Chapter 1

Introduction

"You cannot escape the responsibility of tomorrow by evading it today.”

- Abraham Lincoln
1809-1865

1.1 Background

Corporate Social Responsibility (CSR) is an emerging issue in the corporate world

today. There is no single or universally accepted definition of CSR, but each
definition indicates that business has large impact on the society in which it operates
and there are societal expectations in turn. The Price Waterhouse Coopers Handbook
on Corporate Social Responsibility in India (2013) for the Confederation of Indian
Industry (CII) mentions the following three definitions of CSR to introduce the
concept (www.pwc.in, 2013).

The definition of European Commission (EC) - CSR is “the responsibility of

enterprises for their impacts on society”. To completely meet their social
responsibility, enterprises “should have in place a process to integrate social,
environmental, ethical, human rights and consumer concerns into their business
operations and core strategy in close collaboration with their stakeholders”

The definition of World Business Council for Sustainable Development (WBCSD) -

CSR is “the continuing commitment by business to contribute to economic
development while improving the quality of life of the workforce and their families as
well as of the community and society at large.”

The definition of United Nations Industrial Development Organization (UNIDO) -

“Corporate social responsibility is a management concept whereby companies
integrate social and environmental concerns in their business operations and
interactions with their stakeholders. CSR is generally understood as being the way
through which a company achieves a balance of economic, environmental and social
imperatives (Triple-Bottom-Line Approach), while at the same time addressing the

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expectations of shareholders. In this sense it is important to draw a distinction
between CSR, which can be a strategic business management concept and charity,
sponsorships or philanthropy. Even though the latter can also make a valuable
contribution to poverty reduction, will directly enhance the reputation of a company
and strengthen its brand, the concept of CSR clearly goes beyond that.”

From the above definitions, the following points emerge as mentioned by the PWC
Handbook of CSR in India.
1. “The CSR approach is holistic and integrated with the core business strategy
for addressing social and environmental impacts of businesses.”
2. “CSR needs to address the well-being of all stakeholders and not just the
company’s shareholders.”
3. “Philanthropic activities are only a part of CSR, which otherwise constitutes a
much larger set of activities entailing strategic business benefits.”

The PWC Handbook of CSR in India also indicated the following major benefits of
CSR programme that justifies the expenses and efforts behind CSR in global
perspective.
1. Communities provide the licence to operate and not the government alone.
Thus, a robust CSR programme maintains the licence, thereby reducing the
trust deficit.
2. The corporate CSR initiative involves the employees to implement. This in
turn increases employee morale and a sense of belonging to the company
which increases productivity.
3. CSR initiatives often convert communities as suppliers of material or labour.
This helps the communities to secure their livelihood and in turn the
companies get a secure supply chain and a peaceful local environment.
4. CSR enhances corporate reputation, goodwill and brand value.
Thus CSR has gradually become an integral part of modern corporate framework.

In the past twenty five years, it is interesting to evidence at least three parallel but
contradictory growths: (i) development and growth of corporate governance system
along with stricter corporate legislations; (ii) increasing number of scams and
corporate failures (Enron, Arthur Andersen, WorldCom, Union Carbide, Tyco,
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Barings Bank, Satyam to name a few); (iii) increase in CSR related research and
literature. The academia is constantly developing sophisticated theories based on
which the corporate regulators are framing and modifying regulations. But the fruitful
integration of theory and regulation with practice is often absent. Recently, CSR
practice in business is perhaps reduced to a meaningless exercise of window-dressing
and conforming passively to the letter of law.
Table 1.1
Few corporate failures in the recent times
Company Country Brief reason of failure
Enron USA Inflated earnings
Arthur Anderson USA Dilution of work standard to boost profit
WorldCom USA Expenses booked as capital expenditure
Union Carbide USA Recklessly negligent business operations in third
world
Tyco USA Misappropriation by CEO, unfair share transactions
Barings Bank UK Greedy gambling in stock market
Global Crossing USA False profits to defraud investors
Royal Ahold Netherlands Earnings overstated
Parmalat Italy False transaction recorded
Wal-Mart USA Weak internal controls leading to government
investigations and class action lawsuits by
employees
Xerox USA Accelerated revenue recognition
Satyam India Manipulation of accounts with negligent audit

It is interesting to note that most of the infamous failures with large impact occurred
in the first world countries where corporate governance practices are told to be strong.
It leads to the next question - how far corporate governance is linked with business
ethics. This answer can be depicted according to the discussions of Sullivan (2009) as
follows:
Figure 1.1
Relationship between corporate governance and ethical framework

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From the above diagram it is found that even a strong corporate governance
framework can be inoperative and ultimately fail if accompanied with a weak ethical
frame work. The major problem arises form this point. Corporate ethics is the sum of
individual ethics of the persons working in the corporation whereas the individual
ethics is, in turn, a dependent factor of the ethical environment that prevails in any
corporation. Thus individual ethics creates group ethics and group ethics in turn
influences or modifies individual ethics.

