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Corporate social responsibility: Modern vis-à-

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Article in Measuring Business Excellence · March 2005

DOI: 10.1108/13683040510588828

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Insights from practice
Corporate social responsibility: modern
vis-à-vis Vedic approach
A.K. Sharma and Balvir Talwar
Anil K. Sharma is Assistant
Professor in the Department of
Management Studies, Indian
Institute of Technology Roorkee,
Roorkee, Uttaranchal, India.
E-mail: anilfdm@iitr.ernet.in
Balvir Talwar, is Deputy General
Manager (Business Excellence),
Bharat Heavy Electricals
Limited, Haridwar, Uttaranchal,
India.
E-mail: balvir@bhelhwr.co.in
DOI 10.1108/13683040510588828
Summary
Purpose – With increasing competitiveness today’s business scenario has become highly complex.
Aims to focus on corporate social responsibility (CSR), which has become increasingly important in the
modern era.
Design/methodology/approach – A conceptual discussion and approach are taken.
Findings – CSR encompasses a wide variety of concerns such as ethical values in business, welfare of
society, awareness, respect and protection of the natural and built environment as regular action that
business can take to solve the problems being faced by the Society. CSR is an integral part of Vedic
philosophy. Vedic philosophy emphasizes that those actions, which are coming from the core of heart,
will provide the long lasting results. Veda advocates for minimum accumulation, mutual cooperation and
maintenance of natural harmony. Veda reiterates non-centrality of money in human life, but for
corporations money is the real nerve of business systems. Vedic economic philosophy is pure and
focused on ‘‘Prosperity for all’’. The present study attempts to critically evaluate the modern concept of
CSR and enrich it with the path described by Vedic philosophy to attain the corporate excellence.
Originality/value – Focuses on issues such as corporate accountability, corporate ethics and
disclosure of relevant corporate information which are increasingly becoming important centres of
attention in business.
Keywords Business ethics, Stakeholder analysis, Business development, Corporate governance,
Social responsibility, Branches of philosophy
Paper type General review
Introduction
Management of business has progressed rapidly in last 50 years. It has now thoroughly
matured to higher levels of performance. The present age is a money-dominated age. Every
one is running after money. Business enterprises are coming up with new strategies to earn
more and more profits. Economists are bringing new philosophies to enhance prosperity.
Today the efforts and energy of the world is being spent on increasing the organizational
wealth.
The entities with maximum wealth are the most powerful in the present era and capable of
safe guarding their economic interests leading to the gap between rich and poor widening. It
is leading to a complex situation, where some people try to find out unfair means to quickly fill
this gap. It gives rise to unrest in the human mind and quickly erodes the feeling of
satisfaction and happiness. Quality expert Kaoru Ishikawa emphasizes on the role of
company to keep its employees happy by stating, ‘‘The first concern of a company is the
happiness of the people connected to it. If the people do not feel happy, . . . that company
does not deserve to exist’’ (Ishikawa, 1985).
The pursuit of economic growth does not necessarily lead automatically to social progress.
In many cases it actually leads to a deteriorating physical environment, an unsafe
workplace, needless exposure to toxic substances on the part of the workers and
consumers, discrimination against certain groups in society, urban decay, and other social
VOL. 9 NO. 1 2005, pp. 35-45, Q Emerald Group Publishing Limited, ISSN 1368-3047 j MEASURING BUSINESS EXCELLENCE j PAGE 35
 problems (Leonard and McAdam, 2003). Justice Kuldeep Singh, a judge of Supreme Court
of India, while ordering the closure of more then 700 industrial units in Delhi which were
actively harming ecological balance and had virtually converted river Yamuna into a sewer,
observed that no one can allow economic progress and growth at the cost of ecological
imbalance. As a result, corporate social responsibility (CSR) has become increasingly
important in the modern era.

