STUDY ON CORPORATE SOCIAL RESPONSIBILITY: As perceived by Corporate and Beneficiaries

(A study on Corporate Social Responsibility of 4 corporate and 60 beneficiaries of Petrochemical area in Vadodara)

RESEARCH GUIDE: Mrs. Sunita Jolly

RESEARCHER: Priyank Shukla

APRIL 2013 VADODARA

STUDY ON CORPORATE SOCIAL RESPONSIBILITY: As perceived by Corporate and Beneficiaries

(A study on Corporate Social Responsibility of 4 corporate and 60 beneficiaries of Petrochemical area in Vadodara)

RESEARCH GUIDE: Mrs. Sunita Jolly

RESEARCHER: Priyank Shukla

APRIL 2013 VADODARA

A STUDY ON CORPORATE SOCIAL RESPONSIBILITY: As perceived by Corporate and Beneficiaries

(A study on Corporate Social Responsibility of 4 corporate and 60 beneficiaries of Petrochemical area in Vadodara)

A DISSERTATION SUBMITTED TO THE FACULTY OF SOCIAL WORK THE MAHARAJA SAYAJIRAO UNIVERSITY OF BARODA IN PARTIAL FULLFILLMENT OF THE REQUIREMENT FOR THE DEGREE OF MASTERS OF HUMAN RESOURCE MANAGEMENT

RESEARCH GUIDE: Mrs. Sunita Jolly

RESEARCHER: Priyank Shukla

Table of Contents

Sr. No *** *** *** 1 2 3 4 5 Preface Acknowledgement List of Tables

Particulars

Page No. i ii iii 1-42 43-64 65-102 103-111 112-124 113 115 122

Introduction & Research Methodology Review of Literature Data Analysis & Interpretation Findings, Conclusion & Suggestion Annexure: A. References B. Questionnaire C. Interview Schedule

PREFACE
In the last twenty years, there has been a sea change in the nature of the triangular relationship between companies, the state and the society. No longer can firms continue to act as independent entities regardless of the interest of the general public. The evolution of the relationship between companies and society has been one of slow transformation from a philanthropic coexistence to one where the mutual interest of all the stakeholders is gaining paramount importance. Companies are beginning to realize the fact that in order to gain strategic initiative and to ensure continued existence, business practices may have to be molded from the normal practice of solely focusing on profits to factor in public goodwill and responsible business etiquettes. An examination of some of the factors which have led to the development of the concept of corporate social responsibility (CSR) would be ideal starting ground for the conceptual development of suitable corporate business practices for emerging markets. The business environment has undergone vast changes in the recent years in terms of both the nature of competition and the wave of globalization that has been sweeping across markets. Companies are expanding their boundaries from the country of their origin to the evolving markets in the developing countries which have been sometimes referred to as emerging markets. The current trend of globalization has brought a realization among the firms that in order to compete effectively in a competitive environment; they need clearly defined business practices with a sound focus on the public interest in the markets. The increase in competition among the multinational companies to gain first mover advantage in various developing countries by establishing goodwill relationships with both the state and the civil society is ample testimony to this transformation. Secondly, in most of the emerging markets, the state still holds the key to business success because of the existence of trade and business regulations restricting the freedom of multinational companies to incorporate their previously successful business doctrines which have been tried and tested in the developed nations. The state with its duty of protecting the interests of the general public would naturally be inclined to give preference to companies which take care of the interests of all the stakeholders. Thirdly, emerging markets have been identified as a source of immense talent with the rising levels of education. For example, the expertise of India in churning out software professionals and China in manufacturing has now become internationally renowned. In order to draw from
i

this vast talent pool coming up in developing countries, companies need to gain a foothold in these markets by establishing sound business practices addressing social and cultural concerns of the people. It has been observed that consumers consider switching to another company's products and services, speak out against the company to family/friends, refuse to invest in that company's stock, refuse to work at the company and boycott the company's products and services in case of negative corporate citizenship behaviors.

- Priyank Shukla

ii

ACKNOWLEDGEMENT

There is no such thing as a self made man. We all are made up of thousands of others. GEORGE ADAMS

First of all, I am very grateful to the Faculty of Social Work for granting this precious opportunity to prove my determination by way of this research study. Feeling grateful but not expressing it, is like wrapping a gift but not giving it ; hence, I take this pleasure to extend my heartfelt gratitude to my guide Mrs Sunita Jolly. Our meetings made me feel confident and relaxed. Despite of her busy schedule she was always ready to solve my doubts and because of whom this research has become a reality. Next I would like to thank executives of GSFC, GIPCL, IOCL and Reliance for giving me the permission to do the research work and data collection. I would also like to thank all the respondents for sparing their valuable time to respond to the questionnaires and Interview Schedule. Finally, I want to thank my parents and friends for their love and the faith in me, which inspired me in my work. Last, but not the least. I thank God without whom nothing would have been possible. He showed me the path and light the way when all was dark.

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LIST OF TABLES

TABLE NO
1 2 3 4 5 6 7 8 9 10 11 12

TITLE
Table showing the age group of respondents Table showing Gender of Respondents Table showing villages of the respondents Table showing qualification of respondents Table showing CSR Activities carried on in the target villages Table showing Target Group on which CSR activities were focused Table showing satisfaction with CSR activities Table showing CSR activities needed in near future Table showing reliability on CSR for Infrastructure Development Table showing reliability on CSR for Education Table showing reliability on CSR for Health Table showing dependence on whom if CSR activities are not done in the villages Table showing companies performing CSR activities in target villages Table showing Need Assessment before CSR activity

PAGE NO.
66 67 67 68 69 70 71 72 73 73 74 75

13 14

76 77

iv

15 16

Table showing instances of incomplete CSR activity Table showing level of participation from villages in conducting CSR activity. Table showing contribution from villagers in CSR activities Table showing whether there is any contribution in funds from villages Table showing amount of contribution from villages Table showing Objective of Corporate Social Responsibility Table showing desirability of CSR Table showing Reason to get involved in CSR Table showing whether separate board is there or not for CSR Table showing department which looks after CSR in companies Table showing programs carried out for CSR and their frequency Table showing frequency of formal meetings held in a year to discuss about CSR Table showing involvement of employees in CSR Table showing employees involved in CSR program are Table showing designing of CSR in reference to Table showing suggestion for developing a sustainable CSR program

77 78

17 18 19 20 21 22 23 24 25 26

78 79 79 80 81 82 82 83 84 85

27 28 29 30

86 86 87 87

31 32

Table showing identification of linkages by management Table showing reaction of government to your social responsibilities activity Table showing future prospects of CSR Table showing best suitable CSR approach Table showing CSR is a window for keeping critics happy Table showing there are many business benefits of CSR Table showing CSR initiatives are marketing gimmick to sell to customers Table showing CSR initiatives give the brand an aura of "Socially Responsible Brand" Table showing CSR initiatives influences the brand image of a company or a product Table showing CSR initiatives give competitive advantage over other firms Table showing HR departments role in addressing the CSR issue Table showing A CSR initiative helps in enhancing overall financial position Table showing Investment related to CSR should be covered in core finance module Table showing CSR activity must center on profit maximization

88 88

33 34 35 36 37

89 90 91 91 92

38

93

39

93

40

94

41 42

94 95

43

95

44

96

vi

45

Table showing Profit is necessary but only after meeting certain obligations Table showing Money and wealth are most important for your organization Table showing Money spent on CSR brings long term benefit to company Table showing Companies should inform customers about their indirect contribution Table showing Tangible economic benefits for the company from CSR commitments Table showing Employees have motives beyond economic needs Table showing Group participation is fundamental for meeting social needs Table showing Subordinates opinion should be considered Table showing Business and government must cooperate to solve problems of society Table showing Indian companies are not doing their best for society through CSR initiatives

97

46

97

47

98

48

99

49

100

50 51

100 101

52 53

101 102

54

102

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CHAPTER 1:
INTRODUCTION & RESEARCH METHODOLOGY

Definition- CSR Corporate Social Responsibility (CSR) is a powerful way of making sustainable competitive profit and achieving lasting value for the shareholder as well as for stakeholders. CSR and the reporting thereof is a win-win opportunity, not just for companies and for financial investors but for social at large. (europe2003) CSR-A CONCEPTUAL FRAMEWORK:The World Business Council for Sustainable Development (WBCSD) has defined corporate social responsibility as the commitment of business to contribute to sustainable economic development The primary purpose of CSR is to engage with the internal and external stakeholders. CSR is concerned with the treating the stakeholders of the firm ethically or in a socially responsible manner. The aim of social responsibility is to create higher standards of living, while preserving the profitability of the corporation. (Michael Hopkins 1998). During the initial phase of industrial development in the Western countries, philanthropic contributions to civil society were popular. The initial debate on CSR took place in the United States during the 60s. During this period, the debate focused on the changing role of companies in society; and the increased power especially of multinational companies, among others. One view sought regulations to protect society and the environment, and that the priority of companies should be to make profit within these regulations. In contrast, others argued that companies not only should have a responsibility to their shareholders, but also to their other stakeholders. DEFINING CORPORATE SOCIAL RESPONSIBILITY World Business Council for Sustainable Development defines Corporate Social

Responsibility (CSR) as The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.

The European Commission advocates CSR as Being socially responsible means not only fulfilling legal expectations, but also going beyond compliance and investing more into human capital, the environment and relations with stakeholders. Globalization and rise in competition War for talent; tapping the vast talent pool Strategic importance of Intangible Assets Retrenching of the state and its roles Thus CSR exhorts firms to diverge from their sole aim of maximizing profits and to lay more importance on improving the economic and social standards of the community in their countries of operation. CSR can be thus be simply defined as the additional commitment by businesses to improve the social and economic status of various stakeholders involved while complying with all legal and economic requirements. As Warhust (2001) points out, the three major elements of CSR are product use which focuses on contribution of industrial products which help in well being and quality of life of the society, business practice which focuses on good corporate governance and gives high impetus for the environmental well being and equity which tries for distribution of profits equitably across different societies especially the host community. What is Corporate Social Responsibility? The term is often used interchangeably for other terms such as Corporate Citizenship and is also linked to the concept of Triple Bottom Line Reporting (TBL), which is used as a framework for measuring an organizations performance against economic, social and environmental parameters. The rationale for CSR has been articulated in a number of ways. In essence it is about building sustainable businesses, which need healthy economies, markets and communities. Asia Pacific perspective Corporate social responsibility is represented by the contributions undertaken by companies to society through its core business activities, its social investment and philanthropy programmed
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and its engagement in public policy. In recent years CSR has become a fundamental business practice and has gained much attention from chief executives, chairmen, boards of directors and executive management teams of larger international companies. They understand that a strong CSR program is an essential element in achieving good business practices and effective leadership. Companies have determined that their impact on the

economic, social and environmental landscape directly affects their relationships with stakeholders, in particular investors, employees, customers, business partners, governments and communities. The Asia Pacific context is distinct. On the one hand, there are long-standing traditions of respect for family and social networks, and high value placed on relationships, social stability and education. Diverse religions and cultures also bring distinct attitudes towards community social behavior and engagement as well as support and philanthropic contributions. Governments in the region also play distinct roles often stronger in terms of influence on economic and social priorities, yet not as advanced in terms of social safety nets. This has resulted in the drivers for corporate citizenship being very different from those in other regions. Many of the large corporations in Asia Pacific are private, and many do not have the same public pressures on corporate behavior that public companies in Europe and North America have for progress on corporate social responsibility, although this is changing. Yet many of the larger companies in Asia Pacific have strong localized philanthropic programmed. Also, regional companies that are engaged in supply chains of major global corporations and local affiliates of global corporations from Europe and America have significant pressures and a strong business case to develop corporate citizenship policies and practices within the region, not least on the environment, human rights and labor standards. World Economic Forum & CSR The World Economic Forum has recognized the importance of corporate social responsibility by establishing the Global Corporate Citizenship Initiative. The Initiative hopes to increase businesses' engagement in and support for corporate social responsibility as a business strategy with long-term benefits both for the companies themselves as well as society in general.

At the Forum's Annual Meeting 2002, the Initiative launched a joint CEO statement, Global Corporate Citizenship: The Leadership Challenges for CEOs and Boards. This joint statement recommends a framework for action that business executives can use to develop a strategy for managing their company's impact on society and its relationships with stakeholders. This statement was endorsed by the CEOs of over 40 multinational companies, including the CEOs of Accenture, Deloitte Touche Tohmatsu, Deutsche Bank, Rio Tinto, Siemens, Renault, McDonalds, Infosys Technologies, Coca-Cola, DHL and PricewaterhouseCoopers.

CORPORATE SOCIAL RESPONSIBILITY & HUMAN RESOURCE Social responsibility is an ethical ideology or theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. Social responsibility is a duty every individual or organization has to perform so as to maintain a balance between the economy and the ecosystem. There is always a trade-off between economic development, in the material sense, and the welfare of the society and environment. Social responsibility means sustaining the equilibrium between the two. It pertains not only to business organizations but also to everyone whos any action impacts the environment. This responsibility can be passive, by avoiding engaging in socially harmful acts, or active, by performing activities that directly advance social goals. Businesses can use ethical decision making to secure their businesses by making decisions that allow for government agencies to minimize their involvement with the corporation. (Kaliski, 2001) For instance if a company is proactive and follows the United States Environmental Protection Agency(EPA) guidelines for emissions on dangerous pollutants and even goes an extra step to get involved in the community and address those concerns that the public might have; they would be less likely to have the EPA investigate them for environmental concerns. A significant element of current thinking about privacy, however, stresses "self-regulation" rather than market or government mechanisms for protecting personal information (Swire , 1997) Most rules and regulations are formed due to public outcry, if there is not outcry there often will be limited regulation. Critics argue that Corporate social responsibility (CSR) distracts from the fundamental economic role of businesses; others argue that it is nothing more than superficial window-dressing; others
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argue that it is an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations though there is no systematic evidence to support these criticisms. A significant number of studies have shown no negative influence on shareholder results from CSR but rather, a slightly positive correlation with improved shareholder returns.

DIMENSIONS OF CSR AND RELEVANCE FOR EMERGING MARKETS The Green Paper (2001) by the Commission of the European Communities identifies two main dimensions of CSR, an internal dimension relating to practices internal to the company and an external dimension involving the external stakeholders. INTERNAL DIMENSION This relates to practices internal to the company which need to be modified to incorporate CSR practices. A. Human Resource Management CSR can be successfully implemented in an organization through precise management of its own work force. The internal dimension of CSR includes elements like providing an environment for lifelong learning for employees, employee empowerment, better information flow, improving the balance between work, family, and leisure, diversified work force, profit sharing and share ownership schemes, concern for employability as well as job security among others. Active follow up and management of employees who are off work due to disabilities or injuries have also been shown to result in cost savings for the companies. Molding of recruitment policies to include people from ethnic minorities, older workers, women and the long-term unemployed would be a significant step forward to incorporating CSR practices in Human Resources Management. In the context of emerging markets, the availability of cheap labor is an encouraging factor for companies. Dawar and Chattopadhyay (2000) infer from their research that many times, emerging markets are able to provide cheap skilled and unskilled labor at wages which would be substantially cheaper than the normal cost of automation of the job positions. Developed markets
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have clearly moved towards heavily capital-intensive distribution with the introduction of electronic data interchanges, mechanized movement and monitoring of goods, and vending machines that replace salespeople. By contrast labor-intensive distribution remains economical in emerging markets. For example, in emerging markets, Coca-Cola has not invested in vending machines. These are too expensive relative to salespeople. Benjamin, Brandt and Glewwe (2000) report that in China, instead of vending machines, the company has experimented with a pushcart program in which salespeople dispense the companys drinks by the single-serve bottle. Similarly, in India, almost 10% of Coca- Cola sales take place through fountains, where a salesperson dispenses drinks by the paper cup. Daily sales of as little as 100 cups justify the cost of the fountain and the person employed to dispense the drinks. B. Work safety and health measures Worker safety and labor health have been documented to be having a direct impact on productivity of the labor force. Although legal measures exist in most nations on maintaining standards for ensuring worker safety and providing health benefits, recent trends have made it imperative for companies to adopt a proactive approach to this issue. In emerging markets having significant cost advantages in labor, outsourcing of labor and processes have led to the situation where companies not only need to maintain high safety levels in their own premises but also ensure that their suppliers and other connected parties comply with these principles. The increased focus on safety standards and employee welfare has led to the development of standards across industries. Mechanisms are being designed especially in emerging markets for measuring, documenting and communicating these qualities thereby saving time, work and costs in the purchasing process. C. Adaptation to change A recent trend in the global business scenario has been the wide spread use of mergers and acquisitions for business expansion. Also downsizing has been used, often ineffectively, as a cost cutting measure by firms in their relentless push for profits. According to the Green Paper (2001) by the Commission of the European Communities Restructuring in a socially responsible manner means to balance and take into consideration the
6

interests and concerns of all those who are affected by the changes and decisions. In practice the process is often as important as the substance to the success of restructuring. In particular this involves seeking the participation and involvement of those affected through open information and consultation. Furthermore, restructuring needs to be well prepared by identifying major risks, calculating all the costs, direct and indirect, associated with alternative strategies and policies, and evaluating all of the alternatives which would reduce the need for redundancies. However, Bhattacharyya and Rahman (2003) point out that although most emerging economies have labor laws preventing labor retrenchment even in the event of declining sales, in practice lobbying with the bureaucracy and government is an aspect which firms cannot chose to ignore. D. Management of environmental impacts The importance of this aspect of CSR cannot be overemphasized. Optimization of resource utilization and reducing environmentally damaging effluents can reduce the environmental impact. This will also enable the firms to affect significant cost savings in energy bills and pollution costs. Many firms in emerging markets have had to face serious repercussions from the state and society for over exploitation of natural resources and disregard for environmental safety measures. Studies by Consultancy and Research for Environmental Management on practices of Dutch multinational companies in India (2004) highlight the importance attached by the companies to maintenance of environmental standards. Many multinational companies are realizing to their cost that early compliance with accepted standards will provide strategic advantages in the long run even though cost inefficient in the near future. EXTERNAL DIMENSION: This dimension relates to practices concerning external stakeholders. The significance of this dimension of CSR has come to the forefront with the advent of globalization leading to the development of international standards for business practices. A. Local communities The development of positive relations with the local community and thereby the accumulation of social capital is particularly relevant for non-local companies. These relations are being increasingly used by multinational companies to support the integration of their subsidiaries into
7

