1. CSR just Marketing or really for a better World?

2. The Concept
Definitions
1. 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" (Carroll and Buchholtz)
2. The World Business Council in its publication wrote that "Corporate Social
Responsibility is the continuing commitment by business to behave ethically and
contribute to economic development while improving the quality of life of the
workforce and their families as well as of the local community and society at large“
 CSR is a form of corporate self-regulation integrated into a business model. It is when
a corporation realizes its responsibility towards its stakeholders and other members in
the public sphere.
 An ethical and moral component is underpinned in this rapidly developing concept.
 The concept of CSR 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 legal norms.

3.  It emphasizes on the realization of the ethical responsibility towards the „stakeholders‟.
According to Post, Lawrence, and Weber – “stakeholders are individuals and groups that
are affected by an organization's policies, procedures, and actions.”
The PRIMARY stakeholders, such as employees and owners have specific legal rights
and expectations in regard to the organization's operations while the SECONDARY
stakeholders not, but may perceive that they have moral rights.
 CSR is synchronized with the concept of “sustainability in Development”. In 1987, the UN
appointed Brundtland commission which defined sustainable development as
'development which meets the needs of the present without compromising the ability of
future generations to meet their own needs.' Since then, the concept has caught up very
fast. CSR introduces the concept of “sustainability” into business operations meaning that
business organizations do not just become wealth hoarding chambers but also fulfill their
duty towards the larger community by investing in socially benefiting concerns. Our planet
has limited resources. Corporations and industrial houses cannot go on exploiting this
wealth without significant efforts for its refurbishment.
 CSR is holistic in its approach. It does not include only one aspect but embraces all
aspects that a corporate organization touches and affects.

4. SUSTAINABILITY IN BUSINESS
 It stresses the need to change from the old
sector-centered ways of doing business to
the modern approaches of high level integration,
coordination and cooperation in the operations
while at the same time addressing
efficiently the environmental and social issues.
 An organization needs to be accountable for its
actions. Of all forms of social accounting, the
most widely used is called the „Triple Bottom Line‟ accounting. This term was coined by
John Elkington in 1994. It measure the success of an organization as per the following three
factors: economic, ecological and social. Later on, the concept of “People, Planet, Profit”
was added to the triple bottom line.
• In other words, today‟s business operations do not limit itself to mere adherence to the
legal norms while solely working on profit maximization. The whole idea of CSR ensures
that organizations be pro-active in their efforts to be beneficial to the larger community as
they use its resources to reach higher levels of profits.

5. HISTORY
The concept of corporate citizenship has existed for a long time however it came to be
recognized only since the 1970‟s. CSR in its contemporary shape is of recent origin. It is
accurate to say that all societies at all points of time have had expectations that
organizations would act responsibly.
 In the eighteenth century the great economist Adam Smith suggested that the needs and
desires of society could best be met by the interaction of individuals and organizations in the
marketplace. This view expressed more than 200 years ago still forms the basis of modern
day economies. The industrial revolution brought in tremendous changes in the
industry, especially in Europe and America. Business organizations and enterprises sprang up
in large number.
 In the late 19th century many of these individuals believed and practiced a philosophy that
came to be called "Social Darwinism". This type of philosophy justified cutthroat, even
brutal, competitive strategies. Thus one finds that even though some of these tycoons were
big philanthropists donating millions, the companies that made them rich were practicing
business methods that, by today's standards at least, were exploitative of workers.

6.  By the 1960‟s the business world gradually began to accept additional responsibilities other
than making a profit and conforming to the laws. Furthermore, society began to expect
business to voluntarily participate in solving societal problems.
 The phrase CSR was coined in 1953
with the publication of Bowen's 'Social Responsibility of Businessmen„. Growing
literacy, affluence, mass communication and many other factors paced up the
development of significant corporate citizenship.
 In 1976, the OECD, a grouping of 30 powerful industrialised countries, recognising the
complications associated with companies operating across borders, established a set of
guidelines to ease the workings of globalisation.
 Such initiatives got a major boost when in 2000 the United Nations adopted the UNGC, a
ten principle based framework for businesses to adopt sustainable and socially responsible
policies.
“We need business to give practical meaning and reach to the values and principles
that connect cultures and people everywhere.” - Ban Ki-moon, Secretary-General of the
United Nations

