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Viva co
Report/ Presentatio
F.M.-
Sl Regd Dissertatio n
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NAME Roll no. n F.M.-25 TOTAL
no. No. F.M.-60
Mark Awarded

1 Snehanshu Karan 8419B17011 09158/17

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CONTENTS
Sl no. SUBJECT Page

1. DECLERETION
2. CERTIFIED
3. ACKNOWLEDGEMENT
4. ABSTRACT
5. LIST OF TABLE
6. LIST OF FIGURE
7. CHAPTER-I
8. CHAPTER-II
9. CHAPTER-III
10. CONCLUSION
11. BIBLIOGRAPHY
DECLARATION
CERTIFIED
ACKNOWLEDGEMENT
 ABSTRACT
The CSR campaign has been actively supported by the world organizations
like World Bank, UNDP, OECD, European commission and MNCs. Still today,
the practice of CSR remains basically philanthropic but now it has move on from
nation and institution building to community development with global influences.
The Indian Companies Act, 2013 has introduced the CSR idea to the forefront in
the country and through explains the mandate in promoting greater transparency
and disclosure. The Schedule 7 of the Act listing the CSR activities, suggests the
communities to be focal point. On the other hand, by discussing a company’s
relationship to its stake-holders and integrating CSR into its core operations, the
Draft Rules suggest that CSR needs to go beyond communities and also beyond
philanthropy. It would be quite interesting to observe and study how it translates
into practice at ground level and also how the understanding of the CSR in India
undergoes a change. The recent initiatives of the present Government at the
Centre seems certainly encouraging. It has directed its public sector undertakings
to earmark certain percentage of their annual budget for the furtherance of the
CSR activities. The present paper highlights the emerging perspectives of
Corporate Social Responsibility in India.
1
The Government of India in 1976 had inserted the term “socialist” in the preamble of country’s
constitution thereby committing itself to ensuring a development process which would be guided and
spearheaded by the state. But the ground situation is now fast changing in India. Post 1991, there is
increasingly a receding role of the state in the economic and social sphere. An increasing acceptance of CSR
by large number of corporate, post liberalization can thus be seen in the context of the larger role being
consciously carved for the private sector in an economy which was earlier largely controlled and managed
by the State. The corporate world is keen to exploit the opportunities that are being provided by the new
economic outlook of the State. Today, 93% of the world’s largest 250 companies now publish annual
corporate responsibility reports, almost 60% of which are independently audited.

BRIEF HISTORY
India has the world’s richest tradition of corporate social responsibility. Though the term CSR is
comparatively new, the concept itself dates back to over a hundred years. CSR in India has evolved through
different phases, like community engagement, socially responsible production and socially responsible
employee relations. CSR & Hinduism: Social responsibility is a manifestation of dharma, the duty of human
beings towards society. Atharvana Veda says that “one should procure wealth with one hundred hands and
distribute it with one thousand hands”. The Yajurveda says that “enjoy riches with detachment, do not cling
to them because the riches belong to the public, they are not yours alone”. In the Rig Veda, there is also a
mention of the “need for the wealthy to plant trees and build tanks for the community as it would bring
them glory in life and beyond. “Let us walk together, Let us talk together, Let our heart vibrate together”
– Rig Veda. KautiIya also “emphasized ethical practices and principles while conducting business”. CSR &
Islam: Islam had a law called Zakaat which ruled that a portion of one’s earning must be shared with the
poor in the form of donation. CSR & Sikhism: Similar to Islam’s Zakaat, Sikhs followed what they called
Daashaant.

Corporate social responsibility has come a long way,morphing from a nice thing to do to what it is
today: a necessity for a successful business. Today's CSR program have their roots in corporate
philanthropy. Wealthy businessman and philanthropist Andrew Carnegie challenged wealthy people to
support social causes, following his belief in the gospel of wealth.in the late 1800s, jhonD. Rockefeller.
taking inspiration from Carnegie, followed suit in donating more than half a billion dollars.in 1914, Frederick
Goff, a well - known banker in Cleveland, founded the Cleveland foundation, a trustee of the Cleveland
truest company.it is purpose was to give power to the community by accepting gifts from multiple donor's
rather than one fortune, who could collectively assess needs and respond to the communityThis was the
first community foundation it was not until the 1940 however that business and not their owners or
shareholder, could support charities.

