1.

INTRODUCTION

As the pace of industrialization quickened employers became more and more concerned with the loss
of productivity efficiency due to avoidable sickness or accidents or stoppage of work due to bad
personal relationships. This gave rise to the idea of a welfare state, which was further strengthened by
the growth of democracy and of respect to human dignity during the last 150 years. The frame work
of a welfare state and with it the concept of social responsibility have thus come to stay in many
countries of the world.

The changing image of business in the recent years has lent further support to the idea of social
responsibility. Some public opinion polls in the 1960’s and 1970’s in United States have left
businessman disenchanted. These polls have revealed that the businessman is viewed as an individual
who does not cares for others, who ignored social problems, who preys upon the population, who
exploits labor, and who is a selfish money grabber. On the other hand, until these opinions were
unveiled, the businessman in America believed that others viewed him as he viewed himself, as a
practical, down-to-earth, hardworking, broadminded, progressive, interesting and a competitive free
enterpriser. He believed that the society looked up at him as a self-sacrificing community leader,
pillar of society, generous to a fault, great supporter of education, patron of the arts, in short, the salt
of the earth. Indeed, the businessman in the pre-poll days thought of himself as a happy mix of Plato,
Gandhi, and Churchill.

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What Is Corporate Social Responsibility?

Corporate social responsibility (CSR) is a form of business self-regulation to incorporate social and
environmental concerns. It represents a business model that adheres to laws, ethical standards, and
international norms.

As part of the business model, businesses have to take into account the impact of their activities on
the environment, employees, communities, stakeholders, and other members of the public. In short,
CSR represents the deliberate inclusion of the public’s interest in a business’ decision making to
ensure a triple bottom line that considers the planet, people, and profits.

In general, CSR involves some kind of standardized reporting that allows the business to collect
information on how it is making progress on various fronts. Businesses that engage in CSR typically
focus on some or all of the following:

 Environment: This requires a look at the environmental impacts of products and services, as
well as what the business does outside the company to improve the environment.

 Employees: It’s important to ensure that all employees are cared for adequately. Businesses
usually focus on workplace conditions, benefits, living wages, and training.

 Communities: Engaging the surrounding communities is an important part of not just creating
good human capital that can serve the business, but also securing a reputation that can further
establish the business.

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 Regulations: Respecting regulations to the fullest and often exceeding them is part of being
socially responsible.

 Crisis Preparedness: Being ready to address business crises and ensure safety for employees
and surrounding communities is critical. Having plans ready and tried are important in
ensuring minimal losses during times of crises.

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Meaning and Definition

CSR is about how companies manage the business processes to produce an overall positive
impact on society.

Take the following illustration:

Companies need to answer to two aspects of their operations.

1. The quality of their management - both in terms of people and processes (the inner circle).

2. The nature and quantity of their impact on society in the various areas.

Outside stakeholders are taking an increasing interest in the activity of the company. Most look to the
outer circle - what the company has actually done, good or bad, in terms of its products and services,
in terms of its impact on the environment and on local communities, or in how it treats and develops
its workforce. Out of the various stakeholders, it is financial analysts who are predominantly focused
- as well as past financial performance - on quality of management as an indicator of likely future
performance.

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Other Definitions

The World Business Council for Sustainable Development in its publication "Making Good Business
Sense" by Lord Holme and Richard Watts, used the following definition. "Corporate Social
Responsibility is 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"

The same report gave some evidence of the different perceptions of what this should mean from a
number of different societies across the world. Definitions as different as "CSR is about capacity
building for sustainable livelihoods. It respects cultural differences and finds the business
opportunities in building the skills of employees, the community and the government" from Ghana,
through to "CSR is about business giving back to society" from the Phillipines.

On the other hand, the European Commission hedges its bets with two definitions wrapped into one:
"A concept whereby companies decide voluntarily to contribute to a better society and a cleaner
environment. A concept whereby companies integrate social and environmental concerns in their
business operations and in their interaction with their stakeholders on a voluntary basis".

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Need for Corporate Social Responsibility

There are many situations where social

responsibility of a business becomes
necessary. Few of these situations which
show the need for Corporate Social
Responsibility are discussed below.

