Corporate Social Responsibility: A New Way of Doing Business

Prof. V. Thyagarajan Email : thyagarajan@asiapacific.edu.in Nancy Dhussa Email: nancy23 apoor@yahoo.co.in

Abstract !orporate "ocial #esponsi$ility initiati%es pro%ide $usinesses the mechanism to discharge their responsi$ility to&ards society. Does it end &ith the corporate paying ta'es and pro%iding employment or has a &ider implication( )usinesses are no longer %ie&ed as only the economic entities $ut are percei%ed to $e an insepara$le part of the society and management has $ecome a major leadership group in the industrial society that ha%e a greater responsi$ility not only to&ards their profession $ut also to&ards the people they manage and the society and economy in &hich they operate. The issue of !orporate "ocial #esponsi$ility *!"#+ is a %ery dominant theme in the national as &ell as glo$al corporate practices. Trou$led and costly e'periences ha%e con%inced the giants of the industrial &orld li e "hell, Ni e, !oca !ola, Pepsi!o to in%est hea%ily in impro%ing their o&n ethical profile and reputation and hence performance. The -triple $ottom line- reporting alludes to this ne& approach &here performance is e%aluated along three closely.related lines.economic, social and en%ironmental. "uch an e%aluation process posits an organi/ation as a holistic entity in society, in sharp contrast to its earlier one.dimensional e'istence as a -profit.ma ing machine-. 0hen applied to the in%estment decision.ma ing process, the triple $ottom line approach is

referred to as -socially responsi$le in%esting1. Corporate Social Responsibility: Scope and Challenges 2n the recent years there has $een increased pressure on the organi/ations across the glo$e to practice and demonstrate their role for society. The issue of !orporate "ocial #esponsi$ility *!"#+ is a %ery dominant theme in the national as &ell as glo$al corporate practices. Trou$led and costly e'periences ha%e con%inced the giants of the industrial &orld li e "hell, Ni e, 3nion !ar$ide, !oca !ola, Pepsi!o to in%est hea%ily in impro%ing their o&n ethical profile and reputation and hence performance. Employees and communities &ant safe and en%ironmentally sound &or ing practices, 4o%ernment &ants ethical and responsi$le organi/ations and the consumers &ant safe and cheap products. !alls for corporate social responsi$ility are &idespread yet there is no consensus a$out &hat it means. There is a star contrast $et&een the concepts of corporate social responsi$ility and 5ilton6s declaration of the social responsi$ility of $usiness. 5ilton and other li$eral economists $elie%e that the only form of responsi$ility is economic. Those adapting neo. classical %ie& of the firm ad%ocate that the social responsi$ility of the $usiness end &ith the pro%ision of employment and payment of ta'es and e'tend no further. 5ilton 7riedman &rote in New York Times that the social responsi$ility of $usiness is to increase profit and any di%ersion of the company resources to social programmes and charity represents a ta' on consumers and in%estors and can $e %ie&ed as deri%ing from an agency pro$lem, that is managers &ho use corporate resources to further some social good are doing so only to promote their self image. 7reeman argued that firms ha%e numerous rele%ant constituents &hose interest should $e considered $ecause the firm

cannot thri%e and sur%i%e &ithout the support of these sta eholders, &hich includes employee, customers, suppliers and community groups. 8ence, social responsi$ility is a con%incing role management and also the companies are in%ol%ed in repeated transactions &ith these sta eholders and are e'pected to $e honest, trust&orthy and ethical $ecause the returns of such $eha%ior are high. 0ith the understanding that $usinesses play a ey role for jo$ and &ealth creation in society, !"# is generally understood to $e the &ay a company achie%es a $alance or integration of economic, en%ironmental, and, social imperati%es. !"# is the &ay $usinesses engage9in%ol%e their "hareholders, employees, customers, suppliers, go%ernments, non.go%ernmental organi/ations, international organi/ations and other sta eholders. !"# is often understood as in%ol%ing the pri%ate sector commitments and acti%ities that e'tend $eyond the foundation of compliance &ith la&s. !"# is the $usiness6 contri$ution to sustaina$le de%elopment &hich can $e defined as -de%elopment that meets the needs of the present &ithout compromising the a$ility of future generations to meet their o&n needs1. 0orld )usiness !ouncil for "ustaina$le De%elopment *0)!"D+. Ernst and :oung *;ustralia+ %ie& !"# strategy as an approach to create long term organi/ation %alue through effecti%e management of ris and opportunity associated &ith ethical, en%ironmental and social factors. Corporate social responsibility is the point of forever growth of various initiative aimed at ensuring social economic development if the community which would be livelihood oriented as a whole in a redible and sustainable manner! This 6triple $ottom line6 concept should $e employed to measure the performance and success of $usiness and not just the monetary profits. 2t as s organi/ations to formulate policies and practices to de%elop employees and

