India is widely seen as a country in which corporate social responsibility has long played an important role. National and international nongovernmental organizations and UN agencies are involved in the general public debate in the business community and the media. However, the involvement of the business enterprise community is concentrated among a few long-established family-owned companies that contribute a substantial amount in the field of CSR, in both theory and practice. The Indian subsidiaries of German companies are bound by their parent companies' guidelines for socially responsible behavior, but how these guidelines are actually implemented is left up to each subsidiary. Their CSR activities give attention to their employees (providing training and bettering social security), the environment and aid efforts within India or in your community, which are concentrating on providing help to tsunami victims. Public policymakers would like to achieve inclusive and sustainable growth, and contacting private enterprise to contribute its share.
There is no evidence of CSR activities in the informal sector of the Indian economy, which is responsible for slightly less than half of GDP and employs some 93 percent of India's workforce. Indeed, employees in this sector are afforded no rights or protections whatsoever, and all indications are that no efforts are being designed to fight poverty, promote education or health, protect the surroundings or encourage employee participation in business development.
The UN Global Compact seeks to promote the CSR activities of businesses in India. However, it hasn't succeeded in involving important NGOs, or most of all, the unions. The UN Global Compact is not well known within the business sector or the NGO community. For some time now, German development organizations (GTZ, InWent) have been cooperating closely with the country's important trade associations. The Indo-German Chamber of Commerce is rolling out its own approach to CSR, and conceptual and advisory support for German companies in India.
While CSR is not near the top of the agenda of German political foundations, a few of them are beginning to devote more focus on this area. The German government, represented by the Ministry of Labor, is attempting to achieve greater international cooperation on CSR under the Heiligendamm Process, which includes India as one of five outreach countries. Talks have been held in the context of the formalized partnership between Germany and India. Representatives of the German business community talk with embassy officials at least one time a year, during their monthly business lunches, to go over CSR.
Source: German Embassy, New Delhi
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Corporate social responsibility (CSR) also known as corporate responsibility, corporate citizenship, responsible business and corporate social opportunity is a thought whereby organizations consider the interests of society by firmly taking responsibility for the impact of these activities on customers, suppliers, employees, shareholders, communities and other stakeholders, as well as the environment. This obligation is seen to extend beyond the statutory obligation to comply with legislation and sees organizations voluntarily taking further steps to enhance the standard of living for employees and their families as well for the local community and society at large.
The practice of CSR is at the mercy of much debate and criticism. Proponents argue that there surely is a solid business case for CSR, in that corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate, short-term profits. Critics argue that CSR distracts from the essential economical role of businesses; others argue that it's nothing more than superficial window-dressing; still others argue that it is an effort to preempt the role of governments as a watchdog over powerful multinational corporations.
OBJECTIVE:
The objective of the paper is to examine the type and extent of corporate social responsibility (CSR) initiatives under taken by Indian companies and study its relevance in business.
Overview
Corporate social responsibility is necessarily an evolving term that does not have a typical definition or a fully recognized set of specific criteria. With the knowing that businesses play a key role on job and wealth creation in society, CSR is normally thought as the way a business achieves a balance or integration of economic, environmental, and social imperatives while at exactly the same time addressing shareholder and stakeholder expectations. CSR is considered as applying to organizations wherever they operate in the domestic and global economy. Just how businesses engage/involve the shareholders, employees, customers, suppliers, governments, non-governmental organizations, international organizations, and other stakeholders is usually a key feature of the idea. While business compliance with laws and regulations on social, environmental and economical objectives set the official degree of CSR performance, CSR is often understood as relating to the private sector commitments and activities that extend beyond this foundation of compliance with laws.
From a progressive business perspective, CSR usually involves concentrating on new opportunities as a way to react to interrelated economic, societal and environmental demands in the marketplace. Many firms assume that this focus offers a clear competitive advantage and stimulates corporate innovation.
CSR is generally seen as the business enterprise contribution to sustainable development which has been defined as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs", and is normally understood as focusing on how to attain the integration of economic, environmental, and social imperatives. CSR also overlaps and frequently is synonymous numerous top features of other related concepts such as corporate sustainability, corporate accountability, corporate responsibility, corporate citizenship, corporate stewardship, etc. .