The above discussion shows the corporations are bound to depend upon human
goodness or morality to implement corporate governance effectively. Only legality of
action or a legal framework for corporate governance can not help unless those who
are implementing are responsible. This intensifying problem in the business world is
addressed by the academicians, consultants, legislators, managers and students.
Further, all of them play multiple roles in this regard. However, it may be observed
that the role of the student who undergoes training and education in management
occupies a pivotal role among all these constituencies that are interested in reforming
the social dimension of corporate practices. The following diagram illustrates the
central role of the students and their perception about the social relevance of business.

Figure 1.2
The central role of the students and their perception
about the social relevance of business

The diagram above traces out 14 interconnections amongst identified constituencies

with business management students at the centre. These are tabulated below:
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 Table 1.2
Interconnections amongst identified constituencies with
business management students at the centre

Flow Relationship of Implied Link Example of CSR Implication

Management
Academicians
Suggest
1 with Reveal insight beyond profit
improvement
Consultant and
Regulators
Consultant and MCA, SEBI, ICRA, CRISIL
Provide framework
Regulators with etc. to rule, analyze and rate
2 for analysis and
Management the corporates as a research
research
Academicians framework
Create visibility of Grameen Bank in Bangladesh,
Management
problems and need the brain child of an
3 Academicians
for infrastructure academician, created many
with Entrepreneurs
development entrepreneurs
Entrepreneurs with Provide source for
Exploitation of big businesses
4 Management critical research
over small businesses
Academicians issues
Management Provide conceptual
5 Academicians tools for improving Create various CSR models
with Corporate Managers corporate practices
Corporate Managers Reveal insights into
Validation of the theoretical
with problems and
6 models and diversity of
Management potential crises in
practice
Academicians management
Over mechanization instead of
Entrepreneurs with Generate
7 labour orientation to reduce
Corporate Managers employment
labour related problems
Corporate Managers
8 Create innovations Balance Score Card
with Entrepreneurs
Consultants and
Provide solution to
9 Regulators Ethical investment
problems
with Entrepreneurs
Entrepreneurs with
Provide business Business activity with a
10 Consultants and
opportunities social element or cause
Regulators
Corporate Managers Create business
11 CSR related consultancy
with Consultants opportunities
Consultants with Enable performance Focus on CSR side of
12
Corporate Managers improvement business operations
Trigger new
Corporate Managers with regulations and Help to enrich CSR
13
Regulators subsequent regulations and norms
amendments
Establishes limits Better tuning of
Regulators with
14 and scopes of accountability and
Corporate Managers
business activities responsibility for society

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Hence, the present study proposes to examine in depth, the perception of the students
studying business management at the post graduate level, regarding the relevance and
significance of CSR in business.

1.2 Survey of literature

CSR literatures relevant for this study are surveyed under two broad categories –
(i) Clarification of the conceptual plane for this research study and (ii) Discussion of
the methodological approaches to perception based studies. The following table offers
the survey of literature of the above two categories of literature with their focus in
nutshell.
Table 1.3
Summary of literature surveyed
Focus Authors with the year of publication
Salomon v. A. Salomon and Co. Ltd., Lord Halsbury
(1897), Berle and Means (1932), Drucker (1946),
Corporation itself Friedman (1970), Joel Bakan (Script writer of the
Canadian documentary film The Corporation, 2003)
Corporate Responsibility (CR) Friedman (1970), Clark (1916), Kreps (1931), Sethi
(1975), Carroll (1979), Halme (2007)
Bowen (1953), Frederick (1960), McGuire (1963),
Walton (1967), Friedman (1970), Johnson and
Steiner (1971), Davis (1973), Backman(1975), Sethi
Conceptual framework of (1975), Holmes (1976), Zenisek (1979), Tuzzolino
Corporate Social and Armandi (1981), Drucker (1984), and Cochran
Responsibility (CSR) and Wood (1984), Elkington (1994), Freeman (1994),
Griffin (1997), Miller (1997), Harrison and Freeman
(1999), Chakraborty (2001), Geoffrey (2001),
Prahalad (2004), Isabelle (2004), Porter and Kramer
(2006), Dahlsurd (2006), Husted et al. (2007)
Corporate Sustainability (CS) Keizers (2002), Dyllick and Hockerts (2002)
Business School pedagogy and Matten and Moon (2004), Crane and Matten (2005),
responsibility Jakobsen, et al. (2005), Srinivasan and Srinivasan
(2012)