1. A societal approach to business is the contemporary business philosophy, which demands

business organizations to be responsive to the social problems.
2. As a result of globalization of business, global companies and MNCs operate in a big way in
their host countries. In order to establish a good corporate image, they include social
responsibility as a corporate objective. Indigenous companies are forced to follow suit for
maintaining their corporate identity.
3. In the terms and conditions of collaborations agreements, very often, social welfare terms are
included which necessitates the collaborating company to take up social responsibility of
business.
4. On the basis of legal provisions, companies have to concentrate on social problems. For
example, an industrial organization in India must obtain a certification from Pollution Control
Board.
5. Corporate donations of social welfare projects of approved NGO’s are exempted from income
tax in India.
6. An organizations commitment to social responsibility creates a good corporate image, and
there by a better business environment.
7. Social responsibility of business enables the organization to improve its product positioning
and thereby improve its market share.
8. Very often situations demand due to natural calamities, accidents and so on. For example, gas
leak at the Union Carbide plant in Bhopal, wherein the company had to monetarily
compensate through medical treatment.

IMPORTANCE OF CSR

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CSR is an important business strategy because, wherever possible, consumers want to buy products
from companies they trust; suppliers want to form business partnerships with companies they can rely
on; employees want to work for companies they respect; and NGOs, increasingly, want to work
together with companies seeking feasible solutions and innovations in areas of common concern.
Satisfying each of these stakeholder groups allows companies to maximize their commitment to
another important stakeholder group—their investors, who benefit most when the needs of these other
stakeholder groups are being met:

I honestly believe that the winning companies of this century will be those who prove with their
actions that they can be profitable and increase social value—companies that both do well and do
good….Increasingly, shareowners, customers, partners and employees are going to vote with their
feet—rewarding those companies that fuel social change through business. This is simply the new
reality of business—one that we should and must embrace. Carly Fiorina Chairman and Chief
Executive Office Hewlett Packard Company

The businesses most likely to succeed in the globalizing world will be those best able to combine the
often-conflicting interests of its multiple stakeholders, and incorporate a wider spectrum of opinions
and values within the decision-making process and objectives of the organization. Lifestyle brand
firms, in particular, need to live the ideals they convey to their consumers:

CSR is increasingly crucial to maintaining success in business—by providing a corporate strategy

around which the company can rally, but also by giving meaning and direction to day to day
operations.

CSR IN TODAY’S WORLD

CSR as a strategy is becoming increasingly important for businesses today because of three
identifiable trends:

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• Changing social expectations

Consumers and society in general expect more from the companies whose products they buy. This
sense has increased in the light of recent corporate scandals, which reduced public trust of
corporations, and reduced public confidence in the ability of regulatory bodies and organizations to
control corporate excess.

• Increasing affluence

This is true within developed nations, but also in comparison to developing nations. Affluent
consumers can afford to pick and choose the products they buy. A society in need of work and inward
investment is less likely to enforce strict regulations and penalize organizations that might take their
business and money elsewhere.

• Globalization

The growing influence of the media sees any ‘mistakes’ by companies brought immediately to the
attention of the public. In addition, the Internet fuels communication among like-minded groups and
consumers—empowering them to spread their message, while giving them the means to co-ordinate
collective action (i.e. a product boycott).

These three trends combine with the growing importance of brands and brand value to corporate
success (particularly lifestyle brands) to produce a shift in the relationship between corporation and
consumer, in particular, and between corporation and all stakeholder groups, in general.

The result of this mix is that consumers today are better informed and feel more empowered to put
their beliefs into action. From the corporate point of view, the market parameters within which
companies must operate are increasingly being shaped by bottom-up, grassroots campaigns. NGOs
and consumer activists are feeding, and often driving, this changing relationship between consumer
and company.

CSR is particularly important within a globalizing world because of the way brands are built—on
perceptions, ideals and concepts that usually appeal to higher values. CSR is a means of matching
corporate operations with stakeholder values and demands, at a time when these values and demands
are constantly evolving.

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CSR can therefore best be described as a total approach to business. CSR creeps into all aspects of
operations. Like quality, it is something that you know when you see it. It is something that
businesses today should be genuinely and wholeheartedly committed to. The dangers of ignoring
CSR are too dangerous when it is remembered how important brands are to overall company value;
how difficult it is to build brand strength; yet how easy it can be to lose brand dominance.

CSR is, therefore, also something that a company should try and get right in implementation.