CSR commitments and activities typically address aspects of a firm's behaviour (including its policies and practices) with respect to such important elements as; health and safety, environmental protection, human rights, human resource management practices, corporate governance, community development, and consumer protection, labour protection, supplier relations, business ethics, and stakeholder rights.
Corporations are motivated to involve stakeholders in their decision-making and address societal challenges because today's stakeholders are increasingly alert to the importance and impact of corporate decisions upon society and the environment. The stakeholders can reward or punish corporations. Corporations can be motivated to change their corporate behaviour in response to the business case which a CSR approach potentially promises. This includes:
1. better financial performance and profitability (e. g. through eco-efficiency),
2. improved accountability to and assessments from the investment community,
3. enhanced employee commitment,
4. decreased vulnerability through stronger relationships with communities, and
5. improved reputation and branding.
Criticisms and concerns
Critics of CSR as well as proponents debate lots of concerns related to it. These include CSR's relationship to the fundamental purpose and nature of business and questionable motives for engaging in CSR, including concerns about insincerity and hypocrisy.
Critics concerned with corporate hypocrisy and insincerity generally claim that better governmental and international regulation and enforcement, rather than voluntary measures, are necessary to ensure that companies behave in a socially responsible manner. CSR could prove to be a valuable asset in a day and time of Mergers & Acquisitions, as it can help organizations spread their brand name
INDIAN SCENARIO
Even much before the issue became a global concern, India was aware of corporate social responsibility (CSR), due to the efforts of organisations including the Tata Group. (Around 66 % of Tata Sons, the holding band of the Tata Group, is today owned by way of a trust).
Corporate companies like ITC have made farmer development a essential part of its business strategy, and made major efforts to improve the livelihood standards of rural communities. Unilever is using micro enterprises to strategically augment the penetration of consumer products in rural markets. IT companies like TCS and Wipro have developed software to help teachers and children in schools across India to help expand the cause of education. The adult literacy software is a significant element in reducing illiteracy in remote communities. 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 completed by TNS India (a study organization) and the changing times Foundation with the aim of providing a knowledge of the role of corporations in CSR. The findings revealed that over 90 per cent of most major Indian organizations surveyed were involved in CSR initiatives. In fact, the private sector was more involved with CSR activities than the public and government sectors. The best areas that corporations were involved with were livelihood promotion, education, health, environment, and women's empowerment. The majority of CSR ventures were done as internal projects while a small proportion were as direct financial support to voluntary organizations or communities.
In a survey carried out by the Asian Governance Association, which ranks the top 10 Asian countries on corporate governance parameters, India has regularly ranked among the very best three along with Singapore and Hong Kong, going back eight years.
In another study undertaken by automotive research company, TNS Automotive, India has been ranked second in global corporate social responsibility. State-owned Bharat Petroleum and Maruti Udyog were ranked as the best companies in India. Bharat Petroleum and Maruti Udyog came at the top with 134 points each, accompanied by Tata Motors (133) and Hero Honda (131). The analysis was predicated on a public goodwill index and India received 119 points in the index against a worldwide average of 100. Thailand was at the very top slot with 124 points.
Several foundations run by corporate houses intend to devise a strategy to ensure transparency in their social and community development operations, such as tracking spending in and progress of such projects in their total annual reports.
The effort is significant because it brings together an array of Indian companies to share ideas on innovating sustainable programmes. Among them are Multi Commodity Exchange of India Ltd, Anil Dhirubhai Ambani Group and media company Bennett, Coleman and Co. Ltd,
Audit firm KPMG will partner with them to provide help with evaluating corporate social responsibility or CSR programmes-a trend companies are slowly embracing as India's expanding economy contrasts sharply with growing local protests over land for future professional projects.
The network alliance stems from the first sustainability summit that was organized in January by the Associated Chambers of Commerce and Industry of India.
CSR could prove to be a very important asset in an age of mergers and acquisitions, especially as it helps companies spread their brand name, The new network will also serve as one common ground to lobby with the federal government for tax exemptions and safeguard other interests in the future.
