ISSN eset eel Vol. XXVIII » December, 2014 THE UTKAL BUSINESS REVIEW (The Journal of Business Studies)The Utkal Business Review December 2014, Vol-XXVIIl, pp 48-64 Theory and Practice in Corporate Social Responsibility: Reviewers’ Thoughts on Indian Cases N.M. Leepsa * Pradyot Ku. Pradhan ** ABSTRACT This paper aims to itluminate the issue of corporate social responsibilities as ‘observed through the theory and practice of corporate social responsibiéity CSR from academic and corporate world. The study aims to fine out whether there is a numerous efforts made by earlier researcher ta bring abaut conclustve evidence ‘about the issues of (CSR) in clear and unbiased mariner by property identifying the research gaps found from the literature survey: The impact of CSR on companies or organisations from various sectors is also studied i this paper. This paper investigates the issues of CSR through content analysis by making ‘extensive Fiterature survey from both Indian and international research papers. The findings of the study shows that around 30,000 or more works has been done in the area of CSR from 1995 and earlier till 2015 and most of the research work is done in USA followed By China and few in India relevant to corporate world. Thus it is eonciuded that there is still green areas fo explore and relook in Indian cases. This paper investigates the CSR activities in different industry andits impact ‘on performanee of companies and image among stakeholders. The findings of this research provide more comprehensive evidence from all of the industres that have een involved in Corporate Social Responsibility during the period 2000-2044 so that the returns of different industries can be compared. Most importantly. the evidence shows how across industries the CSR activities change over time at significant levels. Apart froma it the study proposes the future ap areas by making, summary of research papers and finding out the gap areas. Key Words: Industry, Corporate Social Responsibility, Sustainability, India * Aasston Professor Schoo! of Management, NIT: Rourkela, Osha + Professor BG Department of Commerce, Uta Univers Dhabaneswor Odicha 48 M espa Prodvos K Prachan duction Inrecent years, both academics and practitioners are paying more attention to ISR activities due to its significant uence on stakeholders, With regard to jis, CSR includes the companies” towards sharcholders, .. Despite numerous efforts the consequences of corporate ictiities. This paper aims to illuminate the issue of corporate social responsibilities is observed through the theory and tice af corporate social responsibility GR from academic and eorporate world. ie study aims to find out whether there jg. numerous efforts made by earlier fesearcher to bring about conclusive jdence about the issues of (CSR) in clear fiew of Literature and unbiased manner by properly {identifying the research gaps found from the literature survey. The impact of CSR on companies or organisations from various sectors isalso studied in his paper. ‘This paper investigates the CSR activities in different industry and its impact on performance of companies and image among stakeholders. The findings ofthis research provide more comprehensive «evidence feom all ofthe industries that ave been involved in Corporate Social ‘Responsibility during the period 2000- 2014 so that the returns of different industries can be compared. Most importantly, the evidence shows how across industies the CSR activities change over time at significant levels, Apart from it the study proposes the Future gap areas by making summary of research papers and finding out the gap areas Table I Definition of CSR. Definition of CSR I The first social responsibility of business is to make | enough profit to cover costs of the future. If this social | Drucker responsibility is not met, no other social responsibility] (1984) ‘can be met. ‘Corporate social responsibility can be defined as a principle stating that Social corporations should be| Frederick et accountable for the Environmental effects of any of their| al. (1992) actions on their community and environment, 49Theory and Practice in Comporae.. Though on Indion Cones ‘Table I Definition of CSR tLegpso& ProdvotK. Pradhan Initiatives ‘The purpose of CSR isto involve in various Economic, Legal, Ethical, Philanthropic Tt refers to the obligations of businessmen to pursue those tes to benefit of various stakeholders depicted below in graph | to catas socially iblecitizens. and practices of corporations which reflect business responsibility for some of the wider societal good. Policies. to make those decisions, or to follow those lines | Carroll af action which are desirable in terms of the objectives | (1999) and values of our societ ‘Comporate social responsibility is how you weat your employees and all your” stakeholders and “the eShr-em environment. Corporate sustainability and CSR refer (0 company), activities demonstrating the inclusion of social and) 44.