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CORPORATE SOCIAL RESPONSIBILITY

. 

Edited by 
Dr. M. VASAN 
Head, PG & Research Department of Commerce,
K.S.Rangasamy College of Arts & Science (Autonomous),
Tiruchengode ‐ 637 215
Tamil Nadu

  
 


i 
 


PREFACE
The real success of Indian democracy is being attributed to its social
responsiveness towards all of its citizens. Nevertheless, in the endeavour of
sustaining a true and vibrant democracy, the country strives very hard to extent the
facilities and benefits to all strata of the society due to its constrained resources.
Therefore, the Government of India needs a helping hand from corporate sector to
ensure better standard of living of its people. In this regard, the corporate India is
expected to play a constructive role by undertaking activities which may ultimately
lead to social rejuvenation, development and empowerment of unprivileged people. If
this happens, India is very proud to be one of the countries in the world to attain real
inclusive growth. Hence, it is felt that Corporate Social Responsibility (CSR)
activities of companies are really a key to unlock both economic and social
disparities, which in turn, benefits the person in the last mile. Moreover, the
Companies Act, 2013 has directed corporate India to work towards a growth based
socio-economic-environment development model.

The present book is an attempt to provide the emerging trends and best
practices in CSR implementation, models of partnership, managerial and
organizational challenges and issues in monitoring and evaluation of projects related
to CSR in the public and private sector.

I thank all paper contributors for their continued support, encouragement,

inspiration to complete this task. Without their help it will be difficult task for me to
complete this volume.

Dr. M. VASAN

ii 
 
 Book Specifications
 

Book Title Corporate Social Responsibility

Editor’s Name Dr. M. Vasan

Genre Corporate Affairs, Business and Management

ISBN No. 978-1512053005

Language English

Publication Year 2015

Edition First Edition

Book Price Rs 500

No. of Pages 107

Page Size 8``X8.5``

Publisher & Printed EduPedia Publications Pvt Ltd

By
D/351, Prem Nanar-3, Suleman Nagar, Kirari, Nagloi,

New Delhi, PIN-Code 110086, India

Contact : +919557022047 or +919958037887

Email : contact@edupediapublications.org

iii 
 
Chapter CONTENTS Page
No
1 Corporate Social Performance, Ethical and Social Responsiveness 1
of Technological Innovation - The Case of Monsanto´s Capital
Reputational
‐ José g. Vargas- Hernández
2 Corporate social responsibility in India: A Study in the Light of 18
the Companies Act, 2013
- Swapan Kumar Roy and Suhas Roy
3 Role of Government and Non Governmental Organizations in 24
Corporate Social Responsibility
- R. Mubeen
4 Role of CSR in Initiating Women Entrepreneurship 30
- N.Brindha and A.Abirami
5 Corporate Social Responsibility: An Indian Perspective 37
- S Lawrence Leve
6 Corporate Social Responsibility in India 42
- Bh.L.Mohanraju
7 Emergence and Significance of CSR in the Current Business 51
Scenario
- K.Priyadarshini and P.Jeyabharathy
8 Corporate Social Responsibility Planning and Strategy 58
- Luda Joycee
9 Role of CSR in Social Development 62
- Dr.C.Thilakam and S.Mahadevi
10 A study on Corporate Social Responsibility and Usage of Plastic 68
Bags in Small and Medium Size Retail Business in Madurai
- Kumaran Thayumanavan
11 Impact of Corporate Social Responsibility on Business 76
Performance
- Mariya Nathalie Vanhaltren
12 CSR Initiatives By Indian Corporates - A Case Study 88
- S.Thulasimani
13 Corporate Social Responsibility In India - Issues And Challenges 96
- Ch.Venkat Rajam

iv 
 
 LIST OF CONTRIBUTORS
1. ABIRAMI. A, Research Scholar, Ph.D. Scholar (PT), Bharathiar University,
Coimbatore, Tamilnadu.
2. BRINDHA, N. (Dr) Professor in Management Department, Karpagam
Engineering College, Coimbatore, Tamilnadu.
JEYABHARATHY .P, Assistant Professor, Department of Youth Welfare
3.
Studies, Madurai Kamaraj University, Madurai, Tamilnadu.
4. JOSÉ G. VARGAS-HERNÁNDEZ, L.E. Jesús Orozco Gómez, University
Center for Economic and Managerial Sciences, University of Guadalajara,
Zapopan, Jalisco, México.
5. KUMARAN THAYUMANAVAN, Assistant Professor, OAA-MAVMM School
of Management, Madurai, Tamilnadu.
6. LAWRENCE LEVE .S, Research Scholar, St. Joseph’s Institute of
Management, St. Joseph’s College, Tiruchirappalli, Tamilnadu.
7. LUDA JOYCEE, Assistant Professor of Commerce, Holy Cross College,
Trichy, Tamilnadu.
8. MAHADEVI S, Research Scholar (FT), Department of Commerce,
Manonmaniam Sundaranar University, Tirunelveli, Tamilnadu.
9. MARIYA NATHALIE VANHALTREN, Assistant professor of Business
Administration, Holy Cross College, Tiruchirappali, Tamilnadu.
10. MOHANRAJU, Bh.L., Assistant Professor, DNR School of Business
Management Bhimavaram, 534 202, W.G.Dt., Andhra Pradesh.
PRIYADARSHINI .K, Research Associate, Women’s Studies Center, Madurai
11.
Kamaraj University, Madurai, Tamilnadu.
12. R.MUBEEN, Ph.D Research Scholar, Department of Commerce,
K.S.Rangasamy College of Arts and Science, Tiruchengode, Tamilnadu.
SUHAS ROY, Associate Professor of Economics, Bethuadahari College,
13.
Bethuadahari, Nadia- 741126, West Bengal.
Swapan Kumar Roy (Dr), Assistant Professor in Commerce, Bethuadahari
14.
College, Bethuadahari, Nadia- 741126, West Bengal.
15. THILAKAM .C (Dr) Professor of Commerce, Manonmaniam Sundaranar
University, Tirunelveli, Tamilnadu.
16. THULASIMANI .S, Ph D Research Scholar, Bharathiar University,
Coimbatore, Tamilnadu.
17. VENKAT RAJAM .CH., Research Scholar, Department of Commerce &
Business Management, Kakatiya University, Warangal, Telangana State.

v 
 
 CORPORATE SOCIAL PERFORMANCE, ETHICAL AND SOCIAL RESPONSIVENESS OF
TECHNOLOGICAL INNOVATION - THE CASE OF MONSANTO´S CAPITAL REPUTATIONAL

JOSÉ G. VARGAS- HERNÁNDEZ

Introduction
In recent decades, society's concern has focused on demographic matters primarily
associated with strong population growth, mainly in developing countries; whose threat to
natural resources and the environment in general, provide serious consequences on socio-
economic impacts not only in those developing economies, but also in other developed
nations.

The impacts of population growth have been problematic after market changes and
the heavy losses in the production of agricultural fields, as a result of strong drought and
frost problems. From the perspective that there is not sufficient access to nutritious foods
that reduce the rate of malnutrition in the population who are at all stages of life, the
problem has been classified as food insufficient and unsustainable.

In this way, the implementation of public policies and new alternatives based on
actions that favor attention deficiency problem in food production is a challenge in each of
the economies taking care not mainly relying on imports of basic grains. So, before that
problem, numerous studies suggest that genetic modified (GM) crops represent a viable
option that can contribute to increased yields and agricultural production, without being
necessary to increase the area under cultivation, forest rescuing the imminent logging and
deforestation to expand agricultural land.

The rescue alternative of ecosystem pointed to the investment and development of GM

crops, and that agriculture biotechnology enables to obtain healthier foods with better flavor
and reduced pesticide use, increased crop yields, better management of water and reduced
greenhouse gas emissions and other benefits, which not only supports to farmers, but also
benefits families and consumers in general. For this reason, companies like Monsanto are at
the forefront of technology and pose to be found in the best position to contribute to the
global challenges facing society today, generating enough food for the growing population
which is increasingly every day in an effort to abate hunger and extreme poverty by
developing sustainable agriculture.

The purpose of this chapter is to analyze under the frameworks of corporate ethical
business and corporate social responsibility, the relationship of corporate social performance
and reputational capital as an ethical questioning of technological innovation. To achieve
this purpose it is used the case of the firm Monsanto.

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Background
Today, sustainable agriculture has been presented as the solution to the problems of
food shortage facing most economies around the globe, so that companies like Monsanto,
Bayer, Syngenta and DuPont Pioneer American, have expressed to be prepared to reduce
poverty and ensure food security through processes such as genetic improvement. The seed
business by itself, it is quite competitive, and unlike many others, the purchase of the input
is performed annually as seasonal or peak period and depending on the good or bad
experience in the harvest, which will determine the purchase of the same or another seed for
the next season, ensuring competition and constant innovation of the company.

While the leading biotechnology that has been at the forefront and the public focus
has been Monsanto, it has been mainly in regard to such innovation and improvement of
agricultural seeds. Because anti-biotechnology activist groups and unfair competitors or
followers companies that have taken pains to make propaganda against, trying to prove that
the success is due to anti-competitive behavior and further damaging the company's
reputation.

Reputational capital is a valuable tool that the company develops over time and can
make decisions about which products to buy, where to invest and where to work. In this way,
the strategic value of a reputation characterizes the company making it attractive or not and
expanding their options not only for managers, but for the general public consumer. In the
business environment, corporate reputation can be considered as an intangible asset and
strategic organization capable of representing a proof of competitiveness of the firm. For this
purpose, it was selected the firm Monsanto. Meanwhile, Kaplan & Norton (1996) suggest
that the proper management of intangible assets may be favorable to business relationship
with customers, ensuring the loyalty of existing ones and offering services which allow
customers cleave segments and other market areas.

Problem Delimitation
Thus, in an environment that historically technological contributions and
achievements of Monsanto have represented a chronological sum of mistakes, the
reputational capital of the firm is a problem to be analyzed. Because the bad reputation of
the company, the innovations achieved not only generate uncertainty in the population, but a
full assurance that their biotechnological contributions represent a danger to humanity that
should be closely studied.

Justification
In the context in which Monsanto is developing, it is in the best position to meet the
demand for food that suggests a growing world population and fight hunger through the
development of sustainable agriculture, not only supplying the agricultural sector with
seeds, but products of biotechnology, agrochemical and technology in general.

2 
 
 However, one of the main contributions of Monsanto and perhaps the most
representative made lately, has been the production of GM foods. Against this production of
GM foods, several international environmentalists’ organizations have struggled since its
inception. The GM foods are the same ones that Greenpeace (2011) has defined as living with
a technique artificially created by inserting a plant or animal genes of viruses, bacteria,
plants, animals and even humans, in order to produce an insecticidal substance or give
resistance to herbicides.

This invention has been the trigger for society to turn against Monsanto's activities,
arguing that the production of this type of seed varieties not only limits natural native
varieties of the region, pollutes wildlife, reduce biodiversity and chemically contaminate soil
and groundwater. Missouri´s firm through its actions and creations, historically has been
involved or has been responsible for various adverse events:

i) In the beginning, Monsanto made strategic alliances with one of the most
controversial groups in history: Monsanto who became one of Coca-Cola main
suppliers, mainly saccharin and other sweeteners.
ii) Participated in the production of the first nuclear bomb used during World War II,
and then operated an American plant of nuclear in the early 80's.
iii) The creation of the pesticide DDT in 1944. The substance was banned in countries
like Hungary, Norway, Sweden and the U.S. itself.
iv) The company Monsanto acted as a supplier of Agent Orange to the U.S. Army
during the Vietnam War, substance which killed around 400,000 people, causing
damages to around half a million babies in the following years.
v) Creating the growth hormone "bovine somatotropin" (BST), used in countries like
Brazil, United States and Mexico, whose use has been banned in the rest of the
world to be linked with health problems, such as cancer.
vi) The main use of aspartame causing cancer and diabetes. Monsanto through a
vertical integration Strategy, founded in 1980 the company NutraSweet, building
a monopoly of poisons no calorie sweeteners.
vii) Reduction in seed variety. Using horizontal integration (buying organic seed
companies) Monsanto over the years has been commissioned to market only
exclusive products they produce.
viii) Using genetic and toxic methods of bees on crops.
ix) Creating herbicides "non-selective" as Roundup (the patent expired in 2000) whose
main ingredient is Glyphosate that kills plants by inhibiting their ability to
generate aromatic amino acids.

Given these developments, Monsanto has acquired the title of the worst company in
the world, so without making value judgments, such appointment is based on the market
power that the company has, since despite this, its sales and global presence foster its
growth and power.

3 
 
Assumption
Despite the deniability strategy and conduct a carry on whitewash of responsible
image, according to Delgado (2006), the more powerful the technology, the consequences can
be profound. Then, the bad reputation of Monsanto creates uncertainty and mistrust in
society in regard to innovations, assuming its actions are the cause of danger to people and
the environment in general.

Theoretical Framework
The connotation of the literature review arises regarding theoretical models, by which
it is possible to understand the behavior of Monsanto in these 112 years, determined by the
realization of important strategic alliances with other transnationals (TNCs), purchases and
acquisitions of firms that have facilitated some processes execution and reduce its
competition. Similarly, the theoretical conception of the various expansion strategies
implemented by the leading producer of genetic modified organisms (GMOs) is identified by
the link between reputation management and the ability to create value for the firm,
understanding the nature of reputation as enterprise resource.

Strategic Alliances
According to Hitt, Horkisson & Kim (1997), in business, formalizing a partnership is
carried out in response to a particular strategy that might well be addressed with the
implementation of another strategy.

Thus, Tallman & Shenkar (1994) propose that an alliance can conceive how a
managerial process and organizational issues arising from whether economic or not, and by
means of a cost-benefit assessment of the process of this alliance. Incidentally, Das & Teng
(1997) determined that proper management of the alliance is a necessary process, though not
sufficient, for the success of the same, whose decision should be made based on formalization
of the strategy to continue the business, since according Ariño & de la Torre (1998), these
partnerships evolve while the company strategy does.

Therefore, according to McKelvey (1997) and Alcázar & Martínez (2004), the evolution
of a company that has strategic alliances with other companies, is designed simultaneously
with the changing environment (Ariño & De la Torre, 1998). Thus, a match between the goal
of the alliance and strategies of the companies involved is made based on the competitive
environment, institutional and organizational in which they operate.

Vertical Integration
Currently, companies face some problems that can lead to aggravated constraints
which hinder the achievement of goals or objectives thereof, being necessary to resort to
various strategies to obtain new advantages over the competition.

4 
 
 According to Villarreal & Gomez (2009), integration is a strategy that allows
increasing the benefits and profits of organizations by improving processes, adding value and
increasing profitability, allowing better opportunities to stay in the industry. Business
integration can occur vertically, one in which the firm attempts to control the successive
stages of the value chain of the product, or by way of horizontal integration, one in which it
fosters cooperation with competitors in the same stage of the value chain.

According to Colangelo (1995), vertical integration produces higher yields than

horizontal integration. However, Hill & Gareth (2005), state that horizontal integration
increases the profitability as it tends to reduce costs. By contrast, vertical integration
according to Mpoyi (2003), can determine the degree to which the company controls the
production and distribution. Similarly, the sequence of activities is the process which
provides value to the product, which is described by the principle of the value chain by Porter
(1990).

Acquisitions
Among the strategies used by firms to gain size and generate competitiveness, there
are activities such as the purchase of a company by another, also known as acquisition,
whose cause according Zozaya (2007), is mostly facing threats or seize market opportunities.

According to Abellán (2004), the combination of interests of the various actors

involved in the management of the firm can lead to be chosen by the strategy of a merger or
acquisition. At company level, acquisitions often have significant impact on variables to
determine the success and value of the firm, such as employment, stock price, market power,
profits and/or profitability, growth rate, productivity and technological performance to name
a few.

Intangible Assets
In business management, intangible assets were introduced in the late 90's by
Richard Hall. Intangible assets can be understood as business factors represented by an idea
or knowledge that can drive the organization into positions where it is possible to achieve
competitive advantages. In this respect, contributions like Itami (1991) consider
organizational intangibles by way of invisible assets, the relevant factors such as technology,
brand image, consumer confidence, organizational culture, and management capabilities.

Tissen, Andriessen & Deprez (2000), conceived of intangible assets through business
skills that allow them to generate sustainable competitive advantages, arguing that the
proper management of these skills can create economic value for the firm. While Lev (2001),
refers to intangible assets as assets arising from knowledge, Kaplan & Norton (2004),
understood as determining factors for achieving the strategic objectives set by the companies.

5 
 
 While, according to the different views of these assets, it is difficult to define a single
approach, it can be possible to steer it in three main groups common to any corporate
entrepreneurship:

1) Human capital includes skills, attitudes and aptitudes of firm personnel.

2) Organizational capital includes items related intangible knowledge held by the
company from its daily management.
3) Relational capital includes the status of relations of the firm with its stakeholders.

Based on the diversity of ideas described above, from positions such as accounting,
strategic, knowledge management, information technology and human resources, it is
noteworthy that all relate to the concept of intangible assets, knowledge and intellectual
capital.

Intellectual Capital
In terms of strategic management, a pioneer in promoting the concept of intellectual
capital was Stewart (1991), who referred to this concept considering the sum of elements of
the human factor in the company, able to provide a competitive advantage market. In this
regard, Edvinsson & Malone (1997) refer to intellectual capital by way of knowledge that can
be transformed into inventions, technologies, processes and software, providing added value
to the company. Meanwhile, Hand & Lev (2001) refer to this concept, by its origin from three
main areas, innovation, organizational practices and human talent.

Thus, according to various theoretical approaches, it can be identified that the terms
of intangible assets and intellectual capital are often used interchangeably. However, it is
prudent to mention that the existence of intangible resources not necessarily refers to the
intellectual capital of the firm, since it is usually considered only the culmination of the
management process, determining even the generation or destruction of firm value.

Generating Business Value

According to Mandel, Hamm & Farrell (2006), over 50% of the market value of the
companies in the Fortune ranking of 500 is made up of intangible assets. Therefore, most of
the wealth and growth of the developed economies are due to intangible asset management.
In the field of business, to determine the value of a firm is one of the great challenges, this
due to the nature of the resources and liabilities intangible, difficult to quantify objectively in
the financial statements.

Barney (1991) considers the resource-based view and the business capabilities of
intangible resources of the firm, which can create competitive advantages and thus create
value for the company, provided that:
1) The resource provides financial value to the organization,
2) Only some organizations have, that is, there are few,

6 
 
 3) The resource is inimitable, and
4) There are no substitutes on the market.

Thus, it is possible to attribute a monetary value to the competitive advantages of the

firm, since this process represents a quantifiable measure of the value recognized by
investors.

Business Reputation
In the organizational sense or at firm level, Fombrun (1996) mentions that reputation
is an intangible asset of companies that represents the identity and transmits signature
hallmarks by which succeeds in changing behavior of their stakeholders. Therefore, the
degree of perception of the name of the firm, having customers, investors, suppliers,
creditors, employees and the general public are called organizational reputation. Thus, the
institutional reputation refers to the way in which external agents conceive of corporate
reputation, i.e. how they see, hear and opinions regarding the target company, either locally
or internationally. To analyze this concept of institutional reputation, it has been chosen the
transnational corporation Monsanto. According to Villafañe (2004), it is possible to identify
three organizational dimensions around the concept of reputation:
1) Axiological dimension: Within which it incorporates the cultural values of the
organization, corresponding for the ethical question about the relationship with third
parties and being a socially responsible company,
2) Corporate dimension of service: In which are included commitments arising in the
course of time in relation to the key players, and
3) Management corporate dimension: Corresponding to the proactive attitude.

According to Costa (2004), reputation arises from the history of the company, on the
credibility of its organizational objective and the means to achieve this goal by making use of
resources such as corporate culture, based on the recognition that the company makes of its
identity.

Factors Influencing Development of Business Reputation

While organizational reputation represents a certain strategic value to the company,
the difficulty of it lies in measuring the impact it creates in every organization. Hillenbrand
& Money (2007) raise some reputational models about the analysis of such an intangible
asset, emphasizing the theoretical and conceptual foundations for the various interest
groups, whose value appreciates or it is lost over time. Fombrun (2001) proposes five basic
principles to generate organizational prestige:

1) The principle of differentiation: Positioning in the minds of the stakeholders.

2) The principle of concentration. The clear focus of the actions and communications on
the subject of interest from trading.

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 3) Principle of consistency: The integration and coordination of organizational
initiatives, to involve stakeholders.
4) Identity principle: Carry out a performance, public or private, in accordance with the
principles and values that govern the existence of the organization.
5) Principle of transparency. Maintaining strong levels of communication with
stakeholders, and the people in general over the daily management of the
organization.

Meanwhile, Villafañe (2004) refers to the need for hand social interests and business
on maximizing profits for reinvestment. Business viability depends on factors such as ethics
and sustainability. Corporate reputation then is measured by:
1) Financial economic results
2) Quality of commercial offer
3) Corporate culture and work quality
4) Ethics and corporate responsibility
5) Innovation
6) Global dimension and international presence

While the principles of reputational assets is about building conceptual parameters

that allow the perception to be forwarded to the stakeholders, factors refer to specific
quantifications that determine the levels of perceived reputational to keep stakeholders.

Technological Innovation
According to Moreno (1985), innovation is understood from the definition of
technology. It is described from the use of knowledge to produce goods or provide services.
However, in the theory of innovation there are two main approaches conceived. One is
tracked to the technical question in which tangible objects encompass a humanistic approach
that relates to the transformation of objects for the benefit of mankind, for meeting the needs
of the population, as well as greater control over the environment.

According to Escorsa (2003), technological innovation focuses primarily toward

obtaining results, mainly characterized by:

1) Having a novelty character to satisfy the needs of the population.

2) Include the introduction of a technical change in products and services.
3) Provide a socially visible utility.

Similarly, according to Pérez (2005), technological innovation can be seen as a process

that starts from an idea, based on the identification of a need for the development of a
product or service commercially accepted.

8 
 
 In an innovative approach to processes, the strategy of "Technology Brokering" and
building social capital, whose main exponent is Hargadon (2003), argues that technological
innovation is related to the social metaphor of Burt (2000), who proposes that the social
structure is a type of capital that creates a competitive advantage to achieve the goals set by
groups or individuals. However, the change in scientific development and application of
techniques for the generation of technologies with commercial validity, involves a series of
steps that interrelate with other activities incurring in vanishing points that encourage
interconnections.

Corporate Ethical and Social Responsiveness

The globalization economic processes have an enormous impact on corporate ethical
conduct and social responsibility of some issues. Global corporations operating in highly
competitive and changing markets, facing turbulent domestic environments with complex
social and environmental issues requires a strong corporate culture to sustain an ethical
business behavior and social responsibilities under the pressure of public scrutiny.

According to Van Luijk (1993) the corporation is seen as a party which does have the
(social) responsibility to voluntarily contribute to the achievement of a reasonable level of
prosperity in society. However, increasing globalization and a growing mistrust has brought
some corporate ethical business scandals.

Business ethics is related with the firm´s internal values that shape corporate culture
as a framework to sustain decisions regarding social responsibility concerning the external
environment. Corporations may adhere to voluntary and market-based mechanisms of
corporate social responsibility are instruments for encouraging best practice behaviors and
good corporate citizenship. Thus, firms may define and determine themselves the standards
of ethical behavior and monitor for compliance. An ethical corporate decision is moral and
legal to all the stakeholder interests including the global community. Corporations adopt
codes of ethics to strength ethical safeguards and develop policies on corporate social
responsibility (Hunt and Hansen, 2007).

Principles of corporate ethics and social responsibility develop corporate culture to

regulate internal behaviors and external relationships. Corporate culture is a major force
that influences business ethical values and its impact on other issues such as corporate
leadership and decisions on caring for people and the environment, etc. (Walker, June 10,
2007). Corporate ethical decisions are made within the context of firm’s relationships with
other stakeholders and interactions with the environment. Ethical decisions can be made
guided by a normative ethics (Jones, 1991). Ethical business decisions and practices reflect
some patterns of corporate culture in terms of the values, norms, behaviors, attitudes,
beliefs, etc (Donaldson and Dunfee, Summer 1999).

Corporate ethical decision behavior occurs when the firm follows the standard of
fairness encourage moral development and treating others properly when dealing with

9 
 
people (Garaventa, December 1994; Miceli and Near, 1994). Corporate unethical decision
behavior occurs when the corporation gains at the expense of the whole society or other
stakeholders. However, when agents are making ethical decisions to resolve some issues, the
values of moral agents may enter into conflict, creating an ethical dilemma.

Corporate social responsibility is the obligation of Corporations to make decisions and

take actions to contribute to both the firm interests and the welfare of society (Szwajkowski,
1986; Davis, Frederick, and Blostrom, 1979). Social responsibility is the obligation to make
decisions and take actions that contribute to the social welfare and interests (Walker, June
10, 2007). Corporate social responsibility has been defined as “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 World Business Council for Sustainable Development, 2000).

Corporate social responsibility reflects the firm relationships to its internal and
external environment, meaning to be a good corporate citizen. The internal and external
environments consist of various sectors and stakeholders. The corporate social responsibility
concept implies the reintegration of firms into a social contract that allows the stockholders
to make profits while contributing to the well-being of the stakeholders and the society as a
whole. Corporate social responsibility focus on long-term sustainability of business,
environmental development and distribution of well-being by attending to stakeholder
priorities and acknowledging the debt owed to communities. Corporate social responsibility is
more qualitative approach than the business practices of traditional corporate philanthropy
and ethical business.

The relationship between corporate ethical and social responsiveness to financial

performance is highly contestable, although research a positive relationship. Researchers
have reported a link between corporate social responsibility (CSR), and financial
performance of the firms (Garone, 1999; Roman, 1999; Stanwick, 1998; Waddock and Graves,
1997). Reputational capital is an emerging business perspective on corporate social
responsibility for sustaining markets by creating confidence with all the key stakeholders.

