CSR Overview of Indian Corporates

International Journal of Management and Social Sciences Research (IJMSSR) ISSN: 2319-4421
Volume 1, No. 3, December 2012
i-Xplore International Research Journal Consortium www.irjcjournals.org
48
Corporate Social Responsibility (CSR): Overview of Indian
Corporates
Vikramjit kaur, Rayat Institute of Management, Railmajra, Punjab Technical University, Jalandhar.
ABSTRACT
Corporate social responsibility (CSR) is a highly
misunderstood & misinterpreted term in India. Some
Indian companies believe that merely complying with laws
& regulations fulfills their need for social responsibility. A
responsible corporate recognizes that its activities have
wider impact on the society in which it operates. Therefore
it takes account of the economic, social, environmental &
human rights impact of its activities on all stakeholders.
Although India is a favorable business destination for
western investors. It is to be tremendously challenging for
any business to remain competitive here in the long term.
Unless poor people have equity in the growth of economy,
India can never achieve the title of super economy. Here
comes the critical role of corporations. Corporate social
responsibility is one such niche area of corporate
behavior & governance that needs to get aggressively
addressed & implemented tactfully in the organizations. At
the same time CSR is one effective tool that synergizes the
efforts of corporate & the social sector agencies towards
sustainable growth & development of the societal
objectives at large.
This paper emphasizes that how CSR has become the
linchpin for development of any corporate organizations.
This paper tries to bring out CSR initiatives taken by
various organizations in India. An exploratory research
design was chosen in order to develop a profound
understanding of the research topic and to obtain in-depth
data about the research objectives. All main elements of
the research paper, comprising theory, findings and
analysis were incorporated in a lucid and cohesive
manner and structured in order to address and evaluate
the central research objectives appropriately.
KeyWords: CSR, Corporate,
Responsibility,India,Business.
Introduction
Corporate social responsibility (CSR), also known as
corporate responsibility, corporate citizenship, responsible
business, sustainable responsible business (SRB), or
corporate social performance, is a form of corporate self -
regulation integrated into a business model. CSR policy
would function as a built-in, self-regulating mechanism
whereby business would monitor and ensure their
adherence to law, ethical standards, and international
norms. Business would embrace responsibility for the
impact of their activities on the environment, consumers,
employees, communities, stakeholders and all other
members of the public sphere. Furthermore, business
would proactively promote the public interest by
encouraging community growth and development, and
voluntarily eliminating practices that harm the public
sphere, regardless of legality. Essentially, CSR is the
deliberate inclusion of public interest into corporate
decision making, and the honoring of a triple bottom line:
People, Planet, and Profit. The credibility of CSR is
dependant on effective delivery of communication at
recruitment, training and regular communication of recent
changes in the company's plan. CSR is generally seen as
the business contribution to sustainable development
which has been defined as "development that meets the
needs of the present without compromising the ability of
future generations to meet their own needs", and is
generally understood as focusing on how to achieve the
integration of economic, environmental, and social
imperatives.
Corporate social responsibility in India
Business houses and corporate have been taking up social
welfare activities from time to time. Recently, priority of
business is getting widened from 1 P to 3Ps by inclusion
of people and planet with profit. Short-term, charity based
welfare interventions are being replaced by long-term,
empowerment –based Corporate Social Responsibility
(CSR). Based on the realization+, ―business cannot
succeed in a society that fails‖, CSR is being considered as
an imperative for carrying on business in the society rather
than as a charity. While CSR is relevant in business for all
societies, it is particularly significant for developing
countries like India, where limited resources for meeting
the ever growing aspirations and diversity of a pluralistic
society, make the process of sustainable development
more challenging. CSR interventions-based on
commitment, mobilization of employees-voluntarism,
innovative approaches, appropriate technology and
continuing partnership-have been making lasting
differences in the life of the disadvantaged. Further,
synergy of corporate action with the government and the
civil society are making the CSR interventions more
effective and facilitating the corporate carrying on
business in the society.

