolution of the history of our environment, the history
of business corporations, the evolution of the concept of sustainable development and the
history of business law and socially responsible investment as forces seeking to shape the
social and environmental impact of business.
According to Archie B. Carroll the roots of the concept that we know today as
corporate social responsibility have a long and wide-ranging history, it is mostly a product of
the twentieth century, especially from the early 1950s up to the present time. In spite of its
recent growth and popularity, one can trace for centuries evidence of the business
community's concern for society. To help appreciate the context in which corporate social
responsibility (CSR) grew and flourished, we will consider the late 1800s, or the Industrial
Revolution, as a reasonable beginning point for purposes of discussion. The purpose of this
chapter on corporate social responsibility concepts and practices, referred to as just `social
responsibility' (SR) in the period before the rise and dominance of the corporate form of
business organization, is to provide an overview of how the concept and practice of SR or
CSR has grown, manifested itself, and flourished. In addition to considering how the concept
has changed and grown in terms of its meaning, we will consider its practice as well. That is,
we will consider how the concept has, in practice, expanded from its focus on a few
stakeholders, close at hand, to be more far reaching and inclusive, eventually becoming global
in scope.
In addition, we will briefly consider what organizational activities and changes have
taken place to accommodate these new initiatives, to the point at which it has become fully
institutionalized today. It will become apparent that today, well into the first decade of the
2000s, CSR in many firms is moving towards full integration with strategic management and
corporate governance. This has included firms developing management and organizational

17
mechanisms for reporting and control on business's socially conscious policies and practices.
It will also become apparent that the range of stakeholders and issues defining CSR has
broadened, especially in the past several decades.
The systematic writings on CSR were largely a product of the twentieth century,
which is so, since past 50 years. Though it is possible to see evidence of CSR throughout the
world, largely in the developed states, most early writings have been found from US where a
considerable body of literature has accumulated. In the past decade, however, Europe has
become captivated with CSR and there is considerable evidence that scholars and
practitioners in Europe are taking seriously this social concern, often manifested in the form
of formal writings, research, conferences, and consultancies. More recently, countries in Asia
have begun increasing their attention to CSR policies and practices. At the same time, it must
be acknowledged that CSR and related notions have been developed in practice and thought
in a number of other countries and at different times. With this background in mind, this
review of CSR's history will focus primarily on developments in the United States and
Europe.
History of CSR in India: India had a very well developed commerce and industrial sector
since ancient times. The concept of helping the poor and disadvantaged was cited in much of
the ancient literature. The idea was also supported by several religions where it has been
intertwined with religious laws. "Zakaat", followed by Islam, is two percent donation from
one's earnings which is specifically given to the poor and disadvantaged. Similarly Hinduism
follows the principle of "Dhramada" and Sikhs the "Daashaant". In the global context, the
recent history goes back to the seventeenth century when in 1790s, England witnessed the
first large scale consumer boycott over the issue of slave harvested sugar which finally forced
importer to have free-labor sourcing. All the philosophical, religious and spiritual literature
available of that period is testimony to this fact. The great Indian philosopher Kautilya (in 4th
Century BC) in his book Arthshashtra has described in detail the trade and crafts,
manufacturing, agricultural, mining and forestry sector present during the time of Maurya
Empire
1
. Reference to presence of trade and craft is also found in Vedic literature, the Jataka
tales and in Mahabharata one of the greatest Indian epics of all times
2
.
1
L.N. Rangarajan, Kautilya, The Arthashastra, Penguin Books India
2
Jawaharlal Nehru, The Discovery of India, Penguin Books India, 2004, page 113

18
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19
First phase: CSR motivated by charity and philanthropy: The first phase of CSR is
predominantly determined by culture, religion, family tradition, and industrialization.
Business operations and CSR engagement were based mainly on corporate self-regulation.
Being the oldest form of CSR, charity and philanthropy still influence CSR practices today,
especially in community development. In the pre-industrial period up to the 1850s, merchants
committed themselves to society for religious reasons, sharing their wealth, for instance, by
building religious places like Majids, church and religious places like Masjids, Church and
temples. Moreover, "the business community occupied a significant place in ancient Indian
society and the merchants provided relief in times of crisis such as famine or epidemics
throwing open go downs of food and treasure chests (Arora and Puranik 2004).
Under colonial rule, Western types of industrialization reached India and changed
CSR from the 1850s onwards. The pioneers of industrialization in the 19th century in India
were a few families such as the Tata, Birla, Bajaj, Lalbhai, Sarabhai, Godrej, Shriram,
Singhania, Modi, Naidu, Mahindra and Annamali, who were strongly devoted to
philanthropically motivated CSR (Mohan 2001). The early pioneers of industry in India were
leaders in the economic, as also in the social fields. Nevertheless, it has been pointed out that
their engagement was not only altruistic and stimulated by religious motives: It had business
considerations in supporting efforts towards industrial and social development of the nation
and was influenced by caste groups and political objectives (Mohan, 2001). The underlying
pattern of charity and philanthropy means that entrepreneurs sporadically donate money (e.g.
to schools or hospitals) without any concrete or long-term engagement. Charitable and
philanthropic CSR is practised outside the company, focusing on such external stakeholders
as communities and general social welfare bodies.
Second phase: CSR for India's social development: The second phase of Indian CSR
(1914-1960) was dominated by the country's struggle for independence and influenced
fundamentally by Gandhi's theory of trusteeship, the aim of which was to consolidate and
amplify social development. During the struggle for independence, Indian businesses actively
engaged in the reform process. Not only did companies see the country's economic
development as a protest against colonial rule; they also participated in its institutional and
social development (India Partnership Forum, 2002). The corporate sector's involvement was
stimulated by the vision of a modern and free India. Gandhi introduced the notion of
trusteeship in order to make companies the "temples of modern India": businesses (especially