Corporate Social Performance

The transformation of Monsanto from a chemical company into a leading competitor
as an arrogant biotechnology firm, has experienced critical relationships, protest and
controversy from various stakeholders (O’Sullivan, October 2006; Wheeler, Colbert, and
Freeman, Spring 2003; Post, Preston, and Sachs, Fall 2002). Monsanto styles itself as an
agricultural firm that applies innovation and technology to help farmers grow yield and
produce healthier foods, better animal feeds and reduce the impact on the environment.
Monsanto is the world leader in GMOs depending upon the natural environment which
affects by its business activities.

10 
 
 Monsanto has an aggressive market oriented strategy supported by political lobbying
and litigation and achieving more power than some state governments, leading to Chomsky
(2010, 2011) to argue that according to the nature of this corporation it has more rights than
people and therefor it has no social responsibility. Monsanto has enough power to influence
governments on environment and infrastructure putting biodiversity at risk and danger.
However, Monsanto is focused on the market with outcome-driven performance measures
(Thompson, 2001, p.195) where money is more important than ethics. The highest priority of
Monsanto is Monsanto.

Monsanto faces various ethical dilemmas. Corporations have adopted code of ethics to
guide the decision making when facing ethical dilemmas. Ethical dilemmas entail conflicting
values between the needs of the corporation and the whole society such as the case of
Monsanto. It was too late when Monsanto announced that would not market the strain
Roundup ready to avoid the consumer’s resistance. This announcement, unfortunately did
not remove the ethical dilemma. There is an ethical dilemma since farmers become
dependent from Monsanto´s technology when requiring purchasing seeds for every planting.
Furthermore, GM seeds contaminate natural seeds causing natural plants to disappear.

Scientific reports sustain the spreading of super weeds that are immune to
Monsanto’s pesticides raising concerns on negative health and environmental impacts.
Besides, Monsanto is involved in high profile lawsuits against farmers for claims of seed
patent violations. On the issue of social justice, Monsanto has a record of alleged bullying
and prosecuting for patent infringement, stealing intellectual property and for saving seeds.
Monsanto faces ethical dilemmas involved in producing and marketing biotechnological
products that have been proven to have health and environmental side effects. Other ethical
dilemma is the patent protection of seeds considered to be proprietary goods introducing
genes to force new purchases. Monsanto has been accused of hiding illegal pollution and
bribing national governments.

On the issue of social justice, Monsanto has a record of alleged bullying and
prosecuting for patent infringement, stealing intellectual property and for saving seeds.
Besides, Monsanto has a monopoly in some bio-technological products profiting at the
expenses of human health, biodiversity and the environment.

The reputation of Monsanto has been damaged by the strategic misalignment of the
firm engaged in a consultative process with NGOs on marketing its biotechnological products
while seeking approval to introduce the controversial genetic modified seeds in developing
countries (Kluger, 1999). Monsanto treats corporate social responsibility as a public relations
program arising out of some projects and partnerships. Framed on the corporate social
responsibility (CSR) perspective, Glover (2007) argues that the Monsanto Smallholder
Programme (SHP) represented the values and principles of sustainability. The Monsanto
Smallholder Programme could be a good intention and vision linked to the concept of

11 
 
sustainability and integrated into its business strategy. The purpose of the programme was
to support agriculture in less developed countries.

Monsanto conceptualized this programme as the transfer, adoption and

commercialization of modern farming technology with a contribution for market and socio-
economic development. The role of the farmers was to consume the biotechnological products.
The programme was based on how Monsanto might develop and deliver technologies to
alleviate world hunger. Monsanto claimed that it was involved in smallholder projects in
Mexico, India, Indonesis, Kenya and South Africa. The market development and
competitiveness strategy of Monsanto as well as Shapiro’s vision of sustainability ran into
problems due to the campaigns supported by anti-GM activists. Also, the Programme was
undermined by competing financial and commercial pressures to achieve higher returns on
investments in GM biotechnology.

It is clear that Monsanto had exploited the Programme more as a public relations
instrument than a social responsibility commitment. Grameen and CARE organizations
cancelled their collaboration with Monsanto on community development projects. Monsanto
came under pressure in 1999 when the share price fall down due to the protests about its
genetically modified products. In sum, the introduction of GM seeds by Monsanto had a
negative impact on brand reputation, stockholder and reputational values caused by
perceptions of behaving socially irresponsible.

The New Monsanto Pledge adopted by Monsanto was the response to this crisis
portraying the provision of technology for sustainable agriculture and food security.
According to this Pledge, Monsanto is committed to the value of integrity to its multiple
stakeholder interest with whom it builds business relationships. The Monsanto Pledge lists
integrity as the foundation of its business ethics but pushes for excessive use of its products.
Regarding its pledge for dialogue, Monsanto refuses engaging in thoughtful dialogue and
acknowledge responsibility for various biological and environmental disasters. On the pledge
for transparency, Monsanto is determined to defend safety and benefits of GM crops and in
doing so have threatened states and defeating laws, regulations and measures for product
transparency.

The benefits pledge restates Monsanto’s raison d’être to produce and sell
biotechnology inputs. In line with the pledge of sharing, Monsanto is endorsing the
marketing activities to sell its products expanding to the developing markets and sharing its
GM crops whether the farmers like it or not. Monsanto also shares employees with
governments. Despite the pledge to respect, Monsanto has a record of utter disrespect for an
array of issues such as human health and safety.

Monsanto’s pledge, “Growth for a Better World,” makes for hypocrisy and hypo-crazy
reading: “We want to make the world a better place for future generations. As an
agricultural company, Monsanto can do this best by providing value through the products

12 
 
and systems we offer to farmers.
With the growth of modern agricultural practices and crops
that generate ever-increasing yields, we are helping farmers around the world to create a
better future for human beings, the environment, and local economies.”

In congruency with its own CSR report “United in growth” the definition of
sustainability relies on to set the parameters of its intentions. However, a more transparent
report may clarify its definition of sustainability while mentioning how its engagements with
stakeholders are hurt by its control over the seed market. Corporate governance means for
Monsanto “to learn from the experiences of others and encourage new ideas in corporate
social responsibility."

Stakeholders and social activists pressure Monsanto to honor ethical, social and
environmental responsibilities considered as important as economic and legal issues.
Business ethics encompasses the subjective views concerning the morality of business
(Thompson, 2001, p.12). Monsanto has published various reports on the results of
implementing the Pledge to highlight the benefits of GM biotechnology influencing the small
farmers on the appropriateness of transgenic crops. The Monsanto Smallholder Programme
and the Monsanto Pledge are two important instruments to manage the crisis and to respond
to social activists and consumers against GM technology, although there is self interest in
developing and exploiting new markets, as it is clearly stated in its sharing pledge.

To safeguard its corporate integrity, it is highly recommended that Monsanto

proceeds to an analysis and evaluation of the main factors, including corporation efforts,
procedures, rules, measures and stakeholders expectations. According to the analysis of
O'Brien (2001) Monsanto could implement an aligned strategy focused on a socially and
human rights anchored set of bio-engineering competences in developing country markets to
avoid the resistance of social activists.

Monsanto should avoid the arrogance and admit that the market need to be more
regulated and controlled on important issues such as environmental standards and practices,
corporate accounting. It is an imperative for Monsanto to develop a long-term ethically-
driven program of corporate social responsibility aimed to obtained social identity and
reputation. Monsanto needs to transform itself, and set out on a transition towards the
implementation a more aligned sustainable strategy to generate revenue.

Contextual Framework
While almost since the origin of mankind, according to Delgado (2006), biology
through a series of processes and mechanisms of trial and error has been used as a tool to
transform nature by various techniques. With respect to agricultural development, the
contribution of Mendel's laws set the tone for the selection process improvement and
subsequently crosslinking "manual" between compatible species bringing hybridization
(Bisang, Campi, & Cesa, 2009).

13 
 
 According Solbrig (2004), invention and idea of carrying out the modification of the
characteristics of living organisms for specific purposes of the interest is shown and
technological development for thousands of years.

Since the application of biotechnology in the production focuses on natural resources,

it is important to highlight the significant competition in innovation and scientific complexity
that generates about the universe framing the technological development and taking shape
in a small number of companies that generate these advances, such Monsanto is the case. In
that perspective, though, the transnational of Missouri was founded in 1901, its expansion
began in 1928 through the acquisition of companies in the chemical and textile industry. It
was until 1981 when it established as a focus of biotechnology research and in 2000 it
achieved consolidation dedicated exclusively to the agrochemical industry.

Today, according to Pérez & Medina (2008), Monsanto has over 14,000 employees and
has presence in countries on five continents, including: Argentina, Germany, Australia,
Austria, Bangladesh, Belgium, Brazil, Bulgaria, Canada, Chile, China, Colombia, Croatia,
Czech Republic, Denmark, Ecuador, France, Greece, Guatemala, Honduras, Hungary, India,
Indonesia, Ireland, Italy, Japan, Jordan, Kenya, Korea, Malawi, Malaysia, Mexico,
Netherlands, new Zealand, Nicaragua, Pakistan, Paraguay, Peru, Philippines, Poland,
Portugal, Romania, Russia, Senegal, Singapore, Slovakia, South Africa, Spain, Sri Lanka,
Sweden, Switzerland, Taiwan, Thailand, Turkey, Uganda, Ukraine, United Kingdom ,
United States, Venezuela, Vietnam and Zimbabwe.

As in most of those countries where environmental advocacy groups are leading

protests and demonstrations by countless violations on genetic manipulation of natural
products (transgenic), loss of biodiversity, market monopoly, violation of food sovereignty
movement and displacement of peoples and land concentration, among others, are leading
campaigns on the history and impact of the company.

Method
In the present study, it was conducted a review of novel electronic materials and
critical of the current situation of the company, supported by a qualitative analysis of the
main theoretical approaches that explain the behavior and strategies taken by Monsanto.

Analysis of Results
The global expansion strategy has allowed Monsanto to seize food problems of the
population, taking into account their strengths and favorable conditions obtained from
experience by acquiring other companies and integrating both vertically and horizontally
organizations on five continents, transforming key processes and providing technology.

The growth and expansion strategy that Monsanto has been characterized by allying
with dubious companies like Coca-Cola than in Asian countries is called "toxic-tail", accused
of selling harmful products that cause cancer and poison people, water and earth. The

14 
 
NutraSweet Company is in the segment of carbonated beverages that produce carcinogens.
Calgene, Inc., a leader in plant biotechnology, and Dekalb Genetics Corp., the second largest
producer of seed corn "improved" in the United States, or by dubious good intentions by
buying business-oriented organic seed production.

The human health problems and environmental pollution arising from the errors in
products and processes have evolved in reliability problems to the company, expressed
through a series of contingencies that discuss the positioning and consolidation of quality in
biotech innovations Monsanto. While social controversies and conflicts of value arising on the
development of the company are the result of the interests of various groups: Scientists and
technologists, entrepreneurs and investors, farmers, politicians, and citizens in general, have
led to important and significant ethical judgments and mobilizations against transnational,
based mainly on how to operate the company.

The main accusations against transnational include human rights violations and
ancestral rights of indigenous peoples, compulsive evictions, unlawful coercion, murder,
looting of commons, destruction of the territories where they operate, destruction of native
forest, effects on the health of populations, impacts on local sovereignty, national and
popular, violation of labor rights, concentration, privatization and foreign ownership of land.
According to Proceso de Justicia Popular (2012), as demonstrations against such activities,
the multinational has had to face a number of complaints and prosecutions carried out
around the world, such as:

A. The complaint filed by the association Eaux et Rivières de Bretagne in 2001 by

announcing that its Roundup product was efficient and had no risks for the
environment.
B. The complaint by the residents of Anniston (Alabama) in 2002, for polluting the water
sources of the village with the chemical PBC.
C. A lawsuit in 2004 for 350 million dollars for the use of aspartame in their sweeteners
despite its toxic effect to the brain.
D. A complaint in 2004 in Andhra Pradesh by the use of infants in "horrendous
conditions" in cottonseed fields.
As a protest, in order to manifest and protest against the company, there have been
several demonstrations and popular resistances.

A. The campaign in Mexico: "Without corn there is no country" (“Sin Maíz no hay País")
firmly rejects GM maize, and advocates for the defense of the Mexican countryside,
protection of Mexican corn, food sovereignty and the reactivation of the Mexican
countryside.
B. The campaign led by the Peasant Association Scimitar River Valley (Asociación
Campesina del Valle del Río Cimitarra). "Monsanto Mata" in Colombia.

15 
 
 C. The Campaign in Latin America, "Latin American Network for GMO-Free" ("Red por
una América Latina Libre de Transgénicos"), to declare the Andean region, the center
of origin of potato, transgenic potato free.
D. The network of civil society organizations and people's movements lead the
"Campaign for a GMO-Free Brazil" ("Campaña por un Brasil Libre de Transgénicos").
E. Global Protest against Monsanto on behalf of more than 200,000 people in 40
countries on May 25, 2013 by the indignation of the inaction of the governments to the
detrimental effect with GM products and their production without any impediment.

By way of response, Monsanto has directed its strategy faking transparency through
the "green washing" program, whereby attempts to convince the public that favor the
preservation of the environment, and convincing politicians that their activities are popular
support.

Conclusions and Recommendations

Due to the larger social interest in reducing risks to the environment and human
health, the relationship between society and techno-scientific power further conflict, has
become controversial. The controversies generated around innovations in the development
field denote that the industrial model characterized by ignorance and little or no
participation of the society is no longer adequate. Only the evidence of damage already
caused to health or the environment is a cause justifiable for the modification or withdrawal
of such technological inventions.

Given the technological development, issues such as prevention and accountability

represent moral obligations by Global Bioethics, so that genetic modification seen as a
cultural intervention must be assessed in context.

Despite laundering strategy that manages Monsanto responsible image, the bad
reputation that characterizes it, along with the increasingly encourages rejection information
available to the company and the products it develops and produces.

Social, Managerial, Policy and Research Implications

The findings of this analysis have various social, managerial and policy research
implication.

Large corporations should consider that their research, innovation, production and
marketing activities must contribute to the well-being of society as a whole and to satisfy the
different interests of stakeholders while procuring the expected return on investment for the
stockholders. Corporations should consider in their long-term strategic planning the
formulation and implementation of ethical and social responsiveness strategies and
activities.

16 
 
 On the managerial implications, managers should be considered as moral agents
when making ethical decisions, implementing strategies and taking actions, while maintain
a good balance between and among the different interests of stakeholders and stockholders.

Regarding policy implications, it can be concluded out of this analysis that public
servers, bureaucrats, politicians and legislators of local, state and national governments, and
public agencies have to be aware of Corporation´s innovation, production and marketing no
sustainable practices damaging the human health and environmental sustainability. But
being aware is the first step. They should formulate policies to regulate these practices and
protect natural resources.

References
Abellán, D. (2004), Mergers and Acquisitions: a survey of motivations. Documento de trabajo
0401. Universidad Complutense de Madrid.
Alcázar, F. M. & Martínez F. S. (2004), El proceso de alianzas estratégicas desde el enfoque
de la teoría evolutiva de alianzas. Investigaciones Europeas de Dirección y Economía
de la Empresa. Universidad de Cádiz. Vol. 10(3), pp.189-207.
Ariño, A. & De la Torre, l. (1998). Learning from Failure: Towards an Evolutionary Model of
Collaborative Ventures. Organization Science, Vol. 9, 306-325.
Barney, J. B. (1991). Types of Competition and the Theory of Strategy: Toward an
Integrative Framework. Academy of Management Review, Vol.11(4), pp. 791-800.
Bisang, R., Campi, M., Cesa, V. (2009). Biotecnología y desarrollo. Comisión Económica para
América Latina y el Caribe (CEPAL). Naciones Unidas, Santiago de Chile.
Kaplan, R. S., & Norton, D. P. (2004). Measuring the Strategic Readiness of Intangible
Assets. Harvard Business Review, Vol. 82(2), pp. 52-63.
Kluger, J. (1999). The Suicide Seeds, Time Magazine, February 1, 1999, pp. 44-45.
Lev, B. (2001). Intangibles: Management, Measurement, and Reporting. The Brookings
Institution. Washington D.C. (USA).
Mandel, M.; Hamm, S. & Farrell, C. J. (2006). Why The Economy is a lot stronger than you
think. Business Week, ProQuest, No. febrero 13 2006, pp. 62-70.
Mckelvey, W. (1997). Quasi-natural Organization Science. Organization Science, vol. 8(4), pp.
352-380.
Wheeler, B. Colbert, and R. E. Freeman (Spring 2003). Focusing on Value: Reconciling
Corporate Social Responsibility, Sustainability, and a Stakeholder Approach in a
Networked World, Journal of General Management 28, no. 3 (Spring 2003). 1–28.
World Business Council for Sustainable Development. (2000). Corporate social responsibility.
www.wbcsd-org.ae.psiweb.com/publications/prmedia, pp.1-2.
Zozaya, G. N. (2007). Las fusiones y adquisiciones como fórmula de crecimiento empresarial.
Ministerio de Industria, Turismo y Comercio. Dirección General de Política de la
PYME. Madrid.

17 
 
 CORPORATE SOCIAL RESPONSIBILITY IN INDIA: A STUDY
IN THE LIGHT OF THE COMPANIES ACT, 2013

SWAPAN KUMAR ROY AND SUHAS ROY

Introduction
Corporate Social Responsibility is a much talked about subject today. The concept of
CSR is not a new one. It is almost as old as civilization. Initially, charity and philanthropy
were the main drivers of corporate social responsibility. It is built on the Gandhian Principle
of “Trusteeship Concept” which stated that the industry leaders had to manage their wealth
so as to benefit the common man. Globally, the concept of CSR has encompassed all related
concepts such as triple bottom line, corporate citizenship, philanthropy, shared value,
corporate sustainability and business responsibility. It plays a vital role for the sustainable
development of all stakeholders viz., employees, customers and many more. With the passage
of time, it has got its legal status and has become an integral part of the corporate strategy.
The Companies Act, 2013 has introduced several provisions that would change the way of
doing business by the Indian corporate and one such provision is spending on CSR activities.
The CSR activities were largely done voluntarily by the leading companies since long time,
but now it has included in law.

Objectives of the Study

The objectives of the study are:
 To discuss about the conceptual aspect of Corporate Social Responsibility (CSR);
 To study the provisions of the Companies Act, 2013 in the context of Corporate
Social Responsibility;
 To throw light on the activities of CSR performed by different Indian Companies;
 To make concluding remarks.

Methodology
The entire gamut of the study has been based on the secondary sources of data.
Different books, journals, annual reports of different companies, newspapers and relevant
websites have been consulted in order to make the study an effective one.

What is Corporate Social Responsibility (CSR)?

Corporate Social Responsibility (CSR) is interchangeably used as Corporate
Conscience, Corporate Citizenship, Social Performance or Sustainable Responsible Business/
Responsible Business. The idea of CSR first came up in 1953 when it became an academic
topic in HR Bowen’s “Social Responsibilities of the Business”. However, the term CSR gained
popularity in 1990s when the German Betapham, a generic pharmaceutical company decided
to implement CSR. Corporate social responsibility means the obligation, which a corporation
owes to the society. World Bank Group defines CSR as “It is the commitment of businesses to
contribute to sustainable economic development by working with employees, their families,
the local community and society at large to improve their lives in ways that are good for

18 
 
business and for development”. According to World Business Council for Sustainable
Development, Corporate Social Responsibility is - “It 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 European Commission defines Corporate Social Responsibility as “The
responsibility of enterprises for their impacts on society and outlines what an enterprise
should do to meet that responsibility”. CSR is generally understood as being the way
through which a company achieves a balance of economic, environmental and social
imperatives (“Triple-Bottom-Line-Approach”). Triple bottom line (TBL) incorporates the
notion of sustainability into business decisions, coined by John Elkington in 1994. It is an
accounting framework with 3 dimensions: social, environmental and financial. The TBL
dimensions are also commonly called the 3 Ps: people, planet and profit and are referred to
as the “three pillars of sustainability”. CSR is the process of assessing an organization’s
impact on society and evaluating their responsibilities. CSR begins with an assessment of a
business and their customers, suppliers, environment, communities and employees.

Why CSR?
CSR is getting importance because of the following reasons:
 It can act as a driver for the development of new markets and create real
opportunities for growth.
 It strengthens relationships with customers, suppliers and networks.
 It enables continuous improvement and encourages innovation.
 It enhances ability to manage stakeholder expectations.
 It encourages more social and environmental responsibility from the corporate sector
at a time when the consumer confidence and the levels of trust in business is getting
damaged.
 It can enhance brand image and reputation and generate ability to attract and retain
employees.
 It can provide access to investment and funding opportunities.
 It can differentiate yourself from your competitors.
 It generates positive publicity and media opportunities due to media interest in
ethical business activities.

CSR and the Companies Act, 2013: Some Relevant Points

A. Background: The Companies Act, 2013 was enacted on 29th August 2013. After
several deliberations, the Companies Bill, 2011 was approved by the Lok Sabha on 18-
12-2012 as Companies Bill, 2012. The Bill was then considered and approved by the
Rajya Sabha on 08-08-2013 and has received the President’s assent on 29-8-2013. On
publication in the Gazette of India on 30-8-2013, the Bill became the Companies Act,
2013 to replace the nearly 60-year-old Companies Act, 1956. The Companies Act, 2013
has 470 sections. The entire Act has been divided in 29 chapters with 7 schedules. The
section 135 of the new Companies Act, 2013 deals with the Corporate Social

19 
 
 Responsibility (CSR). In order to encourage more entities to participate in the process
of development of the society through CSR, the Government of India has notified the
rules for CSR spending u/s 135 of the New Companies Act 2013 along with Companies
(Corporate Social Responsibility Policy) Rules, 2014 effective from 1st April 2014.
India became the first country to mandate spend on CSR activities through a
statutory provision.
B. Eligibility Criteria: Every company having net worth of Rs.500 crore or more, or
turnover of Rs.1000 crore or more or a net profit of Rs.5 crore or more during any
financial year will have to comply with the CSR provisions as laid down under the
Act.
C. Composition of CSR Committee: Every qualifying company shall constitute a
Corporate Social Responsibility Committee of the Board consisting of 3 or more
directors, out of which at least 1 director shall be an independent director. The
Board’s report under sub-section (3) of section 134 shall disclose the composition of
the Corporate Social Responsibility Committee.

D. Mandate of Corporate Social Responsibility Committee:

 The CSR Committee shall formulate and recommend to the Board, a Corporate
Social Responsibility Policy which shall indicate the activities to be undertaken by
the company as specified in Schedule VII.
 It shall recommend the amount of expenditure to be incurred on the activities as
specified in Schedule VII and
 It shall monitor the CSR Policy of the company from time to time.

E. Responsibility of the Board: The Board of every company shall:

 After taking into account the recommendations made by the CSR Committee,
approve the CSR Policy for the company and disclose contents of such policy in its
report and also place it on the company’s website, if any, in such manner as may be
prescribed; and
 Ensure that the activities as are included in CSR Policy of the company are
undertaken by the company.
 Ensure that the company spends, in every financial year, at least 2% of the average
net profits of the company made during the 3 immediately preceding financial
years on specified CSR activities. Provided that the company shall give preference
to the local area and areas around it where it operates, for spending the amount
earmarked for CSR activities. Provided further that if the company fails to spend
such amount, the Board shall, in its report made under clause (0) of sub -section (3)
of section 134, specify the reasons for not spending the amount. “Average net
profit” shall be calculated in accordance with the provisions of section 198 of the
Companies Act, 2013.

20 
 
 F. Activities which may be introduced by companies in their CSR
Policies(Schedule-VII):
 Eradicating extreme hunger and poverty;
 Promotion of education;
 Promoting gender equality and empowering women;
 Reducing child mortality and improving maternal health;
 Combating human immunodeficiency virus, acquired immune deficiency
syndrome, malaria and other diseases;
 Ensuring environmental sustainability;
 Employment enhancing vocational skills;
 Social business projects;
 Contribution to the Prime Minister’s National Relief Fund or any other fund set
up by the Central Government or the State Governments for socio-economic
development and relief and funds for the welfare of the SCs, the STs, other
backward classes, minorities and women; and
 Such other matters as may be prescribed.

Indian Companies and Corporate Social Responsibility

Here are some glimpses of activities of some Indian companies with regard to CSR:
 TATA: TATA group is considered to be a pioneer in the area of CSR and has played an
active role in nation-building and socio-economic development since the early 1990s.
From its inception, the TATA group has taken up a number of initiatives for the
development of the society. Programmes of TATA Steel Rural Development Society
(TSRDS) cover issues like education, irrigation, afforestation, adult literacy, vocational
training, handicrafts and rehabilitation of the handicapped persons. The Community
Development and Social Welfare Department (CDSW) at TATA steel carries out medical
and health programmes, blood donation drives and drug de-addiction etc.
 Steel Authority of India (SAIL): SAIL was founded with well-articulated socio-
economic objectives towards the people of India - employees, customers, suppliers and
community. It has taken successful actions in the field of environment conservation,
health and medical care, education, women upliftment, providing drinking water and
ancillary development.
 Ashok Leyland: The Company operates a Fun Bus in Chennai and New Delhi. This
bus, equipped with a hydraulic lift, takes differently abled children and those from
orphanages and corporation primary schools on a day’s picnic. The Company also runs
AIDS awareness and prevention programmes in its Hosur factories for about 3.5 lakh
drivers.
 Bharat Petroleum Corporation: Its rain water harvesting project Boond, in
association with the Oil Industries Development Board, selects draught-stricken villages
to turn them from ‘water-scarce to water-positive’. Some of BPCL’s other social
programmes include adoption of villages, prevention and care for HIV/AIDS and rural
health care.

