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INTRODUCTION

Your business doesn’t exist in isolation, simply as a way of making money.


Your employees depend in your business. Customers, suppliers and the local
community are all affected by you and what you do. Your products, and the way
you make them, have an impact on the environment.

Corporate social responsibility (CSR) takes all this into account and can
help you create and maintain effective relationships with your stakeholders. It
isn’t about being “right on”, or mounting an expensive publicity exercise. It
means taking a responsible attitude, going beyond the minimum legal
requirements and following straight forward principles that apply whatever the
size of your business. This guide explains how you can exploit the benefits that
CSR can bring to your bottom line.

Definition
CSR:
‘Corporate’, ‘Social’ and ‘Responsibility’. In broad terms, CSR relates to
responsibilities corporations have towards society within which they are based
and operate, not denying the fact that the purview of CSR goes much beyond
this. CSR is comprehended differently by different people.
Phillip Kotler and Nancy Lee:
“A commitment to improve community well being through discretionary business
practices and contributions of corporate resources”

Mallen Baker:
“Corporate Social Responsibility is the continuing commitment by business to
behave ethically and contribute to economic development while improving the
quality of the workforce and their families as well as of the local community and
society at large.

HISTORY

The concept of CSR in India is not new, the term may be. The process
though scclaimed recently, has been followed since ancient times albeit
informally. Philosophers like Kautilya from India and pre-Christian era
philosophers in the West preached and promoted ethical principles while doing
business. The concept of helping the poor and disadvantaged was cited in much
of the ancient literature. The idea was also supported by several religions where
it has been intertwined with religious laws. “Zakaat”, followed by Muslims, is
donation from one’s earnings which is specifically given to the poor and
disadvantaged. Similarly Hindus follow the principle of “Dhramada” and Sikhs
the “Daashaant”. In the global context, the recent history goes back to the
seventeenth century when in 1790’s, England witnessed the first large scale
consumer boycott over the issue of slave harvested sugar which finally forced
importer to have free-labour sourcing. In India, in the pre independence era, the
business which pioneered industrialisation along with fighting for independence
also followed the idea. They put the idea into action by setting up charitable
foundations, educational and healthcare institutions and trusts for community
development. The donations either monetary or otherwise were sporadic
activities of charity or philanthropy that were taken out of personal savings
which neither belonged to the shareholders nor did it constitute as integral part
of business. The term CSR itself came in to common use in early 1970’s although
it was seldom abbreviated. By late 1990s, the concept was fully recognised;
people and institutions across all sections of society started supporting it. This
can be corroborated by the fact that while in 1977 less than half of the fortune
500 firms even mentioned CSR in their annual reports, by the end of 1990,
approximately 90 percent Fortune 500 firms embraced CSR as an essential
element in their organisational goals and actively promoted their CSR activities
in annual reports.

BACKGROUND OF CSR

The role of corporate by large has been understood in terms of commercial


business paradigm of thinking that focuses purely on economic parameters of
success. As corporate have been regarded as institutions that cater to the
market demand by providing products and services, and have the onus for
creating wealth and jobs, their market position has traditionally been a function
of financial performance and profitability. However, over the past few years, as
a consequence of rising globalisation and pressing ecological issues, the
perception of the role of corporate in the broader societal context within which it
operates, has been altered. Stakeholders (employees, community, suppliers and
shareholders) today are redefining the role of corporate taking into account the
corporates’ broader responsibility towards society and environment, beyond
economic performance, and are evaluating whether they are conducting their
role in an ethical and socially responsible manner. As a result of this shift (from
purely economic to ‘economic with an added social dimension’), many forums,
institutions and corporates are endorsing the term Corporate Social
Responsibility. They use the term to define organisation’s commitment to the
society and the environment within which it operates. The World Business
Council on Sustainable Development’s (WBCSD) report was titled Corporate
Social Responsibility:
Making Good Business Sense and the OECD Guidelines for 1 Multi-National
Enterprises which includes a discussion on how CSR is emerging as a global
business standard. Further, there is a global effort towards reinforcing CSR
programmes and initiatives through local and international schemes that try to
identify best-in-class performers.
Arguments for socially-responsible behaviour
• It is the ethical thing to do
• It improves the firm’s public image
• It is necessary in order to avoid excessive regulation
• Socially responsible actions can be profitable
• Improves social environment will be beneficial to the firm
• It will be attractive to some investors
• It helps to correct social problems caused by business

CSR behaviour can benefit the firm in several ways


• It aids the attraction and retention of staff
• It attracts green and ethical investment
• It attracts ethically conscious customers
• It can lead to a reduction in costs through re-cycling
• It differentiates the firm from its competitor and can be source of
competitive advantage
• It can lead to increased profitability in the long run

Corporate Social Responsibility (CSR) is a concept whereby organisations


consider the interests of society by taking responsibility for the impact of their
activities on customers, employees, shareholders, communities and the
environment in all aspects of their operations. This obligation is seen to extend
beyond the statutory obligation to comply with legislation and sees organisations
voluntarily taking further steps to improve the quality of life of employees and
their families as well as for the local community and society at large.
With businesses focussing on generating profits, sustainability was not a
popular concern among companies up until recently. Now, in an era of
globalisation, multinational corporations and local businesses are no longer able
to conduct destructive and unethical practices, such as polluting the
environment, without attracting negative feedback from the general public. With
increased media attention, pressure from non-governmental organisations and
rapid global information sharing, there is a surging demand from civil society,
consumers, governments, and others for corporations to conduct sustainable
business practices. In addition, in order to attract and retain employees and
customers, companies are beginning to realise the importance of being ethical
while running their daily operations. The corporate response has often meant an
adoption of ‘a new consciousness’ and this has been known as Corporate Social
Responsibility since the 1970’s. As stated by the department of Trade and
Industry in the United Kingdom, CSR represents “the integrity with which a
company governs itself, fulfils its mission, lives by its values, engages with its
stakeholders, measures its impact and reports on its activities”. Although most
people appreciate the recent advancement of CSR, some argue that corporations
are still not doing enough or are only acting in self interest. These people say
that multinational corporations are acting ethically in areas that are highly
regulated, such as North America, but at the same time, they are in an opposite
manner in other parts of the world (such as using cheap or child labour). In
addition, while corporations must have good CSR policies in order to maintain
their reputation, they are also expected to maximise profits for stakeholders
such as shareholders, employees and customers. Therefore, people argue that
businesses do not put in a sufficient amount of resources to achieve what they
have promised in their CSR policies. In any case, companies are now expected to
perform well in non-financial areas such as human rights, business ethics
environmental stewardship, and contributions to community groups and
charities. 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 economics role of businesses; others argue that
it is nothing more than superficial window-dressing; still others argue that it is an
attempt to pre-empt the role of governments as a watchdog over powerful
multinational corporations.

What is CSR or Corporate Social Responsibility?

CSR was a buzzword created in the early 1970’s although it was seldom
abbreviated back then. Corporate Social Responsibility (CSR, also called
corporate citizenship, corporate responsibility, responsible business and
sometimes corporate social opportunity) is a concept whereby a business
organisation considers the wider social and environmental effects that it has as a
trading entity outside of its direct trading environment. For example, a mining
company destroys the natural landscape when mining so part of its responsibility
to the community where they are mining could be to invest in reforestation
projects.