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 Business Managers and Stake Freeman (1984, 2004), Donaldson and Peterson
Holders Theory (1995), Carroll (1979, 1991), Llewellyn (2009),
Bourne (2008)
Albion and Students for Responsible Business
Methodology (1996), Krishnan and Reddy (2002), Ibrahim,
Angelidis and Howard (2006), Tan and Komaran
(2006)

The short details of the survey of above literatures are given below.

Corporation itself
The most successful corporation of human civilization is Kongo Gumi Co. Ltd. of
Japan which was engaged in building monasteries and Buddhist temples mainly in
Japan from 584 AD till it was finally took over by Takamatsu Corporation in January
2006. It is still operating as an independent subsidiary company under Takamatsu
Corporation. This interesting fact of survival of a corporation with its own activity for
over 1400 years proves the strength of corporation as a perpetual successor.

The famous case of Salomon v. A. Salomon and Co. Ltd. (1897, AC 22, House of
Lords), is a path breaker in the idea of corporation. In his famous verdict Lord
Halsbury stated that “… it seems to me impossible to dispute that once the company
is legally incorporated it must be treated like any other independent person with its
rights and liabilities appropriate to itself, and that the motives of those who took part
in the promotion of the company are absolutely irrelevant in discussing what those
rights and liabilities are.” From this case comes the fundamental concept that a
company has a legal personality or identity separate from its members was emerged
and legalised.

Berle and Means (1932) founded the base of corporate revolution in an empirical
study. In 1929, Means found that in only 11% of the 200 largest non-financial
corporations the largest owner hold a majority of the firm’s shares. Further,
establishing ownership of 20% of the stock as a threshold minimum for control, 44%
of those firms had no individual who owned that much of the stock. These 88 firms

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which were classified as management-controlled also managed to account for 58% of
the total assets held among the top 200 corporations. Two trends were indicated – (1)
the growing concentration of power and (2) the increasing dispersal of stock
ownership resulting in a widening gulf between share ownership and executive
control within large corporations. Berle and Means opined that the corporate
revolution occurred.

The first attempt to study the constitution, structure, and internal dynamics of a major
business enterprise was made by Drucker (1946), in his famous book Concept of the
Corporation. The book was based on General Motors’ operations showing how a large
corporation impact society on a broad level. Drucker focused on what happened
inside a company and how this has an impact on the company's success or failure. He
was fascinated by this question, for which he studied management of the company to
understand what makes the company to work so effectively, what are its core
principles and how do these contribute to the phenomenal success in the society.

Noble Prize laureate Milton Friedman’s article (1970), ‘The Social Responsibility of
Business is to Increase its Profits’ is one of the classics of CSR. Though the article is
almost an antithesis of CSR it is highly regarded by the CSR researchers as a
foundation stone of development of CSR theories. Friedman argued that the
corporation is just a construct of human activity like a building for example. It can not
assume any moral responsibility. This is only possible by human being. Thus the
human being that set up and work with the corporation are morally culpable.
Friedman further argued that if the owners want to dedicate their money or their
employees’ time to social causes they are free to do so. But the managers, who are
merely the employees, do not have the right to waste shareholders’ money in the way
they want. Friedman finally argues CSR is undemocratic.

The rise of corporation is also shown in films. The Corporation is a Canadian

documentary flim written by Joel Bakan (2003), directed by Mark
Achbar and Jennifer Abbott. This documentary critically examines the corporation of
modern times specially its legal status as a class of person and a vivid evaluation of its
behaviour towards the society and world as a global citizen. During making of the
film Bakan wrote the book, ‘The Corporation: The Pathological Pursuit of Profit and
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Power’. In this book Bakan shows the corporation as psychopath. Like a psychopath
the corporations are motivated solely by self-interest and are unresponsive to the
concerns, pain, or suffering of others unless it can have further impact on its self-
interest through their suffering.

Corporate responsibility (CR)

Corporate Responsibility is basically of two types. – (1) Corporate Financial
Responsibility and (2) Corporate non Financial Responsibility.