community and maintain en%ironment. 2t re<uires corporate to address not only the financial issues $ut non.financial concerns such as human rights, $usiness ethics, en%ironmental policies, community de%elopment, and corporate go%ernance as &ell. -2n reality, notions of ecological responsi$ility and $usiness responsi$ility are similar. )oth reject &aste and profligacy= $oth em$race the notion of responsi$le ste&ardship and in%estment of assets in order to reap greater returns in the long term-. Corporate Social Responsibility: " A New Way of Doing Business -!orporate "ocial #esponsi$ility is no& a determining factor in consumer and client choice that companies cannot afford to ignore,- says ;ndre& 4rant, Ernst > :oung principal for en%ironment and sustaina$ility ser%ices. -!ompanies, &hich fail to ma'imi/e the adoption of !"# strategy, &ill $e left $ehind-. 6Nestle $elie%es there is a %ery strong lin $et&een corporate profita$ility and corporate social responsi$ility $ut only &hen managed o%er time is that lin apparent. Progressi%e corporations no& that aligning their $usiness o$jecti%es &ith community %alues enhances their economic performance. They understand that it is e'pected from $usinesses to carry out their operations in a responsi$le manner- $oth at home and a$road, and the customers &ill $e loyal to those &ho do so. 0e ha%e to $alance our primary interests as commercial enterprises &ith the &ider interests of the societies of &hich &e are a part. ;nd, &e must reali/e that our health as a company is %ery much tied to the o%erall &ell.$eing of the &orld around us. !ompanies are responsi$le to their shareholders to produce an ade<uate rate of return through acti%ities &hich are la&ful, en%ironmentally sound and morally accepta$le. )y fulfilling this responsi$ility, a corporation can sustain its operations, re&ard the support of its shareholders and contri$ute the ma'imum possi$le to society6s &ell $eing-. There are many e'amples of ho& $usinesses ha%e strategically used !"# as a

competiti%e tool. The most pertinent e'ample is #$he Body Shop %nternational#! 2n ?@AB, ;nita #oddic , founded the glo$ally recogni/ed The )ody "hop. 0ith appro'imately 2CCC stores &orld&ide and ran ed in the top thirty most respected companies in the &orld $y The Financial Times in ?@@D, The )ody "hop stands as a $usiness triumph and remains in the top three in 2nternational !"#. 2ts mission statement reads -dedicate our $usiness to the pursuit of social and en%ironmental change-. The comer stone of the company &as to esta$lish a $usiness &ith ethics. #oddic recogni/ed &hat soon $ecame clear to many other corporate leaders, !"# ma es good $usiness sense. There are clear $enefits including: raised profit and company profile through increased employee and consumer loyalty, strengthened ris management and the creation of a uni<ue competiti%e edge. Perhaps the increasing tendency to adopt !"# is moti%ated $y self.interest, the desire to pursue the many $enefits and imitate the success of companies li e The )ody "hop. 5any multinational companies ha%e agreed &ith the ethical theories on social responsi$ility and ha%e de%eloped codes of conduct for issues such as child la$or, gender or racial discrimination, promotion of human rights, etc. ;t &nilever the code of conduct is performing operations &ith honesty, integrity and openness &ith respect for human rights and interests of their employees. ;t 2TT 2ndustries, the code of conduct includes pro%isions on safety and health, e<ual opportunity, se'ual harassment and other &or place conduct. The code of conduct from Eell&ood !ompany, an international mar eter of camping apparel and other recreational products, encompasses safety and health, en%ironmental, &ages and $enefits, child la$or, discrimination, and freedom of association standards. 2t also re<uires internal and e'ternal monitoring. !onsumers prefer to purchase goods and ser%ices from the companies that are socially