21 
 
 Indian Oil Corporation: It runs the Indian Oil Foundation (IOF), a non-profit trust,
which works for the preservation and promotion of the country’s heritage. IOCL also
offers 150 sports scholarships every year to promising younger stars.
 Oil & Natural Gas Corporation: It offers community-based health care services in
rural areas through 30 Mobile Medicare Units (MMUs). The ONGC-Eastern Swamp
Deer Conservation Project works to protect the rare species of Eastern Swamp Deer at
the Kaziranga National Park in Assam. ONGC also supports education and women
empowerment.
 Reliance Industries Ltd: It launched a countrywide initiative known as ‘Project
District’. It is meant for restoring/bringing back the eye sights of visually challenged
Indians from the economically weaker sections of the society.
 Birla: The Birla Groups of companies are also among the pioneers in the field of CSR in
India. As a part of the Aditya Vikram Birla Group’s Social Reach, the Birla group runs
many hospitals, adult education and schools all over India. This group rehabilitates
handicapped persons. It also provides vocational training and has adopted several
villages under its Village Infrastructure Development Programme.
 Mahindra & Mahindra: Nanhi Kali, a programme run by the KC Mahindra Education
trust, supports education of the underprivileged girls. The trust has awarded grants and
scholarships to the students. In vocational training, the Mahindra Pride School provides
livelihood training to youth from socially and economically disadvantaged communities.
M & M also works for causes related to environment, health care, sports and culture.
 ACC: ACC are setting up schools, health centres, agro-based industries and improving
the quality of rural life.
 BHEL: It is actively involved in the welfare of the surrounding communities. It is also
providing drinking water facilities, construction of roads and culverts, provision of
health facilities, educational facilities etc.
 NTPC: NTPC has established a trust to work for the cause of the physically challenged
people.

Concluding Remarks
CSR is a part and parcel of the corporate strategy. The concept of CSR has been
gaining importance with the passage of time. Needless to mention that many leading
companies are involved in the activities of CSR and trying to contribute to sustainable
development. The compliance of the activities as specified in VII Schedule of the New
Companies Act by the qualifying companies will yield revolutionary changes in the society in
particular and the country at large. There will have the transparency and accountability
while performing CSR activities. Good CSR practices can only bring in greater benefits in the
form of enhancing corporate reputation, attracting and retaining employees.

22 
 
References
Pandab, S. K. (2013), Law Point Publications, Companies Act, 2013, Indian Journal of
Research, Vol-1, Issue-9, September, 2012
Ashwani Singla and Prema Sagar (2004). Trust and Corporate Social responsibility: Lessons
from India. Journal of Communication Management, Vol. 8 Iss: 3, pp.282- 290.
Balasubramanian, N.K, (2003). CSR as an Instrument of Global Competitiveness,IIMB
Management Review, Dec, pp. 61-7
Companies Act, 2013 – Challenges and Opportunities for Corporate Growth, Global
Publications – 2014.
The Chartered Accountant, Vol-59, No-6, December, 2010
www.forbesindia.com
www.business-standard.com
www.csr-weltweit.de
www.dnaindia.com
www.unido.org
www.social-economy-training.eu
www.gtw3.grantthornton.in

23 
 
 ROLE OF GOVERNMENT AND NON-GOVERNMENTAL ORGANIZATIONS
IN CORPORATE SOCIAL RESPONSIBILITY
R. MUBEEN
Introduction
Corporate responsibility involves a commitment by a company to manage its roles in
society - as producer, employer, marketer, customer and citizen - in a responsible and
sustainable manner. That commitment can include a set of voluntary principles - over and
above applicable legal requirements - that seek to ensure that the company has a positive
impact on the societies in which it operates. Strategies related to production and marketing
of goods and services, business ethics, environmental practices, treatment of employees,
approach to human rights and community engagement are all inherent to a comprehensive
corporate responsibility approach.

As a member of society, business creates value for shareholders, employees, customers

and society at large. Private enterprise is unmatched in its ability to assemble people, capital
and innovation to create meaningful jobs and profitably produce goods and services that
meet the needs and requirements of the world's people. Companies are an integral part of
society and are committed to operating in a responsible and sustainable manner. A wide
variety of corporate initiatives, all of which have benefited from a process of innovation and
continuous improvement, have been developed to put that commitment into practice. As
additional initiatives are developed by both public and private institutions, this process of
innovation can only be maintained by assuring that corporate responsibility initiatives
remain voluntary, flexible, and provide a role for companies in decision-making processes.
Bureaucratizing or restricting these multi-faceted and innovative efforts will eliminate the
very value they provide to companies and the commensurate benefits to a civil society: an
incentive to exceed the norm.

Responsible and often progressive business practices in areas such as ethics,

community engagement, philanthropy, procurement, employee satisfaction and
environmental protection are well established. Implementing policies and practices in these
areas has become part of what is generally considered sound management. Corporate
responsibility integrates these activities into a single concept that can generate additional
value by supporting business objectives, promoting dialogue with key stakeholders and
responding to customer needs.

Many companies that have integrated social and environmental aspects into their
business plans have found that they can improve relations with legal and political entities,
effectively address the concerns of external stakeholders, discover areas of strategic
advantage and improve their management systems. Integrating such aspects into
performance objectives can help companies align their business objectives with the societal
expectations. Improved performance in these areas may generate intangible assets, such as
employee commitment

24 
 
Role of Government in CSR
CSR is considered by the three governments to be a cross-governmental issue with a
broad agenda touching on social, environmental and international issues. In each country,
different ministries introduce CSR initiatives into their specific policy areas in parallel;
however, there is often limited coordination between them. There is a strong connection
between CSR and sustainable development. In the United Kingdom and Italy, CSR is seen as
the business contribution to this agenda; in Norway, the Ministry of the Environment is
introducing CSR elements into its sustainability agenda. With respect to the
institutionalization of CSR within governmental Business Ethics: A European Review.

Governments are interested in CSR because the respective business efforts can help
to meet policy objectives on a voluntary basis. This motivation touches not only on policy
objectives related to sustainable development and environmental protection, but also to
foreign policy goals such as human development and development assistance (Haufler 2001,
29). As the CSR critic Henderson (2001b, 28) puts it provocatively, CSR is now “a common
body of doctrine” that requires businesses to ”play a leading part in achieving the shared
objectives of public policy and making the world a better place”.

Second, CSR policies are regarded as an attractive complement for hard-law

regulations in cases where new regulations are politically not desirable or infeasible (in
particular at the international level; for examples see Haufler 2001). Compared to hard-law
regulations, the soft-law character of CSR and CSR policies implies comparatively low
political costs in terms of resistance by special interest groups (Moon2002, 399f; 2007, 302).
Some scholars argue that contemporarily (at least until the financial and economic crisis of
2008/2009), corporations are less likely to be the subject of state interventionism than they
were in Keynesian times until the late 1970s. To put it positively, a decrease of state
interventionism “might open up the possibilities for more ‘responsible’ forms of interaction
between stakeholder groupings”, including new forms of government interventions such as
CSR policies (Mellahi & Wood 2003). In this sense, Haufler (2001) frames CSR as an element
of the “’third way’ between socialism and capitalism” that provides social protections while
strengthening national economic competitiveness.

Third, governments inevitably define CSR negatively with conventional social and
environ-mental regulations because the ‘voluntary business contribution to sustainable
development’ starts where the legal framework ends (McWilliams & Siegel 2001). In
addition, governments seek to play a more active role in defining the concept and also
fostering the respective practices positively with softer, non-binding initiatives.

25 
 
Role of NGO’s in CSR
Non-governmental organizations (NGOs) have played a major role in pushing for
sustainable development at the international level. Campaigning groups have been key
drivers of inter-governmental negotiations, ranging from the regulation of hazardous wastes
to a global ban on land mines and the elimination of slavery.
 Individuals and the institutions in their interactions need to take into account the
potential effects of their exchange.
 The broader view of CSR is applicable to government, media, industry, NGOs and
other variety of social institutions.
 The new focuses on the need for socially driven investments, consistency in profits,
fair wealth distribution and good governance. NGOs are actively intervening by way
of stakeholder and community engagement action programmes.

How far the NGOs in the nation can join hands with the corporate in their effort to
social and environmental development is the prime concern of this article. The corporate
social responsibility blends the objective of social development and environmental protection
thorough ethical effort. Many non-governmental organisations in India are engaged in social
development and environmental development activities. These organisations are good
enough to support the industrial development by ensuring community participation the
developmental process. The concept of corporate social responsibility is underpinned by the
idea that corporations can no longer act as isolated economic entities operating in
detachment from broader society. Corporate Social Responsibility to be looked upon as
mutual support programs that ensure development of community near by the industrial area
with the expansion and development of the industrial organisations.

The community today needs external agency intervention in the alleviation of many
social problems like poverty, health, unemployment, community education, homelessness
and eco development programs. By looking upon the needs of the community, the
organisation gets an opportunity to understand the social needs of the people and it will
enable them to intervene into such social issues and finding solution to the many basic
needs. It develops greater trust and confidence on the community on the business
organisation effort in their real development. Integrated community investment strategies
align internal community-related issues and link business goals with community needs. Here
the role of NGOs can be better realized. The NGOs existing within the industrial location
and closer to the community can better act as moderators and facilitators in the realization
of their social need and better environmental protection. The industrial expansion is a threat
to the people living nearby and it invites protest from many like consumer, investors, activist
groups, government regulators and other stakeholders. To develop a better rapport with the
community in the implementation of the developmental activities the NGOs can play better
role with the industry and community. They can help the industrial management in
convincing the expansion program to the community and there by develop a proactive and
social environmental and industrial development policy. Lower operating costs, enhanced

26 
 
brand image and reputation, reduced regulatory oversight, product safety and decreased
liability, improved financial performance etc are the benefit to the organisation.

The benefit of CSR not only for the community and organisation but also for the
employees. The Research demonstrates Corporate Social Responsibility initiatives have a
positive impact on employee morale, motivation, commitment, loyalty, training, recruitment
and turnover. Benefits in these areas have been found to improve the bottom line of
companies. Three surveys across Europe, the USA and a survey involving 25 countries found
employees felt greater loyalty, satisfaction and motivation when their companies were
socially responsible. The impact of these HR initiatives gives better brand image to the
organisation in the labour market and it in turn help the HR department to get potential
employees who believe in similar values system. The ultimate goal of such effort is the
development of an 'organisational culture' which establishes harmonious relationship with
the Community-Employee and Organisation at large. This establishes that fact that many
Corporate Social Responsibility initiatives reflect the essence of Human Resource
Management activities.

But NGOs are not only focusing their energies on governments and inter-
governmental processes. With the retreat of the state from a number of public functions and
regulatory activities, NGOs have begun to fix their sights on powerful corporations - many of
which can rival entire nations in terms of their resources and influence.

Aided by advances in information and communications technology, NGOs have helped

to focus attention on the social and environmental externalities of business activity.
Multinational brands have been acutely susceptible to pressure from activists and from
NGOs eager to challenge a company's labour, environmental or human rights record. Even
those businesses that do not specialize in highly visible branded goods are feeling the
pressure, as campaigners develop techniques to target downstream customers and
shareholders.

In response to such pressures, many businesses are abandoning their narrow Milton
Friedmanite shareholder theory of value in favour of a broader, stakeholder approach which
not only seeks increased share value, but cares about how this increased value is to be
attained. Such a stakeholder approach takes into account the effects of business activity - not
just on shareholders, but on customers, employees, communities and other interested groups.

There are many visible manifestations of this shift. One has been the devotion of
energy and resources by companies to environmental and social affairs. Companies are
taking responsibility for their externalities and reporting on the impact of their activities on
a range of stakeholders. Nor are companies merely reporting; many are striving to design
new management structures which integrate sustainable development concerns into the
decision-making process.

27 
 
 Much of the credit for creating these trends can be taken by NGOs. But how should
the business world react to NGOs in the future? Should companies batten down the hatches
and gird themselves against attacks from hostile critics? Or should they hold out hope that
NGOs can sometimes be helpful partners?

For those businesses willing to engage with the NGO community, how can they do so?
The term NGO may be a ubiquitous term, but it is used to describe a bewildering array of
groups and organizations - from activist groups 'reclaiming the streets' to development
organizations delivering aid and providing essential public services. Other NGOs are
research-driven policy organizations, looking to engage with decision-makers. Still others see
themselves as watchdogs, casting a critical eye over current events.
Although it is often assumed that NGOs are charities or enjoy non-profit status, some
NGOs are profit-making organizations such as cooperatives or groups which lobby on behalf
of profit-driven interests. For example, the World Trade Organization's definition of NGOs is
broad enough to include industry lobby groups such as the Association of Swiss Bankers and
the International Chamber of Commerce. Such a broad definition has its critics. It is more
common to define NGOs as those organizations which pursue some sort of public interest or
public good, rather than individual or commercial interests.

Even then, the NGO community remains a diverse constellation. Some groups may
pursue a single policy objective - for example access to AIDS drugs in developing countries or
press freedom. Others will pursue more sweeping policy goals such as poverty eradication or
human rights protection.

Conclusion
The government's approach to promoting CSR should seek to mainstream CSR within
community policies, engage the public and private sectors and promote greater transparency
in the marketplace. The Government's approach to CSR should centre around productivity
and competitiveness and on achieving transparency in the market to promote an effective
dialogue with stakeholders. But NGOs are not only focusing their energies on governments
and inter-governmental processes. With the retreat of the state from a number of public
functions and regulatory activities, NGOs have begun to fix their sights on powerful
corporations many of which can rival entire nations in terms of their resources and influence.
Not all NGOs are agreeable to collaboration with the private sector. Some will prefer to
remain at a distance, by monitoring, publicizing, and criticizing in cases where companies
fail to take seriously their impacts upon the wider community. However, many are showing a
willingness to devote some of their energy and resources to working alongside business, in
order to address corporate social responsibility.

28 
 
References
Baxi Ajit Prasad C V (2006), Corporate Social Responsibility Concepts and Cases, Excel
Books, New Delhi, p.15-53
Haufler,V. (2001): A Public Role for the Private Sector: Industry Self-Regulation in a Global
Economy, Washington: Brookings Institution.
Henderson, D. (2001), “The Case against Corporate Social Responsibility”, Policy 17(2),
pp.28-32
John Hancock (2005), Investing in CSR, Kogan page ,London and Sterling, p.1-17
McWilliams, A. and Siegel, D. (2001) “Corporate Social Responsibility: A Theory of the Firm
Perspective”, Academy of Management Review, 26/1, pp.117-127.
Mellahi, K. and Wood, G. (2003), “The Role and Potential of Stakeholders in Hollow
Participation: Conventional Stakeholder Theory and Institutional Alternatives”,
Business and Society Review, 108/2, pp.183-202.
Moon, J. (2002) “The Social Responsibility of Business and New Governance”, Government
and Opposition, 37/3, pp.385-408.
Moon, J. (2007) “The Contribution of CSR to Sustainable Development”, Sustainable
Development, 15, pp.296-306.

29 
 
 ROLE OF CSR IN INITIATING WOMEN ENTREPRENEURSHIP
N.BRINDHA AND A.ABIRAMI

Introduction
Today’s world is changing at a startling pace. Political and economic transformations
seem to be occurring everywhere - as countries convert from command to demand economies,
dictatorships move toward democracy, and monarchies build new civil institutions. These
changes have created economic opportunities for women who want to own and operate
businesses.

CSR can range from charitable programs and community service, to environmental-
impact awareness. The goal of CSR is to ensure that companies uphold and promote high
ethical standards as they simultaneously pursue profits. Today, women in advanced market
economies own more than 25% of all businesses and women-owned businesses in Africa,
Asia, Eastern Europe, and Latin America are growing rapidly. Moreover, the presence of
ethical values of the entrepreneur represents a fundamental driving force in determining the
spreading of a philosophy of governance and corporate management, as well as guiding
towards the adoption of CSR and sustainability practices.

There are actually two different types of corporate social responsibility to consider.
The first one consists of corporations providing funding and resources for worthwhile social
causes, such as donating money or employee time to charities. However, another type of CSR
involves putting together a real plan to produce products or provide services that are in the
best interests of society. These include things like using safe materials in design and
manufacture, corporate environmental initiatives, and other factors such as job creation and
economic development. So women’s business associations play a vital role in identifying
appropriate and/or emerging sectors where women entrepreneurs can succeed. The areas
that are likely to take off quickly during a nation’s market revitalization are public relations,
transport, delivery, producing and marketing consumer goods, commercial banking, financial
services, insurance, and other service-related industries.

As the global impact of women entrepreneurs is just beginning to gain intensity, this
paper examines how women entrepreneurs are initiated by CSR, the support rendered by
CSR to carry out their business, how women’s business associations promote entrepreneurs,
and to what extent women contribute to international trade etc.

Women in Entrepreneurship and CSR

Entrepreneurship has gained currency across the sphere and female-
entrepreneurship has become an important module. India is one of the fastest emerging
economies and the importance of entrepreneurship is realized across the gamut. “Women
Entrepreneurship” means an act of business ownership and business creation that empowers
women economically increases their economic strength as well as position in society.

30 
 
 Corporate social responsibility (CSR, also called corporate conscience, corporate
citizenship, social performance, or sustainable responsible business/ Responsible Business) is
a form of corporate self-regulation integrated into a business model. CSR policy functions as
a built-in, self-regulating mechanism whereby a business monitors and ensures its active
compliance with the spirit of the law, ethical standards, and international norms corporate
social responsibility A company’s sense of responsibility towards the community and
environment (both ecological and social) in which it operates.
 
Women-entrepreneurs have been making a considerable impact in all most all the
segments of the economy. “Women Entrepreneur” is a person who denies the role of their
personal needs to participate and be accepted economically independent. Strong desire to do
something positive is a high-quality women entrepreneur who contributes to the position
values of family and social life.

Role of Women as an Entrepreneur

In the last decade, there has been a remarkable shift it emphasizes from the
traditional industry to non-traditional industry and services. Based on this concept, some
important opportunities are being identified, considering the socio-economic, cultural and
educational status and motivational level of women entrepreneurs, particularly projects with
low investment, low technical know-how and assured market are suggested for them for the
production of many goods and services.

At present they are supposed to possess the traits like Creativity, Quality to working
hard, Determination, Ability and desire to take risk, Profit earning capacity.

Role of CSR in Initiating Women Entrepreneur

 Access to Business Opportunities - by directly incorporating women in their value
chain, companies can open up a world of business opportunity and the potential for a
sustainable source of income. For example, Coca-Cola’s 5 by20 initiative is one of the
flagship corporate initiatives in this area. They aim to “enable the economic
empowerment of 5 million women entrepreneurs across our global value chain by
2020” – from fruit farmers to micro-distributors.
 Access to finance – Women frequently face disproportionate hurdles in accessing
financial services. Financial institutions can of course focus on developing products to
provide appropriate access to business capital for women. There are various options
for doing so, from partnering with a micro-finance institution to establishing
relationships with banks to encourage them to use purchase order agreements with
the company as collateral. Working with the International Finance Corporation, Coca-
Cola has announced a three-year, USD100m joint initiative to provide business
women in their supply chain with financial backing.
 Access to networks - research by the Asia Foundation identified access to networks
as one of the key barriers to women’s entrepreneurship. One way companies’ can help

31 
 
 address this is via mentoring programmes – the connections afforded by such a
programme can open otherwise hidden doors for women entrepreneurs. The Bank of
America, for example, runs their Global Ambassadors Program in partnership with
Vital Voices, and matches accomplished professionals, including Bank of America
executives and other leaders from the private and public sectors, as mentors for
emerging women leaders in developing countries.

Benefits of CSR in Empowering Women Entrepreneurs

Given the crucial role of women in our system, and the economic barriers too many
women still face, we have made women’s economic empowerment a priority. Our 5 by20
women’s initiative launched in 2010 and continues to grow and gain momentum. The 5 by20
initiative aims to enable the economic empowerment of 5 million women entrepreneurs in
our global value chain by 2020. In collaboration with nongovernmental organizations
(NGOs), governments and businesses, female entrepreneurs are associated with the business
gain access to three essential economic enablers: business skills training, loans and financial
services and assets, and peer networks and mentoring. The 5 by 20 initiative focuses on
women in six segments of our value chain: producers, suppliers, distributors, retailers,
recyclers and artisans.

By year’s end, 5 by 20 programs were operating in Brazil, China, Costa Rica, Egypt,
Haiti, India, Kenya, Mexico, Nigeria, the Philippines, South Africa and Thailand. New 5
by20 programs were under development in 10 additional countries as well. Most of the
women we have enabled thus far are retailers. Three quarters of the women enabled are new
to our value chain. In all, the 5 by20 initiative has enabled approximately 3,00,000 women
since the launch of the program in 2010 through December 31, 2012.

Motivating Women Entrepreneurs through CSR

It was found that the women entrepreneurs are opportunity-driven rather than
necessity-driven, and that they mention economic independence, passion and creating jobs as
their main reasons for launching their business ventures. About 85 percent of high-growth
women entrepreneurs have the ambition to keep growing their business. These high-growth
businesses belong to traditional or non-mature sectors such as food and beverages and
services, which tend to have lower rates of potential growth than sectors like software and
Internet, which are preferred by high-growth men entrepreneurs. High-growth women
entrepreneurs are defined as women entrepreneurs whose businesses have experienced
growth rates of more than 20% for at least three years.

These women can be an important source of growth because they create jobs, promote
innovation and reduce the gender gap,” said Nancy Lee, General Manager of the MIF. “But
until now, there has been very little research on who they are and how they see their
successes and challenges. Although many women mentioned that they had more difficulties
than men when they started, 88 percent of high-growth women entrepreneurs stated that
being a woman was not an obstacle to growing a business. Women entrepreneurs initially

32 
 
imagine their businesses to be more restricted in reach. However, once the business grows
their ambitions match those of male entrepreneurs. Only 40 percent of women’s businesses
have international reach, while 71 percent of men’s businesses cross borders.

Women Entrepreneurs in Global Economy

Cultural and social traditions play a large role in determining who within a society
becomes an entrepreneur. For example, social conditions in some societies inhibit women
from starting their own businesses. For a female business owner, the process of starting and
operating a new enterprise can be difficult because often they lack the skills, education, and
support systems that can expedite their business pursuits.

Women’s motivations for starting a business are related to their need to be

independent, achieve job satisfaction, attain personal accomplishment and fulfillment, be
creative and economically self-sufficient. Men and women entrepreneurs are found in two
distinct sectors: the formal or traditional mainstream sector, and the informal or
marginalized sector. An informal sector that operates outside the formal sector is very active
in developing and transitional economies.

Barriers Faced by Women Doing International Business

Obstacles that women face in international business include limited international
business experience, inadequate business education, and lack of access to international
networks. Challenges common to all enterprises include securing funding, developing
marketing and management skills, and devising suitable business strategies to thrive in
globalized social and economic environments. Other impediments for women are societal,
cultural, and religious attitudes. In revitalizing economies they may also face intractable
infrastructure problems.

Successful Leading Business Women in India

1. Akhila Srinivasan, Managing Director, Shriram Investments Ltd
2. Chanda Kocchar, Executive Director, ICICI Bank
3. Ekta Kapoor, Creative Director, Balaji Telefilms
4. Jyoit Naik, President, Lijjat Papad
5. Kiran Mazumdar-Shaw, Chairman and Managing Director, Biocon
6. Lalita D Gupte, Joint Managing Director, ICICI Bank
7. Naina Lal Kidwai, Deputy CEO, HSBC
8. Preetha Reddy, Managing Director, Apollo Hospitals
9. Priya Paul, Chairman, Apeejay Park Hotels
10. Rajshree Pathy, Chairman, Rajshree Sugars and Chemicals Ltd
11. Ranjana Kumar, Chairman, NABARD
12. Ravina Raj Kohli, Media personality and ex-President, STAR News
13. Renuka Ramnath, CEO, ICICI Ventures
14. Ritu Kumar, Fashion Designer

33 
 
 15. Ritu Nanda, CEO, Escolife
16. Shahnaz Hussain, CEO, Shahnaz Herbals
17. Sharan Apparao, Proprietor, Apparao Galleries
18. Simone Tata, Chairman, Trent Ltd
19. Sulajja Firodia Motwani, Joint MD, Kinetic Engineering
20. Tarjani Vakil, former Chairman and Managing Director, EXIM Bank
21. Zia Mody, Senior Partner, AZB & Partners

Strategies for Promoting Women Entrepreneurship by CSR

 Education has been instrumental in increasing the participation of women in
entrepreneurial activities. The formal education not only helps in acquisition of
requires knowledge for a job, but it is a liberating force and barriers of caste and class,
smoothing out inequalities imposed by birth and other circumstances.
 Establishment of proper training institutes for enhancing their level of work-
knowledge, skills, risk-taking abilities, enhancing their capabilities.
 Potential women entrepreneurs should be exposed to different types of emerging
opportunities.
 Housewives should be motivated to learn additional income.
 A Women Entrepreneur's Guidance Cell should be set up to handle the various
problems of women entrepreneurs all over the state.
 Positive attitudinal change in the society recognizing the role of women as
entrepreneur may lead to the development of appropriate environment in which
women will be able to exploit their entrepreneurial talents
 Offering seed capital, up-liftmen schemes, women entrepreneurs fund etc. to
encourage them economically.
 To extend confessional rates facilities and schemes for women entrepreneurs to
prosper in the field of enterprise.

Thus by adopting the aforesaid measures in letter and spirit the problems associated
with women can be solved.

Future Prospects for Development of Women Entrepreneurs

Education is a boon to mankind, while lack of education to a person is a bane now-a-
days. Today the role of Women entrepreneur in economic development is inevitable because
women are entering not only in selected professions but also in professions like trade,
industry and engineering. The industrial structure and the enterprises are undergoing a
radical change. Information Technology has transformed the very technique of doing
business. Individually, business ownership provides women with the independence they
crave and with economic and social success they need. Nationally, business ownership has
great importance for future economic prosperity.

34 
 
 Globally, women are enhancing, directing, and changing the face of how business is
done today. Ultimately, female business owners must be recognized for who they are, what
they do, and how significantly they impact the world’s global economy. Government should
extend better educational facilities and schemes to women folk. Adequate training programs
on management skills should be provided to women community. Encourage women’s
participation in decision making. Vocational training should be extended to women
community to enable them to understand the production process and management. Training
on professional competence and leadership skills should be extended to women
entrepreneurs.