2. REVIEW OF LITERATURE
As pointed earlier that the term Corporate Social Responsibility does not fully describe its role.
The scholars have put forward various definitions which tried to give it a shape according to the
period and the business environment of that time. In totality, it refers to compliance of human
rights standards, labor and social security arrangements, fight against climate change,
sustainable management of natural resources and consumer protection. Since the beginning of

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the civilization, every culture has been guided by the religion. From Sociological point of view,
broadly Religion is said to be “a system of beliefs and practice by means of which a group of
people struggle with the ultimate problems of human life” (Yinger, 1970). Every religion
preaches that a religious person should donate part of his earning towards the religious activities
including taking care of lower strata of the society. Religion and related philosophy play an
important role in forming human values and behaviour, which in turn influences business
operation. The religious values such as Honesty, Trust, Commitment and self satisfaction play an
important role in defining the corporate culture of an organization. Actually, these attributes of
the human personality tend to increase the corporate business performance. (Krishnakumar &
Neck, 2002) (Muniapan B. , 2009). From the perspective of many world religions, the abuse and
exploitation of nature for immediate gain is unjust, immoral, and unethical. (Dwivedi, 1993).
The essence of this charitable disposition from time immortal is to protect and support the
underprivileged members of the society. The underlying theme of this attitude was to ensure that
there was a reasonable respect for the fortunate persons and change the attitude of
underprivileged so that they do not start snatching from rich and spread the chaos. Literature
review relating to past and present enable us to know the historical development related to the
subject and opens up a window of thoughts through which we can get a glimpse of the problem
existed in that particular era. 1.1 General Archie B. Carroll (1999) has made an effort to
critically review the definitions of the CSR. The author took pain to analyses the evolution of the
CSR from the 1950s, the beginning of the modern era of the CSR. Author says as such the era
has started earlier than the 1950 but not much work was done. Actually, Howard Bowen (1953)
made an effort to define the CSR through the book Social Responsibilities of the businessman.
Bowen is considered to be father of the modern CSR. Author has taken and analyzed decade
wise period for the various developments in the thinking about CSR and with the time changes
in the definition was also reflected. In 1960s, most of the literature about defining the CSR was
written by the academicians and prominent names were, in alphabetical order, K Davis, W C
Frederick, J W McGuire, and C C Walton. During the decade of 1970s, the definition started to
take a better shape and more specific. The diversification also occurred during this time to Social
Responsiveness and CSP etc. The prominent contributors of this decade were of H L Johnson, K
Davis, G A Steiner, R Eells and C C Walton, S P Sethi, L E Preston and J E Post, and A B
Carroll. In 1980s, only a few definitions were put forth, but more emphasis was on conducting

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research; attempt to measures and alternative thematic framework. In this period contributions of
Drucker, Epstein, Jones, Wartick and Cochran are worth mentioning.

In nineties, the theoretical construct of the definition was almost stable and the CSR concept
spread out to alternative themes such as business ethics theory, corporate citizenship, stakeholder
theory and CSP. During this time efforts started to operationalize the CSR concept and emphasis
on the alternative concept. The next decade is expected towards more empirical research. On the
basis of the outcome of the research the definition might be refined to suit the actual situation
confirmed by the studies. Jeremy Galbreath (2006) has analyzed the Corporate Social
Responsibility and Corporate Strategies and came to conclusion that both are inseparable.
Businesses need to select an appropriate strategy suiting to the business environment. Author
suggest that for a good decision making, mangers need to be aware of the various options
available to chose from; and have presented four corporate strategies for CSR and advised that
manager may need to mix the available strategies but before finalizing the strategy, one need to
analyses the options properly and align with the business environment.

The available strategies are: 1. Shareholder Strategy 2. Altruistic Strategy 3. Reciprocal Strategy,
and 4. Citizenship Strategy The same strategy may not be suitable for the host country as being
used for the home country due to various attributes such as Local Ethics and Culture,
Regulations, Global Standards and business need to consider the same while finalizing the
strategy. As NGOs influence is increasing day by day, many countries are having NGOs which
are very powerful and focused on the local country issues.

Authors have presented the case studies to illustrate the same. As a guide for CSR decision
making, 25 best practices are also elaborated. The book is designed to maximize the impact on
business investments for doing the economic, social, environmental engagements. A theoretical
viewpoint is also included in addition to personal view of the companies. It contains real-world
advice and proven recommendations on social initiatives. The author has also presented ten
recommended strategies for success. Philip L. Cochran (2007) has thrown light on the evolution
of Corporate Social Responsibility and referenced articles of Dodd and Berle, featuring the
subject. Author further elaborated the natural transition of various attributes of the CSR such as
strategic philanthropy from philanthropy, socially responsible investing from investing, social

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entrepreneurship from entrepreneurship, Social Venture Capital fund from venture capital fund
etc. Businesses which are combining profit with solving social needs will have better chance of
earning reputation from all the stakeholders. Related to modern concept of the CSR, the most
important breakthrough is that to enhance the bottom line of the business, use socially
responsible activities. It means that social responsibility angle should be taken for viewing
economic decision of the business.