and en%ironmentally responsi$le. 2n a sur%ey carried out $y "ocial 5ar et 7oundation, D2F of consumers e'pressed the desire to do so including 23F &ho &ould do so e%en if the option is more e'pensi%e. 8o&e%er, many of them do not ha%e clear and credi$le information a$out the ethical Practices of the companies. Gnly 2F of the consumers ha%e enough information to judge the ethical position of the company &hile A3F feel that they do not ha%e the access to such information most of the time. Economist *2CCC+ reported that the concerns o%er pollution &ere stronger in many third &orld countries as compared to the de%eloped nations. #espondents in de%eloping countries are far more inclined to a%oid products or $rand for en%ironmental reasons, in countries li e 2ndia, Vene/uela, !hina and Egypt HC.ACF of the respondents appeared &illing to pay a ?CF premium for a greener cleaning product &hile in countries li e 7rance, Iapan and 3E only 2CF of the respondents e'pressed the &illingness to do so. !ommercially successful and socially responsi$le organi/ations are %ie&ed as %aluing people more than profits and stri%ing &ith utmost integrity and honor. "ocial and ethical codes act as insurance policy. 2t is far $etter to incur the cost of mechanism to ensure ethical and social practices in an organi/ation than to pay the cost of loss of good&ill or litigations later. Ni e suffered at great loss &hen it &as critici/ed of employing dou$le standards in ;sian countries and not acting socially responsi$le &hen it &as re%ealed that thousands of 2ndonesian &or ers &ere not getting minimum &age of JA29month.They &ere getting only J??.JKA per month &hich &as only 15'Yo of the legal minimum &age, %iolating $oth the 2ndonesian la& and the company6s o&n code of conduct *Education for Iustice, 2CCB+. #ee$o also faced many pro$lems in 2CC2 &hen a Ne& :or $ased non.profit

organi/ation !hild La$or 0atch . pu$lished reports on poor &or ing conditions in its si' factories in !hina. #ee$o &as earlier accused of employing !hild la$or for manufacturing soccer $alls in their operations at "ial ot, Pa istan in ?@@B. #ee$o responded <uic ly to such reports to ensure people aged $elo& ?H years are not employed and e%en stuc a la$el on its soccer $alls &hich declared 64uarantee: 5anufactured &ithout child la$or6. To further impro%e its social image the company launched a J ? million project called #ee$o Educational ;ssistance to Pa istan *#E;P+ in mid ?@@A. The loss caused $y the irresponsi$le $eha%ior of the $usiness organi/ations can $e %ery high and sometimes irrepara$le. The most apt e'ample is )hopal 4as Tragedy *?@DK+ &hen the lea age of a poisonous gas methyl isocyanate from the pesticide plant of 3nion !ar$ide 2ndia Ltd. illed a$out ?C,CCC people lea%ing another HC,CCC persons permanently disa$led. 3nion !ar$ide neglected the safety measures and &as also guilty of prolonging the misery and suffering of the sur%i%ors $y &ithholding medical information on the chemical and depri%ing %ictims of proper medical care. 2n 7e$ruary ?@D@, the "upreme !ourt of 2ndia ruled that the company should pay 3"J KAC million as compensation. )ut can the loss of human life $e re%o ed( Corporate Social Responsibility: $he Business Case 5any managers and companies are concerned a$out social and en%ironmental pro$lems $ut still &onder &hether addressing such issues can impro%e their financial performance. Demonstrating this lin age is often termed as the $usiness case for corporate social responsi$ility. The $usiness case for !"# is compelling. 2f the ethics fail to persuade you, the $ottom line certainly should. 0hile the traditional arguments for !"# are still important there is a greater pressure for attention to !"# today. !"# affects a firm6s reputation, ris , a$ility to attract and retain employees and impro%es relations &ith

sta eholders, all of &hich may affect its profita$ility. ; study of companies o%er an ?? year period concluded that 6sta eholder.$alanced6 companies sho&ed four times the sales gro&th and eight times the employment gro&th as compared to the companies that focus only on shareholders. Starbuc's emphasi(es the business case for CSR as follows: !onsumers are demanding more than 666product66 from their fa%orite $rands. Employees6 are choosing to &or for companies &ith strong %alues. "hareholders are more inclined to in%est in $usinesses &ith outstanding corporate reputations. Muite simply, $eing socially responsi$le is not only the right thing to do= it can distinguish a company from its industry peers. !"# mo%es $eyond the damage limitation to sustaina$le positi%e ad%antage $y proacti%e and sensiti%e management &hich may impro%e $usiness performance. The challenge is to meet the pressure of pu$lic concern o%er social and en%ironmental issues &ith an open t&o &ay communication &ith the sta eholders and using the shared learning for impro%ement to turn pressure and damage limitation into a source of $usiness ad%antage. Adoption of a CSR strategy can bring the following strategic advantages to businesses: !orporate reputation and enhanced )rand image . 4ood corporate social performance can $uild reputation &hile poor performance can damage $rand %alue. Ni e suffered considera$le reputation damage &hen it &as re%ealed that in one their contracted factories in 2ndonesia, 3C.2F of the &or ers had personally e'perienced, and HB.DF had o$ser%ed, %er$al a$use. ;n a%erage of A.DF of &or ers reported recei%ing un&elcome se'ual comments, and 3.3F reported $eing physically a$used. Ni e &as also accused of using child la$or in ?@@B &hen Naomi Elein in her $oo -No Logo- points to a photo sho&ing children in Pa is tan stitching Ni e foot$alls. The company too concerted

