A View on Corporate Social Responsibilities in India
The term "corporate social responsibility" came into common use in late 1960s and early 1970s, after many multinational corporations were formed. CSR is titled to aid an organization's mission as well as a guide to what the company stands for and will uphold to its consumers. Corporate social responsibility is also called corporate conscience, corporate citizenship, social performance, or sustainable responsible business. Corporate Social Responsibility ( CSR) is becoming an increasingly important activity to businesses nationally and internationally. As globalization accelerates and large corporations serve as global providers, these corporations have progressively recognized the benefits of providing CSR programs in their various locations. CSR activities are now being undertaken throughout the globe. A more common approach of CSR is philanthropy. This includes monetary donations and aid given to local organizations and impoverished communities in developing countries. Some organizations do not like this approach as it does not help build on the skills of the local people, whereas community based development generally leads to more sustainable development. A business needs a healthy, educated workforce, sustainable resources and adept government to compete effectively. For society to thrive, profitable and competitive businesses must be developed and supported to create income, wealth, tax revenues, and opportunities for philanthropy. An attempt has been made in this paper to analyze a view on Corporate Social Responsibilities in India.
THE ORIGIN OF CORPORATE SOCIAL RESPONSIBILITIES
The concept of corporate social responsibility of large industrial groups has occupied a prominent place in the greater national discourse on economic issues since the independence era in India. Gandhi described large businesses as 'trusts' of the 'wealth of the people' and thus emphasized on the larger social purpose that industrial wealth should serve in independent India. In the early days of the postindependence period, the Indian state under the heavy influence of Nehruvian socialism encouraged private industries to play an active role in the economic and social development of the backward sections of the society, while at the same time setup a mammoth public sector for serving larger societal interests. As Nehru's gentle socialism gave way to the more radical policies of nationalization and extensive state regulation of the Indira Gandhi era, industrial groups desperate to avoid the draconian state policies and regulations in economic affairs resorted to large scale corporate welfare programs to demonstrate that private wealth also played an important role in poverty alleviation and the socio-economic development of the nation and was not anti-people. An impending crisis in Indian economy led the Rajiv Gandhi and Narashima Rao governments to dismantle the 'license raj' and introduce much-needed economic reforms in the country, which marked the beginning of the economic liberalization and the free market economy in India. In this scenario, there is an increased focus on the social role of these private enterprises by both the proponents and opponents of liberalization in India.
PROBLEM OF CORPORATE SOCIAL RESPONSIBILITIES
The voluntary compliance of social and ecological responsibility of companies is called CSR. Corporate social responsibility is basically a concept whereby companies decide voluntarily to contribute to a better society and a cleaner
environment. Corporate social responsibility is represented by the contributions undertaken by companies to society through its business activities and its social investment. This is also to connect the concept of sustainable development to the company's level. Over the last few years an increasing number of companies worldwide started promoting their Corporate Social Responsibility strategies because the customers, the public and the investors expect them to act in a sustainable as well as responsible manner. In most cases CSR is a result of a variety of social, environmental and economic pressures. The term Corporate Social Responsibility is imprecise and its application differs in many ways. CSR cannot only refer to the compliance of human right standards, labor and social security arrangements, but also to the fight against climate change, sustainable management of natural resources and consumer protection.
IMPORTANCE OF CORPORATE SOCIAL RESPONSIBILITIES Effective Leadership
How a company perceives its societal responsibility depends on various factors such as the markets in which it operates, its business line and its size. Companies understand that a strong CSR program is an essential element in achieving good business practices and effective leadership.
Economic, Social and Environmental sector
Companies have explored that their impact on the economic, social and environmental sector directly affects their relationships with investors, employees and customers. Whilst so far CSR was mainly promoted by a number of large or multinational companies, it is now also becoming important to small national companies.
Prime Goal of a Company
As companies march forward in the context of globalization, they become increasingly aware that Corporate Social Responsibility can be of direct economic value. Although the prime goal of a company is to generate profits, companies can at the same time contribute to social and environmental objectives by integrating CSR as a strategic investment in to their business strategy.
An Intrinsic Part of Business Plans
In India there is a small number of companies which practice CSR. This engagement of the Indian economy concentrates mainly on a few old family owned companies, and corporate giants such as the Tata and Birla group companies which have led the way in making corporate social responsibility of an intrinsic part in their business plans. These companies have been deeply involved with social development initiatives in the communities surrounding their facilities. So, the corporate social responsibilities play a vital role in Indian companies.
POTENTIAL BUSINESS BENEFITS IN CORPORATE SOCIAL RESPONSIBILITIES Human resources
A CSR programme can be an aid to recruitment and retention particularly within the competitive graduate students’ market. Potential recruits often ask about a firm's CSR policy during an interview, and having a comprehensive policy can give an advantage. CSR can also help improve the perception of a company among its staff, particularly when staff can become involved through payroll giving, fundraising activities or community volunteering.
