Corporate Social Responsibility in India

Author(s): Seema Sharma

Source: Indian Journal of Industrial Relations, Vol. 46, No. 4, Beyond GDP (April 2011), pp.
637-649
Published by: Shri Ram Centre for Industrial Relations and Human Resources
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 By Contribution

Corporate Social Responsibility in India

Seema Sharma

CSR - Identifying the Common

Denominator

Any discussion on corporate social

This article attempts to examine
responsibility requires an understanding
the concept and practices of CSR
of the term. In addition, it is also impera
in India based on the primary
tive to understand as to who shall decide
data collected from seventeen
whether a corporate is socially respon
business houses in India. The CSR sible or not. It is interesting to note that
definition followed here is that it there are innumerable definitions of CSR
is the obligation of the firm to use adding to confusion on what it consti
its resources in ways to benefit so tutes. Carroll (1994:14) had termed the
ciety, through committed partici situation as "an eclectic field with loose
pation as a member of society, boundaries, multiple memberships, differ
taking into account the society at ing training/perspectives and
large, and improving the welfare multidisciplinary." At the same time the
'of the society independently of origin of most of the existing definitions
the direct gains to the company. of CSR can be traced to the West. Thus
The study also takes a the way CSR is perceived and imple
stakeholder's perspective to mented is largely guided by the West to
wards CSR. The author discusses the rest of the World.
CSR amongst select Indian enter
prises and concludes with a criti Definitions of CSR range from basic
cal evaluation of their CSR ini to most demanding, from specific refer
tiatives.
ence to a number of necessary activi
ties to demonstrate responsibility, to a
general call for a comprehensive, inte
grated and committed pursuit of social
and environmental sustainability (Aras &
Crowther 2009). It has been defined as
Seem a Sharma is with Department of Social an integration of stakeholder's social,
Work,
University of Delhi, Delhi 110007. E-mail:environmental and other concerns into a
seemasharma.dsw@gmail.com company's business operations (EIU

The Indian Journal of Industrial Relations, Vol. 46, No. 4, April 2011 637

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 Seema Sharma

2002:2). CSR is a process of managing business itself. These they term as group
the cost and benefits of business activity integrative theories. The fourth group of
to both internal (workers, shareholders, theories contends that the relationship
investors) and external (institutions of between business and society is ce
public governance, community members, mented with ethical values. This leads to
civil society groups, other enterprises) a vision of CSR from an ethical perspec
stakeholders (World Bank 2002). Ac tive i.e. as an ethical obligation. These
cording to Carroll (1994), a conscientious are termed as group ethical theories.
business should embrace economic, le
gal, ethical and philanthropic responsibili
Diversity of issues addressed un
ties. Garriga and Meie (2004) consider
der CSR umbrella precludes any
CSR as an obligation of the firm to use
attempt towards a singular univer
its resources in ways to benefit society, sal definition.
through committed participation as a
member of society, taking into account
the society at large, and improving wel The surge in definitions and also the
fare of society independently of the diinitiatives that go in the name of CSR,
rect gains of the company. Relying onwith flavours differing from region to
Parson's framework they have also region, implies that what CSR means is
mapped the territory in which most rel open to contest. At the same time, diver
evant CSR theories and related ap sity of issues addressed under CSR um
proaches are situated. They have thus brella precludes any attempt towards a
classified the existing theories in four singular universal definition. Gallie (1956)
groups. In the first group come theories proposed the essentially contested con
which believe that corporation is an in cepts (ECC) theory to address concepts
strument for wealth creation and that this that, by their very nature, invite perpetual
is its sole social responsibility. This group disputes and are inevitably contested.
of theories, they call instrumental theo CSR, on account of factors such as di
ries. The second set of theories are called verse describability, internal complexity,
political theories as they emphasize on open character, aggressive and defensive
uses is open to consideration for being
the social power of the corporation spe
cifically in its relationship with societyan essentially contested concept (Okoyo
2009).
and its responsibility in the political arena
associated with this power. This leads the
corporations to accept social duties andThe Debate

rights or participate in certain social co

operation. The third group includes theo The debates on the role of CSR have
ries which consider that the business taken place within specific social, eco
nomic and political context, for instance,
ought to integrate social demands. These
in de
theories usually argue that business USA during the Great Depression
pends on society for its continuity(Berle
and 1931,Dodd 1932,Donham 1929);
growth and even for the existence during
of the Cold War (Abrams 1951,