Conclusion
India is a male dominated society and women are assumed to be economically as well
as socially dependent on male members. The absolute dependence seems to be diluted among
the high and middle class women as they are becoming more aware of personal needs and
demanding greater equality. Women entrepreneurs faced lots of problems at start-up as well
as operating stage like, non availability of finance, restricted mobility freedom and having to
perform dual role one at home and other at work.

Technological advancement and information technology explosion have reduced the

problem of women entrepreneurs. Along with technological revolution, mental revolution of
society is needed to change the attitude of the society and provide women with democratic
and entrepreneurial platform.

Globally, women are enhancing, directing, and changing the face of how business is
done today. Ultimately, female business owners must be recognized for who they are, what
they do, and how significantly they impact the world’s global economy.

Thus, Women have the potential and the determination to set up, uphold and
supervise their own enterprises in a very systematic manner. Appropriate support and
encouragement from the Society in general and family members in particular is required to
help these women scale new heights in their business ventures. The right kind of assistance
from family, society and Government can make these Women Entrepreneurs a part of the
mainstream of national economy and they can contribute to the economic progress of India.

References
Bangera, L.C: Entrepreneurial Role in Nursing Sick Units.the financial
Express,August 26, 1980.
Drucker,Peter F:Innovation and Entrepreneurship, William HeinemannLtd.,
London,1985.
David Waldman, Ron S. Kenett &Tami Zilberg 2006. “Corporate Social Responsibility:
What it really is, why it’s so important & how it should be managed. Journal of management
studies, pg 43:1703-1725.

35 
 
 Kabeer, Naila. 1999. Resources, Agency, Achievements: Reflections on the
Measurement of Women s Empowerment. Development and Change Vol. 30, Institute of
Social Studies, Oxford, UK.
New guidelines on corporate social responsibility in India: “Old wine in new bottle”.
“India CSR” Suresh Kr. Pramar. August 5th, 2011.
Malhotra, A., R. Pande, and C. Grown (2003). Impact of Investments in Female
Education on Gender Equality. International Center for Research on Women: Washington,
DC.

36 
 
 CORPORATE SOCIAL RESPONSIBILITY: AN INDIAN PERSPECTIVE
LAWRENCE LEVE S
Introduction
The evolution of CSR in India refers to changes over time in India of the cultural
norms of Corporates engaged in CSR activities. Businesses are managed to bring about an
overall positive impact on the communities, cultures, societies and environments in which
they operate. The fundamentals of CSR rest on the fact that not only public policy but even
corporate should be responsible enough to address social issues. Thus companies should deal
with the challenges and issues looked after to a certain extent by the states.

CSR is a management concept whereby companies integrate social and environmental

concerns in their business operations and interactions with their stakeholders. CSR is
generally understood as being the way through which a company achieves a balance of
economic, environmental and social imperatives while at the same time addressing the
expectations of shareholders and stakeholders. Anything that is beneficial for the society can
be called CSR and such activity must be shown by company on their website and company
should take approval from board.

CSR is an important element of development because companies need to look after

their communities, particularly those that are operating in rural areas. But, CSR also has an
environmental aspect that the business might influence based on their operation Many
companies might have motivations for doing CSR such as the genuine care of their
environment and society that would eventually become their source of human capital as well
as raw materials that they need to sustain. Also, some companies will see it as an important
element of gaining societal acceptance for their operations. It is really true for the companies
that are operating in remote areas, like mining and oil and gas companies. They are often
encountered by many communities that indigenously live there, and the companies have to
live with these communities. Another aspect on CSR is that companies should see it as a
voluntary action rather than something that is highly regulated. Because it is something
that is good for the company to do, it’s not something that the company has to do because of
law or anything else. On the other hand, companies should not be really forced to do CSR as
mandatory action, because again, the development players are not just companies. It also
includes government as well as civil society and the community itself.

Data and Methodology

The data of this study is secondary data which we have collected from different
sources such as official websites of department Corporate Affair minister, Newspaper
Articles, Research Papers and Magazine Articles. As we know the traditional perspective
stressed on Corporate Philanthropy which means charity for Social, Cultural and Religious
purposes and Modern Perspective stressed on long term interest of stakeholders and
sustainable development. The main aim behind this study is to see why is vital for
Corporation? Why should they contribute for Country's Economic Development? and What

37 
 
are the Important steps Government should take to improve contribution of corporate for
CSR activities?

We have examined the data from various sources and analyzed the same. We have not
used any statistical tools and techniques because we are not trying to establish any
relationship between different variables rather through discussions and analytical thinking
we tried to see how our country has changed its policy over the period of time and what are
the result of these policies are.

Policy in India
Under the Companies Act, 2013, that replaces the nearly six-decade old legislation
governing the way corporate function and are regulated in India, profitable companies with a
sizeable business would have to spend every year at least 2 per cent of three-year average
profit on CSR works. This would apply to the companies with a turnover of Rs 1,000 crore
and or more or net worth of Rs 500 crore and more or net profit of Rs 5 crore and more. As
per new proposals, from the beginning of 2013- 14, Top earning PSUs like ONGC, BHEL and
NTPC may have to double their expenditure on CSR as per the new draft guidelines being
finalised by the Department of Public Enterprises (DPE). PSUs with net profit between Rs
100-500 crore are required to earmark 2-3% of their income. They have to ensure that they
spend full amount earmarked for, otherwise, they have to disclose why they have not spent
these fund. Public sector companies with a profit of less than Rs 100 crore are required to
contribute 3% of their income for undertaking such activities.

The proposed guidelines stated that if Public Sector Units (PSU's) are unable to spend
the earmarked amount for CSR in a particular year, it has to be spent in the next two years.
The guidelines continue to exempt sick and loss-making PSUs from allocation of budget for
undertaking CSR activities.

Stipulation of the Company Act, 2013

Every company with net worth of Rs 500 crore or more, or turnover of Rs 1,000 crore
or more or a net profit of Rs 5 crore or more during any financial year to constitute a CSR
Committee of the Board consisting of three or more directors, of which at least one director
shall be an independent director. The Board’s report to disclose the composition of the CSR
Committee.

Main Functions of the CSR Committee

1. Formulate and recommend to the board, a CSR policy indicating the activity or
activities to be undertaken by the company as specified in Schedule VII of the Act.
2. Recommend the amount to be spent on these activities.
3. Monitor the company's CSR policy periodically.
After the CSR Committee makes it recommendations, Board of the company shall
approve the CSR Policy and disclose contents of such policy in its report and also place it on

38 
 
the company's website. Further, details about the policy developed and implemented by the
company on CSR initiatives during the year to be included in the Board's report every year.

Board to ensure that the activities listed in the CSR Policy are undertaken by the
company. Board to ensure that at least 2% of average net profits of the company in the three
immediately preceding financial years are spent in every financial year on such activity.
Preference to be given to the local area and areas around the company operates for CSR
spending. If a company fails to provide or spend such amount, Board to specify reasons in its
report for that failure. Companies required to comply with CSR shall give additional
Information by way of notes to the Statement of Profit and Loss about the aggregate
expenditure on CSR activities. Schedule VII of the Companies Bill 2012 prescribes activities
that may be included by companies in their CSR policies:
1. Eradicating extreme hunger and poverty;
2. Promotion of education;
3. Promoting gender equality and empowering women
4. Reducing child mortality and improving maternal health;
5. Combating human immunodeficiency virus, acquired immune
6. deficiency syndrome, malaria and other diseases;
7. Ensuring environmental sustainability;
8. Employment enhancing vocational skills;
9. Social business projects;
10. Contribution to the Prime Minister's National Relief Fund or any other fund set up by
the Central Government or the State Governments for socioeconomic development
and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes,
other backward classes, minorities and women; and;
11. Other matters as may be prescribed.
Sachin pilot, Corporate Affair Minister has said there would also be a national level
CSR body to monitor the activities. So that Central Govt is planning to have a Special
Purpose Vehicle to monitor spending of CSR Fund and Projects. Govt want that there should
be full utilisation of CSR fund.

Effects of CSR
a. The contribution of CSR is not to contribute in one sector of society only rather to help
businesses and to nurture the society over a period of time. Company can contribute
under CSR in any of the sector (Education, Health, Environment, Upliftment for the
society etc.) which they like most and which is beneficial for the organization point of
view.
b. Corporations should participate effectively and efficiently for CSR contribution as
corporations are involved with numbers' of stakeholders like customers, employees,
suppliers, government, creditor, financial institutions, etc. so they have the
responsibility to take care of the interest of all the stakeholders for their own
sustainable growth.

39 
 
 c. Every Corporation must take initiatives for CSR practices to make this planet a
better place to live and not just this, it will also help corporations to build their
goodwill.
d. Corporations can differentiate themselves from their rivals by taking CSR initiatives.
e. Company can take CSR as an opportunity and a platform for growth and survive.
f. A properly implemented CSR concept can bring along a variety of competitive
advantages, such as enhanced access to capital and markets, increased sales and
profits, operational cost savings, improved productivity and quality, efficient human
resource base, improved brand image and reputation, enhanced customer loyalty,
better decision making and risk management processes.
g. Neither central government nor state government can tell corporate how to spend
money towards welfare for society. The decision rest on board how money spend in
various CSR activity.

Limitations in CSR Policy

1. No incentive if company pay more than 2% of net profit.
2. Carry forward of such a contribution not being mentioned under the provision of CSR.
It means if any of the company not able to spend 2% of average profit in any financial
year so that expenditure not being carry forward for next year.
3. Company does not have adequate profits or is not in a position to spend prescribed
amount on CSR activities, the directors would be required to give suitable
disclosure/reasons in their report to the members.
4. It is not clear whether the Section 25 companies or charitable organisations set up by
them would be included towards CSR.
5. According to the proposed rules, activities relating to eradicating extreme hunger and
poverty; promotion of education, gender equality and empowerment of women;
reducing child mortality and improving maternal health; combating HIV-AIDS,
malaria and other diseases; ensuring environmental sustainability, employment
enhancing vocational skills; and contribution to the Prime Minister’s National Relief
Fund or any other Central or state fund would be considered as CSR activity under
the Act.

Review of Literature
a. According to Geoffrey heal suggested that CSR is an important part of corporate
strategy in sectors where inconsistencies arise between corporate profit and social
goals, or discord can arise over fairness issues. There are number of social sectors
where corporate can play a valuable role under CSR and can produce social goods for
its society. According to him CSR program can be profitable element for company
strategy, reducing risk management, Generating brand equity, improving relations
with regulators, lower cost of capital, improved human relation and employee
productivity and to the maintenance of relationship that are important to long term
profitability.

40 
 
 b. According to Anupam Sharma and Ravi Kiran, them CSR is emerging as a new field
in the management research. In India, many firms have taken the initiatives of CSR
practices which have met with varying needs of society. According to him number of
IT and Auto industry is more going for taking up CSR initiatives while FMCG sector.
Authors said that India has entered or taken a transformational change by involving
into new CSR initiatives.
c. According to Kishor Neelakantan, the enactment of the company act 2013 will create
a big regulatory push for CSR activities and this is mandatory for all company
operating in India. so it is good for economic development but how Shareholder think
about it while evaluating company? So according to author suggests that framework
for investors to evaluate companies’ CSR efforts which is based on four key
parameters- Integrity, strategic orientation, efficiency and transparency.
d. According to Rahul Hakhu Company should be forward looking to adopt in their
corporate policy and take initiative for applying this in the business so that they can
achieve competitive advantage, profitability in the light of liberalized world. He
emphasis that government want that corporation should be more responsible for the
economic development of country, and growth of CSR lead to transformation of
agrarian economy to the path of industrialization. He suggested that CSR provides
valuable information to companies of India and other stakeholders about the prospect
of development, reputation.

Existing CSR Activities of Leading Companies

1. ONGC CSR projects focus on higher education, grant of scholarship and aid to
deserving young pupils of less privileged sections of society, facilities for constructing
schools etc.
2. SAIL has taken successful actions in environment conservation, health and medical
care, education, self employment programmers, sports and games etc.
3. BHEL has developed a CSR scheme and its mission statement on CSR is "Be a
committed Corporate Citizen, alive towards its CSR". BHEL undertakes socio
economic and community development programmes to promote education,
improvement of living conditions and hygiene in villages.
4. Reliance Industries initiated a project named as “Project- Drishti” to bring back the
eyesight of visually challenged Indians from the economically weaker sections of the
society. This project has brightened up the lives of over 5000 people so far. this project
has also creating awareness about the compelling need for eye donation
5. Mahindra & Mahindra launched a unique kind of ESOPs- Employee Social Option
in order to enable Mahindra employees to involve themselves in socially responsible
activities of their choice. It also contributes under Mahindra Hariyali, Mahindra pride
school, Mahindra Education Trust. Under Mahindra Hariyali, over one million trees
have been planted across the country, to increase the country green cover.
6. Infosys: As a leading software company Infosys is into the providing language and
computer education. Company has special program for unprivileged children by whom

41 
 
 company teaches them various skills and change their outlook too. Company also
donates carom, chess board, chocolates etc. to the needy ones.CSR activity includes
Blood donation camp and infosys foundation has been working in the sectors of health
care, education, environment preservation and social rehabilitation.
7. Wipro: Company has taken various initiatives to women empowerment. Three main
CSR activities include environment sector, education sector and energy conservation.
8. ITC: ITC Limited (ITC) is among one of India's leading private sector companies
having a assorted portfolio of businesses. ITC is working with the concept of ‘Triple
bottom line’ that will contribute to the growth of economy, environment and social
development. Major focus area of the company is on raising agricultural productivity
and helping the rural economy to be more socially inclusive.
9. Maruti Suzuki is an automobile industry works upon global warming and global
issues like climate Change Company has been strongly investing on environmental
friendly products and manufacturing best products for the society. Maruti Suzuki is
working upon conserving environment and preserving natural environment. Concept
of reduce, reuse and recycle has been promoted by company in all the manufacturing
units.
10. Gail ltd is largest state owned natural gas processing and Distribution Company. It
contributes towards corpus of GAIL charitable and education trust, natural calamities
or disaster, SC/ST minority’s population. Its objective to satisfy its entire stakeholder.
It participates in an activity which is directly or indirectly benefits the communities.
it enhance the quality of life and economic well being of local population.
11. IBM is a software company. Company is committed towards the implementation of its
environment policy, health services; provide hygiene and safety work place to its
employee.

Conclusion
From the limited experience over the last few years, some lessons nonetheless emerge.
Government introduce CSR because they wants corporation to become more responsible for
the society or for its stakeholders itself. As we know, CSR offer real opportunities for the
corporations to contribute in various activities which directly or indirectly help welfare of the
society. Corporations are social entity so they must take care of all stakeholders, it is vital for
them to take charge of this responsibility in efficient way so that all participant of
corporation feel satisfied. As we know Corporates can't stand alone they also needs the
support of their society at large which is important for their development and goodwill. Many
large corporations now taking steps to improve their environmental and social performance
through the use of voluntary initiatives such as codes of conduct, environmental certification
and reporting, social audits, fair trading schemes and social investment programmes.
Corporates and government must work together and through this, they can bring
dramatically changes in the welfare schemes of society.

42 
 
References
GovtCan’tTellCompaniesHowtoSpend CSR money:SachinPilothttp://www.indiacsr.in
/en/?p=13220
Initiative of major companies of India with focus on Health, Education and Environment.
http://en.wikipedia.org/wiki/Corporate_social_responsibility
http://www.unrisd.org/unrisd/website/newsview.nsf/0/B163470112831808C1256DA90
041ECC5?Open
http://knowledge.wharton.upenn.edu/article/corporate-social-responsibility-in-india-no-clear-
definition- but-plenty-of-debate

43 
 
 CORPORATE SOCIAL RESPONSIBILITY IN INDIA
BH. L. MOHANRAJU
Introduction
The importance of CSR emerged significantly in the last decade. Over the time, CSR
expanded to include both economic and social interests. Along with this it also broadened to
cover economic as well as social interests. Companies have become more transparent in
accounting and display ‘public reporting’ due to pressures from various stakeholders. It is
possible for companies to behave in the ‘desired’ ethical and responsible manner towards
consumers, employees, communities, stakeholders and environment. They have started
incorporating their CSR initiative in their annual reports.

Objectives
i) To study the CSR status in India.
ii) To understand the meaning and various models of CSR.
iii) To study the policies governing CSR in India.
iv) To study the challenges faced by CSR in India.
v) To make suggestions for accelerating CSR initiatives.

Research Methodology
The research paper is an attempt of exploratory research, based on the secondary
data sourced from journals, magazines, articles and media reports.

CSR Concept, Definitions, Models

In India, the ethical model promoted by Mahatma Gandhi during 1930s is well known
which stated the role of family-run-businesses conducting social and economic activities. This
was followed by the Statist model propounded by Pt. Jawaharlal Nehru. In this model, state-
driven policies included state ownership and extensive corporate regulation and
administration. At the global level, the first attempt to define CSR is contributed by many to
Howard Bowen’s Social Responsibilities of the Businessmen (1953) who questioned the
status and degree of responsibilities that business people should accept. Milton Friedman
introduced liberal model which stated that corporate responsibility primarily focus on owner
objectives and stakeholder responsiveness which recognizes direct and indirect stakeholder
interests. During 1980s, the CSR concept grew to integrate corporate objectives with the
social responsibility of business thereby making it responsible to care for environment,
employees and also make good profits. In the 1990s, Peter Drucker and many other authors
propagated CSR as a part of corporate strategy. The approach to CSR has also changed from
Agency theory to Stakeholder theory. Again, the stakeholder model emphasizes on survival
of the corporation which throngs upon not only the responsibility towards shareholders but
also towards employees, governments and customers. CSR is interchangeably used with
several terms like business ethics, corporate citizenship, social and environmental
responsibility, corporate sustainability.

44 
 
 World Business Council for Sustainable Development defines Corporate Social
Responsibility (CSR) as “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 European Commission's definition of CSR is: "A concept whereby companies
integrate social and environmental concerns in their business operations and in their
interaction with their stakeholders on a voluntary basis."

According to CSR Asia, "CSR is a company’s commitment to operating in an

economically, socially and environmentally sustainable manner whilst balancing the
interests of diverse stakeholders.”

Today the concept of CSR has undergone radical change. It has integrated social as
well as environmental issues into their missions and decisions. Companies take keen interest
in informing about their CSR activities to their stakeholders as well. Across the globe,
business enterprises have undertaken CSR initiatives in the areas of water conservation,
healthcare, rural welfare, environment protection, poverty alleviation, education, community
investment projects, culture and heritage, bio-diversity, disaster management and relief,
culture and heritage, green environment, product responsibility, governance, waste
management and gender equality.

CSR in India
In developing economies like India, CSR is seen as part of corporate philanthropy in
which corporations augment the social development to support the initiatives of the
government. However with time, the scenario of CSR has changed from being philanthropic
to being socially responsible to multi stake holders. The period of 1960s and 1970s saw an
emergence of CSR activities being inbuilt in corporate philanthropy (Mohan, 2001).

India has been named among the top ten Asian countries paying increasing
importance towards corporate social responsibility (CSR) disclosure norms. India was ranked
fourth in the list, according to social enterprise CSR Asia's Asian Sustainability Ranking
(ASR), released in October 2009. ‘Sustainability in Asia ESG reporting uncovered’
(September 2010) is based on four parameters viz. General, Environment, Social and
Governance. In its study based on 56 companies in India, it observed that India is ranked
second in country ranking in Asia and is ranked one ranking in general category. It is
observed that reporting is strongly followed by companies as well as they seek international
development standards. It could be attributed to the Indian government compelling the
public sector companies to provide for community investment and other environmental,
social and governance liabilities.

A key finding of the survey conducted in June 2008, aimed at understanding of the
role of corporations in CSR, carried out by TNS India ( a research organization) and the

45 
 
Times Foundation, revealed that over 90 per cent of all major Indian organizations surveyed
were involved in CSR activities. Besides the public sector, it was the private sector
companies that played dominant role in CSR activities. A study on the CSR activities of 300
corporate houses, conducted by an industry body in June 2009, revealed that Corporate India
has spread its CSR activities across 20 states and Union territories, with Maharashtra
gaining the most from them. The study also revealed that about 36 per cent of the CSR
activities are concentrated in the state, followed by about 12 per cent in Gujarat, 10 per cent
in Delhi and 9 per cent in Tamil Nadu. The companies have on an aggregate, identified 26
different themes for their CSR initiatives. Of these 26 schemes, community welfare tops the
list, followed by education, the environment, health, as well as rural development

Another study conducted by Economic Times revealed that donations provided by

listed companies grew by 8 per cent during the financial year 2008-2009 and that 760
companies donated US$ 170 million in the same year, up from US$ 156 million in the year-
ago period. As many as 108 companies donated over US$ 216,199, up 20 per cent over the
previous year.

CSR Controversy
Many countries separate philanthropy from social responsibility. While in India, it is
seen as weapon for social activities including recruitment and retention. Also, many argue
that it helps in building an image of the organization. While some argue that government
does away with their role of playing a regulatory body over the powerful business houses.
Others criticize that CSR is not their basic economic role of business. Some even say that
CSR is put in place to gain commercially as well. It is also argued that CSR initiatives
undertaken result into deviation from basic business roles. While some others state that the
impact of the CSR is not only impacts profits but benefits the society at large. In the light of
these arguments, the trend of increased CSR initiatives cannot be ignored clearly reflecting
the awareness the companies in India have gathered today.

CSR in SMEs
The concept of CSR has extended to SMEs as well. This sector was never taken into
account for deliberations and conventional approach to CSR is generally assumed to be the
part of large companies. It is a well known fact that SMEs produce large proportion of
country’s output, provides huge employment and generate substantial revenues to the
government not only in developed countries but developing countries as well. Small
to medium-sized enterprises account for about 90 percent of businesses worldwide and are
responsible for around 50 to 60 percent of employment. They, potentially have a significant
impact on social welfare. As the SMEs also include stakeholders and an impact on the
society, it is necessary to understand the role of SMEs in CSR activities. However, it is
difficult to enroll the concept for SMEs as they face challenges of survival, time and resource
constraints, fear of additional regulations and no systematic incentives. General problems
like lack of information, getting trained employees, and getting support from related officials

46 
 
are other limiting factors for SMEs to get involved in CSR activities. However, there are
several benefits available to SMEs like small number of employees with quick
communication and decision making, unique selling propositions and competitive benefits
through their products and services, cost and efficiency savings. According to a study by the
European Commission in 2007 (‘CSR in SMEs - SMEs Good practice’), CSR can positively
influence SMEs’ competitiveness in numerous ways. SMEs can provide with improved
products, high customer loyalty, motivated employees, innovative and creative employees,
cost savings, inceased profitability due to optimum resource utilization, enhanced
networking with business partners and improved company image. Thus, it is advisable for
the government to look into policies and legislations for the benefits of SMEs adapting CSR
and take up initiatives aimed at encouraging SME involvement in CSR which should be
easily accessible and relevant.

Policy Initiatives
In 2009, the government made it mandatory for all public sector oil companies to
spend 2 per cent of their net profits on corporate social responsibility. The central
government is working on a framework for quantifying the CSR initiatives of companies to
promote them further. To ensure the active participation of public sector companies in CSR
initiatives, the government in planning to introduce certain legislations. The Department of
Public Enterprises (DPE) has prepared guidelines for central public sector enterprises to
take up important corporate social responsibility projects to be funded by 2 to 5 per cent of
the company's net profits. As per the guidelines, companies with net profit of less than US$
22.5 million will earmark 3 to 5 per cent of profit for CSR, companies with net profit of
between US$ 22.5 million - US$ 112.5 million, will utilise 2 to 3 per cent for CSR activities
and companies with net profit of over US$ 112.5 million will spend 0.5 to 2 per cent of net
profits for CSR. This proposal was discussed two years earlier as well however due to
protests from companies, it became voluntary exercise. As reported in Times of India,
February 10, 2011, the Ministry of Company Affairs (MCA), which is finalizing the new
Companies Bill, has accepted a Parliamentary Standing Committee's recommendation on the
issue. However it has proposed that companies with a turnover of Rs 1,000 crore or net profit
of Rs 5 crore or more must earmark 2 per cent of their net profit for the preceding three years
on CSR. In case if the companies fail to comply with the prescribed spend, it will have to list
out the reasons for the shortfall toits shareholders. The revised Companies Bill will be placed
in Parliament during the Budget session that starts later this month.

CSR Initiatives and Green Measures

India Inc has joined hands to fine-tune all its activities falling under CSR. For this, it
has set up a global platform to showcase all the work done by Indian firms. Confederation of
Indian Industry (CII) and the TVS Group collaborated to form the CII-TVS Centre of
Excellence for Responsive Corporate Citizenship in 2007. It provides consultancy services
and technical assistance on social development and CSR.

47 
 
According to a National Geographic survey which studied 17,000 consumers in 17 countries,
Indians are the most eco-friendly consumers in the world. India topped the Consumer
Greendex, where consumers were asked about energy use and conservation, transportation
choices, food sources, the relative use of green products versus traditional products, attitudes
towards the environment and sustainability and knowledge of environmental issues.
 Reliance Industries and two Tata Group firms-Tata Motors and Tata Steel are the
country's most admired companies for their corporate social responsibility initiatives,
according to a Nielsen survey released in May 2009.
 As part of its Corporate Service Corps (CSC) programme, IBM has joined hands with
the Tribal Development Department of Gujarat for a development project aimed at
upliftment of tribals in the Sasan area of Gir forest.
 The financial services sector is going green in a steady manner. Efforts by companies
such as HSBC India, Max New York Life and Standard Chartered Bank have ensured
that the green movement has kept its momentum by asking their customers to shift
to e-statements and e-receipts.
 State-owned Navratna Company, Coal India Ltd (CIL) will invest US$ 67.5 million
in 2010-11 on social and environmental causes.
 Public sector aluminium company NALCO has contributed US$ 3.23 million for
development work in Orissa's Koraput district as part of its Corporate Social
Responsibility (CSR).

