Corporate social responsibility (CSR) can be defined as the "economic, legal, ethical, and discretionary expectations that society has of organizations at a given point in time". The concept of corporate social responsibility means that organizations have moral, ethical, and philanthropic responsibilities in addition to their responsibilities to earn a fair return for investors and comply with the law. CSR requires organizations to adopt a broader view of its responsibilities that includes not only stockholders, but many other constituencies as well, including employees, suppliers, customers, the local community, local, state, and federal governments, environmental groups, and other special interest groups. Although CSR is often spoken of as if it were a relatively new concept, it is in fact an idea with a long pedigree. In the 1950s, the chief executive officer of the American retailer Sears said that the “four parties to any business in the order of their importance” were “customers, employees, community and stockholders”. Current discussions about CSR evoke old questions about the place of corporations in society, the manner in which corporations are governed, and the ways in which corporate governance arrangements do not compel corporations to respond to claims from society, in addition to claims from shareholders. While CSR is an old idea, its emergence as a significant factor in relation to corporate decision-making is relatively new. The old idea – CSR – has been rising over the past 10 years or so to a prominent place on the corporate agenda. The world is witnessing what appears to be a transformation in popular views about the role of business in society that is on a par with major shifts in attitude, at other points in history, about large issues such as racial discrimination, the environment, and the role of women. By the end of that decade, popular opinion about the role of business in society had evolved to a point which suggested a widespread rejection of Friedman’s “the business of business is business” dictum. The reason for the shift can be attributed to various factors such as; globalization, loss of trust, society activism, and institutional investor interest in CSR. These trends suggest that there is both a growing perception that corporations must be more accountable to society for their actions, and a growing willingness and capacity within society to impose accountability on corporations. This has profound implications for corporate governance.
CSR in India
With the retreat of the state in economic activity in India, the imperative for business to take up wider social responsibilities is growing. The situation is complex and India is facing a compounded set of corporate responsibility challenges. At all levels, there is a felt need for companies to graduate to strategic interventions in CSR, which at present in many cases remain ad hoc. There are many companies that may spend for long-term development. A sense of strategic direction is a vital component in an effective approach to corporate responsibility. Yet, for all these signs of progress, CSR in India has yet to realize its full potential. Individual and collaborative initiatives continue to be dominated by self-assertion rather than accountability. There is certainly no lack of CSR programs and projects in India: what is absent, however, are clear metrics for evaluating their actual impact in improving social conditions. Many Indian business houses, private sector and public sector companies have undertaken major initiatives till date and have adopted several modes of practice related to CSR in India. Several innovative measures have also been adopted by companies towards the institutionalization of CSR that includes CSR initiatives by Lupin, Cipla, Ranbaxy, NIIT, TCS, BPCL, and Ion Exchange. To understand the current status of CSR in India, it is important first to map out the landscape and identify the main families of...
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