¥8° environmental concems in business operations and in (003). interactions with stakeholders. ae ‘A concept whereby companies inteyrate social and environmental concems in theirbusiness operations and in| Dablsrud their interaction with their stakeholders on a voluntary| (2008) basis. CSR reflects the social imperatives and the social consequences of business success, Thus CSR empitially | ign a consists of clealy articulated and communicated policies | ar, Sourees : Collected from various saurces iment Pa 7031 Graph 2:.Purpose of CSR Activities sl‘Theory and Practice in Corpora. Thowphts on Indian Cases ‘Table 1 Understanding the CSR Activities from Literature Tn some finns (eg. in the phannaceutical and resource extrction Couette Past ties) CSR may be a major influence on corporate strateny. Evidence panies making a substantial commitment to CSR—because of a) 6 yo | ” ‘There is a low insignificant relationship between risk-adjusted Aion ness ora nomative case—are likely to ind that this involves major | "39, performance and degree of social responsibility. Vgni” ges with respect to the formulation and implementation of CSR “The fist social responsTbiliy Of business Isto make enough profit © ie fe), not leat beease of the uncertsntes forever associated with cover costs ofthe future. If this social responsibilty s not met, no other | rv a firm's societal obligations. a cesonsin care i GEERT ft is unlikely to play the significant role in poverty reduction in| ! Wverage age of corporate assets is foun ighly comlated wit 3 iy é social responsibifity ranking. After controlling fortis factor, there still] Cochrum & eset unten tat ls peop clint fort, is some correlation between corporate social responsibility and financial | Wood (1984) BR Aiciepaustcliny tecxy sdiocaies snong conporaie eelfrecmaint performance. Aupperle, : ‘ ? ‘arroll & ‘There sno elationship bereen socal responsbiliy and profiabitiy. | At , (1985) 3 | “The abate of relationship between perceptions oF finns comorte sks wes solic magic: Avy tases Ga social responsibilty and measures of theie financial performance show | ay éuipe, Peo Suc ica Gb ahi riptokes seking = that a firm's prior performance, assessed by both stock-market returns eed ee ae yeking mpi and accounting-based measures, is more closely related to corporate | ‘Simderen tive advantage. Corporate citizenship language invokes a} ‘social responsibilty than is subsequent performance. Results also show | ent ere that measures of risk are more closely associated with social (2006) responsibility. : = Five sraegy dimensions are Mentied which help 1 assess the value | Burke & bility language without adopting the econcmie viewpoint, An Gavel fr He GEN fy CSR. Hrosranimies, ceavally ‘tage enial citizenship interpretation expands philanropy as a prosetivity, voluntarism and v (1996) lever for increasing corporate reputation and market There is an “ideal” level of CSR, which managers can determine via | McWilliams mities while retaining managerial diseretion. An idea citizenship costbenelt aa, a hat thre 2 ental latonsip betwen | Sage a ial Htiy ab ends ase (CSR tnd Financial performance 2000) ig ee There is an increasing focus both by business on CSR and also by ae alpine ee society on the actions of business. ‘The Findings implicate both company-specific factors (CSR. isues ‘with low innovativeness capability, CSR actually reduces | Lro & ea of Se Se tae Se oe stisfictien levels and, trough he lowered saison | Bhaachar personal support) are key moderators of consumers’ responses to CS a CSR initiatives can, uncler certain conditions, decrease consumers’ aes 34 (2006) intentions to buy a company’s products. 3Theory and Proce in Corporate. Thoughts on Indian Cases CSR in the Banking Industry Banks contribute to CSR activities NM, Leepaa& Prado K: Prodan ‘of the individual banks and the ines of the Reserve Bank of India to proper cos map for CSR activities | Bffecuive CSR initiaives are those derived trom earl analysis of each | Hesln © development (when comparing banks with forthe efestofother variables likesizeandage ‘organization's unique culture, competencies, and strategie | Jenna . fos Gf te acpi ciasence Kable 207), fi ‘and environment and rural development opportunities 2, Research Methodolo ye eae): hen comparing banks with respect to a irms score higher on CSR when they have Democratic raher han iberofemployees),andinenviranment a. Objectives of Study Republican founders, CEOs, and directors, and when they are market place (whencomparing banks 14 understand the motives of CSR headquartered in Democratic rather than Republican-leaning states. | Dj Giuli & respect to the date of incorporation of ‘activities undertaken by banks in India i pets awnece spank) Indian banks no longer see CSR increases in fim CSR ratings are associated with negative future stock | Kosroversky ie ates tadalvaiyorbeiitgy — to. To-find out the OSR'dlmensions or returns and decline in firm ROA, suggesting that any benefits 10} (20/4) ‘image and marketing their products initiatives by banks in India stakeholders from social responsibility come at the ditect expense of ingh and Aggarwal 2011) it "76 had w iit sep adbctalen by frm value. Banks in Indiahavebeenindulgingina ‘banksin India o achieve the CSR goals Finns with Beier CSR performance face Significantly Tower capital | ~Chengy Bpervewilciiteysboweeestir 4. 