A study of Corporate Social Responsibility
Oil India Limited
The World Business Council for Sustainable Development (WBCSD) describes CSR as “business’ commitment to contribute to sustainable economic development, working with employees, their families, the local community, and society at large to improve their quality of life.”
The European Commission advocates CSR as “Being socially responsible means not only fulfilling legal expectations, but also going beyond compliance and investing more into human capital, the environment and relations with stakeholders”. Thus CSR exhorts firms to diverge from their sole aim of maximizing profits and to lay more importance on improving the economic and social standards of the community in their areas of operation. CSR can thus be simply defined as the additional commitment by businesses to improve the social and economic status of various stakeholders involved while complying with all legal and economic requirements. Although the term corporate social responsibility (CSR) is as old as the history of business itself, the concept was not formally formulated till 1950s. It was in 1953 that the term CSR was first systematically presented by Howard R. Bowen in his book “Social Responsibilities of Businessman”. Bowen believed that there would be general social and economic benefits that would accrue to society, if business recognized broader social goals in its decisions. CSR then is nothing but what an organization does to positively influence the society in which it exists. It could take the form of community relationship, employee volunteer programs, healthcare initiatives, special education / training programs and scholarships, preservation of cultural heritage and beautification of cities. So, Corporate Social Responsibility (CSR) involves a commitment by a company to manage its various roles in society as producer, employer, customer and citizen in a responsible manner. How a company meets its corporate responsibility goals is influenced by its history, vision of the founder, culture, experience, philosophy and business laws and regulations. The goal of CSR is, therefore, to give back to the society, what it (business) has taken from it, in the course of its quest for creation of wealth. Scholars such as Andriof and McIntosh (2001) suggest that corporate social responsibility requires corporate leaders to understand that everything a company does has consequences both inside and outside the company, from customers and employees to communities and the environment. They suggest that these impacts have a ripple effect on society that can be divided into three broad overlapping areas (see in the fig.)
The above mentioned areas can make an impact on the society as a whole but the relationship of each with the business is different. Economic and environmental issues typically get addressed and implemented from within a business, often because they have a direct impact on costs. Social issues, on the other hand, require closer liaison and sometimes partnership with external groups to deal with. So it can be said that CSR assigns to businesses a new role and purpose. Besides its moral value, CSR has an economic argument in favour of it. Proponents of this argument believe that CSR represents a holistic approach to business. Therefore, an effective CSR policy will infuse all aspects of operations. They believe the actions corporations take today to incorporate CSR throughout the organisation represent a real point of competitive market advantage on which future success can depend. Various terms have been used to describe CSR---corporate citizenship, corporate philanthropy, corporate giving, corporate community involvement, community relations, community affairs, community development, corporate responsibility, global citizenship etc
Significance of the study:...