Howard bo social responsibilities of the businessman when is American economist and Grinnell college
president is often cited as the father of CSR. He connected the responsibility of corporation to society and
published a book in 1953,which advocated for business ethics and responsiveness to societal stakeholder
called CSR truly began to take hold in the U.S. in the 1970 when the conce join the concept of the social
contract between business and society was declared by the comedy ford economic development in a 1971.

the social contract is based on the idea that business function because of public consent therefore
businesses has an obligation to constructively server the needs of society.this is often referred to today as
a license to operatethat is to contribute more to society than solve their product for sell it was not until the
1940 however that business and not their owners or shareholders sale.it was not until the good support
charities howard boys 1940 however that busineses, and there not owners or shareholder could support
charities.howard biosocial responsibility of the business man.wen an american economist andgrinnell
college president is often cited as the father of csr:he connected the responsibility corporation to society
and published a book in 1953 which advocated for business ethics and responsiveness to societal
stakeholder called social responsibility of businessmancsr in india: india both leads the world in some areas
of csr and trails a long behind in other and explores the culture and history of csr in india as a background
to eat each company tablet 2013

PHASES OF CSR IN INDIA

Phase 1 (1850 to 1914): The first phase of CSR is known for its charity and philanthropic nature. CSR
was influenced by family values, traditions, culture and religion, as also industrialization. The wealth of
businessmen was spent on the welfare of society, by setting up temples and religious institutions. In times
of drought and famine these businessmen opened up their granaries for the poor and hungry. With the
start of the colonial era, this approach to CSR underwent a significant change. In pre-Independence times,
the pioneers of industrialization, names like Tata, Birla, Godrej, Bajaj, promoted the concept of CSR by
setting up charitable foundations, educational and healthcare institutions, and trusts forcommunity
development. During this period social benefits were driven by political motives.

Phase 2 (1914 to 1960): The second phase was during the Independence movement. Mahatma
Gandhi urged rich industrialists to share their wealth and benefit the poor and marginalized in society. His
concept of trusteeship helped socio-economic growth. According to Gandhi, companies and industries were
the ‘temples of modern India’. He influenced industrialists to set up trusts for colleges, and research and
training institutions. These trusts were involved in social reform, like rural development, education and
empowerment of women.

Phase 3 (1960 to 1990): This phase was characterized by the emergence of PSUs (Public Sector
Undertakings) to ensure better distribution of wealth in society. The policy on industrial licensing and taxes,
and restrictions on the private sector resulted in corporate malpractices which finally triggered suitable
legislation on corporate governance, labour and environmental issues. Since the success rate of PSUs was
not significant there was a natural shift in expectations from public to private sector, with the latter getting
actively involved in socio-economic development. In 1965, academicians, politicians and businessmen
conducted a nationwide workshop on CSR where major emphasis was given to social accountability and
transparency.

Phase 4 (1990 onwards): In this last phase CSR became characterized as a sustainable business strategy. The
wave of liberalization, privatization and globalization (LPG), together with a comparatively relaxed licensing
system, led to a boom in the country’s economic growth. This further led to an increased momentum in
industrial growth, making it possible for companies to contribute more towards social responsibility. What
started as charity is now understood and accepted as responsibility.

Meaning and definition

csr is known as corporate conscience or responsible business corporate social responsibility is a
voluntary mechanism by which company hold themselve to a set of legal,ethical,social and ecological
standards. Corporate social responsibility is a blanket statement for the relationship between business
practice and greater society. it is a concept where corporation can choose to merge profit driven
strategies with regulation that ensure social investment too - whether it is improving working condition of
employees or self regulation practice to ensure a cleaner environment.CSR refers not only to compliance
with human rights standard labor and social security arrangement but also to the fight against climate
change, the sustainable management of natural resources, consumers protection philanthropic initiative
and volunteer project

By mallenbaker

Corporate social responsibility is how companies manager their business process to produce an overall
positive impact on society. It over sustainability social impact ethics and done colectomy should be about
core business how companies make their money, not just add one extract such as philanthropy

By Philip kotier and Nancy Lee(2005)

CSR as a commitment to improve community will being through discretionary business practice and
contribution of corporate resources

2 CHAPTER
TYPES OF CSR
TYEthical Responsibility

Ethical responsibility is about looking after the welfare of the employees by ensuring fair labor practices for
the employees and also the employees of their suppliers. Ethical labor practices for suppliers mean that the
companies will ensure the use of products that have been certified as meeting fair trade
standards. Ensuring fair labor practices for employees mean that there will be no gender, race or religious
discrimination among the employees and each employee will be given equal pay for equal work and better
living wage compensation. Here, a good example can be Google. Google employees have high levels of job
satisfaction because they are well compensated and well paid at work. The work environment at Google is
supportive and the company looks after the wellbeing of its employees. Google offers free meal at work
which saves a lot of money from their wages. Google gives its employees free access to campus cafes, micro
kitchens and other options for breakfast, lunch, and dinner.

Philanthropic Responsibility:

Philanthropic responsibility means to serve the humanity. This criterion pays attention to the wellbeing of
the unprivileged or needy people who badly require our support to sustain on this planet. Companies fulfill
their philanthropic responsibility by donating their time, money or resources to charities and organizations
at national or international levels. These donations are mainly given to a variety of worthy causes including
human rights, national disaster relief, and clean water and education programs in underdeveloped
countries.

No other business tycoon has fulfilled the philanthropic responsibilities better than Bill Gates. Bill Gates has
donated billions of dollars to the Bill and Melinda Gates Foundation, which supports numerous causes
including education, the eradication of malaria and agricultural developments etc.