Advantages of corporate social responsibility

 Japanese companies often have 100 year business plans. If you are
planning to be around in business for the long-run then making sure ALL
your stakeholders are looked after is wise. If you mess the environment
up, people notice. If you mess people around people remember. If you
mistreat people they never forget. And yet when you care for people you
are awarded. You are rarely forgotten when you genuinely care. A
business enterprise is no different to a human – people will have feelings
about it and that impacts business positively or negatively.
 Many companies say they care and yet they may not take actions of
caring. Going beyond what is expected becomes exemplar and noted. An
enterprise’s actions are noted the most by its employees and staff. The
business tram that runs an organization knows what is going on. They
know all the high and low points of a company. These exact same people
interact each other every day with the businesses customers. How they
feel about the company will care for its customers making them feel better
and of course they are then more likely to return.
 Many businesses make a loss the very first time a customer shopped with
them. This is an amazing little known fact outside of the business world. It
may cost thousands of dollars for some companies to gin new customers
because of long lead times or expensive advertising campaigns. If they
only sell to a customer once then they don’t ever recover their investment
in acquiring that new customer or make profit .customers these days are
spoilt for choice. Many customers choose a business on how they feel
about the company. Most purchasing decisions are subjective and hard to
measure components to a business such as solid CSR programmes and to
the perceived value added benefit a customer received when they shop
with the company.
 2008’s Good purpose global study of consumer thinking showed that
almost seven out of 10 (68%) consumers say they would remain to a
brand during an economic downturn if it supports a good cause.
Surprising. And logic-defying.
 That same very recent study highlighted some other interesting things
too. Like this: half(52%) of global consumers are more likely to tell others
about a brand that supports a good cause over one that does not, with
54% saying they would help a brand promote a product if there was a
good cause behind it. And going even further....around the world,
consumers have voiced a strong desire for business marketers to link their
brands to social action. Forty-two percent say that if two products are
identical, in price and quality then the one that has the commitment to a
social purpose trumps key factors like design, innovation and brand loyalty
when selecting one brand over the other. Stunning isn’t it?
 The citizen brand emerges. And this comment from this key report just
says it all: It means that putting meaning into marketing is more important
than ever. One of the reporter puts it this way: “These findings present
brands with an opportunity to engage in ‘mutual social responsibility’-
brands and consumers working together to effect positive social change
for mutual benefit and to realize a ‘return on investment’, a new metric
that looks at participation and involvement as true builders of brand
loyalty. When a brand acts as a ‘citizen brand’ contributing to community
and society beyond its functional benefits, ‘doing good’ can translate to
‘doing well’ and the brand can forge a stronger emotional bond with its
consumers.

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. Today, we are perhaps coming round full circle in emphasizing this
concept through an articulation of the principle of social responsibility of
business and industry. While the interests of shareholders and the actions of
managers of any business enterprise have to be governed by the laws of
economics, requiring an adequate financial return on investments made, in
reality the operations of an enterprise need to be driven by a much larger set of
objectives that are today being defined under the term Corporate Social
Responsibility (CSR).
The broad rationale for a new set of ethics for corporate decision making,
which clearly constructs and upholds a company’s social responsibility, arises
from the fact that a business enterprise derives several benefits from society,
which must, therefore, require the enterprise to provide returns to society that
have now become even more important than traditional relationship between
government and business. These go far beyond what was the case a few
decades ago.

Why should companies whose major objective has been to maximize


profits for the benefit of their shareholders worry at all about serving the society
at large? The answer is simple and yet somewhat circular in nature. A business
cannot succeed in a society which fails this, therefore, clearly establishes the
stake of a business organisation in the good health and well being of a society of
which it is a part. More importantly, in this age of widespread communication
and growing emphasis on transparency, customers of any product or service are
unlikely to feel satisfied in buying from a company that is seen to violate the
expectations of ethical and socially responsible behaviour are also favoured by
the public and preferred for their goods and services.

GLOBALIZATION AND CORPORATE SOCIAL RESPONSIBILITY


Globalization And Corporate Social Responsibility- Anything New?

The social responsibilities of business in a market society have been


discussed for decades, long before globalisation became a catchword. The
capitalist system, i.e. voluntary exchange on free and open markets, is widely
considered the best societal coordination measure to contribute to individual
freedom and the wellbeing of society. Though the functions of the state system
have always been a matter of debate, it is generally acknowledged that in
capitalist societies it is the task of the state to establish the preconditions for the
proper working of markets, i.e., to define legal rules such as property rights and
contractual rights, to erect an enforcement body, to provide public goods, and to
reduce or avoid the consequences of externalities. At the same time, private
firms are entitled to own means of production and to run a business, i.e. to
supply goods and services for a return in private profits, as it is the “invisible
hand” of the market which directs the behaviour of firm owners towards the
common good. The state, it was assumed, is capable of setting the rules in such
a way that the consequences of market exchange contribute to the well-being of
society.

Business firms have to obey the law- this has always been a precondition
and has been accepted as a minimum social responsibility of businesses, even
by the hardest critics of CSR. However, as the system of law and the
enforcement apparatus of the state are incomplete there is a likely possibility of
regulation gaps and implementation deficits which have to be filled and balanced
by diligent managers with prosocial behaviour and an aspiration to the common
good. In as much as the state apparatus does not work perfectly there is a
demand for social responsibilities of business, i.e. corporations are asked to
comply to the law when the enforcement body is weak and to even go beyond
what is required by law, when the legal system is imperfect or legal rules
incomplete.

With globalisation, it seems, the negative consequences of business have


intensified as has the public call for corporate responsibility. Several scholarly
journals have dedicated special issues to the relationship between globalization
and CSR. Paradoxically, today, business firms are not just considered the “bad
guys”, causing environmental disasters, financial scandals, and social ills. They
are at the same time considered the solution of global regulation and public
goods problems as in many instances state agencies are completely overtaxed
or unwilling to administer citizenship rights or contribute to the public good.
The solution of globalization problems is not just a matter of degree of
engagement in CSR, i.e. of more or less investment of business firms in CSR
projects. Rather we suggest that with globalisation a paradigm shift is necessary
in the debate on CSR. Current discussions in CSR are based on the assumption
that responsible firms operate within a more or less properly working political
framework of rules and regulations which are defined by governmental
authorities. The global framework of rules is fragile and incomplete. Therefore,
business firms have an additional political responsibility to contribute to the
development and proper working of global governance.

Globalisation: A Social and Economic Phenomenon

What is Globalisation?

Globalization is one of the most cited catchwords of our time and is used
to describe a process of social change on the macro level of societies. Today,
many social and economic phenomena such as peace, crime, migration,
production, employment, technological developments, environmental risks,
distribution of income and welfare, and social cohesion and identity are
considered to be affected by the process of globalization. We define globalization
as the process of intensification of cross-area and cross-border social relations
between actors from very distant locations, and growing transnational
interdependence of economic and social activities holds that with globalization
“the modes of connection between different social contexts or regions become
networked across the earth’s surface as a whole”. During this process the nation
state loses much of its political steering capacity. The state’s enforcement power
is bound to its territory while the subjects of state regulation, especially the
business firms, have massively expanded their activities beyond national
borders. At the same time, new social and environmental challenges emerge
which are transnational in scope and cannot be regulated or governed
unilaterally. Also, new actors and institutions, such as international
organizations, transnational corporations, nongovernmental organisations, and
civil society groups gain political influence. Their activities are not limited to a
certain territory. Their influence stems from the political power they can exert
inside and outside the traditional institutions of nation-state politics, e.g. by
lobbying public relations, campaigning, knowledge and competence, offering
material or symbolic support, or threatening with disinvestments or the retreat of
resources.