efforts to impro%e the condition and no& has AC staff mem$ers &or ing on corporate responsi$ility issues. #oyal Dutch9"hell faced European $oycott in ?@@H o%er its plan to dump the )rent "par oil platform at sea. The reports of en%ironmental harms as the result of its operation in Nigeria further compounded its pro$lem seeing the fall in sales up to HCF. 7or certain companies, li e The )ody "hop and Van !ity, !"# is part of their $rand image, &hich has allo&ed them to tap into a gro&ing demand for %alue $ased products or ser%ices. 2n the case of Van !ity, potential depositors *-mem$ers-+ may also see the credit union6s !"# &or as a reflection of ho& they &ill $e treated as clients, there$y helping e'pand Van !ityNs client.$ase. Commitments to: Early identification of social and en%ironmental issues Gpen T&o &ay dialogues &ith the sta eholders "hared learning and impro%ement )alancing glo$al standard and local cultural difference.

)ressure and Damage *imitation Distraction from the core $usiness #eacti%e changes in $usiness and project plans !osts Damage of reputation

Business Advantage !orporate reputation and enhanced $rand 2mage. #educe and manage $usiness ris s ;ttract and maintain employees

Esta$lish or impro%e reputation &ith 2n%estors, $ond agencies and $an s ;ccess to mar ets9customers !ost sa%ings9impro%e the $ottom line "timulate inno%ation and generate ideas !orporate %alues: -the right thing to do5eet changing sta eholder e'pectations E'pedited permitting9impro%ed relations &ith.

#eputation is critical to the corporate success. Negati%e !"# association can ha%e a detrimental effect on o%erall product e%aluation, &hile positi%e association can enhance product e%aluation. ; ?@@@ sur%ey of 2HCCC consumers in 23 countries found that more customers form their impression of the company on the $asis of corporate citi/enship practices than on $rand and financial factors, &hile KCF had thought a$out punishing the !ompany they $elie%e is not $eha%ing socially responsi$le. Various studies ha%e demonstrated a lin $et&een reputation and financial performance. ;n analysis of -;merica6s most admired companies- found that a good reputation increases the length of time a firm has earnings a$o%e the a%erage and decreases the length of time the firm has earning $elo& the a%erage financial returns. #educe and manage $usiness ris s 2n the increasingly comple' mar et, &ith greater sta eholder scrutiny of corporate acti%ities, managing ris success. is essential to $usiness

#ecogni/ing the po&er of communities and municipalities, !anadian Pacific #ail&ay *!P#+ has launched a process to reengage communities at the local le%el to resol%e disputes related to the pro'imity of residential and commercial neigh$orhoods to pre.

e'isting rail lines. This is helping it a%oid the inter%ention of courts and the imposition of go%ernment regulations &hich can add to the costs of doing $usiness. ;ttract and maintain employees there is gro&ing e%idence that companies &ith strong !"# or sustaina$ility reputations often find it easier to recruit and retain high <uality employees in tight la$or mar ets. Ed&ard Iones &as num$er one in the Fortune 2CC2 list of $est 3" !ompany to &or for. 2ts employees praise the company ethics, @AF citing its management6s honesty. ; sur%ey of 3" !ompany $y 8udson 2nstitute in 2CCC concluded that employees &ho $elie%e they are &or ing in socially responsi$le companies are si' times more li ely to $e loyal than &ho $elie%e their company is socially irresponsi$le. "tar$uc s6 employee turno%er is less than a third of the a%erage in the retail food industry. This is attri$uted to the company6s socially responsi$le practice. The lo& turno%er also pro%ides economic efficiencies $ecause of lo&er costs of staff recruitment and training. 2n ?@@A 0al er 2nformation sur%ey re%ealed that K2F of the respondents too company6s responsi$le $eha%ior into account &hile deciding &hether to accept a jo$. E'amples of companies using !"# as a means of attracting high <uality employees include 2)5, 5icrosoft, 4eneral 5otors, etc. 2n contrast companies &ith a tarnished image find it difficult to attract the $est talent. 0hen a major oil company damaged its reputation on social grounds, its !EG remar ed that its most negati%e impact &as the fact that $right graduates &ere no longer attracted to the company. Esta$lish or impro%e reputation &ith in%estors, $ond agencies and $an s there is a gro&ing trend in the 2n%estment community to use En%ironmental and social performance factors to e%aluate a company6s suita$ility for in%estment. 2f your company &ill pass any of the accepted !"# audits li e ;;?CCC, ";DCCC or 4lo$al #eporting 2nitiati%e, it has an access to nearly J3 trillion fund held $y more than 3CC mutual funds that in%est only in socially responsi$le companies. ;ccording to the social in%estment forum J2.32 trillion or nearly ?9Dth of the funds under professional management in 3nited "tates &as in%ol%ed in socially responsi$le in%esting