various markets in which they are present. Deep understanding of the local community and social customs is an asset which can be utilized by the companies to gain strategic advantage. In emerging markets, this is more relevant than ever because of the availability of cheaper labor from the local communities. Companies would find it in their interest to substitute capital substitution with labor and reap the cost benefits. For example, Dawar and Chattopadhyay (2000) point out the instance of Whirlpool. Whirlpool discovered that it was unable to sell its high priced, fully automatic machines in the emerging markets. It was only after it introduced twin-tub machines that were cheaper and utilized the consumers labor rather than electronics to complete the entire washing cycle that sales took off. Interestingly, due to the fact that these machines had long disappeared in the developed markets, Whirlpool had to acquire the obsolete technology from Korea. B. Business partners Building long term relationships of sound ethical foundation with suppliers, customers (and even competitors in rare occasions) will enable companies to meet customer expectations better while reducing complexity and costs. Companies should realize their CSR practices will be judged taking into account the practices of their partners and suppliers throughout the supply chain. The effect of corporate social responsibility activities will not remain limited to the company itself, but will also touch upon their economic partners. Companies in emerging markets actually take on additional CSR responsibilities because of the existence of outsourcing opportunities in the form of suppliers and outsourcing agents. Also as part of their social responsibility companies are expected to provide high quality products and services, which meet customer expectations in a manner reflecting the companys concern for the environment and the local conditions. Thus in emerging markets, consumer based business strategies would enable companies to build long lasting relationships with consumers based on trust. C. Human rights According to Robbins (2000), Companies operating in countries where human rights are regularly violated may experience a climate of civil instability and corruption that makes for
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uneasy relations with government officials, employees, local communities and shareholders. Amnesty International states: Companies have a direct responsibility to ensure the protection of human rights in their own operations. They also have a responsibility to use their influence to mitigate the violation of human rights by governments, the forces of law and order or opposition groups in the countries in which they operate. The Caux Round Table Principles state that companies have a responsibility to respect human rights and democratic institutions; and promote them wherever practical. In the context of emerging markets, operations of companies should not impinge on the land rights of the local community. In particular, the company needs to make sure that people are not forcibly removed from their homes and their livelihoods are not endangered. There is the growing need to develop proper consultative processes with local groups protesting against projects or operations in which they are involved. Firms also need to build confidence in the local community that people (including union members) participating in peaceful protests against company operations are not intimidated, arrested or in any other way threatened. Also, companies can take steps to ensure forced labor is not used in their own, or their suppliers operations. According to Robbins (2000), there are reports of Gulags or prison labor camps in China producing products that are then sold locally or exported. An example of foreign companies benefiting from the ruling regimes abuse of its people is the building of the gas pipeline in Burma. Numerous reports tell of the use of forced labor on a grand scale. Companies need to ensure that human rights principles are withheld in all their operations and related activities in emerging markets. Individual Social Responsibility Individual social responsibility or ISR is the responsibility of every individual for his/her actions. It is morally binding on everyone to act in such a way that the people immediately around them are not adversely affected. ISR is a commitment everyone has towards the society contributing towards social, cultural and ecological causes. ISR is based on an individuals ethics. Instead of giving importance only to those areas where one has material interests the individual supports issues for philanthropic reasons. ISR is viewed as a tool for CSR. ISR forms the base for CSR or Corporate Social Responsibility because if everyone in a business organization does his/her bit the bigger things automatically fall into place. The trends however show that big charitable organizations recorded high growth due to the SR efforts of individuals and not corporate or the
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government. ISR may be slightly impractical, especially in the modern competitive world, where everyone works for self-interest, but it will succeed if we take decisions based on what will benefit a large number of people and respect everyones fundamental rights. As individuals we can make our small contributions to society by donating money to trustworthy NGOs, saving our resources by reducing our consumption, Eg. by switching off lights or computers when not in use helps companies reduce their carbon footprints on the earth. In every religion be it Islam, Hinduism, Buddhism, Jainism or Christianity great stress has been laid upon individual social responsibility. In the Bhagavad Gita, also known as the management epic Lord Krishna teaches Arjun what his responsibilities as a king are. The Karma Yoga tells us about the fruits of our labour and how they are directly related with our individual actions. According to Karma Yoga a company which does good work will reap their benefits and vice-versa. Corporate Social Responsibility or CSR has been defined by Lord Holme and Richard Watts in The World Business Council for Sustainable Developments publication Making Good Business Sense as the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large". CSR is one of the newest management strategies where companies try to create a positive impact on society while doing business. There is no clear-cut definition of what CSR comprises. Every company has different CSR objectives though the main motive is the same. All companies have a two point agenda- to improve qualitatively (the management of people and processes) and quantitatively (the impact on society). The second is as important as the first and stake holders of every company are increasingly taking an interest in the outer circle-the activities of the company and how these are impacting the environment and society.

Emerging normative status of CSR Social responsibility as a non-binding, or soft law principle has received some normative status in relation to private and public corporations in the United Nations Educational, Social and Cultural Organization (UNESCO) Universal Declaration on Bioethics and Human Rights developed by the UNESCO International Bioethics Committee particularly in relation to child and maternal welfare. Faunce and Nasu (2009) The International Organization for Standardization (ISO) is developing an international standard to provide guidelines for adopting
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and disseminating social responsibility: ISO 26000 - Social Responsibility. Due for publication in 2010, this standard will "encourage voluntary commitment to social responsibility and will lead to common guidance on concepts, definitions and methods of evaluation." (ISO, 2009) The standard describes itself as a guide for dialogue and language, not a constraining or certifiable management standard. Spirituality and Corporate Social Responsibility have had a deep-rooted connection in India. A phenomenon that has preceded the coining of the term CSR, the link between the karma as espoused by sacred Indian texts and initiatives anchoring corporate as responsible citizens has been amply evident in India since the early days. This is widely divergent from the perspective of corporate social responsibility in Western economies as reflected in the observation by Arthur Page, vice president of public relations at AT&T for around 20 years and former advisor to the US President: all business in a democratic country begins with public permission and exists by public approval. Viewed from this perspective, public relations professionals are the custodians of trust for the corporate world. While the global spotlight today focuses on debates on corporate trust, India can proudly flaunt a head start in this arena. Yet, before we present Indias case, lets briefly scan some recent happenings, particularly in the US, that led to an erosion of trust in Corporate Inc. worldwide. Erosion of Trust in Corporate Inc.: The turn of the millennium has witnessed mammoth bankruptcies, accounting scandals and obstruction of justice allegations. The consequent tarnishing of gilt edged names like Enron, WorldCom, Xerox, Arthur Andersen, Kodak, to name a few, has had widespread ripple effects in the corporate world. Yet news continues to pour in KPMG, the big accounting firm, agreed to pay $200 million in suits arising from audits of Rite Aid and Oxford Health Bristol Myers, the pharmaceutical giant, inflated sales by $2.75 billion in 1999-2002. The National Association of Securities Dealers (NASD) has charged an executive of CSFB with fraudulent allotment of hot IPOs to 300 of his corporate executive friends, to persuade them to prefer CSFB for their investment banking business.
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The new management of Tyco, whose CEO and CFO are under criminal prosecution for frauds totaling $600 million, is discovering more new scandals. Health South has been charged with an accounting fraud of $1.4 billion by inflating insurance claims. There are a number of suits, in what could turn out to be the biggest case, against Citigroup, J P Morgan and other investment banks for helping Enron and other companies to commit fraud, and for rigging IPOs to defraud the investing public. Needless to say, this is hardly an exhaustive list. The repercussions have been immense. According to a survey by Business Week, 92% of respondents have only some or hardly any confidence left that the market treats individual investors fairly. Some 93% have only some or hardly any confidence in those who run big companies. About 95% feel the same way about big auditing companies, such as Arthur Andersen. Some 82% are either not too confident or not at all confident that corporations accurate ly report how much money they make. And few of the respondents really believe that anyone can or will do much about all this. For instance, 94% have only some or hardly any confidence that Congress can write effective rules governing corporate financial practices. Some 93% have the same view of the chances that federal regulatory agencies can do the job. And 60% strongly disagree that corporations can successfully reform themselves. According to another survey by Business for Social Responsibility, a global organization, 90 per cent of American respondents want companies to look beyond the bottom line. BSR also found that nearly 50 per cent form an impression of a company based on its behavior and 39 per cent react negatively to a company that is perceived not to be socially responsible. These are challenging times for companies, pension funds and individual investors. The Teacher Retirement System of Texas and the Texas Employee Retirement System is the last fund that you would expect to be impacted by corporate scandal. But look again. With approximately $100 billion to protect, they have to make wise investment choices for their members. Both funds invested in Enron, and both talk about their losses on their respective websites. In the communications business, we confront the challenge of this changing environment every day. We see stakeholders hold companies under the magnifying glass, checking accountability, monitoring performance and assessing a companys impact in a community or on the
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environment. We have seen and continue to see how this intense scrutiny has affected businesses. India too has seen some repercussions of the global mood: There has been a general mood breeding a lack of trust in regulators following recent scams unearthed in the Indian stock markets. The brooding has had its fallout on unsuspecting companies, as ICICI Bank, one of the countrys largest banks, would confirm. A short message service that the bank was on the verge of bankruptcy started the run, gathered momentum as messages were flashed across cell phone networks, ICICI Bank branches across many cities witnessed the unedifying spectacle of queues of people waiting to withdraw their money as fast as they could. The Reserve Bank of India had to step in to calm things down. The importance of trust Research by Burson Marsteller, called Building CEO Capital reveals dramatic findings. After speaking with more than 1,100 business influential CEOs and other senior executives, financial analysts, institutional investors, the business media and government officials in the United States the research infers that the CEOs reputation is a key factor in a companys reputation. In fact, the research data reveals that: CEO reputation accounts for a staggering 48 per cent of a companys reputation Companies whose CEOs were rated most admired achieved a 13 per cent compound annual shareholder return over a three-year period. Companies with CEOs who were rated less favorably delivered a negative return. Eighty-eight per cent of respondents said that the CEOs reputation would influence whether they would recommend a company as a good place to work. Ninety-four per cent would believe the company if under media pressure. Ninety-two per cent would maintain confidence in the company when share price is lagging. The rise in the number, influence and sophistication of non-governmental organizations that monitor, track and inspect global corporate players. Less than 30 years ago, there were 1,400 NGOs. In 1995, there were nearly 30,000. Today that number has grown 10 fold. An increase in shareholder activism. Of the more than 700 shareholder resolutions filed in the US in 2002, more than a third of them were based on social issues. Greater disclosure requirements of social and environmental performance as part of their new economic regulations by Governments, particularly in Europe.
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Just three years ago, the concept of triple bottom line reporting that means assessing and providing an accounting of a companys social, environmental and economic impact and performance was embraced by only an enlightened few. Today, such reporting is embraced by the majority to prove they are acting responsibly. Respect is, in some ways, an intrinsic part of Indian culture. The Indian ritual of touching the feet of elders is a good example of how respect manifests itself in everyday life. This transcends into the corporate world. For decades now, since Independence, corporate majors such as the Tata and Birla group companies have led the way in making corporate social responsibility an intrinsic part of their business plans. These companies have been intensely involved with social development initiatives in the communities surrounding their facilities. Jamshedpur, one of the prominent cities in the northeastern state of Bihar in India is also known as Tata Nagar and stands out at a beacon for other companies to follow. Respect is a much sought after tag in the Indian corporate world. This is one of the reasons for the immense popularity of The Most Respected Companies of India survey, initiated by one of Indias premier business magazines, Business World in 1983, long before skeletons began toppling out of the corporate closets around the globe. In fact, the magazine admitted in a cover feature following its first survey that the overwhelming reader response to its first ever ranking of corporate reputations indicated that there is a great deal of interest within the management community in the subject of corporate reputations and that this interest was more than academic.

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KEY DRIVERS OF CSR:

(Source: Corporate Social Responsibility Survey 2002 India, United Nations Development Program, British Council, CII, PriceWaterHouseCoopers)

15

Areas of CSR addressed in corporate policies

(Source: Corporate Social Responsibility Survey 2002 India, United Nations Development Program, British Council, CII, PriceWaterHouseCoopers)

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THE TOP 10 BENEFITS OF ENGAGING IN CORPORATE SOCIAL RISPONSIBILITY: 1. Increased profit: Several studies have shown a direct correlation between socially responsible business practice and positive financial performance. A 1997 DePaul university study found that company with a defined corporate commitment to ethical principle do better financially than companies that dont. An 11-year hazard university study found that stakeholder-balanced companies showed four times the growth rate &8 times the employment growth when compared to companies that are shareholder-only focused. 2. Access to capital: Companies that are committed to CSR often have accessed to capital that would not otherwise be available due to increase in socially responsible investment (SRI). A 2001 study showed that 12% of total investment in the USA was of the socially responsible nature. 3. Reduced operating costs/increased operational efficiency: Contrary to widely-held improved environmental management system do not automatically result in greater cost. Over time, they improve official efficiency by reducing waste production and water usage, increasing energy efficiency and in some cases, selling recycled materials. There are also the company specific ways of reducing operating costs e.g. Dow chemical co. has set themselves a target of reducing production of 26 toxic chemicals which will save them 5.4 million Euros per year-2.3 million Euros more than was spent on the initial investment to do so. By considering impacts, a companys action can result in environmental, social and economic benefits. Construction firms, for example reducing products on-site: reduced landfill, reduced community and noise disturbances of additional trucks bringing materials to site, reduced the environmental impact of damaged caused by heavy trucks wheels and reduced cost for the client of buying new materials.

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4. Enhanced brand image and reputation A good reputation is often very hard to build and yet can be destroyed in less than a day. So much of a companys reputation results from trust by stakeholders. A strong reputation in environmental and social responsibility can help a company build this trust. However, it need to result from real practices and can see through fluff. Non Government organization (NGOs) and local communities are far more willing to not take action as a result of environmentallydemanding incident if it is evident that the company has genuinely worked hard to prevent it happening in the first place, and in place solid management practice for rectifying the situationquickly-and for learning and improving to prevent repeat occurrence. 5. Increased sales and customer loyalty: Research has shown that consumer not only want good and safe products, but they also want to know that what they buy was produced in a socially and environmentally responsible way. A CSR study in Europe in 2000 showed that 70% of European consumers say that a companys commitment to car is important when buying a product and 1 in 5 would be willing to pay more for products that are socially and environmentally responsible. Conversely 1 in 6 shoppers frequently boycott products because of the manufactures reputation. Likewise car can lead to new products lines. As Dr Richard steckel and robin Simons pointed out in their book doing best by doing good. F. Schumacher & co products high quality fabrics wall covering and carpets which are sold through interior designer to residential and commercial costumer. In 1984 when Schumacher wanted a new product line, the company went to the national trust for historic presentation. The trustlicensed Schumacher to reproduce fabric patters and artifacts found in the buildings. our company benefits because we are able to replicate the fine design of the past artists and we are permitted to create new designs based on traditional elements, said Robert herring vice president of the designer relations. The national trust benefits by receiving operating income from the royalties. 6. Increased productivity and quality: Business for the social responsibility id the membership for the organization based in san Francisco that helps companies to improve their CSR learning, management and activities. they
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say company efforts to improve working condition lessen environmental impacts or increase employee involvement in the companys decision making often lead to the increased

productivity and reduced error rate. For example companies that improve working condition and labour practices among their suppliers often experience a decrease in merchandise that is defective or cant be sold. 7. Increased ability to attract and retain employees: A companys dedication to CSR can helped to attract and retain employees. People want to work for a company that is in accordance with their on values and beliefs. Employees are not just worried about promotion and salary any more. Since novo Nordisk launched their values in action program which aligns their business objectives with sustainable development they have seen a 5%drop in staff turns over. 78% of employees would rather work for an ethical and reputable company than receive a higher salary. 8. Potentially, reduced regulatory oversight: The more a company shows it is committed to CSR by complying with an going beyond legislation the more lenient governments and regulators may be with the company. they may be given preferential treatment when appalling for permits or permission to do something, and if an accident occurs will be regarded more favorably if they have been transparent and socially responsible in the period running up the accident/incident. 9. Reducing risk and increased risk management: The more the company is committed to CSR the less they are exposing themselves to business risk. This could be reputation risk following bad press, e.g. the highly publicized Nike Sweatshops, financial risk or the environmental risk. Morley fund management for e.g. Has produced environmental reporting guidelines outlining the type of information it expects companies to include in their reports.(they have introduced a requirement for company to disclose their approach to managing their environmental impact). 10. Keeping up with competitors and where the market is:

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This is where business is heading: the world over regardless of the regional culture. The UK, Denmark, France, and other areas in Europe; the USA, Canada India, South Africa, china are the countries that come to mind immediately when discussing the weather and how companies are embracing the concept of the corporate social responsibility. There are other four all starting point are often different. some are driven by regulation and legislation , others are driven by self regulation. Government, the city investors, local communities and suppliers are all putting pressure on companies to live up to their expectation of the company in the society and in the environment. Outcomes of CSR Some of the positive outcomes that can arise when businesses adopt a policy of social responsibility include: Company Benefits: Improved financial performance Lower operating costs Enhanced brand image and reputation Increased sales and customer loyalty Greater productivity and quality More ability to attract and retain employees Access to capital Product safety and decreased liability Benefits to the community and the general public: Charitable contributions Employee volunteer programs Product safety and quality Corporate involvement in community education, employment and homelessness programs Environmental benefits:
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 Greater material recyclability Better product durability and functionality Greater use of renewable resources Integration of environmental management tools into business plans Business importance of CSR: Importance of CSR to a companys activities Improved financial performance Reduced Operating Costs Enhanced Brand Image and Reputation Increased Sales and Customer Loyalty Increased productivity and quality Increased ability to attract and retain employees Reduced regulatory oversight Drivers of CSR: The shrinking role of government Demands for greater disclosure Increased customer interest Growing investor pressure Competitive labour markets

METHODS OF CSR REPORTING Moon (2002) distinguishes three types of CSR reporting community involvement, socially responsible production processes and socially responsible employee relations. During the initial stages of development of CSR in emerging economies, the community involvement is more along the lines of a philanthropic involvement with company involvement limited to
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developing minimal or rather the absolutely necessary amount of communal goodwill necessary to operate in the business environment. As compared with the developed countries like US, CSR in developing countries is seen as part of corporate philanthropy where corporations augment the social development to support the initiatives of the government. However in the US it is seen as a strategic tool which helps the organizations to have a legitimate existence in the society. CSR is considered inbuilt in the business existence of the traditional firms in the emerging markets like India (Mohan, 2001). However, trends in this regard are heartening with companies trying to establish strategic alliances with the state and the civil society thus establishing the presence of CSR as an institution in these markets. The remaining parameters are internal to the firm involving the molding of their business activities while incorporating CSR practices. As companies start to embrace CSR practices to a greater extent, it leads to changes in production processes so that all environmental and societal norms are also satisfied even though they may not contribute to the profit maximizing objective of the firm. This will mean that human rights agreements are also upheld taking into account the rights of the local communities. CSR also leads to evolution of employee relations in the company in such a way that employees become major stakeholders with definite decision making powers especially in the area of formulation of CSR policy. The results of the comparative study of these parameters by Chambers, Chapple, Moon and Sullivan (2003) show that currently Asian nations are still faring strongly only in the first parameter of community involvement thus corroborating the similar findings of Moon (2002).

