Study of Corporate Social Responsibility in India and its impact on business and Society
1. PROJECT REPORT
FOR
THE PARTIAL FULFILLMENT OF
BGS COURSE AT GLIM
Study of Corporate Social Responsibility in India and its impact on
business and Society.
Abstract
The purpose of this study is to explore the various definitions and descriptions of
Corporate Social Responsibility (CSR); intricate upon development of CSR in India.
Vishal Gupta
DM15166
Section 1
Vi shal.pgdm15c@greatlakes.edu.in
2. Abstract
Purpose -The purpose of this study is to explore the various definitions and descriptions of Corporate Social
Responsibility (CSR); intricate upon development of CSR in India; study the theoretical ideas explained by
various researchers and study the changing growth of current CSR practices in India. This paper observes
how India’s top 500 corporations view, and manner their CSR, finds key CSR practices and plans these
beside Global Reporting Enterprise standards.
Methodology
It is a cross-sectional study which is tentative in nature. It used secondary data collection and content
analysis technique to evaluate CSR practices of corporations operating in India.
Findings
The key findings of the study are that CSR is nowadays presented as a broad business strategy, rising mainly
from piece considerations and investor pressure. Corporations consider their interaction with stakeholders
and impact of its business on society as significant issues. CSR policies vary with turnover and profit. The
study suggests that business and CSR strategy seem to be on a convergent path, towards corporate and CSR
integration across the corporation. Out of the top 500 corporations, 229 did not report on CSR activities ,
were therefore filtered. 49% of the lasting 271 corporations were recording on CSR. Many corporations are
making empty gestures towards CSR and a few corporations have a structured and strategic approach.
Several corporations’ extent their CSR funds very finely across many happenings. Every corporation
explains CSR in their own ways as per their needs. CSR is on a rising learning curve and is mainly driven
by compassion.
Introduction
The term corporate social performance was firstly devised by Sethi (1975), prolonged by Carroll (1979),
and then polished by Wartick & Cochran (1985).In Sethi’s 1975 tri level model, the idea of corporate social
performance was deliberated, and differences made among various corporate actions.
World Business Council for Sustainable Development expresses Corporate Social Responsibility (CSR) as
“The ongoing commitment by business to perform ethically and contribute to economic growth while
improving the value of life of the staff and their families also of the society at large.” Thus CSR can be
simply defined as the extra commitment by organizations to improve the social and economic position of
various investors involved while conforming to all legal and economic necessities.
CSR has an important role in governing the dangers of wild development, sustaining the needs of the current
generation and at the same time confirming that the means of future cohorts is not threatened. Corporations
are keener to report on their aids to the maintenance of a comprehensive environment, an improved society
or more principled business practices through both inner and external action within the nations in which
they function. The area often absent is CSR reporting in the zone of labor rights and associations. One of
the major concerns of CSR should be the superiority of industrial relations in a corporation. There will be
amplified costs to implement CSR, but the profits are likely to far balance the costs.