638 The Indian Journal of Industrial Relations, Vol. 46, No. 4, April 2011

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 Corporate Social Responsibility in India

Spector 2006, 2008); with the onset of by firms that have built their reputation
globalisation (Palazzo & Scherer 2008). around being a "virtuous company."
In case of India as well, the growing de Crook questions the locus standi of cor
bate on CSR and its adoption by large porate in taking up social issues (The
number of corporate post- liberalisation Economist 2005) and that it is the respon
can be seen in the context of the larger sibility of Government and its elected
role being played by the private sector in representatives to set goals for society,
the economy. With the increasingly reced deal with externalities, to mediate
ing role of the state in the country's amongst different interests, to attend to
economy and social spheres, the corpo the demands of social justice and pro
rate world, keen to exploit the available vide public goods. The corporations can
opportunities and encash upon the liberal not take decisions on what the society
government outlook, has gone all out to wants. Opposing such arguments is the
expand its economic frontiers by acquir view that business cannot neglect the long
ing land and setting up new ventures. CSR term social costs of business and profits.
is many a time, thus, is used as one of theThis view goes further to state that the
instruments to win over the communities. justification of business is that it benefits
At the same time becoming a global player society (Shaw & Berry 1992). This view
implies that these companies have to com thus looks at CSR as an ethical respon
ply with international standards in report sibility.
ing their socially responsible behaviour.
Global compact and Global Reporting Ini
Firms frequently use CSR initia
tiatives help these companies to project
tives as part of their "image rep
themselves as responsible corporate which
do ethical business.
ertoire" when dealing with the
threat of boycotts.

There are differing views on the use

fulness of CSR to business and society.
Friedman, one of the biggest critiques of
CSR emphasized that business should
only take care of its business (1960).
Social responsibility thus comes from
using resources and engaging in activi
ties so as to increase profit within the
ambit of defined rules (1970). Morris et
al (2010) from Kellogg School of Man
agement in their study based on avail
able data between 1999 and 2005 argue
that firms frequently use CSR initiatives
as part of their "image repertoire" when
dealing with the threat of boycotts. CSR
initiatives are especially likely to be used
Who Decides?
There is increasing evidence in India
that in the race to capture greener pas
tures, corporate houses have been involved
in unethical dealings in collusion with the
power structures of the state. India is in
creasingly seeing gross violation of human
rights in the form of attack on the liveli
hoods of tribals and right to decent living
by those dispossessed of their land in the
name of mining and other development ini
tiatives. Many a time the corporate houses
engaged in such activities are industrial
giants and multinationals. India has seen

639 2011
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 Seema Sharma

responses on their company's CSR ini

big MNCs like the Vedanta Group, which
in connivance with the state powertiatives.
are Those who agreed to cooperate
involved in violation of Forest Rights were
Act,administered a structured interview
Forest Conservation Act and Environment schedule. The schedule focussed on the
Protection Act in Orissa in their haste to Companys' profile, information about their
set up bauxite mines and expand their re CSR department, their understanding of
fineries (Hindustan Times 2010). Thus theCSR and about the initiatives taken by
question of deciding whether and to what them under CSR. There were also ques
tions pertaining to the models used by
extent a business is socially responsible
rests mostly with those communities and them for implementation of their initia
groups who are directly affected by thetives, identification of stakeholders, their
business decisions of the company. Of reporting initiatives and the measures of
course, this is not to deny that there cansuccess in CSR. As far as possible the
be multiplicity of stakeholders in any givenheads of CSR divisions were contacted
situation. and only in situations where the heads
were not available, the senior staff of the
Methodology of the Study CSR unit was interviewed. Seventeen
corporate houses agreed to be a part of
Fifty corporate houses were purpothe study and their details are given be
low.
sively chosen and contacted to elicit their

Table 1: Brief Information about the Organisations Studied

Name of the Type of Main product/ Company Annual
organisation Organisation service Turnover/Profit.