GENERATIONS OF CSR CSR theme has been researched since the 1950s. Notwithstanding the fact that business produces goods and services that society needs, there is also interdependence between business and society as an ongoing process. Increasingly, up to the 1970s the understanding of CSR focused on companies obligation to work for social betterment. However, since the 1970s focus shifted to social responsiveness--- in other words, the capacity of organizations to respond to social pressures. With the change in the

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managerial approach, CSR has now developed and become more main stream and leadership roles for initiating a wide variety of CSR activities have been crystallized and highlighted. Simon Zadek (2001) describes the development of CSR broadly in terms of three generations. The first generation of CSR showed that companies can be responsible in ways that do not detract from commercial success. The most prominent changes include adoption of a strategic approach to philanthropy, expansion of the geographic focus of corporate, and evolving of measurement tools. The Second Generation is focusing on CSR as an integral part of long-term business strategy. (D.E. Schended& C.W Hofer 1979) A Third Generation of CSR is expected to make a significant contribution to address issues such as poverty, exclusion and environmental degradation. This will involve both partnerships with civil society and changes in public policy. (Mandatory social and environmental reporting and support for consumer education, among other (Zadek 2001). Arguments for CSR: Those who argue in favor of organization in socially responsible ways offer many reasons, such as: Balancing corporate power with corporate responsibilities. Discouraging the creation and imposition of government regulations. Focusing on social problems.

Arguments against CSR: Organizations fulfill certain needs of society, and it is feasible for civil society to benefit from the activities of an organization. Some arguments against CSR are: Stakeholders bear the costs of corporate social action (shareholders, employees and consumers), which affect a corporations operating efficiency and weaken competitive position and advantage. Mismatch of the roles and expectations between the organization and society.
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The prospects of corporations becoming even more powerful, as they may already exercise considerable power over society.

Management is trained in functional areas of management and does not have generic in handling society issues.

THEORIES AND MODELS Different Models of CSR Ethics and CSR: Business Ethics is an academic field unto itself. According to Fieser (2001), business ethics examines moral controversies that commonly arise in the business world. Resolving ethical conflicts needs to take into account legal and moral aspects. The operationalization of business ethics is related to other forms of CSR, such as articulation and integration of core values, stakeholder interactions, social audit and other forms of socialperformance measurement and reporting (Business for Social Responsibility, 2001). Altruistic CSR The terms altruistic or humanitarian CSR involves possible personal or organizational sacrifice. Humanitarian CSR is Carrolls fourth face of CSRphilanthropic responsibilities: the implied concept of corporate citizenship fundamental to the notion of giving back to society. (Brenkert, 1996) Strategic CSR: Strategic CSR or strategic philanthropy (Carroll, 2001) is done to accomplish strategic business goals. Such strategic philanthropy grew popular around the mid-1980s. Carroll, (2001) expects it to grow in the years ahead. Socially responsible behavior involves sacrifices. Political Theory of Corporate Social Responsibility
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The political theory of corporate social responsibility is based on assumptions about the motivations of public officials and corporations. Political decision-makers orient their behavior towards constituencies that can provide valuable resources. Elected officials seek resources that can help them get reelected. Appointed officials seek political support to perform their jobs effectively. Society Contract Theory The earliest elements of the notion of the existence of a social contract are found in Platos The Republic. However, the Social Contract Theory developed in the 17th century through Thomas Hobbes Leviathan. Philosophers such as John Locke (1632-1704) and Jean-Jacques Rousseau (1712-1778) later expanded on Hobbes work and developed it towards different directions. A social contract, with implicit and explicit terms, is conceived to exist between the organization and the public at large, not just merely its shareholders. Friedman (1962) prescribed that an organizations sole responsibility was to maximize profits for shareholders. In the past, a firms profits were viewed as a measure of legitimacy. Stakeholders Theory Stakeholder theory, which McWilliams (2001) called the dominant paradigm in CSR, originated in response to one of CSRs most noteworthy critics, eminent economist Milton Friedman. In 1984, Freeman focused on the stakeholder view and propounded six categories: owners, employees, customers, suppliers, communities and governments. Other scholars have since included the natural environment as an additional stakeholder (Carroll and Buchholz, 19992000). Donaldson and Preston (199%) created a well-known stakeholder theory typology to argue for stakeholder engagement as an essential management tool. Economic Theory of Self Regulation In addition, certain CSR activities represent corporate self-regulation. In general terms, these most commonly are environmental and ethics efforts.

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A more specific list of self-regulatory activities would include: The adoption of business ethics codes or codes of conduct; efforts to ensure racial, ethnic, and gender diversity; transparency and accountability measures; compliance with labor laws and protection of human rights. The Neoliberal, Neo-Keynesian and Radical Political Economy Approaches. In defining CSR, neoliberal writers tend to see it fundamentally as the adoption of a set of voluntary policies, codes or guidelines, initiated and driven by the corporation. For example, the Australian Treasury, in a Submission to the Joint Parliamentary Inquiry on CSR, defined CSR as a companys management of the economic, social and environmental impacts of its activities (Australian Government, Parliamentary Joint Committee on Corporations and Financial Services 2006) The neoliberal discourse around CSR generally shares the view articulated by Milton Friedman in the New York Times on September 13, 1970: there is one and only one social responsibility of business-to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud. GLOBALIZATION AND CSR Traditionally, the role of the corporation has been understood primarily in economic terms. Companies provide products and services and, in doing so, they create jobs and wealth. Increasingly, stakeholders (shareholders, investors, communities, regulators, employees, customers and non-governmental organizations) are taking a broader perspective of corporate responsibility that incorporates not only economic performance, but also social and environmental performance factors. In the 1970s, it was the growing economic and technological power of US industry, however in the 1990s; European industry is ready to challenge the US via the CSR route. THE UN GLOBAL COMPACT

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In 1999, Kofi Annan, UN Secretary General provided certain principles by way of Global Compact. These principles focus on labour standards, human rights and environmental protection. The UK Government has strongly supported the Compact from the outset, as an incentive to the private sector to pay its part in economic development, while being accountable against universally recognized principles. Several leading UK companies, including Shell, BP, Rio Tinto, BG Group and Unilever, have signed up the Compact. SOCIAL ASPECTS OF CSR Social CSR aspects are as follows: Human rights Labor Consumer protection Respect for national sovereignty and local communities

ROLE OF GOVERNMENT IN CSR The governments approach to promoting CSR should seek to mainstream CSR within community policies, engage the public and private sectors and promote greater transparency in the marketplace. The Governments approach to CSR should centre around productivity and competitiveness and on achieving transparency in the market to promote an effective dialogue with stakeholders. ROLE OF NGOs IN CSR Individuals and the institutions in their interactions need to take into account the potential effects of their exchange. The broader view of CSR is applicable to government, medial, industry, NGOs and other variety of social institutions. The new focuses on the need for socially driven investments, consistency in profits, fair wealth distribution and good governance. NGOs are actively intervening by way of stakeholder and community engagement action programmers.
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CSR MAIN COMPONENTS The scope of CSR is conceptually quite unbound at the present time. The debate between the private sector, civil society and governments focuses on a few key issues. As there is no single, commonly accepted definition of CSR, there is also no commonly accepted classification of the main components of CSR. Often, CSR is related to

ENVIRONMENTAL PROTECTION The focus is on finding sustainable solutions for natural resources use to reduce companys impact on the environment. Over the past several years, environmental responsibility has expanded to involve substantially more than compliance with all applicable government regulation or even a few initiatives such as recycling or energy efficiency. Many citizens, environmental organization and leadership companies now define environmental responsibility as involving a comprehensive approach to a companys operation, maximizing the efficiency and productivity of all assets and resources; and minimizing practices that might adversely affect the enjoyment of the planets resources by future generations. LABOR SECURITY It includes freedom of association and the effective recognition of the right to collective bargaining; the elimination of all forms of forced and compulsory labor; the effective abolition of child labor; and the elimination of discrimination in respect of environment and occupation. HUMAN RIGHT Business practices can profoundly affect the rights and communities. The main focus is on developing workplaces free from discrimination where creativity and learning can flourish decent codes of professional conduct and where a proper balance can be maintain between work and other aspects of our lives. Behaving irresponsibly on the issue of the issue of human right could be costly because their reputation and bottom line is at stake. This is also related to globalization and increasing international trade and challenge of findings ways of doing business world wide that respect human right and social justice and facilitate the appropriate development of the emerging economies. Countries are expected to support and respect the
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protection of international human right within their sphere of influence; and sure their own corporation is not complicit in human right abuses. So socially responsible management practices may contribute directly to profits. COMMUNITY INVOLVEMENT It includes: community partnership, employee giving, global community involvement, philanthropy, product and services donation, release time, volunteerism etc. corporate community involvement refers to a wide range of actions taken by companies to maximize the impact of their donated money, time, products, services, influence, management knowledge and other resources on the communities in which they operate. When strategically designed and executed, these initiatives not only bring values in local communities where they have significant commercial interests as well as around the world. BUSINESS STANDARDS Cover a broad area of corporate activities such as ethics, financial returns, environment protestation, and human rights and labor standards. The standards are usually accepted at corporate, business association, industry or country level. The risk of international trade, globalization, and instant communication has led to increasing pressure from various groups for the formation of global business conduct standards. Can compliance with a global standard be audited? And if so, who, if anyone, should monitor compliance? Source: UNCTAD, Foreign direct investment and the challenge of development, World investment report, 1999. MARKET PLACE Marketplace issues, as they relate to corporate social responsibility, extend across a wide range of business activities that define a companys relationship with its customers. These activities may be grouped into six categories; (1) product manufacturing and integrity; (2) disclosure, labeling and packaging; (3) marketing and advertising; (4) selling practices; (5) pricing; and (6) distribution. In each of these areas, companies are retooling their business strategies to address new issues such as privacy and technology, marketing to children, heightened expectations for product safety and environmental impact, increased scrutiny by consumers and non governmental organization, and the steady globalization of the consumer movement. ENTERPRISE AND ECONOMIC DEVELOPMENT
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This broad concept includes: competitiveness, development of local Sees, entrepreneurship, community economic development, micro finance in emerging economies etc. the drive of entrepreneurs in developing countries can provide the catalyst to life and economy onto an upward growth spiral. In many cases, however, the lack of an enabling business framework and a scarcity of support structures for new businesses can work their wealth of financial, technical, and managerial expertise, are being called upon to provide a focal point of support for local businesses. At the same time, Macs can work to help governments understand the ways in which an enabling business framework can be developed to fuel domestic entrepreneurial efforts. HEALTH PROMOTION The workplace is now recognized as an important setting for health promotion in industrialized countries, and interest is growing in the wider role that business can play as a partner in health development. Private sector business plays a dominant role as the driver of current global economic development, and globalization is bringing new social and economic challenges. for those concerned with promoting well being, it is essential that policies and programs are adjusted to address this new reality and that the business community is, as far as possible, engaged as a partner in the promotion of well being. World Health Organization director general to the 51st world health assembly in 1998, grow Harlem bundled indicated a signification shift in World Health Organizations policy towards engaging the private sector when she: we must reach out to the private sector The private sector has an important role to play both in technology development and the provision of services. EDUCATION AND LEADERSHIP DEVELOPMENT As education is one of the key elements of sustainable development and pro poor growth, business, working together with public sector and civil society, can make an important contribution to providing an access to quality education for all. Companies can also make more critical impact on the development process by raising standards in corporate education and leadership development, and bringing best practices to their partners in developing and transitional economies.

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HUMAN DISASTER RELIEF Companies, in co operation with public sector, civil society, and international organization, have played an important role in supporting humanitarian relief operations. Due to the rising cost, threat and complexity of the consequences of major disasters on society, the key players to utilize more development oriented approach. CORPORATE CITIZENSHIP Corporate citizenship goes beyond philanthropy. It requires organizations to be actively involved in the process of social and community development. Corporate activities in this area should complement and supplement government action and not substitute it. It is widely understood that being a good corporate citizen also makes good business sense. EMERGING AREAS OF CORPORATE SOCIAL RESPONSIBILITY There are several emerging areas of corporate social responsibility social responsibility, business responsibility, environmental responsibility and stakeholder involvement. Areas of social responsibility include respecting human rights, contributing to social economic development, employee welfare this include right to organize, eliminating child labour, non discrimination, living wage and social security, training, safety, health and well being, lifelong learning, empowerment of employees etc. Consumer protection includes right to information. Respect for national sovereignty and local communities for multinationals. Sharing resources with underprivileged communities and investing in sustainable development programs for the community. Areas of environmental responsibility include respect for environment and environment friendly technologies, conservation and discharge of energy, material and water in eco-friendly manner, adopting preventive and precautionary measures for environment pollution control, rectifying environmental damage at source, treating waste before disposing it, preservation of bio diversity, promoting and implementing an environmental policy for sustainable energy and environment.

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Areas of business responsibility includes compliance with tax laws and other regulations, investing in developing science and technology, fostering ethical trade practices, regulating suppliers CSR practices and distributors CSR practices and transparent financial reporting. Areas of corporate social responsibility include extension of principles and ethical values enshrined in organization to all its stake holders such as authorities, customer group, business partners and external influences. CORPORATE VOLUNTEERING The voluntary work of employees (often members of management) of a corporation to the benefit of local communities, primarily in the sphere of social services and education, is called corporate volunteering. Mainly because of the bad memories of mandatory volunteering during the reign of totalitarian governments, this form of corporate engagement in new EU countries, as compared to the EU-15 countries, is having a hard time ending its place. However, employee volunteering can serve as an interesting team building tool. RECENT CSR INITIATIVES An increasing number of companies are adopting a variety of voluntary initiatives associated with codes of conduct, improvements in environmental management systems and occupational health and safety, company reporting on social and environmental policy and performance, participation in certification and labeling schemes, an increase in corporate social investment in, for example, community development projects, and philanthropy. More recently, there has been an upsurge of international multi stakeholder initiatives, involving a combination of business interests, NGOs, trade unions, and bilateral and multilateral organizations, which set standards and promote monitoring, reporting and/or certification. (The World Summit on Sustainable Development, Johannesburg 2002)