in 2CC. 5atthe& Eiernan, e'ecuti%e managing director of 2nno%est "trategic ;d%isors, argues this is $ecause -a company6s en%ironmental and social performance is an increasingly potent pro'y and leading indicator-. 2n )uilt to Last, Iames !ollins and Ierry Porras compared ?D companies &ith their. Direct peers and found that one dollar in%ested in ?@2B in 6%isionary6 companies ha%ing core purpose $eyond ma ing money ha%e gro&n to JB3HB $y ?@@C as compared to J@HH in the other group. The Do& Iones sustaina$ility 2nde' *DI4"2, introduced in ?@@@+ and 7T"EK4ood *introduced in 2CC?+, list companies that meet socially responsi$le in%esting criteria *"mith 2CC3+. DI4"2 consists of top ?CF companies in terms of sustaina$ility performance dra&n from 2HCC $iggest companies in Do& Iones 4lo$al 2nde' *DI42+. The DI4"2 companies outperformed DI42 companies $y 3B.? F o%er a fi%e year period &hile the energy companies in DI4"2 performed KH.3F $etter than their counterparts. ;ccess to mar ets9customers 2n%estment in !"# pays off in impro%ed access to mar ets, including customer loyalty, security in e'isting mar ets and attracti%eness in ne& mar ets. 4o%ernments also tend to fa%or $idders &ho demonstrate a commitment to society. )ritish Telecom *)T+ $elie%es that the <uality of their !"# performance differentiates them from their competitors. This is important for a company li e )T &ho $ids for major contracts in $oth the pu$lic and pri%ate sectors *&orth O?.3 $illion in the 2CCB financial year alone+ *!"# )usiness !ase, 2CCB+. ; recent study done $y 0al er #esearch indicates that &hen the traditional $uying criteria such as price, <uality and con%enience are e<ual, D? F of the customer &ould s&itch to socially responsi$le $rands. )ritish Telecom has measured the lin $et&een customer satisfaction and !"# for a num$er of years and concluded that there e'ists positi%e correlation $et&een the t&o.

!ustomers &ho $elie%e that )T ta es its responsi$ility to society and the community seriously are more than t&ice as li ely as other customers to $e %ery or e'tremely satisfied &ith )T. DuPont !anada $elie%es its programs help de%elop ne& mar et opportunities for the company. 7or e'ample, DuPont !anada6s pu$lic "ustaina$le 4ro&th #eport has actually $rought in ne& consulting &or . !onsumers are demanding good $eha%ior on the part of companies. 2n a sur%ey done in ?@@A, 3.". consumers re%ealed that they &ant companies to e'pand their roles to em$race $roader social goals. ; sur%ey carried out $y 5c0illiams *2CC?+ confirmed the rise in consumer sensiti%ity to&ards corporate social performance. !ost sa%ings9impro%e the $ottom line . )usinesses can use !"# to produce direct $enefits for the $ottom line. 0hile fe& studies ha%e $een a$le to conclusi%ely dra& a positi%e correlation $et&een an integrated approach to !"# and $ottom line performance, there are many e'amples of $usiness $enefits that results from indi%idual program areas that constitute !"#. !"# generates significant sa%ings in staff retention e'penses. 2t lo&ers turno%er &hich results in lo&er recruitment and training costs. #ecycling, energy sa%ing methods, green $uilding technology, etc., result in considera$le reduction in costs. 2n a 2CC2 study of glo$al !EGs $y the auditing firm Price &ater house !oopers, ACF agreed that !"# is %ital for the profita$ility of a company. ; HC.country study of the !EGs $y En%ironicsKH 2nternational in the same year sho&ed that DCF of the !EGs $elie%e that !"# enhances product inno%ation and profita$ility. DuPont !anada, for e'ample, has reali/ed financial $enefits through &aste and energy intensity reductions. "yncrude6s !EG attri$utes cost sa%ings of J?HC.2CC million annually to the success of their loss management programme &hich addresses en%ironment, health and safety, resulting in impro%ed efficiencies, relia$ility and insurance costs.