49
Why is CSR relevant today?
CSR as a strategy is becoming increasingly important for
businesses today because of three identifiable trends:
 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: 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
Potential business benefits of CSR
The scale and nature of the benefits of CSR for an
organization can vary depending on the nature of
enterprise, and are difficult to quantify, though there is
large body of literature exhorting business to adopt
measures beyond financial ones. The business case for
CSR within a company will likely rest on one or more of
these arguments.
 Human resources A CSR programme can be an
aid to recruitment and retention, particularly within the
competitive graduate student market. Potential recruits
often ask about a firm‘s CSR policy during an
interview, and having a comprehensive policy can give
an advantage.
 Risk management managing risk is a central part
of many corporate strategies. Reputation as take
decades to build up can be ruined in hours through
incident such as corruption scandals or environmental
accident. These can also draw unwanted attention from
regulators, courts, governments & media. Building a
genuine culture of ‗doing the right thing‘ within a
corporation can offset these risk.
 Brand differentiation in crowded market places,
company‘s striving for a unique selling proposition.
That can separate them from the competition in the
minds of consumers. CSR can play role in building
customer loyalty based on distinctive ethical values.
 License to operate corporation are keen to avoid
interference in there business through taxation. By
taking substantive voluntary steps, they can pursuit
governments that they are taking issues such as health
& safety, diversity, or the environment seriously as
good corporate citizen with respect to labor standards
and impacts on the environment.
Review of Literature
Moir Lance (2001) reviewed definitions of corporate
social responsibility from both practice and the literature
and looks at theories to explain why such behaviour takes
place. The literature has strong divides between normative
or ethical actions and instrumental activities. The article
concludes by posing the question of when instrumental
activities become business activities rather than largely
social responsibility. Lantos Geoffrey P. (2001) reviewed
the development of the corporate social responsibility
(CSR) concept and its four components: economic, legal,
ethical and altruistic duties. Discusses different
perspectives on the proper role of business in society, from
profit making to community service provider. Suggests
that much of the confusion and controversy over CSR
stem from a failure to distinguish among ethical, altruistic
and strategic forms of CSR Sarbutts Nigel (2003)
reviewed a spectrum of views on reputation and CSR and
argues that searching for a definitive, value-for-money-
based formula for reputation management and CSR is at
odds with stakeholder expectations, and that much
evidence exists to suggest that truly effective CSR is the
result more of pragmatism than theory or corporate
strategy and in some ways SMEs are better placed to take
advantage of CSR programmes. Christian Superti (2005)
Corporate responsibility (CR) has gained a lot of attention
during the last decade and many more companies are
producing non-financial reports today than ten years ago.
Although a widespread definition is not available CR
means that businesses are pursuing their economic, social
and environmental responsibilities on a voluntary basis
and are integrating them into all business operations, while
interacting with their stakeholders. Marshall Judi (2007)
reviewed the potential gendering of leadership in the
emerging field of corporate social responsibility (CSR). It
explores whose voices are becoming dominant, how
leaders speak, and what forms men's and women's
leadership take.Simeon Scott (2007) examined five themes
arising from definitions of corporate social responsibility
(CSR): responsibility to the community and society;
promoting democracy and citizenship; reducing poverty
and the inequality between rich and poor; employee rights
and working conditions; ethical behaviour. The paper also
aims to evaluate three important articles on CSR, and
investigate conceptual value added, with reference to these
five themes. Shah Anup (2007) Recent years have
witnessed increasing importance on corporate social
responsibility, especially as concerns about climate change
are becoming mainstream. There have been criticisms of
corporate social responsibility from ardent free trade
capitalists and anti globalization
activists/environmentalists alike. The former often feels
that anything getting in the way of profits is not a good

50
idea, and that self-interest and pursuit of profit will
ultimately lead to the market making these improvements
anyway.Mujih Edwin (2007) extended the debate over the
regulation of corporate behaviour in the area of health and
safety to the question of implementing corporate social
responsibility. Whereas the debate was based on the
protection of workers, in particular, by health and safety
regulations, the article focuses on another stakeholder; i.e.