20
well established family businesses) set up trusts for schools and colleges; they also established
training and scientific institutes (Mohan 2001). The heads of the companies largely aligned
the activities of their trusts with Gandhi's reform programmes. These programmes included
activities that sought in particular the abolition of un-touchability, women's empowerment
and rural development.
Third phase: CSR under the paradigm of mixed economy: The paradigm of the "mixed
economy," with the emergence of Public Sector Units it and ample legislation on labour and
environmental standards, affected the third phase of Indian CSR (1960-1980). This phase is
also characterized by a shift from corporate self-regulation to strict legal and public regulation
of business activities. Under the paradigm of the "mixed economy", the role of the private
sector in advancing India receded. During the Cold War, India decided to take a third course
between capitalism and communism. In this scenario, the public sector was seen as the prime
mover of development. The 1960s have been described as an "era of command and control",
because strict legal regulations determined the activities of the private sector (Arora and
Puranik, 2004). The introduction of a regime of high taxes, quota and licence system imposed
tight restrictions on the private sector and indirectly triggered corporate malpractices. As a
result, corporate governance, labour and environmental issues rose on the political agenda and
quickly became the subject of legislation. Furthermore, state authorities established PSUs
with the intention of guaranteeing the appropriate distribution of wealth to the needy (Arora
and Puranik, 2004). However, the assumption and anticipation that the public sector could
tackle developmental challenges effectively materialized to only a limited extent.
Consequently, what was expected of the private sector grew, and the need for its involvement
in socio-economic development became indispensable. An initial and cautious attempt at
reconciliation was made by Indian academics, politicians and businessmen at a national
workshop on CSR in 1965 (Mohan, 2001). According to this agenda, businesses were to play
their part as respectable corporate citizens, and the call went out for regular stakeholder
dialogues, social accountability and transparency. Despite these progressive
acknowledgements, this CSR approach did not materialize at that time.
Fourth phase: CSR at the interface between business and society: In the fourth phase
from 1980 until the present) Indian companies and stakeholders began abandoning traditional
philanthropic engagement and, to some extent, integrated CSR into a coherent and sustainable
business strategy, partly adopting the multi-stakeholder approach. In the 1990s, the Indian

21
government initiated reforms to liberalize and deregulate the Indian economy by tackling the
shortcomings of the "mixed economy" and tried to integrate India into the global market.
Consequently, controls and license systems were partly abolished, and the Indian economy
experienced a pronounced boom, which has persisted until today (Arora and Puranik, 2004).
This rapid growth did not lead to a reduction in philanthropic donations; on the contrary, the
increased profitability also increased business willingness as well as ability to give, along
with a surge in public and government expectations of businesses" (Arora and Puranik, 2004).
Against this background, India has meanwhile become an important economic and political
actor in the process of globalization. This new situation has also affected the Indian CSR
agenda, with more Transnational Corporations (TNCs) resorting to global sourcing, India has
become an attractive and important production and manufacturing site. As Western consumer
markets are becoming more responsive to labour and environmental standards in developing
countries, Indian companies producing for the global market need to comply with
international standards.
1.3 Meaning of Corporate Social Responsibility
Corporate Social Responsibility (CSR) is viewed as a comprehensive set of policies, practices
and programs that are integrated into business operations, supply chains, and decision-making
processes throughout the organization wherever the organization does business and includes
responsibility for current and past actions as well as future impacts. CSR involves addressing
the legal, ethical, commercial and other expectations society has for business, and making
decisions that fairly balance the claims of all key stakeholders. Effective CSR aims at
"achieving commercial success in ways that honor ethical values and respect people,
communities, and the natural environment." Simply put it means "what you do, how you do it,
and when and what you say." Several terms have been used interchangeably with CSR. They
include business ethics, corporate citizenship, corporate accountability, sustainability and
corporate responsibility. The issues that represent an organization's CSR focus vary by size
(small, medium and large), sector for example, financial institutions, infrastructure providers,
textile manufacturers, agri-producers, supermarket retailers, and even by geographic region.
In its broadest categories, CSR typically includes issues related to business ethics, community
investment, environment, governance, human rights, the marketplace and the workplace.

22
1.4 Defining Corporate Social Responsibility
One of the factors responsible for limited conceptual understanding of CSR is the complexity
and absence of consensual definitions of the concept. Although the concept of CSR is widely
discussed in theory and practice a universally accepted definition of CSR is yet to emerge.
CSR can be conceptualised differently by individuals. Indeed Amaeshi and Adi (2005) argue
that there are as many definitions of CSR as there are writers on the topic. Though there is no
universal definition for CSR, but it is necessary to mention some of the important definitions
those are accepted by many researchers, academicians and CSR practitioners and those are as
following:
World Business Committee for Sustainable Development (WBCSD, 1998): "The
continuing commitment by business to behave ethically and contribute to economic
development while improving the quality of life of the workforce and their families as well as
of the local community and society at large".
International Labour Organisation (ILO, 2009): "Corporate social responsibility is a way
in which enterprises give consideration to the impact of their operations on society and affirm
their principles and values both in their own internal methods and processes and in their
interaction with other actors. CSR is a voluntary, enterprise-driven initiative and refers to
activities that are considered to exceed compliance with the law".
Carroll (1999): "The social responsibility of business encompasses the economic, legal,
ethical and discretionary expectations that a society has of organizations at a given point in
time."
Mallenbaker (2008): "CSR is about how companies manage the business processes to
produce an overall positive impact on society"
European Commission (2011): "A concept whereby companies integrate social and
environmental concerns in their business operations and in their interaction with their
stakeholders on a voluntary basis."

23
Bowen (1953); "It refers to the obligations of businessmen to pursue those policies, to make
those decisions, or to follow those lines of action which are desirable in terms of the
objectives and values of our society."
Committee for Economic Development (CED) (1971); In Social Responsibilities of
Business Corporations report: "Business functions by public consent and its basic purpose is
to serve constructively the needs of society to the satisfaction of society." Further that
"Business is being asked to assume broader responsibilities to society than ever before and to
serve a wider range of human values. Business enterprises, in effect, are being asked to
contribute more to the quality of American life than just supplying quantities of goods and
services. Inasmuch as business exists to serve society, its future will depend on the quality of
management's response to the changing expectations of the public". Eilbert and Parket
(1973); "Perhaps the best way to understand social responsibility is to think of it as `good
neighborliness.' The concept involves two phases. On one hand, it means not doing things
that spoil the neighborhood. On the other, it may be expressed as the voluntary assumption of
the obligation to help solve neighborhood problems." Or..."...the commitment of a business or
business, in general, to an active role in the solution of broad social problems..."
Prakash Sethi (1975); Distinguishing social obligation, social responsibility, and social
responsiveness: "Thus social responsibility implies bringing corporate behavior up to a level
where it is congruent with the prevailing social norms, values, and expectations of
performance."
Jones (1980); "Corporate social responsibility is the notion that corporations have an
obligation to constituent groups in society other than stockholders and beyond that prescribed
by law and union contract. Two facets of this definition are critical. First, the obligation must
be voluntarily adopted; behavior influenced by coercive forces of law or union contract is not
voluntary. Second, the obligation is a broad one, extending beyond the traditional duty to
shareholders to other societal groups such as customers, employees, suppliers, and
neighboring communities."
In Simple term: Corporate social responsibility is the corporate belief that a company needs
to be responsible for its actions socially, ethically and environmentally. It is the integration of
business operations and values whereby the interests of all stakeholders including customers,