"timulate inno%ation and generate ideas . )y e'amining their core $usinesses through the lens of corporate social responsi$ility, many companies ha%e found opportunity for inno%ation and ha%e de%eloped ne& $usiness prospects. !"# can support inno%ation in se%eral &ays. 2f a firm is percei%ed as socially responsi$le, it is li ely to encounter less resistance &hen introducing ne& products, technologies, or management practices. ; prime focus of !"# in%estments is life long learning *LLL+, through &hich firms can $uild a more <ualified, moti%ated, and adapta$le &or force to $olster their performance and inno%ation efforts. Lin ing the local and glo$al net&or is an increasingly organi/ed net&or of N4Gs &hich scrutini/e company6s action and transform local e%ents to glo$al ne&s %ia the internet. 5ost companies cite impro%ed relations &ith sta eholders as an outcome of their !"# acti%ities. 0hen sta eholders see that companies are open to hearing their concerns and &or ing &ith them to address them, trust is $uilt &hich is in%alua$le to resol%ing disputes and issues. E'pedited permitting9impro%ed relations &ith regulators . !ompanies that demonstrate they are engaging in !"# practices can de%elop $etter relations &ith regulatory agencies &hich can mean less red tape and scrutiny, &hich help them o$tain the re<uired permits for their operations &ith fe&er hold.ups. ;mong other things, a good reputation affords resource companies their social license to operate. 8ome Depot notes that its reputation of gi%ing $ac to communities and of $eing a good neigh$or has helped the company o$tain permits to open ne& stores, an o$%ious ad%antage for a company that is planning to open BCC ne& stores o%er the ne't three years. 8us y recently e'panded into Vermont, 3";, a state &ith a particularly tough regulatory en%ironment $y demonstrating the company6s Purpose and Values. The study pro%ides many e%idences that the inclusion of !"# in the core organi/ational %alues pro%ides numerous $usiness ad%antages and results in $etter economic6 performance.

$he recognition of the importance of $rust is well entrenched in %ndia !orporates such as the Tata and )irla group companies ha%e led the &ay in ma ing corporate social responsi$ility an intrinsic part of their $usiness plans. These companies ha%e $een intensely in%ol%ed &ith social de%elopment initiati%es in the communities surrounding their facilities. Iamshedpur, one of the prominent cities in the northeastern state of )ihar in 2ndia is also no&n as Tata Nagar and stands out at a $eacon for other companies to follo&. The parameters for corporate respect in this sur%ey are &ide ranging: G%erall <uality, top management leadership, depth of talent, $elief in transparency, ethics, social responsi%eness, en%ironmental consciousness. "ur%ey clearly re%eals is that impressi%e financials are not enough to earn respectP:ou &ere respected not $ecause you &ere $ig and po&erful, $ut $ecause you &ere transparent, your sta eholders trusted your policies, your 8# guidelines &ere fair, you &ere ethical, and you contri$uted to society. Transparency and ethics &ere the most important. Q#espect is the first thing &e loo for &hen doing anything,1 says N.#. Narayana 5urthy, !hairman 2nfosys Technologies, the company that &as cro&ned the 5ost #espected !ompany in the sur%ey this year. $op $en +ost Respected Companies in %ndia ,--. ?. 2nfosys Technologies 2. 8industan Le%er 3. #eliance 2ndustries

K. 0ipro H. 2!2!2 )an B. 4ujarat !o.operati%e 5il 5ar eting 7ederation A. Dr. #eddyNs La$oratories D. 8D7! @. 2T! ?C. 8ero 8onda
"ource: )usiness &orld, Ianuary 2CC3 R2ndiaNs most respected companiesS

/industan &ni*ever *td., is another company that has remained in the top three most respected companies for the past decade, and has topped the chart four times, the ma'imum num$er of times yet for any company Q2f you ha%e respect, %alue &ill follo&,1 says !hairman 5.". )anga, reflecting the %ie& from the %ery top. ;dds Narayanmurthy, Q;t the end, respect comes to people &ho do desira$le things and &ho can $e trusted. 0hen you ma e a statement, people should say, &e $elie%e.1 2t is no surprise that Narayanmurthy holds I.#.D. Tata in great esteem as an icon. The first name that comes to any 2ndian on the su$ject of !"# is that of the Tata 4roup. There has $een a long history of !"# in 2ndia and the Tatas ha%e $een the role models on this path. E'plains the chairman of the Tata 4roup, #atan N. Tata, Q0e do not do it for propaganda. 0e do not do it for pu$licity. 0e do it for the satisfaction of ha%ing really achie%ed something &orth&hile.1 The Tata )usiness E'cellence 5odel integrates social responsi$ility into the frame&or of corporate management &herein social responsi$ility is encapsulated as Eey )usiness Process. 2n fact all social ser%ice departments in Tata companies ha%e annual programmes and $udgetsP and all this is aligned to the 5DNs )alanced "core !ard. !orporate "ocial #esponsi$ility programmes at the $ata group of companies e'tend across a &ide spectrum including rural de%elopment, community de%elopment and social