The concept of corporate social responsibility:

Corporate social responsibility (CSR) is fundamentally an ethical concept. It involves
changing notions of human welfare and emphasizes a concern about the social
dimensions of business activity that have a direct concern with quality of life in the
society. The concept provides a way for business to concern itself with social dimensions
and pay some attention to its social impacts. The word ‘‘responsibility’’ implies that
business organisations have some kind of obligation towards the society in which they
function to deal with social problems and contribute more than just economic services.
The Strategic Advisory Group on CSR of International Organisation for Standardisation
(ISO), describes it as ‘‘a balanced approach for organisations to address economic,
social and environmental issues in a way that aims to benefit people, community and
society’’ (ISO, 2002).
As per Peter Drucker, ‘‘the enterprise is an organ of society and its actions have a decisive
impact on the social scene. It is thus important for management to realise that it must
consider the impact of every business policy and business actions upon society. It has to
consider whether the action is likely to promote the public good, to advance the basic belief
of society, to contribute to its stability, strength and harmony’’ (Drucker, 1954).

Infosys Chairman, Narayana Murthy, defines CSR as, ‘‘Social responsibility is to create
maximum shareholder value working under the circumstances where it is fair to all its stake
holders, workers, consumers, the community, Government, and the environment’’.

CSR, in its true sense, is hard work and must be seen in conjunction with the basic
functioning of the company. It must radiate outwards to the society from within the core
efficiencies of the firm in order to strengthen them in a not-too-long-run. CSR, thus,
self-consciously raises the stakes for itself and in doing so sets new targets and challenges
that eventually impact the industry as a whole. For example pioneering milk cooperatives at
Anand (Gujrat, India) with famous and most successful brand name ‘‘Amul’’ encourages
dairy farming and animal husbandry in the region. Bill Gates’ efforts in raising computer
literacy will eventually help the software industry all around the world in general and
‘‘Microsoft’’ in particular. Pharmaceutical concerns can set up public health clinics to better
understand how people react to illness and then factor that knowledge in to research and
development (Dipankar, 2003). Similarly R&D activities by the business to a greater extent
may be outsourced to academic and research institutions on the pattern of advanced
economies (USA and Europe) the benefit of which can jointly be enjoyed by larger segments
of society.
Globalisation has resulted in the proliferation of new laws and regulations that direct
business activities to address diverse social problems. The long-term impact of these social
policies is a sea change in the ‘‘rules of thumb’’ by which business is expected to operate in
harmony with social environment. The firm’s external environment manifested in public
policies and expectations is becoming a key factor in major strategic business decisions. In
addition, change in social values and ideologies have tremendous implication for the role
that business is expected to play in the society. Growing concern about the ethical
dimensions by corporations has become a practice. In this scenario, it is no wonder that the
attention of top management, Government and society are being directed towards
corporate governance and corporate accountability (Hazarika, 1998).
As per Goyder, ‘‘Industry in the coming time can no longer be regarded as a private
arrangement for enriching shareholders. It has become a joint enterprise in which workers,

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management, consumers, the locality, Government and trade union officials all play a part
. . . Some way must be found to embrace many interests which go to make up industry in a
common purpose’’ (Goyder, 1951). Being major users of nature, society and environment,
business enterprises could play an important role in the protection of nature and
environment and promote the social objectives. To achieve these objectives they can work
either in partnership with Government, other interest groups or on their own. For example,
association of Total Fina Elf and the Bolivian National Oil Company, YPFB, to minimize the
ecological impacts of oil exploration is a good case of this nature. Likewise, an informal
partnership between Exxon Mobil, the Government of Zimbabwe and some local groups in
the design of exploration for oil in the Zambezi River Valley is a positive step towards growth
and development of sense of joint social responsibility.