0, sive theubdedyingsmmuipons constraints. We provide evidence that both better stakeholder | foannou & Bee cai ses of corporate so of banks to keep themselves involved engagement and transpareney around CSR performance sre ieiportant | Serafeim indoing CSR activities in reducing capital constants ory b. Sample Description [ee wat semester gers eae Takeo, hie i CSR have # specific strategie intent. Mostly the intent is to gain ts Daponkis ats ya eag ‘ alee Kiessling & Significant role in any economy and compat advantage sich a improved elatonship with easomes, | seh eesnconaay ee suppliers and employees, reduce market risks and improve reputation. | MA ee ey ine Tee eck Ber |. This depends om evaluating the the other indus a due to external stakeholder pressure (Beck et al., 1999); (Decker, 2004); (Marin etal., 2009; Truscott etal., 2009) less profitable or smallerbanks may want to increase their CSR initiatives to build stronger ‘elationships with its stakeholders (Narwal cited from Fatma, Rahman & Khan ‘mostly in the priority sector hi ly Priority sector areas. They (2014), In this backdrop, this study has support schools and provide funds for meeting educational expenses. Various studies have shown that banks spend more oneducational and environmental issues in orderto strengthen theirimage and increase consurmer satisfaction. Large banks tend to take on more CSR activities to indicate better market performance, while relatively 4 2007), Indian banks differ in their CSR Orientation with respectto their ownership structure, number of employees, and date of its incorporation, Ithas been found that there isasignificant difference in orientation in the areas of environment and rural impact of CS on Corporate ability (CS), defined in terms of an fion’s financial performance, in banking industry isexaminedby tdaionshipbetveenCSR raingand ion’ financial performance slike Profit Afier Tax (PAT) and Per Share (EPS) afer controlling 55 chosen the Indian banking sector to study the association of CSR with its intemal stakeholders. While doing so, banking industry is divided into private banks, public banks and foreign banks in India The sample chosen for study are as follows:Theoryand Praetie in Corporate. Tovghts on Indian Cases * Private Sector Banks in India: Axis Bank, ICICI Bank, HDFC Bank, ‘Yes Bank, ING Vysya Bank * Indian Public Sector Banks: Bank of India, Dena Bank, Bank of Baro, State Bank of India, Union Bank of India Foreign Banks operating in India: American Express Bank Ltd, Bank of America, Citibank, Standard Chartered Bank, Deutsche Bank AG Sources of Data Forattaining various objectives cited above, the analysis has been conducted by collecting information from various online sources. newspapers, and magazines to find out the CSR initiatives, inbanking Industry. Technique of Analysis ‘The study is caried out by collecting information find outthe CSR dimensions adopted by banks the different activities done and theirassumption they take while doing the (CSR activities Thispaperinvestigates the isous ‘of CSR through content analysis by making cxtensivelitesturesurvey fombothlndianand international esearch papers, Thenthe theory ‘scompared with thereal life exarnpes fom the Indian banking industry toknowhow CSR is practised in corporate world. ‘Process Steps Taken CSRInitaives Motives of CS Company Narn 7Theoryand Praetie in Corporate. Tovghts on Indian Cases * Private Sector Banks in India: Axis Bank, ICICI Bank, HDFC Bank, ‘Yes Bank, ING Vysya Bank * Indian Public Sector Banks: Bank of India, Dena Bank, Bank of Baro, State Bank of India, Union Bank of India Foreign Banks operating in India: American Express Bank Ltd, Bank of America, Citibank, Standard Chartered Bank, Deutsche Bank AG Sources of Data Forattaining various objectives cited above, the analysis has been conducted by collecting information from various online sources. newspapers, and magazines to find out the CSR initiatives, inbanking Industry. Technique of Analysis ‘The study is caried out by collecting information find outthe CSR dimensions adopted by banks the different activities done and theirassumption they take while doing the (CSR activities Thispaperinvestigates the isous ‘of CSR through content analysis by making cxtensivelitesturesurvey fombothlndianand international esearch papers, Thenthe theory ‘scompared with thereal life exarnpes fom the Indian banking industry toknowhow CSR is practised in corporate world. ‘Process Steps Taken CSRInitaives Motives of CS Company Narn 7since) = AM, Laopaa de Prot K: Pradan ‘hear and Pract Coparte.Thewgs ot indian Cases (lupe wo aan sen Soetay Suton ti ony par ag pa ana we pCR NaI eons ha, 38.uns ys ‘eo Bas Sia yxy NM Legpea & Pryor K Proion ming seas™ ronan Pract in Cnporat.. Tow on Pion Caser NM, Lespua et Prodvot Pradhan MM. ets a au ue le ~ i : it r satel : 5 me 1¢ findings of * Gate u in Bus & aie = around 30,000 oon qouion a — 3 i : ks orporate social S my ile ye wae ape Eascaesmees | acne | HEA eu iedtne' a Bp uel Hi apd i fe Moe Duuedty Cie i aity |e id bald = De cuales © cine si TEER HWE i a Ta ene ete Rat Hasta 4 il green area loa cone Hay Ps aa Ha Wy ee A i dian case: ingress HMansemen ery shill a & ib ae Ha 2 Hl zctice SOs pence a Sel ele a Hit jities in s ‘9 Pay unl b LE Sata mon industry, it is Sangeeta , R.A. (1984). a ‘ 1a: i 3 lucation, health, finan a ae nn ames zi siete ls le men empowerment, Sevtaigon Da ae : : sues. Banks create 38 ane ouoe * eee pace ; i. i ar cputoneee ys ee of = : — ; ' ; sonore CSR jude tee of 37 definitions. Cc aod bee c profit but want ue cen a ze i , oan repens ad eon ie aie Ss fe icir profit to society. 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