&elfare, family initiati%es, tri$al de%elopment and &ater management. ;$out ACCC %illages around Iamshedpur and Grissa $enefit from de%elopment programmes run $y the $ata Steel Rural Development Society 0$SRDS1! Programmes of T"#D" co%er issues li e education, irrigation, afforestation, adult literacy, %ocational training, handicrafts and reha$ilitation of the handicapped persons. The !ommunity De%elopment and "ocial 0elfare Department *!D"0+ at Tata steel carries out medical and health programmes, $lood donation dri%es, mass screening of Tu$erculosis patients immuni/ation camps and drug de.addiction. 2n ?@@@, Tata "teel em$ar ed on an ;2D" a&areness programme, &hich has no& $ecome an integral part of all training programmes. #outine acti%ities li e immuni/ation programmes, sterili/ation operations and mother and child health care programmes are conducted through @ family &elfare centres, @ child clinics and B community.$ased clinics. 2n fact, Tata "teelNs !entre for 7amily 2nitiati%es *!72+ &as successful in influencing H@ per cent of IamshedpurNs eligi$le couples practicing family planning, compared to the national figure of 3H per cent. ; commitment to the &elfare of the community has long $een central to the %alue system of companies in the Tata 4roup. To $uild upon this heritage the Tata !ouncil for !ommunity 2nitiati%es *T!!2+ has created the Tata 4uidelines on !ommunity De%elopment, an effort of o%er three years from the field e%ol%ed into a frame&or of $est practices. The Birla group of companies are also among the pioneers in the field of corporate social responsi$ility in 2ndia. ;s part of the ;ditya Vi ram )irla 4roupNs "ocial #each, the )irla group runs as many as ?H hospitals in 2ndia= includes ;dult education and schools conducting as many as AD schools all o%er 2ndia= reha$ilitates 8andicapped

persons ha%ing touched more than HCCC physically challenged indi%iduals. 5ore than ?,CC,CCC patients ha%e $een e'amined under the 4roupNs medical programmes. G%er ?H,CCC children along &ith 2CCC pregnant &omen ha%e $een immuni/ed, o%er HCC cataract patients operated, 2CCC T) patients pro%ided medical care, ?CC leprosy.afflicted attended to, free of cost. 2t also pro%ides Vocational Training, ha%ing pro%ided training to o%er 3CCC &omen and ha%ing distri$uted o%er ?KCC tool its in a %ariety of areas li e electrical, auto repair, electronic e<uipment maintenance and repair and tailoring. 2t has adopted se%eral %illages under its Village 2nfrastructure De%elopment programme and has pro%ided e'tensi%e training to o%er ?C,CCC %illagers in its !arpet 0ea%ing !enter. ;mong corporates &ho ha%e displayed deep commitment to !orporate "ocial responsi$ility o%er long years is +ahindra 2 +ahindra! The late 5r. E. !. 5ahindra for promoting education among 2ndians at all le%els esta$lished the E. !. 5ahindra Education Trust in ?@H3. E%ery year the Trust offers up to 3C.KC interest.free loan scholarships to post.graduate students going a$road for higher studies. The 5ahindra "earch for Talent "cholarships is a scheme esta$lished in 3K schools in 2ndia to enthuse and re&ard students &ho ha%e achie%ed e'cellence in their academic pursuits. "imilar commitment to !"# has $een displayed $y se%eral corporates in 2ndia. The list, &hich at $est can $e far from complete, includes ;r%ind 5ills, Escorts, Da$ur, )ajaj, 4odrej, 8ero 8onda, D!5 "riram, ;sho Leyland, )allarpur 2ndustries, Eicher, Einetic 4roup, Eirlos ar, 2nfosys, #eliance, #an$a'y, 0ipro, each of &hich has $een deeply committed to their communities engaging in programmes encompassing education, health,

