By Dr Shanker Adawal

There are customers, employees, shareholders and the neighbours.

The business class should render their support to the general people.
If they will be uplifted socially and economically, the productivity of
the corporate is also bound to increase.

The corporate sector in India very often blames the government for
poor governance and lack of farsightedness. The question that comes
every time into mind is, do the corporate sector performs its duty to
contribute to the overall growth of the country? Does it have right to
blame the government for poor governance? Does it contribute to
nation building?
In India, most of the corporate do not have a clear policy on social
responsibility. While developed countries like England have separate
ministries to look after the issue of corporate social responsibility, in
India, the government does not have a clear policy on the issue. Out of
very few companies who contribute to the social development, the
basic intention was not to ensure the good of the nation, rather a
business policy to stay away from the tax net.

The corporate and the government should try to build up a relationship

between the business and the society. The concept of corporate social
responsibility (CSR) has so far failed to take deep root in India because
the nomenclature is not properly defined. The CSR is in a nascent
stage. Much needs to be done to bring changes in attitude towards
CSR and bring awareness among the corporate about their social
responsibilities. The corporate should be made aware about the
changing nature of business due to globalization, transformation of
market environment and deepening of competition. The market
economy has paved the way for enterprise-led development and a new
cultural perspective is taking place in Indian business environment
that has a strong bearing on social responsibilities.
Social responsibility encompasses the sectors like health, education,
employment, income and quality of life. It should be binding on the
corporate sector to work on the above aspects, which are thought to
be primary social indicators. They have enough money to serve the
nation on the above segments of the society. They should not forget
that if general health of the mass were good, they would have better
bying capacity.

In 1970, Milton Friedman of New York Times rightly wrote: the social
responsibility of business is to increase profits. This view is often held
and propounded by those who do not see much merit in companies
being engaged in issues of Social Responsibility other than the making
of profit. However, increasingly, the profit case, evident indicators that
are tangible and the altruistic/ philanthropic/ ethical case, evident in
the intangibles are getting blurred. In this context the purpose is to
highlight the need for a paradigm shift in the importance of greater
investment in intangibles to enhance corporate value.

Significance of CSR for India

The ideal corporate citizenship has ethical and philosophical
dimension, particularly in India here wide gap exists between people
in terms of income and living standards as well as social status.
A latest survey by the Tata Energy Research Institute (TERI) called
Altered Images: the 2001 State of Corporate Responsibility in India
Poll Traces Back The History Of CSR In India and suggests that there
are four models of CSR.

Ethical model
The origin of the first ethical model of corporate responsibility lie in
the pioneering efforts of 19 th century corporate philanthropists such
as the Cadbury brothers in England and the Tata family in India. The
pressure on Indian industrialists to demonstrate their commitment to
social development increased during the independence movement,
when Mahatma Gandhi
developed the notion of trusteeship, whereby the owners of property
would voluntarily manage their wealth on behalf of the people.
Gandhis influence prompted various Indian companies to play active
roles in nation building and promoting socio-economic development
during the 20th century. The history of Indian corporate philanthropy
has encompassed cash or kind donations, community investment in
trusts and provision of essential services such as schools, libraries,
hospitals, etc. Many firms, particularly family-run businesses, continue
to support such philanthropic initiatives.

Statist model
A second model of CSR emerged in India after independence in 1947,
when India adopted the socialist and mixed economy framework, with
a large public sector and state-owned companies. The boundaries
between the state and society were clearly defined for the state
enterprises. Elements of corporate responsibility, especially those
relating to community and worker relationships, were enshrined in
labour laws and management principles. This state sponsored
corporate philosophy still operates in the numerous public sector
companies that have survived the wave of privatization of the early
1990s.
Liberal Model
Indeed, the worldwide trend towards privatization and deregulation
can be said to be underpinned by a third model of corporate
responsibility that companies are solely responsible to their owners.
This approach was encapsulated by the American economist Milton
Fried-man, who in 1958 challenged the very notion of corporate
responsibility for anything other than the economic bottom line.
Many in the corporate world and elsewhere would agree with this
concept, arguing that it is sufficient for business to obey the law and
generate wealth, which through taxation and private charitable
choices can be directed to social ends.

Stakeholder Model
The rise of globalisation has brought with it a growing consensus that
with increasing economic rights, business also has a growing range of
social obligations. Citizen campaigns against irresponsible corporate
behaviour along with consumer action and increasing shareholder
pressure have given rise to the stakeholder model of corporate
responsibility. This view is often
associated with R. Edward Freeman, whose seminal analysis of the
stakeholder approach to strategic management in 1984 brought stake
holding into the mainstream of management literature (Freeman,
1984). Ac-cording to Freeman, a stakeholder in an organisation is any
group or individual who can affect or is affected by the achievement of
the organisations objectives.
Perception and practices of CSR in India
A survey was conducted by ORG-MARG for TERI-Europe in several
cities of India in 2001. The basic purpose of the survey was to capture
perceptions and expectations (related to corporate responsibility) of
the following three sets of stakeholders such as general public,
workers (skilled, semiskilled and un-skilled) and corporate executives
(head of corporate relation, labour relations, welfare dept. and
manufacturing dept. in MNCs, large and medium sized Indian
companies).The poll gathered that people believe that companies
should be actively engaged in social matters.
A majority of the general public feels that companies should be held
fully responsible for roles over which they have direct control. These
include providing good products and cheaper prices, ensuring that
operations are environment friendly, treating employees fairly without
any discrimination based on gender, race or religion and applying
labour standards globally. More than 60% of the general public felt that
the companies should also be held responsible for bridging the gap
between the rich and the poor, reducing human rights abuses, solving
social problems and increasing economic stability.

CSR as business success

CSR is considered to be an important aspect of business success
through efficient resource management, environment protection,
employment, eco-friendly atmosphere, etc.
Ashok Khosla, President of Development Alternatives, an Indian NGO,
is of the view that sustainability includes sustainable consumption and
sustainable production and is thus the responsibility of both
procedures and consumers. The CSR is not a one size fits all. The
NGOs, citizens and governments must look at sizes, types and
locations of companies to explore how
CSR can be brought to bear on companies.

The civil society is good for business and a tool for advancing
corporate take-up of CSR. Therefore, the business should view civil
society as being the CSR auditors for business and a friend to
business, much like traditional auditors. There are lessons for
business to learn from their interactions with civil society that cannot
only re-duce risk but improve overall competitive
advantage.

Conclusion
The business of the 21-st century will have no choice but to implement
CSR. The sooner corporate houses realize this and aggressively pursue
this process, the better off they will be. The laws need to be
formulated to help in reinforcing CSR practices.
Indian CSR has traditionally been a matter of classical
paternalistic philanthropy, financially supporting schools, hospitals
and culture institutions. However, far from being an add-on motivated
by altruism and personal glory, the philanthropic drive has been driven
by business necessity. With minimal state welfare and infrastructure
provision in many areas, companies had to ensure that their workforce
had adequate housing, healthcare and education and simultaneously
the country grows at a fast pace.
The CSR should not be merely a statement of intent. It should be made
compulsory for the corporate operating in India. This will definitely
help in upholding human rights. In this context, the following measures
may be made mandatory to ensure participation of the corporate in
social development:
Incorporation of a section on social actions in annual reports of
companies
Appointment of an independent social accounting committee to
measure, monitor, evaluate and report impact of CSR in annual
reports.

Separate department to look after the CSR

Periodic training programmes and awareness camps to train personnel
on CSR
Linkage between CSR and financial success should be established
A certain percentage of profit should be earmarked for social
development that should reflect in the annual balance sheets of
companies.
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