7.  The 2002 session of the World Economic Forum witnessed the drafting of a joint statement
entitled Global corporate citizenship: the leadership challenge for CEOs&boards.
 At its General Assembly in Stockholm, Sweden, in September 2002, the International
Standardization Organization decided that the time had come to consider the value of
developing management standards on CSR. This resolution recognized the value of the ISO
14000 environmental management system standard in improving the efficiency of
corporate environmental management. Along with this, ISO 26000 is the recognized
international standard for CSR which is currently being drafted.
Arguments against CSR
The company makes profit and the society benefits. Is it really possible ?
 The primary motive of business is to earn profits for its owners and investors and it should
focus on profit-making.
 Giving away shareholder‟s money for charity purposes is wrong.
 Assuming social responsibility leads to a competitive disadvantage.
 Those in the corporate world are not equipped to deal with social problems.
 CSR is a strategy for avoiding regulation and also to gain competitive advantage.
Highlighting their „best‟ practices to divert attention from their „bad‟ practices.

8. Arguments in favor of CSR
The rise of the modern corporation created and continues to create many social problems.
Therefore, the corporate world should assume responsibility for addressing these problems.
 In the long run, it is in corporations' best interest to assume social responsibilities.
 Large corporations have huge reserves of human and financial capital. They should
devote at least some of their resources to addressing social issues.
 The corporate world has some of the brightest minds in the world, and it possesses
tremendous financial resources.
 „Ethical consumerism‟ is catching up with people.
 CSR can serve as the USP that companies look for their products.
 Corporations are keen to avoid interference in their business through taxation or
regulations.
CSR in contemporary times
CSR has continued to grow with almost all the major business houses joining the
bandwagon. Though, all this is really skeptical. There have been cases of companies
giving up their CSR contributions in times of financial crisis. Also, critics argue that it has
just been a deception without any major contribution to the welfare of the society.

9. 'The twentieth century has been characterised by three developments of great political
importance: the growth of democracy, the growth of corporate power and the growth of
corporate propaganda to protect corporate power against democracy.' – Alex Carey.
On the other hand, a significant number of investors are keeping track of a company‟s social
decisions in order to decide of their investment. Many believe that it adds to the company‟s
reputation more than the brand image. This is pretty obvious in the first world. In the rich
countries, the consumer trend is marked by a growing consciousness regarding a company‟s
social responsibility. Socially Responsible Investment (SRI) is being highly emphasized upon
these days.
Scenario in India
 Corporate Social Responsibility (CSR) has been on the agenda in India for a considerable
period. Most big Indian corporations are engaged in some CSR activities. As is the case in
many countries, the private sector is generally more active in this area than the
governmental/public sector.
 A National Foundation for Corporate Governance (NFCG) has been established by the
Ministry of Corporate Affairs.
 India being a member of the International Labour Organization (ILO) has ratified 40 of its
conventions. However in certain areas of key concern India is still lagging behind.

10.  Labour laws
India has altogether ratified 333 labour laws. However, these vary in terms of
implementation. The Minimum Wage Act was implemented in 1948. Since, most of the
labour is in the informal sector its implementation still remains a far-fetched reality.
Bonded labour is another serious issue to be dealt with.
 Environment laws
The main law on environment and production is The Environment (Protection) Act (1986).
This law gives the central government the authority to protect and improve
environmental quality, as well as control and reduce pollution.Many bodies like the CII
and the Indian Chamber of commerce have taken several energy efficient initiatives.
 Right to Information and Corruption
India currently ranks 84th in the Corruption Perceptions Index devised by Transparency
International.
The introduction of RTI in 2005 has led to changes in the transparency regarding
establishment and implementation of strategies, programmes and laws.
• Even much before the issue became a global concern, India was aware of corporate social
responsibility (CSR), due to the efforts of organisations such as the Tata Group.
Corporate companies like ITC have made farmer development a vital part of its business
strategy, and made major efforts to improve the livelihood standards of rural
communities.