Adam Smith’s (1776) ‘Wealth of Nations’ is perhaps the major motivating force for
several modern economists to develop new aspects of organizational theory. Among
other things, Smith predicted that if an economic firm is controlled by a person or
group of persons other than the firm’s owners, the objectives of the owners are more
likely to be diluted than ideally fulfilled. As discussed earlier Friedman (1970), was a
hard core believer of corporate financial responsibility. Corporate financial
responsibility includes procurement of finance, effective utilisation of finance, giving
return with proper accounts to the providers of finance and finally protection and
enhancement of the financial kitty. This also includes audit of accounts, payment of
taxes and submission of returns to different statutory bodies.

On the other hand, corporate non financial responsibility also has a long history. In
1916, J. M. Clark mentioned the importance of transparency in business dealings. In
an article in the Journal of Political Economy he wrote ‘if men are responsible for the
known results of their actions, business responsibilities must include the known
results of business dealings, whether these have been recognised by law or not’.
Hence going beyond legal requirement in corporate operations has its trace even in
1916. In 1931, Professor Theodore Kreps (1897-1981) introduced the subject of
Business and Social Welfare to Stanford University. He first used the term ‘Social
Audit’ in relation to companies reporting on their social responsibilities. Drucker
(1942) argued that companies have an economic purpose as well as a social
dimension. In his book ‘The Future of Industrial Man’ he addressed primarily two
issues – economic responsibility and preservation of freedom.

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The Agency Theory is useful to understand corporate responsibility. The primary
agency relationships in business are those (1) between stockholders and managers and
(2) between debt holders and stockholders. The business managers have separate sets
of goals to pursue where as the shareholders goal is maximization of wealth. Since the
shareholders authorize managers to administer the firm's assets, a potential conflict of
interest exists between the two groups. Another conflict remains between the agency
relationship between the stockholders and the creditors. The creditors have a primary
claim over the assets of the business where as the stockholders control the decisions
of finance. Thus the conflict continues.

Sethi (1975) developed a three tier model for classifying corporate responsibility. The
three states of corporate behaviour are based on: (a) Social obligation (response to
legal and market constraints); (b) Social responsibility (addressing societal norms,
values and expectations of performance); (c) Social responsiveness (anticipatory and
preventive adaptation to social needs).

Based on Sethi’s model (1975), Carroll (1979) proposed a model that contains the
following four categories of corporate responsibility in decreasing order of
importance: (a) Economic - be profitable; (b) Legal - obey the law; (c) Ethical -
do what is right and fair and avoid harm; (d) Discretional / philanthropic - be a good
corporate citizen.

The controversy continued and numerous theories came out. But, undoubtedly the
importance of corporate non financial responsibility started increasing. Halme (2007)
came out with a clean logic of corporate non financial responsibility actions. Her
argument gives a judicious balance to the supporters of both corporate financial
responsibility and corporate non financial responsibility. She explicitly showed that
complying with corporate non financial responsibility in turn enriches the basic
operations of the corporate which serves the corporate financial responsibility in a
better way in long run. Her logic is shown by the following table and diagram.

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 Figure 1.3
Relationship between corporate non financial responsibility
with corporate financial responsibility

Figure 1.4
Integration of corporate non financial responsibility with
core corporate activities or corporate financial responsibility

Corporate responsibility came a long way from the hardcore corporate financial
responsibility. The footprints of this journey, which started like a marching army with
a strong commanding voice, lost its firmness as the battle itself lost its relevance. The
baby footprints of CSR emerged along with its soft voice and new hope as the future
of humanity.

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Corporate social responsibility (CSR)

The definitions, boundaries, and different aspects of CSR was largely contributed by
Bowen (1953), Frederick (1960), McGuire (1963), Walton (1967), Johnson and
Steiner (1971), Davis (1973), Backman (1975), Sethi (1975), Holmes (1976), Zenisek
(1979). In nineteen eighties the concept of CSR as an organizational process was
contributed by Tuzzolino and Armandi (1981), Drucker (1984), and Cochran and
Wood (1984). In nineteen nineties, Elkington (1994) coined the term triple bottom
line accounting. This school was enriched by Freeman (1994), Griffin (1997), Miller
(1997), Harrison and Freeman (1999). The new millennium showed the emergence of
strategic CSR developed by Chakraborty (2001), Geoffrey (2001), Prahalad (2004),
Isabelle (2004), Porter and Kramer (2006), Husted et al. (2007).

Corporate sustainability (CS)

Keizers (2002) indicated that CSR and CS have recently converged though they have
emerged from separate path. Marrewijk (2003) strongly opined that in the past
Sustainability was related to environment only where as CSR was referred to social
aspects like human rights. According to Marrewijk there is a small but essential
difference between CSR and CS. CSR is associated with the communication aspect of
people with organisations where as CS is associated with agency principle. Therefore
CSR relates more with transparency, stakeholder dialogue, sustainability reporting
etc. where as CS is more focused with value creation, environmental management,
environment friendly production system, human capital management and so on.