Environmental Responsibility:

Currently, we need to focus on two main areas of our environment: limiting pollution and reducing
greenhouse gases. Companies are bound to fulfill their economic responsibility because awareness of
environmental issues are growing largely among the consumers and today they want businesses to take
necessary steps to save our planet and preserve all the lives in it. Companies that are concerned about
reducing air, land and water pollution have increased their standing as good corporate citizens while
benefiting the society.

An example of environmental responsibility is Tesla Motors that design cars combining style, acceleration
and handling with advanced technologies in order to make it more environmental friendly and reduce
pollutions. Tesla cars do not need gasoline refueling and it can be charged at home.

Economic Responsibility:

Economic responsibility is an interconnected field which focuses to strike a balance between business,
environmental and philanthropic practices. Economic responsibility abides by, the set standards of ethical
and moral regulations. In this context, companies try to find out a solution which can facilitate their
business growth and generate profits by benefitting the community and our society.Here economic
decisions are made by considering their overall effects on society and businesses at the same time. Hence,
economic responsibility can improve business operations while engaging in sustainable practices.
ADVANTAGES OF CSR
Improves the image of a company:CSR activities reflect positively on the image of a company. When you
implement CSR policies in your company, it increases your goodwill. Consumers will be more willing to avail
your products/services because of the clean image of your company. “A study by Unilever, found that a
third of consumers are choosing to buy brands based on their social or environmental impact

Helps attract and retain potential employees:

Companies which are involved in serious CSR activities are more recognizable. This makes it easier for your
company to attract potential candidates who seek employment opportunities. Also, when your company
starts earning goodwill through significant CSR activities, the employees are more likely to continue with
the company for a longer tenure. Millenials generally prefer organisations where they have a flexible work
culture and they are able to feel good in working with the organisation.Theorganisation’s beliefs and value
let the employess earn a level of self-pride.

You get into the good books of regulatory authorities:

It is the job of the regulatory authorities to scrutinise the operations of various companies. However, when
your company starts doing CSR activities on a large scale, these regulatory authorities become less hostile
towards your company. Besides, any company that has a strong CSR generally stays within the regulations
to gain the benefits.

Attracts new investors:

A company’s reputation in the market determines whether it will receive new investments or not. With CSR
programs, you can certainly boost your company’s image. And when your company starts to grab enough
eyeballs, it also attracts a number of investors. Be prepared to receive investment proposals from venture
capitalists, other firms, and even from the government.

A brand new way to advertise your brand:

It is often said that any publicity is good publicity. When your company starts a CSR program, it
automatically gives your company a certain level of publicity. It won’t be wrong to call such publicity as an
advertisement. You just need to make sure your products or services are aligned with the CSR activities you
are involved in.

DISADVANTAGES OF CSR
Shift in the profit-making objective:

Economist Milton Friedman often criticized CSR by saying that it shifts the company’s focus of the profit-
making objective. For any financial entity, profit-making is the utmost priority. However, when you get
involved in CSR activities, you need to cut on the profit margin, which can make your shareholders
unhappy.
Hamper the reputation of your company:CSR policies mandate the companies to reveal the shortcomings
of their own products in case they are found to violate the CSR program. If your existing customers find out
the flaws of your products, they are most likely to lose faith in your company. So, it can reflect negatively
on your sales figures as well.

Customers can get impatientEveryone will appreciate you for adopting CSR program for the company at
the beginning. In fact, it can gain your company a significant amount of popularity in the market for being
associated with a good cause. However, if the program does not offer instant results, people may think this
is nothing but a PR stunt. That won’t be good for your company’s reputation.

Sudden rise in the cost of production:

Being involved in CSR activities can often increase the expenditure of your company. As you may realize,
when you are giving back to society, it costs you a significant amount of capital. If you increase the price of
your products to make up for the expenses, the customers will have to bear the burn. Large businesses can
absorb the blow, but small businesses can’t

FEATURE CSR IN INDIA

Companies’ journey towards business transformation via sustainability and CSR initiatives with some of the
following key trends would be emerging:

1. Make in India but with Responsibility: The new thrust towards “Make in India” shifts focus from
services to manufacturing. It includes both Indian as well as foreign companies catering to both
domestic as well as international demand. This has a number of implications: (a) Manufacturing
companies require larger investments and are more likely to fall in the mandatory CSR bracket. (b)
The CSR lifecycle for manufacturing typically starts with local community driven inventions. This is
likely to see a surge as Make in India picks up steam. (c) International markets demand greater
focus on social interventions. This is manifested in no child labour, humane working conditions,
environmental safeguards etc. This will force companies to spend more on CSR in India. (d) The
demand for trained CSR managers will increase multifold. (e) Make in India will lead to a thrust
towards efficient supply chains. Sustainable supply chains will demand attention. (f) Support system
for improved disclosure and CSR governance will be in demand.
2. 2. Global Indian Corporations need to manage International Risk and Reputation: Indian companies
are going global. They are addressing not just customers of developed countries but under explored
markets in Africa and Latin America. Mining rights in Australia, factories in South Africa and telecom
networks in Kenya are the growth engines of the future. Globalization and this expansion in scale
for Indian companies offers unique opportunities, though at the same time it brings tremendous
risks. Scale is many times difficult to manage when companies use strict command and control
structures that can’t really adapt to changes in local environments. Technology and the fast moving
flow of information are great disruptors that have brought many a global corporation to its knees.
Customers, Suppliers and Governments have been joined by NGOs, Communities, Employees and
Media over information networks to create Social Risk. Global Indian companies now need to factor
in the new reality where Reputation, Responsibility and Risk are increasingly interconnected.
3. 3. CSR and Reputation will be part of Strategic Intelligence: Going forward companies will connect
not just as producers but as people. The personal digital brand is now the most powerful entity in
 the world. It can influence consumers to promote or turn away from corporations. It can influence
trends and shake up the established norms. Information is today freely and readily available, what
one does with the flow of information and how quickly the corporation responds is really what will
matter in the digital world of tomorrow. CSR will be more about genuine impact that simple
philanthropy. It will be about connecting causes to brands and people. Genuine inside out
responsibility forthe world we live in built into product lifecycle, communication and on ground
engagement.
4. CSR management will need insight and adaptation not just knowledge and skill: Linkages of CSR to
core business and strategic intelligence management will help companies navigate the quickly
changing landscape and even manage unexpected twists. Though this can only happen if the CSR
manager of tomorrow has not just knowledge and skill but insight. These insights will help
companies find breakthroughs that can help solve everyday problems, connect through
conversations and help people. The connected world no longer forgives centralized model of one
way corporate communication that was the norm in the last century. The insight is necessary to
tune CSR activities to local needs and aspirations rather than a common approach across the global
footprint. Adaptation to changing needs, regulations and societal changes will be imperative
5. Innovate, Transform and Engage: Most corporates think inside out – “I spend so much money
therefore I am a socially responsible company”. Others focus on the no of activities or Spread. They
key question though is, Are my activities impactful? Are they genuinely changing the ground
reality? Companies need to build, innovate and transform on a regular basis. India’s top companies
are investing in products and services that will build sustainability at the core. New Technologies,
Dematerialization, Reuse and Recycling will drive business innovation. Companies need to earn
trust and so do the causes they support. Providing a service without looking at customer safety,
won’t help in getting customers to believe in your brand no matter how charitable you are.
Responsibility is about the values that integrate with the 4 Ps of marketing – product, price, place
and promotion. Just as FMCG (Fast Moving Consumer Goods) companies need to think about
better packaging, Banks need to think about whether services at concessional rates or loan waivers
to the poor really qualify as CSR.

BUSINESS IMPORTANT OF CSR

3 CHAPTER
DIFERENT DYMENSION OF CSR
Internal Dimensions of CSR:
Human Resource Management:

How the company deals with its human resources is certainly part of its corporate social responsibility.
This will include all workplace-related issues such as levels of salaries, timely disbursal of wages,
administration of benefits, issues related to working hours, and quality of work.
Health and Safety at Work:
Amongst all issues relating to the company’s human resources, those dealing with health and safety
deserve special mention. There is increasing pressure to recognize corporate responsibility towards
workers’ health and safety. This is of particular importance when workers are exposed to hazardous
materials or when they have to work in potentially dangerous working conditions.

ADVERTISEMENTS:

The responsibility of the employer does not come to an end at the end of the employee’s employment,
but if it can be proved that any subsequent malady is related to conditions previously prevailing at the
employee’s former place of employment, then the erstwhile employer can be held responsible.

An example is the case of retired employees suffering from asbestosis, who were able to claim
compensation from their former employers-like in the case of employers of W.R. Grace and Co, National
Gypsum, Manville Corporation, and Several others.

Adaptation to Change:
We live in an ever-changing world and it is the responsibility of the employer to prepare the employees
to meet and deal with the changes. When the industry is going through a phase of rapid automation and
computerization, the employer may be expected to help train its employees to meet the new challenges
faced due to this onslaught of technology. It is also very important to ensure that the employees leaving
the organization are fully equipped to face the challenges in the outside world.

Management of Environmental Impact and Natural Resources:

Companies have to be exceedingly careful while utilizing natural resources. Even when they have a
licence or mandate to use a particular resource, society does expect them to be judicious and restrained
while using them. Entrepreneurs have to be particularly careful while using shared resources. For
example, many factories may be using water from a river that is also the source of water for a nearby
village or town. The factory might even be disposing its industrial waste into the very same river, which
is compounding the problem.

External Dimensions of CSR:

Local Community:
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There is a very complex interrelationship between a corporate and the community around which its
activities are centred. At the least, the company may be expected to be part of the local economy by
providing jobs, consuming local products and services, and contributing to local taxes. In some cases, the
corporate may take on a much broader role by even providing basic civic amenities as in the case of
several industrial townships such as Tatanagar in Jharkhand.