As a result we observe new forms of government below, above and


beyond the nation state. This definition of globalization emphasizes the process
aspect of change and is related to other concepts that describe the status quo
towards this change process develops and the normative claims that are related
to this process.

The concept of “globalism” is used to describe an ideology, i.e. a


normative attitude towards the process of globalization. While globalization
protesters and sceptics reject the idea that the globalization process will lead to
more prosperity and social well-being in the world, the adherents of globalism
are convinced that an unconstrained and borderless world economy will make
everybody better off. They advocate a primacy of market imperatives over
political regulation via the nation state. The central idea of modernity – that
nation state politics shall define legal, social and ecological framework and the
restrictions within which market transactions take place – is abandoned in favour
of a dominance of economic rationality. As a consequence of cross-border trade,
multinational enterprises and global supply chains, there is an increased
awareness on CSR concerns related to human resource management practices,
environmental protection, and health and safety, among other things. Reporting
on the CSR activities by corporates is therefore increasingly becoming
mandatory.

In an increasingly fast-paced global economy, CSR initiates enable


corporate to engage in more meaningful and regular stakeholder dialogue and
thus be in a better position to anticipate and respond to regulatory, economic,
social and environmental changes that may occur. There is a drive to create a
sustainable global economy where markets, labour and communities are able to
function well together and companies have better access to capital and new
markets. Financial investors are increasingly incorporating social and
environmental criteris when making decisions about where to place their money,
and are looking to maximise the social impact of the investment at local or
regional levels.

What are the Causes of Globalization?

One could suggest that the globalization process was started to some
extent deliberately by political decisions. However, it was also caused and/or
supported by technological, social, and economic developments. The intensified
cross border transfer of resources, such as assets, capital, and knowledge, is in
part result of the liberalization policy of many nation state governments after
WWII. The growing cross-area and cross-country social exchange was also made
possible through technological inventions and achievements (e.g.
telecommunications, mass media, the Interne, transportation, etc.) The
exchange processes are accompanied by a growing independence between
citizens from different communities through the emergence of global risks (e.g.
nuclear weapons, global warming, global diseases, etc.) which connect the
destinies of peoples with each other. In the following we will describe some
dimensions of globalization.

Dimensions of Globalization

• Political Decisions and Disruptions


The General Agreement Tariffs and Trade (GATT) at the end of WWII was
certainly an important factor for the liberalization of the world economy.
At the end of WWII in Bretton Woods politicians from over twenty countries
decide on the post-war economic order. They shared the conviction that
free and open trade would lead to world-wide prosperity and would in turn
reduce the possibility of war and forceful conflicts. The GATT (and later the
WTO) member tastes decide to reduce tariffs and because non-tariff
barriers to trade step by step. This process of liberalisation in cross
country trade and investments was accompanied by a policy of
liberalisation and privatization in many of the industrial states in the
Western world. Highly regulated industries with the state owned or
controlled firms and monopolies such as telecommunications, public
transport, electricity, and water were privatised. In the 1980’s, the
collapse of the iron curtain of the Communist countries in Eastern Europe,
and in many other countries in the world, led to another breakdown of
trade barriers and encouraged intensified cross-border trade and
investments.

• Technological Developments and Achievements


The rapid technological development in the communication industry led to
a significant decline in communication costs. Perraton, Goldblatt, Held,
and McGrew reported that the costs for a 3 minute phone call from New
York to London dropped from 244.65 US $ in 1930 to 3.32 US $ in 1990.
The advances in telecommunications and in computer technology along
with the invention and growth of the Internet have made it possible for
people to communicate with each other between virtually all points on the
earth.
Along with the decrease in communication costs there has been a
dramatic drop in transportation costs.

• Socio - cultural Developments


As a result of globalization, the more or less homogeneous cultures of the
pre globalization world were dissolved. New values and life styles have
entered the static world of traditional cultures: values, attitudes and social
practices that were once taken for granted have lost their certainty. This
process is accompanied by the various migration processes which lead to
a pluralism of cultures and values and to a growing heterogeneity of social
expectations. At the same time we observe the emergence of new social
movements, civil society groups, and NGO’s which aggregate diverse and
disparate opinions and concerns into shared interests and thus create new
identities for people who lose the backing of their traditional home culture
and their reliance on the capacity of official state agencies to resolve
issues of public concern. These new social movements can gain political
currency outside and beyond the traditional institutions of the state
system.

• Economic Developments
On the macro level, the liberalization of trade, investments and financial
transactions has led to a huge increase both in foreign direct and
investments and in cross-border trade. Though some authors suggest that
with regard to certain macroeconomic measures the situation today is not
much different than it was one hundred years ago, we hold that with a
new situation without precedent in history.
First, economic measures show that for several decades the growth
rate in the volume of world merchandise exports as been much higher
than the growth rate of world GDP and that the intra-firm trade has
expanded dramatically. Second, the unprecedented interconnectedness of
the destiny of people from different social settings and distinct locations
has created new challenges. Also, on the firm level, one can observe an
entirely new situation. Business firms are able to split up their value chain
and to source where the production of goods and services is most
efficient. By means of technology they are able to collect information
about sources, qualities and prices, and to coordinate the various value
chain processes inside and outside the boundaries of the firm. Today, at
large multinational corporations have become very powerful economic and
social agents. The world’s biggest corporations have revenues that equal
or even exceed the gross domestic product of some developed states. The
power of MNCs is not just based on the enormous amount of resources
they control. Their power is further enhanced by their mobility and their
capacity to shift resources to locations where they can be used most
profitably and to choose among suppliers applying criteria of efficiency. In
effect this gives multinational firms the latitude to choose locations and
legal systems under which they will operate. However, the power of the
MNCs and their leaders is not unlimited. Rather, top managers more and
more feel the pressure of the global financial markets when they have to
respond to the profitability demands of investors and have to protect their
firms from hostile takeovers. Institutional investors direct their attention
and money to profitable firms and investments. Corporations that do not
earn high enough profit are sanctioned with disinvestment. Managers who
do not earn a high stock price may become the targets of takeovers. All in
all the global financial market pressures business firms to stress profit and
to engage only in such projects that will lead to satisfactory return.
Altruistic managers with pro-social attitudes may therefore be suspect in
the emerging shareholder society and may be forced to adapt their
behaviour to the expectations of profit seeking investors.

• The Emergence of Transnational Risks


The process of globalization is accompanied by the emergence of global
risks. Citizens from very different communities and countries realize that
their destiny is bound together and depends on how economic and
political actors in other countries behave, though they often have no
influence to regulate or determine their behaviour. Environmental
disasters, global diseases (bird flu, mad cow disease etc.) and social
problems (drugs, organized criminality, terrorism etc.) do not halt at
national borders but affect the lives of people who become aware that
their traditional nation state institutions have become unable to protect
them from harm.

Changing Public Expectations of Business

Globally companies are expected to do more than merely provide jobs and
contribute to the economy through taxes and employment. Consumers and
society in general expect more from the companies whose products they buy.
This is coherent with believing the idea that whatever profit is generated is
because of society, and hence mandates contributing a part of business to the
less privileged.

Further, separately in the light of recent corporate scandals, which


reduced public trust of corporations, and reduced public confidence in the ability
of regulatory bodies and organisations to control corporate excess. This has led
to an increasing expectation that companies will be more open, more
accountable and be prepared to report publicly on their performance in social
and environmental arenas.