11.  IT companies like TCS and Wipro have developed software to help teachers and children in
schools across India to further the cause of education.
• Banks and insurance companies are targeting migrant labourers and street vendors to
help them through micro-credits and related schemes.
• In June 2008, a survey was carried out by TNS India (a research organization) and the
Times Foundation with the aim of providing an understanding of the role of corporations in
CSR. The findings revealed that over 90 per cent of all major Indian organizations surveyed
were involved in CSR initiatives. An estimated 100 corporate foundations and 25 foreign
firms are involved in CSR activities in India, but statistics on input and output are elusive.
• The Indian corporate sector spent US$ 6.31 billion on social expenditure during 2007-08, up
from US$ 3.68 billion spent during the previous fiscal.
The need is for a better tie-up between corporations and government so that significant
betterment is achieved. This is not merely a game of expenditure and revenue but of „real‟
change. It is time that businesses play their proactive role with this realization.

12. • India based Satyam Computers which is a leading global consulting and IT
service company leverages its core business namely Information
Technology to bridge the yawning digital divide between the urban and
rural areas. Satyam has integrated its business with in built social values
and is a staunch community reformer. Satyam views its socially
responsible initiatives as an important strategic aspect for the long term
sustainability of the organization. This case focuses on the Gram IT
approach, an initiative taken by the Byrraju Foundation, an NGO promoted
by Satyam Computers. Gram IT takes business process outsourcing to the
educated unemployed youth in villages. It is an initiative that enables rural
youth to create wealth by honing their computer and English skills for
world class service delivery. Gram IT was such a unique model that it is
found near perfect for rural India. For this venture, Satyam bagged the
Asian CSR award under poverty alleviation category in 2007. The case
examines how this unique technology platform can endure the teething
troubles usually associated with growing economies.

13. • The case discusses about carbon credit trading, one of the most controversial
trade in the world. Post industrial era of human civilization had collided with the
earth’s environmental system resulting in disastrous effects that are strong enough
to threaten the biodiversity of the earth. Emission of GHGs and toxic co-pollutants
had made earth a boiling pot as the heat-trapping CO2 concentration in the
atmosphere is rising steadily to 450 parts per million. With the concern of
scientists and environmentalists increasing, countries of the world were forced to
make a collective effort through Kyoto Protocol in 1997. Though many global
initiatives have been taken with the mission of reducing GHG emissions, lack of co-
operation from major polluters like US and China have affected the effective
implementation of protocol.
• However, as emission reductions became a major concern, Kyoto Protocol initiated
mechanism of carbon trading. Though carbon trading helps in the reduction of
GHG emissions, many activists and analysts who point to the other side of it are
afraid about the negative effects it can have. However, carbon credit trading has
opened a new arena of profit making for developing countries that have lesser
emission levels. Sustainability being taken to the core strategy to gain competitive
advantage, developing climate related strategies would become a critical success
factor of corporate bodies.

14. CSR is at the juncture of its development. CSR can
become a tool of corporations to be used
tactically to defuse criticism and protect their
image or it can become an effective tool in truly
democratic societies to make corporations
socially and environmentally responsible by
creating a sustainable business ethos. In thinking
about probable outcomes, Allen White recently
prepared a paper addressing the future of CSR
ten years from now by imaginatively pondering
on the characteristics and implications of three
plausible outcomes.

15. The fad-and-fade scenario
White depicts this scenario, under a severe
economic global crisis, where “CSR, once viewed
as irreversibly destined to become integral to
corporate strategy, management and
governance, has proven to be fragile and
transient. Attention of business and government
turns to basic economic survival and recovery
from the crisis. CSR moves quietly into hibernation
with an uncertain future, characterized by
practices associated with its earliest
phase, namely compliance and philanthropy.

16. The transition-and-transformation scenario
In this scenario, White envisions the failure of
CSR as an instrument of corporations to behave
responsibly due to intensifying ecological stresses
and social inequalities16 despite the incremental
progress achieved in labour, human rights and
environmental practice. The implication is that a
business-driven CSR, voluntary and self-
regulated, was not up to the job of building a
social, economic and environmentally-sustainable
ethos and was deemed a failure by most
stakeholders.

17. The embed-and-integrate scenario
This scenario is depicted as the triumph of the
CSR movement, for companies have moved to
embed CSR as a core part of corporate strategy
and operations. As White asserts, For large and
small, public and private companies alike, CSR is
the rule; the small fraction of firms that fail to
grasp this find themselves increasingly at a
competitive disadvantage.