3. NEED FOR CORPORATE SOCIAL RESPONSIBILITY
The current style of globalization has prepared the corporations realize that in order to contest effectively
in a competitive atmosphere they need obviously defined business practices with a complete focus on the
public importance in the markets . Firstly, the rise in competition among the MNCs to gain first mover
benefit in various developing nations by establishing goodwill dealings with both the state and civil society
is ample witness to this transformation. Secondly, in most of the emerging markets, the state has a duty of
protecting the interests of the general public and thus gives preference to corporations which take care of
the interests of completely. Thirdly, India has been identified as a spring of immense talent with the
mounting levels of education. E.g, the capability of India in tossing out software professionals has now
become internationally well-known. In order to lure from this vast talent pool upcoming up in developing
countries, corporations need to gain a base in these markets by creating sound business follows addressing
social and cultural apprehensions of the people. Fourthly, firms all over the sphere are beginning to hold
the significance of intangible assets, be it trademark or employee morale. Equity generated in a
corporation’s reputation or brand can easily be impaired or even lost mostly for corporations whose brand
equity rest on corporation status. Reputation is built about intangibles such as trust, quality, relationships,
transparency, credibility, and consistency, and tangibles such as assets like people, the environment and
diversity. Only organizations that have grew the goodwill of the overall public and are ideal business
citizens will be to grow these intangible assets into tactical advantages. CSR can be an important element
of an organization’s business and corporate-level different strategies. Fifthly, CSR is a vital factor for
employee enthusiasm and in appealing and retaining top class employees as well. , intellectual capital,
creativity, Innovation and learning are assisted by a positive CSR approach. Sixthly, improved risk
management can be realized by in-depth study of relations with external investors. Given the surge in cross-border
business associations and the danger of cross-border litigation, panels have to ponder the risk
management principles of business partners and suppliers. CSR also helps in agreement with regulation and
the escaping of legal approvals, while the structure of dealings with host govt., societies and other investors
can improve a corporation’s reputation and reliability and be important with concern to its coming
investment decisions.
The main drivers for CSR are the dwindling role of govt., demands for better disclosure, amplified customer
interest, rising investor pressure, reasonable labor markets, and dealer relations. The corporations enjoy
several assistances like improved economic performance, minor operating costs, improved brand image
and status, improved sales and consumer loyalty, merchandise safety, greater use of renewable resources
and material recyclability etc.
CSR History
Historically, the philanthropy of corporate people in India has look like western philanthropy in existence
rooted in religious belief. Corporate practices during the 1900s that could be named socially responsible
acquired different forms:
Promoting religious conduct, enhancing employee, service to the community, welfare and Philanthropic
donations to charity.
Corporations may give capitals to charitable or educational organizations and may claim for them as
unlimited humanitarian deeds, as soon as in fact they are merely trying to buy public good will. The
philosophy of CSR in the 1950s was mainly based on a statement of the obligation of business to society.
JRD Tata who always placed a great deal of importance to go past conducting themselves as truthful citizens
keen out that there were numerous ways in which manufacturing and corporate enterprises can contribute
to civic welfare past the scope of their standard activities. He counseled that apart from the apparent one of
donating funds to upright causes which has been their usual practice for years; they might have utilized
their own financial, executive and human resourced to offer task forces for mission direct relief and
rebuilding measures. Slowly, it was initiated to be accepted.
4. The last period of the twentieth century seen a swipe away from help and traditional philanthropy in the
direction of more direct commitment of business in conventional development and anxiety for deprived
groups in the society. This has been obsessed both within by corporate will and visibly by increased
legislative and civic expectations (Mohan, 2001).
Conferring to Infosys founder, Narayan Murthy, ‘social responsibility is to generate maximum shareholders
worth working under the conditions, where it is just for all its consumers, workers, stakeholders, the
community, govt. and the environment.’
CSR framework
CSR Initiatives:
A lot of initiatives have been taken by the Indian companies. A list of those is as:
1) Industry Association Initiative.
2) Company Initiatives.
3) Roundtables and Networks in India.
Observations
Based on the study, the following chart depicts the major approaches followed by top Indian Corporations
for their CSR activities.
64 corporations of top 200 Indian corporations have their own devoted foundations to convey their CSR
actions. Foundations are ”not for profit organizations” made for serving the society by several activitie s
such as education growth etc. In India organizational foundations are normally registered as charitable trusts
for the persistence of social growth through healthcare development programs, poverty eradication
programs etc. Hindustan Unilever’s Unilever foundation, work towards improving the living of poor in
local societies and instantaneously fosters markets of the future, helping more than one billion people to
develop their health and well-being and, thus, creating a sustainable future.
