INTRODUCTION
Corporate social responsibility focusses on the idea that a business has a social obligation above and beyond making a profit. Corporate social responsibility (CSR) is a prominent 21st century business ideology that heightens expectations of companies regarding social and environmental standards.
Challenges lie in allocating time and resources necessary to develop a CSR approach that meets governmental and social standards and achieves compliance with informal CSR guidelines related to social and environmental responsibility. One of the biggest features addressed by CSR is its intent to cause companies to recognize responsibilities to stakeholders outside of shareholders. This includes customers, communities, employees and suppliers. While proponents of CSR point out the long-term benefits of taking care of these core relationships, shareholders are often deterred at the notion that companies will invest in anything that does not create immediately obvious financial gain. With CSR, detecting measurable bottom line benefits is a challenge as social and environmental programs are hard to account for with regard to financial gain. The evolution of corporate social responsibility in India refers to changes over time in India of the cultural norms of corporations’ engagement of corporate social responsibility (CSR), with CSR referring to way that businesses are managed to bring about an overall positive impact onthe communities, cultures, societies and environments in which they operate. The fundamentals of CSR rest on the fact that not only public policy but even corporates should be responsible enough to address social issues. Thus companies should deal with the challenges and issues looked after to a certain extent by the states. Among other countries India has one of the richest traditions of CSR. Much has been done in recent years to make Indian Entrepreneurs aware of social responsibility as an important segment of their business activity but CSR in India has yet to receive widespread recognition. If this goal has to be realized then the CSR approach of corporate has to be in line with their attitudes towards mainstream business- companies setting clear objectives, undertaking potential investments, measuring and reporting performance publicly[1]
The Sanskrit saying Atithi Devo Bhava means- the
one who comes to you for being served, should be taken to be as God, is
considered as the highest order of responsibility, be it to individuals or to
the society. Thus the phase Social Responsibility has its roots in Indian
context. This Phrase has long been in use with growth of industries and
corporate.
It not only reflects the ‘passage of time’ in its impact and transformation,
but its meaning and understanding has been affected by the growth of society,
nations and changes in their appreciation of cultural heritage and background.
Globalization has influenced trade all over the world; companies have looked
for new opportunities in doing business outside their home country. In recent
years Corporate Social Responsibility (CSR) has gained growing recognition as a
new and emerging form of governance in business. It is already established in a
global context, with international reference standards set by the United
Nations, Organization for Economic Co-operation and Development (OECD)
guidelines and International Labor Organization (ILO) conventions.
Broadly speaking, CSR has
three key components are the basic values, ethics, policies, and practices of a
company’s business; the voluntary contributions made by a company to community
development; The management of environmental and social issues within the value
chain by the company and its business partners—from the acquisition and
production of raw materials, through the welfare of staff, to product sale,
use, and disposal.[2]
APPROACHES TO CSR
There are two basic approaches
to CSR: Traditional Approach and Modern Approach
Traditional Approach, Under
the traditional/classical operation of the corporate enterprises, society’s
basic demands upon the business were to produce goods and services efficiently
and the responsibility of business enterprises was to use resources and engage
in activities designed to increase profits and size of enterprises.
The Modern Approach, New social pressures have
changed the objectives of business enterprises. There is growing public demand
for corporate involvement in solving many social practices so that social
responsibility becomes a standard by which business practices are evaluated. It
is opined that business houses should formulate financial goals for the
shareholders and social goals like pollution abatement, minority employment and
related corporate activities.[3]
CSR STATUS IN INDIA
Corporate Social Responsibility Practices in India sets a realistic agenda of grassroots development through alliances and partnerships with sustainable development approaches. All the Business houses and corporate organisation have been taking up social welfare activities from time to time. CSR is of great significant for developing countries like India, where limited resources for meeting the ever growing aspirations and diversity of a pluralistic society makes the process of sustainable development more challenging.
CSR is not a new concept in India. It is still one of the least understood initiatives in the Indian development sector. But the situation is now changing. Corporate organisations are doing their bit for the society through donations and charity events. The basic objective of CSR is to maximise the companies overall impact on the society and stakeholders by organising various CSR programmes ranges from community development to development in education, Environment, healthcare etc.[4]
CSR has gone through many phases in India. The ability to make a significant difference in the society and improve the overall quality of life has clearly been proven by the corporate. Not one but all corporate should try and bring about a change in the current social situation in India in order to have an effective and lasting solution to the social woes. Partnerships between companies, NGOs and the government should be facilitated so that a combination of their skills such as expertise, strategic thinking, manpower and money to initiate extensive social change will put the socio-economic development of India on a fast track.
SIGNIFICANCE OF CSR
CSR plays a very crucial role in smooth functioning of organizations. It includes:
- Social responsibility and consumer relationships- the companies must build the long term trusting relationships with customer because it is the consumer to decide the fate of every business organisation. They should maintain high quality standards at reasonable price. Therefore, it is important to fulfil the contractual obligations to its customers.
- Motivating employees- Employees are the most valuable assets of a company. Therefore, it is the foremost obligation of the co. to treat is employees with respect and provide them fair working conditions which also means establishing fair hiring practices and non discriminatory work place which lead to improve the morales of the employees with in the work place and encourage them to work in their best ability.
- Social media visibility- The corporations should have visible CSR campaigns is due to the importance and prevalence of social media. Social media plays a very important role in promoting the brand. Social media is an integral part of public perception. When a corporation exercises social responsibility in the form of fund raising or setting up employee giving programs, using social media to promote these actions helps to create a positive branding environment and it is a great way to engage with your audience on a deeper level that goes beyond your products or services
- Profitability and value- A CSR policies helps the company to improve its profitability and value. CSR also increases company accountability and its transparency with investment analysts and the media, shareholders and local communities. Csr in return enhances its reputation among investors such as mutual funds that integrate CSR into their stock selection result in increase of companies stock value.