Challenges of CSR
 It is important for CSR strategies to become central to business strategy and part of
the long-term planning process. Stakeholders are questioning more on CSR initiatives
of the companies today. They are challenging the companies’ decisions-making in this
direction. It has become imperative to incorporate stakeholders’ views.
 In India the CSR managers face number of challenges in managing CSR activities.
The biggest problem is of lack of budget allocations followed by lack of support from
employees and lack of knowledge as well. Lack of professionalism is another problem
faced by this sector. Absence of training and undeveloped staff are additional
problems for reduced CSR initiatives.
 General Public also do not take enough interest in participating and contributing to
CSR activities of companies as they have little or no knowledge about it.
 The increasing demand for more transparency and accountability on the part of the
companies and disclosure of information through formal and improved reporting is
also inevitable for the companies. Themore the open and honest disclosure, the
stronger and trusting relationships can be built with the stakeholders and consumers.
 Small companies do not take adequate interest in CSR activities and those which
undertake them fail to disclose it to the society. In the process they loose out on people
and their trust in them.
 Media can come up with strong support for informing the people at large about the
CSR initiatives taken up by the companies. It can sensitize population and also make

48 
 
 them aware of the benefits of CSR to them. However, media is not doing enough in
this regard.
 The failure of the government to come up with statutory guidelines to give a definite
direction to companies taking up CSR activities, in terms of size of business and
profile of CSR activities also results into few companies practicing CSR concept
adequately.

Suggestions
 Companies can set a network of activities to be taken up in a consortium to tackle
major environmental issues. It would also provide an opportunity to learn from each
other. Everyone in the organisation needs to recognise their own role in promoting
CSR. Companies should provide wider professional development activities.
 Training, conferences and seminars could be organised by companies to disseminate
and generate new knowledge and information in this sector. A strong budgetary
support would definitely help to grow this sector and research related to respective
industry would enhance their organisation’s contribution further. Government
regulations which are supporting in this direction could attract more response from
organisations. All this would also lead to benchmark CSR activities.
 Companies need to involve their stakeholders in order to build meaningful and long
term partnerships which would lead to creating a strong image and brand identity. It
is also suggested to review existing policies in order to develop more meaningful
visions for the companies and broaden their contributions to reach to local
communities.

Conclusion
Corporate sustainability is an evolving process and not an end. The Companies bill is
a good initiative on the part of the government however what would be included in ‘spending’
on CSR is unclear and is left for the companies to decide. Across the globe, the concept of
CSR has been accepted as an element for success and survival of business along with
fulfilling social objectives. However, the challenge for the companies is to determine a strong
and innovative CSR strategy which should deliver high performance in ethical,
environmental and social areas and meet all the stakeholders’ objectives.

References
Banerjee , P. K. (2003), “Corporate Governance & Business Ethics in the 21st Century”,
ICFAI Journal of Corporate Governance, Vol III No 2.
Brown K (2001), "Corporate Social Responsibility: Perceptions of Indian Business", in Mehra
M (Ed.), Retrieved from www.csmworld.org/public/ pdf/social_respons.pdf (Accessed
February 10th 2011).
EU Green Paper (2001), Promoting a European Framework for Corporate Social
Responsibility, Brussels, Commission of the European Communities, Retrieved from
www.btplc.com/Societyandenvironment/ Reports/GreenpaperonCSR.pdf (Accessed
February 10th 2011).

49 
 
Krishnan, S. (2001). “Corporate social responsibility: How and why in India”, Retrieved from
http://www.coolavenues.com/know/ m/corporate_citizenship.php3 (Accessed February
10th 2011)
Mohan, A. (2001), “Corporate Citizenship: Perspectives from India” , Journal of Corporate
Citizenship, Spring, pp 107-117.
Moon, J. (2002). “Corporate Social Responsibility: An Overview”, International Directory of
Corporate Philanthropy, London, Europa Publications.
Read-Brown Alex, Bardy Florent, Lewis Rebecca, (2010), “Sustainability in Asia ESG
reporting uncovered”, Retrieved from www.asiansr.com/sustainabilityin_ asia

50 
 
 EMERGENCE AND SIGNIFICANCE OF CSR IN THE
CURRENT BUSINESS SCENARIO

K. PRIYADARSHINI AND P. JEYABHARATHY

Introduction
Corporate social responsibility is a form of corporate self-regulation integrated into a
business model. CSR policy functions as a built-in, self-regulating mechanism whereby a
business monitors and ensures its active compliance within the spirit of the law, ethical
standards, and international norms. CSR is a process with the aim to embrace responsibility
for the company's actions and encourage a positive impact through its activities on the
environment, consumers, employees, communities, stakeholders and all other members of
the public sphere who may also be considered as stakeholders.

The term "corporate social responsibility" came into common use in the late 1960s and
early 1970s after many multinational corporations formed the term stakeholder, meaning
those on whom an organization's activities have an impact. It was used to describe corporate
owners beyond shareholders as a result of an influential book by R. Edward Freeman,
Strategic management: a stakeholder approach in 1984. Proponents argue that corporations
make more long term profits by operating with a perspective, while critics argue that CSR
distracts from the economic role of businesses. Others argue CSR is merely window-dressing,
or an attempt to pre-empt the role of governments as a watchdog over powerful
multinational corporations.

Objective of the Study

The primary objective of the present study is to present an overview of the corporate
social responsible activities by the Indian companies, the government’s enforcements and to
throw light on the times of India survey on CSR.

Methodology
This study is based on secondary data which were collected from various websites and
related articles. The study also covers two cases of Indian context based on the reports of the
individual companies.

Evolution of Corporate Social Responsibility in India

It refers to changes over time in India of the cultural norms of corporations'
engagement of corporate social responsibility (CSR), with CSR referring to way that
businesses are managed to bring about an overall positive impact on the communities,
cultures, societies and environments in which they operate. The fundamentals of CSR rest on
the fact that not only public policy but even corporate should be responsible enough to
address social issues. Thus companies should deal with the challenges and issues looked
after to a certain extent by the states.

51 
 
 Among other countries India has one of the most richest traditions of CSR. It has been
done in recent years to make Indian Entrepreneurs aware of social responsibility as an
important segment of their business activity but CSR in India has yet to receive widespread
recognition. If this goal has to be realised then the CSR approach of corporates has to be in
line with their attitude towards mainstream business- companies setting clear objectives,
undertaking potential investments, measuring and reporting performance publicly.

The First Phase

At the pre industrialisation period before1850, the wealthy people of the country
helped the people during epidemics and famine through their own money

The Second Phase

The second phase, was during the independence movement, According to Gandhi,
Indian companies were supposed to be the "temples of modern India". Under his influence
businesses established trusts for schools and colleges and also helped in setting up training
and scientific institutions. The operations of the trusts were largely in line with Gandhi's
reforms which sought to abolish untouchability, encourage empowerment of women and
rural development.

The Third phase

This is the period which the public sector enjoyed enormous growth and the people
also felt that contribution by the public sector undertaking alone is not enough for the
economic and social development of the country and there is a need of private participation.
In 1965 Indian academicians, politicians and businessmen set up a national workshop on
CSR aimed at reconciliation. They emphasized upon transparency, social accountability and
regular stakeholder dialogues. In spite of such attempts the CSR failed to catch steam

The Fourth Phase

This is the phase started from 1980 till now, were the economy faced a lot of changes
like globalistion and liberalisation, because of these radical changes CSR gain momentum.
Figure1 shows the driving factors why the companies opt for CSR

A report from global accounting and consulting firm Grant Thornton that used data
collected in late 2010 and early 2011 noted that CSR activities across the world have
increased dramatically in recent years as "businesses realize their value not only
commercially, but also in terms of boosting employee value, attracting staff and cutting
costs." Incidentally, "Saving the planet" came in sixth in the survey of drivers of CSR. The
Grant Thornton International Business Report was launched in 1992 and now covers over
11,000 respondents per year in 39 economies.

52 
 
 Figure 1: Driving Factors for CSR Globally
70 65 63
60 56

50 44
40 39 38
40
30
20
10
0
Recruitment/retention Cost management Public Tax relief Saving the planet Investorrelations Government pressure
of staff attitudes/building
brand

Source: Grant Thornton Report

From figure 1 it is understood that Even the employees want to work in a CSR
accredited firm, only 56% infer CSR as a brand building activity and 40% say that they are
doing it in real environmental consciousness and very pathetic is 38% accept that they are
doing it under government pressure.

Times of India Survey on CSR

The times foundation joined hands with TNF foundation, a international market
research agency conducted a survey on CSR. The research activity comprised of 100
companies including the public sector, nationalized private sector and the private companies.
The questionnaire was administered to chairman and CSR heads of the companies. The
following figure shows that CSR spending pattern of public sector, private sector of national
and multinational companies in various issues.

53 
 
 From the above figure education is given more emphazise among the other issues like
health, microfinance and the least importance is given to livelihood promotion. The spending
pattern of the public sector companies for the environment issues should be really
appreciated. women issues also should be still focused.

From the above figure it is inferred that the public sector’s CSR had attained a
maturity level where as other private sector undertakings CSR policy is still growing.

Considering the above figure all the firms need strong policies to be framed by the
government and another important criteria is companies want less monitoring and
regulation.

54 
 
 The firms consider goodwill as the main boon obtained from their CSR activities. The
multinational companies perceive branding as a main advantage where they differ from
others.

Benefits of CSR
CSR is very beneficial to both the organization and the society. Some of them are
presented below
i) Improved Financial Performance: An recent study has found that stake holder
balanced companies showed four times the growth rate and eight times employment
growth, when compared to companies that focused only on shareholders and profit
maximization.
ii) Enhanced Brand Image and Reputation: A company considered socially
responsible can benefit both by its enhanced Reputation with the Public as well its
reputation within the business.
iii) Increased sales and customer loyalty: A number of studies have suggested a large
and growing market for the products and services of companies to be socially
responsible.
iv) Increased ability to attract and retain employees: Companies perceived to have
strong CSr commitments often found it easier to recruit employees particularly in
tight labour markets. Retention levels are higher too.
v) Reduced Regulatory oversight: Companies that demonstrate that they are
engaging in practices that satisfy and go beyond regulatory compliance requirements
are given less scrutiny and more free reign by both National and Local Government
Entities.
vi) Easier access to Capital: It is clear that companies addressing ethical, social and
environmental responsibilities have rapidly growing access to capital that might not
otherwise have been available.
vii) Case studies of CSR in India: The corporate social responsibility of Indian
companies is illustrated with the following cases.

CANON India
As a responsible business, Canon India takes pride in being socially inclined and
focuses on sustained and effective CSR projects. The three core areas that Canon India
supports are Eye Care, Education and Environment. The CSR policy aligns with the
corporate philosophy of Kyosei, which means living and working together for common good.
Our employees are encouraged to volunteer their time and skills and enjoy the experience of
giving back to the communities in which their work.To make a long term and sustainable
impact in the core areas supported by iCare, CSR at Canon India has adopted a village to
develop and strengthen Eye Care facilities and Education in the community. Ferozpur
Namak village is situated in Mewat district, Haryana. The implementing partner for the
project is CAF India with direct support in the village from NGO SARD and ICARE Hospital
in Noida. The three core projects that will be undertaken in the village are:

55 
 
 (i) Set up of a Vision Center
(ii) Supporting the local Government School

Today's buzzword, Corporate Social Responsibility or CSR has been part of the Tata
Group ever since the days of Jamshetji Tata. Even while he was busy setting up textile
ventures, he always thought of his workers' welfare and requirements of the country. From
granting scholarships for further studies abroad in 1892 to supporting Gandhiji's campaign
for racial equality in South Africa to giving the country its first science centre, hospital and
atomic research centre to providing relief and rehabilitation to natural disaster affected
places - they have done it all.

TATA Group of Companies

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. Ages ago when Corporate Social
Responsibility was either the government, or charitable organisations headache, the Tatas
aggressively worked for the upliftment of the community. Tata initiated various labour
welfare laws, like the establishment of Welfare Department was introduced in 1917 and
enforced by law in 1948 or Maternity Benefit was introduced in 1928 and enforced by law in
1946. Further, different Tata companies have been actively involved in various social work.
Like Tata Consultancy Services runs an adult literacy programme, Titan has employed 169
disabled people in blue collar workforce at Hosur, Telco is fighting against Leprosy at
Jamshedpur, Tata Chemicals runs a rural development programme at Okhamandal and
Babrala, Tata Tea's education programme and Tata Relief Committee (TRC) which works to
provide relief at disaster affected areas.

Conclusion
CSR is so important to both the country and the company. In any society there is one
section that makes huge profits and richer than the rest which leads to disparity. Over a
period of time it has been witnessed that corporations die out if they do not support the
masses. Compared to western world our rural masses are still suffering without even the
essential needs like education and health. It is a high time for the corporate to join hands
with our government in rendering their services to the people of our country, then only we
can achieve “Inclusive growth”.

Reference
Adnan Safi and Muhammad Ismail Ramay(2013), Corporate Social Responsibility and
Consumer Behavior: A Study from Pakistan, Information Management and Business
Review Vol. 5, No. 4, pp. 194-202, April 2013 (ISSN 2220-3796).
Bangera, L.C: Entrepreneurial Role in Nursing Sick Units.the financial Express,August 26,
1980.

56 
 
IBM Launches Leadership Programs for Women. The Economic Times dated November 10,
2011.
IBM to Increase Leadership Pool of Women Professionals by 20% in Tech & 15% in Sales
Dept. The Economic Times dated November 10, 2011.
Iza Gigauri (2012), Impact of Corporate Social Responsibility on Consumer Purchase
Decision, American-Eurasian Journal of Scientific Research, 7 (5): 2012 ISSN 1818-
6785, pp. 207-211.
More Women Leaders, Better Corporate Social Responsibility. The Economic Times dated
November 22, 2011.
Muhammad Adnan Khurshid, Omair Mujahid Malik and Ahmed Ali Soliman(2013),
Corporate Social Responsibility Awareness: An Exploratory Study among MBA
Students International, Journal of Arts & Sciences (IJAS) Conference for Academic
Disciplines, Harvard University, USA, 26-30 May 2013.
Women Matter 2: Female Leadership, A Competitive Edge for the Future. McKinsey &
Company.
www.canon.co.in
www.tata.in

57 
 
 CORPORATE SOCIAL RESPONSIBILITY PLANNING AND STRATEGY

LUDA JOYCEE
Introduction
Corporate social responsibility (CSR) The Company must act responsibly, and criteria
for social responsibility must be adopted to contribute toward consolidating better companies
not only in social terms – that is, companies which are more useful to society – but better
companies in purely economic terms – that is, better quality, more efficient, more competitive
companies.

Purpose of CSR
The needs of current and future generations require respect for natural resources and
the development of standards to protect environmental and social values. The role of the
business sector is critical to the achievement of this goal. Addressing common problems is in
business' best interest as they will require a health operating community. This requires
corporate social responsibility considerations. The proper understanding of CSR means that
companies need to work with stakeholders affected by a business decision. This will result in
the development of economically viable products that will help to improve social conditions
and environmental protection. Companies risk tarnishing their name or their brand if they
fail to achieve positive performance or engage in questionable behavior.

CSR Planning
When CSR activities are being planned at a new or existing foreign site, the first step
is to take stock of the situation. The company’s CSR-relevant principles and values, as well
as the applicable guidelines and systems, need to be adapted to local circumstances. Each
country’s specific conditions, the needs of the various stakeholders, and local cultural and
socioeconomic characteristics must be considered.

Strategic Plan for Corporate Social Responsibility

The principal goal of the Strategic Plan for Corporate Social Responsibility is to
establish some management directives to guarantee certain ethical principles, respect for
people and for the environment.

The specific objectives that have been established in the Strategic Plan for Corporate
Social Responsibility coincide with the strategic lines defined:
1. Minimize the environmental impact.
2. Guarantee transparency with the investment community.
3. Ensure that employees are motivated and involved in the continuous improvement of
the company.
4. Maintain a close relationship with the client to guarantee client satisfaction.
5. Extend the commitment to Social Responsibility to suppliers and sub-contracted
companies.
6. Involvement with the community and the society as a whole.

58 
 
 7. Encourage and systematize communication channels.
8. Guarantee that the implementation of the Strategic Plan for Corporate Social
Responsibility is controlled and monitored.
Strategic Line 1: Minimize Environmental Impact
 Identify and evaluate the activity’s main environmental impacts.
 Establish improved objectives to reduce the activity’s environmental impacts.
 Maintain a register of environmental legislation that affects the activity and
guarantee that it is complied with and kept up to date.
 Systematically control water and energy consumption and the production of residues.
 Manage residues appropriately.
 Optimize energy consumption.
Strategic Line 2: Guarantee Transparency with the Investment Community
 Comply with the rules on transparency and adopt the recommendations from the
Code and Report.
 Guarantee two-way communication with the investment community.
 Have a system for the evaluation, application and monitoring of opinions and
demands from the investment community.
Strategic Line 3: Ensure that Employees are Motivated and Involved in the
Continuous Improvement of the Company
 Increase the representation of women.
 Ensure employment of disabled personnel.
 Value the training needs of all personnel and prepare an annual training program
that includes issues of Corporate Social Responsibility in the training sessions.
 Provide training to new employees on the commitments to Corporate Social
Responsibility.
 Develop a system of management by objectives.
 Develop a system to encourage employee participation through suggestions.
 Guarantee coherence, equal opportunities and no discrimination.
 Protect the stability of the workforce.
 Evaluate the level of employee satisfaction.
 Adopt the necessary measures (ergonomics in space, material, equipment, etc.) to
guarantee a good work environment.
 Ensure basic health, safety and accident prevention measures are taken.
 Encourage good environmental practices at home amongst employees.
 Prepare an employee’s code of ethics.
Strategic Line 4: Maintain a Close Relationship with the Client to Guarantee
Client Satisfaction
 Evaluate the level of client satisfaction.
 Communicate all information about a product or service offered clearly and
transparently.
 Encourage good environmental practices amongst clients.

59 
 
Strategic Line 5: Extend the Commitment to Social Responsibility to Suppliers and
Subcontracted Companies
 Homologate product supplies based on established environmental and social criteria.
 Include requisites, based on established criteria, in the contractual agreement.
 Establish a system for evaluating suppliers and subcontracted companies, based on
criteria established in the previous point.
Strategic Line 6: Involvement with the Community and Society as a Whole
 Develop a system of communication to improve dialogue with the local community.
 Be an active member of associations and groups with a close relationship.
 Prepare a Sponsorship and Social Action Plan and a Sponsorship manual.
Strategic Line 7: Encourage and Systematize Communication Channels
 Develop a communication plan to make all interested and potentially interested
parties aware of the Strategic Plan for Corporate Social Responsibility, so as to
contribute to its implementation.
 Increase contents of information on Social Responsibility in the existing
communication channels.
 Create, within each company, two-way communication channels with employees.
 Establish a program of social activities for employees.
 Create a working group to encourage dialogue with employees.
 Ensure that each company has a formally established system to collect queries and
suggestions from clients, as well as mechanisms to respond, monitor and record them.
 Create incentives within subsidiary and associated companies to encourage dialogue
with interested parties (employees, clients, local community).
Strategic Line 8: Guarantee that the Implementation of the Strategic Plan for
Corporate Social Responsibility is Controlled and Monitored
 Appoint a leader of the Strategic Plan for Corporate Social Responsibility in each of
the subsidiary and associated companies.
 Update the data for the indicators with the frequency established in each case.
 Report the results of the indicators for each company to the Social Responsibility
Unit, so that they can prepare the triple bottom line.
 Evaluate the impact of implementing the Strategic Plan for Corporate Social
Responsibility.
 Create a platform for the Strategic Plan for Corporate Social Responsibility.

Conclusion
The impact of a company’s action on society Requires a manager to consider his acts
in terms of a whole social system and holds him responsible for the effects of his acts at all
levels in that system. Business has an obligation to society which extends beyond economic
and legal duties Described as one of the most important social movements of our time.

60 
 
References
Ashwani Singla and Prema Sagar (2004). Trust and Corporate Social responsibility: Lessons
from India. Journal of Communication Management, Vol. 8(3), pp.282.
Balasubramanian, N.K, (2003). CSR as an Instrument of Global Competitiveness, IIMB
Management Review, Dec, pp. 61-7
Bhattacharya, C.B., Sankar Sen and Daniel Korschun (2008), "Using Corporate Social
Responsibility to Win the War for Talent," MIT Sloan Management Review, 49 (2), 37-
44; "The Good Company". The Economist. 2005-01-20. Retrieved 2008-03-07.
Gopal K. Kanj, Parvesh K. Chopra (2010), "Corporate Social Responsibility in a Global
Economy." Routledge

61 
 
 ROLE OF CSR IN SOCIAL DEVELOPMENT
Dr. C. THILAKAM AND S.MAHADEVI

Introduction
Corporate social responsibility (CSR) is a form of corporate self-regulation integrated
into a business model. It is also called as corporate conscience, citizenship, social
performance, or sustainable responsible business. CSR policy functions as a built-in, self-
regulating mechanism whereby business monitors and ensures its active compliance with the
spirit of the law, ethical standards, and international norms. The goal of CSR is to embrace
responsibility for the company’s actions and encourage a positive impact through its
activities on the environment, consumers, employees, communities, stakeholders and all
other members of the public sphere. Furthermore, CSR-focused businesses would proactively
promote the public interest by encouraging community growth and development, and
voluntarily eliminating practices that harm the public sphere, regardless of legality. CSR is
the deliberate inclusion of public interest into corporate decision-making that is the core
business of the company or firm, and the honoring of a triple bottom line: people, planet,
profit.

Corporate Social Responsibility in India

Corporate Social Responsibility (CSR) is the soul of every business these days. It has
also become the password to not only overcome competition but to ensure sustainable
growth. It been supported not only by the shareholders but stakeholders by and large
encompassing the whole community. CSR in truth is the alignment of business operations
with social values. It into account the interests of stakeholders in the company's business
policies and actions. It focuses on the social, environmental, and financial success of a
company - the so-called triple bottom line - with the aim to achieve social development while
achieving business success. More importantly, CSR is the point of convergence of various
initiatives aimed at ensuring socio-economic development of the community which would be
livelihood oriented as a whole in a credible and sustainable manner. There does seem to be a
glimmer of hope from the rapidly growing field of CSR and from the greater involvement of
companies in providing private funds for relief.

Role of CSR
India is widely regarded as a country in which corporate social responsibility has long
played an important role. National and international nongovernmental organizations and
UN agencies are involved in the public debate in the business community and the media.
However, the involvement of the business community is concentrated among a few long-
established family-owned companies that contribute a significant amount in the field of CSR,
in both theory and practice. The Indian subsidiaries of German companies are bound by their
parent companies’ guidelines for socially responsible behavior, but how these guidelines
are actually implemented is left up to each subsidiary. Their CSR activities focus on their
employees (providing training and improving social security), the environment and aid

62 
 
efforts within India or in the region, which are currently concentrating on providing help to
tsunami victims. Public policymakers are seeking to achieve inclusive and sustainable
growth, and calling on private enterprise to contribute its share. There is no evidence of CSR
activities in the informal sector of the Indian economy, which is responsible for slightly less
than half of GDP and employs some 93 percent of India’s workforce. Indeed, workers in this
sector are afforded no rights or protections whatsoever, and all indications are that no efforts
are being made to fight poverty, promote education or health, protect the environment or
encourage employee participation in business development. The UN Global Compact seeks to
promote the CSR activities of businesses in India. However, it has not succeeded in involving
important NGOs, or most importantly, the unions. The UN Global Compact is not well
known within the business sector or the NGO community. For some time now, German
development organizations (GTZ, InWent) have been cooperating closely with the country’s
important trade associations. The Indo-German Chamber of Commerce has developed its
own approach to CSR, and provides conceptual and advisory support for German companies
in India.

While CSR is not at the top of the agenda of German political foundations, some of
them are starting to devote more attention to this area. The German government,
represented by the Ministry of Labor, is working to achieve greater international cooperation
on CSR under the Heiligendamm Process, which includes India as one of five outreach
countries. Talks have been held in the context of a formalized partnership between Germany
and India. Representatives of the German business community meet with embassy officials
at least once a year, during their monthly business lunches, to discuss CSR.

Growing Importance of CSR

Corporate social responsibility (CSR) is the responsibility recognized by the
companies for acting in socially responsible manner. There is no single universally accepted
definition of corporate social responsibility, it has generally come to mean business decision
making linked to ethical values, legal compliance, and respect for people, community, and
environment. CSR expects a company to go further than required by law so as to:
 Treat employees fairly and with respect
 Operate with integrity and in an ethical manner in all its business dealings with
customer,
 suppliers, lenders, and others
 Respect human rights
 Sustain the environment for future generations
 Be a responsible neighbor in the community and a good ‘corporate citizen’.

Occupational welfare and corporate community welfare or corporate social

responsibility (CSR) are of growing importance to governments and service providers as they
promise to meet challenges of social problems within changing welfare environments. The
modern governments have increasingly Maratha Mandir’s Babasaheb Gawde Institute Of
Management Studies resorted to corporate involvement in local services and have also

63 
 
encouraged the expansion of occupational welfare. Over the last twenty years an increasingly
large number of business houses have responded positively to the banner of CSR. This has
perhaps been partly due to their aspiration to make their operations more ethical. While for
the government, the role the businesses can play in the development of society is quite
crucial, the activist community might like to take credit for the growing importance of CSR
as a clear victory for their efforts in pressurizing the activities of companies. To put the same
in other words, companies introduced CSR reports and programs as a response against
damage inflicted on their sale and reputation by attacks from activist groups who aided by
24 hour news media in which corporate wrongdoing has been especially highlighted. While
on the one hand this makes compelling news, it puts an ethical pressure on the companies to
give back at least a part to society in return what they have gained from it. It is therefore, no
longer important for companies to just make profit, the way this profit is generated is deeply
investigated by the activists. A company must not be seen violating ethics or law in any of
the areas like market behavior, trade policies, employment relations, sourcing of raw
materials, human rights, environmental laws or the activists would put pressure on them
through media or the other channels. This analysis however fails to appreciate much of the
social contributions businesses have been making since long back. The companies may either
include CSR report in their annual report and accounts or may publish their separate
corporate responsibility report which may be called a ‘social and environmental report’ or a
‘sustainability report’. These reports indicate a company’s commitment toward ethical
behavior and highlight their progress towards achieving their strategic CSR objectives.
Increasingly more and more companies have begun to incorporate ethics and CSR in their
strategic planning and objectives. Many large companies have adopted formal environmental
policies with the objectives of creating a sustainable business and being environment
friendly. For instance, a company that uses large quantities of timber as raw material might
adopt a policy of re-forestation to replace the trees they have cut down.