Dyllick and Hockerts (2002), made a good attempt to make a framework of Corporate
Sustainability (CS). According to them at business level CS is often equated with eco-
efficiency which is a under valuation of its potential. They rather indicated three types
of capital relevant within the concept of Corporate Sustainability (CS): Economic,
Natural and Social Capital. Based on this they developed six criteria which the
business managers aiming for corporate sustainability will have to satisfy: Eco-
efficiency, Socio-efficiency, Eco-effectiveness, Socio-effectiveness, Sufficiency and
Ecological Equity.

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Business school pedagogy and responsibility
Challenging the very integrity of the business ethics and CSR curriculum started from
the beginning of this century. The social responsibility of the business school to make
the students aware of business ethics and CSR by crossing the narrow limits of profit
is critically analyzed.

Matten and Moon (2004), made a survey of CSR teaching and research in Europe and
found the historical role of motivated individuals in reshaping the future of modern
business. They finally concluded that the future of business education remains in
study, research and application of CSR.

Crane and Matten (2005), questioned the domain of the business ethics curriculum in
Europe. They identified four potential gaps. The curriculum must consider the culture
of the geographic area where the course is taught. Second, the nature of the recent
scandals globally will be considered in the course. Third, the impact of globalization
is to be considered. Fourth, the course must be viewed from the angle of the new
stakeholders, i.e. civil society.

Jakobsen, et al. (2005) made an interesting survey and published the findings in the
paper ‘Faculty Members Attitudes towards Ethics at Norwegian Business Schools: An
Explorative Study’. According to them, there is a growing interest in the knowledge
of ethics and related subjects among the faculty members of Norwegian Business
Schools which is a good trend.

IIM, Bangalore and Centre for Corporate Governance and Citizenship conducted a
very important survey on ‘Research on Teaching and Training on Corporate
Governance in India’, under the supervision of Srinivasan and Srinivasan (2012).
They covered four areas Ethics, Governance, CSR and Environment in the survey.
The surprising observation of the study is that more than 90% of the business schools
keep modules covering four areas Ethics, Governance, CSR and Environment. But the
understanding and outcome of the students from such teaching is uncertain. The study
suggested that the objectives of teaching the courses on Ethics, Governance, CSR and
Environment are to be changed. Those courses are better to be changed in a direction
so that those can generate – (a) awareness among the students regarding the role of
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the corporate in society; (b) to sensitize the students to the social context of businesses
operations; (c) to enrich the theoretical wisdom of the students to enable them in
decision making and to understand the consequences of their actions; (d) to provide a
holistic perspective to the field of ethical and social responsibilities of business. The
pedagogy of such course are to be improved with caselets that were relevant,
contemporary topics, use of short films, documentary and you tube clips etc. and role
plays. According them, ‘role plays have an enormous potential for active engagement
in learning by the student community’. Hence the need of the pedagogue as a role
model is critically important.

Business managers and stakeholder theory

The great CSR debate of Friedman vs. Freeman contributed in along way to shape the
Stakeholder Theory. Freeman (1984) published his famous book ‘Strategic
management: A Stakeholder Approach’ where he explained Stakeholder Theory.
After receiving lots of praises and criticisms for twenty years Freeman (2004)
published the paper ‘The Stakeholder Approach Revisited’. This paper explained his
contention of his book published in 1984. He categorically pointed out the following
six points which can be taken as the summary of his theory in short in his own words.
– ‘(1) No matter what you stand for, no matter what your ultimate purpose may be,
you must take into account the effects of your actions on others, as well as their
potential effects on you. (2) Doing so means you have to understand stakeholder
behaviours, values, and backgrounds / contexts including the societal context. To be
successful over time it will be better to have a clear answer to the question “what do
we stand for”. (3) There are some focal points that can serve as answers to the
question “what do we stand for” or Enterprise Strategy. (4) We need to understand
how stakeholder relationships work at three levels of analysis: the Rational or
“organization as a whole”; the Process, or standard operating procedures; and the
Transactional, or day to day bargaining. (5) We can apply these ideas to think through
new structures, processes, and business functions, and we can especially rethink how
the strategic planning process works to take stakeholders into account. (6) Stakeholder
interests need to be balanced over time.’