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 3. METHODOLOGY

It is recommended that every company should publish a separate Corporate Sustainability Report
(as per the Global Reporting Initiative (GRI) framework) along with their Annual Report. At the
very least, every company must include a Corporate Sustainability section in its Annual Report
(similar to the mandatory section on Conservation of Energy, Technology Absorption and Foreign
Exchange Earnings and Outgo).

CSR philosophy to be defined and actuated

Every company must clearly define its own CSR philosophy and objectives, stating which issues it
intends working on or contributing to. It is recommended that a company first takes up areas that
directly concern its business processes, and thereafter any other related or unrelated issues. These
can also yield strategic benefits to the company.

Minimum annual CSR expenditure

Every company must spend a minimum of 0.2% of its annual income on CSR activities. The CSR
spending of a company should not be linked to the profit made by the company because this would
vary from year to year and the CSR activities would thus not be consistently maintained.

The scale of operations of a company and its impact is connected with its sales, and not with its
profits. The larger the company, the greater is the damage it is doing to the environment.
Conversely, the greater is the company's ability to do good.

Protection and restoration of the environment

Every company must be engaged in CSR activities that minimize its harm to the environment, and
which help restore damage done to the environment because of the company. For example, all
companies should use energy-efficient technologies for their factories and offices, and adopt
rainwater harvesting irrespective of the production process they are engaged in.

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Employment for marginalized groups
Every company should provide inclusive employment opportunities and include the physically-
challenged and marginalized groups in their workforce. The number of employment opportunities
offered to such groups should be stated in the Annual Reports as is done by Public Sector
Undertakings.

Local community development

It is recommended that a company first undertakes projects in the places where it functions, and
helps those local communities and environments that are affected by its work.

Use of core competence

Every company should use its core competence to benefit its stakeholders and society. For instance,
banks can use their expertise to identify and counsel debtors who are likely to run into financial
trouble

Extending profile and area of businesses

A company should attempt to stretch its business beyond its existing profile and into areas where it
does not normally work so as to reach out to under-served groups and populations. While this may
sometimes mean smaller profit margins or marginal losses for the company, it will invariably result
in valuable business learning's as well as effective CSR for the company.

Developing internal CSR implementation systems

A company may choose to develop an in-house CSR team or division that undertakes the CSR
activities for the company. This is desirable as it leads to greater sensitization and awareness within
the company about it's processes, responsibilities, role, etc. and leads to the internalization of the
company's CSR philosophy.

Instead of contributing to the trust of the CEO or the promoter family, a company should set up its
own trust/foundation as a matter of proper business ethics.

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It is recommended that a company set up a committee that includes an external Director, an NGO
and local stakeholders for selecting, monitoring and evaluating its CSR activities.

Focused CSR activities for greater impact

It is recommended that a company identifies a few issues for it's CSR activities and works on these
areas for a sustained period of time so that measurable results and improvements can be achieved,
rather than undertaking or supporting several small initiatives across several areas thereby reducing
effective impact.

4. RESULTS

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Only Few Indian companies (from this study) publish a Corporate Sustainability Report to measure
and assess the impact of their business on the environment.

Very few companies openly state the processes followed by them, the damage caused by these
processes, and the steps taken to minimize this damage.

Very few companies state how much they spend on CSR. There is no mention of the amount spent in
any of their balance sheets or annual reports. Most companies just list and describe their CSR
activities and seem to be spending minimal amounts on CSR.

Very few companies are engaged in CSR activities in the local communities where they are based.

Very few companies have a clearly defined CSR philosophy. Most implement their CSR in an ad-hoc
manner, unconnected with their business process.

Most companies spread their CSR funds thinly across many activities, thus somewhere losing the
purpose of undertaking that activity.

Most companies appear reluctant to themselves fulfill their CSR unless it is mandatory by law.

Generally speaking, most companies seem either unaware or don’t care about CSR. However, all
companies can be considered to be an upward learning curve with respect to CSR and it is expected
that the situation will improve.

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 5. Discussion
 Jamshed Irani, Director, Tata Sons Ltd, says, "The Tata credo is that 'give back to the people
what you have earned from them'. So from the very inception, Jamshetji Tata and his family have
been following this principle." Moreover he says that for any business to sustain in the long run
they have to look beyond business.
 The organisation believes that India is far away from reaching that phase of economic
development where government is solely responsible for the basic needs of the public. We don't
have a social security, adequate health and education services. So till then corporate houses
should fill the gaps.
 The group's policy is to provide livelihood instead of giving money.