Business Partners, Suppliers, and Consumers:

Dealings of a corporate with its business partners may come under scrutiny. The corporate is expected
to be fair and honest in its dealings with suppliers and consumer additionally, it is also expected to
promote an honourable code of conduct amongst its business partners and supplier of particular note is
the wave of negative sentiment Nike had to face when the exploitative labour practices of its suppliers
came to light.

Human Rights:
The company’s record on human rights is very important for its positive public image. Very few
entrepreneurs can afford to carry an image of direct abuse of human rights. Corporate world would
avoid supporting an administration that has a past history of human rights abuses. That is one of the
reasons why many large companies are wary of identifying themselves closely with the Chinese
Government.

CSR CHALANGES FACE BY INDIA

CSR THEORIES
The stakeholder theory of CSR
Since the 1990s’ the stakeholder theory has become famous as a direct alternative and challenge to
the shareholder value theory (Freeman 1984). It argues that the number of stakeholder pressure
groups has developed widely since the 1960s’ and the stakeholder forces impact on business must
not be underestimated. Ethical and pragmatic as it ought to be business success assume vast
interests of stakeholders than the shareholder’s interest alone. The stakeholder theory emphasizes
special social rather than any others unrelated to the corporation. Thus CSR is denoted as a
company stakeholder responsibility.

Business ethics theory of CSR

The business ethics theory is based on wider social obligation and the moral duty that business has
towards society (Bigg, 2004). This theory justifies CSR on 3 varied but interrelated ethical grounds:

1. Changing and emerging social responsiveness and social expectations to particular social
problems.

2. Eternal or intrinsic ethical values always inspired by Kantian ethics and denoted as some
normative and universal principles like social justice, fairness and human rights

3. Corporate citizenship i.e. corporation as a better citizen in a society to contribute to social

well being.
 The shareholder value theory of CSR

The shareholder value theory a perspective denoted by the Nobel Laureate Milton Friedman (1970)
argues that only social responsibility of business is to develop its profits while following legal norms.
Neoclassical economists like Hayek assert that the function of business is doing business that
contributes to society and economy and its function must not be confused with other social
functions performed by not for profit organizations and governments. Otherwise, it is not the most
effective way of allocating resources in a free market. Economists like agency theorists believe that
the corporation owners are its managers and stakeholders as agents have a fiduciary duty to serve
the shareholders interest rather than any others.

Although maximizing the profit of shareholder is justified as the most significant or only corporate
responsibility, corporate social obligations are regarded often as a strategic instrument for a
corporate competitive benefit and more profit gain.

DRIVERS OF CSR
1. Care for all Stakeholders: The companies should respect the interests of, and be responsive towards all
stakeholders, including shareholders, employees, customers, suppliers, project affected people, society at
large etc. and create value for all of them. They should develop mechanism to actively engage with all
stakeholders, inform them of inherent risks and mitigate them where they occur.

2. Ethical functioning: Their governance systems should be underpinned by Ethics, Transparency and
Accountability. They should not engage in business practices that are abusive, unfair, corrupt or anti-
competitive.

3. Respect for Workers’ Rights and Welfare: Companies should provide a workplace environment that is
safe, hygienic and humane and which upholds the dignity of employees. They should provide all employees
with access to training and development of necessary skills for career advancement, on an equal and non-
discriminatory basis. They should uphold the freedom of association and the effective recognition of the
right to collective bargaining of labour, have an effective grievance redressal system, should not employ
child or forced labour and provide and maintain equality of opportunities without any discrimination on any
grounds in recruitment and during employment.

4. Respect for Human Rights: Companies should respect human rights for all and avoid complicity with
human rights abuses by them or by third party. CORPORATE SOCIAL RESPONSIBLITY IN INDIA: AN

5. Respect for Environment: Companies should take measures to check and prevent pollution; recycle,
manage and reduce waste, should manage natural resources in a sustainable manner and ensure optimal
use of resources like land and water, should proactively respond to the challenges of climate change by
adopting cleaner production methods, promoting efficient use of energy and environment friendly
technologies.

6. Activities for Social and Inclusive Development: Depending upon their core competency and business
interest, companies should undertake activities for economic and social development of communities and
geographical areas, particularly in the vicinity of their operations.
Lack of Awareness of General Public in CSR Activities:There is a lack of interest of the general public
in participating and contributing to CSR activities of companies. This is because of the fact that there exists
little or no knowledge about CSR. The situation is further aggravated by a lack of communication between
the companies involved in CSR and the general public at the grassroots.

Need to Build Local Capacities: There is a need for capacity building of the local non-governmental
organizations as there is serious dearth of trained and efficient organizations that can effectively contribute
to the ongoing CSR activities initiated by companies. This seriously compromises scaling up of CSR initiatives
and subsequently limits the scope of such activities.

Issues of Transparency: Lack of transparency is one of the key challenges for the corporate as there exists
lack of transparency on the part of the small companies as they do not make adequate efforts to disclose
information on their programmes, audit issues, impact assessment and utilization of funds. This negatively
impacts the process of trust building among the companies which is a key to the success of any CSR
initiative.

