Professional Documents
Culture Documents
1. Kautilya, the father of Arthshashtra, has covered all possible theories of present day
CSR in 300 BC itself. According to him, the king was supposed to do four primary
actions:- i. to acquire what is not gained, ii. To protect what is gained, iii. To increase
what is protected, iv. To bestow the surplus upon the deserving. The political
organization was presented as consisting of stakeholders – the king, the ministers, the
territory, the fort, the treasury, the army & the ally. It was emphasised that happiness
of king rest in the happiness of subjects. Kautilya emphasised upon the correct &
fruitful utilization of land & equitable distribution of economic resources with social
welfare around to create a sustainable economic management system. Kautilya
developed his concepts after extensive study of Vedas. The Vedas present an
exhaustive commentary on all matters including the study of man made catastrophes
& effects of the same on ecology. “Don’t destroy forests with tigers & don’t make
forests devoid of tigers. Forests cannot be saved without tigers & tigers cannot live
without forests because forests protect tigers & tigers protect forests.”
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that long term interests of corporation can be best served if the environment, to which
they belong to, is strengthened. I the environment is not preserved to the desired
extent, the interests of shareholders are bound to suffer. IN 80s & 90s, numerous
campaigns like friends of the earth, consumer boycotts & ethical product labelling
campaigns became increasingly effective in changing corporate perspective. In early
90s, Greenpeace – a pressure group facilitated a unit in Germany which manufactured
CFC –free refrigerator. Within six months, all mainstream units started producing
identical refrigerator. In the changing political paradigm, market forces started
defining new arrangements in which market forces emerged stronger defining state’s
boundaries of financial & social activity.
Corporations are involved in CSR practices through education, healthcare, rural
development, women empowerment, environment protection, & disaster
management. Most of the organisations in present scenario pursued CSR as charity &
philanthropic activity. As a result, CSR rested on the foundations of charity than
sustainability. The intentions of the corporations were to use limited resources, lesser
efforts, publicity, brand building & short term gains. Presently we are going through a
fast paced globalised approach which sees integration of other value additions thus
shaping CSR a holistic model affecting business & society together, where it is no
longer a mere charity oriented programme.
3. Emerging Face of CSR & Corporate Sustainability: CSR from charity &
philanthropic activity to board room activity is a long journey. CSR goes beyond
charity & requires the company to act beyond its legal obligations & integrate social,
environmental & ethical concerns into company’s business process. The emerging
concept of CSR moves from shareholder & profit centric approach to stakeholders
approach. This would include investors, employees, customers, regulators, supply
chain, local community & society. It is not the areas of activities but the intentions &
approach to the whole issue which appears making the difference. There is increasing
recognition of the the Triple Bottom Line- People, Planet & Profit. The triple bottom
line approach to CSR highlights a company’s commitment to operate in socially,
economically & environmentally sustainable manner. Society depends on the
economy; economy depends on the global eco system whose health represents the
ultimate bottom line. The three bottom lines are not stable; they are in flux because of
social, economic & political & environmental pulls, pressures, cycles & conflicts.
Corporate sustainability is foreseen only in context of corporate growth & social well
being.
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a. Globalization has demanded more accountability & transparency in
business environment & so demanded social & environmental investment.
b. Prominence of eco – social stability ruling the attention of international
community & having far reaching impact on the survival of free market
economy.
c. New realization of involving all players- stakeholders to minimise any
investment risks & maximise profits.
5. Corporations have shifted from granting charity to produce products & services in a
manner that would make a real difference in the target communities:
a. IBM has joined hands with the tribal development department of Gujrat for
upliftment of tribals in Gir forests.
b. Lupin India ltd, India’s third largest manufacturer of pharmaceuticals has
started a project for providing sustainable development in 154 villages across
Rajasthan.
c. Cipla, another Indian pharmaceutical has found a novel approach to fulfil
CSR by selling a cocktail of three anti HIV drugs at lower rates through NGOs. This
led to significant decrease in the prices of these drugs world wide & increase in the
availability of these drugs in developing countries.
d. TCS has set up a fully equipped computer training lab for children from
the society for the welfare of physically handicapped & research centre, Pune
for imparting basic computer knowledge.
e. Bharat electronics Ltd built cyclone proof houses for the victims of super
cyclone with the help of the victims themselves so that the houses are built
according to their needs.