Benefits of CSR
 Win new business.
 Increase customer retention.
 Develop and enhance relationships with customers, suppliers and networks.
 Attract, retain and maintain a happy workforce and be an employer of choice.
 Save money on energy and operating costs and managing risk.
 Differentiate yourself from your competitors.
 General innovation and learning and enhance your influence.
 Improve your business reputation and standing.
 Provide access to investment and funding opportunities.Maratha Mandir’s Babasaheb
Gnawed Institute Of Management Studies
 Generate positive publicity and media opportunities due to media interest in ethical
business activities.

64 
 
CSR Importance and its Relevance Today
The amount of information available to customer about the company, product, brand
globally through easy accessible and available mode of information; internet, communication,
customer wants to buy product from trusted brand, employee want to work for the company
who respect them, NGO’s want to work with company who work with the same vision for the
benefit of the people. As said by Peter Duker “The 21st century will be the century of the
social sector organization. The more economy, money, and information become global, the
more community will matter.” (Corporate watch report, 2006).According to strategic
corporate social responsibility by William B. Werther, David Chandler there is three trends
which are going to have importance in future are:
 Increasing Affluence: Customer from elite level can afford to buy and pay more for
premium brand but the poor customer might not be willing to pay so much for brand,
instead they would prefer to spend their money on business which can take their
business to much better level.
 Changing social expectation: Its natural that customer expect more from the
company whose product they buy but with recent controversy and scandal of company
has reduced the trust and confidence in the regulatory body and organization which
manage the corporate.
 Globalization and free flow of Information: With growing trend of media and
easy access to information through mobile, TV even the minor mistake of the company
is brought in public in no time, this sometime fuels the activist group and likeminded
people to spread message which can lead to situation like boycott of the product.

There can be few key steps to implement CSR successfully (Corporate Social
Responsibility, 2014)
 Better communication between top management and organization
 Appoint for CSR position.
 Good relationship with customer, supplier, stakeholder.
 Annual CSR audit.
 Feedback process

CSR and Brands

Brands are the way to success for a business. The sales and revenue of the company are
widely dependent on the brand they give to customer. Few of the traits which affect the
brand are
 Positive Marketing/ Brand Building - Times of India (kalingatimes.com) “Lead
India Campaign” by Time of India is perfect example for brand building through CSR.
This was the brought by times of India to bring about change in society. It was more of
business/brand building strategy than CSR. Such activities knowingly or unknowingly
prepare an image in mind of viewers and hence building image.
 Brand insurance - NIKE (Corporate Social Responsibility, 2014) NIKE has emerged
as one of the most progressive global corporations in terms of CSR because it has

65 
 
 learned from its past mistakes and attacks by NGOs. As one of the first corporations to
have a Vice-President for Corporate Responsibility and to publish an annual CSR
Report, the company has done a lot to mitigate public opinion, establish its brand as
representative of a much more committed corporate citizen, and ‘insure’ itself against
any repeat of the consumer boycotts it faced in the mid-1990s.

Conclusion
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 good and get self satisfaction in return as well as
societal obligation of business.

CSR can play a valuable role in ensuring that the invisible hand acts, as intended, to
produce the social good. In addition, it seems clear that a CSR program can be a profitable
element of corporate strategy, contributing to risk management and to the maintenance of
relationships that are important to long-term profitability. It can be concluded that in today’s
informative world where information are readily available to general public CSR has been an
important part of any organization to be successful. Organization in present world cannot be
successful without taking into account the social responsibility. CSR has been a vital
component for any organization to have perpetual success and to create brand.

References
Brown K (2001), "Corporate Social Responsibility: Perceptions of Indian Business", in Mehra
M (Ed.), Retrieved from www.csmworld.org/ public/pdf/social_respons.pdf (Accessed
February 10th 2011)
Charities Aid Foundation (http://www.cafindia.org/): CAF India provides strategic and
management support to corporates, individuals and PSUs in order to ensure greater
impact of their philanthropic and CSR investments.
GiveIndia (http://www.giveindia.org/): GiveIndia is a donation platform that allows
companies to support a cause of choice from about 200 NGOs that have been
scrutinised for transparency and credibility.
http://www.chillibreeze.com/articles_various/CSR-in-India.asp.
Krishnan, S. (2001). “Corporate social responsibility: How and why in India”, Retrieved from
http://www.coolavenues.com/know/ m/corporate_ citizenship.php3 (Accessed February
10th 2011)
Oxfam India (http://www.oxfamindia.org/): The Oxfams are rights-based organisations that
fight poverty and injustice by linking grassroots programming (through partner
NGOs) to local, national and global advocacy and policy-making.

66 
 
Voluntary Action Network India (http://www.vaniindia.org/): Voluntary Action Network
India works towards building a society where voluntarism and voluntary
organisations play a dominant role in social cohesion, economic empowerment and
nation-building.
www.k4d.org/Health/sustainable-development-challenges-and-csr-activities-in- india.

67 
 
 A STUDY ON CORPORATE SOCIAL RESPONSIBILITY AND USAGE OF PLASTIC
BAGS IN SMALL AND MEDIUM SIZE RETAIL BUSINESS IN MADURAI

KUMARAN THAYUMANAVAN

Introduction
India consumes around five million metric tonnes of plastic products every year. Of
this, plastic bags alone form a large part.Four to five trillion plastic bags are manufactured
each year and only 1% of the plastic bags are recycled. It takes 1000 years for polyethylene
bags to break down and this leaches toxic substances that enter the food chain. Plastic bags
are often mistaken as food by marine mammals and 100,000 marine mammals die a painful
death as the plastic wraps around their intestines or they choke to death. The chemical
elements in the formulation of additives can harm the environment. Furthermore, their use
can also lead to other types of environmental harm, for example, small plastic fragments
resulting from the decomposing process are easily carried by air to rivers, lakes, seas, major
thoroughfares, cultivations and forests causing considerable damage, ranging from the
blocking of plumbing and river drainage systems to the death of animals who choke on
plastic fragments found in the environment (ACMINAS, 2011).Plastic bags therefore are the
single largest urban impact on the environment. This is the reason why the UN is also
proposing a global plastic bag ban - the result would be monumental. According to the
survey, 80% of plastic bags are used only once and then thrown away. They are usually re-
used for storing domestic waste. Every month, Month retailers distribute a billion plastic
bags to their consumers.

Therefore, Green marketing, therefore, is now in focus. Its main objective is to make
people and organizations aware of environmental issues by using marketing strategies.
Environmental marketing or green marketing encompasses all activities developed to
generate and promote trade in order to satisfy the needs and desires of consumers, provided
that they cause the least amount of negative impact on the environment.

Tamil Nadu is determined to carry forward its fight against use of low quality plastic,
considered an environmental hazard. One of the first states to ban use of plastic less than 40
microns thick, Tamil Nadu is now gearing up to ban use of plastic with a thickness of less
than 60 microns. Legislation is in the offing to enforce the new standard. Only in February
2011, the Centre banned use of plastic with less than 40 microns across the country. At least
4,000 tonnes of carry bags and throwaway plastics are manufactured in the state. A
notification issued by the Union ministry of environment and forests in 2011 banned use of
plastic sachets for storing, packing or selling tobacco and pan masala. Rules are never
implemented. Unlike tourist spots like Ooty or Mammallapuram, plastic carry bags with less
than 15 or 20 microns are freely available in the market.Importantly, there are also no
environmental benefits to banning plastic bags, but there is potential harm. Compared to
cloth bags, plastic bags require less energy to produce and less energy to recycle and produce

68 
 
less municipal waste. Plastic bags generate fewer greenhouse gas emissions and require less
water to produce than paper bags. Cloth bags need to be used 104 times before there is any
environmental advantage over plastic bags. But most cloth bags are used half that amount.

Problem Statement
Awareness of corporate responsibility is rising and the understanding of the term is
moving away from just charitable donations to include environmental matters, health and
safety, ethics and other considerations. The use of plastic carrier bags by retailers has been a
subject of debate in many states in India.It is about time retailer start thinking of an
outright ban on plastic bags as a step in the direction if positive CSR. The retailer should
show an increased sense of responsibility towards their people, the environment and the
wider community.

Objective of the Study

 To investigate Small and Medium Size retailer’s attitude towards the distribution of
Plastic bags in Madurai district
 To deepen the conceptual understanding of corporate social responsibility (CSR) and
retailer’s underlying motivations to engage in CSR
 To find out whether retailers in the Madurai are willing to change their purchasing
behaviour to reduce negative impacts on the environment.

Review of Literature and Hypothesis Development

At the individual level, CSR has been constructed by Ackermann (1975) as
managerial discretion. According to this view managerial actions are not fully defined by
corporate policies and procedures. So although managers are constrained by their work
environment they nonetheless have to weigh the moral consequences of the choices they
make. The view of CSR is strongly anchored in the business ethics literature (Jones, 1991;
Donaldson &Dunfee, 1994; Crane &Matten, 2003).

With Freeman’s (1984) seminal book the focus moved from legitimacy and morals
towards a new theory of the firm. Social considerations are thus no longer outside an
organization but are part of its purpose of being. CSR thus becomes a question of stakeholder
identification, involvement, and communication (Mitchell, Agle, & Wood, 1997; Morsing&
Beckmann, 2006; Morsing& Schultz, 2006).

Conventional plastic bags, also known as oxo-biodegradable, are used to carry

shopping from supermarkets. They emerged in the 1950s in the United States and arrived in
Brazil in the 1980s, substituting paper bags, previously used for this purpose (AMIS,
2011).Conventional plastic carrier bags are widely used by retailers in most of Brazil. They
are produced using polyethylene, a substance derived from oil and oxidizing additives. They
take approximately 400 years to decompose in the soil (PORTALPBH, 2011).

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 The following hypothesis was formulated based on the review of literature.
H1 Type of Retailer and the demand raised by the customers for Plastic Bags
H2 Educational Qualification of the respondents and the awareness level towards
Government rules and regulation.
H3 Age of the respondent and the Ban of Plastic Bag.
H4 Years of Existence and avoiding the Plastic Bag in Future

Research Methodology
A quantitative approach was used in this research and the research is descriptive in
nature.

Measurement and Scaling

The conceptualization and development of the questionnaire was based on the
existing literature. A typical 5-point Likert scale was used to measure the constructs
presented in the proposed model. The survey instrument was refined during a pilot study to
ensure the internal consistency of the measured instrument, with the involvement of 10
respondents.

The questionnaire contained 37 items in total. The first part of the instrument
contained six questions about demographics of the respondents such as, age, education, type
of retail outlet etc. The second part of the questionnaire contained six questions about
characteristics of the retailers and third part of the questionnaire contains three items
regarding CSR and Fourth Section included 22 items, which contained CSR (8 items),
Retailer’s Attitude (4 items) Environmental Hazards (3 items) and Plastic Bag and Retailer
(7 items).

The questionnaires were administered by personal delivery. Convenience sampling

approach was adopted in order to collect the primary data and it took a period of 15 days for
the entire collection of data. The individuals targeted for the collection of data for this
research project were the owner / employee of Textile, Jewellery, Grocery, Book, snacks and
Bakery retailers and Small and Medium Size Hotels, in Madurai District.

During a fifteen days period, 107 respondents completed the survey. Seventeen
responses were discarded due duplicate submissions or incompletion, a net sample of 90 (Size
is determined based on the sample standard deviation) usable questionnaires was used in
this study.

Tools Used
For the purpose of data analysis, statistical package for social sciences (SPSS) version 20
was used. Percentage analysis and Chi Square test were used to check the relationship
between two variables.

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Analysis and Discussion
 30% of the retailers established their business in between 15 and 20 years followed
by 23.3% of the respondent’s established their business in between 10 and 15 years.
 Most of the respondents (24.4%) are between 36 and 40 years of age andabove 41
years.
 Majority of the respondents (21.1) are studied up to HSC followed by 21% of the
respondents are graduates.
 35.6% of the retail outlets are located inside the shopping complex followed by 22% of
the outlets are located along the roadside in Madurai district.
 27.8% of the retail outlets are having two employees followed by 23.3% of the
retailers having three employees.
 16.6% of the respondents are equally selected from Textile, GroceryRetailer, Book
Retailer, Snacks& Bakery, Hotel and Jewellery retailers in Madurai district.
 When respondents are asked how you woulddefine corporate responsibility, Majority
of the respondents informed (36%) that they are conducting business in an ethical
and professionalmanner, followed by 30%providing a safe working environment for
employees, 24%, giving donations to charity 10% informed that they are taking
initiatives to reduce the company’s impact onthe environment.
 53% of the retailers stated that they have been questioned by regulators about their
impact on the community and on the environment.
 Majority of the respondents informed that they are notgiving a lot of importance to
CSR.
 Overall retailers were positive about the implementation of the ban if the
government offer alternative solution at the same cost.
 66% of the retailer thought that a total ban on plastic bags is unrealistic; and18%
declined to answer this question for various reasons.
 Majority of the retailers informed that even though these are called single use Plastic
bags, consumers use plastic bags more than once.
 The retailers are concerned with environmental issues and are willing to change
their behaviour in view of the introduction of substitution of conventional plastic
bags by compostable carrier bags.
 Another important finding is that very few consumers claimed they had changed
their consumer habits due to the new legislation and decided to adopt other measures
instead of using conventional carrier bags to transport their shopping.
 Very few respondents stated that they started to value green products more after the
law relating to compostable bags was introduced and they also believe that this new
law may have a positive effect on the environment.

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Chi-square Test Results
Table I: Chi Square Test results
No. Hypothesis Results Reasons
Type of Retailer and the demand Chi Square results, df value = 20,
H1 raised by the customer for Plastic Supported Asymp. Sig. (2-sided) = 0.006
Bags
Educational Qualification of the Chi Square results, df value = 20,
respondents and the awareness Not Asymp. Sig. (2-sided) = 0.250
H2
level towards Government rules and Supported
regulation.
Age of the respondent and the Ban Not Chi Square results, F value = 20,
H3
of Plastic Bag. Supported Asymp. Sig. (2-sided) =0.979
Years of Existence and avoiding the Chi Square results, F value = 16,
Not
H4 Plastic Bag in Future Asymp. Sig. (2-sided)=0.958,
Supported

The above Table I shows the results of chi-square Test for four hypotheses. Three of
the four hypotheses were not supported by the data, consistent with previous literature in
most cases. In the cases, Retailer’s type has relationship with the demand raised by the
customer for plastic bag.There is no relationship between Educational Qualification of the
respondent and the awareness level towards Government rules and regulation,Age of the
respondent and the Ban of Plastic Bagand finally there is no relationship between Years of
Existence and avoiding the Plastic Bag in Future.

Table II: Corporate Social Responsibility

CSR SD D NA/DA A SA
CSR needs to be strongly promoted by government 12.2 20.0 26.7 27.8 13.3
I am aware of government rules and regulation regarding 23.3 24.4 28.9 17.8 5.6
Responsible businesses go beyond what is required by law 8.9 14.4 13.3 52.2 11.1
CSR encompasses a set of activities retailer carry out 24.4 24.4 25.6 16.7 8.9
CSR is primarily motivated by public relations or 10.0 23.3 22.2 23.3 21.1
CSR is important to us 6.7 14.4 16.7 33.3 28.9
Do you pledge to support the Tamilnadu government aim 11.1 20.0 44.4 14.4 10.0
CSR is a resource intensive and costly concept 10.0 10.0 24.4 44.4 11.1

Table II shows the Perception of Respondents for Dimensions of Likeability for CSR.
It is clear that 27.8% of the retailer agreed that CSR needs to be strongly promoted by
government authorities. 28.9% of the retailer neither agreed nor disagreed that they are
aware of government rules and regulation regarding the rules for plastic bags. 52.2% of the
retailer agreed that the businesses should go beyond what is required by law to make a
positive impact on society and the environment. 25.6% of the retailer neither agreed nor

72 
 
disagreed that the CSR encompasses a set of activities retailer carry out independently of
their daily business operations. 23.3% of the respondents agreed and disagreed that CSR is
primarily motivated by public relations or marketing considerations. 33.3% of the retailer
agreed that CSR is important to them. 44.4% of the respondents neither agreed nor
disagreed to support the Tamilnadu government’s aim to reduce the use of plastic shopping
bags within the district. 44.4% of the retailer agreed that CSR is a resource intensive and
costly concept.
Table III: Retailer’s attitude towards CSR
Retailer’s Attitude SD D NA/DA A SA
If single-use plastic carryout bags were banned, it will 11.1 20 18.9 23.3 26.7
i act to o b i e
CSR can lead to an increase in profits 27.8 18.9 37.8 8.9 8.9
Do your employees ask customers whether they would 46.7 22.2 13.3 8.9 8.9
I thought of using alternatives instead of plastic bag 24.4 8.9 23.3 31.1 12.2
Table III shows the retailer’s attitude towards Plastic Bags. It is clear that 26.7% of
the respondents strongly agreed that if single-use plastic carryout bags were banned, it will
impacts their business. 37.8% of the respondents neither agreed nor disagreed that CSR can
leads to an increase in profits. 46.7% of the respondents strongly disagreed with the
statement that do your employees ask customers whether they would like a single-use plastic
carryout bag. 24.4% of the retailer strongly disagreed with the statement that I thought of
using alternatives instead of plastic bag.
Table IV: Environmental Hazards
Environmental Hazards SD D NA/DA A SA
I know very well that use of plastic bags will harm the 11.1 11.1 24.4 22.2 31.1
Birds and animals are suffering due to the consumption 10 10 18.9 40 21.1
I agree that the Plastic bags are the major threat to 10 14.4 27.8 33.3 14.4

Table IV shows the awareness level of environmental hazards caused due to Plastic
Bags. It is clear that most of the respondents (31.1%) strongly agreed thatthey know very
well that use of plastic bags will harm the environment. 40% of the respondents agreed that
Birds and animals are suffering due to the consumption of plastic bag. 33.3% of the
respondents agreed that the Plastic bags are the major threat to environment.
Table V: Plastic Bag and the Retailer
Plastic Bag and the Retailer SD D NA/DA A SA
I will consider the size of plastic bag before purchasing it 23.3 25.6 20 17.8 13.3
I thought of avoiding plastic bag in future 25.6 15.6 25.6 23.3 10
Have you thought of implementing price for carry bags 22.2 23.3 32.2 13.3 8.9
I am using plastic bag due to the demand raised by the 11.1 14.4 21.1 36.7 16.7
I will stop using plastic bag if government give 11.1 14.4 27.8 32.2 14.4
I will stop using plastic bag if consumer avoid it 8.9 10 16.7 43.3 21.1
I would like to see a total ban on the use of plastic bags 24.4 27.8 30 12.2 5.6

73 
 
 Table V shows the usage of Plastic bag and the retailer attitude towards it. It is clear
that 25.6% of the retailer disagreed that they will consider the size of plastic bag before
purchasing it. 25.6% of the retailer strongly disagreed that they thought of avoiding plastic
bag in future. 23.3% of the respondents disagreed with the statement that have you thought
of implementing price for carry bags. 36.7% of the respondents agreed that they are using
plastic bag due to the demand raised by the consumer. 32.2% of the respondents agreed that
they will stop using plastic bag if government give offer/alternative. 43.3% of the respondents
agreed that they will stop using plastic bag if consumer avoids it. 27.8% of the respondents
disagreed with the statement that they would like to see a total ban on the use of plastic
bags.

Conclusion
Banning plastic bags is not just the jurisdiction of government. It is also a retailer’s
responsibility and it is not just retail chains that need to make the effort. It is one of the
simplest CSR initiatives that can be undertaken. Just the act of charging customers for
plastic bags is going to see a dramatic reduction in the number of bags used.Retailer’s have
to develop new competitive strategies which take into account the changes that influence
consumers, be these personal, psychological or cultural, and within this context, they need to
consider consumers' greater awareness of the importance of preserving the environment.

Future Research
One of the suggestions for future research is to replicate this study in other areas of
the state which have banned the use of plastic carrier bags. It may also be interesting to
conduct this research in cities where similar laws have not been passed, so as to compare the
behaviour of consumers in these circumstances.

Reference
Dees, J. G., Emerson, J., & Economy, P. 2001b. Strategic Tools for Social Entrepreneurs:
Enhancing the Performance of Your Enterprising Nonprofit. New York: John Wiley &
Sons.
Dikgang, Johane and Martine Visser (2010), ‘Behavioral response to plastic bag legislation in
Botswana’, Environment for Development, Discussion Paper Series, Resources for the
Future, Washington DC,10 - 13.
Akullian, A., Caroline Karp, Kemen Austin, and Drew Durbin (2006), ‘Plastic bag
externalities and policy in Rhode Island’, Brown Policy Review Paper, Available at:
http://seattlebagtax.org/referencedpdfs/en-akullianetal.pdf
Cummings, Ronald and Laura O. Taylor (1999), ‘Unbiased value estimated for
environmental goods: a cheap talk design for contingent valuation method’, The
American Economic Review 89(3):649-665.
The Economist (2009), ‘India’s urban environment: heavy baggage ’,January 29th , available
at http://www.economist.com/node/13041382.

74 
 
Express India (2008),‘Plastic bags banned, blamed for Mahafloods’August 27, available
at:http://www.expressindia.com/news/fullstory.php?newsid=53482
Haoran,He (2010), ‘The effects of an environmental policy on consumers: lessons from the
Chinese plastic bag regulation’, Working Paper No. 453, University of Gothenburg,
Sweden.
Naryan, Priya (2001), ‘Analyzing plastic waste management in India: case study of polybags
and pet bottles’, M.Sc. Thesis Submitted to the University of Lund, Sweden.
Spivy, Angela (2003), ‘Plastic bags-prolific problems, ’Environmental Health
Perspectives’111(4):208.
The Energy Research Institute (2002), ‘Plastic waste management for Delhi’, Report
Submitted to Department of Environment, Government of Delhi, India.

75 
 
 IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON BUSINESS PERFORMANCE

MARIYA NATHALIE VANHALTREN

Introduction
CSR is concerned with treating the stakeholders of the firm ethically or in a
responsible manner. ‘Ethically or responsible’ means treating stakeholders in a manner
deemed acceptable in civilized societies. Social includes economic responsibility.
Stakeholders exist both within a firm and outside. The natural environment is a stakeholder.
The wider aim of social responsibility is to create higher and higher standards of living,
while preserving the profitability of the corporation, for peoples both within and outside the
corporation. In the refined CSR strategy set forth by the European Commission in 2011 as
well as in many past and recent scientific publications, a considerable focus is being set on
the benefits of CSR to the society as a whole. Consequently, much effort is being made to
promote CSR in all member states and companies of all sizes. Furthermore, member states
are not only asked to update their individual CSR strategies, but also to prepare for some
further regulatory intentions. Some business associations (e.g. the German Chamber of
Commerce and Industry) are rather hesitant to accept mandatory CSR requirements
promoted by the Commission, although the value and importance of CSR for society is
acknowledged, there is more and more awareness that CSR activities are not only merely of
charitable nature, but that they also contribute to a positive image of the company ,like to
increase employee and customer satisfaction as well as to other soft factors that need to be
taken into account when measuring business success. These developments consequently lead
to the question: Is it possible to measure the impact of CSR activities on business
performance; and if so, how? This Paper helps us in understanding latest trends in the field
of Corporate Social Responsibility and offers a possible way to measure its impact on
Business Performance on the basis of the stakeholder concepts.

Definitions
CSR (Carrol, 1979) Firms have responsibilities to societies including economic, legal,
ethical and discretionary (or philanthropic).

Social Contract (Donaldson, 1982; Donaldson and Dunfee, 1999) There is a tacit social
contract between the firm and society; the contract bestows certain rights in exchange for
certain responsibilities.

Stakeholder Theory (Freeman, 1984) A stakeholder is “any group or individual who

can affect or is affected by the achievement of an organization’s purpose.” Argues that it is in
the company’s strategic interest to respect the interests of all its stakeholders.

76 
 
 Figure: Activities of CSR Management

Business Performance - Definition and Measurement

a) Background: Business Performance was traditionally a topic that leaders of large
companies paid a good deal of attention to, because it gives vital information about the state
of the company, its success, development and future outlook. However, even though for large
companies it is inevitable to employ Business Performance Measurement Systems, which are
usually supported by Information Technology like Data Mining or Data Warehouse, Small
and Medium Sized companies traditionally lack well-performed strategies in this area.

Adaption of SMEs: All business processes eventually revolve around the target of
contributing to the success of the company in one way or another. While the term “success”
describes the positive effective overall turnout of a company´s activities, the term Business
Performance in itself is a neutral descriptive concept for the effectiveness and the efficiency
of the company´s actions in general or of certain parts or processes of the company in
particular. Business Performance can be characterized with attributes, for example as “well”
or “poor”, depending on the expectations of the individual. If Business Performance is weak,
managers need to intervene in order to return to the path of growth. Especially in a market
in which competition is increasing and globalization demands for better competitively,
business leaders need to pay close attention to Business Performance.