Non-Availability Of Well Organized Non-Governmental Organizations: There is non - availability of well

organized nongovernmental organizations in remote and rural areas that can assess and identify real needs
of the community and work along with companies to ensure successful implementation of CSR activities.

Visibility Factor: The role of media in highlighting good cases of successful CSR initiatives is welcomed as it
spreads good stories and sensitizes the population about various ongoing CSR initiatives of companies. This
apparent influence of gaining visibility and branding exercise often leads many non-governmental
organizations to involve themselves in event based programmes; in the process, they often miss out on
meaningful grassroots interventions.

Narrow Perception towards CSR Initiatives: Non-governmental organizations and Government agencies
usually possess a narrow outlook towards the CSR initiatives of companies, often defining CSR initiatives
more as donordriven. As a result, corporates find it hard to decide whether they should participate in such
activities at all in medium and long run.

Non-Availability of Clear CSR Guidelines: There are no clear cut statutory guidelines or policy directives to
give a definitive direction to CSR initiatives of companies. The scale of CSR initiatives of companies should
depend upon their business size and profile. In other words, the bigger the company, the larger its CSR
programme.

4 CHAPTER
 • A disturbing aspect of Section 135 relates to the linking of a company’s profitmaking with the
development of local areas. Companies are required to spend 2% of their average net profits from the
preceding three years and focus on local areas around which they operate. This is an absurd
proposition as it will increase inter-state disparities in social indicators. For instance, states like Gujarat,
Maharashtra and Andhra Pradesh (as also Odessa in 2013), with their large number of industrial units,
are likely to see greater social development on account of higher CSR spend by the private sector.
• What happens to development projects when companies make losses? According to one estimate,
of the 5,138 firms listed on the BSE, the total number of companies qualifying under Section 135 has
come down from 1,500 in FY 2010 to 1,372 in FY 2012. So has the number of total qualifying companies
with profit after tax greater than zero: from 1,457 to 1,265.
• It is during recessionary times, when the need for CSR expenditure may be highest among
vulnerable groups, that such spending may actually become unavailable.
• The rules in the Companies Act-2013 would make it difficult for companies to pursue strategic CSR
- aligned to business strategy - since any expense that can be traced back to financial profits may have
to be set aside from CSR, as indicated by the law.

• Under the Companies Act – 2013, a company can only be penalized for not filing of details
regarding CSR, but no penal action for no-performance. Hence, there should be a clarification for penal
action.
• Creating awareness among the general public in CSR activities and improving communication
between the companies involved in CSR and the general public at the grassroots.
• There is a need for capacity building of the local non-governmental organizations as there is
serious dearth of trained and efficient organizations that can effectively contribute to the ongoing CSR
activities initiated by companies.
• There is a need for improving transparency on the part of the small companies as they do not make
adequate efforts to disclose information on their programmes, audit issues, impact assessment and
utilization of funds, which is a key to the success of any CSR initiative.
• There is a need for well organized non-governmental organizations to ensure successful
implementation of CSR activities.
• The role of media in highlighting good cases of successful CSR initiatives is welcomed as it spreads
good stories and sensitizes the population about various ongoing CSR.
• Broad perception towards CSR initiatives is essential, as non-governmental organizations and
Government agencies usually possess a narrow outlook towards the CSR initiatives of companies, often
defining CSR initiatives more as donor-driven.

It is too early to say what the real impact of this act will be, especially given that passing it and
enforcing it are too different things. Moreover, today the concept of corporate social responsibility is firmly
rooted on the global business agenda. But in order to move from theory to concrete action, many obstacles
need to be overcome. A key challenge facing business is the need for more reliable indicators of progress in
the field of CSR, along with the dissemination of CSR strategies. No clear cut regulatory framework
regarding also acts as a hindrance in implementing CSR. It is found that the degree of CSR activities of
companies should depend upon their business size and profile. In other words, the bigger the company, the
bigger is its CSR program. Non-governmental organizations and Government agencies generally possess a
constricted viewpoint towards the CSR activities of companies. As a result, they find it hard to decide
whether they should contribute in such activities at all in medium and long range. Lack of transparency is
another issue which needs focus. This is mainly due to the fact that there is little or no knowledge about
CSR within the local communities since no sincere efforts have been made to create awareness about CSR
and win the confidence of local communities. There is a need to increase the understanding and active
participation of business in equitable social development as an integral part of good business practice.
CASE STUDY OFTATA GROUP
I. INTRODUCTION

