36 Urmila Moon Ab
36 Urmila Moon Ab
36 Urmila Moon Ab
Introduction
The importance of CSR emerged significantly in the last decade. Over the time, CSR expanded to include both economic and social interests. Along with this it also broadened to cover economic as well as social interests. Companies have become more transparent in accounting and display public reporting due to pressures from various stakeholders. It is possible for companies to behave in the desired ethical and responsible manner towards consumers, employees, communities, stakeholders and environment. They have started incorporating their CSR initiative in their annual reports.
Objectives:
1. 2. 3. 4. 5. To study the CSR status in India. To understand the meaning and various models of CSR. To study the policies governing CSR in India. To study the challenges faced by CSR in India. To make suggestions for accelerating CSR initiatives.
Research Methodology:
The research paper is an attempt of exploratory research, based on the secondary data sourced from journals, magazines, articles and media reports. CSR concept, definitions, models: In India, the ethical model promoted by Mahatma Gandhi during 1930s is well known which stated the role of family-run-businesses conducting social and economic activities. This was followed by the Statist model propounded by Pt. Jawaharlal Nehru. In this model, state-driven policies included state ownership and extensive corporate regulation and administration. At the global level, the first attempt to define CSR is contributed by many to Howard Bowens Social Responsibilities of the Businessmen (1953) who questioned the status and degree of responsibilities that business people should accept. Milton Friedman introduced liberal model which stated that corporate responsibility primarily focus on owner objectives and stakeholder responsiveness which recognizes direct and indirect stakeholder interests. During 1980s, the CSR concept grew to integrate corporate objectives with the social responsibility of business thereby making it responsible to care for environment, employees and also make good profits. In the 1990s, Peter Drucker and many other authors propagated CSR as a part of corporate strategy. The approach to CSR has also changed from Agency theory to Stakeholder theory. Again, the stakeholder model emphasizes on survival of the corporation which throngs upon not only the responsibility towards shareholders but also towards employees, governments and customers. CSR is interchangeably used with several terms like business ethics, corporate citizenship, social and environmental responsibility, corporate sustainability. World Business Council for Sustainable Development defines Corporate Social Responsibility (CSR) as 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.
Reliance Industries and two Tata Group firmsTata Motors and Tata Steelare the country's most admired companies for their corporate social responsibility initiatives, according to a Nielsen survey released in May 2009. As part of its Corporate Service Corps (CSC) programme, IBM has joined hands with the Tribal Development Department of Gujarat for a development project aimed at upliftment of tribals in the Sasan area of Gir forest. The financial services sector is going green in a steady manner. With an eye on preserving energy, companies have started easing the carbon footprint in their offices. The year 2009 witnessed initiatives including application of renewable energy technologies, moving to paperless operations and recognition of environmental standards. Efforts by companies such as HSBC India, Max New York Life and Standard Chartered Bank have ensured that the green movement has kept its momentum by asking their customers to shift to e-statements and e-receipts. State-owned Navratna Company, Coal India Ltd (CIL) will invest US$ 67.5 million in 2010-11 on social and environmental causes. Public sector aluminium company NALCO has contributed US$ 3.23 million for development work in Orissa's Koraput district as part of its Corporate Social Responsibility (CSR).
Challenges of CSR: It is important for CSR strategies to become central to business strategy and part of the long-term planning process. Stakeholders are questioning more on CSR initiatives of the companies today. They are challenging the companies decisions-making in this direction. It has become imperative to incorporate stakeholders views. In India the CSR managers face number of challenges in managing CSR activities. The biggest problem is of lack of budget allocations followed by lack of support from employees and lack of knowledge as well. Lack of professionalism is another problem faced by this sector. Absence of training and undeveloped staff are additional problems for reduced CSR initiatives. General Public also do not take enough interest in participating and contributing to CSR activities of companies as they have little or no knowledge about it. The increasing demand for more transparency and accountability on the part of the companies and disclosure of information through formal and improved reporting is also inevitable for the companies. The
Suggestions:
Companies can set a network of activities to be taken up in a consortium to tackle major environmental issues. It would also provide an opportunity to learn from each other. Everyone in the organisation needs to recognise their own role in promoting CSR. Companies should provide wider professional development activities. Training, conferences and seminars could be organised by companies to disseminate and generate new knowledge and information in this sector. A strong budgetary support would definitely help to grow this sector and research related to respective industry would enhance their organisations contribution further. Government regulations which are supporting in this direction could attract more response from organisations. All this would also lead to benchmark CSR activities. Companies need to involve their stakeholders in order to build meaningful and long term partnerships which would lead to creating a strong image and brand identity. It is also suggested to review existing policies in order to develop more meaningful visions for the companies and broaden their contributions to reach to local communities.
Conclusions:
Corporate sustainability is an evolving process and not an end. The Companies bill is a good initiative on the part of the government however what would be included in spending on CSR is unclear and is left for the companies to decide. Across the globe, the concept of CSR has been accepted as an element for success and survival of business along with fulfilling social objectives. However, the challenge for the companies is to determine a strong and innovative CSR strategy which should deliver high performance in ethical, environmental and social areas and meet all the stakeholders objectives.
References:
Banerjee , P. K. (2003), Corporate Governance & Business Ethics in the 21st Century, ICFAI Journal of Corporate Governance, Vol III No 2. Brown K (2001), "Corporate Social Responsibility: Perceptions of Indian Business", in Mehra M (Ed.), Retrieved from www.csmworld.org/public/pdf/social_respons.pdf (Accessed February 10th 2011).