In the following figure displays the Business Performance of a company in relation to

its management, to the business strategy and to the company´s processes: It shows the two-
sided approach to Business Performance. On one hand, there is a normative relation on the
side of the company management (top-down relation). The leadership´s inherent
responsibility is to set out a Business Strategy in which Business Performance is defined:
Business Performance must meet or exceed the expectations of the leadership. On the other
hand, the bottom-up relation is a descriptive one: Measurement of Business Performance
through selected indicators shows the management if expectations are met and gives vital
information about necessary adjustments to the business processes that need to be made.

77 
 
The figure shows that both, normative definitions and descriptive measurements of Business
Performance must be made. Normative definitions of Business Performance are described
within the framework of Business Strategies. They include approaches such as Total Quality
Management (TQM) and Management by-strategies. Descriptive approaches to Business
Performance often focus on selecting indicators in order to show the status quo of the
business processes. However, newer developments in Business Strategies, such as the
Baldridge Performance Excellence Program and the EFQM model, include the descriptive
components already in its strategy model.

Figure: Business Performance in Business Architecture

Once indicators are selected, the peculiarities of the different indicators must be
identified and a predefined weighing executed in order to measure the current performance
of the company. Usually this is not only done once, but in a frequency that allows the
administration to evaluate possible improvements or deteriorations and to act upon them in
time. The auditing process can be done either internally or externally. Performance
Measurement Systems were described in 1995 as “the set of metrics used to quantify both
the efficiency and effectiveness of actions”. The measurement process can be done in an
automated way using information technology. Often large companies have the financial
ability and adequate human resources to purchase and to implement necessary IT
equipment, such as software programs like SAS or ORACLE. But SMEs frequently lack
these possibilities even though they would like to implement some kind of performance
management. For this reason it is inevitable to equip SMEs with easily-understandable
systems that contain indicators that are not too difficult to measure.

b) The EFQM model as a reference system: EFQM is an abbreviation of the non-profit

organization “European Foundation for Quality Management” and was founded in the year
1988 by the presidents of the 14 founding members, among them BOSCH, OLIVETTI,
VOLKSWAGEN, FIAT and ELECTROLU. The foundation is based in Brussels, Belgium and
has now more than 500 member organizations in more than 55 countries and 50 industries.
The intent of establishing this foundation was to provide for a European version of an

78 
 
excellent quality award based on the philosophy of Total Quality Management. The most
popular quality award at the time was the American Malcolm Baldridge National Quality
Award. Less known in western countries but popular in Asia was the Japanese Deming
Prize. The initial EFQM model relied to a large decree on the criteria and weighing of the
Malcom Baldridge Award. Significant new developments were the inclusion of a broader
stakeholder approach and the equal weighing of enablers and results. In the economic and
scientific communities of the European Union, the EFQM model soon achieved high
recognition and many non-profit organizations became members.

In May 2009 - and thus in the middle of the financial and economic crisis- the Board
of Governors of the EFQM Foundation formally requested an update of its Business
Excellence model. The EFQM Foundation states that its request for the update was
influenced by a variety of stakeholders such as members, assessors, partners, trainers,
learning networks and even EU representatives. Therefore, the revised model contains up-to-
date key drivers of Business Excellence. The changes also reflect the increasing awareness
for the need of sustainable economic and social performance.

In order to measure and compare business performance, criteria’s have been set up by
the EFQM and grouped into two main categories: Enablers and Results. Enablers represent
factors that help companies achieve their desired results. Excellent businesses have a
leadership that supports sustainable development, sets up a consistent strategy, works
effectively together with partners, makes use of resources in an optimal way and focuses on
people. Next to these factors, the processes, products and services are evaluated. On the
results side, not only classical key results like market share and growth, turnover and profit
are evaluated, but also soft factors like the impact of the business processes on its own
people, on the customers, and on society. Long-term-focused activities like corporate social
responsibility are to be considered as important as shareholder value and other rather short-
term-focused factors.

Figure: The EFQM 2010 Model

79 
 
 According to Serban and Ghentavii, the EFQM-model is used as a diagnostic model
and serves as a basis for an expansion that includes aspects of social and environmental
responsibility. Using this model, the companies learn to evaluate themselves and to measure
their own progress for continual further development. This is difficult to do in prosperous
times. It is more difficult to maintain this commitment in a time of rapid technological
innovation cycles; rising international competition; fundamentally changing processes;
frequent changes in the economic, social, and customer environment; and, last but not least,
in a time of financial or economic crisis.

Next to a simplification of terms, the weight given to each criteria was changed while
still carefully maintaining the equal value between the capacity of an organization, displayed
by the five “enablers criteria”, and the performance it delivers for its stakeholders measured
by the four “results criteria”. Capacity and performance each account for 50% of the total.
Figure 5 shows the new weighting percentages. While the criteria themselves have not
changed significantly, there have been some shifts in the underlying fundamental concepts.
In an analysis of the revised concepts, one can see that the content has been changed to
promote a more balanced and sustainable view of business culture and processes.

Figure: The EFQM 2010 Model

While some criteria and weighing of criteria was changed, the underlying structure of
the model was not altered. Based upon the well-known Plan-Do-Check-Act-cycle, the system
was named RADAR, an acronym for “Results, Approach, Deployment, Assessment and
Refinement. The RADAR system is a framework surrounding the actual EFQM criteria and
the evaluation process. Similar to the radar system in airplanes or water vessels its function
is the surveillance of a changing environment, with the aim of displaying possible negative
impacts and therefore prompting adjustments and changes of the system. Its components
constitute fundamental core principles that build the basis for all business processes, such as
achieving balanced results, adding value for customers and taking responsibility for a
sustainable future. All processes must contribute to the goals formulated in the fundamental
principles, and the RADAR system ensures that no detachment takes place. Figure 6 shows
the RADAR system graphically.

80 
 
 Figure: RADAR System Surrounding the EFQM Criteria

The EFQM model is becoming more and more popular, not only to evaluate and
manage quality, but also for other management aspects. It has gained international
recognition with a rising number of companies and institutions joining from non EU-
countries, such as countries of the Persian Gulf-region.

Corporate Social Responsibility – Historical and Current Developments

The European Commission defined CSR in 2006 as “A concept whereby companies
integrate social and environmental concerns in their business operations and in their
interaction with their stakeholders on a voluntary basis”. The individual actions of
companies undertaking CSR measures are voluntary and are until now not standardized.
Currently, there are voices demanding for legislation on the EU level that aim at raising
CSR activities onto a mandatory component of business activities. Proponents of this
requirement argue that companies play a vital role in society and therefore should contribute
to growth in social issues. Opponents to these demands hold that privately run companies
should not be held responsible for activities that should primarily be the domain of public
agencies and private initiatives. However, awareness of Corporate Social Responsibility is
not a new development. Concern for society and environment can be traced back to the
beginning of time. According to one of the oldest known written documents, the account of
Genesis by the biblical writer Moses, man was instructed by his Creator to “fill the earth and
govern it” (Genesis 1, 28), and is later challenged: “The LORD God took the man and put him
in the Garden of Eden to work it and take care of it” (Genesis 2, 15), thus implying a
balanced approach to using natural resources and exercising responsibility. During the
course of history awareness of social and environmental responsibility developed from
individual social and environmental concerns and led to the perception that also collectives,
such as profit-oriented businesses, need to partake in responsible activities that do not
necessary produce profits visible in the short run. In the ancient Codex Hammurabi,
excavated in Susa in 1902 and displayed today in the Louvre, Paris, a number of laws
address the responsibility businesses carry for the effects of their products and processes on
customers and citizens: For example, if a property developer would build a house that

81 
 
collapses later because of faulty statics and thereby causes the death of occupants, severe
punishment would be due. Hammurabi’s crowning took place around 1800 B.C., and similar
laws were set up already about 300 years earlier by the Sumerian king Ur-Nammu.

Looking back to the immediate present, between 2006 and 2011 the European
Commission worked on refining the definition of CSR as well as its strategy in respect to
understanding and practically implying CSR in companies within EU member states. One of
the questions addressed was the possible shift from voluntary actions to a mandatory
requirement for enterprises to implement a CSR strategy. Business associations by and large
have criticized this prospect, largely due to an increased load of reporting duties that would
exceed the capacities especially of SMEs. For instance, the Association of German Chambers
of Industry and Commerce stated repeatedly that, particularly in SMEs, CSR is a widely
spread concern on the management level and that the voluntary approach would lead to best
results. Key drivers for change should therefore not be requirements formulated by political
institutions, but rather pressure built up by society and different stakeholders, such as
customers. Business Associations like the German Chamber of Industry and Commerce took
various actions in an effort to publically display the already \existing CSR activities, e.g. by
conducting round tables and instigating contests in which commendable CSR activities were
rewarded. However, the European Commission altered its 2006 definition of CSR in October
2011adding that “CSR should have in place a process to integrate social, environmental,
ethical and human rights concerns into their business operations and core strategy in close
collaboration with their stakeholders”.

This wording replaces the original solely voluntary approach with a weak
requirement, depicted in the word “should”. Concerning SMEs, the commission states that
“for most small and medium-sized enterprises, especially micro-enterprises, the CSR process
is likely to remain informal and intuitive”. The Commission sets out an action plan for the
period between 2011 and 2014 with eight focus areas:
1. CSR and good practices should become more visible. In order to achieve this vision, a
new European award is to be established and stakeholders should meet in a more
formal way to set common goals and monitor progress in the CSR strategy of the
affected companies.
2. Levels of trust should be tracked and improved by the European Commission by
launching a public debate on the role and potential of enterprises and by organizing a
survey on citizen trust in businesses.
3. Self- and corregulation initiatives are to be guided and improved by the Commission.
4. EU policies in the field of consumption, investment and public procurement are to be
aimed enhancing market rewards for responsible business conduct.
5. The Commission intends to develop a legislative proposal for company disclosure of
their environmental and social performance.
6. CSR should be integrated in education, training and research with potential funding
possibilities.
7. EU member states should present and update their national CSR strategies and

82 
 
 8. CSR should be aligned and embedded in other international programs, including the
OECD Guidelines for Multinational Enterprises, the 10 principles of the UN Global
Compact, the UN Guiding principles on Business and Human Rights, ILO and ISO
26000 standards.

Considering the definition and strategy lined out by the Commission, it becomes
evident that CSR will be a focal issue in succeeding years and that all effort is taken to make
CSR more verifiable, better known and more widespread. Even though CSR is not a
completely new topic, an increased public awareness regarding social responsibility of
companies started to develop during the late 50’s and early 60’s of 11 the 20th century. This
led to new literature about Corporate Social Responsibility (CSR) as well as to models for
corporate conduct. During this era, managers started to ask themselves what was expected of
them by society and what their responsibilities ought to be. However, many believed that
business and ethics are two contradictory terms and that they are therefore difficult to
combine. M. Friedman (1970) for instance argued that CSR served solely the personal benefit
of company managers in raising their reputation in society, thus leading to higher personal
wages, while shareholders would experience loss because companies were not profiting from
CSR activities as these activities would incur only expenses. He argued that businesses
should focus only on increasing their profits and not on adding value to society in general.
This reasoning was in line with the market driven approach coined by Adam Smith: The
invisible hand of free markets would produce best results if all agents would strive to
maximize their profits.

In this context, one issue that has frequently been addressed is the question, for what
and to whom companies actually are responsible when pursuing business. A radically
different view have those who argue that a company is responsible for all of its stakeholders
and should take greater responsibility for society at large and should seek to solve social and
environmental problems in its markets. In other words, this view has expanded the
definition of ‘stakeholders’, beyond merely the investors and shareholders, to include all of
society. The stakeholder concept was described in a detailed way by E. Freeman (1984).
Freeman argued that managers should tailor their policies to satisfy the needs of all the
stakeholders, not just those of the shareholders. In this approach, CSR became a strategic
mandate for business leaders and thus a favorable task also for the top management level.

Ever since, the stakeholder concept has been fine-tuned, and more and more
systematic research has been done on the different constituents that should be taken into
consideration. According to Carroll and Buchholtz (2003), the stakeholders can be
subcategorized into primary stakeholders, consisting of shareholders (owners), employees,
customers, business partners, communities, future generations and the natural environment;
and secondary stakeholders, made up of the local, state and federal government, regulatory
bodies, civic institutions and groups, special interest groups, trade and industry groups,
media and competitors. However, the categorization is rather arbitrary and, for the sake of
SMEs, the stakeholder concept should be adapted to the individual circumstances of the

83 
 
company. Since budgets, personnel, and available time for strategic evaluation are usually
limited, SMEs should identify key stakeholders and should cater their CSR approaches to an
easily comprehensible scope of stakeholders. Donaldson (1990) went a step further:
According to him, managers were not only to engage in CSR activities because of strategic
reasoning, but rather because of the existence of a “moral mandate” for them to act
responsibly, without regard to the effects on the company. However, he also stated that there
is a “Business Case” for CSR. Jones(1995) describes the mutual benefit of CSR activities for
businesses and their stakeholders, in particular for the stakeholders: Since firms display
responsibility by their CSR involvement, they are perceived as trustworthy and thus as safe
market transaction partners. One can take this approach a step further and can conclude
that companies not involved in CSR will not be attractive to customers, employees, suppliers
and other stakeholders, because there is a lack of trust: the company is seen as a profit-
maximizing organization with little or no regard to the needs of its business partners or
customers and hence unattractive to do business with.

Nowadays, however, researchers and authors agree that the address of ethics is
crucial to the enhancement of long-term corporate success. Therefore, business ethics has
received enormous attention, and numerous books have been written about this subject
during the last twenty years. Especially in large companies and due to globalization, there is
increased pressure on companies and managers to act ethically and socially responsible.
Through the internet, television and press, most customers are aware of issues such as child
labor, exploitation of workers, destruction of the environment, etc. As a result, pressure from
different stakeholders along with massive media coverage has forced many companies to
take action in order to protect their public reputation. Currently, corporate responsibility is
the second most important factor in a company’s reputation next to the quality of products.
According to some scientific research, customers do not evaluate companies based only on the
features of their products and services, but also on what business practices they are engaged
in, how their products are produced, and what effect on society the company has.
Consequently, issues such as animal testing, environmental damage, irresponsible
marketing, violation of land rights, trade union relations, fair wages and working conditions
have become highly important for companies to consider since corporate actions now play a
central role in customer decision-making. Moreover, managers have realized the enormous
costs that public scandals generate such as disruptions, expensive legal entanglements,
lower employee morale, difficulties in recruiting, internal fraud and loss of public confidence.
Even though there have been a number of scientific articles about the different aspects of
CSR – theoretical and empirical approaches – the research is still at an early stage. In one
article, the state of knowledge in this field is even described as “embryonic”. However,
scientific examination has already taken place and should be considered.

The Indirect Approach to Measure the Impact of CSR on Business Performance

As outlined above, the EFQM model provides a modern and intuitive approach to
integrate CSR activities into the observation of Business Performance and the measurement

84 
 
of Business success on a sustainable foundation. Some companies have already implemented
new CSR strategies linked with EFQM evaluation. For example, in 2011, the operator of the
Ferenc Liszt airport in Budapest announced that, together with business partners, it had
developed and deployed a CSR strategy based on the EFQM model. The name given to this
undertaking was “Committed to CSR excellence”, thus combining the ideas of quality with its
aim for excellence and CSR. According to the company, the aim was not only to implement a
fitting strategy for the airport industry (the stated goal was to develop three successful CSR
activities within one year), but also to be an example to other Hungarian companies, thus
leading by example. Furthermore, the EFQM model provides an ideal framework for the
measurement of CSR activities and their influence on Business Performance, in the sense
that the model provides guidelines regarding how much weight should be given to different
“enablers” and “results” criteria within the overall performance measurement. But how can
the CSR component in the evaluation of Business Performance be isolated? First, one needs
to identify the contribution of CSR to each examined criteria. Second, since the affected
criteria are closely linked to known stakeholders, relevant data of these stakeholders must
be collected. An effective method of obtaining data on the basis of the stakeholder concept is
the collection of data by means of interviewing different groups, for example in the form of a
questionnaire. The satisfaction levels of different stakeholder groups in this concept are the
dependant variables, whereas the cumulated CSR activities resemble the independent
variable in this simple regression analysis with only one regressor (the CSR activities). In
the data collecting process of the dependent variable, the stakeholder satisfaction level, it
will be important to eliminate other factors that contribute to the satisfaction level of the
examined groups. These factors are e.g. wage, gratification programs, retirement programs,
carrier opportunities, an ergonometric workplace and many more. For this reason, the
questionnaires must be clearly focused on the effect of only the CSR activities on stakeholder
satisfaction. In the case of an employee questionnaire, this can be achieved by formulating
questions such as:
 “Are you aware of the fact that your company has participated in program?”
 “Do you approve of the company´s involvement in program?”
 “Does the involvement of the company make you think better of the company?”
 “Do you think your company should do more such activities? In which areas?”

However, although these questions will already generate some useful information as
far as the acceptance and also effects of CSR activities are concerned, they do not
automatically offer useful data for an econometric analysis. For this means, another
necessary step must be taken: The collected data must be transferred onto a cardinal scale.
For this reason, a model must be developed which accounts for all relevant aspects of the
effects of CSR activities on the satisfaction level of a number of different stakeholders and, in
a further step, on the satisfaction level of all stakeholders. This will be done by first
determining satisfaction levels for various stakeholders and then computing a weighed
averaged of all satisfaction values in order to obtain a single value which will be used to
perform econometric tests:

85 
 
 In this calculation SSLtot resembles the total satisfaction level and SSLn the
satisfaction level of a certain number of stakeholder groups. On the side of the independent
variable, the CSR activities, a similar process must be developed. The activities of the
company must be transferred into and displayed on a cardinal scale. But how should one
measure CSR activities of various companies with differing sizes and, furthermore, how can
CSR activities and the impact on stakeholder satisfaction levels be compared? Since
companies vary in size and business branch, an optimal solution would be to measure CRS as
a budget share of all business expenses per a selected observation period (CSRE). A plausible
econometric model equation therefore would be:

In this equation the parameter α describes the value for the intercept parameter, β
the influence of CSR expenditures on SSLtot and ε depicts an error term. The explanatory
parameter β shows the influence of a 1% increase of CSR expenditure on the explained
variable, SSLtot. This procedure provides essential information for managers and business
owners when CSR budgets are determined. The concept is rather straight-forward and easy
to handle once relevant stakeholders are determined and a conclusive concept measuring
satisfaction levels is established.

Conclusion
Can the impact of CSR on Business Performance be measured? Yes, it can. However,
an indirect approach must be chosen. Although it is virtually impossible to subtract out the
influence of CSR on Business Performance directly, it is possible to determine the influence
of CSR on different stakeholders of the company by using a new approach: It is necessary to
measure changes in stakeholder satisfaction levels due to investments in Corporate Social
Responsibility. In a further step, a company must then determine how much it should value
a rise in SSLtot. The EFQM system provides a useful model to establish the value of
corresponding soft factors for long term business success. Further study could focus on the
determination of an optimal CSR budget which would provide companies with useful
information in their struggle to integrate CSR into their overall business strategies.

References
Donaldson.T.Preston (1995):” The Stakeholder Theory of corporation: Concepts, evidence and
implications/” Academy Of Management Review.
Gemoets, P,(2009).EFQM Transition Guide –How to upgrade to the EFQM Excellence Model
2010.EFQM.
http://ec.europa.eu/enterprise/policies/sustainable=business/CSR/index_en.htm.
http://www.efqm.org/en/.

86 
 
Neely A.G.M et al (1995) “Performance measurement system design: a literature review and
research agenda International Journal of Operations & Production Management,15
(4):80:116.
Olaru, M,G,Stoleriu: CSR concerns of SMEs in Romania
SERBAN.V And M,Ghenta (2009) Excellence Sustainability ,Using the European business
excellence EFQM-Model for a sustainable development of the organization.
T.A (2007). A history and review of thr Europena Quality Award model. The TQM
Magazinee. Bingley,Emerald.19:112-128.

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 CSR INITIATIVES BY INDIAN CORPORATES – A CASE STUDY
S. THULASIMANI

Introduction
The 'Global Compact' was launched by UN Secretary General Kofi Annan in 1999. It
promotes nine business principles (more recently 10), with considerable emphasis on labour
practices. It is broad in scope and does not lend itself to easy measurement of progress. It
aims to demonstrate that globalization helps the poor and also to achieve global consensus
about the role of contemporary business in society. 'Accountability 1000', in contrast, comes
out of the non-government Institute of Social and Ethical Accountability in London. In
another contrast, it offers a standard for measuring and reporting ethical behaviour in
business. Its designers hope thereby both to improve ethical performance and to be able to
judge the validity of companies' ethical claims. The goal is to help business define targets,
measure progress towards those targets, audit and report performance, and establish
feedback mechanisms. The standard is designed for both internal and external audit
procedures and to be applied by businesses of any size.

'Social Accountability 8000' is another voluntary universal standard for companies

interested in auditing and certifying their labour practices, together with those of their
suppliers and vendors. Like the Global Compact it highlights nine key areas for assessment,
but unlike the Compact it seeks to measure performance in these areas. This is despite the
inclusion of notoriously hard-to-measure dimensions like 'discipline' and 'discrimination'.

The 'Global Reporting Initiative' (GRI), although first conceived by the Coalition for
Environmentally Responsible Economies (CERES) in 1997, was launched in New York as
recently as 2003. It is designed to promote a widely acceptable framework for the voluntary
reporting of economic, environmental and social performance by business and, importantly,
is enjoying faster take-up than other CSR frameworks. It offers a corporate disclosure
framework, which businesses can use to fully report their performance. The GRI is also
leading debate on issues such as TBL in accounting and is acknowledged by many CSR
enthusiasts as the leading initiative of its kind. A permanent GRI secretariat has been
established in Amsterdam and more than 150 companies have published annual reports
based on its guidelines (Fenton-Jones, 2003). Companies using these guidelines dominate the
sample of companies assessed in SustainAbility's 2004 Survey of Corporate Sustainability
Reporting.

The challenge is not to get companies to take on the responsibilities of governments

but to help ensure governments fulfil their own responsibilities

The evolution of corporate social responsibility in India refers to changes over time in
India of the cultural norms of corporations' engagement of corporate social responsibility
(CSR), with CSR referring to way that businesses are managed to bring about an overall

88 
 
positive impact on the communities, cultures, societies and environments in which they
operate. The fundamentals of CSR rest on the fact that not only public policy but even
corporate should be responsible enough to address social issues. Thus companies should deal
with the challenges and issues looked after to a certain extent by the states.

Among other countries India has one of the most richest traditions of CSR. Much has
been done in recent years to make Indian Entrepreneurs aware of social responsibility as an
important segment of their business activity but CSR in India has yet to receive widespread
recognition. If this goal has to be realised then the CSR approach of corporates has to be in
line with their attitudes towards mainstream business- companies setting clear objectives,
undertaking potential investments, measuring and reporting performance publicly.

Current Status of CSR in India

CSR is not a new concept in India. Ever since their inception, corporates like the Tata
Group, the Aditya Birla Group,and Indian Oil Corporation, to name a few, have been
involved in serving the community. Through donations and charity events, many other
organizations have been doing their part for the society. The basic objective of CSR in these
days is to maximize the company's overall impact on the society and stakeholders. A more
comprehensive method of development is adopted by some corporations such as Bharat
Petroleum Corporation Limited, Maruti Suzuki India Limited, and Hindustan Unilever
Limited.

CSR Law in India

The Companies Act, 2013 In India, the concept of CSR is governed by clause 135 of
the Companies Act, 2013, which was passed by both Houses of the Parliament, and had
received the assent of the President of India on 29 August 2013.

As per the Companies Act, 2013, section 135, every company having a net worth of
rupees five hundred crore or more, or a turnover of rupees one thousand crore or more or a
net profit of rupees five crore or more, during any financial year, shall ensure that the
company spends, in every financial year, at least two per cent of the average net profits of
the company made during the three immediately preceding financial years, in pursuance of
its Corporate Social Responsibility policy.

The new rules, which will be applicable from the fiscal year 2014-15 onwards, also
require companies to set-up a CSR committee consisting of their board members, including
at least one independent director. The Act encourages companies to spend at least 2% of
their average net profit in the previous three years on CSR activities. The ministry’s draft
rules, that have been put up for public comment, define net profit as the profit before tax as
per the books of accounts, excluding profits arising from branches outside India. The
application is to every company, including its holding or subsidiary, and a foreign company
having its branch or project office in India.