Corporate Brand

In an economy where corporate strive for Proposition to differentiate


themselves from their competitors; CSR initiatives enable corporate to build
stronger brand that resonates with key external stakeholders- customers,
general public and the government. Businesses are recognising that adopting an
effective approach to CSR can open up new opportunities, and increasingly
contribute to the corporates’ ability to attract passionate and committed
workforces. Corporate in India are also realising that their reputation is
intrinsically connected with how well they consider the effects of their activities
on those with whom they interact. Wherever the corporate fail to involve parties,
affected by their activities, it may put at risk their ability to create wealth for
themselves and the society. Therefore, in terms of business, CSR is essentially a
strategic approach for firms to anticipate and address issues associated with
their interactions with others and, through those interactions, to succeed in their
business endeavours. The idea that CSR is important to profitability and can
prevent the loss of customers, shareholders, and even employees is gaining
increasing acceptance.

Further, CSR can help to boost the employee morale in the organisation
and create a positive brand-centric corporate culture in the organisation. By
developing and implementing CSR initiatives, corporate feel contented and
proud, and this pride trickles down to their employees. The sense of fulfilling the
social responsibility leaves them with a feeling of elation. Moreover it serves as a
soothing diversion from the mundane workplace routine and gives one a feeling
of satisfaction and a meaning to their lives.
Corporate branding is the process by which you impart a personality or public
image to an entire company, not just its products or services. It’s different from
“umbrella branding” because “umbrella” suggests that there are specific sub-
brands as identity.
May be this will help:
Procter and Gamble, a corporate entity, has a brand image or “corporate
brand”. It’s often referred to as “P&G”.
The company also has a number of brands, like Ivory – which is a bar soap,
a liquid dishwashing detergent, and a light duty laundry product.
None of the individual brands, or the umbrella brand, use the P&G brand
as part of their identity. P&G is strictly the corporate brand.
Of course, sometimes the corporate image is so important to the
individual brands that the corporate brand is also an umbrella brand, covering
many different products/services as well as the corporation. It can work, but
usually it’s difficult to suggest a single benefit for a diverse family of products
and services, so the corporate brand is better left intact for the corporation.

An excellent answer form good man, but one of the things I enjoy about
branding is it’s so imprecise – so hear another example of the same thing –
Corporate Brand is the brand that applies to corporate entity; the key
difference is its target market is shareholders, analysts, fund managers, i.e. the
investment community.

Trends in Corporate Social Responsibility


‘Thinking Globally’ to ‘Thinking Locally’

The last decade has seen a mad rush amongst multinational companies to
gain first mover advantages in emerging markets by establishing operations and
subsidiaries. However most of the firms have found out to their cost that local
completion was not as easy to overcome as they had thought with matters made
being worse by cutthroat competition amongst the multinationals themselves.
Most multinationals are beginning to realise that loss making operations cannot
be continued year after year under the pretext of investment for future
expectation of profits. It is high time that the local subsidiaries start to deliver
profits of their rather than continuing to act as sinks of the firm’s global
resources.

According to Dawar and Chattopadhyay(2000) “Local operations now


realise that the three to five percent of consumers in emerging markets who
have global preferences and purchasing power no longer suffice as the only
target market. Instead, they must delve deeper into the local consumer base in
order to deliver on the promise of tapping into billion-consumer markets”.
Batra(1999) suggest that the usual business strategy of using products that have
been historically successful in developed nations will not work in emerging
markets. Prahlad and Lieberthal(1998) point out that companies must make the
transition in their business strategy of ‘thinking globally’ to ‘thinking locally’ as
each of the emerging markets represents as intriguing challenge for marketing
with its vast diversities existing across nations and even within nations in culture
and socio economic conditions. It is in marketing across such diverse cultures
and varying conditions that the concept of corporate social responsibility
becomes critical to success. In this paper, we will focus on two main paradigms
of marketing in which CSR plays an important part.

Graphical Representation:
Redesigning marketing paradigms for emerging markets

CSR refers to the obligation of an organisation which considers the


interests of all their stakeholders which includes the consumers, employees,
shareholders, communities and ecological considerations in all aspects of their
operations.
Companies which aspire to be, or are, leaders in corporate social
responsibility are challenged by rising public expectations, increasing innovation,
continuous quality improvement and heightened social and environmental
problems. They are forced to chart their CSR course within a very complex and
dynamic environment.

CSR trends that provide rewards for companies, communities and the
world...

 Return on investment (ROI): more businesses are recognising the benefits


of CSR, from cost savings on energy and materials to direct benefits like
enhanced reputation among customers and clients and indirect benefits
like employee satisfaction. Most importantly, CSR programs provide
rewards – and increased monetary value – through the creation of
products and services that support sustainability.
 Increasing Rewards for Communities and Workers: Companies are working
to mitigate their impacts on community resources such as water through
conservation and by promoting sustainable development that benefits
communities and employees.
 New Media and the Fight For Customers’ Mindshare: Through CEO blogs,
YouTube videos and other new media tools, smart companies are arming
customers with more information about CSR efforts.
 Carbon Foot printing Reaches Supply Chains: More companies are
gathering credible data about the carbon emissions, advanced companies
are working to monetize an develop markets for environmental services
like water, nutrients and biodiverisity.

THE FUTURE OF CORPORATE SOCIAL RESPONSIBILITY

Companies today are increasingly sensitive about their social role. The
companies not only concentrate on how they will position their product or how
they will sell it but also they have a social strategy because they have started
feeling that brands are built not only around emotions and values that people
ascribe to those products

In addition to be more precisely defined, the CSR movement is evolving


following some trends that I intend to describe briefly:

 First, there are no more a few companies, which have consecrated


themselves to this new doctrine, but the majority of large enterprises have
introduced it in their agenda. Philip Kotler and Nancy Lee in their book
“Corporate Social Responsibility” indicate that charitable giving has risen
from $9.6 b in 1999 to $12,19 b. In spite of some opponents like the
survey in The Economist last year which maintains that CSR is eroding the
basis of the free enterprise system, every time more this new doctrine is
catching the attention of business people.
 Second, since the term “triple bottom line” was carried in 1994, an
accelerating progression from early concerns about safety, health and
environment to a growing range of social concerns have been seen,
among them human rights and diversity. Recently other concerns like fair
trade pricing and fair wages as well as socially increasingly have
increasingly made headlines. There is an increasing conviction that there
is not a conflict but a positive correlation between CSR and profitability
and that profit can go hand-in-hand with social and environmental
responsibility.
 Third, the social responsible enterprises every time more publish their
activities for their shareholders and the public in general, either in general
annual report or in CSR specific reports. According to a survey of KPMG in
2002, 45% of co portions issued environmental, social or sustainability
reports compared with 35% in their 1999 survey. Greater transparency is
a means to improve accountability and trust.
 Fourth, CSR has ceased to be a form of philanthropy so that is no more the
case to sign a check at the end of each financial year, after a positive
result –and CSR enters into the normal activities of the corporation
declaring its profits and becoming a all year around responsibility. It is a
shift to making long-term commitments to especial social issues providing
more than cash contributions, sourcing funds from business units as well
as philanthropic budgets, forming strategic alliances, etc. CSR is becoming
as much as anything a way of thinking about and doing business.
Corporate investment decisions driven by quarterly profit earnings are
short-sighted and sacrifice long-term wealth creation.
 Fifth, it is no longer the owner or the CEO the one which decides to write
the check, but it is the collective commitment of all the corporation from
the CEO until the last employee; it is precisely the employees’ satisfaction
one of the objectives of CSR. There is an increasing awareness of CSR
among the workforce.
 Sixth, the establishment of a social activity generally dissociated from the
cooperation, the trend is that the activity be totally related with the core
business of the cooperation, its products or services(for instance when as
electronic corporation decides to rain the students of a school on the use
of computers).
 Seventh, the establishment of a social norm to do good. As William Clay
Ford, Ford Company CEO “there is a difference between a good company
and a great company. A good company offers excellent products and
services. A great company also offers excellent products and services but
also thrives to make the world a better place”. From the philosophy of
“doing good to look goof”, to the conviction of “doing well and doing
good”.
 Eight, it is clear today that CSR’s success requires the decisive
cooperation of the government and business in a strong symbiosis. This is
particularly clear in developing countries. As the World Summit on
Sustainable Development (Johannesburg 2000) recognised, partnership
between business, government and civil society is the key to the progress
we need on sustainable development.
 Ninth, every time sectoral projects on CSR are materialising in the mining
industry, the energy industry or the apparel industry, for example, the
Multi-fibre Arrangement Forum, or like the Equator Principles where a
group of large financial institution decided to impose conditions
particularly environmental conditions to their clients’ projects.
 Ten, Up to now CSR has been something voluntary. Today there is a big
debate whether CSR should remain voluntary or should become
compulsory. Many believe for example that the limitation of the CO2 in the
atmosphere emissions will not stop voluntarily unless it becomes a legal
duty.