the local community which plays host to a multinational
company in the extractive industry. Ball Kim (2008)
proposed a shift in view from corporate social
responsibility to corporate social performance (CSP) as a
means to assess CSR policies and practices. A harmful
product category was chosen to illustrate how corporate
social performance using a consumer's point-of-view can
be assessed.Robins Fred (2008) explored the general
question: Is corporate social responsibility (CSR) a
business duty, as many contend, or really just a benign
delusion? Bibri Mohamed (2008) explored the current
practices in corporate sustainability /CSR communications
was performed through a pertinent empirical and
theoretical literature review as well as a quantitative and
qualitative empirical method using a survey questionnaire.
The author attempted, in the same way, to illustrate how
corporate sustainability/CSR communications can
strengthen corporate reputation and directly enhance
financial performance.Galbreath Jeremy (2009) explored
how corporate social responsibility (CSR) can be
effectively built into firm strategy.Gabriel Juan (2009)
From the decision-maker's viewpoint, the success of a
social responsibility program rests heavily on a
corporation's ability to create links in the public
consciousness between the CSR activities of an
organization and its performance to different stakeholders.
However, thinking broadly about CSR outcomes often
results in a list that is much too long to be of any practical
use. The purpose of this paper is to provide an empirical
study to provide understanding as to why business
organizations are increasingly engaging in corporate social
responsibility issues.Jones Brian (2009) explored and
explained corporate social responsibility (CSR) as a
theoretical construct that has implications and
consequences for corporate governance in particular, and
more generally for the economy, business and society.
David Fatima (2009) discussed the interrelationship
between corporate income tax (CIT) and corporate social
responsibility (CSR) within the international framework of
the European Union (EU).
Jose Rigoberto (2009) developed an analytical model for
appraising and measuring corporate social responsibility
(CSR). The theoretical and conceptual grounds that sustain
the model are based on previous approaches. Karin
Greenberg (2009) aim is the understanding of the
mechanisms involved when an organization decides to
direct its focus on CSR issues. CSR efforts are carried out
on a long term basis, often in a turbulent business
environment.
CSR Initiatives of Indian Companies
Corporate social responsibility is necessarily an evolving
term that does not have a standard definition or a fully
recognized set of specific criteria. With the understanding
that businesses play a key role on job and wealth creation
in society, CSR is generally understood to be the way a
company achieves a balance or integration of economic,
environmental, and social imperatives while at the same
time addressing shareholder and stakeholder expectations.
CSR is generally accepted as applying to firms wherever
they operate in the domestic and global economy. The way
businesses engage/involve the shareholders, employees,
customers, suppliers, governments, non-governmental
organizations, international organizations, and other
stakeholders is usually a key feature of the concept. While
business compliance with laws and regulations on social,
environmental and economic objectives set the official
level of CSR performance, CSR is often understood as
involving the private sector commitments and activities
that extend beyond this foundation of compliance with
laws.
CSR - Corporate Examples
 Corporate companies like ITC have made farmer
development a vital part of its business strategy, and
made major efforts to improve the livelihood standards of
rural communities.
 IT companies like TCS and Wipro have
developed software to help teachers and children in
schools across India to further the cause of education.
 Aptech Limited, a leading education player with
a global presence, has played an extensive and sustained
role in encouraging and fostering education throughout
the country since inception. As a global player with
complete solutions-providing capability, Aptech has a
long history of participating in community activities. It
has, in association with leading NGOs, provided
computers at schools, education to the underprivileged
and conducted training and awareness-camps. Aptech
students donated part of the proceeds from the sale of
their art work to NGOs. To propagate education among
all sections of the society throughout the country,
especially the underprivileged, Aptech fosters tie-ups
with leading NGOs throughout the country, including the
Barrackpur-based NGO, Udayan, a residential school for
children of leprosy patients in Barrackpur, established in
1970.The company strongly believes that education is an
integral part of the country's social fabric and works
towards supporting basic education and basic computer
literacy amongst the underprivileged children in India.