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MYTHS OF CSR CSR strategies may work under certain conditions, but they are highly vulnerable to market failures, including such things as imperfect information, externalities, and free riders. Most importantly, there is often a wide chasm between what's good for a company and what's good for society as a whole. The reasons for this can be captured under what I'll argue are the four key myths of CSR. Myth 1: The market can deliver both short-term financial returns and long-term social benefits. One assumption behind CSR is that business outcomes and social objectives can become more or less aligned. The rarely expressed reasoning behind this assumption goes back to the basic assumptions of free-market capitalism: People are rational actors who are motivated to maximize their self-interest. Since wealth, stable societies, and healthy environments are all in individuals' self-interest, individuals will ultimately invest, consume, and build companies in both profitable and socially responsible ways. In other words, the market will ultimately balance itself. Yet, there is little if any empirical evidence that the market behaves in this way. In fact, it would be difficult to prove that incentives like protecting natural assets, ensuring an educated labor force for the future, or making voluntary contributions to local community groups actually help companies improve their bottom line. While there are pockets of success stories where business drivers can be aligned with social objectives, such as Cisco's Networking Academies, which are dedicated to developing a labor pool for the future, they only provide a patchwork approach to improving the public good. In any case, such investments are particularly unlikely to pay off in the two- to four-year time horizon that public companies, through demands of the stock market, often seem to require. As we all know, whenever a company issues a "profits warning," the markets downgrade its share price. Consequently, investments in things like the environment or social causes become a luxury and are often placed on the sacrificial chopping block when the going gets rough. Meanwhile, we have seen an abject failure of companies to invest in things that may have a longer-term benefit, like health and safety systems. BP was fined a record $1.42 million for
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health and safety offenses in Alaska in 2004, for example, even as Lord John Browne, chief executive of BP, was establishing himself as a leading advocate for CSR, and the company was winning various awards for its programs. At the same time, class-action lawsuits may be brought against Wal-Mart over accusations of poor labor practices, yet the world's largest and most successful company is rewarded by investors for driving down its costs and therefore its prices. The market, quite frankly, adores Wal-Mart. Meanwhile, a competitor outlet, Costco, which offers health insurance and other benefits to its employees, is being pressured by its shareholders to cut those benefits to be more competitive with Wal-Mart.3 CSR can hardly be expected to deliver when the short-term demands of the stock market provide disincentives for doing so. When shareholder interests dominate the corporate machine, outcomes may become even less aligned to the public good. As Marjorie Kelly writes in her book, "The Divine Right of Capital": "It is inaccurate to speak of stockholders as investors, for more truthfully they are extractors." Myth 2: The ethical consumer will drive change. Though there is a small market that is proactively rewarding ethical business, for most consumers ethics are a relative thing. In fact, most surveys show that consumers are more concerned about things like price, taste, or sell-by date than ethics.5Wal-Mart's success certainly is a case in point. In the United Kingdom, ethical consumerism data show that although most consumers are concerned about environmental or social issues, with 83 percent of consumers intending to act ethically on a regular basis, only 18 percent of people act ethically occasionally, while fewer than 5 percent of consumers show consistent ethical and green purchasing behaviors. In the United States, since 1990, Roper ASW has tracked consumer environmental attitudes and propensity to buy environmentally oriented products, and it categorizes consumers into five "shades of green": True-Blue Greens, Greenback Greens, Sprouts, Grousers, and Basic Browns. True-Blue Greens are the "greenest" consumers, those "most likely to walk their environmental talk," and represent about 9 percent of the population. The least environmentally involved are the "Basic Browns," who believe "individual actions (such as buying green products or recycling) can't make a difference" and represent about 33 percent of the population.7
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Joel Makower, co-author of "The Green Consumer Guide," has traced data on ethical consumerism since the early 1990s, and says that, in spite of the overhyped claims, there has been little variation in the behavior of ethical consumers over the years, as evidenced by the Roper ASW data. "The truth is, the gap between green consciousness and green consumerism is huge," he states.8 Take, for example, the growth of gas-guzzling sport-utility vehicles. Even with the steep rise in fuel prices, consumers are still having a love affair with them, as sales rose by almost 8 percent in 2004. These data show that threats of climate change, which may affect future generations more than our own, are hardly an incentive for consumers to alter their behavior.9 Myth 3: there will be a competitive "race to the top" over ethics amongst businesses. A further myth of CSR is that competitive pressure amongst companies will actually lead to more companies competing over ethics, as highlighted by an increasing number of awards schemes for good companies, like the Business Ethics Awards, or Fortune's annual "Best Companies to Work For" competitions. Companies are naturally keen to be aligned with CSR schemes because they offer good PR. But in some cases businesses may be able to capitalize on well-intentioned efforts, say by signing the U.N. Global Compact, without necessarily having to actually change their behavior. The U.S.based Corporate Watch has found several cases of "green washing" by companies, and has noted how various corporations use the United Nations to their public relations advantage, such as posing their CEOs for photographs with Secretary-General Kofi Annan.10 Meanwhile, companies fight to get a coveted place on the SRI indices such as the Dow Jones Sustainability Indexes. But all such schemes to reward good corporate behavior leave us carrying a new risk that by promoting the "race to the top" idea, we tend to reward the "best of the baddies." British American Tobacco, for example, won a UNEP/Sustainability reporting award for its annual social report in 2004.11 Nonetheless, a skeptic might question why a tobacco company, given the massive damage its products inflict, should be rewarded for its otherwise socially responsible behavior.

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While companies are vying to be seen as socially responsible to the outside world, they also become more effective at hiding socially irresponsible behavior, such as lobbying activities or tax avoidance measures. Corporate income taxes in the United States fell from 4.1 percent of GDP in 1960 to just 1.5 percent of GDP in 2001.12 In effect, this limits governments' ability to provide public services like education. Of course, in the end, this is just the type of PR opportunity a business can capitalize on. Adopting or contributing to schools is now a common CSR initiative by leading companies, such as Cisco Systems or European supermarket chain Tesco. Myth 4: in the global economy, countries will compete to have the best ethical practices. CSR has risen in popularity with the increase in reliance on developing economies. It is generally assumed that market liberalization of these economies will lead to better protection of human and environmental rights, through greater integration of oppressive regimes in the global economy, and with the watchful eye of multinational corporations that are actively implementing CSR programs and policies. Nonetheless, companies often fail to uphold voluntary standards of behavior in developing countries, arguing instead that they operate within the law of the countries in which they are working. In fact, competitive pressure for foreign investment among developing countries has actually led to governments limiting their insistence on stringent compliance with human rights or environmental standards, in order to attract investment. In Sri Lanka, for example, as competitive pressure from neighboring China has increased in textile manufacturing, garment manufacturers have been found to lobby their government to increase working hours. In the end, most companies have limited power over the wider forces in developing countries that keep overall wage rates low. Nevertheless, for many people a job in a multinational factory may still be more desirable than being a doctor or a teacher, because the wages are higher and a worker's rights seem to be better protected.

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LIMITATIONS OF APPROACHES TO CSR We have mentioned a number of initiatives and actins by the governments and corporations in the developed countries as also how several other developing economies are emphasizing the CSR route to economic development. The CSR approaches since the 1990s have become: inclusive in the sense that multi stakeholder initiatives are being adopted to promote the concept and practices of introducing and managing CSR programs. Large corporations are increasingly recognizing the need for corporate social action in the wake of consumer movements and demands of the civil society. CSR is being interpreted as good corporate governance and the need for good governance could hardly be overstressed. NGOs, trade unions and multilateral institutions are emphasizing adoption of codes and standards to promote monitoring and certification, of which the Global Reporting initiative is one example. The issues involved in encouraging and institutionalizing public-private partnerships are also debated world-wide. While the need for newer and innovative measures to assess the impact of CSR programs on the society and community is stressed, we have yet to achieve significant progress in this regard. On the one hand, large corporations have not much difficulty in committing some resources towards promotions of CSR, on the other, the execution of multifarious schemes of CSR and their monitoring and evaluation raise some fundamental concerns. CSR is not the core competence of the corporate planners and top executives of the large corporations regardless of their ownership. It is necessary to have an assessment if the government and various institutions are to be committed to durable public-private partnership. One of the limitations of the approaches to promoting CSR has been the relative lack of clarity of the definition of CSR and the models of CSR to be adopted by the companies. The net result is that regardless of ownership, the large corporations are undertaking multifarious activities, without developing the core competency and adopting adequate institutional safeguards to ensure an appropriate framework for CSR implementation. The second limitation is that many corporations, especially the public enterprises, who are ready to engage in CSR as it is being mandated by the Government, are not in a position to determine what segments of socially responsive investment they should commit themselves to. They are on the lookout for project ideas and they may hold dialogues with the NGOs and other organizations as an exploration but they may not get much out of such an exercise because of
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inadequate focus on the agenda building and agenda ownership process. One of the consequences is that the corporations prefer the existing product-existing market model and therefore, adopt the measures and social action programs that the other corporations are implementing. This is turn shows a relative lack of measures to innovate and evolve newer CSR leadership roles. The preference for standardized approaches does not allow opportunities to the corporations to adopt local approaches. Also in this process the public-private partnerships may leave out a significant segment of the small and medium enterprises that may often bear the brunt of implicit costs of CSR programs adopted by the mega corporations. The World Bank research has classified public sector engagement into mandating, facilitating partnering, and endorsing, and in performing each of these roles the enterprises will need to move beyond compliance mindset. In the mandating role, the key areas are: control legislation, regulation, legal and fiscal penalties and rewards; in the facilitating role the key areas are: enabling legislation, creation of incentives, in partnering, and the focus is on: combining resources, raising resources and dialoguing; and in the endorsing arena the focus is on: obtaining political support and undertaking publicity measures. (Tom Fox , Halina Ward, and Bruce Howard, 2002) According to the World Bank study cited above, some of the key constraints in the public sector roles are: lack of capacity to negotiate and implement projects, integrating CSR with the regional schemes, lack of engagement with processes and guidelines, weak institutional infrastructure and weak organized labor, among others. The third question that needs to be addressed is the need for capacity building in corporations that are seriously pursuing corporate social action on a long-term basis. The skills, knowledge, and attitudes required for planning CSR approaches, implementing the same, and evaluating various outcomes are just not available in corporations. The operating executives would need training and development programs and possibly a long-term engagement with a reputed CSR practitioner and/or consultant in order to professionalize the activity. A related question is internal stakeholder involvement in the proposed and/or ongoing/CSR activities. Unless the internal stakeholders subscribe to the concept and practices of CSR, it would be very difficult to
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undertake extensive schemes of CSR promotion for the external constituencies of the civil society. Last but not the least, large corporations in order to engage in a durable public-private partnering process should develop a focus and not attempt a generic, all-inclusive variety of CSR role and function, Within the public policy framework in a given country, a corporation needs to identify areas of interest and capability to take up CSR in a focused manner. One of the main difficulties in countries like India is that while competition is somewhat easier, the institutions and enterprise find it very difficult to collaborate because of various reasons. In part, this is attributable to the lack of open communication on and knowledge of CSR within and outside corporations; therefore, in other words, there are issues of mindset and culture which are fundamentally more important. It is in such a context that in countries like India we need to endorse and encourage the recent practice by some leading public and private corporations appointing specialist in CSR as a part of the top management team for introduction and management of the CSR roles and functions.

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RESEARCH METHODOLOGY
TITLE:CORPORATE SOCIAL RESPONSIBILITY: As Perceived by Corporate & Beneficiaries. SUBTITLE:A study on Corporate Social Responsibility of 4 corporate and 60 beneficiaries of Petrochemical area in Vadodara OBJECTIVES:1. To study the CSR activities done by the companies around Petrochemical Area. 2. To study the views of companies towards their CSR activities. 3. To study the view of beneficiaries towards the benefits received from the CSR activities.

OPERATIONAL DEFINITIONS:1. Corporate Social Responsibility: For the purpose of this study Corporate Social Responsibility means commitment and activities done by the companies around petrochemical area to contribute to the economic and social development while improving quality of life of the local community and society at large. 2. Corporate: For the purpose of this study corporates are the 5 companies of petrochemical area in Vadodara involved in CSR activities for the nearby villages. 3. Beneficiaries: Here beneficiaries are the people of nearby villages where the CSR activities have been implemented by the corporate.

SIGNIFICANCE OF THE STUDY:The study on Corporate Social Responsibility is more relevant and worth considering in the current time wherein globally it has been an established fact that no organization can ignore the CSR. Moreover, with the introduction of Global Compact the concept of CSR has been reinforced. The modern corporation has grown phenomenally impacting various constituencies
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of civil society. The working of NGOs as well as the agencies like World Bank and other also have brought lots of awareness and need to thoughtfully to work out for CSR. The CSR is an emerging concept in Indian corporate world. The socio-economic changes, particularly in the LPG era, have brought several challenges to the business. Along with the focus on the business, the organization cannot, now ignore the need for CSR. The business organization is an integral part of the society & as it is getting too much inputs from the society as well as from the various stakeholders- viz. shareholders, customers, employees, suppliers etc; so it is a moral obligation of the business that to give returns to them in terms of doing something for the betterment of the community in which the company exists.It is also found that the business which pays attention to the social causes has been perceived with greater respect in community. There are many industrial benefits that the company could get by adopting CSR in well manner and that, ultimately leads to the development of the company as a whole. A developed company by performing social activities in the place where it is established leads to the development of the society.Further it will lead to the development of that state and ultimately it lead to the social and economic development of the nation. Thus, this study attempts to find out the views of corporates and beneficiaries regarding Corporate Social Responsibility. RESEARCH DESIGN:This study is Descriptive as it describes about the perception of Corporates and Beneficiaries towards the Corporates Social Responsibility. UNIVERSE:The Universe considered for the purpose of this study from beneficiaries includes the population of all 6 villages where CSR activities has been conducted by the Corporates.

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The Universe considered for the purpose of this study from corporate includes the 10 executives of 4 companies of petrochemical area who are involved in CSR activities of their respective companies. SAMPLE:The Sample size for beneficiaries is restricted to 60 respondents from 6 villages i.e. 10 respondents from each village. The Sample size for corporate is same as universe of corporate i.e. 10 executives of 4 companies SAMPLING METHODS:1. Stratified Random Sampling Method was used to collect the data from beneficiaries. 2. Purposive Sampling method was used to collect the data from corporate.

TOOLS OF DATA COLLECTION:1. Questionnaire is used to collect data from corporates for the purpose of this study. 2. Structured Interview schedule which includes close ended questions is used to collect data from Beneficiaries for the purpose of this study.

PRESENTATION OF THE STUDY:1. Introduction & Research Methodology 2. Review of Literature 3. Data Analysis & Interpretation 4. Findings, Conclusion & Suggestions 5. Annexure a. References b. Questionnaire c. Interview Schedule

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CHAPTER 2: REVIEW OF LITERATURE

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Over the past decade, a growing number of companies have recognized the business benefits of CSR policies & practices. Their experiences are bolstered by a growing body of empirical studies which demonstrates that CSR has a positive impact on business economic performance, and is not harmful to shareholder value. Companies also have been encouraged to adopt or expand CSR efforts as the result of pressures from customers, suppliers, employees, communities, investors, activist organizations and other stakeholders. As a result, CSR has grown dramatically in recent years, with companies of all sizes and sectors developing innovative strategies.

Books on CSR: All books are content about CSR but its not giving clear one clear definition about CSR. Most of the available literature defined CSR as complex phenomena, and regards the definition to be unpractical. None of the book gave a clear historical review on CSR when the term was started with its synonyms? The relatively short history of CSR has been nothing if not combative. In literature they have not explained an important point is that; what is CSR now? Also literature is limited only with few theories and models of CSR. Texts only defined one side of corporate strategy or activities for society which most of the corporations are doing through CSR, literature does not looking another side of capitalist business which is destroying livelihoods based on natural resources. Here it is very important to mention the name of Stephen Dunne, (2007) who has written in his paper that the very lack of clarity regarding what CSR means, has perhaps become its single greatest strength: without any formal determination or widely accepted definition, CSR has come to mean so very much. Come to the particular books which I used as a review of literature for my research purpose. The following books which are written on Corporate Social Responsibility (CSR) by different author in different ways. CSR: As a Taken for Granted or Just Do It! Philip Kotler is an author of the Corporate Social Responsibility Doing the Most Good for Your Company and Your Cause (2005). This book does not focus philosophy of Kant and Aristotle. (Author mentioned question What Is Good? pp. 2-4) It is more focused on profitable outcome, which gives only an aspiration on how organizations have reached at websites of Fortune 500
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corporations. The capitalists focus more on their outcome rather than the process involved in it. They only care about their results, for example the company A did plan B and achieved result C. The purpose of this book is uncertain as it gives priority only to industrialists over the masses of the people. Here CSR is locked by the author as a marketing perspective only. Purpose of Kotler and Lee care less about CSR than marketing or big business. The book Corporate Social Responsibility Concepts and Cases: The Indian Experience: edited by C V Baxi and Ajit Prasad (2005) this is divided into two sections. Section one contains different papers, which analyses the conceptual framework of corporate social responsibility, which has considered CSR concepts, practices and country experience, stakeholder engagement theory, these all explained in very short outline. Ch. 1 Conceptual framework of CSR does not give a thorough historical overview of CSR only clue is given on it in one paragraph. Also the whole section is very less discussed on what is the genesis of CSR? How it emerged and when? Theories and models of CSR do not give a deep idea about CSR and did not say which theory and model is more applicable for India. All theories and models explain within 2 pages (pp. 6-7). A global view on CSR only gives the idea of what was the objective of different countries government to implementing CSR. But what is the outcome, after adopting the CSR policy and making different law or code, it does not reflect in the section. The book says government approach to CSR should be more on productivity and competitiveness and achieving transparency in the market (pp. 15). Here the question is how transparency is remaining good for consumers in cut through the competition? Conclusion part does not take particular stand, the authors showed both sides of philanthropy positive and negative. The second is a collection of eighteen case studies highlighting various aspects of CSR in some of the most famous companies in India. Here second section is trying to justify the big and famous corporations are doing well. But section is more silence on some real facts which are badly attached with these famous companies. For example, the case study of Ambuja Cement mentioned as a shining example of leadership effort in environmental Stewardship and companys empowering Mission Statement is that Give a Man orders..., Give him freedom and authority and his task becomes a personal mission- I CAN. But recent news published in various well known newspapers that Vice President of Ambuja Cement, with few other department managers have been arrested in connection to the Ambuja cement factory mishap," Five workers were killed when an ash container crashed in the mixing unit of the plant
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in Rawan village. Chief Minister Raman Singh has directed the factory management to provide compensation of Rs 10 lakh to the kin of each victim and a job to one member of their families. This shows factory was not following The Industry Act, 1948, Ch. IV of Safety. I hope this compensation amount will not treat under the title of CSR in their annual report. So, this is the reality of most of the shining Indians companies or MNCs which are doing CSR plays with common peoples lives, giving with sugar coated words. But N R Narayana Murthy, Indias well known industrialist, has written a book A Better India a Better World. The book is undoubtedly a philosophers statement or rather a collection of statements. There are prevarications of the problem. The book is a collection of Narayana Murthys lectures, and not a true book by him. Murthy believes that our future development should be based on the following pillars. 1) Education 2) Good value system 3) Capitalism 4) Globalisation. He explains how globalization is a win-win situation. But I would like to critique these last two pillars through Prof. M. Kunhamans words which nicely put in the essay under the title of Unsustainable Globalization: A Theoretical cum - Historical Perspective, he says market and capitalism are inseparable. Capitalism, in its highest form, cannot exist without imperialism and imperialism inevitably leads to war. Capitalists are always aggressive and profit minded. In the word of Poan Robinson who said Animal spirit, which is the moti ve force of the capitalist. This is because no noble ideology or moral principle underlines such a system. Book corporate social responsibility in Asia which is edited by Kyoko Fukukawa gives global overview on CSR. This described the historical outlook and different experiences of CSR existing in Asian countries. Compared to Asian Tiger countries the culture of CSR is very poor. For example Bangladesh, which is worlds third largest employer in the textile sector and sixth largest employer in the clothing industry though Bangladeshi garment workers are the lowest paid and most shockingly exploited in the world. This is because lack of good governance. Here also MNCs shows their visions, Mission statement and taking pride to do good business through CSR.

