2. INTRODUCTION
Corporate social responsibility (CSR)
delineates the relationship between
business and the larger society.
CSR can be defined as a concept whereby companies voluntarily
decide to respect and protect the interest of a broad range of
stakeholders and to contribute to a cleaner environment and a
better society through active interaction.
Corporations have a degree of responsibility not only for the
economic consequences of their activities, but also for the social
and environmental implications.
This is sometimes referred to as a ‘triple bottom line’ approach
that considers the economic, social and environmental aspects of
corporate activity.
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3. NATURE OF CORPORATION
Originally, company has been considered an artificial person.
But with the advent of organic theory, a company is considered a
living organism, is entitled to rights and also liable for duties Law
confers personality to the company and strictly speaking
personality denotes having rights and duties.
In India, the Supreme Court has categorically declared that even
though company is not a citizen, it can claim the protection of
fundamental rights, which are guaranteed under the Constitution
of India
Now, if a corporate entity enjoys rights, it has to bear certain
duties or responsibilities like natural person. Thus, with the
change in the nature of a corporation, its role has also changed.
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4. NEED FOR CSR
1. Reputation
management /
Goodwill Creation
2. Employee
attraction
7. Quality
3. Competition
(in general)
6. Cost efficiency
5. Corporate
liabilities /Legal
claims
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4. Investor
relations
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5. ROLE OF CORPORATION IN SOCIETY
Corporations are not only a profit churning organizations, the
working of which would be no concern to the society, rather
they are multinational giants affecting the different sectors of
society by their functioning.
Maximization of social welfare should be the legitimate goal of a
company
Present role of corporation Starting company in rural area
o Employing socially handicapped and weaker sections of
community
o Taking interest in work, welfare of employees and their
families including the spread of adult literacy
o Environmental protection
o Consumer’s health, welfare and safety.
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6. SOCIAL RESPONSIBILITY
Social responsibility emphasizes the intimacy of the relationship
between the corporation and society
Means of production of economy should be so employed that it
leads to enhancement of total socio- economic welfare
In every society there are social forces which form the basis of
social responsibility. These forces are as follows:
 Social institutions
 Labour organizations
 Social consciousness
 Modern management
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7. CLASSIFICATION OF SOCIAL
RESPONSIBILITY
Responsibility towards itself:
o Each corporate entity to do business and stay in the business
has to work towards growth, expansion and stability and
thus earn enough profits.
Responsibility towards shareholders:
o Secure and safeguard the shareholders’ investment and
endeavor to provide a reasonable return on their money.
Responsibility towards State:
o Foremost duty to not indulge in tax evasion practices to
realize fruits of welfare state concept
Responsibility towards consumers:
o It is imperative for every corporate entity to fulfill its
contractual obligations to its customers
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8. DEVELOPMENT OF CSR
Present age is money dominated. Business enterprises are coming
up with new strategies to earn more and more profits.
Globalization led to the opening of the markets and thereby
facilitated in cross-border trades. Centralized mode of production
has given way to a highly decentralized mode of production which
is spread across the world.
Rules of corporate governance have changed. On one hand,
globalization and liberalization have provided a great opportunity
for corporations to be globally competitive by expanding their
production base and market share. On the other hand, the same
situation poses a great challenge to the sustainability and viability
of such mega-businesses, particularly in the context of emerging
discontent against MNCs across the world.
By capping and limiting the unsustainable use of resources, a
healthy environment can be sustained
Threats to sustainability include climate change (despite
improvements in energy efficiency we still burn too much fossil
fuel), increasing scarcity of water, loss and fragmentation of
biodiversity (deforestation continues apace in the tropics), and
buildup of colossal toxic pollutants in the environment
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9. The current wave of interest in CSR differs from the past
experiences
No longer limited to social concerns, SRI now takes environmental
issues into account
Today, social responsibility is no longer the purview of just a
handful of managers concerned with the social or environmental
impact of their firm’s operations. Quite often, it is a part of the
overall business strategy
Upsurge in ‘voluntary initiatives’ associated with codes of
conduct, improvements in environmental management systems,
improved health and safety standards, etc.
Large companies are also participating in so-called ‘multistakeholder initiatives’ and ‘public-private partnerships’ with
NGOs and governmental or multilateral organizations
The United Nations has played an important role in promoting
partnerships with transnational companies (TNCs) through various
arrangements
Criticism: Many CSR initiatives amount to ‘green wash’ and CSR is
a genuine attempt on the part of big business to improve social,
environmental and human rights conditions but the CSR agenda
needs to be broadened and implementation strengthened .
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10. CSR AND ENVIRONMENT
If we consider the corporation to be the ‘public vehicle of society’
and if we take ‘social responsibility’ to imply a broadly-based
responsibility to society, then the responsibility of corporate
executives is to order the priorities of the corporation and set the
managerial balance in line with changing needs of society, while
at all times keeping an eye on the interests of the stakeholders in
corporate management.
This does not imply that social responsibility is the ‘primary
responsibility’ and economic responsibility the ‘secondary
responsibility’. Rather, social responsibility must be recognized as
a concept that encompasses both, and whose aim is to create the
synergetic development of society and the corporation by
harmonizing the two responsibilities on a higher dimension.
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11. BHOPAL GAS DISASTER
The disaster at Union Carbide Corporation (UCC) plant on
December 3, 1984, released 40 tons of poisonous methyl
isocyanate gas (MIC).
The aftermath of the disaster left 15,000 dead, numerous ill, with
a polluted environment that is yet to recover
The victims of the disaster are yet to receive adequate
compensation and medical help from the company
NEED FOR CSR ,Dow Chemicals, which took over UCC in 2001,
from the beginning of takeover, ensured that there were no
outstanding liabilities in relation to the Bhopal disaster
It did not take any responsibility for the tragedy, as well as
cleaning up the site and ground water, medical monitoring,
economic compensation and rehabilitation for the victims
It put entire responsibility on government and freed itself from
taking any legal obligation saying that it wanted to protect the
shareholders’ interest. At the 2003 annual shareholder meeting,
William S Stavropoulos, CEO of Dow Chemicals, stated that the
case of disaster had been resolved in court and thus they are not
liable for it any further.
Having seen the impact of negligence, Bhopal Gas Leak Disaster
(Processing of Claims) Act, 1985 and Environmental Protection
Act, 1986 were enacted
Dow being financially sound should have been more responsible
towards socio, economic and environmental issues. Hence, for
Dow, it was high time to take some positive action and proper CSR
approach towards human rights.
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12. HUMAN RIGHTS AND CSR
Four basic trends can be identified as catalyzers of the new
human rights presence in business discourses and top level
economic forums
 FIRST – the controversial process of economic globalization
 SECOND – the emerging network society