Literature Review

The concept of CSR originated in the 1950‘s in the USA but it became prevalent in early
1970s . At that time US had lots of social problems like poverty, unemployment and pollution.
Consequently a huge fall in the prices of Dollar was witnessed. Corporate Social Responsibility became
a matter of utmost importance for diverse groups demanding change in the business. During the
1980‘s to 2000, corporations recognized and started accepting a responsibility towards society.
Corporate social responsibility (CSR) focuses on the wealth creation for the optimal benefit of all
stakeholders – including shareholders, employees, customers, environment and society. The term
stakeholder, means all those on whom an organization's performance and activities have some impact
either directly or indirectly. This term was used to describe corporate owners beyond shareholders as a
result of a book titled Strategic management: a stakeholder approach by R. Edward Freeman in the
year 1984. 1
According to Bowen, ―CSR refers to the obligations of businessmen to pursue those policies to
make those decisions or to follow those lines of relations which are desirable in terms of the objectives
and values of our society. ― 2 Frederick (1960) stated ‗Social responsibility means that businessmen
should oversee the operation of an economic system that fulfills the expectations of the people.‘ . 3
Davis (1960) argued that social responsibility is a nebulous idea but should be seen in a managerial
context. He asserted that some socially responsible business decisions can be justified by a long,
complicated process of reasoning as having a good chance of bringing long-run economic gain to the
firm, thus paying it back for its socially responsible outlook (p. 70). 4 An ideal CSR has both ethical and
philosophical dimensions, particularly in India where there exists a wide gap between sections of
people in terms of income and standards as well as socio-economic status (Bajpai, 2001) 5 .
Goyder(2003) argues: ―Industry in the 20th century can no longer be regarded as a private
arrangement for enriching shareholders. It has become a joint enterprise in which workers,
management, consumers, the locality, govt. and trade union officials all play a part. If the system which
we know by the name private enterprise is to continue, some way must be found to embrace many
interests whom we go to make up industry in a common purpose.‖ ). 6 CSR implies some sort of
commitment, through corporate policies and action. This operational view of CSR is reflected in a
firm‘s social performance, which can be assessed by how a firm manages its societal relationships, its
social impact and the outcomes of its CSR policies and actions (Wood, 1991). 7

Purpose

To understand the concept and scope of corporate social responsibility and getting an insight in CSR
practices in the light of se study of the TATA Group.

Objectives of the study

 To understand the concept of CSR

 To find out the scope of CSR
 To know how the Tata group has fulfilled its responsibility towards all stakeholders; what specific
activities, programs and strategies it has set, devised and implemented for the same.
II.CONCENTRIC CIRCLE & CSR
In 1971, the Committee for Economic Development issued a report throwing light on different
dimensions of responsibilities to be fulfilled by the corporate. The responsibilities of corporations are
described consisting of three concentric circles.
(a) Inner Circle:Clear cut, basic responsibilities for the efficient execution of the economic function,
products, jobs and economic growth.
(b) Intermediate Circle:Encompasses responsibility to exercise this economic function with a
sensitive awareness of changing social values and priorities. With respect to environmental
conservation, hiring and relations with employees, expectation of customers for information, safety
factors, etc.
(c) The Outer Circle: Newly emerging and still amorphous responsibilities that business should
assume to become more broadly involved in actively improving the social environment.

III. CLASSIFICATION OF SOCIAL RESPONSIBILITY

Responsibility towards itself
It is the responsibility of each corporate entity run business and to work towards growth,
expansion and stability and thus earn profits. If the corporation is to achieve social and economic ends,
organizational efficiency should be boosted up.
Responsibility towards Employees
Employees are the most important part of an organization. Following are some of the
responsibilities which a business entity has towards its employees-
 Timely payment
 Hygienic environment
 Good and impartial behavior
 Health care through yoga
 Recreational activities
 Encouraging them to take part in managerial decisions
Responsibility towards shareholders
It is the responsibility of corporate entity to safeguard the shareholders‘ investment’ and make
efforts to provide a reasonable return on their investment.
Responsibility towards state
Out of the profit available, the state is entitled to a certain share as per the income tax laws.
Utmost transparency has to be exerted regarding the profit &loss account and the balance sheet.
Responsibility towards consumers
The Company should maintain high quality standards at reasonable prices. It should not resort to
malpractices such as hoarding and blackmarketing.
Responsibility towards environment
It is the responsibility of the organization to contribute to the protection of environment. It should
produce eco -friendly products. Moreover, industrial waste management must be taken care of.

Social Responsibility Models

Carroll’s Model

Archie B. Carroll has defined CSR as the complete range of duties business has towards the society. He
has proposed a 3-d conceptual model of corporate performance. According to Carroll, a firm has the
following four categories of obligations of corporate performance.-

ECONOMIC

LEGAL

ETHICAL

DISCRETIONARY

HIERARCHY OF RESPONSBILITIES OF BUISNESS

Economic: The firm being an economic entity, its primary responsibility is to satisfy economic needs of
the society and generation of surplus for rewarding the investors and further expansion and
diversification.
Legal:The laws of the land and international laws of trade and commerce has to be followed and
complied with.
Ethical: Ethical responsibilities are norms which the society expects the business to observe like not
resorting to hoarding and other malpractices.
Discretionary:Discretionary responsibilities refer to the voluntary contribution of the business to the
social cause like involvement in community development or other social projects pertaining to health and
awareness of the masses.