Indian companies have made little progress in reporting development projects. And only 48 companies have so far given their commitment to support the US Global Compact, a charter for enhancing the global business environment through standards, such as labour rights and fighting corruption.
Addressing business leaders in May this past year, Prime Minister Manmohan Singh said "Corporate social responsibility should not be defined by tax planning strategies alone. Rather, it should be defined within the framework of a corporate philosophy, which factors the needs of the community and the regions in which a corporate entity functions. "
Some say companies come with an inherent "mental block" in reporting development programmes. A recently available KPMG study among 27 Indian companies showed a mere 8% mentioned their social expenditures in their gross annual reports, and only 25% filed CSR reports by any means. But 25 % of these are also signatories of the Global Reporting Initiative, a 10-year-old movement started by an NGO called Coalition for Environmentally Responsible Economies (CERES) and the United Nations Environment Programme. This encourages companies to make voluntary disclosures and lays down framework on improving reporting principles.
"Most companies have a tendency to give to charities than make long-term development commitments. When a company voluntarily opens up for self-evaluation, it generates value for shareholders when competing with others, " said Parul Soni, associate director of KPMG's Aid and Development Services.
An estimated 100 corporate foundations and 25 foreign organizations are involved in CSR activities in India, but statistics on input and output are elusive.
According to Times' Pandey, the Indian corporate sector spent Rs30, 000 crore on social expenditure during the last financial year, up from Rs17, 500 crore the prior year. Quoting from a government report, he said, companies drew a total exemptions of Rs5, 500 crore under income-tax laws this past year. These figures, an analyst said, sound improbable as Indian companies still do not distinguish between philanthropy and internal practices to benefit stakeholders such as employees and community.
Companies, too, continue to rely on different models to earmark its social expenditure, rendering it difficult to gauge the overall impact.
For instance, the Steel Authority of India Ltd (SAIL), the country's major steel company, spent Rs100 crore on CSR this past year; this was 2% of its profit after tax, exclusive of dividend tax, according to SAIL spokesperson N. K. Singhal. While others, such as Tata Steel Ltd, which runs a 850-bed hospital and rural projects in 800 villages around Jamshedpur, spends typically Rs150 crore as part of its annual earnings expenditure.
What eventually accocunts for for CSR of an company ultimately depends upon leadership; as part of company decision, about 66% of Tata Sons, the holding group of the Tata group, is today owned by the trust.
Pharmaceuticals company Jubilant Organosys Ltd, already runs an anti-tuberculosis programme with the federal government of Uttar Pradesh. Apart from schools and hospitals that are run by trusts and societies, the government, too, is exploring to widen the scope of public-private partnerships to develop and maintain schools and hospitals in substitution for a set annuity payment.
CONCLUSION
The idea of corporate social responsibility has gained prominence from all avenues. Organizations must realize that government alone will not be in a position to get success in its endeavor to uplift the downtrodden of society. The present societal marketing theory of companies is continually evolving and has given rise to a new concept-Corporate Social Responsibility. Lots of the leading corporations around the world had realized the importance to be associated with socially relevant causes as a way of promoting their brands. It stems from the desire to do good and get self satisfaction in return as well as societal obligation of business.
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 Steel Authority of India Ltd (SAIL), the country's greatest steel company, spent US$ 21. 05 million on CSR this past year; Tata Steel Ltd, (which runs a 850-bed hospital and rural projects in 800 villages around Jamshedpur), spends about US$ 31. 58 million within its annual earnings expenditure. There are plans to also introduce CSR in the small and medium enterprises (SME) sector to increase its reach in remote areas.
REFERENCES:
1. Corporate Social Responsibility in India - An Empirical Research
By Bernadette Dsilva
2. CSR could end up being a valuable asset in an age of M&As, as it can help organizations spread their brand - Maitreyee Handique
3. Corporate Social Responsibility is no more just an addition, it is an integral differentiator. " Prasad Chandra, CMD, BASF South Asia
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ABSTRACT
An progressive model is being implemented by corporate world to construct brands in the rural market. Organisations are instigating social responsibility campaigns in the rural areas, which also exhibit the potencies and the values a brand illustrates. These campaigns create valuable words of mouth publicity for the brand in the oral socialist culture of rural India, that your short ten second commercial advertisements are not in a position to do. Corporate world needs to create a social responsibility campaign around the business model of the organisation and strengths and values that are depicted by the brand. Then only the campaign can be handy to construct brand in the rural areas.
