Corporate Social Responsibility

Topics: Corporate social responsibility, Business ethics, Social responsibility Pages: 28 (8071 words) Published: March 18, 2011


Bijoya Banik[1]

Corporate Social Responsibility is the responsibility of the business towards the society that it takes from. It is the management of the business in a manner such that it produces a positive impact on society. Critics of CSR say that the primary purpose of a business is to make profit, and that it has no additional duty as long as it complies with all rules and regulations. Not doing anything negative might seem easy, but it could actually go a long way.

Multinational corporations face major challenges when dealing with crises simultaneously at both local and global levels. The magnitude of the environmental and human devastation resulting from the Bhopal disaster confronted Union Carbide with a challenge that severely tested the mettle of its crisis communication expertise. Although two decades have elapsed since the disaster, Bhopal is still evoked as an example of “what not to do” in the case of a crisis of global proportions. As one of the world’s worst industrial disasters, the Bhopal tragedy devastated an entire city and country both physically and emotionally. The disaster had far reaching ethical, social, environmental, legal, and financial consequences for Union Carbide, and offers a rich lesson in corporate social and communication irresponsibility.

The 1984 Bhopal Gas disaster involved a catastrophic failure at Union Carbide Corporation (UCC), pesticide manufacturing plant at Bhopal, India. Over 15,000 people died, and 500,000 injured in the accident. The disaster occurred due to lack of safety measures and inferior technology at the plant. The aftermath of the disaster was improperly handled by the management of UCC as well as Dow Chemical after its takeover. Indian government officials also failed to provide adequate compensation and relief and rehabilitation to the victims. It had been the source of ongoing legal battles in both India and the U.S. Dow being financially sound could have dealt the case on much humanitarian ground but it denied to take any liability and responsibility of the disaster. This case study narrates the management and governmental failures towards the victim and asks for proper CSR approach towards them.

As a welcome change it is seen now a day that all consumers like to feel that the enterprises they support are doing ‘their bit’ toward society. Shareholders look into CSR policies before investing. Even fresh graduates are keenly interested in a prospective company’s CSR mandate. Not being socially responsible, it seems, is starting to become taboo in the corporate world.


Globalization has influenced trade all over the world; companies have looked for new opportunities in doing business outside their home country. In recent years Corporate Social Responsibility (CSR) has gained growing recognition as a new and emerging form of governance in business. It is already established in a global context, with international reference standards set by the United Nations, Organization for Economic Co-operation and Development (OECD) guidelines and International Labor Organization (ILO) conventions. With brand value and reputation increasingly being seen as one of a company’s most valuable assets, CSR is now seen as building loyalty and trust amongst shareholders, employees and customers.[2] CSR applies to a wide variety of company activities, especially in enterprises that operate multi-nationally in very different social and environmental settings.

CSR is closely linked with the principle of sustainable development, which argues that enterprises should make decisions based not only on financial factors such as profits or dividends but also based on immediate and long term social and environmental consequences of its activities. CSR has a significant role in controlling the perils of uncontrolled development, satisfying the needs of the present generation and at the same time...
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