24
employees, investors, the community, and the environment are reflected in the company's
policies and actions.
1.5 Motives of Corporate Social Responsibility
A number of factors are driving the increased adoption of CSR practices in the corporate
India. Regulation obviously provides the baseline for corporate action, notably for
employment practices and the environment. Beyond this, for many companies, being a good
corporate citizen is a vital aspect of their identity, values, and vision. Far-sighted business
leaders recognize that it is unsustainable for their companies to exist as `islands of prosperity'
in a sea of poverty. `We must do something for the community from whose land we generate
our wealth', says one leading chief executive officers. Market forces are also propelling many
firms to go `beyond compliance', notably for those selling into international supply chains.
No longer a legal necessity and a nice thing to do, corporate social responsibility is emerging
as a `hard' commercial factor, linked directly to profits and brand value.
In the recent years corporate business houses have substantially involved towards
societal responsibilities. Companies have started to realise the importance of corporate social
responsibility and initiating the steps towards it. Today, the objectives of the companies are
not limited to profit maximisation, economic gains or enhancing competencies but at the same
time ensure environmental protection, promotion of social responsibility including consumer
interest. It will lead to good public image which in turn have positive impact on the wealth of
the organisation. The reasons that motivate organisations to involve in corporate social
responsibility activities are discussed as follows:
1. Globalization and market forces: As corporations pursue growth through globalization,
they have encountered new challenges that impose limits to their growth and potential
profits. Government regulations, tariffs, environmental restrictions and varying standards
of what constitutes labour exploitation are problems that can cost organizations millions
of dollars. Some view ethical issues as simply a costly hindrance. Some companies use
CSR methodologies as a strategic tactic to gain public support for their presence in global
markets, helping them sustain a competitive advantage by using their social contributions
to provide a subconscious level of advertising. (Fry, Keim, Meiners 1986) Global

25
competition places particular pressure on multinational corporations to examine not only
their own labour practices, but those of their entire supply chain, from a CSR perspective.
2. Laws and regulation: Another driver of CSR is the role of independent mediators,
particularly the government, in ensuring that corporations are prevented from harming the
broader social good, including people and the environment. CSR critics such as Robert
Reich argue that governments should set the agenda for social responsibility by the way of
laws and regulation that will allow a business to conduct them responsibly. The issues
surrounding government regulation pose several problems. Regulation in itself is unable
to cover every aspect in detail of a corporation's operations. This leads to burdensome
legal processes bogged down in interpretations of the law and debatable grey areas
(Sacconi, 2004).
3. Social awareness: The role among corporate stakeholders to work collectively to pressure
corporations is changing. Shareholders and investors themselves, through socially
responsible investing are exerting pressure on corporations to behave responsibly. Non-
governmental organizations are also taking an increasing role, leveraging the power of the
media and the Internet to increase their scrutiny and collective activism around corporate
behavior. Through education and dialogue, the development of community in holding
businesses responsible for their actions is growing (Roux, 2007).
4. Ethical Consumerism: The rise in popularity of ethical consumerism over the last two
decades can be linked to the rise of CSR. As global population increases, so does the
pressure on limited natural resources required to meet rising consumer demand (Grace,
2005). Industrialization in many developing countries is booming as a result of technology
and globalization. Consumers are becoming more aware of the environmental and social
implications of their day-to-day consumer decisions and are beginning to make purchasing
decisions related to their environmental and ethical concerns. However, this practice is far
from consistent or universal.
5. Stakeholder priorities: Increasingly, corporations are motivated to become more socially
responsible because their most important stakeholders expect them to understand and
address the social and community issues that are relevant to them. Understanding what
causes are important to employees is usually the first priority because of the many
interrelated business benefits that can be derived from increased employee engagement
(i.e. more loyalty, improved recruitment, increased retention, higher productivity, and so
on). Key external stakeholders include customers, consumers, investors (particularly

26
institutional investors, regulators, academics, and the media). There is a wide consensus
among public and private institutions that the concept of Corporate Social Responsibility
(CSR) is based on a company attaining a balance between the interests of all its
stakeholders within its strategic planning and operations.
6. Consumers Satisfaction: Responsible companies give greater priority to their customers.
With diminishing business boundaries across the world consumers have become aware
and more demanding in terms of information regarding conditions in which the products
and services are produced along with the sustainability impact thereof. CSR is about
values and accountability which includes the behaviour of the people. Many potential
clients who themselves operate CSR activities expect their suppliers to do similar kind of
programmes. Sometimes the selection is on the basis of social responsiveness of the
supplier.
7. Employees Satisfaction: Young blood in the organisation wants more than the financial
benefit. They feel sense of pride to be connected with the organisation which is socially
responsible. Strong CSR practices can help in attracting, recruiting and retaining the best
young talent.
8. Image Building: Globalisation and universal expansion of the economies enhances the
consideration of image and reputation among organisations. An organisations image and
reputation can be ruined in days through unregulated and unethical practices. So, imbibing
CSR practices becomes the strong foundation in image building. CSR practices can help
the organisation to avoid the risk of corruption scandals, environment disasters, child
labour violations and dangerous work environment. These incidents also draw unwanted
attention from regulators, courts, governments and media. A genuine effort in playing
straight and having good CSR record with the right check insulates the companies from
such risks.
9. Risk Management: Managing risk is a central part of many corporate strategies.
Reputations that take decades to build up can be ruined in hours through incidents such as
corruption scandals or environmental accidents. These events can also draw unwanted
attention from regulators, courts, governments and media. Building a genuine culture of
'doing the right thing' within a corporation can offset these risks.
10. License to operate: Corporations are keen to avoid interference in their business through
taxation or regulations. By taking substantive voluntary steps, they can persuade
governments and the wider public that they are taking issues such as health and safety,