CSR – relevant approaches

There are two basic approaches to the concept of corporate social responsibility. One
school of thought focuses on ‘‘micro level’’ analysis, how individual companies could be
made more responsible towards society. Robert Ackerman, a micro-level theorist in his
model (Ackerman’s model) suggests that responsiveness should be the goal of corporate
social endeavour. He described three phases (at the levels of Top management, Staff
specialists and Divisional management) through which companies commonly tend to pass
for developing a response to social issues (Stoner et al., 1995). Similarly, Carroll, in his model
(Carroll’s four part model) through the length of its bars suggests that the primary
responsibilities of a firm are economic and legal. It must produce the goods and/or services
that society wants and in a lawful manner and must sell them at a profit. But still it has ethical
as well as discretionary bindings. Carroll opines that to the extent firms fail to acknowledge
discretionary or ethical responsibilities, society will assert and bring them under legal
framework (Carroll and Buchholtz, 2003). Before that happens, it is advisable that
corporations understand and perform social activities voluntarily.
Researchers belonging to other school of thought concern themselves with the ‘‘macro
level’’ of analysis. They favour that the Government, not individual companies, should
establish and achieve a country’s social goals. Milton Friedman and Theodore Levitt are
important names favouring this approach. Friedman based his arguments on two principal
contentions, one economic and other legal. From the economic perspective, he asserted
that if managers spend corporate funds on projects not intended to maximise profits, the
efficiency of the market mechanism will be undermined and resources will be misallocated
within the economy. On the legal side, Friedman contended that because managers are
legal agents of stockholders, their sole duty is to maximise the financial return to them.
Hence, if they spend corporate funds for social purposes, they are essentially stealing from
the stockholders (Friedman 1962). Theodore Levitt argued against CSR, fearing that
business might come to dominate society. He believed that business, as an institution would
become the twentieth-century equivalent of the medieval church – the all-embracing
institution in the society (Levitt, 1958).

Corporate social responsibility – current scenario

Both approaches as elaborated above are quite prevalent both in global as well as Indian
industrial scenario. Today business managers live under continuous pressure ‘‘to excel’’ or
‘‘to achieve’’. Competitive environment builds more and more pressure on them to adopt all
such methods that might ensure achievement of business goals. Values and ethics at this
juncture become irrelevant. Hazardous work conditions of mining corporations, cement
industries, exploiting child labour in glass and cracker industry, greedy pricing by
pharmaceuticals companies on monopoly products are a few examples. However, all
companies are not alike and many have come forward for the cause of society. The impact of
CSR on brand image of a corporation is clearly evident in rankings such as by Business
Week, ‘‘The best and worst corporate brands in America’’ (Lavelle, 2002). In 2002, the top
ranking companies included Johnson & Johnson, Apria Healthcare, Colgate Palmolive and
General Electric (Lavelle, 2002). Some other companies namely ABB, Aracruz Celulose,
General Motors, Dow Chemical, Mitsubishi Group, Novartis and Rio Tinto are also involved

