The Indian Situation

• The Indian business sector presents a mixed picture as far as

social responsibility is concerned.
• It is gratifying to note that a number of leading companies in
India have shown recognition of the social responsibility of
corporate sector.
• The business community has been instrumental in setting up
hundreds of intuitions of public service like schools, colleges,
management institutes, hospitals, cultural institutions and place
of religions worship.
• Many businessmen have risen up to occasion to help the victims
of droughts, floods, earthquakes and other natural calamities.
• One of the important externalities of industrialization is the
serious ecological damage.
• The problem of environmental pollution caused by industries
is serious in a number of places in our country.
• Many public sector enterprises in India have failed to
discharge their primary responsibly-increase in the
productivity and production, efficiency in the provision of the
services , etc.
• The CSR is usually advocated for the private sector,
presumably on the assumption that the public sector is
socially quite responsible. But the fact remains that the public
sector in India has yet to prove that it is more responsive to
society than the private sector.
 Arguments for Social Involvement Business

1. Business which survives using the resources of the society

has a responsibility to the society.

2. Business which is an integral part of the social system has to

care for the varied needs of the society.

3. Business which is resourceful has a special responsibility to

the society.

4. Social responsibilities like recycling of waste may have

favorable financial effects.
5. Social involvement may create a better public image for the
company which may help it in attracting customers, efficient
personnel and investors.

6. Social involvement of business would foster a harmonious and

healthy relationship between the society and business to the
mutual benefit of both.

7. Social involvement may discourage additional government

regulation and intervention.
 Arguments against social involvement of
business
1. Business should confine to its own business. There are
government and social organizations to carry out social
activities.
2. Involvement in social activities could adversely affect the
economic health of a business enterprise. When a business
incurs excessive costs for social involvement, it passes the
cost on to its customers in the form of higher prices. Society,
therefore, has to bear the burden of the social involvement of
business by paying higher prices for its products and services.
3. If the cost of the social involvement of business is ultimately
passed on to the consumers, there is no point in exalting the
social involvement of business.
4. Many companies involve themselves in social activities
because of the tax exemptions on the income spent on
special purposes

5. If the social involvement of business enterprises causes an

increase in the price of its products, it could affect its
competitiveness both in the domestic and international
markets.

6. Social involvement of business could lead to an increase in the

dominance or influence of business over the society
7. Lack of necessary skills among businesspeople
Businesspeople do not possess the necessary skills to handle
the problems of society. Their expertise and knowledge may
not be relevant to deal with social problems.

8.Lack of accountability to society

Until a proper mechanism to establish the accountability of
businesses is developed, they should not get involved in social
activities.

9.Lack of consensus on social involvement

There is no agreement regarding the type of socially
responsible actions that a business should undertake.