 In another study undertaken by automotive
research company, TNS Automotive, India has been
ranked second in global corporate social responsibility
 The effort is significant because it brings together
a wide range of Indian companies to share ideas on
innovating sustainable programmes. Among them are
Multi Commodity Exchange of India Ltd, Anil

51
Dhirubhai Ambani Group and media company
Bennett, Coleman and Co. Ltd
 Audit firm KPMG will partner with them to offer
guidance on evaluating corporate social responsibility or
CSR programmes—a trend companies are slowly
embracing as India's expanding economy contrasts
sharply with growing local protests over land for future
industrial projects.
 Indian companies have made little progress in
reporting development projects. Addressing business
leaders in May last year, Prime Minister Man Mohan
Singh said "Corporate social responsibility must not be
defined by tax planning strategies alone. Rather, it should
be defined within the framework of a corporate
philosophy, which factors the needs of the community
and the regions in which a corporate entity functions."
 Pharmaceuticals Company Jubilant
Organosys Ltd already runs an anti-tuberculosis
programme with the government of Uttar Pradesh. Apart
from schools and hospitals that are run by trusts and
societies, the government, too, is exploring to widen the
scope of public-private partnerships to build and maintain
schools and hospitals in return for a fixed annuity
payment.
 Infosys Foundation, the philanthropic arm of
Infosys Technologies Ltd., came into existence on 4th
December 1996 with the objective of fulfilling the social
responsibility of the company by supporting and
encouraging the underprivileged sections of society. The
Foundation has undertaken various initiatives in
providing medical facilities to remote rural areas,
organizing novel pension schemes and in aiding orphans
and street children. It has undertaken a large rural
education program titled "A library for every school"
under which 5500 libraries have been set up in
government schools spread across many villages.
 The Tata Memorial Centre is not just India's
best cancer hospital. It is a global centre of excellence
where 70 per cent of patients get free primary care. About
10 to 12 million people the world over suffer from
cancer. Almost 52 per cent of them are from developing
countries. In India 800,000 are diagnosed with this
dreaded disease every day.
 IBM - Japan's 'e-elder' initiative is a national
program using training materials and other support from
IBM Japan which will hire and train seniors as instructors
for other seniors in an effort to help elder citizens more
fully participate in a Web-based society.
 Microsoft works closely with international
organizations such as the World Food Programme, Save
the Children, and Mercy Corps to provide technology-
based development assistance through the HEART
(Humanitarian Empowerment and Response through
Technology) program. More and more, global
organizations rely on technology to improve the
effectiveness of their humanitarian efforts around the
world.
 The Social Initiatives Group (SIG) of ICICI
Bank Ltd works with a mission to build the capacities of
the poorest to participate in the larger economy. The
group identifies and supports initiatives designed to break
the intergenerational cycle of poor health and nutrition
ensure essential early childhood education and schooling
as well as access to basic financial services. Thus, by
promoting early child health, catalyzing universal
elementary education and maximizing access to micro
financial services, ICICI Bank believes that it can build
the capacities of India's poor to participate in larger
socio-economic processes and thereby spur the overall
development of the country. The SIG locates cost
effective and scalable initiatives and approaches that have
the potential to address these gaps and supports research
to understand their impact. This is undertaken in
collaboration with research agencies, nongovernmental
organizations (NGOs), companies, government
departments, local stakeholders and international
organizations.