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VOL. 9 NO. 1 2005 MEASURING BUSINESS EXCELLENCE PAGE 37
 into the CSR programme while moving ahead in their business. Asea Brown Boveri, the
Swiss engineering corporation, is a sponsor of the Global Sustainable Development Facility
(GSDF) and an active member of the World Business Council for Sustainable Development
(WBCSD). It is a world leader in developing eco-efficient technologies in a wide range of
industry areas from electric transmission to transportation and is building a global network to
install these technologies in many developing and transition economies. Aracruz Celulose,
the world’s largest exporter of bleached eucalyptus pulp, is often cited for its efforts to
promote sustainable development through tree plantation, harvesting and pulp production,
processed in Brazil. General Motors, the world’s largest automobile manufacturer is involved
in various environmental protection initiatives and partnerships. Similarly, Dow Chemical, a
US corporation was selected to participate in the GSDF for, inter alia, ‘‘abiding by the highest
standards of human rights, environment and labour standard norms, as defined by UN
agencies. Mitsubishi Group has been actively cultivating an image of environmental
responsibility through advertising and specific environmental projects. Novartis, the Swiss
life science corporation, is another participant in the GSDF and member of the WBCSD. It is
often cited for its efforts in the fields of poverty alleviation and environmental protection. Rio
Tinto, the British company, is often cited for its standards of environmental reporting and for
promoting continuous social development and sustainable livelihood. CSR provides a
number of advantages to business like lowering and limiting litigation, reduction in taxes,
protecting brand image, improving customer satisfaction and reducing absenteeism,
employee turnover and increasing the ability to retain talented employees etc. (ISO, 2002).
Googins (1997) suggests that a company must establish a legacy of trust by implementing
community programmes (philanthropy, voluntarism, partnerships, in kind donations) that
improve the quality of community life and promote the company’s long-term business
strategies and goals. Barette (1997) argues that good community relations can even help
tackle the main political risks in the region. She suggests constructing a stake holding
society by giving the local community an interest in the success of the project through a
comprehensive and well-organized community relations programme.
In India, Tata Group strongly favours and follows the concept of CSR, while the Reliance
Group argues strongly against it. India’s largest and internationally best-known Tata group of
Companies, founded by Jamsetji Tata, believes in pioneering concept of trusteeship in
management. Benefits of the profits of many of the companies in the group are channelled
back to the people through the major philanthropic trusts, as exhibited in Figure 1. It may be
observed that during recent years profits of the company exhibit a fluctuating trend but their
expenditure on society is consistent. Nearly 80 per cent of the capital of the holding
company, Tata Sons Limited, is held by these Trusts. As a result, great national institutions
have come into being in the areas of science, medicine, atomic energy and performing arts.
J.R.D. Tata, who has been instrumental in conducting the first social audit in India and
perhaps in the world, remarks, ‘‘While profit motive no doubt provides main spark for any
economic activity, any enterprise which is not motivated by consideration of urgent services
to the community becomes outmoded soon and cannot fulfil its real role in modern society’’.

Figure 1 Profitability and expenditure on society by Tata Steel

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PAGE 38 MEASURING BUSINESS EXCELLENCE VOL. 9 NO. 1 2005
Besides Tata Group, the other companies which have adopted and followed the CSR in India
are: BHEL, Wipro, Bajaj Auto Ltd., Larsen & Toubro, Sriram Investments, Otis Elevator Co.
India, ACC, Asian Paints, Brook Bond, Colgate Palmolive, Escorts, SAIL, ITC etc. The
contribution of these companies towards CSR encompasses various initiatives like starting
social trusts, anti pollution measures, adopting villages, family planning clinics, training
unemployed youth, and community development activities etc. Further, they conduct social
audits on a voluntary basis, provide medical, recreational facilities, develop sports,
undertake consumer education campaigns, avoiding unethical and deceptive advertising
and so on. Azim Premji, Chairman of Wipro, has created enormous trust for facilitating
primary and elementary education in India.
Reliance group, founded by Dhirubhai Ambani, propounds the other school of thought,
which is opposed to CSR as such. ‘‘As an industrialist my job is’’, declared Dhirubhai, ‘‘to
produce goods to satisfy the demand. Let us be clear about it. Everyone has to do his job.
My commitment is to produce at the cheapest price and the best quality. If you dabble in
every thing then you make a mess of things. If we cannot take care of our shareholders and
employees and start worrying about the world, then that is hypocrisy’’.
Thus, one can evidently find arguments and counter arguments in favour and against the
issue of CSR. However in Indian context, acceptance of social responsibility is no more than
rededicating ourselves to cherished values of our ancestors in the field of business. In older
times, whenever people of the country were under the social or natural problems, leading
businessmen have literally thrown open their treasure chests to provide the required
assistance and help to the needy. Gandhiji reminded us of these values, when he
propounded the theory of trusteeship. As a sequel to that, more and more companies are
now realizing that they can no more function or to be judged solely on the basis of their thick
bottom-lines and fulfilling their economic objectives only. A positive impact on employees,
customers and community at large has assumed an equal or greater significance in the
overall success of the companies and building their brand image. This realization has made
them undertake socially responsive actions, which are also strongly proponed by Vedic
philosophy.