Goodyear India Ltd. Multinational Truck tyres, passenger In 2009, Goodyear

Corporation vehicle tyres, posted net sales of
Tractor tyres $16,301 billion.

Infosys Technologies Multinational Software Development, BPO For year 2010, revenue
Limited Corporation services, consulting services, as posted in their
IT services and engineering website is Us
services $ 4.66 billion.

National Thermal Public Sector Engineering, construction Provisional and

Power Corporation Undertaking and o[terating power un-audited profit after
(NTPC) Limited generation plants and power tax for year 2009-10
consulting^Coal mining, is Rs 8,656.53 crore.
equipment manufacturing,
power trading, ash business

Steel Authority of Public Sector Manufactures and sells a Profit after tax for the
India Limited (SAIL) Undertaking year 2009-10 is
broad range of steel products.
US $2.2 billion

Xerox India Multinational Manufacturer and supplier Total revenue for the
Corporation of printer, photocopier, year 2009 is $ 15,179
BPO, IT outsourcing million

cont.

640 The Indian Journal of Industrial Relations, Vol. 46, No. 4, April 2011

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 Corporate Social Responsibility in India

TATA Indicom Private companyTele services, internet INR Rs. 2,51,543

services Crore (US$62.5 billion)
National Hydro Public Sector Power Generation Profit after tax for

Power Corporation Undertaking 2009-10 was

(NHPC) Rs 2090.50 crore.
Maruti Suzuki Multinational Car manufacturing Revenue of Rs 301,197
Industries Limited Corporation million during the
fiscal year 2009-10
Ansal APi Private company Real Estate- township, malls,Profit after tax for
Hi-tech engineering, year 2008-2009 was
Rs 5,221.52 lacs
hospitality and entertainment.
Amway India Multinational Products related to personal Sale turnover of over
Corporation care home care and cosmetics Rs 800 crore in 2007
category. Products in the (latest data
area of nutrition, wellness, not available)
beauty and home as well
as commercial products.

TATA Consultancy Multinational Software Consultancy Profit after tax in 2009

Services Corporation 10 was Rs7,001 crore
Dabur India Limited Joint Venture Food products such as juices,Rs 2834.11 Crore
home made pastes, sauce, (financial Year 2009).
health supplements, oral careProfit after tax for
and digestives aurvedic and 2009 was Rs 391 crore
herbal personal products,
consumer health products
and medicated oils.
Metals and Mineral Public Sector Metal Trading, minerals, Rs 37,000 Crore. The
Trading Corporation
Undertaking net profit during 2008
fertilizers,agro products, coal,
Limited hydrocarbons and other trading09 was Rs 1402 million
(MMTC Limited)

KRIBHCO Cooperative KRIBHCO has a fertiliser Rs 2549.42 crore in

2008-09
complex to manufacture Urea,
Ammonia and bio fertilisers
Fortis Healthcare Multinational Health care Rs 160.02 crore
Limited Corporation in 2008-09

Steria India Multinational IT services, data management 1.8 Billion Euros

Limited Corporation and business intelligence, in 2008-09
infrastructure services,
testing and quality assurance,
BPO, biometrics and identity
management, enterprise
application services.

North Delhi Joint Venture: Electricity distribution Rs 223.12 crores n

Power Limited Tata power & FY 2008-09
Delhi Govt

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 Seema Sharma

Aid to Business CSR is a platform to help the poor

(3)*
CSR seems to be having different
CSR is giving back to society what
meaning for different corporate houses
society gives you (4)*
under study. There are broadly three cat
egories under which these meaningsCSR
fall.
aims to provide social, environ
First are those who look at CSR as a mental and economic benefits to so
business decision which adds to the ciety
company's bottom line. Four corporate
houses out of the seventeen maintain this CSR means working for the better
ment of society
stand on CSR as explained hereunder.
CSR essentially implies working for
CSR is a practice whereby the com the up-lift of communities (3)*
panies consider the impacts of their
activities on the community and then * Iindicate the number of companies
try to reduce the negative impacts with the response
and maximize the positive impacts for
Ethical Commitment?
their benefit. This benefit is profit.