27
diversity or the environment good corporate citizens with respect to labour standards and
impacts on the environment.
11. Environment protection: Environment protection becomes an area of concern these
days. A CSR programme that aims to conserve earth's natural resources, avoiding
pollution, water conservation and minimising global warming effects are the areas in
which the companies take initiative.
1.6 Approaches of CSR
Some commentators have identified a difference between the Canadian (Montreal school of
CSR), the Continental European and the Anglo-Saxon approaches to CSR. It is said that for
Chinese consumers, a socially responsible company makes safe, high-quality products; for
Germans it provides secure employment; in South Africa it makes a positive contribution to
social needs such as health care and education. And even within Europe the discussion about
CSR is very heterogeneous.
A more common approach to CSR is corporate philanthropy. This includes monetary
donations and aid given to local and non-local non-profit organizations and communities,
including donations in areas such as the arts, education, housing, health, social welfare, and
the environment, among others, but excluding political contributions and commercial
sponsorship of events. Some organizations [who?] do not like a philanthropy-based approach
as it might not help build on the skills of local populations, whereas community-based
development generally leads to more sustainable development.
Another approach to CSR is to incorporate the CSR strategy directly into the business
strategy of an organization. For instance, procurement of Fair Trade tea and coffee has been
adopted by various businesses including KPMG. Its CSR manager commented, "Fair trade fits
very strongly into our commitment to our communities." Another approach is garnering
increasing corporate responsibility interest. This is called Creating Shared Value, or CSV. The
shared value model is based on the idea that corporate success and social welfare are
interdependent. A business needs a healthy, educated workforce, sustainable resources and
adept government to compete effectively. For society to thrive, profitable and competitive
businesses must be developed and supported to create income, wealth, tax revenues, and
opportunities for philanthropy. CSV received global attention in the Harvard Business Review

28
article Strategy & Society: The Link between Competitive Advantage and Corporate Social
Responsibility by Michael E. Porter, a leading authority on competitive strategy and head of
the Institute for Strategy and Competitiveness at Harvard Business School; and Mark R.
Kramer, Senior Fellow at the Kennedy School at Harvard University and co-founder of FSG
Social Impact Advisors. The article provides insights and relevant examples of companies that
have developed deep linkages between their business strategies and corporate social
responsibility. Many approaches to CSR pit businesses against society, emphasizing the costs
and limitations of compliance with externally imposed social and environmental standards.
CSV acknowledges trade-offs between short-term profitability and social or environmental
goals, but focuses more on the opportunities for competitive advantage from building a social
value proposition into corporate strategy. CSV has a limitation in that it gives the impression
that only two stakeholders are important shareholders and consumers and belies the multi-
stakeholder approach of most CSR advocates.
Many companies use the strategy of benchmarking to compete within their respective
industries in CSR policy, implementation, and effectiveness. Benchmarking involves
reviewing competitor CSR initiatives, as well as measuring and evaluating the impact that
those policies have on society and the environment, and how customers perceive competitor
CSR strategy. After a comprehensive study of competitor strategy and an internal policy
review performed, a comparison can be drawn and a strategy developed for competition with
CSR initiatives.
1.7 The Benefits of CSR
Every concept has got two faces naturally the advantage as well as disadvantage, here the
research try to highlight the first face of corporate social responsibility in terms of its practical
benefits and those as mentioned below.
Building Reputation by increasing environmental efficiency and improving environmental
responsibility, an enhanced reputation is often manifested in awards and recognition from
governments, rating agencies, and public surveys.
Developing human capital through better human resource management, a high quality work
force is essential for competitiveness since it improves productivity, product quality, and

29
innovation. A study in India covering 52000 employees in 200 companies found a positive
correlation between employment practices and financial returns.
Improving access to capital through high standards of corporate governance that reassure
investors on issues relating to shareholder and stakeholder rights, transparency and disclosure,
and proper governance structures. Another interesting illustration of the business case for
CSR is provided by Bob Willard (2002) in his book, The Sustainability Advantage: seven
business case benefits of a triple bottom line.
Easier hiring of the best talent Researchers estimate that the most important corporate
resource over the next 20 years will be talented employees, many of which pay attention to
corporate social and environmental behaviour. Willard shows how recruiting costs for South
Dakota Inc. could be reduced by 5% through a positive South Dakota branding.
Higher retention of top talent Studies show that talented employees tend to stay with a
company when they have meaningful work. Willard shows how South Dakota Inc., in
embracing a sustainable framework, could avoid 38 million dollars in costs.
Increasing employee productivity Willard discusses the connection between meaningful
work and productivity, and shows that engaging the entire organization in sustainable
development goals like zero emissions, self-sufficient energy production, zero waste, helping
restore the planet's health, ensures that the company gets more output from its employees.
Small and medium enterprise (SMEs) productivity benefit translates into 756 million dollars,
the equivalent of 12,600 extra employees.
Reduced expenses in manufacturing Willard demonstrates savings opportunities through
eliminating or recycling waste and redesigning processes to use less energy, water, and
materials in manufacturing, which are the low hanging fruits of eco-efficiency.
Reduced expenses at commercial sites A lot of unnecessary waste takes place at non-
manufacturing sites. Through more judicious waste handling, energy efficiency, water
conservation, and naturalized landscaping, SD Inc. can add 26 million dollars of pure profit.
Improved financial performance As stated above a corporations' priority is to maximize
profits and therefore it is interesting to discuss the relationship between social responsibility

