Corporate Social Responsibility-The changing face of Indian Industry


Sumanta Dutta
Faculty Member
ICFAI National College
Garia, Kolkata

The wind of transformation of the global economy has manifested new changes in the corporate initiative. Earlier firms viewed corporate social activity as just writing checks based on management discretion, to projecting themselves as good. But there has been a shift towards identifying the domain area and initiatives that can be integrated with the business philosophy for making long term commitments with the objects of not only doing well, but also doing well.

What is corporate social responsibility?

Corporate social responsibility is a much misunderstood concept. It contradicts the corporate objectives of profit motive. But it is difficult to overlook the prime objective of the business for the purpose of 'do good activity'. Today consumer not only ready to accept the role of a corporate house only to satisfy their demand to produce the goods according to their requirement. According to Kotler and Lee-it is" a commitment to improve community well being through discretionary business practices and contributions of corporate resources."

The world business council on Sustainable Development has defined corporate social responsibility as the "commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life." It is the backbone of today's business sustainability.Kotler cites several benefits of corporate social initiatives on the part of corporates.It includes-

1) Increase in sales
2) Increase in market share
3) Strengthened brand positioning
4) Improve corporate image
5) Increased appeal for customers, employees and investors
6) Reduced operating cost

As "initiative" is necessary to fulfill the unfulfilled business operation and long term profitability as well as sustainability by meeting the ethical, legal, commercial and public expectation that society has from business.

What is our new mantra of corporate social initiative:

The following is the major underlying thought in respect of corporate social responsibility.

- What has been the organization's contribution to society and the economy as a whole?
- Has the organization employed ethical business practices?
- Does it contribute to the sustainable development of the economy and the environment in which it operates?

M B Lal ,chairman and MD of HPCL considered that large transnational  corporations need to play the role of 'Social Transformation Agents' by creating a positive impact through their business interventions.Organisation should transformed their role from 'wealth creators' to 'wealth distributors' in order to the enterprise activities.

Corporate social initiatives may be defined as 'the major activities undertaken by a corporation to support social causes and to fulfill commitment to corporate social responsibility.' In other words, Corporate social initiatives of transnational corporations is no more an option but an imperative for sustainable in the long run.

What is the core philosophy under Corporate social responsibility?

It is needless to mention that a corporation is framed or exist for the basic purpose of wealth generation, maximizing the stockholder's return and long run sustainability. Profit or economic gain should be the core objectives of any business to survive. But at the same time for the sake of the self sustainability and enjoy a longevity and growth, the organization cannot or should not forget its responsibility towards the society or the environment in which it operates.

To provide support in the favour of corporate social responsibility the comment of Canadian Center of Philanthropy as "a set of management practices that ensure the company minimized the negative impacts of its operations on society while maximizing its positive impact".

The economic aspects of corporate social responsibility:

Corporate social responsibility in the broader sense is taken to mean sustaining economic/business activity by co-mingling social responsibility of the enterprise in their external and internal relations with business prospects. Hence, corporate social responsibility is more than charity. It has some underlying economic implication. It is an innovative way to contribute by the firms to spend in towns and villages and to buy products from millions of artisans who are at the bottom of the pyramid. The fortune of the bottom of the pyramid calls for corporations to design products/services for the enormous population at the bottom of the pyramid.The primary assumption is that this population segment has some disposable income and firms can still make profits on large volume.Hence it moves the corporation towards a set of socially committed and aligned work culture.


It may be aptly said that it is a co-branding with corporates social initiatives with core objective of business philosophy. It is not a charity rather, it is a mean to sustain long term economic gain over other competitors.Hence, and the idea of a business organization to maximize profits and also contribute to the society is mutually exclusive.

Sumanta Dutta
Faculty Member
ICFAI National College
Garia, Kolkata

Source: E-mail March 10, 2007


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