Key Words:- CSR, brand Building, Rural India,
INTRODUCTION
The idea of corporate social responsibility originated in the 1950s in USA and the concept came into prominence in public debate through the 1960s and 1970s. During 1980s to 2000, corporations generally recognized a responsibility to society and weighed up against the demands of being competitive in a rapidly changing global economy. Corporate social responsibility is fundamentally a philosophy or a vision about the relationship of business and society. It is a process of continuous improvement which starts small, grows and expands over a period. It has been known as caring capitalism in contrast to financial capitalism. Corporate Social Responsibility (CSR), also called corporate responsibility, corporate citizenship, responsible business and corporate social performance is a kind of corporate self-regulation integrated into a business model. Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure their adherence to law, ethical standards, and international norms. Business would embrace responsibility for the impact of their activities on the surroundings, consumers, employees, communities, stakeholders and all the members of the public sphere. Furthermore, business would proactively promote the general public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. CSR is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple important thing: People, Planet, and Profit.
Corporate Social Responsibility (CSR) is an idea that encourages organizations to consider the interests of society by firmly taking responsibility for the impact of the organization's activities on customers, employees, shareholders, communities and the environment in all aspects of its operations. This obligation is seen to extend beyond the statutory obligation to adhere to legislation and sees organizations voluntarily taking further steps to improve the standard of living for employees and their own families as well for the neighborhood community and society most importantly. The practice of CSR is subject to much debate and criticism. Proponents argue that there is a strong business case for CSR, in that corporations benefit in multiple ways by operating with a perspective broader and longer than their own immediate, short-term profits. Critics argue that CSR distracts from the fundamental financial role of businesses; others argue that it is nothing more than superficial window-dressing; others argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations.
Social responsibility is an ethical or ideological theory that an entity whether it's a government, corporation, organization or individual has a responsibility to society. This responsibility can be "negative", meaning there's a responsibility to avoid acting (resistance stance) or it could be "positive, " meaning there is a responsibility to act (proactive stance). There is a huge inequality in the means and roles of different entities to fulfill their claimed responsibility. This would imply the several entities have different responsibilities, in so much as states should ensure the civil rights with their citizens, that corporations should respect and encourage the human rights of their employees which citizens should abide with written laws. But social responsibility can mean more than these examples. Many Non-governmental organizations (NGOs) accept that their role and the responsibility of their members as citizens are to help improve society by firmly taking a proactive stance in their societal roles. Additionally, it may imply that corporations own an implicit obligation to give back again to society.
Many businesses in emerging markets are realizing advantages from corporate social responsibility initiatives, with quantified improvements in revenue and market access, productivity, and risk-management. While emerging-market companies have a tendency to focus more on short-term cost savings and earnings gains, intangibles, such as brand value and reputation issues, are more significant for companies in developed countries. The contemporary corporate social responsibility agenda, however, is relatively immature in all countries. Despite widespread rhetoric, its impact is still patchy. In practice, implementation of this agenda by many companies is shallow and fragmented. Governments are starting to view corporate social responsibility as cost-effective means to enhance sustainable development strategies, so when a component of the national competitiveness strategies to attract foreign direct investment and position their exports in global markets. There's a significant chance for the public sector to harness business enthusiasm for corporate social responsibility to help achieve its goal of reducing poverty. The task today for the public sector in developing countries is to identify corporate social responsibility priorities and incentives that are meaningful in their national context, also to play a role in strengthening appropriate local initiatives.