Articles: Articles gave a very brief reflection on CSR as it is shortly defined what is CSR? These models do not say anything new about CSR. Its just another dimension to look at CSR. Majority articles
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defined some small case study, which is very general in Indian context and given case studies and highlighted ideas are overlapping in most of the articles. For an example case study of ITC e Choupal, all articles follow all most same writing structure. Like the introduction, explained through small case studies and conclude. Sunil Kumar and Shilpa Jains article talking about what is the Bottom of Pyramid (brief explanation of C.K Prahalads book, The Fortune at the Bottom of the Pyramid) how it is related to the world market? What is the requirement for BOP development? These are all about for marketing purpose only. The article says the manager should try to create awareness among the BOP consumer to afford and buy their product. Finally its looking like scope of profit. The same thing mentioned in the article of Corporate Social Responsibility: A Competitive Corporate Advantage has written by Uma V.P. Shrivastava. Articles explanation for the manager is how organization survives for a long time or an enterprises long term social responsiveness model. This is the general model or ideas which are only for enterprises and for their profit. R N Patils article on New Perspectives on CSR for Rural Development does not say anything new about CSR and rural Development. It gives only a general explanation on CSR, what kind of partnership should be? What corporations can offer? All these questions and answers for them and not for ordinary or marginalized people. But it does not give any clarification or solution on how CSR should eradicate caste, inequality, gender into the Indian society? Which kind of strategies will more affected to the poor or marginalized sections of the society. Most of the review has given justification of capitalist activities through defined CSR. CSR today means something, but not always the same thing, to everybody (Votaw, 1972: 25) and wayward path or not, it is making its presence felt. In short Vision, Mission, CSR, etc. is only sugar coated words and nothing else. Asian corporations are rushing to copy western model which is not fit in local traditions. Companies will simply do everything they can to boost profits will end up increasing social welfare. In circumstances where profits and social welfare are in direct opposition, an appeal to corporate social responsibility will almost always be ineffective, because executives are unlikely to act voluntarily in the public interest and against shareholder interests. Without profit there is no firm and no corporate social activity. And at the same time, no company can afford to let its profits drop.
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CSR BETWEEN LEGITIMACY, ETHICS, STAKEHOLDER DIALOGUE AND SUSTAINABILE DEVELOPMENT In recent years the business strategy field has experienced the renaissance of corporate social responsibility (CSR) as a major topic of interest. The concept has not surfaced for the first time. CSR had already known considerable interest in the 1960s and 70s, Spawning a broad range of scholarly contributions (Cheit, 1964; Heald, 1970; Ackermann & Bauer, 1976; Carroll, 1979), and a veritable industry of social auditors and consultants. However, the topic all but vanished from most managers' minds in the 1980s (Dierkes & Antal, 1986; Vogel, 1986). Having blossomed in the 1970s CSR all but vanished and only re-emerged in recent years. CSR resurfaced forcefully over the past ten years in response to mounting public concern about globalization. Firms find themselves held responsible for human rights abuses by their suppliers in developing countries; interest groups demand corporate governance to be transparent and accountable; rioters from Seattle to Genoa protest violently against the cost of free trade and other perceived negative consequences of globalization. However, nearly two decades of neglect have helped to undo much of the past achievements of corporate social responsibility. It is thus no surprise that both practitioners and scholars are struggling once again to answer the question what the strategic implications of CSR are. The literature on CSR and innovation draws on a number of different theoretical traditions, which often are in contradiction to each other. Wood (1991) describes three levels of analysis: institutional, individual, and Organizational.

Institutional Level: CSR as Organizational Legitimacy Davis (1973) describes the iron law of responsibility, as the fact that firms exercising power will eventually be held accountable by society. At this level CSR can be best understood as a quest for organizational legitimacy. Firms are under the obligation not to abuse the power invested on them by society or they risk losing societys implicit endorsement. More recently this view point
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has resurfaced as a firms need to retain its license to operate (Post, Preston, & Sachs, 2002: 21). Individual Level: CSR as Moral Choices of Managers At the individual level, CSR has been constructed by Ackermann (1975) as managerial discretion. According to this view managerial actions are not fully defined by corporate policies and procedures. So although managers are constrained by their work environment they nonetheless have to weigh the moral consequences of the choices they make. The view of CSR is strongly anchored in the business ethics literature (Jones, 1991; Donaldson & Dunfee, 1994; Crane & Matten, 2003). Organizational Level: CSR as Stakeholder Management With Freemans (1984) seminal book the focus moved from legitimacy and morals towards a new theory of the firm. Social considerations are thus no longer outside an organization but are part of its purpose of being. CSR thus becomes a question of stakeholder identification, involvement, and communication (Mitchell, Agle, & Wood, 1997; Morsing & Beckmann, 2006; Morsing & Schultz, 2006). The purpose of stakeholder management was to devise a framework to manage s trategically the myriad groups that influenced, directly and indirectly, the ability of a firm to achieve its objectives. (Freeman & Velamuri, 2006)

The aim of stakeholder management is thus to analyze how a company can serve its customers and be lucrative while also serving its other stakeholders such as suppliers, employees, and communities. Recently the stakeholder perspective has dominated the reinterpretation of CSR pushing the question of the legitimacy of corporate power as well as the moral dimension of managerial decisions more into the background.

Global Level: CSR as Sustainable Development

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The latest literature tradition to have impacted our understanding of corporate social responsibility is that of sustainable development. It was the Brundtland Commission (1987) that for the first time systematically emphasized the link between poverty, environmental degradation, and economic development. Its definition of sustainable development, as meeting the needs of the present, without compromising the ability of future generations to meet theirs, extends the responsibility of firms both inter- and intra generationally. Thus firms are expected to also consider traditionally unrepresented stakeholders such as the environment and as well as future generations. Although many CSR authors have taken up the notion of a triple bottom line (Elkington, 1997) there remain important tensions between the CSR and the sustainable development debate (i.e. Dyllick & Hockerts, 2002).

CSR GLOBAL CONTEXT The World Business Council for Sustainable Development in its publication, making Good Business Sense by Lord Holmes and Richard Watts, used the following definition. Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.

The 2010 Corporate Social Responsibility Perceptions Survey More than 75 percent of consumers say that it is important for companies to be socially responsible according to a survey released today by Penn Schoen Berland, Landor Associates, and Burson-Marsteller. The Second Annual Corporate Social Responsibility Perceptions Survey tested consumer views of companies in 14 industries ranging from Apparel to Telecommunications. Despite the recession, consumers continue to prioritize social responsibility across business sectors, and 55 percent are more likely to choose a product that supports a certain cause when
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choosing between otherwise similar products. Moreover, 38 percent of respondents still plan to spend the same or more for products and services from socially responsible companies, and 70 percent are willing to pay more for a $100 product from a company they regard as responsible. However, companies are not communicating their CSR efforts with consumers as effectively as they could. Only 13 percent of consumers report having read about a companys social responsibility agenda on its website. If companies are able to better communicate their CSR efforts, they may have the opportunity to influence consumer perceptions seeing as 75 percent of consumers who have read about a companys social responsibility agenda on its website indicated that it made them more likely to purchase products or services from that company. Some of the studys other key findings include: Of 14 tested industries, Food, Consumer Goods and Retailers are perceived as performing best, while Financial Services, Healthcare and Media are perceived as performing worst. Consumers perceive General Mills to be the most responsible of 64 tested brands. Seventy-Two Percent say they will make some sacrifices in their spending or in their salary to support social responsibility.

Businesses are owned by their shareholders - money spent on CSR by managers is theft of the rightful property of the owners This is the voice of the laisser-faire 1980s, still being given powerful voice by advocates such as Elaine Sternberg. Sternberg argues that there is a human rights case against CSR, which is that a stakeholder approach to management deprives shareholders of their property rights. She states that the objectives sought by conventional views of social responsibility are absurd. Not all aspects of CSR are guilty of this, however. Sternberg states that ordinary decency, honesty and fairness should be expected of any corporation. In the first instance, this case strongly depends on the model of social responsibility adopted by the business being a philanthropic one. The starting point assumption is that, through CSR, corporations simply get to "give away" money which rightfully belongs to other people. If CSR is seen as a process by which the business manages its relationships with a variety of influential stakeholders who can have a real influence on its license to operate, the business case becomes
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immediately apparent. CSR is about building relationships with customers, about attracting and retaining talented staff, about managing risk, and about assuring reputation. The market capitalization of a company often far exceeds the "property" value of the company. For instance, as much as 96% of Coca Cola is made up of "intangibles" - a major part of which rests on the reputation of the company. Only a fool would run risks with a company's reputation when it is so large a part of what the shares represent. In any case, if shareholders are to be accorded full property rights one would expect to see the balancing feature of responsibility for the actions taken by the enterprises they often fleetingly own. Since most shareholders remain completely unaware of any such responsibility, it can only fall to the management - the "controlling mind" of the company, to take that responsibility on. The leading companies who report on their social responsibility are basket cases - the most effective business leaders don't waste time with this stuff. When surveys are carried out of the "Most Respected Business Leaders" you will often find names there, such as Bill Gates of Microsoft, a few years ago Jack Welch of GE, who have not achieved their world class status by playing nice. Welch is still remembered for the brutal downsizing he led his business through, and for the environmental pollution incidents and prosecutions. Microsoft has had one of the highest profile cases of bullying market dominance of recent times - and Gates has been able to achieve the financial status where he can choose to give lots of money away by being ruthless in business. Doesn't that go to prove that "real men don't do CSR" In the first instance, very few businesses operate in a black or white framework, where they are either wholly virtuous or wholly without redemption. There are many aspects in the way Jack Welch restructured General Electric which would play to the kind of agenda recognizable to advocates of social responsibility - in particular that of employee empowerment. Welch has gone on record as saying that he believes the time has passed when making a profit and paying taxes was all that a company had to worry about. And since Welch moved on, General Electric has been busy catching up big time with its Eco Imagination initiative. Also, many of the leading companies with regard to their social responsibility are equally successful companies. The same "Most Respected" surveys will usually provide other names at,
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or near, the top such as IBM and Motorola - and these are companies that have been much more strongly associated with the CSR movement. Coca Cola achieved its place partially because of its profile in social responsibility. When still in charge, Sir John Browne of BP was widely respected as having led BP into a strong position as one of the world's leading companies whilst also showing environmental leadership. The events that latterly tarnished that reputation simply show that skill in execution is the key to success - but even those events don't disprove the fact that success in business and commitment to responsibility can go hand in hand. It's all very well for the very big companies with lots of resources at their disposal. For those fighting for survival, it's a very different picture. You can't go spending money on unnecessary frills when you're laying people off and morale is rock bottom. And the odd bit of employee volunteering won't make any difference to our people when they feel cynical and negative about how the company operates. Social accounting, auditing, and reportingFor a business to take responsibility for its actions, that business must be fully accountable. Social accounting, a concept describing the communication of social and environmental effects of a company's economic actions to particular interest groups within society and to society at large, is thus an important element of CSR. Social accounting emphasizes the notion of corporate accountability. D. Crowther defines social accounting in this sense as "an approach to reporting a firms activities which stresses the need for the identification of socially relevant behavior, the determination of those to whom the company is accountable for its social performance and the development of appropriate measures and reporting techniques." An example of social accounting, to a limited extent, is found in an annual Director's Report, under the requirements of UK company law. A number of reporting guidelines or standards have been developed to serve as frameworks for social accounting, auditing and reporting including: Accountabilitys AA1000 standard, reporting The Prince's Accounting for Sustainability Project's Connected Reporting Framework
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based

on Ellingtons triple

bottom

line (3BL)

 The Fair Labor Association conducts audits based on its Workplace Code of Conduct and posts audit results on the FLA website. The Fair Wear Foundation takes a unique approach to verifying labour conditions in companies' supply chains, using interdisciplinary auditing teams. . Global Reporting Initiative's Sustainability Reporting Guidelines. Good Corporations Standard developed in association with the Institute of Business Ethics. Earthcheck www.earthcheck.org Certification / Standard Social Accountability International's SA8000 standard Standard Ethics Area guidelines The ISO 14000 environmental management standard The United Nations Global Compact promotes companies submitting a CSR/ sustainability report a Communication on Progress (COP). A COP report describes the company's implementation of the Compact's ten universal principles. The United Nations Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR) provides voluntary technical guidance on eco-efficiency indicators, corporate responsibility reporting, and corporate governance disclosure. Verite's Monitoring Guidelines. The FTSE Group publishes the FTSE4Good Index, an evaluation of CSR performance of companies. In some nations, legal requirements for social accounting, auditing and reporting exist (e.g. in the French bilan social), though international or national agreement on meaningful measurements of social and environmental performance is difficult. Many companies now produce externally audited annual reports that cover Sustainable Development and CSR issues ("Triple Bottom Line Reports"), but the reports vary widely in format, style, and evaluation methodology (even within the same industry). Critics dismiss these reports as lip service, citing examples such as Enron's yearly "Corporate Responsibility Annual Report" and tobacco corporations' social reports.

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In South Africa, as of June 2010, all companies listed on the Johannesburg Stock Exchange (JSE) were required to produce an integrated report in place of an annual financial report and sustainability report. An integrated report includes environmental, social and economic performance alongside financial performance information and is expected to provide users with a more holistic overview of a company. However, this requirement was implemented in the absence of any formal or legal standards for an integrated report. An Integrated Reporting Committee (IRC) was established to issue guidelines for good practice in this field. Potential business benefits The scale and nature of the benefits of CSR for an organization can vary depending on the nature of the enterprise, and are difficult to quantify, though there is a large body of literature exhorting business to adopt measures beyond financial ones (e.g., Deming's Fourteen Points, balanced scorecards). Orlitzky, Schmidt, and Rynes. Found a correlation between social/environmental performance and financial performance. However, businesses may not be looking at short-run financial returns when developing their CSR strategy. The definition of CSR used within an organization can vary from the strict "stakeholder impacts" definition used by many CSR advocates and will often include charitable efforts and volunteering. CSR may be based within the human resources, business development or public

relations departments of an organization, or may be given a separate unit reporting to the CEO or in some cases directly to the board. Some companies may implement CSR-type values without a clearly defined team or program me. The business case for CSR within a company will likely rest on one or more of these arguments: Human resources: A CSR programmer can be an aid to recruitment and retention, particularly within the competitive graduate student market. Potential recruits often ask about a firm's CSR policy during an interview, and having a comprehensive policy can give an advantage. CSR can also help improve the perception of a company among its staff, particularly when staff can become involved through payroll giving, fundraising activities or community volunteering.
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CSR has been found to encourage customer orientation among frontline employees. See also Corporate, whereby CSR can also be driven by employees' personal values, in addition to the more obvious economic and governmental drivers. Risk management: Managing risk is a central part of many corporate strategies. Reputations that take decades to build up can be ruined in hours through incidents such as corruption scandals or environmental accidents. These can also draw unwanted attention from regulators, courts, governments and media. Building a genuine culture of 'doing the right thing' within a corporation can offset these risks. Brand differentiation: In crowded marketplaces, companies strive for a unique selling proposition that can separate them from the competition in the minds of consumers. CSR can play a role in building customer loyalty based on distinctive ethical values. Several major brands, such as The Co-operative Group, The Body Shop and American Apparel are built on ethical values. Business service organizations can benefit too from building a reputation for integrity and best practice. License to operate: Corporations are keen to avoid interference in their business through taxation or regulations. By taking substantive voluntary steps, they can persuade governments and the wider public that they are taking issues such as health and safety, diversity, or the environment seriously as good corporate citizens with respect to labor standards and impacts on the environment. Criticisms and concerns: Critics of CSR as well as proponents debate a number of concerns related to it. These include CSR's relationship to the fundamental purpose and nature of business and questionable motives for engaging in CSR, including concerns about insincerity and hypocrisy.