Vedic philosophy – a brief insight

Man has natural instinct to remain happy since evolution and Vedic teachings help to attain
the eternal happiness. Vedic philosophy evolved along with the creation of the universe with
energy explosion – the ‘‘Big-Bang’’ – which ultimately led to the formation of various
elementary particles, nebulae, stars, planets, galaxies and so on. The complete knowledge
was transmitted as waveform (chhanda) and spread out with the expanding universe. These
were ‘‘received’’ by our ancient sages (rishis) through meditation and given to the mankind
in the form of four Vedas namely – Rig-Veda, Yajur-Veda, Sama-Veda and Atharva-Veda.
Vedas contain the complete knowledge of and about the God, the Soul (Atma), and the
physical universe (Prakriti). Rig-Veda explains the cosmic order (rit) saying the entire
universe is governed by physical as well as moral laws and that no transgression of these
laws is allowed. Swami Dayananda has classified the knowledge contained in Vedas
(Rig-Veda 10-90-9) into four classes:
1. Transcendental knowledge (Gyan). Transcendental knowledge is the knowledge of
ultimate realities i.e. God, Soul and Matter. Precise knowledge of God and obedience of
his instructions and knowledge of matter, which means knowing the qualities and uses of
material objects form the part of transcendental knowledge.
2. Action (Karma). It is set of those actions and rituals, which lead to the attainment of
spiritual and social welfare.
3. Worship (Upasana). This relates to all measures adopted for realisation of God.
4. Science (Vigyan). It is the body of knowledge.
Vedic preaching reaches its summit in Upnishadas, which tells the essence of Vedic
philosophy. Besides, Upa-Veda, Brahman Granthas, Smrities, Puranas, Darshan Shastras,

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VOL. 9 NO. 1 2005 MEASURING BUSINESS EXCELLENCE PAGE 39
 Bhagwad Gita, Ramayana, etc. are the other holy books that explain how to practice the
Vedic preaching in our life to achieve salvation or happiness. They provide triggers to use
the Vedic knowledge for our scientific and management research.
The Vedic management system derives its actions from the universal laws of Nature. Vedic
management is scientific management because whatever is Vedic is scientific. Anything that
must be mathematically precise has to be Vedic; anything that has to be evolutionary has to
be progressive and has to be Vedic. Anything that is Vedic supports the unified field of all the
laws of Nature. Anything that is Vedic is upheld by all the theories of all the different discipline
of modern science. Vedic management only has that unlimited broad base of the total
organising power of natural law from where it draws upon the infinite creativity of the infinite
organising power of holistic value of natural laws.

Vedic philosophy identifies four objectives to be sought in the human life. These are value
system (Dharma), money (Artha), urges (Kama) and salvation (Moksha). These should be
followed in such a way that value system (Dharma), should lead to achievement of money
(Artha), money (Artha) should lead to achievement of urges (Kama) and finally urges (Kama)
leading to attainment of salvation (Moksha). Swami Vivekananda says, ‘‘The basis of all
systems social or political rests upon the goodness of man.’’ Thus value system (Dharma) is
the first pillar in attainment of prosperity and happiness. The values from material to moral
are approved by Vedas. Value system (Dharma) is superior to urges (Kama) as Lord Krishna
says; ‘‘Value system protects you if you follow it’’ (Dharmo Rasshati Raksshata).

The principal role of money (Artha) is to serve the needs of the society. Mahavir (2001), a
renowned Vedic scholar, has come out with 22 types of money, as explained in the Vedas,
depending upon how it has been earned. Giving several examples of Vedic hymns he
stresses that Vedas preach us to earn more and more following the values (Dharma). Some
examples are:
B God give us lot of wealth (Yajur-Veda 10-20).
B O Lord! Fill our hands with lot of riches (Yajur-Veda 5-19).
B O Lord! Shower all the riches on us (Yajur-Veda 34-38).
B O knowledgeable Agene! Show us the right path to earn great wealth and riches
(Yajur-Veda 7-43).