 HCC plays an active role in CSR initiatives in
the fields of Health, Education, Disaster Management,
and Environment. Disaster Resource Network DRN is a
worldwide initiative, promoted by the World Economic
Forum (WEF).Trained volunteers and equipment
resources from Engineering Construction & Logistics
companies will complement the existing efforts of
Government, NGO's and International Organizations in
disaster management. It was during the WEF annual meet
that the massive earthquake struck Gujarat in January
2001. The need for a trained and effective participation
from industry was first felt there. The members of
Engineering and Logistics segment of WEF came
together to establish this network. The idea was further
strengthened during the 9/11 incident where again the
industry participated in the relief operations. DRN
Worldwide was formally launched in New York in
January 2002. And shortly thereafter, DRN - India
Initiative was launched.
Reinventing Business - The Changing Face
of Corporate Social Responsibility
Simon Zadek a useful best practice five-stage maturity
model of how organizations deal with Corporate
Responsibility.
1. Defensive - "It's not our job to fix that" – Deny: In
the defensive stage, the company is faced with often
unexpected criticism, usually from civil activists and the
media but sometimes from direct stake-holders such as
customers, employees, and investors. The company's
responses are designed and implemented by legal and
communications teams and tend to involve either outright
rejections of allegations ("It didn't happen") or denials of
the links between the company's practices and the alleged
negative outcomes ("It wasn't our fault"). Think of Royal

52
Dutch / Shell's handling of the controversy around carbon
emissions. For years, the company - along with the rest of
the energy sector - denied its responsibility for emissions
created by the production and distribution of its energy
products.
2. Compliance - "We'll do just as much as we have to"
– Adopt: At the compliance stage, it's clear that a
corporate policy must be established and observed,
usually in ways that can be made visible to critics.
Compliance is understood as a cost of doing business; it
creates value by protecting the company's reputation and
reducing the risk of litigation. The current public debate
on obesity highlights the same dynamics - food
companies' instinct is to simply aim for compliance,
while the public clearly wants a far greater commitment
from them.
3. Managerial - "It's the business, stupid" – Embed:
At the managerial stage, the company realizes that it's
facing a long-term problem that cannot be swatted away
with attempts at compliance or a public relations strategy.
The company will have to give managers the core
business responsibility for the problem and its solution.
Nike and other leading companies in the apparel and
footwear industries increasingly understand that
compliance with agreed-upon labor standards in their
global supply chains is difficult if not impossible without
changes to how they set procurement incentives, forecast
sales, and manage inventory.
4. Strategic - "It gives us a competitive edge" –
Integrate: A company at the strategic stage learns how
realigning its strategy to address responsible business
practices can give it a leg up on the competition and
contribute to the organization's long-term success.
Automobile companies know that their future depends on
their ability to develop environmentally safer forms of
mobility. Food companies are struggling to develop a
different consciousness about how their products affect
their customers' health.
5. Civil - "We need to make sure everybody does it" –
Promote: In the final civil stage, companies promote
collective action to address society's concerns.
Sometimes this is linked directly to strategy. For
instance, Diageo and other top alcohol companies know
that as sure as night follows day, restrictive legislation
will come unless they can drive the whole sector toward
responsible practices that extend well beyond fair
marketing. Among other activities, these companies have
been involved in educational initiatives that promote
responsible drinking.
Problem: Since July 1991 India has chartered a course,
which is supposed to take the country from a controlled
economy to a market economy. Economic democracy
advocates reliance on the free market to stimulate growth.
But it is also explicit that market mechanism is
inadequate to offer distributive justice. Recognizing this
the East Asian Economies built a frame work of
Institutions to increase the opportunities for the less
privileged to share in the benefits of growth via support
for small and medium enterprises, housing and health
services. The accent was not on direct income transfers or
on subsidizing specific commodities but on increasing
opportunities. With the continuous development of
market economy and customer literacy, industries had to
satisfy the customer's goods and services. This led to the
upcoming of, Quality Management, Standardization,
Customer Relationship Management,
Technology/Internet Revolution, Brand Building, After
Sales Service's, Value Addition, Customer Retention,
etc… This led to huge competition in the industrial
scenario. On analyzing the last few years, it could be
easily concluded that the customers and the society at
large have developed a different expectation. This
different expectation is the social responsibility of the
corporate world. The question that arises is whether "CSR
is an Old Wine in New Bottle or a Concept that needs to
be trickled down the Line”. Critics argue that CSR
distracts from the fundamental economic role of
businesses; others argue that it is nothing more than
superficial window-dressing; still others argue that it is
an attempt to preempt the role of governments as a
watchdog over powerful multinational corporations.
