Presentation on theme: "1 National Conference on “Corporate Social Responsibility Issues & challenges” Being organized by Baba Saheb Gawde Institute of Management Studies, Maratha."— Presentation transcript:
1 National Conference on “Corporate Social Responsibility Issues & challenges” Being organized by Baba Saheb Gawde Institute of Management Studies, Maratha Mandir, Mumbai On 26th March’ 2011. Title of the paper Corporate Social Responsibility in Indian Organizations By DR. MOHAMMAD KHALIL AHMED Associate Professor Head, Department of Commerce Burhani College of Com, Arts, Media & Management, Mazagaon, Mumbai
Introduction ‘Social responsibility in the final analysis implies a public posture toward society’s economic and human resources and a willingness to see that those resources are used for broad social ends and not simply for the narrowly circumscribed interests of private persons and firms’(Carroll 1999).
OBJECTIVES OF THE STUDY: To explore the various definitions and descriptions of Corporate Social Responsibility (CSR). To study the theoretical concepts expounded by various researchers To elaborate upon development of CSR in India To study the deployment of current CSR practices in India.
SCOPE OF THE STUDY Scope of the study is limited to study concept of CSR and mostly focusing on the different CSR activities carried out by Indian corporates.
METHODOLOGY: The study was conducted using both primary and secondary data. Karmyog Study Report on CSR. Secondary data It was collected from various books, articles, journals and blogs on CSR.
LIMITATIONS OF THE STUDY The study does not consider each and every company i.e. only few companies are taken as examples.
Corporate Social Responsibility in India In India, CSR has evolved to encompass employees, customers, stakeholders and sustainable development or corporate citizenship. The spectrum of CSR includes a number of areas as human rights, safety at work, consumer protection, climate protection and caring for the environment, and sustainable management of natural resources.
CSR Surveys Singh and Ahuja 1983 Raman (2006) Partners in Change 2000 From 2000 onwards, 4 important surveys have been conducted. The first and second surveys were carried out in 2001 and 2002 by Business Community Foundation for TERI-Europe. A third survey was jointly conducted in 2002 by CII, United Nations Development Program (UNDP), British Council (BC) and Price Water Coopers (PWC). The fourth survey, the Karmyog CSR rating 2007-08 is for the largest 500 companies.
Observations from the Karmayog CSR Ratings Most companies are not doing any CSR. Most companies believe that charity and philanthropy equals to CSR. Most companies use CSR as a marketing tool to further spread the word about their business. Only 5 Indian companies (from this study) publish a Corporate Sustainability Report. Very few companies openly state the processes followed by them. Very few companies state how much they spend on CSR. There is no mention of the amount spent in any of their balance sheets or annual reports.
Observations from the Karmayog CSR Ratings) contd.. Very few companies are engaged in CSR activities in the local communities where they are based. Very few companies have a clearly defined CSR philosophy. Most implement their CSR in an ad-hoc manner, unconnected with their business process. Most companies appear reluctant to themselves fulfill their CSR unless it is mandatory by law.
The rationale for Corporate Social Responsibility in India Gandhiji was a person who in several respects was ahead of his time. His view of the ownership of capital was one of trusteeship, motivated by the belief that essentially society was providing capitalists with an opportunity to manage resources that should really be seen as a form of trusteeship on behalf of society in general.
Role of Social Responsibility in Indian companies In a global CSR study undertaken in 7 countries (viz. India, South Korea, Thailand, Singapore, Malaysia, The Philippines and Indonesia) by the U.K. based International Centre for CSR in 2003, India has been ranked second in the list.
Sl. No.Corporate Area of activityBeneficiary state 1.ITC Primary education Livestock development Social forestry Integrated watershed development UP, Bihar, MP, AP, Karnataka, MP 2.ACC Revival of traditional arts Preserving culture and heritage Health and medicine Disaster management and relief Education Sports Water conservation Rajasthan, HP, MP, Jharkhand, Maharastra, AP 3.Citi group Women empowerment Rehabilitation Education Health AP, TN, Karnataka, Kerala, Maharastra, MP 4.HLL Rehabilitation Education Health and hygiene education Water conservation and harvesting Women empowerment Gujarat, Maharastra, UP, Bihar, Jharkhand, WB, Orissa, MP, Chattisgarh, Maharastra 5.TISCO Community development Social welfare Tribal area development Agriculture Rural industrialization MP, Bihar, UP, Gujarat, Maharastra, Karnataka, Orissa, WB 6.SAIL Community development AIDS awareness Education Medical facilities and health Development of small scale/ancillary industries Agriculture, poultry, fisheries Maharastra, AP, MP, Karnataka, Bihar, Jharkhand
Recommendations for better CSR Companies should extend their CSR activities in less privileged states rather than concentrate in resource rich states. It is essential that companies develop an effective value chain system of their products through their CSR activities, which is essential for competing in the global market. It will give better results if activities are based on a more participatory approach and touch the grassroots level. Voluntarism among employees should be encouraged and institutionalized through recognition and incentives.
Recommendations for better CSR (contd.) There is also need for public-private partnership with well-defined controls and process for the best use of resources for social change. Special training need to be given to business mangers in working with social issues. Participation of small and medium business should be encouraged. Experience has shown that working with NGOs is more worthwhile and result-oriented. Joining hands with related NGOs is therefore advisable.
The Road Ahead The parliamentary standing Committee on Finance has proposed mandatory corporate social responsibility(CSR) by companies as part of changes to Companies Bill 2009. Greater advocacy relating to what constitutes CSR and how it can be implemented needs immediate attention. Concerns like Infosys, Wipro, Tata, L&T ITC, Dabur, Mahindra and Mahindra, NTPC, BHEL, Aditya Birla Group of companies and many others are doing yeomen service in the field of CSR.
Conclusion CSR holds a very important place in the development scenario of the world today and can pose as an alternative tool for sustainable development. As companies have shown great concerns for their immediate community and the stakeholders, it can be safely concluded that much of the fate of society lies in the hands of the corporates. There are several companies in India involved in diverse issues such as healthcare, education, rural development, sanitation, microcredit, and women empowerment. Analysis of several surveys in India suggest that though many companies in India have taken on board the universal language of CSR, CSR seem to be in a confused state. Individual companies define CSR in their own limited ways and contexts.
Contd.. A long term perspective by organizations, which encompasses their commitment to both internal and external stakeholders, will be critical to success of CSR and the ability of companies to deliver on the goals of their CSR strategy. With increasing and widespread commitment of corporate resources to CSR, attention is now shifting to the strategic formulation, implementation, and measurement of the market returns to CSR initiatives. There is urgent need that all stakeholders in national economic development put synergistic effort to create an impact. This balancing has to be achieved or growth has to be stabilized in respect to social growth else the divergence between them will cross a threshold and after that a downfall will come which will lead to a stagnancies in growth.
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