Title

“Role of Corporate Social Responsibility in Community

Development.”

Author- Garima Jayaswal

Co- Author- Dr. Viplaw Kishore Pandey
ABSTRACT
Corporate social responsibility (CSR) refers to strategies corporations or firms conduct their
business in a way that is ethical, society friendly and beneficial to community in terms of
development. The nature of society we are living in has changed. The nature of governance has
equally changed since people are now enjoying more freedom within each societal democratic
tenet. This freedom has found its way in the business and into the factories. This article analyses
the meaning of CSR based on some theories available in literature. It is argued that three theories
namely utilitarian, managerial and relational theories of CSR supported by works of other
scholars in the area could be used to suggest that CSR becomes an international concern due to
globalized nature of business that knows no border. CSR is evolving in its meaning and practice.
The article then discusses the role of CSR in community development because the very logic of
CSR is towards seeing its impact in community socially, environmentally and economically.
Competencies required by CSR managers are also analyzed in order to have a better
understanding of the practical aspects of CSR. Finally, conclusions and implications for future
research are discussed. 

Keywords: Corporate social responsibility, community development, competencies of CSR

managers, multinational corporations, corporate-society relations.

INTRODUCTION
Corporate social responsibility (CSR), also known as sustainable responsible business (SRB), or
corporate social performance, is a form of corporate self-regulation integrated into a business
model. Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby
business would monitor and ensure their adherence to law, ethical standards, and international
norms. Business would embrace responsibility for the impact of their activities on the
environment, consumers, employees, communities, stockholders and all other members of the
public sphere Corporate Social Responsibility is a very well known concept in the present day
world. Infact the corporate giants are very conversant with corporate social responsibility or
corporate sustainability –in today's parlance. The responsibility they have towards the society
and the community as a whole cannot be denied. A tremendous surge and then a sustained
consistency in the progress of the concept  of CSR has been witnessed over a span of quite a
number of years, elevating it to the highest pedestal of importance in all aspects of business and
production, be it private or public.

The issue of corporate social responsibility (CSR) has been debated since the 1950s. Latest
analyses by Secchi (2007) and Lee (2008) reported that the definition of CSR has been changing
in meaning and practice. The classical view of CSR was narrowly limited to philanthropy and
then shifted to the emphasis on business-society relations particularly referring to the
contribution that a corporation or firm provided for solving social problems. In the early
twentieth century, social performance was tied up with market performance. The pioneer of this
view, Oliver Sheldon (1923, cited in Bichta, 2003), however, encouraged management to take
the initiative in raising both ethical standards and justice in society through the ethic of
economizing, i.e. economize the use of resources under the name of efficient resource
mobilization and usage. By doing so, business creates wealth in society and provides better
standards of living.
The present-day CSR (also called corporate responsibility, corporate citizenship, responsible
business and corporate social opportunity) is a concept whereby business organizations consider
the interest of society by taking responsibility for the impact of their activities on customers,
suppliers, employees, shareholders, communities and other stakeholders as well as their
environment. This obligation shows that the organizations have to comply with legislation and
voluntarily take initiatives to improve the well-being of their employees and their families as
well as for the local community and society at large.
CSR simply refers to strategies corporations or firms conduct their business in a way that is
ethical and society friendly. CSR can involve a range of activities such as working in partnership
with local communities, socially sensitive investment, developing relationships with employees,
customers and their families, and involving in activities for environmental conservation and
sustainability.

Growing importance of CSR

Corporate social responsibility (CSR) is the responsibility recognized by the companies for
acting in socially responsible manner. There is no single universally accepted definition of
corporate social responsibility, it has generally come to mean business decision making linked to
ethical values, legal compliance, and respect for people, community, and environment.
CSR expects a company to go further than required by law so as to:
 Treat employees fairly and with respect
 Operate with integrity and in an ethical manner in all its business dealings with
customer, suppliers, lenders, and others
 Respect human rights
 Sustain the environment for future generations
 Be a responsible neighbor in the community and a good ‘corporate citizen’.