30
actions and economic performance. There different opinions on this matter and they can be
structured into three different viewpoints. The first viewpoint believes that there is a trade off
between social responsibilities and financial performance. Engaging in CSR will get in the
way of profit maximization and it is therefore irresponsible of a corporation towards its
shareholders to engage in CSR operations. The second viewpoint believes that the costs
occurring when the corporations embrace their social responsibilities are marginal and
outweighed by benefits such as improved employee moral and productivity. The third
viewpoint believes that CSR is important in itself and its costs are offset by a reduction of
other costs (Mcguire et al. 1988).
1.8 Scope for Corporate Social Responsibility in India
The scope for corporate social responsibility can be classified into two major areas such as
internal scope and external scope; those are discussed in detailed as following:
1.8.1 Internal Scope for CSR
Risk Management: organizational health and safety, product safety, regulatory compliance,
reputation management, responsible business practices, stakeholder engagement
Value Chain: responsible procurement, supplier management, externalisation of costs,
supplier screening, supplier feedback, fair trade
Employees: Turnover, morale, satisfaction, work-life balance, internal culture (transparency),
labour practices, job security, remuneration, diversity, equal opportunity, training
Environment: Environmental footprint, waste and pollution avoidance, eco-efficiency,
product recycling, sustainability, greenhouse gas emissions, resource reduction, precautionary
principle with in the organisation.
Measurement: Global Reporting Initiative (GRI) reporting, internal and external audits,
verification statements, management targets

31
1.8.2 External Scope for CSR
Education: Support to technical or vocational institutions for their self- development,
academic education by way of financial assistance to primary, middle and higher secondary
schools, adult literacy especially amongst those belonging to BPL, awareness programmes on
girl education, counseling of parents. special attention on education, training and
rehabilitation of mentally and physically challenged persons, spreading legal awareness
amongst people and disadvantageous sections of the society about their rights and remedies
available, promotion of professional education by setting up educational institutions offering
courses in engineering, nursing, management, medicine and in technical subjects.
Water Supply including Drinking Water: Installation repair of hand pumps tube wells,
digging or renovation of wells, gainful utilization of waste water from under-ground mines for
cultivation or any other purpose, development construction of water tank ponds, rain water-
harvesting scheme, formation of a task force of volunteers to educate people regarding proper
use of drinking water, empowerment to the villagers for maintenance of the above facilities
for availability of water.
Health Care: Human Immunodeficiency Virus Infection/Acquired Immunodeficiency
Syndrome (HIV/AIDS), awareness and care, tuberculosis (TB) and leprosy, social evils like
alcohol, smoking, drug abuse child and mother care, diet and nutrition, operation Jyoti­vision
to help the people of the peripheral area for necessary assistance, blood donation camps,
diabetics detection and hypertension camps, family welfare, senior citizen health care,
wellness clinics, fully equipped mobile medical vans, Tele medicine, to supplement the
different programme of local or state authorities, eyes and heart care, collaboration with govt.
health institution.
Environment: organizing sensitizing programmes on environment management and pollution
control, green belt development forestation, social forestry, check dams, park, restoration of
mined out lands, development of jobs related to agro product i.e dairy, poultry, farming and
others, plantation of saplings producing fruit, animal care.
Social Empowerment: Priority for local youth in employment, Self Gainful Employment
Opportunities Training of Rural Youth for Self Employment (TRYSEM) on welding,
fabrication, and other electronic appliances, to provide assistance to villagers having small of

32
land to develop mushroom farming, medicinal plants, farming and other cash crops to make
them economically dependent on their available land resources, training may be provided by
agricultural experts for above farming, organizing training programmes for women on
tailoring, embroidery designs, home foods/fast foods, pickles, painting and interior decoration
and other vocational courses.
Village Infrastructure Development: To develop infrastructural facilities for providing
electricity through Solar Lights or alternative renewal energy to the nearby villages, Pawan
Chakki as alternative for providing electricity in villages, construction of road, drainage, bus
stand, community hall, toilets water supply pipe line, water storage tank, check dam.
Sports and Culture: Promotion of sports and cultural activities for participation in state and
national level, by conducting tournaments like football, cricket, Kabaddi and Khokho,
providing sports materials for football, volleyball, hockey to the young and talented village
youths. Promoting and sponsoring of national level teams, national sports events in coalfield
areas and supporting local players, and extending sponsorship for cultural event to restore
Indian cultural, traditions and values, last but not the least providing sports facilities for
physically handicapped persons may be explored, development of park so on and so forth.
1.9 Measuring Methods of CSR
The concept CSR is not easy to measure, though many researchers have developed lots of
methods. Generally, there are two accepted methods of measuring CSR, one is reputation
index, and the other is content analysis (Ahmed and Uchida, 2009). The former measurement
is a method that is based on the view of the knowledgeable observers who rate firms on the
basis of one or more dimensions of social performance. The advantages of their method are: it
summarizes the responses of a key. Constituency of various firms and it tends to be internally
consistent because one evaluator is applying the same criteria to each firm (Karake, 1998).
Content analysis is a way of codifying text and content of written narratives into groups or
categories based on selected criteria, with the end goal of transforming the material into
quantitative scales that permit further analysis (Weber, 1998; Holder-Webb et al., 2007).
Both methods have their limitations. The reputation index heavily relies on the observers
subjective judgments; instead, the content analysis relies on information provided by the
company itself (Karake, 1998).

33
Comparing the CSR progress of India with the other emerging economies is difficult
to achieve, because there are no global benchmarks. However, some proxy indicators are
available. In September 2004, the International Organisation of Standardisation published its
latest survey of the adoption of the International Organisation for Standard (ISO) 14001
environmental management system. At the end of 2003, over 66000 certificates had been
issued worldwide, up 16 percent on the year before. Of these, India had 879 certificates, a
substantial growth from the 600 certificates in 2002. Yet, India lagged far behind China,
which had over 5000 ISO 14001 certificates in 2003, making it the country with the third
highest number of ISO 14001 registrations after Japan and the United Kingdom.
1.9.1 The United Nation Global Compact Ten Principles
Another broader measure of corporate commitment to social responsibility is the United
Nation Global Compact, a set of 10 principles launched by UN Secretary-General, Kofi
Annan. Currently, 95 Indian companies have backed the Global Compact, slightly less than in
Brazil, but on this occasion, considerably more than in China. The UN Global Compact's ten
principles in the areas of human rights, labour, the environment and anti-corruption enjoy
universal consensus and are derived from: The Universal Declaration of Human Rights, the
International Labour Organization's declaration on fundamental Principles and Rights at
Work, the Rio Declaration on Environment and Development and the United Nations
Convention against Corruption. The UN Global Compact asks companies to embrace, support
and enact, within their sphere of influence, a set of core values in the areas of human rights,
labour standards, the environment and anti-corruption:
1.9.2 Human Rights
Principle 1: Businesses should support and respect the protection of internationally
proclaimed human rights; and
Principle 2: make sure that they are not complicit in human rights abuses.
Labour
Principle 3: Businesses should uphold the freedom of association and the effective
recognition of the right to collective bargaining;

