Corporate Social Responsibility: GLOBAL INITIATIVE FOR SUSTAINABLE

DEVELOPMENT

Corporate Social Responsibility (CSR) can be said to be a strategy module to integrate socially
beneficial programs into a corporation's model of business. CSR also helps a company attract
positive attention enabling them to earn more profit in all aspects and also helps corporations
become more efficient in their operations. Corporate Social Responsibility (CSR) is a regulating
body that helps the business to self regulate its business and also aids them to socially account its
users such as stakeholders, management, directors and the public. CSR is defined by various
international institutions differently such as the Organisation for Economic Corporation and
Development (OECD) defines CSR as a search for an effective 'fit' between businesses and the
societies in which they operate. UN defines CSR as a management concept where companies try
to integrate social and environmental concerns along with their business operations and
interaction with their stakeholders. European Union (EU) indicates CSR as the responsibility of
enterprises for their impacts on society. Corporate Social Responsibility is also known as
Corporate Citizenship which is really helpful for companies to analyze the kind of impact they
have in all aspects of society including at social, economic and environmental level. Corporate
Social Responsibility is a very broad concept depending upon the nature of the company or
industry. For a Company to be socially responsible, it has to be to firstly responsible to itself and
its stakeholders as a company can contribute socially only after it has achieved substantial
economic heights itself and have sufficient resources for its owners as well as for shareholders.
Thus, it can be said that CSR is a strategy only suitable for large corporations. Also, as a
corporation expands and prospers, its responsibilities towards the society rise as it takes the
resources of the society and thus it needs to return something back to it. Also, CSR is an
important strategy for corporations to set ethical standards. Moreover, to have an upper hand
towards their peers, industries, and competitors.
There are various ways to practice CSR, some of the major ways include Environmental efforts,
philanthropy, Ethical labor practices, Volunteering, etc. Environmental efforts point to taking up
of steps to reduce the carbon footprints production by the company to a possible extent as carbon
is harmful to the environment and reducing its production would prove beneficial for the
company as well for the society. Companies also show their concern towards the society by
giving away donations. Companies donate money, products and services for the society. Such
charity and donations given for the purpose of fulfilling the Corporate Social Responsibility are
termed as Philanthropy. For industries or companies operating in the international market,
treating employees fairly and ethically also shows a company's concern towards fulfilling their
Corporate Social Responsibility, this is known as Ethical Labor Practices. Attending
volunteering events aimed for a good purpose and also doing good deeds for the society without
any expectations for returns speaks a lot about the company's concern towards the society and
thus can be considered as a way to fulfill Corporate Social Responsibility.
CSR strategy implementation also offers all sorts of benefits to the business as well. Some of
such benefits include prevention or reduction of financial ramification which means that
following CSR strategies will prevent fines and would also lower legal expenses which would
have acquired a major part of the financial part of the business if the self-regulatory mechanism
through CSR had not been implemented as implementing CSR strategies means following the
rules and laws established for such business work at a national and international level and thus
following this laws and rules would result in prevention of much of the legal expenses and fines.
Another benefit of implementing CSR strategies is that it increases the loyalty of employees
towards the organization as treating employees fairly is a part of CSR strategies through which it
can be clearly stated that by providing adequate jobs and under good professional and moral
standards, the loyalty of employees towards the organization will increase which can prove to be
the most beneficial aspect of an organization for its success. Moreover, acquiring products from
those overseas factories which treat their employees ethically, a firm also gains support from the
advocates of 'Fair Trade'. A company can also, through its CSR strategies can demonstrate a
variety of consciousness relating to different fields through which a corporation can garnish a
good reputation in the market, gain publicity for the business and can have tangible proof of their
fair and ethical conduct. Such consciousness may include consciousness for the environment
which consists of taking measures towards producing and using sustainable products, lowering
the use of energy, reducing waste and minimizing carbon prints, etc. Consciousness for social
concern is another form of consciousness which includes activities like donating to humanitarian
causes to help epidemic victims such as AIDS or Ebola and to fight persistent poverty. Also,
Social concern includes helping those heavily influenced by natural calamities, this measures
shows the consumers Company's concern towards them. Furthermore, CSR credentials of a
company also increase with their clients in a given location, when it involves itself in local
community projects, through financial donations, employee participation, and fundraising.
Another benefit of implementing CSR strategies is that it helps companies attract positive
attention of the public which further helps the company to grow the customers for the company
and hence result in an increase in the profit for the company. Also, through such CSR strategies
companies are enabled to save money as they gain operational efficiency as a good company
which follows proper CSR strategies attract top talents which helps them achieve the desired
result in a given time period and without wasting much of the resources which are used in
operation of the company, and also inspire innovation which helps the company and its
employees ease the work and perform the operation in a more effective and efficient manner.
Hence, CSR strategies are considered essential for a company as not following CSR strategies
can cost a company to lose its customers or see its reputation suffer to a great deal and also can
cause financial and legal harm to the company.
The concept of CSR first came up in 1953 when the 'Social Responsibility of Businessmen' by
Bowen was published. It posed a question regarding the responsibilities that society may expect
from the business people.