There are three ways to use the money – spending money on self, donation and commotion
of money. The best use of the money is donation for the welfare of others. Many hymns
explain that whatever is given to the society, it returns several times. For example,
atmospheric pollution to cosmos may get back as acid rain while clean atmosphere through
Vedic Yagna, plantation etc. provides clean air and good health.

CSR: current practices vis-à-vis Vedic philosophy

In Vedic mythology, business has been seen as a legitimate, integral part of the society. Its
core function is to create wealth for society through manufacturing, domestic distribution,
foreign trade, financing and other such related activities. It emphasizes to work for an
economic structure based on ‘‘Sarva loka hitam’’ which means ‘‘the well-being of all
stakeholders’’. Adopting an ethical approach and meeting the expectations of the
community at large best serve the long-term interest of the organisation and its people. If an
organisation sacrifices its profits for the sake of welfare of the society in the right manner, it is
destined to gain profits.
Vedic preaching begins with ‘‘Sah Navavtuh Ma Vidvishavhe’’, which means, ‘‘May we
together shield each other and may we not be envious towards each other’’. Business
enterprises of today focus on aggressive growth in the market share, higher profits, higher
returns on equity to earn more and more money and power. With globalisation, becoming
order of the day the pressures of competitiveness is building further up with nail biting finish.

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PAGE 40 MEASURING BUSINESS EXCELLENCE VOL. 9 NO. 1 2005
Veda advocates minimum consumption and accumulation, mutual co-operation, with focus
on natural harmony. It reiterates non-centrality of money in human life, but for corporations of
present era, money is the real nerve of business systems (Pandey and Tripathi, 2002).
Veda emphasizes that the continuous flow of money to the people who need it is more
important than its accumulation. Thus, the use of wealth for the welfare of society is one of the
important responsibilities of the business enterprises. In contrast, very few business
enterprises recognize the fact this fact and contribute generously for the welfare of society.
As the hymn from Atharva Veda (3-24-5) says:
O man! Procure wealth with one hundred hands and distribute it with one thousand hands. Thus
you attain perfection of the work done and to be done.

Besides that the success of an organisation, is measured by the extent and quality of goods
and services delivered to its stakeholders as the given hymn verifies,
O King! Take care of the welfare and growth of all your people. Then you will grow as the Sun
grows and shines at dawn and after its rise.

Voluntarily sacrifice (Yagna) in Vedic thoughts says that whatever we are giving to the
society, it returns after getting multiplied several times. The hymn of Rig-Veda (1-8) explains:
Sun takes water from the earth to distribute it after making it thousand times, we should also
perform our business in the same way.

But a bird’s eye view of current business practices gives a naı̈ve feeling that business has
ignored this fact in the real terms. However in the changing times various ‘‘business
excellence’’ models have attempted to address the issue. Business excellence models
focus on balancing the needs and expectations of the all stakeholders. The key similarity of
these models with Vedic thoughts is long-term focus and sharing of profits among various
stakeholders. These models also focus on meeting the needs and expectations of the
Society as a whole, which also remains the focal point of Vedic economic thoughts.

Essence of Vedic economic thoughts

Vedic economic thoughts are focused on sacrifice for others. According to Manu-Smriti
‘‘Among all purity, purity of the money is supreme.’’ The five governing principles for purity of
money are:
1. It should not cause any adverse impact on any living being.
2. It should not cause any kind of physical harm to us.
3. Money should be earned through our own efforts and not fetched from efforts of others.
4. Money should be earned through legitimate virtuous means only.
5. The earning process should not be an impediment to learning process.
Furthermore, Vedic economics advocates the free and uninterrupted flow of new ideas,
knowledge, products, materials and money from one corner of the world to another so as to
ensure the prosperity for all. Ideally speaking, money should continuously flow from the
customers to suppliers; Materials should continuously flow from suppliers without any
accumulation at any stage, get processed and reach customers as finished products
without any rejection and rework. Any interruption in flow at any stage leads to addition of
non-value adding activities and additional cost. According to kaizen guru, Masaaki Imai,
‘‘generally speaking there are about one thousand non-value-adding activities for a single
value adding activity. However, some efficiently run organisations have been able to bring
non-value-adding activities down to two hundred per value adding activity’’.
The additional cost as caused due to the interruption in the free flow of money, goods, and
resources is passed on to the various stakeholders, which hinders the achievement of
ultimate objective of prosperity for all. If it happens, it will lead to the realisation of the Vedic
economic system which is superior to all present day economic systems as given in the
‘‘Supply and demand matrix’’ (Figure 2).