34
Principle 4: the elimination of all forms of forced and compulsory labour
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect of employment and occupation.
Environment
Principle 7: Businesses should support a precautionary approach to environmental
challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; and
Principle 9: encourage the development and diffusion of environmentally friendly
technologies.
Anti-Corruption
Principle 10: Businesses should work against corruption in all its forms, including extortion
and bribery.
1.10 Indian Leading organisations' CSR Practices
Corporate social responsibility
is not a new concept in India. Corporates like the Tata Group,
the Aditya Birla Group, and Indian Oil Corporation, to name a few, have been involved in
serving the community ever since their inception. Many other organizations have been doing
their part for the society through donations and charity events. Today, CSR in India has gone
beyond merely charity and donations, and is approached in a more organized fashion. It has
become an integral part of the corporate strategy. Companies have corporate social
responsibility teams that devise specific policies, strategies and goals for their corporate social
responsibility programs and set aside budgets to support them. These programs, in many
cases, are based on a clearly defined social philosophy or are closely aligned with the
company's business expertise. Employees become the backbone of these initiatives and
volunteer their time and contribute their skills, to implement them. Corporate social
responsibility programs could range from overall development of a community to supporting

35
specific causes like education, environment and health care. Best practices followed by many
Indian companies related to CSR are as follows:
Ashok Leyland Operates a Fun-Bus in Chennai and New Delhi. This bus, equipped with a
hydraulic lift, takes differently able children and those from orphanages and corporation
primary schools on a day's picnic. The company also runs AIDS awareness and prevention
programmes in its Hosur factories for about 3.5 lakh drivers
Axis Bank The Axis Bank Foundation runs Balwadis which are learning places for children
living in large urban slum clusters. It also conducts skill development programmes (PREMA
and Yuva Parivartan) in motor driving, welding, mobile repairing, tailoring etc, for the youth
in backward districts.
Bharat Petroleum Corporation Its rain water harvesting project Boond, in association with
the Oil Industries Development Board, selects draught stricken villages to turn them from
water scarce to water positive. Some of BPCL's other social programmes include adoption of
villages, prevention and care for HIV/AIDS and rural health care.
Hindalco Industries Its CSR activities are concentrated in 692 villages and 12 urban slums,
where it reaches out to about 26 lakh people. It has constructed check dams, ponds and bore
wells to provide safe drinking water. In education, it awards scholarships to students from the
rural schools it supports. Its other interests include women's empowerment and health care, in
which it treats patients in hospitals, runs medical camps and operates rural mobile medical
van services
Infosys The Infosys Science Foundation, set up in 2009, gives away the annual Infosys Prize
to honour outstanding achievements in the fields of science and engineering. The company
supports causes in health care, culture and rural development. In an interesting initiative
undertaken by it, 100 school teachers in Karnataka, who were suffering from arthritis,
underwent free surgery as a part of a week long programme.
Mahindra Mahindra Nanhi Kali, a programme runs by the KC Mahindra Education
Trust, supports education of over 75,000 underprivileged girls. The trust has awarded grants
and scholarships to 83,245 students so far. In vocational training, the Mahindra Pride School
provides livelihood training to youth from socially and economically disadvantaged

36
communities. MM also works for causes related to environment, health care, sports and
culture.
Tata Consultancy Services Its Computer Based Functional Literacy (CBFL) initiative for
providing adult literacy has already benefitted 1.2 lakh people. The programme is available in
nine Indian languages. Besides adult education, TCS also works in the areas of skill
development, health care and agriculture.
Tata Steel It comes out with the Human Development Index (HDI), a composite index of
health, education and income levels, to assess the impact of its work in rural areas. Health
care is one of its main concerns. The Tata Steel Rural Development Society aims to improve
agricultural productivity and raise farmer's standard of living.
ONGC and Indian Oil Corporation has been spending 0.75-1 percent of their net profits on
CSR activities. In 2007-08 Rs. 246.70 crores was spent by oil PSUs on CSR activities. Oil
and Natural Gas Corporation's (ONGC) CSR projects focus on higher education, grant of
scholarship and aid to deserving young pupils of less privileged sections of society, facilities
for constructing schools etc.
Reliance Industries: Reliance Industries initiated a project named as "Project Drishti" to
bring back the eyesight of visually challenged Indians from the economically weaker sections
of the society. This project has brightened up the lives of over 5000 people so far.
SAIL has taken successful actions in environment conservation, health and medical care,
education, women upliftment providing drinking water.
BHEL and Indian Airlines have been acclaimed for disaster management efforts. Bharat
Heavy Electronic Limited
(BHEL)
has also adopted 56 villages having nearly 80,000
inhabitants.
Glaxo Smith Kline Pharmaceuticals CSR programs primarily focus on health and healthy
living. They work in tribal villages where they provide medical check-up and treatment,
health camps and health awareness programs. They also provide money, medicines and
equipment to non-profit organizations that work towards improving health and education in
under-served communities.