All of these trends mean that businesses need to manage their environmental
and social impacts much better: corporate responsibility has to cease being a
bolt-on to business operations; and instead be built-in to business purpose and
strategy. This involves a clear link to business values and culture; strong
leadership from the top; and the active engagement of stakeholders.

Potential benefits of implementing a CSR approach

Key potential benefits for firms implementing CSR include: Better


anticipation and management of an ever-expanding spectrum of risk. Effectively
managing social, environmental, legal, economic and other risks in an
increasingly complex market environment, with grater oversight and stakeholder
scrutiny of corporate activities, can improve the security of supply and overall
market stability. Considering the interests of parties concerned about a firm’s
impact is one way of anticipating and managing risk.

Improved reputation management. Organisations that perform well with


regard to CSR can build reputation, while those that perform poorly can damage
brand and company value when exposed. This is particularly important for
organisations with high-value retails brands, which are often the focus of media,
activist and consumer pressure. Reputation, or brand equity, is founded on
values such as trust, credibility, reliability, quality, and consistency. Even for
companies that do not have direct retail exposure through brands, their
reputation as a supply chain partner – both good and bad – for addressing CSR
issues can make the difference between a business opportunity positively
realized and an uphill climb to respectability.

Enhanced ability to recruit, develop and retain staff. This can be the direct
result of pride in the company’s products and practices, or of introducing
improved human resources practices, such as “family-friendly” policies. It can
also be the indirect result of programs and activities that improve employee
morale and loyalty. Employees become champions of a company for which they
are proud to work.

Improved competitiveness and market positioning. This can result from


organisational, process and product differentiations and innovation. Good CSR
practices can also lead to better access to new markets. For example, a firm may
become certified to environmental and social standards so it can become a
supplier to particular retailers.

Enhanced operational efficiencies and cost savings. These flow in


particular from improved efficiencies identified through a systematic approach to
management that includes continuous improvement. For example, assessing the
environmental and energy aspects of an operation can reveal opportunities for
turning waste streams into revenue streams(wood chips into particle boar, for
example) and for system-wide reductions in energy use. Corporate social
responsibility promotes a vision of business accountability to a wide range of
stakeholders, besides shareholders and investors. Key areas of concern are
environmental protection and wellbeing of employees, the community and civil
society in general, both now in the future. The concept of CSR is underpinned by
the idea that corporations can no longer act as isolated entities operating in
detachment from broader society. Traditional views about competitiveness,
survival and profitability are being swept away.

Some of the drivers pushing business towards CSR include:

1. The shrinking role of government

In the past, governments have relied in legislation and regulation to


deliver social and environmental objectives in the business sector.
Shrinking government resources, coupled with a distrust of regulations,
has led to the exploration of voluntary and non-regulatory initiatives
instead.

2. Demands for greater disclosure

There is a growing demand for corporate disclosure from stakeholders,


including customers, suppliers, employees, communities, investors, and
activist organisations.
3. Increased customer interest

There is evidence that the ethical conduct of companies exerts a growing


influence on the purchasing decisions of the customers. In a recent survey
by Environics Internationals, more than one in five consumers reported
having either rewarded or punished companies based on their perceived
performance.

4. Growing investor pressure

Investors are changing the way they assess companies’ performed and
are making decisions based on criteria that include ethical concerns. The
Social Investment Forum reports that in the US in 1999, there was more
than $2 trillion worth of assets invested in portfolios that used screens
linked to the environment and social responsibility. A separate survey by
Envirnics Internationals revealed that more than a quarter of share-
owning. Americans took into account ethical considerations when buying
and selling stocks. (More on socially responsible investment can be found
in the ‘Banking and investment’ section of the site.)

5. Competitive labour markets

Employees are increasingly looking beyond pay checks and benefits, and
seeking out employers whose philosophies and operating practices match
their own principles. In order to hire and retain skilled employees,
companies are being forced to improve working conditions.

6. Supplier relations

As stakeholders are becoming increasingly interested in business affairs,


many companies are taking steps to ensure that their partners conduct
themselves in a socially responsible manner. Some are introducing codes
of conduct for their suppliers, to ensure that other companies’ policies or
practices do not tarnish their reputation.

Some of the positive outcomes that can arise when businesses


adopt a policy of social responsibility include:

1. Company Benefits:

• Improved financial performance;


• Lower operating costs;
• Enhanced brand image and reputation;
• Increased sales and customer loyalty;
• Greater productivity and quality
• More ability to attract and retain employees;
• Reduced regulatory oversight;
• Access to capital;
• Workforce diversity
• Product safety and decreased liability.

2. Benefits to the community and the general public:

• Charitable contributions
• Better product durability and functionality
• Corporate involvement in community education, employment and
homelessness programmes;
• Product safety and quality

3. Environmental benefits:

• Greater material recyclability;


• Better product durability and functionality;
• Greater use of renewable resources;
• Integration of environmental management tools into business plans,
including life cycle assessment and costing, environmental management
standards, and eco-labelling.

Nevertheless, many companies continue to overlook CSR in the supply chain –


for example by importing and retailing timber that has been illegally harvested.
While governments can impose embargos and penalties on offending companies,
the organizations themselves can make a commitment to sustainability by being
more discerning in their choice of suppliers.

The concept of corporate social responsibility is now firmly rooted on the


global business agenda. But in order to move from theory to concrete action,
many obstacles need to be overcome.

A key challenge facing business is the need for more reliable indicators of
progress in the field of CSR, along with the dissemination of CSR strategies.
Transparency and dialogue can help to make business appear more trustworthy,
and push up the standards of other organizations at the same time.

The Global Reporting Initiative is an international, multi-stakeholder effort


to create a common framework for voluntary reporting of the economic,
environmental, and social impact of organization-level activity. Its mission is to
improve the comparability and credibility of sustainability reporting worldwide.

There is an increasing recognition of the importance of public-private


partnerships in CSR. Private enterprise is beginning to reach out to the other
members of civil society such as non-governmental organizations, the United
Nations, and national and regional governments.