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VOL. 9 NO. 1 2005 MEASURING BUSINESS EXCELLENCE PAGE 41
 Figure 2 Supply and demand matrix

The matrix as conceived and developed by authors, by integrating the modern as well as
Vedic economic concepts, clearly exhibits the state of affairs of different levels of economic
growth. Looking at the matrix in Figure 2, one would conclude that highest rate of growth can
be achieved only through the Vedic economic approach, where welfare of all happens to be
the prime concern. In essence, Vedic economy emphasises on the following four concepts
to be observed by the business organisation for its growth and prosperity (Tripathi Nalini
V. Dave, 2002):

1. Yagna spirit. Sacrificing individual desires in favour of community benefits. Lord Krishna
says in Bhagwad Gita (3-13), that all sorrows from the society would be removed if
socially conscious members of a community feel satisfaction in enjoying the ‘‘Remnants’’
of their work performed in ‘‘Yagna spirit’’ (Selfless welfare of others).
2. Sreyas. Preferring of long-term benefits over short-term gains. This will lead to welfare of
all rather than benefit of only a few.
3. Sharing. Sharing the business prosperity with all the stakeholders of the business.
Rig-Veda offers comprehensive vision of excellence for corporate life in the Sangathan
Sukta (Synthesis of Vedas).
4. Cosmic harmony. Non-disturbance of any thing in the environment. Bhagwad Gita says
universe is an undivided whole, where every particle is connected with every other
particle. Hence, doing well to others ultimately does well to the doer. Corporate world has
forgotten to take care of this aspect in the past; leading to the industrial recessions, trade
union struggles and other problems. However, the initiatives like ISO 9001, ISO-14001,
SA-8000, OHSAS-18001 and the Global Compact etc. are a good beginning in this
direction.

The global compact

As first proposed by United Nations’ Secretary General, Kofi Annan in his address to the
World Economic Forum on 31 January, 1999, Global Compact and its operational phase was
launched at the UN Headquarters in New York on 26 July, 2000. Kofi Annan invited business
leaders to join an international initiative – the Global Compact – that would bring companies
together with UN agencies, labour and civil society to support nine universal principles in the
areas of human rights, labour and environment. The Global Compact seeks to advance
responsible corporate citizenship so that business could be part of the solutions to the
challenges of globalisation. Today hundreds of companies from all regions of the world,
International labour and civil society organizations are engaged in the Global Compact (UN,
2003).

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The Global Compact is a voluntary corporate citizenship initiative. It offers facilitation and
engagement through several mechanisms: Policy Dialogues, Learning, Local Networks and
Partnership Projects. The Global Compact is not a regulatory instrument but a network – it
does not ‘‘police’’, enforce or measure the behaviour or actions of companies. Rather, it
relies on public accountability, transparency and the enlightened self-interest of companies,
labour and civil society to initiate and share substantive action in pursuing the principles
upon which the Global Compact is based. These principles are:
1. Human rights:
B business should support and respect the protection of internationally proclaimed
human rights; and
B make sure they are not complicit in human rights abuses.
2. Labour:
B business should uphold the Freedom Association and the effective recognition of the
right to collective bargaining;
B the elimination of all forms of force and compulsory labour;
B the effective abolition of child labour; and
B eliminate discrimination in respect of employment and occupation.
3. Environment:
B business should support a precautionary approach to environmental challenge;
B undertake initiatives to promote greater environmental responsibility; and
B encourage the development and diffusion of environmentally friendly techniques.
4. Anti corruption:
B businesses should work against all forms of corruption, including extortion and
bribery.