6. In post liberalisation era, with the enhanced role of private players in the market &
with the unshakling of monopoly & quota, CSR has acquired focused place with
tighter accountability norms.
a. Defensive: (It is not our job to fix that). In case of facing criticism, the
organisation resorts to rejection of criticism or denials of the links between the
organisation & alleged outcomes.
b. Compliance: (We will do as much as we have to) Embed. At the compliance
stage, it is clear that the corporate policy must be established & observed.
Compliance is understood as a cost of doing business. It creates value by
protecting organisation’s reputation & reducing the risk of litigation.
c. Managerial: It is the business. At the managerial stage, the organisation
realizes that it is facing a long term problem that cannot be resolved merely by
compliance or public relation exercise. The organisation will have to give
managers the core business responsibility for the problem & solution.
d. Strategic (It gives us competitive edge) integrate: An organisation learns how
realignment of business strategy can create competitive edge for long term
success. Automobile companies now realize that their future operations depend
on their ability to develop environmentally safer form of mobility.
e. Civil (We need to make sure every body does it): Promote. In the final stage,
organisations promote collective action to address society’s concerns. Diageo &
top alcohol companies chose to involve in educational initiatives to promote
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responsible drinking, knowing fully well that restrictive legislation will cause
problem at some or the other time in future.
c. L&T: The organisation believes that the true & full measure of growth,
success & progress lies beyond balance sheets that make difference to the lives
of people. L&T addresses the issues related to health, education, environment,
conservation, community development along with government agencies &
NGOs.
d. Mahindra Group: Mahindra group conducted CSR by manufacturing socially
responsible products engaging in socially responsible employee relations &
making a commitment to community. In 2005, the group decided to set aside
1% of the profit for CSR activities. Out of number of CSR initiatives, one is
running courses like IT, Retail & Automotive Engineering with special
emphasis on employability.
e. Microsoft: Microsoft spends 60 bn $ towards various activities of social well
being.
f. Tata Group: The Tata group is most respected for its CSR orientation. Tatas
remain pioneer in introducing social audit for its programmes. A feeling of
healing is funded by Tatas for the revitalization of local health. They develop
tribal communities around Jamshedpur.
g. CSR initiatives through University Alumni: Through CSR initiatives, alumni
of BIT Pilani launched a programme named BIT Sunami as a five year
rehabilitation initiative, along with corporates like Wipro, Hewlett – Packard,
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Kanbay etc to transform rural communities having undergone sufferings due
to sunami. The activites are;
a. Geographical Information System (GIS) based resource mapping for the
villages, designed sanitation & water resource plans.
b. Building a calamity relief shelter- cum- community centre equipped
with communication & public address & warning system.
c. CSR at Isha foundation: Not only for spiritual & inner well being but
also to address rural education, health, child welfare & women
empowerment under the name of rural rejuvenation sustainability of
CSR.
d. A massive shift in the CSR approach from the days of plantation of
saplings as separate activity with advertisement tails, to this time when
the CSR is resorted to as integrated with business initiatives, is
noticeable. This was amply in evidence when seven multinational
companies like Coca Cola, Kellogg India, nestle India, Pepsi Co &
Hindustan Uniliver announced a common commitment to responsible
marketing to children & vowed not to advertise food & beverage
products to children under 12 years on TV, Internet or in the print.
Industry self regulation can be the best example of responsible CSR.