In support of corporate responsibility in terms of stakeholder theory Donaldson and

Peterson (1995), argued that - (1) the stakeholder theory is unarguably descriptive; (2)
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the stakeholder theory is also instrumental; (3) the fundamental basis of stakeholder
theory is normative and (4) the stakeholder theory is managerial in broad sense of the
term.

Carroll, has attempted to reconcile the firm’s economic orientation with its social
orientation, or the shareholder and stakeholder perspectives as described above. While
giving a comprehensive definition of CSR, Carroll (1979) stated, “A four part
conceptualization of CSR is the idea that the corporation has not only economic and
legal obligations, but ethical and discretionary (philanthropic) responsibilities as
well”. Later, Carroll visualised these obligations in the form of a pyramid (Carroll,
1991), constructed by the four types of social responsibilities that constitute corporate
social responsibility: economic, legal, ethical, and philanthropic.

From the above concepts of stakeholder theory the concept of stakeholder

management emerged. Llewellyn (2009) has given a good overview of this concept.
According to him, a stakeholder is anyone who is - (1) managing the programme of
work; (2) working within the programme of work; (3) directly or indirectly
contributing to the programme of work; (4) affected by the programme of work or its
outcomes. Hence the main areas to address in stakeholder management are to identify
stakeholders, to establish stakeholder management strategy, to analyse stakeholders,
stakeholder communication, communications plan, communication channels,
managing stakeholders and responsibilities for stakeholder management.

The next development in this trend is the stakeholder relationship management. The
matured form of this concept is well understood by the findings of Bourne (2008).
According to her, the central role of the stakeholders lies in successful delivery of a
project. Thus identifying, mapping, and prioritising the stakeholders community is the
beginning of stakeholder relationship management. The five levels of stakeholder
relationship management are – (1) Ad hoc - some use of processes; (2) Procedural -
focus on processes and tools; (3) Relational - focus on stakeholders and mutual
benefits; (4) Integrated - methodology is repeatable and integrated across all
programmes and projects and (5) Predictive - used for health checks and predictive
risk assessment and management.

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Methodology
The literature on appropriate methodological frameworks for analyzing CSR
perception is relatively recent.

Angelidis (1993) made an analysis of perception of CSR of top executives and

business students and found it as managerial ambiguities which are inherent in
business decisions are further complicated by growing societal demands on
corporations and increased attention on the ethical dimensions on corporate decision
making.

Albion and the Students for Responsible Business (1996) conducted a large sample
survey in USA, on 2124 MBA students. The findings are multifold. It is found that
CSR remains new and ill-defined to most students. The survey identified the
characteristics of a well run company which are product quality, corporate citizenship,
no child labour, no sexism and racism at workplace. It finally pointed out that the
students do not perceive CSR as a single solution of all problems but they expect the
companies to treat people well, show concern for social issues and not to place
economic decisions over socially responsible decisions.

O’ Dwyer (2002) made a study of perception of CSR of managers in the Irish context
and found misinterpretations, narrow conception and complexity of conceiving of a
clear meaning for CSR. Ibrahim, Angelidis and Howard (2006) showed that the
students are more concerned about the ethical and discretionary components of CSR
and less concerned about the economic performance of the corporations than the
practicing accountants.

Krishnan and Reddy (2002) made a survey of the MBA student’s perception of Ethics
and Society. It was found that the students are on a whole idealistic when confronted
with general statement but willing to do whatever it takes to make a business
successful and less questioning the ethicality of the issues.

Tan and Komaran (2006) conducted an empirical study of perception of CSR in

Singapore among the full time working adults and reaffirmed the findings of Roche
and Webb (2003) that “In Singapore, there is little public pressure on companies to be
16
accountable to wider society”. Tan and Komaran’s work was mainly based on
Carroll’s pyramid of corporate responsibility. Their conclusion was that there is
adequate appreciation of more socially responsible business in Singapore but there is
no specific consciousness, willingness and strategic planning to implement CSR.

1.3 Research gap

The literatures surveyed shows that a good number of literatures and research
outcomes are available regarding different aspects of corporate social responsibility.
The literatures regarding perception of CSR are relatively new. The few, which are
available, are regarding the perception of managers or working adults in foreign
perspective or regarding the business student’s perception of business ethics. There is
no research or literature available on the perception of the business management
students regarding CSR based on local, national or even global level.

In this context the researcher humbly expresses his incapacity to search all literatures
published in paper or in electronic medium in all corners of this infinite world of
knowledge. The above comment regarding non availability of literature has been
made with limited knowledge but after making an all out survey. If any related
literature is already published in this area that must be regarded as the pioneer.