education, integrated rural de%elopment. )eyond the pri%ate sector, corporate players in 2ndiaNs pu$lic sector too ha%e $een acti%ely in%ol%ed in corporate social responsi$ility initiati%es. Conclusions The rapidly gro&ing field of !"# &as initially a tactic used $y major corporations aiming to pacify consumers6 ethical concerns, &ith origins in the anti corporate and anti. glo$ali/ation protests of the late ?@@Cs. Today, !"# is epitomi/ed as the %oluntary ethical $eha%ior of a company to&ards society including shareholders and sta e holderNs -holding- human and employee rights, en%ironmental protection, community in%ol%ement, and supplier relations as core %alues. The reasons for companies $ecoming interested in social responsi$ility are di%erse: #is protection, mar et Positioning, recruitment, political.social relationships, etc. ; !onference )ard of !anada poll re%ealed that AAF of !anadians are most li ely to in%est in, D?F to purchase from, and A@F to &or for companies they %ie& as socially responsi$le. "imilar demands ha%e $een &itnessed in other countries as &ell. There are many e%idences &here$y adopting !"# practices $usinesses ha%e $een a$le to turn things around for their good. ;midst the negati%e pu$licity, "hell in the mid.@Cs &itnessed producti%ity do&nturn and lo& employee morale. The company6s su$se<uent commitment to colla$oration and sta eholder responsi%eness turned things around. "hell has o$ser%ed that ne& employees coming into the company in recent years match their ideal profile much more closely than in past. The "ears e'perience lin ing a HF increase in re%enues &ith the HF increase in employee satisfaction su$stantiates the happy employee happy customer financial performance connection. "tudies ha%e also positi%ely correlated the6 presence of &or .life programs and loyalty to the organi/ation. ;me',

Electrolu', and !o e also found that product lines and mar eting initiati%es lin ed to !"# produced a$o%e.a%erage returns *5ess, 2CC3+. The lin $et&een !"P and !7P is moti%ating $usinesses to $ecome increasingly in%ol%ed in !"# practices and address the &ide ranging and e%er changing demands of the sta eholders. Bibliography )irch, D., *2CC3+, !orporate "ocial #esponsi$ility: "ome Eey Theoretical 2ssues and !oncepts for Ne& 0ay of Doing )usiness, !ited in !orporate "ocial responsi$ilities, !ontemporary insights *ed. #eddy+, and 2!7;2 3ni%ersity Press. 2CCK. )ro&n, D. *n.d.+. The ;ccounta$le )usiness: 5anaging !orporate #esponsi$ility in Practise. !orporate "ocial #esponsi$ility, !oncept and !ases, Vol.l. ". #eddy.6 8ydera$ad, 2!7;2 3ni%ersity Press: pg AC.DK. )ro&n, T. I. and P. ;. Dacin *?@@A+. -The !ompany and the Product: !orporate ;ssociation and !onsumer Product #esponses.Journal ~marketing B?4an.+: pg BA. 7riedman, 5., *?@AC+, 6The "ocial #esponsi$ility of )usiness is to 2ncrease its Profits, New York Times !aga"ine "eptem$er, ?3. 4alliara, D. 5. ;. *2CCK+. Dri%ers and 5odels in !"#. "tudy 5aterial in !orporate "ocial #esponsi$ility. 5um$ai, 5arsee 5onjee 2nstitute of 5anagement "tudies: pg KA.H@. 7reeman, #.E., *?@DK+, 6"trategic 5anagement: ; "ta eholder Perspecti%eEngle&ood !liffs, NI: Prentice 8all. 4upta, V., Prasanth, E., *n.d.+, 6#ee$o 6, in "umati #eddy edited. !orporate "ocial #esponsi$ility !oncepts and !ases V C?.? *2CC3+, 2!7;2 3ni%ersity Press, 8ydera$ad. 4riffin, I. I. and I. 7. 5ohan *?@@A+. -The !orporate "ocial Performance and !orporate 7inancial Performance De$ate: T&enty 7i%e :ears of 2ncompara$le #esearch.- #usiness and $ociet% 3B*?+: pg H.3?. Iohnson, 5., Vaele, 4., and 5c en/ie "., *2CC2+, 6!orporate "ocial #esponsi$ility: ; "ur%ey of 4lo$al !ompanies6 in "umati #eddy edited !orporate "ocial #esponsi$ility !oncepts and cases VoLl, 2!7;2 3ni%ersity Press, 8ydera$ad. Iones, T., *?@@H+, 62nstrumental "ta eholder Theory: ; "ynthesis of Ethics and Economics6, ;cademy of 5anagement #e%ie&, V C?.2C, pg KCK . K3A. Eee$le, I. and D. )ro&n *2CC2+. The )usiness !ase for !orporate !iti/enship.

!orporate "ocial #esponsi$ility: !oncepts and cases, Vol.?. ". #eddy. 8ydera$ad, 2!7;2 3ni%ersity Press: pg 3.?2.