Nature of business: Milton Friedman and others have argued that a corporation's purpose is to maximize returns to its shareholders, and that since only people can have social responsibilities, corporations are only responsible to their shareholders and not to society as a whole. Although they accept that
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corporations should obey the laws of the countries within which they work, they assert that corporations have no other obligation to society. Some people perceive CSR as in-congruent with the very nature and purpose of business, and indeed a hindrance to free trade. Those who assert that CSR is contrasting with capitalism and are in favor of neoliberals argue that improvements in health, longevity and/or infant mortality have been created by

economic attributed to free enterprise. Critics of this argument perceive neoliberals as opposed to the well-being of society and a hindrance to human freedom. They claim that the type of capitalism practiced in many developing countries is a form of economic and cultural imperialism, noting that these countries usually have fewer labor protections, and thus their citizens are at a higher risk of exploitation by multinational corporations. A wide variety of individuals and organizations operate in between these poles. For example, the REALeadership Alliance asserts that the business of leadership (be it corporate or otherwise) is to change the world for the better. Many religious and cultural traditions hold that the economy exists to serve human beings, so all economic entities have an obligation to society (see for example Economic Justice for All). Moreover, as discussed above, many CSR proponents point out that CSR can significantly improve long-term corporate profitability because it reduces risks and inefficiencies while offering a host of potential benefits such as enhanced brand reputation and employee engagement. Motives: Some critics believe that CSR programs are undertaken by companies such as British American Tobacco (BAT), the petroleum giant BP (well known for its high-profile advertising campaigns on environmental aspects of its operations), and McDonald's (see below) to distract the public from ethical questions posed by their core operations. They argue that some corporations start CSR programs for the commercial benefit they enjoy through raising their reputation with the public or with government. They suggest that corporations which exist solely to maximize profits are unable to advance the interests of society as a whole. Another concern is that sometimes companies claim to promote CSR and be committed to sustainable development but simultaneously engage in harmful business practices. For example, since the 1970s, the McDonald's Corporation's association with Ronald McDonald
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House has been viewed as CSR and relationship marketing. More recently, as CSR has become main stream, the company has beefed up its CSR programs related to its labor, environmental and other practices. All the same, in McDonald's Restaurants v Morris & Steel, Lord Justices Pill, May and Keane ruled that it was fair comment to say that McDonald's employees worldwide 'do badly in terms of pay and conditions and true that 'if one eats enough McDonald's food, one's diet may well become high in fat etc., with the very real risk of heart disease.' Royal Dutch Shell has a muchpublicized CSR policy and was a pioneer in triple bottom line reporting, but this did not prevent the 2004 scandal concerning its misreporting of oil reserves, which seriously damaged its reputation and led to charges of hypocrisy. Since then, the Shell Foundation has become involved in many projects across the world, including a partnership with Marks and Spencer (UK) in three flower and fruit growing communities across Africa. Critics concerned with corporate hypocrisy and insincerity generally suggest that better governmental and international regulation and enforcement, rather than voluntary measures, are necessary to ensure that companies behave in a socially responsible manner. A major area of necessary international regulation is the reduction of the capacity of corporations to sue states under investor state dispute settlement provisions in trade or investment treaties if otherwise necessary public health or environment protection legislation has impeded corporate investments. Others, such as Patricia Werhane, argue that CSR should be considered more as a corporate moral responsibility, and limit the reach of CSR by focusing more on direct impacts of the organization as viewed through a systems perspective to identify stakeholders. Ethical consumerism: The rise in popularity of ethical consumerism over the last two decades can be linked to the rise of CSR. As global population increases, so does the pressure on limited natural resources required to meet rising consumer demand (Grace and Cohen 2005, 147). Industrialization, in many developing countries, is booming as a result of both technology and globalization. Consumers are becoming more aware of the environmental and social implications of their day-to-day consumer decisions and are therefore beginning to make purchasing decisions related to their environmental and ethical concerns. However, this practice is far from consistent or universal.
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Globalization and market forces: As corporations pursue growth through globalization, they have encountered new challenges that impose limits to their growth and potential profits. Government regulations, tariffs, environmental restrictions and varying standards of what constitutes "labor exploitation" are problems that can cost organizations millions of dollars. Some view ethical issues as simply a costly hindrance, while some companies use CSR methodologies as a strategic tactic to gain public support for their presence in global markets, helping them sustain a competitive advantage by using their social contributions to provide a subconscious level of advertising. (Fry, Keim, Meiners 1986, 105) Global competition places a particular pressure on multinational corporations to examine not only their own labor practices, but those of their entire supply chain, from a CSR perspective. Social awareness and education: The role among corporate stakeholders is to work collectively to pressure corporations that are changing. Shareholders and investors themselves, through investing are exerting pressure on corporations to behave responsibly. Non-governmental organizations are also taking an increasing role, leveraging the power of the media and the Internet to increase their scrutiny and collective activism around corporate behavior. Through education and dialogue, the development of community awareness in holding businesses responsible for their actions is growing. In recent years, the traditional conception of CSR is being challenged by the more community-conscious Creating Shared Value concept (CSV), and several companies are refining their collaboration with stakeholders accordingly. Ethics training: The rise of ethics training inside corporations, some of it required by government regulation, is another driver credited with changing the behavior and culture of corporations. The aim of such training is to help employees make ethical decisions when the answers are unclear. Tullberg believes that humans are built with the capacity to cheat and manipulate, a view taken from (Trivers 1971, 1985), hence the need for learning normative values and rules in human behavior. The most direct benefit is reducing the likelihood of "dirty hands" (Grace and Cohen 2005), fines and damaged reputations for breaching laws or moral norms. Organizations also see secondary benefit in increasing employee loyalty and pride in the organization. Caterpillar and Best Buy are examples of organizations that have taken such steps.
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Increasingly, companies are becoming interested in processes that can add visibility to their CSR policies and activities. One method that is gaining increasing popularity is the use of wellgrounded training programs, where CSR is a major issue, and business simulations can play a part in this. One relevant documentary is The Corporation, the history of organizations and their growth in power is discussed. Corporate social responsibility, what a company does to in trying to benefit society, versus corporate moral responsibility (CMR), what a company should morally do, are both important topics to consider when looking at ethics in CSR. For example, Ray Anderson, in The Corporation, takes a CMR perspective in order to do what is moral and he begins to shift his company's focus towards the biosphere by utilizing carpets in sections so that they will sustain for longer periods. This is Anderson thinking in terms of Garret Hardin's "The Tragedy of the Commons," where if people do not pay attention to the private ways in which we use public resources, people will eventually lose those public resources. Laws and regulation: Another driver of CSR is the role of independent mediators, particularly the government, in ensuring that corporations are prevented from harming the broader social well, including people and the environment. CSR critics such as Robert Reich argue that governments should set the agenda for social responsibility by the way of laws and regulation that will allow a business to conduct them responsibly. The issues surrounding government regulation pose several problems. Regulation in itself is unable to cover every aspect in detail of a corporation's operations. This leads to burdensome legal processes bogged down in interpretations of the law and debatable grey areas (Sacconi 2004). For example, General Electric failed to clean up the Hudson River after contaminating it with organic pollutants. The company continues to argue via the legal process on assignment of liability, while the cleanup remains stagnant. (Sullivan & Schiafo 2005). The second issue is the financial burden that regulation can place on a nation's economy. This view shared by Bulkeley, who cites the Australian federal government's actions to avoid compliance with the Kyoto Protocol in 1997, on the concerns of economic loss and national interest. The Australian government took the position that signing the Kyoto Pact would have caused more significant economic losses for Australia than for any other OECD nation (Bulkeley 2001, pg 436).
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On the change of government following the election in November 2007, Prime Minister Kevin Rudd signed the ratification immediately after assuming office on 3 December 2007, just before the meeting of the UN Framework Convention on Climate Change. Critics of CSR also point out that organization pay taxes to government to ensure that society and the environment are not adversely affected by business activities. Denmark has a law on CSR. On 16 December 2008, the Danish parliament adopted a bill making it mandatory for the 1100 largest Danish companies, investors and state-owned companies to include information on corporate social responsibility (CSR) in their annual financial reports. The reporting requirements became effective on 1 January 2009. The required information includes: Information on the companies policies for CSR or socially responsible

investments (SRI) Information on how such policies are implemented in practice, Information on what results have been obtained so far and managements expectations for the future with regard to CSR/SRI. CSR/SRI is still voluntary in Denmark, but if a company has no policy on this it must state its positioning on CSR in their annual financial report. Crises and their consequences: Often it takes a crisis to precipitate attention to CSR. One of the most active stands against environmental management is the CERES Principles that resulted after the Valdez incident in Alaska in 1989 (Grace and Cohen 2006). Other examples include the lead poisoning paint used by toy giant Mattel, which required a recall of millions of toys globally and caused the company to initiate new risk management and quality control processes. In another example, Magellan Metals in the West Australian town of Esperance was responsible for lead contamination killing thousands of birds in the area. The company had to cease business immediately and work with independent regulatory bodies to execute a cleanup. Odwalla also experienced a crisis with sales dropping 90%, and the company's stock price dropping 34% due to several cases of E. coli spread through Odwalla apple juice. The company ordered a recall of all apple or carrot juice products and introduced a new process called "flash pasteurization" as well as maintaining lines of communication constantly open with customers.
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Stakeholder priorities: Increasingly, corporations are motivated to become more socially responsible because their most important stakeholders expect them to understand and address the social and community issues that are relevant to them. Understanding what causes are important to employees is usually the first priority because of the many interrelated business benefits that can be derived from increased employee engagement (i.e. more loyalty, improved recruitment, increased retention, higher productivity, and so on). Key external stakeholders include customers, consumers, investors (particularly institutional investors), and communities in the areas where the corporation operates its facilities, regulators, academics, and the media. Branco and Rodriguez (2007) describe the stakeholder perspective of CSR as the inclusion of all groups or constituents (rather than just shareholders) in managerial decision making related to the organizations portfolio of socially responsible activities. This normative model implies that the CSR collaborations are positively accepted when they are in the interests of stakeholders and may have no effect or be detrimental to the organization if they are not directly related to stakeholder interests. The stakeholder perspective suffers from a wheel and spoke network metaphor that does not acknowledge the complexity of network interactions that can occur in cross sector partnerships. It also relegates communication to a maintenance function, similar to the exchange perspective.

Robert Dahl (1972) argued influentially (among academics), 'that every large corporation should be thought of as a social enterprise. It should be thought of as an entity whose existence and decisions can be justified in so far as they serve public or social purposes' (Dahl, 1972 cited in Beesley & Evans, 1978:17; see also McDermott, 1991). This is a position which recognized that 'business will benefit from a better society just as any citizen will benefit; therefore business has a responsibility to recognize social problems and actively contributor its talents to help solve them. Such involvement is expected of any citizen, and business should fulfill a citizenship role.' Jones (1995) confirming Stakeholder Theory states, Firms involved in repeated transactions with stakeholders on the basis of trust and cooperation have an incentive to be honest and ethical, since such behavior is beneficial to the firm. The ethical behavior of firms will enable them to

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achieve a competitive advantage, because they will develop lasting, productive relationships, with these groups. Hart (1995) emphasizing Resource-Based View of the Firms states, for certain companies, environment social responsibility can constitute a resource or capability that leads to a sustained competitive advantage. Jennings and Zandbergen (1995), cities the bases of Institutional Theory to explain CSR and said, "Institutions play an important role in shaping the consensus within a form regarding the establishment of an "ecologically sustainable" organization. Entine (1996) has put it that "There are two senses in which CSR could be defined. The narrow sense is based on the broad principles of integrity and fairness and focuses on internal stakeholders issues such as product quality, customer satisfaction, employee wages and benefits, fair treatment of suppliers and shareholders, and local community and environment and environment responsibilities, issues that a company can actually influence.

Corporate Social Responsibility: Unlocking the Value According to the results of a global survey in 2002 by Ernst & Young, 94 per cent of companies believe the development of a Corporate Social Responsibility (CSR) strategy can deliver real business benefits, however only 11 per cent have made significant progress in implementing the strategy in their organization. Senior executives from 147 companies in a range of industry sectors across Europe, North America and Australasia were interviewed for the survey.

The survey concluded that CEOs are failing to recognize the benefits of implementing Corporate Social Responsibility strategies, despite increased pressure to include ethical, social and environmental issues into their decision-making processes. Research found that company CSR programs influence 70 per cent of all consumer purchasing decisions, with many investors and employees also being swayed in their choice of companies.

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"While companies recognize the value of an integrated CSR strategy, the majority are failing to maximize the associated business opportunities," said Andrew Grant, Ernst & Young Environment and Sustainability Services Principal. "Corporate Social Responsibility is now a determining factor in consumer and client choice which companies cannot afford to ignore. Companies who fail to maximize their adoption of a CSR strategy will be left behind."

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CHAPTER 3: DATA ANALYSIS AND INTERPRETATION

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ANALYSIS OF BENEFICIARIES

Table 1 Table showing the age group of respondents

Age Group (In Years) 21 to 30 31 to 40 41 to 50 51 to 60 61 to 70 Total Frequency 12 28 11 6 3 60 Percentage 20 46.67 18.33 10 5 100

50 40 28 30 20 10 0 20 to 30 12 20

46.67

18.33 11 6 10 3 5

31 to 40 Frequency

41 to 50

51 to 60

61 to 70

Percentage

As shown in the table, out of 60 respondents, 12 (20%) respondents have age between 21 to 30 while 11 (18.33%) respondents are between 41 to 50 age group. Maximum respondents i.e. 28 (46%) are between the age group of 31 to 40. Only 3 respondents have age more than 60.

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Table 2 Table showing Gender of Respondents

Gender Male Female Total Frequency 42 18 60 Percentage 70 30 100

The above table shows that the ratio between male and female respondent is 7:3 respectively. There are total 48 male respondents and 12 female respondents.

Table 3 Table showing villages of the respondents

Villages Bajwa Dhanora Karachiya Karodiya Koyli Ranoli Total

Frequency 10 10 10 10 10 10 60

Percentage 16.67 16.67 16.67 16.67 16.67 16.67 100

The above table shows that the 10 respondents belong to each village. There are total 6 villages from where the respondents belong.

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Table 4 Table showing qualification of respondents Educational Qualification

Illiterate Primary Secondary Diploma Graduate Post Graduate Total

Frequency
7 6 17 13 17 0 60

Percentage
11.67 10.00 28.33 21.67 28.33 0.00 100

Qualification
Illiterate; 7 Graduate; 17 Primary; 6 Illiterate Primary Secondary Diploma Secondary; 17 Diploma; 13 Graduate

The above table shows that the maximum numbers of respondents are graduate and Secondary qualified i.e. 17 (28.33%). Not a single respondent has done post graduation. Only 11.67% respondents are illiterate.

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Table 5 Table showing CSR Activities carried on in the target villages

CSR Activities Education Infrastructure Development Mid-day meal Health & Environment Any Other Total Frequency 10 27 3 20 0 60 Percentage 16.67 45.00 5.00 33.33 0.00 100

45.00 45 40 35 30 25 20 15 10 5 0 Education Infrastructure Mid-day meal Development Frequency Health & Environment Percentage Any Other 10 3 5.00 0 0.00 16.67 27 20 33.33

The above table shows that the maximum respondents i.e. 27 (45%) are of the view that Infrastructure Development is focused more as a part of CSR activity in their village. 33.33% respondents believe that CSR related to Health & Environment is done in their village whereas only 5% counts for mid-day meal as a CSR activity.

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Table 6 Table showing Target Group on which CSR activities were focused
Target Group Children Youth Aged Village as a whole Total Frequency 9 3 9 37 60 Percentage 15.00 5.00 15.00 61.67 100

70 60 50 40 30 20 10 0 Children Youth Frequency Aged Percentage 15.00 9 3 5.00 9 15.00 37

61.67

Village as a whole

The above table shows that mostly village as a whole is targeted for CSR activity by the companies. Youth is targeted the least for CSR activities.

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Table 7 Table showing satisfaction with CSR activities

Satisfaction Yes No Total Frequency 41 19 60 Percentage 68.33 31.67 100

The above table shows that 68.33% of the respondents are satisfied with the CSR activities in their villages where as 31.67% of the respondents are not satisfied with the CSR activities.

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Table 8 Table showing CSR activities needed in near future

Future CSR activities Education Health Infrastructure Drainage Facility Any Other Total Frequency 12 18 3 27 0 60 Percentage 20.00 30.00 5.00 45.00 0.00 100

50 40 30 20 10 0 Education Health Frequency Infrastructure Percentage 12 3 5.00

45.00

30.00 20.00 18

27

Drainage Facility

The above table shows that 45% of the respondents want Drainage facility as the future CSR activity in their villages. 30% of the respondents want Health care facility as the future CSR activity where as 20% want Education as the future CSR activity and only 5% want Infrastructure as the CSR activity in near future.

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Table 9 Table showing reliability on CSR for Infrastructure Development

Reliability for Infrastructure Very high High Moderate Reliability Not at all reliable Total

Frequency 1 22 37 0 60

Percentage 1.67 36.67 61.67 0.00 100

The above table shows that the reliability on CSR for infrastructure development is neither too high and nor too low. 61% of the respondents believe that Infrastructure Development has a moderate reliability whereas only 1.67% believes that it has very high reliability. 36.67% believes that it has high reliability.

Table 10 Table showing reliability on CSR for Education

Reliability for Education Very high High Moderate Reliability Not at all reliable Total Frequency 3 19 30 8 60 Percentage 5.00 31.67 50.00 13.33 100

The above table shows that the reliability on CSR for Education is neither too high and nor too low. 50% of the respondents believe that Education has a moderate reliability whereas only 5% believes that it has very high reliability. 13.33% believes that it is not at all reliable and 31.67% believes that it has high reliability.

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Table 11 Table showing reliability on CSR for Health

Reliability for Health Very high High Moderate Reliability Not at all reliable Total Frequency 21 33 6 0 60 Percentage 35.00 55.00 10.00 0.00 100

The above table shows that the reliability on CSR for Health high in the target villages. 55% of the respondents believe that Health has a High reliability whereas only 10% believes that it has moderate reliability. 35% of the respondents also believe that reliability on CSR for Health is very high.

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Table 12 Table showing dependence on whom if CSR activities are not done in the villages
Dependence District Development Officer (DDO) Government Aid Government Schemes Will Influence the co. Total Frequency 16 12 22 10 60 Percentage 26.67 20.00 36.67 16.67 100

40 30 20 10 0 District Development Officer (DDO) Government Aid 16 12 26.67 20.00 22

36.67

16.67 10

Government Schemes

Will Influence the co.

Frequency

Percentage

The above table shows that 36.67% of the respondents are of the view that if CSR activities are not done in their village then they will depend on Government Schemes. 26.67% of the respondents will depend on District Development Officer whereas 16.67% will try and influence the companies to do CSR activities.

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Table 13 Table showing companies performing CSR activities in target villages

Companies GACL GSFC IOCL Reliance/IPCL GIPCL Total Frequency 10 19 7 11 13 60 Percentage 16.67 31.67 11.67 18.33 21.67 100

35 30 25 20 15 10 5 0 GACL 10 16.67 19

31.67

21.67 18.33 11.67 7 11 13

GSFC

IOCL Frequency

Reliance/IPCL Percentage

GIPCL

The above table shows that 31.67% respondents say that GSFC performs CSR activities in their village. 21.67% respondents say that GIPCL performs CSR activity in their village whereas 18.33% respondents say Reliance/IPCL. 16.67% and 11.67% respondents say that GACL & IOCL respectively performs CSR activities in their villages.

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Table 14 Table showing Need Assessment before CSR activity

Need assessment Yes No Total Frequency 26 34 60 Percentage 43.33 56.67 100

The above table shows that 56.67% respondents are of the view that need assessment is not done before conducting the CSR activity in their village whereas 43.33% respondents believe that need assessment is done before conducting the CSR activity.

Table 15 Table showing instances of incomplete CSR activity

Incomplete CSR activity Yes No Total Frequency 21 39 60 Percentage 35.00 65.00 100

The above table shows that 35% respondents are of the view that there are instances where CSR activities initiated had been left incomplete whereas 65% respondents defer from this view.

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Table 16 Table showing level of participation from villages in conducting CSR activity
Level of Participation Very high Moderate little bit Not at all Total Frequency 1 24 34 1 60 Percentage 1.67 40.00 56.67 1.67 100

The above table shows that 56.67% respondent believe that there is very little level of participation from villages in conducting CSR activity. 40% respondent believes that level of participation form villages for CSR activities is moderate.