An example of such a partnership is the ‘Global Compact’. Launched in


1999 by the United Nations, the Global Compact is a coalition of large business,
trade unions and environmental and human rights groups, brought together to
share a dialogue on corporate social responsibility. The ‘Working with NGOs’
section offers some insights into the way businesses and lobby groups are
working together to mutual benefit. Management training plays an important
role in implementation of CSR strategies, and there are a growing number of
conferences and courses available on the subject. Organizations that provide
such training include Global Responsibility, Business for Social Responsibility and
the Corporate Social Responsibility Forum. The idea of Indian companies going
beyond business imperatives to do something for society has undergone
remarkable changes over the years. Time was when companies merely
dispensed cash by way of charity to organizations and NGOs engaged in social
work. Others promoted activities that were mutually beneficial, to villagers living
around a company plant or offices, and providing amenities that were lacking.
Companies supplemented facilities in schools or hospitals, helped women earn
extra income through sponsorship of, say, sewing machines or community
centres which, apart from generating income, promoted adult literacy and family
welfare activities. With the growth of environment consciousness in the 1960s,
companies felt the need to redeem themselves for some of the damage done.
They got involved in forestation, water conservation and similar projects. The
concept of corporate social responsibility (CSR) thus evolved – from philanthropy
to a more elaborate concept that encompassed the environment, employee
relations, corporate governance and engaging with the community. The current
understanding of CSR also attempts to deploy company’s core competencies to
help address society’s problems. Examples of this approach abound, and one
standout example is TCS, which has used its expertise in information technology
to help communities in different parts of India help themselves.TCS has
developed a database for Child Line, which supports children in distress in 54
centres in India, all using volunteers from among its employees; it has also
designed and implemented a ‘computer-based functional literacy’ project, a
unique idea that enables adults to learn to read – using low-end computers and a
breakthrough software solution – within 30 to 40 hours, over two-three months.
Similarly, NIIT has used its IT expertise for its ‘hole in the wall’ experiment,
where children from slums learn to use computers with a touch screen. Cut from
the same cloth is ITCs much-celebrated e-choupals, which help farmers check
prices in Indian and global markets before going to the marketplace with their
produce.

An important aspect of CSR today is the encouragement given to the


employees to get involved in tackling social issues. Mother Teresa used to tell
admirers eager to offer her money: “I don’t want your money; I want your time”.
She ended up getting both. CSR today is that which relates directly to the giver’s
core competencies and offers real value, not just philanthropy. It is no longer
considered good for business, but simply good business. Because when you give
back to the society you operate in, you become truly embedded in that society,
rather than being perceived as seeking profits alone.

Evaluation

Along with innovation at conceptualisation and implementation, corporate


are now undertaking greater evaluation and stricter accountability and
transparency norms. Evaluating the programme essentially answers question
“what good did we do?” Evaluating programmes, base on internationally
accepted formats provide feedback for correction and based on that public
disclosure is done.

What is an evaluation?

An evaluation tracks the overall progress of a firm’s approach and forms


the basis for improvements and modification. With the information derived from
verification and reporting, a firm is in a good position to rethink its current
approaches and make adjustments. Evaluation is all about learning. Learning
organizations are those whose existence is based on continuous receipt and
comprehension of new information and adaption for sustainable advantage. They
do not simply attempt to achieve objectives; they are constantly on the alert to
adapt to changing circumstances or to find ways for improving their approaches.
An evaluation should involve stakeholder engagement, including comments and
suggestions from management, CSR coordinators, managers and committees,
employees and outside stakeholders.

Why evaluate?

An evaluation allows a firm to o the following:


Determine what is working well, why and how to ensure that it continues to do so
• Investigate what is not working well and why not, to explore the barriers
to success and what can be changed to overcome the barriers.
• Revisit original goals and make new ones as necessary
This base of information should allow the firm to determine whether the current
CSR approach is achieving its objectives and whether the implementation
approach and overall strategy are correct.

How to do an evaluation?

Drawing on the CSR objectives and indicators, and the information


obtained through the verification and reporting process, firms should consider
and respond to the following questions:
• What worked well? In what areas did the firm meet or exceed targets?
• Why did it work well? Were the factors within or outside the firm that
helped it meet its targets?
• What did not work well? In what areas did the firm not meet its targets?
• Why were these areas problematic? Were there factors within or outside
the firm that made the process more difficult or created obstacles?
• What did the firm learn from this experience? What should continue an
what should be done differently?
• Drawing on this knowledge, and information concerning new trends, what
are the CSR priorities for the firm in the coming year?
• Are there new CSR objectives?

Finally, it is important that firms celebrate their successes. When goals are met
and progress is achieved all parties concerned need to give each other a pat on
the back for a job well done.

Reporting

A very important aspect of CSR is the reporting practices that corporate


adhere to inform their key internal and external stakeholders of social
responsibility practices. In the recent past, several indicators such as the Global
Reporting Initiatives guidelines and sustainability reporting have been
developed. Sustainability Reporting (SR) frameworks help the companies
conform to the global standards of disclosures for maintaining transparency with
regard to its operations an value chain and ensuring accountability towards its
internal and external stakeholders.

CSR: A Quantitative Analysis

The Case Study quantitative analysis represents an objective overview of the


corporate social responsibility trends in India based on the desktop research and
case study analysis of the corporate who have responded to the request by
ASSOCHAM to share their CSR efforts and initiatives, for the compendium, 27
case studies were submitted in total and out of these 24 were used as a base to
deduce some directional pointers on the status of CSR and some trends in India.
The analysis does not intend or aim to pass a qualitative judgement or any
corporate initiative or how good or bad it is, but rather focuses on presenting a
broad overview of implementing the CSR practices. It is assumed that there is an
inherent bias, as the corporate that have submitted case studies are
implementing the CSR in a way or other. Moreover the source of information
being they (corporate) is not an unbiased source.

Thematic Areas

Action in CSR in India largely spans a diverse set of thematic areas –


health, education, livelihood, poverty alleviation, environment, water, housing,
energy and microfinance. However some other areas like women empowerment,
child development and infrastructure also appeared in the case studies. Based
on the cooperative study of the 24 companies, it was found that while some
companies chose to narrow their focus on a few thematic areas, others took a
broader view and undertook a larger scope of areas to focus on. Out of 24 case
studies that were analysed, it was found that there as many as 16 corporate
focusing on 3-5 thematic areas, whereas only 4 corporates catered to 1-2
thematic areas of work and remaining four stuck to six or more thematic areas.
In terms of the area focus, environment garnered the maximum attention from
corporate while women empowerment and poverty alleviation were neglected
areas with minimal corporate focusing on the same.

Health

Health has been identified as a primary objective in the community


development process. As a part of the healthcare initiatives weekly clinics,
counselling sessions, health camps are regularly held to promote general health
and well-being in the community. The health perils in the community are
numerous and in order to treat some minor ailments and casualties, community
members have been identified and are being trained to treat minor ailments.

Education

Education too has been a primary focus area for the foundation, and a
number of initiatives have been designed to promoted non-formal education in
the community. Akansha, a non - governmental organization that focuses on
developing a strong educational foundation, deep sense of self esteem and
facilities fun activities for underprivileged children has been identified to
facilitate education and awareness. PMC schools have been computers to
promote IT education in the neighbouring area of Chandan Nagar.
Simultaneously, IT education programs have also been deployed to spread
computer literacy within Zensar’s support staff. The response to all these
initiatives has been overwhelming and the foundation is now taking up more
initiatives to address the requirements.