Role of CSR in community development

First of all community is generally defined as a group of people sharing a common purpose, who
are interdependent for the fulfillment of certain needs, who live in close proximity and interact
on a regular basis. There are shared expectations for all members of the group and responsibility
taken from those expectations. The group is respectful and considerate of the individuality of
other persons within the community. In a community there is a sense of community which is
defined as the feelings of cooperation, of commitment to the group welfare, of willingness to
communicate openly, and of responsibility to and for others as well as to one’s self. Most
important there exists community leaders who are responsible for the success of any community
event, depending on the needs of the community, and the individual’s own feelings. The
community leaders are individuals who strive to influence others to take responsibility for their
actions, their achievements, and the community welfare. Community development (CD) refers to
initiatives undertaken by community with partnership with external organizations or corporation
to empower individuals and groups of people by providing these groups with the skills they need
to effect change in their own communities. These skills are often concentrated around making
use of local resources and building political power through the formation of large social groups
working for a common agenda. Community developers must understand both how to work with
individuals and how to affect communities' positions within the context of larger social
institutions.

The role of CSR in Community Development used in this paper is any direct and indirect
benefits received by the community as results of social commitment of corporations to the
overall community and social system. The common roles of CSR in Community Development
are discussed as follows:
 To share the negative consequences as a result of industrialization. This is related to
increasing conscience-focused marketplaces necessitating more ethical business
processes. E.g. higher UK road tax for higher emission vehicles, thus reducing the burden
of small vehicle owners in a community (Wikipedia, 2009). By doing so, small vehicle
owners share less the tax burden, hence could re-channel the money for more productive
uses in the community.

 Closer ties between corporations and community. Through CSR the existence of
corporations in the social system is felt beyond a perception that corporation is a place
just to get employment and producers of goods and services. By doing so, corporations
and community would stay in peace and harmony. This becomes a social capital that is
essential in community development.

 Helping to get talents. Organizations with a reputation for CSR can take advantage of
their status and strengthen their appeal as an attractive employer by making their
commitment part of their value proposition for potential candidates. It is also found that
when employees view their organization's commitment to socially responsible behavior
more favorably, they also tend to have more positive attitudes in other areas that correlate
with better performance. They believe their organizations recognize and reward great
customer service, act quickly to address and resolve customer concerns, and are led by
people in senior management who act in the best interest of customers. Confidence in
 senior management is higher in other areas, too, when employees give their company
high marks for being socially responsible. For example, if a large number of employees
perceive that their organization's senior management supports new ideas and new ways of
doing things, this would result on better perception of employees to the organization,
hence their trust and loyalty to the organization. There is a correlation between a
company's success in the marketplace is often influenced by its capacity for innovation,
the perception of the employees to the organization. It is also a factor in attracting and
retaining talents. In relating to Community Development, good employees’ perceptions
on a corporation would lead to the community that treats the corporation as an important
economic asset in the community.

 Role in transfer of technology (TOT). Closer ties help in TOT between MNCs that give
concerns on CSR and communities in the host countries. MNC is a corporation that has
its facilities and other assets in at least one country other than its home country. Such
companies have offices and/or factories in different countries and usually have a
centralized head office where they coordinate global management. Very large
multinationals have budgets that exceed those of many small countries. Barton (2007)
focuses on three mechanisms of international technology transfer: the flow of human
resources; the flow of public-sector technology support; and the flow of private
technology from MNCs to developing countries. He argues for greater mobility within,
and globalization of, the world’s scientific enterprise and reasserts an economic rationale
for investing in public-sector research in the developing countries. Through TOT coupled
with CSR processes, the targeted community would gain in the various aspects of product
development and marketing, such as better price and quality, as well as concern for
people’s wellbeing.

 CSR helps to protect environment. Some of the world's largest companies have made a
highly visible commitment to CSR, for example, with initiatives aimed at reducing their
environmental footprint. These companies take the view that financial and environmental
performance can work together to drive company growth and social reputation.