1.4 Research question

The basic question this research addresses is – What is the perception of corporate
social responsibility of the business management students with special reference to
Kolkata?

The rationales behind the question are as follows:

CSR failure, even in case of the large and professionally managed
corporations globally has become a common phenomenon for which the
problem is to be analysed in depth.
As discussed earlier a corporation works through its employees and managers.
The professional managers have their own perception of CSR which is
enriched at a matured level at work mostly for compliance purpose. Most of
the present managers have not studied business ethics and CSR as a structured

17
 curriculum as this subject is a recent inclusion in the business management
courses based on the global need for it. Coupled to this, the Williamson’s
Model of Managerial Discretion (1963) reminds that profit maximization is
not the objective of the managers of the joint stock companies. They
maximize utility which is most often maximization of self utility or self
interest.
Further, Angelidis (1993) and O’ Dwyer (2002) has already made studies on
the perception of CSR of the business managers. But the perception of the
budding managers are absent in research and literature. The special
importance of the perception of the students’ of business managements is
already shown above. An assessment of the perception of the students
regarding CSR leave an opportunity for rectification through the process of
teaching and learning if wrong perception is one among many causes of CSR
failure. Unless a perception is reasonably correct the execution can not be
successful enough.
The special reference to Kolkata is made to limit the study within a
geographical location in which it is possible for the researcher to conduct the
survey personally with limited resource and time. Personal observations were
necessary for the assessment of attitude of the students, their learning
environment, meeting the teachers of the business schools and other
qualitative aspects which are the integral part of this study based on which
observations and comments are made. The territorial limit of Kolkata also
makes the opportunity of the study in the cultural perspective of India as well
as the eastern part of the world.

1.5 Research objectives

The existing literature on perception of CSR covers a wide and varied number of
issues. Most of the studies are from western countries. If we go by Maignan’s (2002)
findings that show the geographical implication of CSR and its readjustment
according to territorial needs, there is a potential research gap prevailing in this
context which is sought to be covered by this study. There is no comprehensive
research in the field of perception of business management students regarding CSR in

18
the Indian context especially with empirical support to the conceptual frames. Thus,
the present study aims at bridging the ensuing research gap to certain extent.
More specifically the study aims at addressing the following issues:
To study the CSR perception of the business management students in the
eastern context, especially in the geographical context of Kolkata.
To understand the present state of perception of the business management
students regarding CSR by observing the common idea of the majority
students.
To analyse the correlation between the biographical factors of the students
with the technical factors of the questionnaire regarding CSR perception. This
is done with an objective to find out which biographical factors are having
highest influence on the perception of the students. Further to see which of
those can be controlled or be improved so that there is any scope of
improvement in the perception building process.
To study the syllabi of the business schools specially the syllabi regarding
business ethics and CSR. The objective is to study the impact of the related
syllabus on the perception of CSR of the students.
To develop a reliable, valid and general measurement tool regarding CSR
perception which can measure the perception level of an individual student, a
group of students or ranking a group of business schools based on the CSR
perception of their students.
Besides understanding the perceptions of CSR of the business management
students the study attempts to understand the draw back in the course
curriculums studied and the ambiguity of CSR definitions and implications
among students, which the previous academic exercises have largely ignored.

1.6 Research methodology

The research methodology is subdivided in the following heads:

Survey procedure and sample selection

In this research primary data is majorly used which is entirely based on survey.
Secondary data is used where it is necessary and available from books, journals,
reports, newspapers and periodicals, cinema, picture, sketch, internet resources etc.

19
The sources of primary data are the business school students. In India Business
School are of three types: affiliated to any university, stand alone business schools
and business schools established through a special act of parliament. In this study the
sample is taken from all types of business schools which are conducting post graduate
business management courses in Kolkata (West Bengal, India). The domain ‘Kolkata’
is defined by the postal Pin Codes of Kolkata (please refer Annexure 2). Only those
business management schools which are conducting post graduate business
management courses under regular class teaching method with a pre approved
syllabus are considered for this survey.

The sample is based on Cluster Sampling which is a method of Restricted Random

Sampling falling under the area of Probability Sampling while choosing the business
school students. The survey was conducted by questionnaire in printed form, which
was duly tested for the purpose of reliability and consistency. The students who have
already gone through a module or part paper or whole paper or specialisation group
covering the topic Business Ethics and Values or CSR are taken as sample. In a
particular class room of a business school almost all the students present at the time of
survey were administered with the survey questionnaires. The students filled up the
questionnaires their own in hand writing. 704 usable filled up questionnaires are
processed as database.