Nowadays firms have started using CSR as a strategy to
focus on new opportunities and respond to interrelated
economic, societal and environmental demands in the
marketplace. Many firms believe that this focus provides
a clear competitive advantage and stimulates corporate
innovation and creativity.
Arguments Underpinning CSR
Arguments offered favour of CSR can be broadly
classified into two camps - moral and economic.
1. A Moral Argument for CSR: While recognizing that
profits are necessary for any business entity to exist; all
groups in society should strive to add value and make life
better. Businesses rely on the society within which they
operate and could not exist or prosper in isolation. They
need the infrastructure that society provides, its source of
employees, not to mention its consumer base. CSR is
recognition of that inter-dependence and a means of
delivering on that obligation, to the mutual benefit of
businesses and the societies within which they are based.
2. An Economic Argument for CSR: An economic
argument in favor of CSR can also be made. It is an
argument of economic self - interest. Examples of
economic sphere that contain the range of CSR.
Corporate Governance: This encourages transparency in
management of day-to-day activities. Patriotism: All
business organizations should not try to avoid taxes. The
trade carried on by the business organizations must be
fair i.e. charging fair prices for the goods which they
purchase and charge reasonable prices for the products
they sell.

53
Diversity: The ethnic makeup of population has been
changing rapidly. Business organizations should consider
these changes in ethnic make up of population.
Suggestions: In developing countries like India, it is
being clearly seen that the ground realities like
unemployment, availability of basic amenities,
corruption, poverty, education, etc… are not being
looked into "Practically". The viability of the
Government schemes and Projects are under the scanner.
The question that arises at this juncture – Is it the
Responsibility only of the Government? From the
viewpoint of renowned academicians, both the Public and
the Private Sector has to play a major Role. To create an
increasing database of customer the concept of an all
round CSR need to be put in place. CSR may have
become a hot topic in some management circles for the
past few years, but for a significant proportion of
ordinary employees it is completely irrelevant. This is
because CSR has not been made to understand down the
line.
Conclusion
Corporate social responsibility and volunteerism have no
boundaries and are not constrained by race, colour, or
religion. Sadly, concern for the community is often
mistaken for socialism. On the contrary, capitalism
thrives only when every citizen is an asset in economic
activity and has opportunities to succeed. Corporate
social responsibility is a culture and unwritten contract
with the community. This invisible culture can shape
brighter futures for nations. If employees don't see the
point of CSR initiatives, or understand the message,
initiatives are unlikely to be effective. The concept of
corporate social responsibility has gained prominence
from all avenues. Organizations must realize that
government alone will not be able to get success in its
endeavor to uplift the downtrodden of society. The
present societal marketing concept of companies is
constantly evolving and has given rise to a new concept-
Corporate Social Responsibility. Many of the leading
corporations across the world had realized the importance
of being associated with socially relevant causes as a
means of promoting their brands. It stems from the desire
to do well and get self-satisfaction in return as well as
societal obligation of business. The Indian corporate
sector are planning to introduce CSR in the small and
medium enterprises (SME) sector to increase its reach in
remote areas. Most of the companies throughout the
world had accepted that business is not just for making
money and this is evident through their involvement in
various community developmental activities. Many
Business firms had realized the importance of using
business ethics as a tool for retaining customers and
increasing its market share by highlighting the initiatives
it has taken for providing a clean environment for the
society. Also some companies started using the CSR as a
strategy, which aims at mutual development of company
and the community simultaneously.
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