Corporate social responsibility is not a new concept in India. However, what's new is the shift in focus from making profits to meeting societal challenges. Now-a-days, employees are actively taking part in the social activities even on holidays. That is mainly because employees feel a feeling of pride when they get excited about such activities. Moreover, companies are experiencing dedicated departments for CSR. CSR taken up by various selection of companies primarily targets poverty alleviation, environmental protection and sustained development. Companies are taking initiatives for developing infrastructure in rural areas. TVS Electronics was involved with CSR through the Tsunami to provide relief measures to the victims. They also have participated with the government to improve sanitation in a village called Tiruvidenthai. Such initiatives will help in increasing the conditions of rural people. Satyam Foundation of Satyam Computer Services Ltd. , Infosys Foundation of Infosys Technologies Ltd. , GE Foundation of the General Electric Company are exemplary instances of the benevolent commitment of the corporate sector in India. Regardless of the profits they make, these foundations are aiming at uplifting of the poor and enhancing the standard of life in the rural sector.
The companies which implemented CSR in rural India are discussed below
RURAL ELECTRIFICATION CORPORATION LTD
The approach of REC towards Corporate Social Responsibility is oriented to identify and formulate projects in response to felt societal needs in diverse areas also to implement them with full involvement and commitment in a period bound manner. Like a responsible corporate entity, Rural Electrification Corporation is constantly strive for opportunities to meet up with the expectation of its stake holders by pursuing the concept of sustainable development. The major activities in rural area are to facilitate demonstration of commercially viable rural electricity delivery models with appropriate intervention and support over a selective basis such that they can be replicated elsewhere. REC provides promotion of rural enterprise and livelihood including skill development and training, Provides development support to common facility centres / production centres in rural areas. REC Promotes development of rural technologies for micro enterprise and also Promotes sports and games.
LAFARGE CEMENT
Lafarge worldwide gives prime importance to sustainable development for sustainable economical performance. Lafarge is committed to the communities where it operates. In India Lafarge has undertaken a number of initiatives under its corporate social responsibility programme. The major initiatives are Project Employability, Project Low Cost Housing, and Project Education. Project Employability targets creating sustainable livelihoods for local communities. The concept of the project is to generate communities that will be more skilled and capable of sustaining themselves independently by taking advantage of the business's expertise, knowledge and competencies, rather than merely providing continued financial support. It directly provides answers to the critical community problem of unemployment, through a way, which is "development" oriented and lays the foundation for long term success of the society.
Project Employability provides professional training in masonry to the illiterate and unemployed youth in these communities making them employable. The objective of Low Cost Housing is to promote and enhance the use of cement in houses to be able to provide safe and comfortable habitats. Since a huge part of India (70%) lives in rural areas, the project is basically geared to meet rural housing needs. Project Low Cost housing, which we initiated during 2004 incorporating modern tools, is becoming our priority area. The purpose of the project is to create safe houses, which can be replete with basic amenities and provide a platform because of its replication across geographies. Lafarge at present is conducting Computer Education classes, cost free, for over 1500 girl children in about 10 middle schools in Jharkhand and Chhattisgarh in the part of its Project Education. Lafarge also has plans to broaden the scope and escalate the activities of Project Education further under the aegis of
BPCL
BPCL at first started employed in Mahul, the village found in the vicinity of its Mumbai refinery since 1986. The habitants of Mahul, essentially from the fishing community, were rich because they possessed marine wealth but so far as education, health, etc was concerned, they needed help. BPCL volunteered and the original success brought such gratification that immediately it adopted another village (this time an inside one) called Karjat, developments with selfless intentions helped introspect about the near future role BPCL should adopt in its try to contribute to this effort, then there after there was no looking back. As being a corporate responsibility, today 37 villages across India have been adopted. This consists of making substantial investments for almost a decade. 5 in those to make them fully self reliant, providing them fresh normal water, sanitation facilities, medical facilities, enhancing their income standards by imparting vocational training and agricultural innovations. However, BPCL also firmly believes that the one vehicle for raising the villagers using their company present state is by educating the young and the old, a give attention to providing grants for opening schools and opening adult literacy camps as well.