THIRD – information and knowledge technologies which
create expectations of greater corporate transparency
while fast tracking and multiplying content and information
on these issues in local and global interactions
 FOURTH – the emerging risk society by which company
reputation, image and identity are coming under the
scrutiny of certain rising values in a civil society that is
increasingly informed and mobilized on such issues.
Corporations are part of the entire society and human rights focus
on the dignity and worth of the human beings who compose the
society
Human rights form part of international law and corporations are
bound by those laws that are applicable to non-state parties
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13. A current development lies in the area of environmental crimes
and humanitarian law
In the international arena, human rights are often in a state of flux
and satisfactory human rights condition in a country may
deteriorate because of an outbreak of civil conflict or some other
apocalyptic event. The corporation then has to choose whether to
disinvest or risk accusations of collusion with the human rights
violators. Very often the corporation may be a supporter of
international human rights standards and yet be in a nation where
human rights policies are difficult or impossible to implement.
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14. CODES FOR CSR CONDUCT
UN Copenhagen World Summit for Social Development of 1995;
UN World Summit on Sustainable Development, Johannesburg,
2002; ILO’s 1998 Declaration on Fundamental Principles and
Rights at Work Standards; OECD’s Updated Study on International
Trade and Core Labour Standards, 2000 as The International
Organization for Standardization (ISO)
NGOs like Amnesty International, Human Rights First have also
developed standards for the CSR arena





Protect environment
Attain equitable access to education and primary health care
Reduce absolute poverty by a target date
Eliminate forced child labour
Accelerate development of the least developed countries.
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15. CSR INITIATIVES AND EXAMPLES
ANAND CORPORATE SERVICES LIMITED:
 Twenty-five years ago, the SNS Foundation, an expression of
Anand’s corporate social responsibility, was born. The
Foundation has created programs in the fields of health,
education, natural resource management and life skills
training, only to make sure that fellow humans could
breathe easy.
INFOSYS TECHNOLOGIES LIMITED:

Infosys promoted, in 1996, the Infosys Foundation as a notfor-profit trust to which it contributes up to 1% PAT every
year. Additionally, the Education and Research Department
(E&R) at Infosys also works with employee volunteers on
community development projects.
ITC LIMITED:
 ITC is engaged in elevating its partnership with the Indian
farmer to a new paradigm by leveraging information
technology through its trailblazing ‘e-Choupal’ initiative. It is
significantly widening its farmer partnerships to embrace a
host of value-adding activities viz. creating livelihoods by
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16. helping poor tribes make their wastelands productive,
investing in rainwater harvesting to bring irrigation to
parched dry lands, empowering rural women by helping
them evolve into entrepreneurs, and providing
infrastructural support to make schools an exciting platform
for village children.
LARSEN & TOUBRO LIMITED:
 L&T promotes Construction Vocational Training in India by
establishing a Construction Skills Training Institute (CSTI) at
Manapakkam, Chennai and many other parts which imparts
free of cost basic training in farm work, carpentry, masonry,
plumbing and sanitary, etc.
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17. VIOLATION OF CSR PRINCIPLES
CASE OF COCA COLA IN INDIA
Coca Cola is one of the most recognized brands across the globe.
It ranks among one of the top foreign investors in India
High degree of public protest against the Coca Cola plant at
Plachimada, Kerala got international attention and led to
government intervention for closure of the plant
Plant at Plachimada was alleged to have exploited the ground
water resources leading to drying up of wells and other natural
water resources in the area
Company had to deal with protest from the local community and
environmental conservation groups
Company was also accused of supplying poisonous waste as
fertilizers to the local farmers.
The sludge which was disposed in open ground ran along with rain
water to the natural water resources. Tests also showed that the
water available to the wells was contaminated and unsuitable for
consumption
Added to these were the findings from the Center for Science and
Environment which said that twelve large soft drinks brands
manufactured by Coca Cola and its rival Pepsi, sold in and
around Delhi, contained a cocktail of pesticide residues including
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18. chemicals which can cause cancer and damage the nervous and
reproductive system and also reduce the bone mineral density
The case clearly shows that emerging markets can respond and
protest against the irresponsible behavior of MNCs
The case also shows that emerging markets might have loose laws
which do not protect interests of local population or laws that are
not implemented properly
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19. CONCLUSION
• The role of a successful company is to contribute to national
wealth, generate employment opportunities, promote e-business
and e-commerce, bring transparency in management policies, and
provide open communication and a safe working environment
• India is facing many problems viz. unclear, unpractical and poorly
monitored regulations, poor infrastructure, a complicated tax
system, and too much bureaucracy
• Broad frameworks on corporate governance should be developed
and followed. And further, penalties for non-compliance should
be strictly implemented
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