Organisational Growth:
a. L&T anticipated healthy growth in its order inflows of 25-30%in
financial year 2009-2010 even in the challenging environment. Finally
the company recorded growth of 24% in order inflows. This became
possible only due to committed employees & support of the society. The
commitment & support generated due to care, trust & continuous
learning.
b. Mr Kumar Manglam Birla, chairman, Aditya Birla group, one of the
fortune 500 companies aired his views on the growth of the organisation
by investing in people. He emphasised that a new brand of managers has
been nurtured. Employees welfare & building of right environment for
growth are effective CSR initiatives only.
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b. A drug manufacturer in India provides gifts & vacations abroad to doctors who
prescribe its product.
c. Media corporate houses who have practically no role in the domain of social
responsibilities, have suddenly publicised their great role in societal changes. For
them CSR is a step to build their brand.
Rediscovering CSR: How is its face & pace expected to change the business is
business is business approach:
Positive CSR programs have a positive impact on business economic performance &
support shareholders. Some of the benefits which may accrue to the company are as
under:
a. improved financial performance
b. power operating costs
c. enhanced brand image
d. increased sales
e. greater productivity
f. environmental benefits
g. greater renewable resources
h. employee volunteer programmes
Social audit: It is believed today that it is the duty of corporate enterprise to ensure
that it does not adversely affect the life of the community in which it operates. Social
audit is commitment to systematic assessment of & reporting of some meaningful
definable domain of a company’s activities that have social impact.
Towards a Prolonged Prospect: Surging economies, including India, are dealing
with issues related to poverty, education, community welfare & thus are hotbed for
innovative CSR scenario which is still maturing. As India traverses the wave of
economic boom & commercial success, CSR is presenting itself as a prospect &
prerequisite for corporates to be engaged in. Mahatma called it part of inclusive
growth. Dr Manmohan Singh described CSR as the issue which has galloped post
liberalisation era. Doing well by doing good’’ is mantra followed by many
corporates. It advocates business to be gauged in the context of working in the
broader positive interests of society & also in the narrower interests of shareholders.
Consumers expect much more from the companies whose product they buy. It is
believed that whatever profit is generated is from the same society in which the
organisation operates.
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Going Green: Jairam Ramesh made a key note address in 2007 on global warming
asserted, ‘if India wants to be global super power, it must also take on global
super responsibilities.’’
CSR in minimizing waste & E-Waste: Titan industries has established a high
quotient of eco friendliness in their core competency & manufacturing. The ISO
14000 certified company has focused on initiatives like eliminating the use of ozone
depleting substances, minimizing the use of plastic packaging, vermin composting &
piloting the conversion of industrial waste. As a result of their sustained efforts
towards environment friendly production, the company’s energy consumption per
watch reduced by 41% with cumulative energy savings of 26 lakh.
Recommendations: Following are the few recommendations that can make CSR a
potent & viable happening:
a. Corporate along with non governmental agencies if pool the resources can
launch CSR activities at wider platform with bigger purpose for the
community.
b. CSR has to move inside rural pockets where poverty alleviation & health
are the real issues.
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c. CSR as an approach has to be developed at the business schools for larger
understanding to make it integral to the attitude & planning.
d. Companies require to pool in resources & utilise them as part of holistic
management instead of duplicating the allotment & utilisation of
resources.
e. CSR has to be addressed as agenda & potent tool of social justice agenda
in addressing issues related to livelihood of a big chunk of population.
f. CSR has to become an essential & compulsory part of business plan
instead of philanthropic & volunteer activity.
g. To change the perception of business as a privately deliberated upon
activity to earn profits. Business was envisaged to be innovative for long
term sustainability for the benefits of stakeholders.
For the business leaders of today it is to be understood that business will change ever
faster, issues will become more complex. CSR will become even more complex issue
requiring deliberation & handling. Economic well being & empowerment to the
populace are the net outcome of CSR which can ensure better standards of living &
quality of life. CSR today is not a soft issue but hard edged business issue. The
globalisation is helping to raise standards of living in both developed & developing
world. Business must do more to help win the globalisation debate & reconnect to the
aspirations of the people. CSR has moved from periphery to the centre stage.