REFLECTIVE

Essay

This Photo by Unknown Author is licensed under CC BY

 1

Introspection

Prior to any knowledge about CSR, I assumed corporate’s only objective was to generate profit
for its shareholders. I was first introduced to the concept of CSR in my undergrad through a course
“Business Environment”. I learned that corporates’ responsibilities extended to complying with legal
legislation, providing quality goods and services to their customer and protecting the environment they
worked in. It was only later, when I started working in EY I understood the philanthropic aspect of CSR.
BUSN7017 further enhanced my understanding of CSR and exposed me to various concepts of CSR. I
understood that a company’s objective is far broader than merely profit making through Freeman’s
(1984) stakeholder view. I learned the importance of philanthropic responsibilities owed by corporates,
through Carroll’s (1991) pyramid of CSR. Just when I started to think that it is only corporates who
could bring about social and environmental changes in the society, I realized the impact I could make as
an investor by choosing to make a socially responsible investment. Further, when I learned that it's not
only investors who are striving to bring about a change, but also the capital market participants who
strive to influence SRI, I apprehended that the society at large has realized the importance of CSR and
have started making dedicated efforts towards creating a more socially responsible and sustainable
business.

Freeman’s (1984) shareholder view changed my perception of companies’ responsibilities. All

along I had laid emphasis only on the economic aspect of a company. I could relate my own thought
prior to any understanding about CSR to that of Friedman (1970) Shareholder view. When I started
working in Ernst & Young, I had the opportunity to participate in their CSR programs, it was then I
grasped the philanthropic dimension of CSR. As a part of CSR programs, I have been to NGO’s,
orphanages and underprivileged schools. We helped raise funds, so they could have better
infrastructure. We would help in to teach the kids basic math, English and science over the weekends.
These activities were completely unrelated to Ernst & Young’s business operations, but still every year
the company would spend a considerable amount of its revenue and resources on such activities. After
I have learned and practically been a part of a company’s CSR activities I could no longer agree with
Friedman’s (1970) shareholder views. I understood that my opinion had transitioned from Friedman’s
(1970) shareholder views to Freeman’s (1984) stakeholder view. Nevertheless, I was able to appreciate
 2

Friedman (1970) simplistic view given the time he came from and the dominant prevalence of agency
problem.

Carroll’s (1991) pyramid of CSR, demonstrated that people’s opinion about CSR was also
changing with time. Corporates owed a responsibility beyond economic, legal and ethical
responsibilities. When I further researched Carroll (1991), I learned that he had re-arranged the
pyramid to emphasise the importance of philanthropic responsibilities in developing countries. I come
from India and I know for a fact that a significant proportion of people rely on such philanthropic
responsibilities owed by the government and corporates for their livelihood. I could strongly relate and
agree with the hierarchy in his pyramid for both developing and developed countries.

Heal (2004) highlighted the power capital market participants have and their influence on CSR.
Institution investors as a representative of many shareholders will be able to make a larger impact on
influencing the decisions of the company. Since the company depends on these investors for funding,
they are more susceptible to fulfilling the expectations of the institutional investors. I believed it is
extremely challenging to influence the decision of corporate giants. However, I realized that alone it is
hard to achieve the impact we want, but collectively we could make a positive impact by choosing and
encouraging SRI.

The concept of SRI reiterated the positive changes I could bring about as an investor. I hope to
start my own accounting firm someday. In this process, I will be making investments in different
companies. Since I have realized the importance of CSR I will consciously screen and direct my
investments to those companies that are committed to protecting the environment by lowering carbon
emission, not polluting water bodies, not exploiting its employees or committed to being socially
responsible in various other ways. Back in my country, community investments also play an important
role. I think this is helpful especially in developing countries. I have personally been a part of
community investment, where, as a small community we would contribute funds during community
meetings. These funds are in turn lent to small business such as farming, tailoring, weaving and
poultry. These community investments have impacted and changed the lives of many people. I will
 3

continue to do so in the future as you get back your money at the same time get a satisfaction of
making a small impact in the society.

The course so far has helped me change my perspective from shareholder view to stakeholder
view. It has also reinforced my ideas of philanthropic responsibilities. It has also thought me new
concepts such as screening, shareholder advocacy and community investing as a part of SRI. It
introduced the dimension of capital market influence on CSR. All these concepts will play a vital role
when determining the objectives of my accounting firm. I am truly motivated to incorporate effective
CSR programs as a part of my firm’s activities to help keep the surrounding clean, help small business
and promote recycling of waste. These are small initiative I will take to contribute to the society and
the environment, while constantly trying to improve my shareholder's profit.
 4
References

Carroll, AB 1991, ‘The Pyramid of Corporate Social Responsibility: Toward the Moral Management of
Organizational Stakeholders’, Business Horizons, vol. 34, pp. 39–48.

Freeman, R. 1984, ‘Strategic management: A stakeholder approach’, Google Scholar.

Friedman, M 1970, ‘The Social Responsibility of Business is to Increase its Profits’, The New York Times
Magazine, pp. 1–4.

Geoffrey, H 2004, ‘Corporate Social Responsibility: An Economic and Financial Framework’, pp. 1–33.