37
Bajaj Electricals Ltd corporate social responsibility activities include Education, Rural
Development and Environment. And IBM has joined hands with the Tribal Development
Department of Gujarat for a development project aimed at upliftment of tribal in the Sasan
area of Gir forest.
Navratna Company, Coal India Ltd (CIL) invest US$ 67.5 million in 2010-11 on social
and environmental causes and National Aluminium Company Ltd (NALCO) has contributed
US$ 3.23 million for development work in Orissa's Koraput district as part of its Corporate
Social Responsibility (CSR).
HSBC India, Max New York Life The financial services sector is going green in a steady
manner. With an eye on preserving energy, companies have started easing the carbon
footprint in their offices. The year 2009 witnessed initiatives including application of
renewable energy technologies, moving to paperless operations and recognition of
environmental standards. Efforts by companies such as Hongkong and Shanghai Banking
Corporation (HSBC) India, Max New York Life and Standard Chartered Bank have ensured
that the green movement has kept its momentum by asking their customers to shift to e-
statements and e-receipts.
1.11 CSR Guidelines of Ministry of Corporate Affairs, Government of India
Since the present study is to understand the trend, issues and strategies of CSR in India, it
becomes important to understand the country law or guidelines to implement the CSR,
because most of the activities of the organisations are based on the guidelines provided by the
Govt. The guidelines also helps researcher as bench mark in study. So it becomes mandatory
to mention as given by the Govt. of India, Ministry of Corporate Affairs
3
.
Fundamental Principle: Each business entity should formulate a CSR policy to guide its
strategic planning and provide a roadmap for its CSR initiatives, which should be an integral
part of overall business policy and aligned with its business goals. The policy should be
framed with the participation of various level executives and should be approved by the board
and the CSR Policy should normally cover following core elements:
3
Corporate Social Responsibility Voluntary Guidelines 2009, Published by Ministry of Corporate Affairs,
Government of India, New Delhi for more details visit: http://www.mca.gov.in

38
Care for all Stakeholders: The companies should respect the interests of, and be responsive
towards all stakeholders, including shareholders, employees, customers, suppliers, project
affected people, society at large etc. and create value for all of them. They should develop
mechanism to actively engage with all stakeholders, inform them of inherent risks and
mitigate them where they occur.
Ethical functioning: Their governance systems should be underpinned by Ethics,
Transparency and Accountability. They should not engage in business practices that are
abusive, unfair, corrupt or anti-competitive.
Respect for Workers' Rights and Welfare: Companies should provide a workplace
environment that is safe, hygienic and humane and which upholds the dignity of employees.
They should provide all employees with access to training and development of necessary
skills for career advancement, on an equal and non-discriminatory basis. They should uphold
the freedom of association and the effective recognition of the right to collective bargaining of
labour, have an effective grievance redressal system, should not employ child or forced labour
and provide and maintain equality of opportunities without any discrimination on any grounds
in recruitment and during employment.
Respect for Human Rights: Companies should respect human rights for all and avoid
complicity with human rights abuses by them or by third party.
Respect for Environment: Companies should take measures to check and prevent pollution;
recycle, manage and reduce waste, should manage natural resources in a sustainable manner
and ensure optimal use of resources like land and water, should proactively respond to the
challenges of climate change by adopting cleaner production methods, promoting efficient use
of energy and environment friendly technologies.
Activities for Social and Inclusive Development: Depending upon their core competency
and business interest, companies should undertake activities for economic and social
development of communities and geographical areas, particularly in the vicinity of their
operations. These could include: education, skill building for livelihood of people, health,
cultural and social welfare etc., particularly targeting at disadvantaged sections of society.

39
Additional Instructions
· The CSR policy of the business entity should provide for an implementation strategy
which should include identification of projects activities, setting measurable physical
targets with timeframe, organizational mechanism and responsibilities, time schedules and
monitoring. Companies may partner with local authorities, business associations and civil
society non-government organizations. They may influence the supply chain for CSR
initiative and motivate employees for voluntary effort for social development. They may
evolve a system of need assessment and impact assessment while undertaking CSR
activities in a particular area. Independent evaluation may also be undertaken for selected
projects activities from time to time.
· Companies should allocate specific amount in their budgets for CSR activities. This
amount may be related to profits after tax, cost of planned CSR activities or any other
suitable parameter.
· To share experiences and network with other organizations the company should engage
with well established and recognized programmes/platforms which encourage responsible
business practices and CSR activities. This would help companies to improve on their
CSR strategies and effectively project the image of being socially responsible.
· The companies should disseminate information on CSR policy, activities and progress in a
structured manner to all their stakeholders and the public at large through their website,
annual reports, and other communication media.
· The investment in CSR should be project based and for every project time framed periodic
mile stones should be finalized at the outset.
· Project activities identified under CSR are to be implemented by Specialized Agencies
and generally not by staff of the organization. Specialized Agencies could be made to
work singly or in tandem with other agencies.
· Such specialized agencies would include: Community based organization whether formal
or informal, Elected local bodies such as Panchayats, Voluntary Agencies (NGOs),
Institutes, Academic Organizations, Trusts, Mission etc, Self-help groups, Government,
Semi Government and autonomous Organizations, Standing Conference of Public
Enterprises (SCOPE), Mahila Mondals, Samitis and the like, Contracted agencies for civil
works, and Professional Consultancy Organization etc.

40
1.12 Statement of Research Problem
At the beginning of the new millennium, the world faces various challenges. Global warming
is an all too familiar word, global terrorism is a threat to many countries that always felt safe
and an ever looming oil crisis just does not want to go away. No longer can it be argued that
nature is a never-ending provider of resources. In order for humanity to co-exist with nature, it
is of great importance that we take our responsibility towards nature and other human beings
seriously. In the midst of all these, the most prominent institution in the world, the
corporation, plays a very significant role. They are the biggest traders in resources and they
are also the institutions that affect our lives more than any other. It is because of the influence
that corporations have in our lives and on the natural environment they operate in, that they
need to take their social and environmental responsibility seriously. For many years
companies (foreign as well as domestic) have abused their power in rural and remote areas
where they have extracted natural resources. This by emptying these areas of resources and
leaving with all the profit with nothing left for the local inhabitants in these areas.
CSR have since then played a major role for some companies in India in order to
become accepted and secured from its surrounding society. CSR is a relatively new but well
known concept among companies in India; nevertheless difficulties lie within interpreting
what the term CSR really means. CSR is a widely interpreted term with almost as many
meanings as interpreters. Furthermore, as a strategic tool for companies to use in order to
satisfy its stakeholders as well as create a healthier environment for the surrounding society.
Over the past twenty years, globalisation, deregulation, privatisation and a redrawing of the
roles between state and market have radically changed the basis on which private enterprise is
expected to operate. Meanwhile, discussions around concepts such as Corporate Social
responsibility (CSR), Good Corporate Citizenship or Corporate Accountability, indicate the
growing vacuum between strictly nation-bound governmental control and increasingly global
efforts in areas such as protection of the environment and social cohesion. It is now
recognised that socially and environmentally sustainable poverty reduction depends on the
emergence of a growing number of responsible entrepreneurs and small and medium
enterprises (SMEs), since that it leads to increasing productivity and economic opportunity in
developing countries that is socially and environmentally protective.