Table 17 Table showing contribution from villagers in CSR activities

Contribution in CSR Cash contribution Personal Involvement Planning & Decision Making No Contribution Any Other Total Frequency 11 24 0 25 0 60 Percentage 18.33 40.00 0.00 41.67 0.00 100

The above table shows that 41.67% respondents are of the view that there is no contribution from their side in CSR activities. 40% respondents are of the view that their contribution is in form of Personal Involvement whereas 18.33% respondent has contributed in form of cash for CSR activities.

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Table 18 Table showing whether there is any contribution in funds from villages
Funds from villages Yes No Total Frequency 38 22 60 Percentage 63.33 36.67 100

The above table shows that 63.33% respondents says that there has been contribution in funds from villages for CSR activities where as 36.67% respondents are of the view that there is no contribution in funds from villages for CSR activities.

Table 19 Table showing amount of contribution from villages

Contribution in CSR Up to 10 % Up to 25 % Up to 50 % Labour Contribution Any Other Total Frequency 24 14 0 8 0 46 Percentage 52.17 30.43 0.00 17.39 0.00 100

The above table shows that 52.17% respondents has contributed up to 10% of the total expenditure in cash for the CSR activity whereas 30.43% has contributed up to 25% of the total expenditure. 17.39% respondents say that they have contributed in form of labour for CSR activity.

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Analysis of Corporate

Table 20 Table showing Objective of Corporate Social Responsibility

Objective Encourage responsible business practice Promote the concept of good corporate citizenship Highlight the social responsibility of the organization Responsibility of an organization towards the society Any other Total Frequency 1 1 Percentage 10 10

10

7 0 10

70 0 100

The above table shows that, 7 (70%) respondents believe that the objective of CSR is Responsibility of an organization towards the society while 1 respondent each believes it is to either Encourage responsible business practice, Promote the concept of good corporate citizenship or Highlight the social responsibility of the organization.

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Table 21 Table showing desirability of CSR

Desirability Very much desirable Desirable Indifferent Not at all desirable Total Frequency 4 5 1 0 10 Percentage 40 50 10 0 100

50 50 40 30 20 10 0 Very much desirable Desirable Frequency Indifferent Not at all desirable 4 5 1 10 0 0 40

Percentage

The above table shows that 5 (50%) respondents believe that CSR is desirable for business while 4 respondents believe that it is very desirable for business and only 1 respondent was having indifferent view point. Not a single respondent is of the view that CSR is not at all desirable for the business.

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Table 22 Table showing Reason to get involved in CSR

Reason For better financial return to boost brand image just for marketing To do good for society & environment All of the above Total Frequency 0 0 2 6 2 10 Percentage 0 0 20 60 20 100

The above table shows that, out of total 10 respondents 6 i.e. 60% thinks that reason to get involved in CSR is to do good for society & environment. 2 respondents also think that the only reason to get involved in CSR is just for marketing of the company or a product. And 2 respondents also think that it is all the above mentioned reason.

Table 23 Table showing whether separate board is there or not for CSR
Separate Board Yes No Total Frequency 7 3 10 Percentage 70 30 100

The above table shows that out of 10 respondents, there is separate board for CSR in the organization of 7 respondents.

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Table 24 Table showing department which looks after CSR in companies

Department HR Admin Cross Functional Team Outside NGO Separate CSR division Total Frequency 2 2 0 0 6 10 Percentage 20 20 0 0 60 100

The above table shows that out of 10 respondents, in the organization of 6 (60%) respondents separate CSR division looks after the CSR activities while in the organization of 2 respondents it is done either by HR or by Admin.

60 60 50 40 30 20 10 0 HR Admin Cross Functional Team Frequency Outside NGO Separate CSR division 2 2 6 0 0 0 0 20 20

Percentage

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Table 25 Table showing programs carried out for CSR and their frequency

Environment Freq uency Regularly Frequently Sometimes Never Total 4 2 1 2 10 Percenta ge 40% 20% 10% 20% 100%

Rural Development Frequen cy 2 6 1 1 10 Percenta ge 20% 60% 10% 10% 100%

Health Frequen cy 4 3 3 0 10 Percenta ge 40% 30% 30% 0% 100%

Educational Frequen cy 4 4 2 0 10 Percenta ge 40% 40% 20% 0% 100%

The above table shows that, out of 10 respondents, 4 (40%) are of the view that programs related to Environment are carried out regularly while 2 respondents are of the view that it is carried out frequently and other 2 says that it had never been carried out. Out of 10 respondents, 6 (60%) says that program related to Rural Development is carried out frequently while 2 of them says that program related to Rural Development is done on regular basis. As far as program related to Health is concerned, 4 respondents says that it is done on regular basis while 3 says that it is done frequently and remaining 3 says that it is done only sometimes. Out of 10 respondents, 4 say that program related to education is carried out regularly and frequently and 2 respondents are of the view that it is carried out sometimes only.

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Table 26 Table showing frequency of formal meetings held in a year to discuss about CSR
Meetings No Formal meetings Monthly meetings Quarterly Meetings Six Monthly meetings Annual Meetings Total Frequency 1 3 4 1 1 10 Percentage 10 30 40 10 10 100

Frequency of formal meetings No Formal

Six Monthly meetings 10% Annual Meetings 10% meetings 10%

Monthly meetings 30%

Quarterly Meetings 40%

The above table shows that out of 10 respondents, 4 (40%) respondents say that Quarterly meetings are held in a year to discuss about the CSR while 3 (30%) respondents say that Monthly meetings are held to discuss about the CSR. The remaining 3 respondent say that No formal meeting, six monthly meeting and Annual meeting respectively are held to discuss about CSR.

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Table 27 Table showing involvement of employees in CSR

Involvement Exclusively working on it Rotated on their willingness Shoulder dual responsibility Any other Total Frequency 6 1 3 0 10 Percentage 60 10 30 0 100

The above table shows that out of 10 respondents, 6 (60%) respondents say that they are exclusively working on CSR while 3 respondent say that they are given dual responsibility and 1 respondent say that he is rotated on his own willingness.

Table 28 Table showing employees involved in CSR program are

Particulars Professionally Qualified On the Job training is given Self-Learning expected Any other Total Frequency 6 1 3 0 10 Percentage 60 10 30 0 100

Out of 10 respondents who are involved in CSR program, 6 (60%) respondents are professionally qualified while 3 respondents say that self learning is expected out of them for doing CSR activity and 1 respondent say that on the Job training is given.

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Table 29 Table showing designing of CSR in reference to

CSR designing reference Community Needs Government guidelines Company's global CSR framework Any other Total Frequency 1 2 5 2 10 Percentage 10 20 50 20 100

Out of 10 respondents, 5 (50%) respondents say that designing of their CSR program is as per companys global CSR framework while 2 respondents say that it is as per government guidelines and only 1 respondent say that CSR is designed as per community needs.

Table 30 Table showing suggestion for developing a sustainable CSR program

Suggestion Building awareness on CSR Facilitating the adoption of CSR Organizing seminars, meetings, visits etc All of the above Total Frequency 2 2 3 3 10 Percentage 20 20 30 30 100

Out of 10 respondents, 3 respondents (30%) say that for developing a sustainable CSR program, seminars, meetings and visits should be organized while 2 respondents say that awareness should be build on the CSR and adoption of CSR should be facilitated. The remaining 3 respondent say that all the 3 suggestion helps in developing a sustainable CSR program.

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Table 31 Table showing identification of linkages by management

Linkages CSR & Business Performance CSR & Employee Relation CSR & Community Support CSR & Customer Loyalty Total Frequency 5 0 5 0 10 Percentage 50 0 50 0 100

The above table shows that out of 10 respondents, 5 (50%) respondents feel that their management has been able to find out linkage between CSR & Business performance while other 5 respondents feel that there is a linkage between CSR & Community support. No one has been able to identify the linkage between CSR & Employee relation and CSR & Loyalty.

Table 32 Table showing reaction of government to your social responsibilities activity

Linkages Very Positive Just appreciates Negative No reaction Total Frequency 5 5 0 0 10 Percentage 50 50 0 0 100

Out of 10 respondents, 5 respondents say that the response of government is very positive towards the CSR activities while remaining 5 say that government just appreciates their CSR activities.

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Table 33 Table showing future prospects of CSR

Future parameters Bright Very Bright Poor No future at all Total Frequency 6 2 2 0 10 Percentage 60 20 20 0 100

60 60 50 40 30 20 10 0 Bright Very Bright Frequency Poor Percentage No future at all 6 2 2 0 0 20 20

The above table shows that out of 10 respondents, 60 % respondents are of the view that the future of CSR is bright while 20% of the respondents believe that it is very bright and only 20% of the respondents think that CSR have poor future.

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Table 34 Table showing best suitable CSR approach

CSR approaches Community based development Philanthropic Creating shared value Benchmarking Incorporating CSR strategy into business Total Frequency 7 0 2 0 1 10 Percentage 70 0 20 0 10 100

70 70 60 50 40 30 20 10 0 Community based development Philanthropic Creating shared value Benchmarking Incorporating CSR strategy into business Percentage 7 0 0 2 20 10 0 0 1

Frequency

The above table shows that out of 10 respondents, 7 (70%) respondents believe that community based development is the best suitable approach for Corporate Social Responsibility while 2 respondents are of the view that best suitable approach to CSR is by creating a shared value.

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Table 35 Table showing CSR is a window for keeping critics happy

Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 0 1 3 6 0 10 Percentage 0 10 30 60 0 100

The above table shows that 60% of the respondents disagree that CSR is a window for keeping critics happy while 30% of the respondents are uncertain whether CSR is just a window for keeping critics happy and 10% of the respondents agree to the above mentioned statement.

Table 36 Table showing there are many business benefits of CSR

Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 0 7 3 0 0 10 Percentage 0 70 30 0 0 100

The above table shows that out of 10 respondents, 7 (70%) of the respondents agree to the statement that there are many business benefits of CSR while 3 (30%) are uncertain of the above mentioned statement.

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Table 37 Table showing CSR initiatives are marketing gimmick to sell to customers
Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 0 7 3 0 0 10 Percentage 0 70 30 0 0 100

70 70 60 50 40 30 20 10 0 Strongly Agree Agree Uncertain Frequency Disagree Percentage Can't say 7 0 0 3 0 0 0 0 30

The above table shows that out of 10 respondents, 7 (70%) respondents agree to the statement that CSR initiatives are marketing gimmick to sell to customers while 3 (30%) are uncertain of the same statement. No one disagrees to the statement that CSR initiatives are marketing gimmick to sell to customers.

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Table 38 Table showing CSR initiatives give the brand an aura of "Socially Responsible Brand"
Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 2 5 2 1 0 10 Percentage 20 50 20 10 0 100

The above table shows that out of 10 respondents, 5 (50%) respondents agree and 2 (20%) respondents strongly agree to the statement that CSR initiatives give the brand an aura of Socially Responsible Brand. 2 respondents are uncertain and 1 respondent disagree to the same statement.

Table 39 Table showing CSR initiatives influences the brand image of a company or a product
Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 2 5 3 0 0 10 Percentage 20 50 30 0 0 100

The above table shows that out of 10 respondents, 5 (50%) respondents agree and 2 (20%) respondents strongly agree to the statement that CSR initiatives influences the brand image of a company or a product. The remaining 3 respondents are uncertain of the same statement.

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Table 40 Table showing CSR initiatives give competitive advantage over other firms
Particulars Strongly Agree Agree Uncertain Disagree Cant say Total Frequency 0 4 5 1 0 10 Percentage 0 40 50 10 0 100

The above table shows that 50% of the respondents are not sure (uncertain) whether CSR initiatives give competitive advantage over other firms or not while 4 (40%) respondents agree that CSR initiatives do give competitive advantage over other firms and 1 respondent disagree to that statement.

Table 41 Table showing HR departments role in addressing the CSR issue

Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 0 4 4 1 0 9 Percentage 0 44.44 44.44 11.11 0.00 90

The above table shows that out of 9 respondents, 4 respondents agree and equal number of respondent are uncertain about the statement that HR department has significant role to play in addressing the CSR issue while 1 respondent disagree to the statement. (Note: 1 respondent didnt answered this question)

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Table 42 Table showing A CSR initiative helps in enhancing overall financial position
Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 0 2 4 3 1 10 Percentage 0 20 40 30 10 100

The above table shows that, out of 10 respondents, only 2 (20%) respondents agree to a statement that CSR initiative helps in enhancing overall financial position. 4 (40%) respondents are uncertain about the same statement while 3 (30%) respondents disagree to it.

Table 43 Table showing Investment related to CSR should be covered in core finance module
Particulars Strongly Agree Agree Uncertain Disagree Cant say Total Frequency 0 4 5 1 0 10 Percentage 0 40 50 10 0 100

The above table shows that out of 10 respondents, 4 (40%) respondents agree that investment related to CSR should be covered in core finance module while 5 (50%) respondent are not sure (uncertain) whether it should be covered or in finance module or not. 1 respondent disagree to the above statement.

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Table 44 Table showing CSR activity must center on profit maximization

Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 0 3 3 4 0 10 Percentage 0 30 30 40 0 100

40 40 35 30 25 20 15 10 5 0 Strongly Agree Agree Uncertain Frequency Disagree Can't say 0 0 3 3 4 0 0 30 30

Percentage

The above table shows that out of 10 respondents, 4 (40%) respondents disagree that CSR activity must center on profit maximization while 3 (30%) respondents agree to that CSR activity must center on profit maximization and remaining 3 (30%) are uncertain about the above statement.

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Table 45 Table showing Profit is necessary but only after meeting certain obligations
Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 0 6 3 1 0 10 Percentage 0 60 30 10 0 100

The above table shows that out of 10 respondents, 6 (60%) respondents agree that profit is necessary but only after meeting certain obligations while 3 (30%) respondents are uncertain of the above statement and 1 respondent disagree to it.

Table 46 Table showing Money and wealth are most important for your organization
Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 0 2 4 3 1 10 Percentage 0 20 40 30 10 100

The above table shows that out of 10 respondents, 4 (40%) respondent are uncertain of the statement that money and wealth are most important for your organization while 2 (20%) agree to it. 3 (30%) respondent disagree with the above statement.

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Table 47 Table showing Money spent on CSR brings long term benefit to company
Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 1 5 3 1 0 10 Percentage 10 50 30 10 0 100

50 50 40 30 30 20 10 10 0 Strongly Agree Agree Uncertain Disagree Can't say 5 1 3 1 10 0 0

Frequency

Percentage

The above table shows that out of 10 respondents, 5 (50%) agrees that money spent on CSR brings long term benefit to company while 1 (10%) strongly agrees to above statement. 3 (30%) of the respondents are uncertain whether the money spent on CSR brings long term benefit to company or not and 1 (10%) of the respondents disagrees to the above statement.

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Table 48 Table showing Companies should inform customers about their indirect contribution
Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 1 6 2 1 0 10 Percentage 10 60 20 10 0 100

60 60 50 40 30 20 10 0 Strongly Agree Agree Uncertain Disagree Can't say 1 10 20 6 10 2 1 0 0

Frequency

Percentage

The above table shows that out of 10 respondents, 6 (60%) respondents agree that companies should inform customers about their indirect contribution while 1 (10%) respondents strongly agrees to the above statement. 2 (20%) of the respondents are uncertain whether companies should inform customers about their indirect contribution or not while 1 (10%) disagrees to the same.

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Table 49 Table showing Tangible economic benefits for the company from CSR commitments
Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 0 2 5 3 0 10 Percentage 0 20 50 30 0 100

The above table shows that out of 10 respondents, 5 (50%) respondents are uncertain whether CSR commitments results in tangible economic benefits for the company or not while 2 (20%) respondents agree that CSR commitments do result in tangible economic benefits for the company and 3 (30%) disagrees that CSR commitments do not result in tangible economic benefits.

Table 50 Table showing Employees have motives beyond economic needs

Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 1 7 2 0 0 10 Percentage 10 70 20 0 0 100

The above table shows that out of 10 respondents, 7 (70%) respondents agrees that Employees have motives beyond their economic needs and for organization efficiency their needs must be fulfilled. 1 (10%) strongly agrees while 2 (20%) disagrees to the above statement.

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Table 51 Table showing Group participation is fundamental for meeting social needs
Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 0 8 1 1 0 10 Percentage 0 80 10 10 0 100

The above table shows that out of 10 respondents, 8 (80%) respondents agree to the statement that group participation is fundamental for meeting social and psychological needs of employees. 1 (10%) are uncertain and remaining 1 (10%) disagree to the above statement.

Table 52 Table showing Subordinates opinion should be considered

Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 1 6 2 1 0 10 Percentage 10 60 20 10 0 100

The above table shows that out of 10 respondents, 6 (60%) respondents agree that opinion of subordinates should be considered as it may lead to some profitable ideas while 1 (10%) disagree and 2 (20%) respondents are uncertain regarding the above statement.

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Table 53 Table showing: Business and government must cooperate to solve problems of society
Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 1 6 2 1 0 10 Percentage 10 60 20 10 0 100

The above table shows that out of 10 respondents, 6 (60%) respondents agree that Business and Government must cooperate to solve the problems of society while 2 (20%) respondents are uncertain about the statement and 1 (10%) respondents disagree to the statement that Business and Government must cooperate to solve the problems of society.

Table 54 Table showing Indian companies are not doing their best for society through CSR initiatives
Particulars Strongly Agree Agree Uncertain Disagree Can't say Total Frequency 1 6 2 1 0 10 Percentage 10 60 20 10 0 100

The above table shows that out of 10 respondents, 6 (60%) respondents agree that Indian companies are not doing their best for society through CSR initiatives while 1 (10%) strongly agree to the statement. 2 (20%) respondents are uncertain and 1 (10%) disagree that Indian companies are not doing their best for society through CSR initiatives.