Managing risk is a central part of many corporate strategies. Reputations that take decades to build up can be ruined in hours through incidents such as corruption scandals or environmental accidents. These can also draw unwanted attention from regulators, courts, governments and media. Building a genuine culture of ' doing the right thing' within a corporation can offset these risks.
In crowded marketplaces, companies strive for a unique selling proposition that can separate them from the competition in the minds of consumers. CSR can play a role in building customer loyalty based on distinctive ethical values. Several major brands, such as the cooperatives group, the body shop and American apparel are built on ethical values.
License to operate
Corporations are keen to avoid interference in their business through taxation or regulations. By taking substantive voluntary steps, they can persuade governments and the public at large that they are taking issues such as health and safety, diversity, or the environment seriously as good corporate citizens with respect to labour standards and impacts on the environment.
CRITICISMS AND CONCERNS OF CORPORATE SOCIAL RESPONSIBILITIES Nature of business
Some people think that a corporation's basic purpose is to maximize returns to its shareholders, and that since it is for the people to have social responsibilities, corporations are only responsible to their shareholders and not to society as a whole. Although they accept that corporations should obey the laws of the countries within which they work, they assert that corporations have no other obligation to society. Motives
Some corporations start CSR programs for the commercial benefit they enjoy through raising their reputation with the public or with government. They suggest that corporations which exist solely to maximize profits are unable to advance the interests of society as a whole.
The rise in popularity of ethical consumerism over the last two decades can be linked to the rise of CSR. As global population increases, so does the pressure on limited natural resources required to meet rising consumer demand. Industrialization, in many developing countries, is booming as a result of both technology and globalization.
Globalization and market forces
As corporations pursue growth through globalization, they have encountered new challenges that impose limits to their growth and potential profits. Government regulations, tariffs, environmental restrictions and varying standards of what constitutes "labor exploitation" are problems that can cost organizations millions of dollars. CSR methodologies as a strategic tactic to gain public support for corporate presence in global markets, helps them sustain a competitive advantage by using their social contributions.
Social awareness and education
The role among corporate stakeholders is to work collectively to pressurise corporations to keep changing. Shareholders and investors themselves, through socially responsible investing are exerting pressure on corporations to behave responsibly. Non-governmental organizations are also taking an increasing role, leveraging the power of the media and the Internet to increase their scrutiny and collective activism around corporate behavior.
The rise of ethics training inside corporations, some of it required by government regulations, is another driver credited with changing the behavior and culture of corporations. The aim of such training is to help employees make ethical decisions when the answers are unclear. Hence the need for learning normative values and rules in human behavior. Organizations also see secondary benefit in increasing employee loyalty and pride in the organization.
Laws and regulations
Another driver of CSR is the role of independent mediators, particularly the government, in ensuring that corporations are prevented from harming the broader social well, including people and the environment. Governments should set the agenda for social responsibility by way of laws and regulations that will allow a business to conduct themselves responsibly.
MANAGING THE CHANGE: PUBLIC SECTOR ENTERPRISES, CORPORATE SOCIAL RESPONSIBILITY AND LIBERALIZATION
In our narrative so far, we have focused on the private sector and its greater societal obligations. India, also, has a large public sector with several huge corporations. There are government companies operating in various
sectors like petroleum, heavy industries, aviation, mining, steel, equipment manufacturing and shipping. The Indian public sector has had a long tradition of corporate social responsibility and the initiatives of corporations like the Oil and Natural Gas Commission (ONGC), Steel Authority of India Ltd (SAIL) and Gas Authority of India Ltd. (GAIL) have played a critical role in the development of several backward regions of the country. Indian Airlines and Bharat Heavy Electronics have been widely acclaimed for their disaster management efforts. The era of liberalization has led to the privatization of several public sector units and others being forced to make switch from being monopolies to being free market players with intense private competition. These dynamic processes have raised several key questions relating to the corporate social responsibility of the public sector. Meanwhile the opponents of privatization have used the 'corporate social responsibility' argument for their cause, they argue that considering the vital importance of the social role played by the public sector in India, there should not be any privatization of these vital industries. Business organizations across the world are realizing the benefits of adopting socially responsible behavior. This idea still needs to be understood and implemented in a better manner by the business sector in India.
India is becoming one of the fastest growing economies in the world. With a soaring growth rate, India is inviting more and more international investors to its markets. But is this rise in economic growth solely based on successful business operations. As far as the upliftment of communities, generation of employment opportunities and ensuring economic growth is concerned, the government alone cannot attain success. The concept of CSR is not new to India as large companies like BIRLAs and TATAs have been integrating good work in their business operations for decades. Even though the concept is not new to the country, its implementation has been a major concern for years. If experts are to be believed, corporate social responsibility is still in the nascent stages in India. In short, CSR is misunderstood for charity by a large number of Indian companies. It is merely considered a policy that should be implemented in business operations rather than giving importance to social good. The key to CSR success is establishing the wellbeing of all stakeholders in the programme. While CSR strategy and programme planning is vital, implementation still needs continuous monitoring, improvement and vigilance on the impacts on its beneficiaries.
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