89 
 
Sakthi Masala
 Sakthidevi Charitable Trust: Sakthidevi Charitable Trust was founded in the year
1997 by Shri.P.C.Duraisamy, Founder, Sakthi Masala, to promote the cause of
community development services such as upliftment of physically challenged and
mentally retarded, Educational Assistance to pursue higher Education, Appreciation
to School Toppers in Government Public Examinations, Establishment of Libraries in
Government Schools & Mass Tree Plantations are the other social welfare activities of
Trust.
 Sakthi Hospital: Sakthi Hospital is run by the Trust to serve the public and free
consultancy by Specialised Doctors is offered in the fields of General Medicine, Ortho,
Dental, Eye, ENT, Skin, Gynecology, Peadiatric & Rehabilitation. Periodical Medical
Camps are conducted by the Specialised Doctors. The Trust is deputing Doctors and
other Staff every week to conduct free Medical Check-up and Counselling for the
inmates of "The Home for the Elderly" run by Lions Club of Erode Mid Town.
 Sakthi School for Mentally Retarded: A Special School is being run by the Trust
for Mentally Retarded children upto 14 years, free of cost. After the training by
Special Educators the children are being admitted to the regular schools. Slow
learners hailing from surrounding villages are given special training by Special
Educators during evenings to improve the learning skills. The School is approved by
the State Commissioner for the Disabled, Government of Tamilnadu.
 Sakthi Rehabilitation Centre: Sakthi Rehabilitation Centre run by the Trust is
Constructed in 10000 Sq.ft and fully equipped with latest equipments, offers free
treatments daily to Physically & Mentally Challenged Children by Qualified
Physiotherapists in Exercise Therapy, Electro Theraphy, Speech Therapy,
Occupational Therapy. More than 150 children are benefitted. Further, a Dietician is
giving advice to the Children/Parents/General public on their diet habits to maintain
good health.
 Educational Assistance Cash Prize to School Toppers: An Educational
Assistance Programme, every year is being conducted by the Trust, where
Educational assistance is provided to pursue Higher Education in the field of Medical,
Engineering, Arts & Science. Erode district Government School Toppers (1st &2nd
rank) in 10th & 12th Public Examinations are appreciated with Cash Prize &
Certificate. Every year around 450 students are benefitted by these schemes.
 Vazhikatti (Guide) Project: Under this Project, three Governments Schools located
in Manickampalayam, Chithode & Perundurai in Erode district are adopted.
Libraries have been established in these schools in the name of "Dr.A.P.J.Abdul
Kalam" by the Trust. Staff members are appointed to manage the Library. It benefits
over 6000 students and Teachers. Apart from the above, Personality Devevlopment
programmes, Computer, Spoken-English, Home Keeping, Tailoring classes are
conducted at regular intervals.
 Tree Plantation: Trust is maintaining a nursery and growing various types of
saplings for free supply to needy people, interested in Tree plantation under the

90 
 
 project called "THALIR". Cash Awards, Shields, Certificates, Gold Medals are given to
best tree growers in a function every year to encourage the general public in Tree
plantation. More than One Lakh saplings were supplied/planted at free of cost so far.
 Aid to Schools: On request from Government / Municipal / Panchayat Schools for
construction of additional blocks, Library block, toilets, compound wall, water
facilities, etc, the Trust has been donating money for the construction of buildings etc,
through Parents Teachers Associations in various rural places in Erode district.
 Project "Jeevan": A unique project "JEEVAN" a basic life supporting training
programme is being conducted every month from September 2008 for the NCC, NSS,
Youth Red Cross, Social Service League Students, Public Service Personnel and other
volunteers in partnership with Indian Medical Association Nursing Home Board. This
programme will be conducted for 4 years for the benefit of the general public.

Hero Honda
The Company believes it has managed to bring an economically and socially backward
region in Dharuhera, Haryana, into the national economic mainstream. An Integrated Rural
Development Centre has been set up on 40 acres of land along the Delhi-Jaipur Highway.
The Centre-complete with wide approach roads, clean water, and education facilities for both
adults and children-now nurtures a vibrant, educated and healthy community. The
Foundation has adopted various villages located within vicinity of the Hero Honda factory at
Dharuhera for integrated rural development. This includes:
 Installation of deep bore hand pumps to provide clean drinking water.
 Constructing metalled roads and connecting these villages to the National Highway
(NH -8).
 Renovating primary school buildings and providing hygienic water and toilet
facilities.
 Ensuring a proper drainage system at each of these villages to prevent water-logging.
 Promoting non-conventional sources of energy by providing a 50 per cent subsidy on
biogas plants.
Other key projects taken up by the Foundation include:
 The Raman Munjal Vidya Mandir began with three classes (up to class II) and 55
students from nearby areas. It has now grown into a modern Senior Secondary, CBSE
affiliated co-educational school with over 1200 students and 61 teachers. The school
has a spacious playground, an ultra-modern laboratory, a well-equipped audio visual
room, an activity room, a well-stocked library and a computer centre.
 Multi-specialty Hospital equipped with the latest diagnostic and surgical
technology. The Raman Munjal Memorial Hospital provides healthcare to the rural
population in and around Dharuhera, and also caters to accident and trauma victims
driving along the Delhi-Jaipur highway.
 Raman Munjal Sports Complex: The Raman Munjal Sports Complex has
basketball courts, volleyball courts, and hockey and football grounds are used by the

91 
 
 local villagers. In the near future, sports academies are planned for volley ball and
basket ball, in collaboration with National Sports Authority of India.
 Vocational Training Centre: In order to help local rural people, especially women,
Hero Honda has set up a Vocational Training Centre. So far 26 batches comprising of
nearly 625 women have been trained in tailoring, embroidery and knitting. The
Company has helped women trained at this centre to set up a production unit to stitch
uniforms for Hero Honda employees. Interestingly, most of the women are now self-
employed.
 Adult Literacy Mission: This Scheme was launched on 21st September, 1999,
covering the nearby villages of Malpura, Kapriwas and Sidhrawali. The project
started with a modest enrolment of 36 adults. Hero Honda is now in the process of
imparting Adult Literacy Capsules to another 100 adults by getting village heads and
other prominent villagers to motivate illiterate adults.
 Marriages of Underprivileged Girls: Marriages are organized from time to time,
particularly for girls from backward classes, by the Foundation by providing financial
help and other support to the families.
 Rural Health Care: Besides setting up a modern hospital, the Foundation also
regularly provides doorstep health care services to the local community. Free health
care and medical camps are now a regular feature in the Hero Group's community
outreach program.
 Environment: For its efforts, Hero Honda was awarded for Safety Performance and
Best working condition and Canteen facilities in the plant by the Government of
Haryana for 2007. The Company has also been nominated for the Green
Manufacturer of the year under the TERI Corporate Award Scheme. A green vendor
development program was launched on the World Environment Day June 5, 2007. A
green charter was released giving specific guidelines to the vendors and suppliers. A
total of 31 vendors were selected in the first phase and in all, 256 vendors will be
covered and certified as green vendors over a period of 5 years. Each vendor will
initiate EARN programs in the areas of pollution prevention, waste reduction, water
conservation, energy conservation and statutory compliances. Each vendor will be
evaluated and certified cluster wise.
 During the year, an environmental plan to reduce hazardous waste from the
pollution control facilities was developed. As much as 30% of sludge generated was
reduced through a sludge decanter system.
 The company also increased the conversion rate of paint sludge into useful primer
from 15 MT to 25MT per month. Hero Honda has also successfully developed
primer from the waste paint sludge, which used to be incinerated earlier. This
development has been demonstrated to the state authorities, and the Company is
seeking authorization to use this practice on a regular basis. The converted primer
has already been used on the products, which has passed al l quality parameters.
 To fulfill its commitment towards water conservation, a recycling plant of 400KL
per day capacity with reverse osmosis technology has been installed which

92 
 
 recycles the sewage effluent into the process at the Haridwar plant. A similar
project has also under progress at the Dharuhera plant and this is likely to be
completed in 2008.

Community: Hero Honda Motors takes considerable pride in its community relationships,
especially ones at the grassroots that have evolved over time. The Company has played a
pivotal role in bringing an economically and socially backward region in Dharuhera,
Haryana, into the national economic mainstream through direct interventions in education,
healthcare, vocational training, creation of social and physical infrastructure, and
environment management.
 Most of the group's social enterprises - including the Rural Development Centre-- are
planned and executed by the Raman Kant Munjal Foundation. To help local people,
especially women, Hero Honda has set up a vocational training centre which runs a 6
months Diploma Course for Tailoring, Embroidery and carpet weaving, etc.
 During the year in review, the Centre was upgraded. It now trains 50 girls per batch up
from 25 & the duration of the course was increased from six months to 9 months. The
Centre has also been equipped with modern machines to prepare the girls for the
Garment Export Industry, where placement is 100%.
 Also during the year, women from four villages near the factory at Dharuhera benefitted
from food-processing courses conducted at the Centre. In February 2007, the Foundation
had set up a computer training & learning centre in partnership with Microsoft. A total of
8 to 10 batches (boys and girls) are run simultaneously consisting of 18- 20 students per
batch. Till date, close to 400 students have been trained at the centre. To enhance the
value of rural youth in the job market, a spoken English course was started during the
year. Currently the course is being run in three Batches during the day. It is proposed to
train approx 120 students per year. The Foundation will make an effort to place them
with BPO/Call Centres, provided the students also have the requisite computer training.
 A vocational centre for boys is expected to start during 2008-09 and will run on the lines
of an ITI. The centre will provide training in Fitter, Welding, Carpentry and Plumbing &
Electrician Trades. It is planned to train approx. 50 students every year, and efforts will
be made to accommodate them in group companies.
 The Foundation also runs an Adult Literacy Program, a marriage facilitation service for
underprivileged girls, besides doorstep healthcare programs and medical camps for the
local population. A graduate teacher from the targeted village is appointed to teach the
elders. Approx 650 people have benefited from this scheme spread over 20 villages.
 In every CSR Project undertaken, the Foundation always involves either a local NGO
preferably the village itself or panchayat members not only during execution but also for
subsequent sustainability/maintenance of project. In certain areas such as computer
learning by rural youth Udyan Care, a reputed NGO has been made a partner in
association with Microsoft. In Projects like Hygiene, Sanitation and Safe Drinking Water,
Local Government Representatives such as Block Development Officers are also involved.

93 
 
Aditya Birla Group
Vision "to actively contribute to the social and economic development of the
communities in which we operate. In so doing build a better, sustainable way of life for the
weaker sections of society and raise the country's human development index". (Mrs.
Rajashree Birla, Chairperson, Aditya Birla Centre for Community Initiatives and Rural
Development).

Implementation Process: Identification of Projects

Arising from this the focus areas that have emerged are Education, Health care,
Sustainable livelihood, Infrastructure development, and espousing social causes. All of our
community projects are carried out under the aegis of The Aditya Birla Centre for
Community Initiatives and Rural Development
Education
 Formal schools
 Balwadis for elementary education
 Quality primary education
 Aditya Bal Vidya Mandirs
 Girl child education
 Adult education programmes
Health
 Primary health care centres
 Mother and Child care projects
 Immunisation progr ammes with a thrust on polio eradication
 Health care for visually impaired, and physically challenged
 Preventive health through awareness programmes.
Sustainable Livelihood
 Formation of Self Help
 Groups for women empowerment
 Vocational training through Aditya Birla Rural Technology Parks
 Agriculture development and better farmer focus • Watershed development
 Partnership with Industrial Training Institutes.
Infrastructure Development
Basic infrastructure facilities
 Housing facilities
 Safe drinking water
 Sanitati on & hygiene
 Renewable sources of energy.
Social Change
 Dowryless marriage
 Widow remarriage
 Awareness programmes on anti social issues
 De-addiction campaigns and programmes

94 
 
  Espousing basic moral values
Expanding the ambit, works carried out by corporates for slum area development will
be now considered as social welfare spending activity under the new companies’ law.

Conclusion
In general, organizations have taken initiatives to fulfill their economic
responsibilities. The firms with poor reputations are unlikely to gain any immediate benefits
from engaging in CSR. However, the firm, which is having good reputation and recognition,
should have the intention to provide valuable service rather than to get more and more
benefit out of it. Not only the businesses required being responsive to current concerns, but
they must also balance present requirements with future demands and issues, as well as
balancing local and global concerns. CSR in today’s organizational level is not that much
appreciable, yet need to be improved to a better extent by implementing proper guidance on
implementing CSR in operations.

References
Corporate Social Responsibility: A case study of TATA group, IOSR Journal of Business and
Management, Vol. 3, Issue 5, pp 17-27.
Bidhu Kanti Das and P. K. Halder. 2011. Corporate Social Responsibility Initiatives of Oils
PSUs in Assam: A case study of ONGC, Management Convergence, Vol. 2, No. 2, pp
75-85.
Gautam P. Kanani. 2012. Multinational Companies in Emerging Markets: A Case for
Corporate Social Responsibility, BAUDDHIK, Vol. 3, No.1, pp 78-83.
Ivan Montiel. 2008. Corporate Social Responsibility and Corporate Sustainability Separate
Pasts, Common Futures, Organization & Environment, Sage Publications, Vol. 21,
No. 3, pp 245-269.
Kamal Naser and Yousef Hassan. 2013. Determinates Of Corporate Social Responsibility
Reporting: Evidence From An Emerging Economy, Journal of Contemporary Issues in
Business Research, Vol. 2, No. 3, pp 56-74.
Kavitha Shanmugam. 2013. Environment CSR initiatives of manufacturing units in India –
An empirical study, African Journal of Business Management, Vol. 7(16), pp 1560-
1570.
Prasad S. Madan and M. A. Bansode. 2013. Corporate Social Responsibility in Indian
Perspective, Excel Journal of Engineering Technology and Management Science, Vol.
1, No. 3, pp 1-7.
Revathy. B. 2012. Corporate Social Responsibility - An Implementation Guide for Business,
Far East Journal of Psychology and business, Vol. 6, No. 2, pp 15-31.

95 
 
 CORPORATE SOCIAL RESPONSIBILITY IN INDIA – ISSUES AND CHALLENGES

CH. VENKAT RAJAM

Introduction
In a societal structure, we have many stakeholders, one amongst them are companies
or Corporate Houses. These Corporate houses are meaningfully contributing from their kitty
which impact their internal stakeholders and also openhandedly support societal initiatives.
In India companies like TATA and Birla are practicing the Corporate Social Responsibility
(CSR) for decades, long before CSR become a popular basis. There are many instances where
corporate have played a dominant role in addressing issues of education, health,
environment and livelihoods through their corporate social responsibility interventions
across the country. As per United Nations and the European Commission, Corporate Social
Responsibility (CSR) leads to triple bottom-line: profits, protection of environment and fight
for social justice. It is expected that Civil society, activist groups, Government and corporate
sectors should work together to create appropriate means and avenues for the marginalized
and bring them to the mainstream. The success of CSR lies in practicing it as a core part of a
company’s development strategy. It is important for the corporate sector to identify, promote
and implement successful policies and practices that achieve triple bottom-line results.

At one end of the spectrum, CSR can be viewed simply as a collection of good
citizenship activities being engaged by various organizations. At the other end, it can be a
way of doing business that has significant impact on society. For this latter vision to be
enacted in India, it will be necessary to build CSR into a movement. That is to say, public
and private organizations will need to come together to set standards, share best practices,
jointly promote CSR, and pool resources where useful. An alliance of interested stakeholders
will be able to take collective action to establish CSR as an integral part of doing business –
this is not a passing fad. There are more than 1,000,000 registered companies in India out of
which less than 1percent companies are traded on the Indian Stock Exchange. A new Trend
has started in Corporate is the establishment of special committees within the board of
directors to oversee CSR activities. Groups of corporate are being encouraged to come
together to promote CSR. In 2006, Europe created the European Alliance for CSR. It
currently consists of 70 multinational corporate houses and 25 national partner
organizations and has become a unique resource for building capability in CSR.

Nature of CSR
 Business is the primary source of wealth creation, innovation and employment. Business
is an integral part of society and is committed to operating in a responsible and
sustainable manner, alongside other actors.
 CSR is a positive business-driven response o the business environment of today. CSR is
not an add-on for business; it is increasingly being integrated in to business operations,

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 governance, management system and thinking. It must therefore, be seen within the
context of the totality of a business today.
 CSR is a multi-dimensional concept covering social, economic and environmental
concerns and is continually evolving within the diversity of the market. This diversity of
the market place makes innovation a critical aspect in the development and
implementation of the varied CSR initiatives. Efforts to regulate or standardize such as
inherently dynamic process of voluntary action would stifle this very.
 CSR is not an alternative to regulation. Government must be responsible for the
implementation and enforcement of national laws.

Objectives
The Present paper is basically concerned with the following objectives:
1. To study the Issues and Challenges for CSR in India.
2. To study comprehensively the corporate social performance towards the stakeholder,
employees, creditors, customers etc.
3. To examine the attitude and practices of business ethics by different companies,

Research Methodology
Looking into requirements of the objectives of the study the research design employed
for the study is of descriptive type. Keeping in view of the set objectives, this research design
was adopted to have greater accuracy and in depth analysis of the research study. Available
secondary data was extensively used for the study. The investigator procures the required
data through secondary survey method. Different news articles, Books and Web were used
which were enumerated and recorded.

Issues and Challenges

Many companies think that corporate social responsibility is a peripheral issue for
their business and customer satisfaction more important for them. They imagine that
customer satisfaction is now only about price and service, but they fail to point out on
important changes that are taking place worldwide that could blow the business out of the
water. The change is named as social responsibility which is an opportunity for the business.
Some of the drivers pushing business towards CSR include:
 The Shrinking Role of Government: In the past, governments have relied on
legislation and regulation to deliver social and environmental objectives in the business
sector. Shrinking government resources, coupled with a distrust of regulations, has led to
the exploration of voluntary and non-regulatory initiatives instead.
 Demands for Greater Disclosure: There is a growing demand for corporate disclosure
from stakeholders, including customers, suppliers, employees, communities, investors,
and activist organizations.
 Increased Customer Interest: There is evidence that the ethical conduct of companies
exerts a growing influence on the purchasing decisions of customers. In a recent survey
by Environics International, more than one in five consumers reported having either

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 rewarded or punished companies based on their perceived social performance. Growing
Investor Pressure: Investors are changing the way they assess companies' performance,
and are making decisions based on criteria that include ethical concerns. The Social
Investment Forum reports that in the US in 1999, there was more than $2 trillion worth
of assets invested in portfolios that used screens linked to the environment and social
responsibility.
 Competitive Labour Market: Employees are increasingly looking beyond paychecks
and benefits, and seeking out employers whose philosophies and operating practices
match their own principles. In order to hire and retain skilled employees, companies are
being forced to improve working conditions.
 Supplier Relations: As stakeholders are becoming increasingly interested in business
affairs, many companies are taking steps to ensure that their partners conduct
themselves in a socially responsible manner. Some are introducing codes of conduct for
their suppliers, to ensure that other companies' policies or practices do not tarnish their
reputation.
 Lack of Community Participation in CSR Activities: There is a lack of interest of
the local community in participating and contributing to CSR activities of companies.
This is largely attributable to the fact that there exists little or no knowledge about CSR
within the local communities as no serious efforts have been made to spread awareness
about CSR and instil confidence in the local communities about such initiatives. The
situation is further aggravated by a lack of communication between the company and the
community at the grassroots.
 Need to Build Local Capacities: There is a need for capacity building of the local non-
governmental organizations as there is serious dearth of trained and efficient
organizations that can effectively contribute to the ongoing CSR activities initiated by
companies. This seriously compromises scaling up of CSR initiatives and subsequently
limits the scope of such activities.
 Issues of Transparency: Lack of transparency is one of the key issues brought forth by
the survey. There is an expression by the companies that there exists lack of
transparency on the part of the local implementing agencies as they do not make
adequate efforts to disclose information on their programs, audit issues, impact
assessment and utilization of funds. This reported lack of transparency negatively
impacts the process of trust building between companies and local communities, which is
a key to the success of any CSR initiative at the local level.
 Non-availability of Well Organized Nongovernmental Organizations: It is also
reported that there is non-availability of well organized NGOs in remote and rural areas
that can assess and identify real needs of the community and work along with companies
to ensure successful implementation of CSR activities. This also builds the case for
investing in local communities by way of building their capacities to undertake
development projects at local levels.
 Visibility Factor: The role of media in highlighting good cases of successful CSR
initiatives is welcomed as it spreads good stories and sensitizes the local population about

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 various ongoing CSR initiatives of companies. This apparent influence of gaining
visibility and branding exercise often leads many nongovernmental organizations to
involve themselves in event-based programs; in the process, they often miss out on
meaningful grassroots interventions.
 Narrow Perception towards CSR Initiatives: Nongovernmental organizations and
Government agencies usually possess a narrow outlook towards the CSR initiatives of
companies, often defining CSR initiatives more donor-driven than local in approach. As a
result, they find it hard to decide whether they should participate in such activities at all
in medium and long run.
 Non-availability of Clear CSR Guidelines: There are no clear cut statutory guidelines
or policy directives to give a definitive direction to CSR initiatives of companies. It is
found that the scale of CSR initiatives of companies should depend upon their business
size and profile. In other words, the bigger the company, the bigger is its CSR program.
 Lack of Consensus on Implementing CSR Issues: There is a lack of consensus
amongst local agencies regarding CSR projects. This lack of consensus often results in
duplication of activities by corporate houses in areas of their intervention. This results in
a competitive spirit between local implementing agencies rather than building
collaborative approaches on issues. This factor limits company’s abilities to undertake
impact assessment of their initiatives from time to time.

Recommendations
In order to crystal gaze the future of CSR in India and take time bound steps to
mainstream it, the recommendations of the survey are firm indications of the existing state
of affairs in the CSR domain; they correspondingly call for necessary and appropriate steps
to be initiated to put CSR on firmer ground. Keeping in view the broad results of the survey,
the following recommendations are listed for serious consideration by all concerned
stakeholders for their effective operationalization to deepen CSR in the company’s core
business and to build collaborative relationships and effective networks with all involved.
It is found that there is a need for creation of awareness about CSR amongst the general
public to make CSR initiatives more effective. This awareness generation can be taken up
by various stakeholders including the media to highlight the good work done by corporate
houses in this area. This will bring about effective changes in the approach and attitude of
the public towards CSR initiatives undertaken by corporate houses. This effort will also
motivate other corporate houses to join the league and play an effective role in addressing
issues such as access to education, health care and livelihood opportunities for a large
number of people in India through their innovative CSR practices. Thus, the social justice
agenda of the day would be fulfilled more meaningfully.
It is noted that only medium and large corporate houses are involved in CSR activities,
that too in selected geographical areas. This issue builds a case for more companies to be
brought under the CSR domain. To address the issue of reaching out to wider geographical
areas, the involvement of small and medium enterprises (SMEs) in the CSR domain will be
e essential. It is recommended that a campaign should be launched to both spread

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 awareness on CSR issues amongst the general public as well as to involve SMEs to
participate more actively in CSR initiatives. This will help CSR reach out to other locations
and cover a large number of communities and help companies play a valuable role in
addressing various social and development issues. This approach will help CSR get
ingrained into the DNA of core business activities of companies.
It is found that corporate houses and nongovernmental organizations should actively
consider pooling their resources and building synergies to implement best CSR practices to
scale up rejects and innovate new ones to reach out to more beneficiaries. This will increase
the impact of their initiatives on the lives of the common people. After all, both corporate
houses and non- governmental organizations stand to serve the people through their
respective projects and initiatives. It is recommended that the projectisation, scaling up
and sustainability of CSR projects need to be safeguarded at all costs for their efficiency
and efficacy.
It is found that many CSR initiatives and programs are taken up in urban areas and
localities. As a result, the impact of such projects does not reach the needy and the poor in
the rural areas. This does not mean that there are no poor and needy in urban India; they
too equally suffer from want of basic facilities and services. While focusing on urban areas,
it is recommended that companies should also actively consider their interventions in rural
areas on education, health, girl child and child labor as this willdirectly benefit rural
people. After all, more than 70 per cent people still reside in rural India.
It is noted that the Government should consider rewarding and recognizing corporate
houses and their partner non-governmental organizations implementing projects that
effectively cover the poor and the underprivileged. Incentives to be offered to the private
sector to strengthen their good work must include a formal partnership with local
administration, easy grant of 12A, 80G and Foreign Contribution Regulation Act (FCRA)
license and other fiscal incentives including matching project grants and tax breaks for
social and development projects. This will be instrumental in encouraging enhanced
voluntary participation of greater number of corporate houses in CSR activities.
It is noted that CSR as a subject or discipline should be made compulsory at business
schools and in colleges and universities to sensitize students about social and development
issues and the role of CSR in helping corporate houses strike a judicious balance between
their business and societal concerns. Such an approach will encourage and motivate young
minds, prepare them face future development challenges and help them work towards
finding more innovative solutions to the concerns of the needy and the poor. It is
recommended that involvement of professionals from the corporate sector,
nongovernmental organizations and business schools would be key in ensuring youth
participation in civic issues.
It is found that there are approximately 250 corporate houses in the country that are
directly involved in various CSR initiatives. These companies continue to decide their own
projects depending on a number of parameters.
It is found that companies involved in CSR implement projects in the areas of health,
education, environment, livelihood, disaster management and women empowerment, to

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 mention a few. In many such contexts, it’s noticed that companies end up duplicating each
others’ efforts on similar projects in the same geographical locations. This creates problems
and induces a competitive spirit amongst companies. Considering the diverse issues and
different contexts that exist currently in the CSR domain, it is recommended that
companies involved in CSR activities urgently consider pooling their efforts into building a
national alliance for corporate social responsibility. This alliance, representing various
industry interests, should take up broad development agenda and provide high value
services to the poor and the underprivileged. Over the years, the alliance would grow into a
special purpose vehicle (SPV) and work closely with stakeholders to raise the level and
quality of CSR interventions. There are already such models available in different industry
segments both within the country and overseas; all that is needed is to identify and
leverage these models to set up a national platform for effective thought alignment between
companies and other stakeholders, in order to redefine CSR practices in India.
The role and efforts of the private sector in taking development agenda forward with focus
on education, health, environment, livelihood, women empowerment, disaster management
to mention a few have been visible and effective. Some innovative models are also available
of private sector interventions in these areas. In order to push the development agenda in a
mission mode, it is recommended that realistic and operational models of engagement
between all three important stakeholders - the Government, the non-governmental
organizations and the private sector - are jointly explored and addressed.

Conclusion
The concept of corporate social responsibility is now firmly rooted on the global
business agenda. But in order to move from theory to concrete action, many obstacles need to
be overcome. A key challenge facing business is the need for more reliable indicators of
progress in the field of CSR, along with the dissemination of CSR strategies. Transparency
and dialogue can help to make a business appear more trustworthy, and push up the
standards of other organizations at the same time. Some of the positive outcomes that can
arise when businesses adopt a policy of social responsibility.

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Ashwani Singla and Prema Sagar (2004). Trust and Corporate Social responsibility: Lessons
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Balasubramanian, N.K, (2003). CSR as an Instrument of Global Competitiveness, IIMB
Management Review, Dec, pp. 61-70.
Matilda Jonung and Martin Malhotra (2007). Attitudes towards Sustainable Development
and Corporate Social Responsibility Among Future Business Leaders In Bangalore,
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Goodwin, F.W. and Bartlett, J.L. (2008) Public Relations and Corporate Social Responsibility
(CSR) - Working Paper http://eprints.qut.edu.au

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