INDIAN OIL
Indian Oil has a concerted social responsibility programme to partner communities in health, family welfare, education, environment protection, providing potable water, sanitation, and empowerment of women and other marginalised groups. Indian Oil has always been in the forefront in times of national emergencies. Indian Oil People have over and over rallied to help victims of natural calamities, maintaining uninterrupted supply of petroleum products and contributing to relief and rehabilitation measures in cash and kind. Indian Oil's community-focussed initiatives include allotment of petrol/diesel station dealerships and LPG distributorships to beneficiaries from among Scheduled Castes, Scheduled Tribes, physically handicapped, ex-servicemen, war widows, etc. The Corporation in addition has unveiled kisan seva kendras as small-format shops to attain quality products and services to the people in the rural areas. Indian Oil in addition has create the Indian Oil Foundation (IOF) as a non-profit trust to safeguard, preserve and promote national heritage monuments. THE ORGANIZATION also supports a variety of endeavours in arts, culture, music and dance, aside from organising programmes on its own under the banners of Indian Oil Art Exhibition, Indian Oil Sangeet Sabha and Indian Oil Kavi Sammelan.
ACC
ACC has undertaken social volunteering practices almost from its inception, - a long time before the word corporate social responsibility was coined. The business's earliest initiatives in community development date back again to the 1940's in a village on the outskirts of Mumbai as the first formal Village Welfare Scheme premiered in 1952. The community living around many of our factories comprises the weakest sections of rural and tribal India with no usage of basic amenities. Its community development activities revolve around the under-privileged community that lives in the immediate vicinity of the cement plants. The number of activities starts with extending educational and medical facilities and goes on to pay vocational guidance and supporting employment-oriented and income-generation projects like agriculture, animal husbandry, cottage industries by developing local skills, using local raw materials and helping create marketing outlets. In any way our cement factories ACC share amenities and facilities with members of the neighborhood community. This consists of sharing education and medical facilities, sports, recreation, usage of Bore Wells, normal water and the use of colony roads.
COLGATE'S PROJECT JAGRUTI
In the year 1998 Colgate started project Jagruti, the rural hygiene drive combined with the Indian dental Association. This project covers 60 lakh people in 20, 000 villages, out of which 15, 000 villages had no experience to the availability of toothpaste and tooth powder. The aim of the drive is to promote the brand in rural areas but the overall strategy is also spreading the vital information of oral hygiene one of the lesser aware rural people.
CHAMBAL FERTILISER'S UTTAM BANDHAN
Uttam Bandhan, the city welfare initiative launched by the K. K. Birla group's flagship company Chambal Fertilisers and chemicals ltd (CFCL) in Rajastan in the year 2000. Under this programme, CFCL trains unemployed rural youth as extension workers known as krishi sewaks, who connect to the farmers and advise them.
HUL'S VINDHYA VALLEY PROJECT
In the year 2000 HUL helped state owned Khadi Board via an advisory relationship with the federal government of Madhya Pradesh. It helped the board to brand local produce from villages and tribal areas such as natural honey collected from forests in the state of hawaii under the brand Vindhya Valley. The merchandise range includes edible products like papads, pickles, masala and turmeric. HUL provided the corporate expertise, marketing acumen and quality parameters, while the state government bore the marketing expenses for the brand building.
ITC'S CSR INITIATIVE
ITC has taken a good number of social initiatives in rural areas around its plants, that are helping both the population of adjoining areas and the organisation itself. These developmental efforts are providing meaningful occupations in the village itself. Among the CSR initiatives is Sunehra Kal ( Better Tomorrow). It is a social forestry project that was launched around its Bhadrachalam plant in Andhra Pradesh. This programme targeted at economically backward communities, living below the poverty line involves forestation, soil and water conversion, community development, health and sanitation, education and watershed management.
Even though companies are taking serious efforts for the sustained development, some critics still are questioning the concept of CSR. A couple of people who declare that Corporate Social Responsibility underlies some hidden motives while others consider it as a myth. Is CSR a really stalking horse for an anti-corporate agenda? The reality is that CSR is not really a tactic for brand building. Indulging into activities that help society in a single way or the other only adds to the goodwill of any company. Rural people can become a viable market for the corporate with a developmental approach of social marketing. Organisations can launch social responsibility initiatives in order to make brands in the rural areas. The social responsibility initiatives are more effective in building brands in rural market than the commercial advertisements.
