an assessment would not be very difficult had there been a single, widely-held conceptualisation of CSR, a standard set of criteria andmeasures based on this conceptualisation and international benchmark for CSR in emerging economies such as India, again flowing from this conceptualisation. The issues then would mainly relate to data availability and analysis. The reality, however, is that there exist several interpretations of what the social responsibility of business is. Different assessors of firms’ social responsibility employ different evaluation yardsticks without stating the conceptual foundation from which these are derived. Often a set of criteria are subjectively chosen and firms are rated against them. What is often not seriously dealt with is the correlation between these scores and the level of social responsibility that businesses exhibit. We propose in this paper to circumvent these problems by first developing a typology that can be used to categorise extant CSR approaches. Next, we argue the case for one of these approaches— what we call ‘Serving Society, Profitably’—as being the one consistent with the long-term interests of business as well as society. We then turn to the ground reality in India and, based on published information and our own impressions, qualitatively assess which ‘CSR types’ are prevalent in India and the extent to which the approach advocated by us is followed by Indian companies. We conclude with some reflections on the road ahead.
SOCIAL RESPONSIBILITY OF BUSINESS:
A TYPOLOGY AND CRITIQUE
What is CSR? A management scholar once remarked that there are as many definitions of corporate strategy as there are writers on the subject and the same could be true in the case of CSR too. CSR has been defined, variously and at different points in time, as obeying laws and customs; as meeting societal expectations; as balancing the interests of stakeholders; as living up to the expectations of ‘society at large’; as paying heed to the ‘triple bottom line of profits, people and the planet’; and so on. Further, it is often stressed that CSR should be an ‘integral’ part of a company’s strategy; that the question of CSR has to take in the role of business in society; and that with globalisation, the diminishing role of the state in economic activity and the increasing elimination of government subsidies, the responsibility of businesses should beextended to cover developmental issues as well. However, CSR surveys hardly touch upon the extent to which such exhortations are actually being followed by companies. To come to terms with this complex and often confusing situation, we base our analysis on what we think are the two key dimensions of social reponsibility. The first relates to corporate purpose—what a firm stands for, the raison d’être of its existence. Purpose could be categorised as societal value creation or value appropriation. The second dimension has to do with the extent to which social goals are integrated into its strategy. It is measured in terms of the extent of prevalence of ‘stand-alone’ CSR activities. Based on these two dimensions, it would be possible to place the CSR approaches of businesses into one of four quadrants as shown in Figure 1. Quadrants I and II correspond to a corporate purpose of value appropriation. While quadrant I represents an approach that includes engagement in stand-alone CSR activities, quadrant II represents an approach where a firm undertakes activities that providesome social benefits while also subserving the firm’s business goals. We have named these approaches as ‘Add-On’ and ‘StrategicPhilanthropy’ respectively. Likewise, quadrants III and IV represent a corporate purpose of societal value creation. We have named the approach represented by quadrant III ‘Serving Society, Profitably’. With regard to quadrant IV, in addition to its purpose being attuned to serving society, the firm also engages in charitable activities. We call this approach...
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