- Government relations- Corporations that place an emphasis on corporate social responsibility typically have an easier experience when dealing with politicians and government regulators. It has undoubtedly been settled that the business sector is the major source of income in every economy, whether capitalist or socialist. Thus, out of the profit available, the state is entitled to a definite to definite share as per the income tax laws and this commitment has therefore to be performed at priority.
- Building a Positive Workplace Environment- one of the great significance of promoting social responsibility in the workplace is the positive environment you build for your employees. When employees and management feel they are working for a company that has a true conscience, they will likely be more enthusiastic and engaged in their jobs. This can build a sense of community and teamwork which brings everyone together and leads to happier, more productive employees.
DIMENSIONAL ASPECT OF CSR
Three dimensional aspect of CSR are as follows:
- Economic aspects- The economic aspects of CSR consist of understanding the economic impacts of the company’s operations. However, the economic responsibility is not simply a matter of companies being financially accountable, recording employment figures and debts in their latest corporate responsibility report. The economic dimension of the Role Of Corporate Social Responsibility in Organization should rather consider the direct and indirect economic impacts that the organization’s operations have on the surrounding community and on the company’s stakeholders That is what makes up
- Social aspects– Social responsibility is the newest of the three dimensions of corporate social responsibility and it is getting more attention than it has previously had. Many organizations are becoming increasingly active in addressing social concerns. Social responsibility means being accountable for the social effects the company has on people -even indirectly. This includes the people within the company, in the supply chain of the company, in the community the company is in and as customers of the company which means the whole lot of stakeholder. It refers to the management’s obligation to make choices and take actions that will contribute to the well fare and interests of society as well as those of the organization. The social aspects of CSR includes various responsibilities of the corporation towards its customers, employees and community.
- Environmental aspects- Environmental concern and sustainable development is a key pillar of the corporate social responsibility. Environmental and ecological issues are the important factors are to be taken into consideration by every organizations. The knowledge and issues within the dimensions have progressed across a landscape of changing business realities. Environmental helps in creating better understanding of the environmental impacts of business. Usually environmental impact refers to the negative effects occurring in the surrounding natural environment due to business operations. Such impacts may include overuse of natural and non-renewable resources of energy, pollution wastage, degeneration of biodiversity, climate change, deforestation etc. In fact many organisation took part at global level to protect environment.
CONCLUSION
Hence hereby we can conclude that Corporate Social Responsibility is one of main aspect of Corporate Laws in India. CSR is one of the responsibility of every company which is to be followed. The Sanskrit saying Atithi Devo Bhava means- the one who comes to you for being served, should be taken to be as God, is considered as the highest order of responsibility, be it to individuals or to the society. Thus the phase Social Responsibility has its roots in Indian context. This Phrase has long been in use with growth of industries and corporate.
Through various following cases we can see how the organisations are distributing their bit to the society for the betterment of society. For an instance, Reliance Industries Ltd. launched a countrywide initiative known as “Project Drishti”, to restore the eye-sights of visually challenged Indians from the economically weaker sections of the society.
Further we can take an example
of ITC (Indian Tobacco Co.) partnered the Indian farmer for close to a century.
It is now engaged in elevating this partnership to a new paradigm by leveraging
information technology through its trailblazing ‘e-Choupal’ initiative. ITC is
significantly widening its farmer partnerships to embrace a host of
value-adding activities viz. creating livelihoods by helping poor tribes make
their wastelands productive, investing in rainwater harvesting to bring
irrigation to parched dry lands, empowering rural women by helping them evolve
into entrepreneurs, and providing infrastructural support to make schools an
exciting platform for village children.
companies like TATA and BIRLA have been imbibing the
case for social good in their operations for decades long before CSR become a
popular cause. Inspite of having such life size successful examples, CSR in
India is in a very nascent stage. It is still one of the least understood
initiatives in the Indian development sector. It is followed by a handful of
public companies as dictated by the very basis of their existence, and by a few
private companies with international shareholding as this is the practice
followed by them in their respective foreign country. Thus the situation is far
from perfect as the emphasis is not on social good but rather on a policy that
needs to be implemented.
But organizations are coming to realize the bottom-line benefits of
incorporating sustainability into their DNA. It’s beneficial for attraction and
retention and it’s the right thing to do. HR is a key organizational leader and
can take the lead or partner with other executives to work cross-functionally
to integrate CSR objectives into how business gets conducted. HR practitioners
can act as translators of the organization’s CSR commitment vertically and
horizontally across departments. To guarantee the supply of responsible and
ethical goods, it is especially important to implement a nationwide system of
CSR standards.
[1] http://www.iosrjournals.org/iosr-jbm/papers/Vol13-issue4/A01340108.pdf
[2] http://www.legalservicesindia.com/law/article/944/3/Corporate-Social-Responsibility
[3] http://www.legalservicesindia.com/law/article/944/3/Corporate-Social-Responsibility
[4] http://www.csrtimes.com/community-articles/why-india-needs-aggressive-csr-implementation/eFVPkxHMIn
This article is written by Radhika Bansal.
Disclaimer: This article is an original submission of the Author. Lex Insight does not hold any liability arising out of this article. Kindly refer to our Terms of use or write to us in case of any concerns. This article is a part of the 1st National Essay Competition, 2019.
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