 Interdependency between a corporation and community. The close link between a

corporation and community is another aspect of CSR role in Community Development
because in long run it creates sustainable development

Examples of Corporate Social Responsibility in India

Tata Group

Tata Group in India has a range of CSR projects, most of which are community improvement
programs. For example, it is a leading provider of maternal and child health services, family
planning, and has provided 98 percent immunization in Jamshedpur. The company also endorses
sports as a way of life. It has established a football academy, archery academy, and promotes
sports among employees. It offers healthcare services all over the country with programs like
rural health development.
Tata Group also has an organized relief program in case of natural disasters, including long-term
treatment and rebuilding efforts. It did laudable work during the Gujarat earthquakes and Orissa
floods. It also supports education, with over 500 schools, and also is a benefactor of the arts and
culture. It has done abundant work in improving the environment and local populations around
its industries.
Aptech

Aptech has a long history of participating in community activities. It has, in association with
leading NGOs, provided computers at schools, education to the deprived, and training and
awareness-camps.

Infosys

Infosys is aggressively involved in a variety of community growth programs. In 1996, the

company created the Infosys Foundation as a not-for-profit trust to which it contributes up to 1
percent of profits after tax every year. Moreover, the Education and Research Department at
Infosys also works with employee volunteers on community development projects.
The management team at Infosys continues to set examples in the area of corporate citizenship
and has involved itself vigorously in key national bodies. They have taken initiatives to work in
the areas of research and education, community service, rural outreach programs, employment,
healthcare for the poor, education, arts and culture, and welfare activities undertaken by the
Infosys Foundation.
Mahindra & Mahindra

At Mahindra & Mahindra, The K. C. Mahindra Education Trust was established in 1953 with the
purpose of promoting education. Its vision is to renovate the lives of people in India through
education and financial assistance across age groups and across income strata. The K. C.
Mahindra Education Trust undertakes a number of education plans, which make a difference to
the lives of worthy students. The Trust has provided more than Rs. 7.5 crore in the form of
grants, scholarships and loans. It promotes education mostly by the way of scholarships. The
Nanhi Kali (children) project has over 3,300 children under it and the company aims to increase
the number to 10,000 in the next two years by reaching out to the underprivileged children,
especially in rural areas.

Jindal Steel and Power

The company strongly believes that sustainable community development is essential for
harmony between the community and the industry. It endeavors to make a positive contribution
 to the underprivileged communities by supporting a wide range of socio-economic, educational
and health initiatives. Also, it is committed to integrate its business values and operations to meet
the expectations of all its stakeholders.

The company serves its communities by:

 Ensuring they benefit from its presence by proactively responding to their needs
 Building and strengthening community institutions and Panchayti Raj Institutes (PRIs)
 Working in partnership with civil society organizations (CSOs) and government bodies to
widen the reach and leverage each partner's individual experience and expertise
 Providing all assistance during times of disasters
 Encouraging its employees to volunteer

Conclusion

It is concluded that CSR is about business, government and civil society collaboration with the
bottom line is the achievement of win-win situation among the three entities. From the social
point of view, CSR should benefit community because the latter has a very complex structure as
it consists of individuals with various levels of control of resources physically and intangibly.
The analysis on the theories allows the understanding of CSR that goes beyond its traditional
meanings; therefore, CSR necessitates a multidisciplinary approach in its perspective and
practice.
Roles of CSR in Community Development refer to the ways the responsible behavior is
perceived by community of stakeholders and how impacts are felt by them. The analysis shows
that CSR proved to have many roles and the brought impacts to the community as follows:
Closer ties and interdependencies between corporations and community, sharing the costs the
society has to pay due to environmental degradation, transfer of technology from international
companies to developing countries, environmental protection measures that done together by
corporation and the communities, poverty alleviation in the communities, and human right
advocacy. For many corporation leaders, it is difficult to know where their responsibilities begin
and end in relation to building infrastructure, creating economic opportunities, and access to core
services such as health, education and poverty alleviation. Experience has made one thing certain
that sustainable CSR solutions at community, provincial and national levels are based on
partnerships between government, civil society and business

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