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CHAPTER 4: FINDINGS, CONCLUSION & SUGGESTIONS

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FINDINGS
Findings from Beneficiaries More number of respondents from beneficiaries i.e. 46.67% is between the age group 31 to 40 years while 18.33% respondents are between the age group of 41 to 50 years. Male respondents are more than female respondents. They are in the ratio of 7:3. Maximum numbers of respondents have graduate and secondary qualification. 45% of the respondents believe that CSR activity focused in their villages are of Infrastructure Development and 33.33% respondents are of the view that Health & Environment is focused more as CSR activities by the companies. Corporate Social Responsibility activities done are focused more on development of village as a whole rather than on child or youth development. Maximum number of people is satisfied with the Corporate Social Responsibility activities carried out by the companies. More number of respondents wants Drainage Facility in their village as a part of future Corporate Social Responsibility activities. As far as Infrastructure development & Education is concerned reliability on Corporate Social Responsibility is very moderate. But, as far as Health is concerned reliability on Corporate Social Responsibility is high. More number of respondents is of the view that they will have to depend on Government Schemes if Corporate Social Responsibility activities are not done in their villages. Out of the 5 companies carrying out the Corporate Social Responsibility activities in the petrochemical area, GSFC is doing the maximum Corporate Social Responsibility activity followed by GIPCL, Reliance, GACL and IOCL respectively. Most of the respondents say that need assessment is not done by the companies before carrying out the Corporate Social Responsibility activity. Most of the respondents i.e. 65% say that there are no instances of incomplete Corporate Social Responsibility activities.

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 Most of the respondents say that there had been very little participation from villages in conducting Corporate Social Responsibility activities. 40% of the respondent says that their contribution in Corporate Social Responsibility activities is in the form of personal involvement. 63.33% respondent says that they have also contributed in funds for Corporate Social Responsibility activities. Majority of the respondent i.e. 52.17% says that they have contributed up to 10% of the total expenses of Corporate Social Responsibility activity carried out in their village while 30.43% respondent says that they have contributed up to 20% of the total expenses of Corporate Social Responsibility activity.

Findings from Corporate Majority of the corporate believes that objective of Corporate Social Responsibility is Responsibility of organization towards the society Majority of the corporate believes that Corporate Social Responsibility is desirable for their business. Most of the corporate has involved them in Corporate Social responsibility to do good for the society & environment. Most of the companies have separate board for Corporate Social Responsibility in the organization. 40% of the respondent says that program related to Environment are carried out regularly by them as a part of CSR activity while as far as Rural Development is concerned, programs related to it are carried out frequently by the companies. CSR activities related to Health and Education is also carried out on a regular basis. In most of the company, quarterly meetings are held to discuss about the matter related to Corporate Social Responsibility. 30% of the respondent says that monthly meetings are also held for CSR related matter. 60% of the respondents involved in Corporate Social Responsibility are exclusive working on it while 30% of the respondents are shoulder dual responsibility one of them being CSR.

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 60% of the employees working on Corporate Social Responsibility for their respective organization are professionally qualified in the field. 50% of the respondents say that designing of their Corporate Social Responsibility activity are in accordance with companys global CSR framework while 20% respondents feel that it is according to government guidelines. For developing a sustainable CSR program seminar, meetings and visits should be organized before conducting the program. Also awareness should be build regarding the program on the beneficiaries. 50% of the respondents believe that Corporate Social Responsibility has a direct linkage with Business Performance while other 50% of the respondents are of the view that CSR is linked with the community support. 50% of the respondent feels that reaction of government to their Corporate Social Responsibility activity is very positive while other 50% are of the view that government just appreciates their efforts related to CSR activity in the society. Most of the corporate feels that Corporate Social Responsibility has a bright future and there is not a single person who says that CSR has no future at all. Majority of the respondent i.e. 70% believes that best suitable approach of doing Corporate Social Responsibility is through Community Based Development approach. 70% of the respondent agrees that there are many business benefits of Corporate Social Responsibility. Majority i.e. 70% of the respondents believe that Corporate Social Responsibility initiatives are marketing gimmick to sell to customers. 50% of the respondent feels that CSR initiatives give the brand an aura of Socially Responsible brand.

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 Corporate Social Responsibility initiatives do influences the brand image of a company or a product. Corporate Social Responsibility does not any give clear cut advantage over the other firms to an organization. There is a mixed view to a statement that HR department has a significant role to play in addressing the issue of Corporate Social Responsibility. It is very clear from the study that Corporate Social Responsibility initiatives do not enhance the financial position of an organization. Majority of the respondent are uncertain as to whether investment related to CSR should be included in core financial module or not. Most of the respondents disagree to the statement that CSR activity must centre upon profit maximization. 60% of the respondent believes that profit is necessary but only after meeting certain obligations. 50% of the respondents feel that money spent on Corporate Social Responsibility brings long term benefit to the company. Majority of the companies believe that they should inform customers about their indirect contribution to the society. 70% of the respondents feel that employees have motive behind the economic needs and for the organizational efficiency their needs must be fulfilled. 80% of the respondents are of the view that group participation is fundamental for meeting social needs. While deciding on the Corporate Social Responsibility opinion of subordinates should also be considered as it may lead to some profitable ideas.
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 60% of the companies believe that Business and Government must cooperate with each other to solve the problems of the society. Majority of the respondents say that Indian companies are not doing their best for society through Corporate Social Responsibility Initiatives.

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CONCLUSION
The concept of CSR is becoming more and more popular throughout the world. Several corporate have begun to implement programs related to CSR. Of course, not all of them are being done in the spirit of sharing or serving the people. As far as petrochemical area in the city of Vadodara is concerned, implementation of CSR activities is done properly and the beneficiaries do reap the benefits of those activities. Infrastructure Development is the most focused area by companies in and around petrochemical area, which is adopted as a part of CSR initiatives. This can be seen in context to Gujarat Model at state level wherein Narendra Modis emphasis is also on the development of state infrastructure. These CSR activities by the corporate are supplementing the Gujarat Model. It is found out from the study that if Corporate Social Responsibility activities are not done in the villages, they would depend on the Government Schemes for such benefits. Involvement of both, beneficiaries and benefactors for a cause always yields better and quality results. As seen in the CSR approach in petrochemical area, there is an active involvement of people living in villages. This involvement is in terms of personal contribution and cash contribution both. CSR is responsibility of organization towards the society. CSR is desirable for the business as a whole and is done to do good for society and environment. Programs related to Environment are carried out regularly in the petrochemical area as a part of CSR initiatives and mostly companies has separate board to discuss on the issue of CSR. Even improvement of Health and Education in villages is given due importance by the companies as part of their CSR initiatives. People working Corporate Social Responsibility in their respective companies are exclusively working on it and quarterly meetings are held to discuss on the matter of CSR. It is seen that employees are representative of the society & they do have needs beyond the economical need i.e. psychosocial needs, developmental need & the organization should have due concern to fulfill those need of their employee. Thus to fulfill this mission the organization should see to it that all employees should be involved in decision making to make them realize their importance in the organization & this will motivate them to lead the torch forward. The need of an hour is not merely to do CSR activities but to build a sustainable CSR model for petrochemical area. And to do that various seminars, meetings and visits should be organized by the corporate before initiating the program so that they get accustom to ground reality and can
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design the program accordingly. Over and above this most important thing is to create awareness in the eyes of beneficiaries about the advantage of the seminars. As CSR is basically focused for the welfare of the community people, the government should jointly take the responsibility to solve the problems of the society. Study also reveals that the best suitable approach for corporate social responsibility is community based development approach and if such approach is adopted then corporate social responsibility will have very bright future. As a counter argument, study has also revealed that corporate social responsibility initiatives are just a marketing gimmick by the companies and does not give any clear advantage over the other companies. It also reveals that CSR initiatives by the company do not improve the financial position of the company and it should not centre upon profit maximization. Customers should be informed about the indirect contribution by the companies as it brings long term benefits to the company. CSR is a corporate policy & commitment by the board of director to the down below employees & each & every stake holders of the organization. It also take care of various areas such as business conduct, customer care, human rights, employees and their family members, suppliers as also community & health & safety of all. Thus at the end finally concluding the importance to be given to CSR is that of DNA in the human body. CSR is treated as a foundation on which the corporate business is developed.

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SUGGESTIONS
1. The study reveals that there is a need of draining facility in the surrounding villages of petrochemical area. So companies should try and focus more on drainage facility as part of their Corporate Social Responsibility initiatives.

2. Right now the CSR activities are focusing more on development of village as whole, instead of which focus should be on development of child in terms of proper education and development of youth in terms of skill building.

3. The study shows that proper need assessment is not done by the companies before conducting any CSR activity so, before initiating any CSR activity in the village need assessment survey should be done.

4. Well Defined CSR policy should be there. a. Well defined CSR policy which has wide spread acceptance, & known to all stakeholders. b. To make aware all the employees to integrate with all function of the organization related to CSR. c. To make community, socially & environmentally empowered to play pivotal role in their own development. d. Organization should play a role of facilitator rather than providing facilities.

5. For developing a sustainable CSR program, seminar, meetings and visits should be organized before conducting the program. Also awareness should be build regarding the program on the beneficiaries.

6. CSR need to be audited by independent audit firm to have CSR in true spirit for all stake holders.

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CHAPTER 5: ANNEXURE

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REFERENCES
Bibliography: Ahuja, Ram. 2001. Research Methods. New Delhi: Rawat Publications: 155-184. Baxi, C.V. and Ajit Prasad. 2005. Corporate Social Responsibility: Concepts and Cases. The Indian Experience. New Delhi: Excel Book. Been, S. and Dianne Bolton. 2011. Key Concepts in Corporate Social Responsibility. New Delhi: Sage Publications Ltd: 56-62. Kottler, Philip and Nancy Lee. 2005. Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause. New Delhi: Wiley India Pvt. Ltd.: 1-48. Kumar, Sunil and Shilpa Jain. 2009. Serving the Bottom of the Pyramid: A Win-Win Game. VikasVani Journal, Vol. 3, No.2: 1-6. Mitra, Meera. 2007. Its Only Business! Indias Corporate Responsiveness in a Globalized World. New Delhi: Oxford University Press. Murthy, N. R. Narayana. 2009. Corporate Social Responsibility and Philanthropy, A Better India A Better World. New Delhi: Sage Publication.

Websites: http://en.wikipedia.org/wiki/Corporate_social_responsibility http://www.bsr.org/en/bsr-conference/session-summaries/2011/ http://www.csreurope.org/pages/en/activities.html http://www.iblf.org/ http://www.slideshare.net/AngelinDafni/needs-and-importance-of-corporate-social-responsibility

http://www.weforum.org/reports
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http://corpgov.net/stakeholders/ http://svn.org/get-inspired/svn-news-program www.wbcsd.org http://www.weforum.org/ http://www.unido.org/csr.html

Dissertations: Shailja Raijada, 2008: Corporate Social Responsibility by selected Multinational Corporations in Gujarat. Patadia Aarohi, 2008: Corporate Social Responsibility as perceived by the executives of GNFC Ltd, Bharuch.

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QUESTIONNAIRE FOR CORPORATES

Priyank Shukla Masters in Human Resource Management (2011-13) Faculty of Social Work, Maharaja Sayajirao University of Baroda

Topic: CORPORATE SOCIAL RESPONSIBILITY: As Perceived by Corporate and Beneficiaries.

Note: This information will be kept confidential and will be used only for academic purpose.

1. Name (optional):2. Personal Information: a) Age:b) Sex:c) Educational Qualification:d) Department:e) Designation:f) Work Experience in this Company:g) Total Work Experience:-

GENERAL INFORMATION: 3. According to you the objective of CSR is: a. Encourage responsible business practice. b. To promote the concept of good corporate citizenship. c. Highlight the social responsibility of the organization. d. Responsibility of an organization towards the society. e. Any Other (Please Specify)

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4. Do you feel that social responsibility is desirable for the business? a. Very much Desirable b. Desirable c. Indifferent d. Not at all Desirable

5. What do you think is the main reason for the organizations to get involved in the Corporate Social Responsibility practices? a. For better financial returns b. To boost brand image c. Just for marketing d. To do good for the society and environment e. All of the above

6. Do you have any Separate Board? a. Yes b. No

7. Who looks after Social Responsibility affairs in your organization? a. Human Resource (HR) department. b. Admin Department. c. Cross functional team is identified. d. Outside NGO. e. Separate Social Responsibility Division. f. Any Other (Please Specify): _______________________

8. Which programs do you carry out for the betterment of community? Regularly a b Environmental protection Rural development frequently sometime Never

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c d e

Health Educational Others (Please Specify)

9. Frequency of Formal Meetings held in a year to discuss CSR agenda. a. No formal meetings. b. Monthly Meetings. c. Quarterly Meetings. d. Six Monthly Meetings. e. Annual Meeting.

10. Employees Involved in CSR programs are. a. Exclusively working on it. b. Rotated on their willingness for volunteering. c. Shoulder dual responsibility. d. Any Other (Please Specify).

11. Employees involved in CSR program are: a. Professionally qualified. b. On the Job Training is given. c. Self-Learning expected. d. Any Other (Please Specify).

12. CSR is designed strictly in reference to : a. Community Needs. b. Government guidelines. c. Companys global CSR framework. d. Any Other (Please Specify).

13. What are your suggestions for developing a sustainable CSR program?
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a. Building awareness on CSR. b. Facilitating the adoption of programs. c. Organizing seminars, meeting, visits etc. d. All of the above.

14. Management has been able to identify linkages between: a. CSR & Business Performance b. CSR & Employee Retention. c. CSR & Community Support. d. CSR & Customer Loyalty.

15. What is the reaction of government to your Social responsibility activities? a. Very Positive b. Just Appreciates c. Negative d. No reaction.

16. What according to you is the future prospect of CSR in India? a. Bright b. Very Bright c. Poor d. No future at all

17. Which approach for CSR best suits your organization? a. Community based development approach. b. Philanthropic approach c. Creating shared value (CSV) approach d. Benchmarking approach e. Incorporating the CSR strategy directly into the business strategy

18. List down any 03 activities conducted by your company in the recent times? a. ___________________________________________
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b. ___________________________________________ c. ___________________________________________

Please Tick mark on the appropriate answer.

Sr. No. Statement Strongly Agree Agree Uncertain Disagree Cant say

PERCEPTION:
19.

CSR is just a window that companies do to keep critics happy.

20.

There are many business benefits of CSR.

21.

CSR

Initiatives

are

just

marketing gimmick adopted by the company to sell to customers?

22.

CSR Initiatives gives a brand the aura of a "Socially Responsible Brand".

23.

CSR

initiatives

influence the

brand Image of a company or a product.

24.

CSR program(s) gives your firm competitive advantage over other firms in your industry.

25.

The

HR

department

has

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significant role to play in the addressing of the issues of CSR.

26.

If

company its

adopts

CSR

practices

overall

financial

performance is enhanced.
27.

CSR is one of the hot topic in todays world and the investments related to this should be covered in the core module of the finance allocation.

ECONOMIC PERSPECTIVE:
28.

CSR activity must center around profit maximization.

29.

Profit is necessary but only after meeting certain other obligations.

30.

Money and wealth are most important for your organization.

31.

Money spent on CSR actually brings about long term benefits to the company.

32.

Companies should inform the customers that a part of the price they pay for the product will go to charity.

33.

There

are

tangible

economic

benefits for your firm from having CSR commitments.

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SOCIAL PERSPECTIVE:
34.

Employees have motives beyond their economic needs. For their

organizational

efficiency

needs must be recognized.

35.

Group

participation

is

fundamental for meeting social and psychological needs of

employees. Besides it contributes to organizational successes.

36.

Subordinates opinion should be considered because it may lead to some profitable ideas.

37.

Business and government must cooperate to solve problems of society.

38.

Indian Companies are not doing their best for society through CSR initiatives.

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INTERVIEW SCHEDULE FOR BENEFICIARIES

Priyank Shukla Masters in Human Resource Management (2011-13) Faculty of Social Work, Maharaja Sayajirao University of Baroda

Topic: - CORPORATE SOCIAL RESPONSIBILITY: As Perceived by Corporates and Beneficiaries.

Note:This information will be kept confidential and will only use for academic purpose.

(A) PERSONAL INFORMATION: 1. NAME: 2. AGE: 3. GENDER: a. Male b. Female 4. VILLAGE: 5. TALUKA: 6. DISTRICT: 7. EDUCATIONAL QUALIFICATION: a. Illiterate b. Primary c. Graduate 8. OCCUPATION: 9. CATEGORY: d. Diploma e. Secondary f. Post Graduate

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(B) GENERAL INFORMATION: 1. Which CSR activities have been done in your village? a. For Education b. For Infrastructure Development c. For Mid-day meal d. For Health & Environment e. Any Other_______________ 2. Which target group was benefited from the CSR activities? a. Children b. Youth c. Aged d. Village as a whole 3. Are you satisfied with the CSR activities? a. Yes b. No 4. Which CSR activities do you want in your village in near future? a. Education b. Health c. Infrastructure d. Drainage Facility e. Any Other____________________ 5. How much do you rely on CSR activities done by the companies as far as Infrastructure is concerned? a. Very High b. High c. Moderate Reliability d. Not at all reliable 6. How much is your reliability on CSR activities as far as Education is concerned? a. Very High b. High c. Moderate Reliability d. Not at all reliable 7. How much is your reliability on CSR activities as far as Health is concerned? a. Very High b. High c. Moderate Reliability d. Not at all reliable

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8. On whom will you depend if CSR activities are not done in your village? a. District Development Officer (DDO) b. Government aid c. Government Schemes d. Will influence the companies 9. Which company is doing or has done CSR activity in your Village? a. GACL b. GSFC c. IOCL d. Reliance/IPCL e. Any Other _________________ 10. Do companies go for Need Assessment before conducting CSR activity? a. Yes b. No 11. Has there been any case where a particular company has started the CSR activity but has not been able to finish it completely? a. Yes b. No 12. What is the level of participation from Village people in conducting the CSR activities? a. Very Much b. Moderate c. Little Bit d. Not at all. 13. What is your contribution in the CSR activities carried out in your village? a. Cash contribution b. Personal involvement c. Involvement in planning & decision making d. No contribution e. Any Other ________________ 14. Is there any contribution in funds from village side in conducting the CSR activities? a. Yes b. No 15. If Yes, how much contribution is their? a. 10% b. 25 % c. 50 % d. Contribution in terms of Labour e. Any Other ______________

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