Halal’s model
Halal‘s return on resource model of corporate performance recognizes the fact that the corporate social
responsiveness is a quite difficult task as no corporate posture is value free. A firm can only attempt to
form a workable coalition among groups having diverse interests, engaged in creating value for
distribution among members of coalition. The social issues may become conflicting beyond a certain level
of economic activity. The coordination between economic and ethical decisions is necessary so that the
future of the firm and shareholders may be safeguarded.

Ackerman’s model

First phase - Top management recognizes social problem

Second phase–The company appoints staff specialists to look into the issue and find measures to tackle it
Third phase - Implementation of the strategy derived by the specialists
IV. CORPORATE SOCIAL RESPONSIBILITY AS A STRATEGY
CSR needs a proper and step by step implementation. Andrew (1980) 11 has developed an approach to the
question of strategic choice. His four key questions suggest the approach that companies may follow in
determining their level of CSR activity.

Those four questions are following:

a. Determining Organizational Competencies: what can we do?

b. Looking at Industry threats and opportunities: what might we do?

c. Examining the values of key implementers: what do we want to do?

d. Determining the social responsibility: what ought we to be doing? 5

By finding out answers to these questions managerial decisions can be molded towards serving a strategic
need. This means CSR in practical terms is an ongoing process, constantly monitoring the environment and
inter and intra firm relationships. Burke Lee and Jeanne M. Logsdon (1996) 12 suggest that there are five
dimensions of corporate strategy that are critical to the success of CSR process in terms of value creation by
the firm. They are:

a. Centrality - CSR initiative activities should be close to the firm's mission and objectives.
b. Specificity- Strategic CSR initiatives should specifically benefit the firm. The firm should be able to
capture the benefits of CSR initiatives.
c. Proactivity- CSR initiatives should focus on the dynamics of stakeholder expectations i.e. to capture the
changes in socio-environmental, political and technological factors.
d. Voluntarism- CSR decisions should be discretionary and thus they should be taken up by the firm
voluntarily.
e. Visibility- Strategic CSR initiative should build firm‘s image and add up to the goodwill by creating
positive media attention. It can also mitigate negative image of the firm.

V. TATA GROUP & CSR

Ranging from steel, automobiles and software to consumer goods and telecommunications the
Tata Group operates more than 80 companies. It has around 200,000 employees across India and thus has
the pride to be nation‘s largest private employer. Mr. Ratan N. Tata has led the eminent Tata Group
successfully. He was trained as an architect at New York's Cornell University but he chose to enter the
family business .He assumed the Chairmanship of the Group in 1991. Named Business Man of the Year for
Asia by Forbes in 2004, Mr. Ratan Tata serves on the board of the Ford Foundation and the program board
of the Bill & Melinda Gates Foundation's India AIDS initiative. Tata Group chairman Ratan Naval Tata has
stepped down to pass on the entire responsibility to Cyrus Mistry. Under Tata, the group went through
major organizational phases — rationalization, globalization, and now innovation, as it attempts to reach a
reported $500 billion in revenues by 2020-21, roughly the size of what Walmart is today. 13

Approximately two third of the equity of the parent firm, Tata Sons Ltd., is held by philanthropic trusts
endowed by Sir Dorabji Tata and Sir Ratan Tata, sons of Jamsetji Tata, the founder of today’s Tata empire in
the 1860s. Through these trusts, Tata Sons Ltd. utilizes on average between 8 to 14 percent of its net profit
every year for various social causes. Even when economic conditions were adverse, as in the late 1990s, the
financial commitment of the group towards social activities kept on increasing, from Rs 670 million in 1997-
98 to Rs 1.36 billion in 1999-2000. In the fiscal year 2004 Tata Steel alone spent Rs.45crore on social
services. . 14

Tata is accredited to initiate various labor welfare laws. For example- the establishment of Welfare
Department was introduced in 1917 and enforced by law in 1948; Maternity Benefit was introduced in
1928 and enforced by law in 1946. A pioneer in several areas, the Tata group has got the credit of
pioneering India's steel industry, civil aviation and starting the country's first power plant. It had the world's
largest integrated tea operation. It is world's sixth largest manufacturer of watches (Titan).

VI.CONCLUSION
For bringing back and maintaining the general balance in the economic and social arena it is evident
to think deeply and act wisely about CSR. Every business house owe some responsibility towards the
society, nation and world in general which provide it with all human, material and natural resources.
Considering the long run growth and sustainable development following the norms of CSR , devising new
policies and effective implementation is inevitable to bring and sustain a balance between corporate world
and society, present generation and upcoming generation, man and nature .

As far as the Tata group is concerned, it has gone a long way in fulfilling its duty and responsibility
towards the society and the nation. It has reached the masses to elevate their lives, to nurture their dreams
and to hone their skills justifying the statement of the founder ―We do not claim to be more unselfish,
more generous and more philanthropic than other people. But we think we started on sound and
straightforward business principles, considering the interests of the shareholder, our own, and the health
and welfare of the employees, the sure foundation of our prosperitY