 Tata group has instituted the Tata Council for Community Initiatives – TCCI, a central body that
acts as a facilitator for the entire group’s social initiatives
 Formation of the TCCI has given a common direction to the Tata group’s CSR activities
 To achieve it’s aim, the TCCI planned to draw up a set of guidelines that would form the basic
framework within which individual companies who worked closely with TCCI contributed their
core competencies for the betterment of the community.
 TCCI has brought about a more structured approach to the CSR activities at the Tata group. CSR
is implemented through the P-D-C-A Model – a management system
 The common approach to community development ensures that every activity or project is
checked out on certain important aspects of development and values the group collectively
agrees upon.

Tata Business Excellence Model (TBEM)

• Community: The strategy that each Company evolves, needs to be focused on the real needs of
the communities in which the company operates and which it seeks to serve.
• Overall Development: There needs to be a dovetailing of the skills and strengths of the
Company and its employees with the immediate and long-term gaps in the overall development
of those communities - be they in the field of education, health, environment, civic amenities,
infrastructure, family planning, vocational skills etc.
• Minimum programmed: TATA Brand: In Tata companies we encourage the management to
make a declaration of policy, strategy and budgets for environment and community development,

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 and run activities as part of a non-negotiable minimum programmed aimed at generating the
reputation for the Tata Brand.

• CSR expenditure budgeted before preparation of profit and loss account by companies
• Active volunteering programmed in Group
• Over 11,500 registered volunteers in 20 companies
• 150,000 volunteer man hours

INITIATIVES

TATA CONSULTANCY SERVICES (TCS)

TCS is committed to reducing the environmental impact of its operations through
Appropriate ongoing material management.
Reduction of waste at source
Reuse of material wherever possible
Recycling
Purchasing of products with recycled content

Tata MOTORS
The Company is engaged in community and social initiatives on labor and Environment .
Reducing Pollution
Restoring Ecological Balance
End of Life Vehicle Treatment and Recycling
TATA Group companies have always displayed a keen interest in the welfare of the communities
in which they operate. As pioneers in the area of CSR, TATA has played an important role in
nation building and socio-economic development since the early 1900s.
A survey conducted by the website indianngos revealed that Tata’s spent Rs. 1.5 billion on
community development and social services during the fiscal 2001-02 - the highest by any
corporate house in India.

• Tata Chemicals Society for Rural Development (TCSRD)

Tata Chemicals set up TCSRD in 1980 to promote social uplift projects for communities in and
around Mithapur (Gujarat), Babrala (U.P.) and Haldia (West Bengal).
The initiatives that TCSRD is involved in include:
– Agricultural development
– Education
– Women's programmes
– Animal husbandry

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– Rural energy
– Watershed development
– Relief work

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 Conclusion

Corporate Social Responsibility is a difficult and elusive topic for companies to deal with. It can often
be very costly and yield benefits that are hard to quantify. Perhaps this is one reason why companies,
according to the survey, have put so much focus on the internal improvements that can be made, such
as improving corporate governance and transparency. This could also explain why the most important
stakeholders, after customers, are the traditionally important employees and shareholders.

There’s also the issue of just what standard of corporate social responsibility should companies use
and how far companies should go to perform their responsibilities beyond what the laws call for. The
issue of what is the “responsibility” of a corporation is far from being settled, and there is an
unresolved argument over what corporate social responsibility means. Companies face a plethora of
options among the various standards, guidelines, benchmarks and other proposed measures of
corporate social responsibility.

One point that all can agree on is that corporate social responsibility is not a neutral topic. There is a
persistent debate about whether the corporate social responsibility “movement” represents an
unjustified intrusion into corporate affairs, and whether companies should invest profits in their own
corporate social responsibility projects or return the money to shareholders to let them invest as they
see fit. But there is no denying that corporate social responsibility has become an important issue
facing the global business community and one that promises to grow in importance in the coming
years.

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 7.0BIBLIOGRAPHY

7 .Reference

1. Sen Gupta, Sunita Singh (2004). Business Social Partnership : An International Perspective.
Jaipur: Aalekh publications.
2. Jagdish (2004). Social Welfare in the Twenty-First Century : Issues , Critique and Relevance.
New Delhi: Akansha.
3. Sharma, Shashi Prabha (2004). Basic Principles of Education. New Delhi: kanishka.
4. Saeen, Sandeeep(2001). Ethics Management. New Delhi: Sarup.
5. Corporate Social Responsibility in India - An Empirical Research
By Bernadette Dsilva
6. 2. CSR could prove to be a valuable asset in an age of M&As, as it helps firms spread their
brand name - Maitreyee Handique

3. Corporate Social Responsibility is no longer just an addition, it is a key differentiator." Prasad

Chandra, CMD, BASF South Asia

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