41
We believe that a company making billions of dollars of revenue through processes
and products, which are harmful to humans, other forms of life and environment and spending
millions of dollars of that income on philanthropy is a billion dollar problem. Instead, the
world should welcome corporates which are sensible and sensitive, work on their business
processes which take care of multiple stakeholders and environment but not spending a single
dollar on community initiatives every company during its operations and activities degrades
the environment. Thus, it becomes the duty of every company to give back and replenish, first
the environment, and thereafter undertake various community development initiatives,
infrastructure projects, and other innovative projects that benefit society, (Karmayog,
2007). Conducting business in a responsible way has always been a priority.
The company should recognise that every action and the implementation of that action
affect people, communities and the environment. From buying tea from estates around the
world to the point where its many tea products are sold, understanding and addressing the
impact of its business activities is central to the way the company works. Many of the CSR
practitioner, researcher and academicians express their opinion that there are number of
survey studies were carried out based secondary information and organisational reports but
very few studies conducted to understand the practice of CSR in India in a true sense.
Community is one of the important stakeholders in CSR but the existing review of literature
shows that the studies to understand CSR from community prospective is lacking at present
literature. Therefore an attempt is made in the present study to understand the interface
between the company and community pertaining to the concept of CSR as a societal motto of
CSR initiatives and sustainable development.
1.13 Objectives
In view of the statement of the research problem made above, the present study try to address
itself to the objectives stated below:
1. To study the awareness and knowledge of community about CSR and implementing
organisations.
2. To identify the emerging trends of CSR programmes carried out by the organisations
in India and study sites.
3. To observe the different strategies adopted by the organisations and its effectiveness.

42
4. To through a light on the issues rose in implementation of CSR activities in
community.
5. To understand the impact of CSR activities carried by the organisation in enhancing
the community development.
1.14 Hypothesis
In pursuance of the objectives stated above, few hypotheses were deduced to be tested and
those are as follows:
1. Still common man (Community) is unaware of the concept of CSR.
2. There is no observable change in CSR trend from past five and six years
3. No specific strategies difference was observed in implementation of CSR across
organisations.
4. Most of the CSR initiatives of organizations were biased towards community
infrastructure development rather than environment protection.
5. Corporate bodies operating CSR in India lack professional approach and committed
human resources to execute CSR activities in more appropriate manner.
6. Directly or indirectly communities surrounding to organisations few of were got benefited
through CSR activities while, major chunk of them still remained unsatisfied.
1.15 Significance of the study
Over the last twenty years an increasingly large number of business houses have responded
positively to the banner of CSR. This has perhaps been partly due to their aspiration to make
their operations more ethical. While for the government, to play the role collaboration with
the businesses community can play in the development of society is quite crucial, the activist
community might like to take credit for the growing importance of CSR as a clear victory for
their efforts in pressurizing the activities of companies. To put the same in other words,
companies introduced CSR reports and programs as a response against damage inflicted on
their sale and reputation by attacks from activist groups who aided by news media in which
corporate wrongdoing has been especially highlighted. Many of the researchers, experts and
the practitioners express their opinion that there are very few studies conducted to understand
the practice of CSR from community prospective in India.

43
Further, the review of literature suggest that there were many studies exist in India to
understand CSR as a subject of management but there were few studies undertaken to
understand other dimension of CSR that is beneficiaries of CSR. The present study was an
attempt to understand the CSR concept from both the dimensions such as CSR implementing
organisation and beneficiaries of CSR activities (community). The present study tries to
understand the issues covered by the management and their implemented approach in order to
executive the same at community level. Moreover, at the same time the researcher tries to
study the community requirement in that particular site, in terms of by checking trend and the
effectiveness of such different strategies through the community satisfaction. Eventually, this
type of attempt was first in kind in Karnataka rather in India to study the community
awareness and their knowledge about CSR as well as organisations working in their
community as part of CSR. The present study also tries to measure the impact of the CSR
activities undertaken by the organization in a way to have the sustainable development at the
village community. In this scene the present study got a significant role to play in the field of
corporate manage as well as social science especially from the social work prospective.

44
Chapter-2: Review of Literature
Chapter-2: Review of Literature
2.1 Introduction
The purpose of this chapter is to review the literature on CSR in different aspects. This review
is perceived to be important in a sense it provides the context and justification for the
proposed research. The review of the CSR as an essential preface to the investigation of CSR
studies undertaken in past. The Corporate Social Responsibility as a principle and practice in
a way is closely linked with the concept of welfare state, enlightened management and
ameliorative populist movements that are conspicuous characteristics of the contemporary
civil society. The emphasis is moral, social and ethical obligations of these who are benefited
to part with a portion of fortunes for a betterment and uplift of those who may have borne the
brunt of the process of creation of wealth on the one hand and might have contributed to this
process without being the part of it.
However the business can have obligations that extend beyond economic roles is not
new in many respects. Throughout the history the roles of organizations producing goods and
services for the marketplace were frequently linked with and include political, social and
military roles. For example, throughout the early evolutionary stages of company
development in England where organizations such as the Hudson Bay company and the East
India company received broad mandates, there was a public policy understanding that
corporations were to help achieve societal objectives such as the exploration of colonial
territory, setting up settlements ,providing transportation services, developing bank and
financial services. During the nineteenth century, the corporation as a business form of
organization evolved rapidly in the United States (US). It took on a commercial form that
spelled out responsibilities of the board of directors and management to shareholders (i.e.
fiduciary duty). In this later evolutionary form, public policy frequently addressed specific
social domains such as health and safety for workers, consumer protection, labor practices,
environmental protection. Thus, corporations responded to social responsibilities because they
were obligated to be in compliance with the law and public policy. They were also responded
voluntarily to market demands that reflected consumer morals and social tastes.

Details

Pages
Type of Edition
Erstausgabe
Year
2016
ISBN (PDF)
9783960676072
ISBN (Softcover)
9783960671077
File size
10.3 MB
Language
English
Institution / College
Gulbarga University – Department of Studies and Research in Social Work
Publication date
2016 (November)
Keywords
Corporate Social Responsibility CSR India Interview Karmayog Corporate Affairs Strategy
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