Csr-an Indian Perspective

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The European Union defines
Corporate Social
Responsibility (CSR) as “a
concept that an enterprise is
accountable for its impact on all
relevant stakeholders. It is the
continuing commitment by
business to behave fairly and
responsibly and contribute to
economic development while
improving the quality of life of the
workforce and their families as well
as the local community and the
society at large.” In broader terms,
CSR means a collection of policies,
programs and practices adopted,
followed and recognized by a
company that is based on certain
values, including respect for people,
communities (in which the
company operates) and the
Corporate plays a vital role in
shaping the quality of life of the
society as a whole in today’s
globalized economy. According to
Nobel Laureate Amartya Sen,
“Market forces alone are not
sufficient for equitable distribution,
and some sort of intervention is
required, be it political or from
business houses, towards society.”
CSR covers various issues, like
human rights, working conditions,
equality and diversity, consumer
protection, environment and
health impacts, economic
development, ethical business
practices and lobbying and political
Today, companies are increasingly
adopting socially responsible
practices because of their long-term
benefits. Some of the benefits are:
Creating and maintaining a high
Securing strong relationship
with stakeholders;
Creating a better, safer and more
stimulating work culture;
Improving business management
Protecting from boycott actions;
Making access to funding easier;
Benefiting from fiscal
advantages and administrative
Reducing enterprise risk.
Indian Context: The Evolution and
Growing Interest
Companies funded education and
other social welfare activities even
during the pre-independence era in
India as a part of business and
corporate philanthropy. During the
freedom struggle, Indian companies
supported Mahatma Gandhi’s cause
for development of the nation; thus
many of them were involved in
providing education, health
services, and even clean water. Even
Sardar Vallabhbhai Patel persuaded
industrialists to build educational
campuses in order to cater to the
needs of engineering candidates.
But philanthropy is different from
CSR. CSR essentially means a more
integrated and proactive action
towards all the stakeholders while
philanthropy could be a charitable
donation to the citizens in and
around the area of operation of the
Components of Corporate Social
Even after independence, companies
such as TISCO and other public
sector enterprises voluntarily
contributed to community
development. However, mere
contribution to community
building doesn’t make a company
socially responsible. A company
should take a balanced view of the
components of CSR and implement
the strategies in line with the vision,
mission and values of the company.
While companies in North America
and Europe are pressured by
stakeholders to adopt CSR
practices, the Indian companies so
16 HRM Review January 2008
far have not faced any such
pressures. Also, while companies in
developed countries report their
activities adhering to the Global
Reporting Initiative (See Exhibit);
in India, companies are still not
legally bound to formally report
CSR activities.
According to a study “Corporate
Philanthropy as Business Strategy:
An Indian Perspective” by Laxman
Mohanty and Neharika Vohra,
published in IIM B Review:
Only 12.4% of Indian companies
pursue strategic philanthropy as
compared to 48% of the
Multinational Corporations
Charity is pursued by 35% of
Indian companies as against
62% of MNCs.
Both Indian and multinational
corporations give money
primarily to support education
services, environment,...
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