Time frame
The response of the corporate world towards CSR has changed drastically by the eye
opening scams of Enron, WorldCom and Satyam etc. Further the new wave of
corporate governance backed Sarbanes-Oxley Act, 2002 has added a new spice in the
old soup. Thus the time frame of 2002 to 2012 has been proposed for analyzing the
impact of the latest CSR wave on the future managers.

Methodology used for analysis

Preparation and testing of the questionnaire – As no ready questionnaire was
available in this regard a questionnaire is developed for conducting the survey. The
questionnaire is evaluated from the view point of reliability, validity and
generalisability before being used.

20
Student specific analysis - At first the survey data is observed and interpreted from
descriptive viewpoint. Thereafter test of normality is conducted and it is found to be a
non parametric dataset. Then, by using appropriate statistical methods and statistical
application software package SPSS a meaningful interpretation of the biographical
data and the technical data is found.

Syllabus specific analysis – The prevailing syllabi of the business schools regarding
business ethics and CSR are studied and evaluated by experts with different academic
training to assign merit scores against such syllabi so that those can be used for
statistical analysis or be correlated with the perception of the students who studied
those syllabi.

Overall analysis – Three major aspects i.e. biographical background of the students,
technical perception of CSR of the students and the impact of the syllabi of business
ethics and CSR that they have studied have been analysed in totality to make a critical
observation of the factors that are mostly responsible to build the CSR perception of
the students.

1.7 Structure of the study

To make a methodical and meaningful study the rest of the study is segmented into
the following chapters:
Chapter 2 : CSR – A Brief Discussion
Here the historical backdrop of CSR, development of CSR concepts, CSR
terminology, CSR theories, and arguments against CSR are discussed to
conceptualise CSR.
Chapter 3 : Criteria Governing Variability of CSR Perception
In this chapter the different factors influencing the variability of CSR perception of
the business management students are discussed.
Chapter 4 : A Survey of CSR Related Curricula of Business Management
Courses
This chapter starts with the rationale behind the business management curricula in
the global perspective. Then the relevance of business ethics and CSR related
curricula of business management courses are discussed. Thereafter the business

21
 ethics and CSR related curricula of nineteen business management schools
governed by twelve syllabi are studied. These twelve syllabi are evaluated by nine
visionary academicians and experts having different academic trainings. These experts
evaluated and awarded with merit scores to the twelve syllabi. The average merit score
for each syllabus was used in chapter 6 to find out correlation, if any, between the
merit of syllabus and the perception of the students regarding CSR who has studied
these syllabi in different business schools.
Chapter 5 : Business Management Students and Perception of CSR – A
Conceptual Discussion
This chapter primarily deals with the concept of perception from the clinical and
psychological background. Then the concepts of CSR perception are discussed.
Finally the empirical surveys on CSR perception are discussed which is relevant
for this study.
Chapter 6 : Analysis of Perception of B School Students: an Empirical Study
by Data Analysis and Interpretation
The analytical part of the research work is presented in this chapter. This includes
summarisation and presentation of the survey data, various statistical tests using
these data, analysis and interpretation of the results derived.
Chapter 7 : Summary of Findings, Limitations, Scope for Further Research,
Conclusions
Summary of research findings, limitations of the study and further scope of
research and conclusions are presented in this chapter.

CSR came a long way since the idea has emerged in early 1950s. It changed its
perspective from business philanthropy to essential business strategy for survival in
long run. CSR became an integral part of core business operation of any good
corporation. During this journey the definitions and the concepts changed from simple
to complex. The business schools started courses on business ethics and CSR to cope
up with this increasing complexity and importance. To perceive CSR, which has no
single dimension, it is important to study the concept from different perspective. The
next chapter is an attempt in this regard.

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Case Law
Salomon v. A. Salomon and Co. Ltd. (1897), AC 22, House of Lords
26
Cinema
Bakan, J. (Script Writer); Achbar, M. and Abott, J. (Directors), (2003). The
Corporation, Achbar, M and Simpson, B. (Producer), Canada

Websites
http://www.pwc.in/en_IN/in/assets/pdfs/publications/2013/handbook-on-
corporate-social-responsibility-in-india.pdf visited on 29/01/14
https://www.gsb.stanford.edu/stanford-gsb-experience/leadership/history/
theodore-kreps visited on 25/01/13
http://en.wikipedia.org/wiki/Kong%C5%8D_Gumi visited on 16/5/2012
http://www.kongogumi.co.jp/profile.html visited on 16/5/2012

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