62 out of the 200 Indian corporations of top 200 companies in India work along NGOs, charitable trusts
and other similar organizations to achieve their objectives of carrying out growth in the society where these
organizations work. E.g. Jet airways, India's foremost airline with the extensive domestic network and
processes in 24 international terminuses across 4 continents, operates with numerous NGOs to carry out its
CSR activities
5. 46 of the corporations work in collaboration with a no. of govt. agencies for pursuing their CSR activities.
18 corporations, were indulged directly in CSR activities. E.g., Havells India Limited, $1.3 billion and one
of top 5 lighting corporations of world provides mid-day meals to about 350 govt. schools in Alwar district
of Rajasthan, covering 30,000 students per day.
12 corporations pursue their CSR by provisioning good and improved health care facilities for the backward
segments of the society.
10 corporations maintains distinctive funding for CSR activities and likewise keeps provisions of deputy
funding for CSR for the next economic year so that the CSR strategies and activities of the corporation can
be prearranged and carried out tactically throughout the year. E.g., ONGC emphasizes revolution of the
organization to "stakeholder participation" from "Philanthropy".
10 businesses also report to involve their employees directly to carry out its CSR actions with the local
public members.
2 corporations, Educomp Solutions limited, and Ranbaxy Laboratories Ltd. of 200 Indian companies,
mention as involved in public private partnership (PPP) as a model to carry out their CSR activities.
According to the newly passed Companies Bill 2012 CSR spends and reporting have been made more
stringent. Corporations with net worth more than INR 500 crores, or revenue more than INR 1000 crores,
or net profit of more than INR 5 crores are obligatory to constitute a CSR board to frame CSR policy for
the firm. Corporations now have to pass a minimum of 2% of net profit made during preceding 3 years
before creation of the policy. Majority of academic works advises that CSR done by organizations is largely
egotistic, rather than being useful to society largely.
6. Results:
Government and CSR
As per study with the top 200 Indian companies. The CSR activities method followed by each company is
in addition to the aid by the govt. to society. Thus a bit of burden for the societal development is unloaded
of the government in terms of the CSR activities.
Government has controlled the activities by the new companies act. And the CSR social impact is measured
to find the final change by the activity.
Corporate Social Responsibility’s social impact be measured as following:
Social impact index= Net improvement in quality of life, and number of lives affected due to the nature of
the CSR activity and based on the needs of the TB
CSR’s SII is one of the indicator mentioned and calculated by government to govern the companies to
follow the laws and impishness of the activities.
Thus CSR is an aid to government’s aim of development.
Business and CSR
Business are looking for the better grounds to hold an opportunity in the developing market and India has
got the potential. The Perception of the companies in the customers is built on the basis of their products
and the service to the society. Like Tata group has made an image and brand value via its ethical CSR
services.
Companies like ITC and HUL has their go to village strategy for the business development. Which raises
the business and do well for the society as well. Thus meeting the obligations of the government to follow
up the new laws.
Businesses in India are holding ground and are responsible to the social responsibility and are now more
indulging in these in the essence of competition as well to maintain a social brand image.
Thus Business also are impacting via new CSR rules and they are looking at all profitable ways to all,
society government and business, to carry out. One of the suggested index to ROI of CSR activities.
Society and CSR
Society is the main focus of the CSR activities as Corporations major focus is toward the development of
the society showing their responsibility towards the environment they do businesses.
Society gains a lot from these activities and a major development was shown by certain CSR activities.
NGOs associated with the human development and the welfare of the society are aided by certain
companies. These NGOs are mostly non for profit organizations.
As per our study the research work of the various top companies on the development of the society under
their responsibility has increased the quality of living and the knowledge of the civic people there.
Even many initiatives have given rise to many entrepreneurs and many farmers are back to their livelihood.
The various CSR actions in the term of Health care services has saved many livings and provided quality
health care to the needy and poor.
Many corporations also felt their responsibility towards the Eco culture as they are more pronounced for
their tree plantation and green technology transformation in the society.
Thus finally the society is benefited by the CSR majorly as this was the major focus of the activity.
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