One can trace the origin of Corporate Philanthropy to way back to the 19th century which was
based upon the factors such as businessmen had a deep concern for the welfare of the immediate
corporate members which includes the staff, employees and the families. Many visionary
business leaders had a vast contribution to the innovation of philanthropic institutions out of their
personal shares in a quest to achieve personal satisfaction. Some corporate bodies also desired to
build a relationship with the state and the society, this desire led to the establishment of certain
institutions that would fulfill the requirements of the community. Moreover, to have tax benefits
trusts were established, which also support socially beneficial activities. This all things led to the
development of what we know as traditional corporate philanthropy.
The actual origin of the concept of Corporate Social Responsibility can be traced from the
ideology of religious thinkers from the early twentieth century, which suggested that certain
religious principles can be applied to certain business activities. For example, a classic two-fold
statement of Corporate Social Responsibility was devised by Andrew Carnegie which was based
on religious thinkings and beliefs. This two-fold statement consisted, firstly of the charity
principle which required fortunate individuals with good financial support to help the less
fortunate members of the society. But by 1920s community needs outgrew the financial backing
of even the most generous or wealthy members of the community and also resulted in the
expectations of the society to a level where they started expecting that the business organizations
would even donate their resources for the purpose of aiding the unfortunate members of the
society.
The second principle which formed the part of the two-fold statement was the stewardship
principle which required the businesses and wealthy individuals to perceive themselves as
stewards or caretakers not only with respect to the shareholder's financial resources but also
regarding the society's economic resources, which meant that they would hold their property in
trust for the benefit of the whole of the society. This principle was later propounded by Mahatma
Gandhi also.
In the latter half of the twentieth century, the idea of corporate social contract arose, which today
is known as the Corporate Social Responsibility concept. This idea proposed that a firm's
responsibilities should be equivalent to its social, economic and political powers.
Most of the companies in the U.S. and Europe had their prime focus on an efficient production
system, during the 1950s. After this in the 1960s, the focus of major companies shifted from
areas of the budget, operations, and control to planning processes.
In the 1970s, in the U.S. there were social protests relating to scandals in relating to business and
political regards. Japan, during that period of time, started to make huge gains, especially in
electronics and automobiles. Consequently, it gave rise to a substantial debate over the concept
of Corporate Social Responsibility. This debate attached substantial importance over Corporate
Social Responsibility and also linked it the strategy based on long-term economic effects and
free from personal bias of the managers.
Even though many companies accepted Corporate Responsibilities, some critics still came up
against this concept. The best known among them was Milton Friedman. According to him, there
was only one responsibility of business that was to use the resources and indulge in activities
which are supposed to increase the profit of the business as long as it stays within the rules of the
game which according to him was to engage in open and free competition without any kind of
deception or fraud.
Several authors during 1980s developed ideas of "Corporate Social Responsiveness " in strategic
management which tries to quickly respond to any social demand or to be proactive.
Caroll in 1979 introduced a comprehensive idea which included both Corporate Social
Responsibility and Corporate Social Responsiveness which was that termed as "Corporate Social
Performance (CSP)". Wood presented a model of Corporate Social Performance which was
composed of principles of Corporate Social Responsibilities, processes from Corporate Social
Responsiveness and the outcomes from the corporate behavior.
Corporate Social Responsibility principles were expressed to be at an institutional, organizational
or an individual level. The process of Corporate Social Responsiveness includes processes such
as environmental assessments, management of stakeholders, and issue management. And the
outcome of corporate behavior includes social impact, social policies, and social programmes.
This concept of Corporate Social Performance mainly aims at ways to integrate social demands,
arguing that business is dependent upon society for its existence, growth, and continuity.
The Stakeholders theory has grown considerably since the late 1980s. This theory helps in
understanding the strategy and ethics connection.
During the 1990s, the strategy field had its attention focused on the resources that were very
likely to lead to a competitive advantage. The interest was growing mainly in social and ethical
aspects during this period. Ethical issues were considered at all the levels of the strategic analysis
of the organization, i.e., at institutional, organizational and personal levels. It was included in
regards to the strategic thoughts, majorly due to its contribution towards the valuable future
competitive advantage.
In the 21st century, public demands that the organizations should make social issues as a part of
their strategies. Managers nowadays, have to continuously work towards the achievement of the
demands of various stakeholders which generally relate to devoting of the resources for
Corporate Social Responsibility.
Today, there is a need to develop dominant designs that would allow the companies to develop
communities that aim at allowing those consumers that are very participative, to interact with the
firm's stakeholders and to help them in creating some values.
Strategic Decision making is a complex task and has an ethical and economic end. These two
aspects are essentially present in today's management decisions of all the managers.
In India, the concept of CSR manifested itself at first through the charity that was carried out by
the businesses and philanthropists with strong religious sentiments in the period before 1947.
After 1947, the Gandhian philosophy of trueship became popular which advocated the role of
Public Sector Units (PSUs) as an important element in fulfilling the agenda of development.
After 1991 the entry of global players was allowed which enhanced the competition in the
market. The global standards of CSR motivated or forced the local businesses to respond to the
needs and enhance the brand value and meet the consumer satisfaction.
After 2000, the global information sharing allowed the Indian Government to incorporate the
best practices which made India the first country to mandate CSR.