The path ahead

Motivation for an organisation to become socially enlightened and responsive comes from
both internal as well as external environmental factors. The important drivers of CSR may be,
‘‘Personal ethics of individual entrepreneurs, Laws and regulations, Supply chain pressures,
Assurance of public relations and reputation, Shareholders activism and investors relations,
Social license to operate, Sustaining key aspects of business, Co-operation in development,
improving the business as a whole’’ (Ward et al., 2002). As per Vedic mythology, business
excellence can be achieved only through ‘‘Prosperity for all’’. Many management experts
have come forward with their theories and thoughts to bridge the gap between the
conflicting needs of stakeholders (Talwar, 2002).
J.R.D. Tata points out, ‘‘high standards of behaviour and of discharge of social obligations
should be expected of or demanded from, not only business and industry but from all
economic groups in the country whose actions have an impact on the public weal’’. An
organisation works more effectively when it has mutually beneficial relationships, built on
trust, sharing of knowledge and integration, with its customers, suppliers, employees,
partners and society at large. Vedic philosophy, as well as various business excellence
models, emphasises the minimisation of the total cost and moving towards building the
long-term relationship based on loyalty and mutual trust with all stakeholders. The
enhancement of organisational performance is possible only through teamwork and sharing
of best practices among organisations. Benchmarking offers the possibility to exchange
experiences with peers from other companies in a very open and friendly atmosphere.
Participation in Benchmarking Clubs by a variety of industries makes it easy to find
companies that have different strengths. Thus the team spirit between the organisations play
a major role in high growth of all, as the hymn in Atharva Veda says ‘‘Samana Sadeva’’ which
means, ‘‘People with same divine thoughts grow together’’.

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 Our scriptures move a step further and stresses on continuous efforts or process focus with
detachment. Yajur-Veda guides that one should continue to put in best efforts with
detachment from the results. The selfless actions will lead him to get highest level of
happiness (Salvation) as the hymn says:

One should like to live in this world doing hard work for hundred years. There is no other way for
one’s salvation. A selfless and detached action keeps the doer away from harm.

Drawing a clue from the above Vedic preaching, the corporate world must spend liberally on
overall community welfare and development not bothering much about its returns. Vedic
philosophy assures that returns are bound to come in the long run as a governing principle of
cosmic harmony.

Conclusion
To attain the excellence we need to have common vision, universal brotherhood and
equitable prosperity for all, as the following hymn from Rig-Veda clearly says:

O ye mankind! Let your vision and thinking of life be one and common, Let your hearts be
transpired with feeling of equality, Let your minds be united together, Resulting in equal prosperity
and common excellence in the life for all.

Vedanta recognises the desires and urges (Kama) of man on the scale of Values (Dharma). It
preaches giving up wealth and those urges, which are opposed to the value system. In
Bhagwad Gita, Lord Krishna says ‘‘Dharma Viruddo Bhuthesu, Kamosm Bharat Srabha’’,
which means ‘‘I am that action in all beings that is unopposed to Values’’. By following the
above principles, we will achieve material as well as spiritual success leading to the
salvation (Moksha) and universal prosperity now and in the future.
In the years to come, issues such as corporate accountability, corporate ethics, disclosure of
relevant corporate information shall become increasingly important centres of attention.
Besides, diversification and adopting synergistic policies, Corporations need to develop
new measures of performance, new standards of ethics and a new awareness of multiple
bottom lines instead of concentrating only on profits as they did in the past. They have to
increasingly focus on multiple bottom lines – informational, social, environmental and ethical
– which are interconnected and interdependent. Hence, corporations should pay great
attention to ethical issues while performing their role because, if ethics are missing, business
and society as a whole would not flourish.

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