Environment

• Your business affects many different people – employees, customers,


suppliers and the local community. It also has a wider impact on the
environment.
• Even the simplest energy efficiency measures, like switching off lights and
equipment when they aren’t needed, makes a real difference. Reducing
the use of water also directly cuts your costs.
• Minimising waste can also make an important contribution. Simple steps
like reducing the amount of paper you waste can immediately cut costs.
You can save even more by thinking about waste implications when you
design new products and production processes.
• Caring about the environment can increase income too. Many customers
prefer to buy from responsible companies. There are all sorts of ways you
could think about reducing the environment impact of your business.

Livelihood

A unique program to create more opportunities for less privileged youth.


Pune Corporate Consortium for LABS was inaugurated on April 4, 2006. LABS, a
flagship program of Dr. Reddy’s Foundation (DRF), promotes customized
programs for youth and women in the age group of 18-30 years from
economically weaker sections of society, and empowers them to gain access to
opportunities for sustainable livelihoods and growth in the New Economy. This
program is implemented in Pune with the help of organizations such as Thermax,
Forbes Marshall, Confederation of Indian Industries – Young Indians (CII-YI) and
Zensar Technologies in association with Pune Municipal Corporation to actively
support this initiative. CII-YI is the primary coordinator of this activity that plans
to train 300 young members in the coming year. This program aims to empower
students who have discontinued formal education for various reasons. A total of
80 students have already enrolled for this batch which began from April 4, 2006
in Pune.

CSR Management

It has been observed that for 37% corporates, the CSR initiative is being
implemented through a well structured separated Foundation. Among 58%
corporate there is a separate CSR department that takes care of the activities to
be implemented.

The importance of building strong public-private partnerships as well as working


closely with NGOs as implementation partners is being increasingly realised by
corporates. It has been observed that 58% of the corporate within the surveyed
sample partnered with the government departments. The number is higher for
the engagement with the NGOs, where approximately 67% corporate have
formed linkages, 21 percent corporates were working in partnership with
multilateral or bilateral organisations.
Stakeholders

Stakeholders’ engagement has become one of the important aspects of


CSR practices. Though there are different sets of stakeholders that can be taken
into account while implementing CSR, we decided to obtain information on the
following – employees, neighbouring community and general public.
Neighbouring community refers to the people in catchment area of corporate
who have a direct effect of business on them. Out of total 24, five corporates
work towards the benefit of employees and general public as their stakeholders.
Five and two corporates have as their stakeholders the set of general public and
neighbouring community and employees and neighbouring community
respectively. Only one corporate has decided to concentrate on the neighbouring
community as the stakeholder.

Sustainability Reporting (SR) is also gaining prominence and recognition as a


value added tool for displaying a corporate’s commitment towards transparency
and accountability towards its stakeholders. It helps a company to report on the
social, environmental and economic impact of its activities, along with a report
on the internal state of its management and employee welfare system in a
manner as rigorous and transparent as financial reporting. A well drafted
Sustainability report provides a balanced and reasonable representation of the
sustainability performance of a reporting organisation (both positive and
negative). SR helps the organisations define and communicate their overall
context and rationale to solve global problems through its specific business
model or elicit whether its business model design is influenced by those
problems. SR is also increasingly recognised as a tool for brand and image
building.

Reporting Initiatives

Public disclosure and reporting was another metric used to compare the CSR
initiatives of corporate. It was observed that within the sample of 24 countries
used, 25% are reporting as per the GRI guidelines while 21% were signatories of
the UN Global Compact. An equal number of corporates (21%) came up with a
separate CSR report while there are only a few (8%) who have a mention of their
CSR activities in the annual report. Comparative numbers of reporting of CSR in
the annual report at global level are much higher. For instance in 1977 the
number was 50%, which rose to 90% in 1990.

THE FUTURE OF CORPORATE SOCIAL RESPONSIBILITY

The reasons for companies becoming interested in social responsibility are


diverse. Risk protection, market positioning, recruitment, political-social
relationships– each displaying an inverse relationship between immediate
economic impact and degree of commitment. Corporate social responsibility is
about the acknowledging that sustainable competitive advantage requires
companies to be economically viable, environmentally sound and socially
responsible. CSR is 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 the local community and society at
large.
- World Business Council for Sustainable Development (WBCSD)

CSR has now been discussed in the companies across the globe for more
than 15 years but a lot of people in and outside of business are very critical of
CSR. This argument is that CSR. Their argument is that CSR is a management
fashion that will go away at one point and be replaced by something else.

Corporate Social Responsibility (CSR) and its potential role as a force for change
in a globalised world:

CSR is a concept whereby companies and financial institutions not only


consider their profitability and growth, but also the interest of society and the
environment by taking responsibility for the impact of their activities on
stakeholders, employees, shareholder, customers, suppliers and civil society
represented that go beyond a simple policy of “paternalism” vis-a-vis their
suppliers, customers and employees, such as that practised until recent times.
Companies which aspire to be, or are, leaders in corporate social responsibility
are challenged by rising public expectations, increasing innovation, continuous
quality improvement and heightened social and environmental problems. They
are forced to chart their CSR course within a very complex and dynamic
environment. To assist this exercise it can be useful to reflect on the longer term
trends in CSR – the future of corporate social, environmental and ethical
responsibility 5-10 years from now, beyond the immediate operating
environment. How will the social/environmental/ economic dimensions of
corporate sustainability evolve 5 – 10 years out?
What will be the stakeholder demands on companies in the future? What forms
of collaboration and partner-ship will emerge? What will be new CSR issues
confronting corporations? What will be the regulatory environment and
government’s role in CSR? In effect, what will be the new CSR operating
environment for companies? In the future a significant number of companies will
be convinced it’s in their strategic interest to incorporate CSR substantively into
their operations. There will be pressure through competition for better CSR
performance – this will impact on suppliers etc. A small group of companies will
be there will be differentiation between different models and levels of CSR as a
result of continuous efforts.

Improvement and Quality Assurance:

CSR will advance, but it will advance inconsistently across sectors,


depending on a company’s economic performance, economic downturns,
competitiveness of the market, etc.
• Underlying structural drivers will impact large scale companies, such as
the value of knowledge workers and other intangible assets, driving
companies to take different issues into account.
• Increasingly businesses will see CSR as resulting in increased
competitiveness and profitability
• The cynical corporations are dinosaurs and will be swept aside, though not
in 10 years; change will be there, but it won’t be dramatic
• CSR is part of a search for a new social contract between business and
society. This new social contract will not necessarily be through
experimentation. In spite of the difference in views of social impact and
degree of corporate commitment, the majority of the optimists and the
pessimists agreed that 5-10 years from now CSR will nonetheless become
increasingly main–stream within business, even if not within the public
consciousness. CSR tools, resources, language – all will become more
aligned with business norms and systems. CSR standards – to greater or
lesser effect – will be part o business basics and not an add-on. Most of
this speculation points to continued, albeit slow progress toward
increasing integration of CSR values into the corporate sector with varying
levels of commitment and impact within the 5-10 year time frame.
CSR Strategic:
Companies will become strategic about different aspects of CSR. They will
become compliant with standards and then will create niches in specific areas
of CSR more strategic to their companies. They will develop business
strategies within one or two aspects of CSR around which they can develop a
competitive advantage. Companies in certain sectors will believe their key to
survival is providing products and services acceptable to broad public
interests or they will go out of business.
CSR Integrated:
Further along the continuum will be those companies that fully integrate
CSR throughout their business model, not as a strategic advantage, but in the
belief of the need to take social and environmental impacts and opportunities
into account. They will have comprehensive CSR policies covering all areas of
their operations and will be operationalizing their CSR principles through
rigorous performance, reward mechanisms, etc. CSR or sustainable
development will inform decision-making and business strategy throughout
the company.
Deep CSR:
A group of companies will adopt or be founded on business models whose
mission is to improve social or environmental condition.
More Significant Roles for Stakeholders:
One of the top trends around which there is consistent agreement is the
increasing importance of stakeholder engagement in the future of CSR. Not
only will stakeholders be engaged in increasingly significant ways, they will
gain in influence, and will continue to innovate and bring forward new and
challenging values, consumers, employees, shareholders, suppliers, NGOs,
governments and business partners- all those that have a “stake” in a
company’s operations.
Employees a Growing CSR Force:

Most predictions point to increasing numbers of employees concerned


about the social values of their employer, companies with a bad CSR track record
will have difficulty recruiting compared to their more advanced CSR
counterparts. Younger entrants to the work force, particularly, are expected to
seek work with companies aligned to their values. More generally it is expected
that employees will increasingly demand that their work and the organizations
they work for be aligned with their personal values. Non-responsive employers
will find their staff, particularly their most talented staff, leaving for other more
compatible settings. In a mobile workforce employees won’t put up with
companies that don’t reflect their values. Another expected trend 5-10 years
from now is the increased hiring of NGO activists and social scientists within
corporations. CSR Management System Standardize and Differentiate –
Improvement and Impact are Key There is widespread consensus that basic CSR
systems will become more standardized and routine within 10years. The codes of
conduct debate will have been resolved. There will be convergence in codes and
standards. CSR Management Systems Standardize and Differentiate –
Improvement and Impact are Key:
There is widespread consensus that basic CSR systems will become more
standardized and routine within 10 years. The codes of conduct debate will have
been resolved. There will be convergence in codes and standards. There will be
more clarification of what is meant by ‘real’ CSR to distinguish it from ‘cosmetic’
CSR. Leading edge CSR today will be baseline 5 -10 years from now is the bar
will be continuously lifted. CSR will continue to evolve with the evolution of social
and environmental issues. Standards and systems will continue to be affected by
these developments in a very “organic” process. The future will also see not only
increased adoption of these standards, but increased experimentation within
companies, sectors, at the site level and in regions. The new focus will be
measuring and reporting on CSR impact – the degree to which a corporation’s
CSR performance has actually improved conditions in society or the
Environment. Companies will be showing how they have used the data and
information on which they report and how they have used the data and
information on which they report and how they have used stakeholder input to
improve their operations. Through this they will be enhancing their accountability
to stakeholders. As a result of this increased impact reporting, there will be more
focus on outcome comparisons between companies. There will also be an
increased in board CSR committees or sub-groups focused on CSR policy. Tools
will be developed to enhanced CSR corporate governance. In the future
companies will stop looking at CSR as a way of responding to external pressures
and will start managing it, using the systems, tools and standards available to
them, to increase CSR reputation and results, reduce risks and improve
relationships. Most expect that government will be working to support
accountability and transparency in company operations, particularly through
reporting.
Innovation and Learning Drive CSR

There will be in-house training programs to bring up the skills of employees


across the company focused on how CSR is defined, how it is applied and how it
is applied and how it impacts the business process. For companies going through
a deeper CSR integration process there will be a focus on internal transformation
beginning with personal and professional development of key personnel. There
will be more academic research into CSR and CSR fundamentals. There will
continue to be research on the business case, which itself will continue to evolve.
CSR in this environment will become a stimulant for creativity and innovation.
New products and services which integrate CSR and stakeholder values will be
developed and market makers. Some companies will have discovered that by
creating new environmentally and socially sustainable markets they can benefit
from increased business opportunities.

Companies Expected to Achieve or Lever Greater Social Change:

The big debate in CSR in 5 – 10 years is expected to be over its impact on


social change. Many are pinning their hopes on an emergent sector whose entire
mission and agenda is sustainability, both social and ecological. Sometimes
called the third sector or the civil economy, these companies have core CSR
values and an ethos committed to integrated social and environmental
responsibility. They include natural, clothing, building and construction,
community banking, social investment, travel and educational services, Co-
operatives, credit unions and non-profit enterprises are found in this sector. This
sector is expected to grow and evolve over the next 5 – 10 years and will impact
the marketplace, society and the environment. They will be a competitive force
in the economy, albeit in niche markets. They will be leaders in CSR innovation
and will help raise the bar for CSR performance across sectors. The future of CSR
lies in the hands of the public and civil society organizations and their changing
expectations and the vision and leadership of the private sector.

Corporate Social Responsibility is not Charity

The originally defined concept of CSR needs to be interpreted and


dimensionalised in the broader conceptual framework of how the corporate
embed their corporate values as a new strategic asset, build a basis for trust and
cooperation within the wider stakeholder community. Though there have been
evidences that record a paradigm shift from charity to a long-term strategy, yet
the concept still is believed to be strongly linked to philanthropy. There is a need
to bring about an attitudinal change in people about the concept. Several
corporate today have specific departments to operationalise CSR. There are
either foundations or trusts or a separate department within an organisation that
looks into implementation of practices. Being treated as a separate entity, there
is always a flexibility and independence to carry out the tasks. But often these
entities work in isolation without creating synergy with the other departments of
the corporate. There is a need to understand that CSR is not only a pure
management directive but it is something that is central to the company and has
to be embedded in the core values and principles of the corporate.

Corporate Citizenship: A new way to market CSR?

A new terminology that has been gaining grounds in the community today
is Corporate Citizenship. So what is corporate citizenship and is this
fundamentally different from corporate responsibility? Corporate citizenship is
defined by the Boston College Centre for Corporate Citizenship. As the business
strategy that shapes the values underpinning a company’s mission and the
choices made by its executives, managers and employees as they engage with
society. According to this definition, the four key principles that define the
essence of corporate citizenship are: 1) Minimise harm 2) Maximise benefit 3) Be
accountable and responsive to key stakeholders 4) Support strong financial
results. Thus, corporate citizenship, similar to its CSR concept, is focusing on the
membership of the corporation in the political, social and cultural community,
with a focus on enhancing social capital. Notwithstanding the different
terminologies and nomenclature used, the focus for companies today should be
to focus on delivering to the basic essence and promise of the message that
embodies these key concepts – CSR and Corporate Citizenship.

Conclusion:

Corporate Social Responsibility is not a fad or a passing trend, it is a


business imperative that many Indian companies are either beginning to think
about or are engaging with in one way or another. While some of these initiatives
may be labelled as corporate citizenship by some organizations, there basic
message and purpose is the same. A successfully implemented CSR strategy
calls for aligning these initiatives with business objectives and corporate
responsibility across the business principles to make CSR sharper, smarter, and
focused on what really matters.
This can be done by:
• Focusing on priorities
• Allocating finance for treating CSR as an investment from which returns
are expected.
• Optimising available resources by ensuring that efforts are not duplicated
and existing services are strengthened and supplemented
• Monitoring activities and liaising closely with implementation partners
such as NGOs to ensure that initiatives really deliver the desired outcomes
• Reporting performance in an open and transparent way so that all can
celebrate progress and identify areas for further action.

A long term perspective by organisations, 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. Wealth has
to be created before it can be distributed. The responsibility to create wealth is
of business. And responsibilities and rights must go together. Hence, the society
cannot disarm business of its rights whis are essential for creating value.

Corporate Social Responsibility: The Journey has Begun !