CSR is the DNA of a company and This can be considered as the high
is a hard core business decision est level of commitment to CSR as this
which is responsible for the involves no ulterior motive of the corpo
company's financial sustainability. rate, where as in the other two under
CSR is integral to value creation in standings the corporate either directly
business through enhancement of expects financial returns or indirectly
human, natural and social capital expects recognition through its benevo
complementing their economic and lent efforts. Only one organisation's re
financial growth in order to give thesponse towards their understanding of
CSR falls under the category of an ethi
enterprise an enduring future and also
cal commitment
to serve a larger goal at all times.

It is a chanty which is done to ulti

This organisation defines CSR as:
mately get translated into profit
It is a social commitment that should
Benevolence or Philanthropy? be carried out without the selfish
motive of creating image or profit.
Twelve corporate houses look at
CSR as an act of charity. Yet there is
For sixteen out of the seventeen
an implicit understanding among all that
corporate houses, CSR is linked to
charity would positively impact the busi
profits directly or indirectly
ness bottom-line. The responses as
given are:

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 Corporate Social Responsibility in India

Thus, we see that for sixteen out of 6. Employees, communities and govern
the seventeen corporate houses, CSR is ment

linked to profits directly or indirectly (i.e.

7. Farmers
through charity). One can say that these
corporate houses are guided by enlight * Indicate the number of corporate
ened self interest in their CSR initiatives. houses with the response

CSR & Decision Making

The initiatives are mostly given
shape at the head office and then
The present study reveals that ex
launched.
cept for four organisations, all other
organisations have a CSR department
which comprises social workers, engi Interestingly only seven organisations
neers, HR staff, corporate communica consider their own staff as stakeholders
tions staff and marketing professionals. in the CSR initiatives. Only five
Yet, it is the senior management that de organisations consult a few of their stake
cides the budget and the nature of initia holders on the nature of initiatives to be
tives that would be taken up under CSR undertaken. Of these, four organisations
in thirteen out of the seventeen consult their staff and one consults farm
organisations. The decisions are
ersthen
who are their major stakeholders. The
implemented independent of engaging the are mostly given shape at the
initiatives
stakeholders. In the remaining
headfour
office and then launched. One
organisations, the staff opinion isorganisation
sought gives freedom to their sta
as to what initiatives they wouldtion
like CSR
to department to propose the na
suggest which may be taken up as CSR
ture of initiatives and the expected finan
initiatives. When the copororatescial were
requirements for implementation.
The remaining seven corporate houses
asked to identify their main stakeholders,
only ten could point out who the stake
cannot identify who their stakeholders are
holders were in the CSR initiatives. Fol
in the entire process. Their interventions
are based on the area of interest of their
lowing were identified as stakeholders.
senior management.
1. Employees and local communities
Nature of Initiatives
2. Employees, share holders, customers,
community and environment (2)*
There is a variety of initiatives under
the CSR in these corporate houses.
Employees, customers, dealers, ven
These
dors, government, and environment initiatives can be broadly catego
(2)* rized under three heads. First comes
those that can be considered to be phil
4. Communities (2)*
anthropic. Almost all the corporate
5. Employees, distributors and local houses studied are giving donations to
communities wards some cause or the other. These

643
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 Seema Sharma

range from donations of computers, ing

oldhealth initiatives. While vocational
clothes, books to libraries, holding training
blood by some of the organisations does
not have backward or forward linkages,
donation camps, donations to orphanages,
hospitals, donations in cash or kind the to
skills imparted are also not the ones
homes for the aged and scholarships that
for the growing economy like India re
the weaker sections of the societyquires.
espe Some examples of the vocational
cially the scheduled castes and sched
training without backward or forward
uled tribes. Donations during disasters
linkages are those provided for plumb
and free veterinary assistance were ers,
otherelectricians, beauticians, tailoring,
modes of philanthropy. None of and these
computer operating and driving. The
activities is sustainable and is more in the communities are left to find jobs for them
form of financial contribution or contri selves after training. In contrast, the
bution in kind. These initiatives have been
SHGs initiated by Dabur India limited for
taken as a good cause. The second setbee keeping and mushroom cultivation are
of initiatives is those that fall in the do not only linked to the organisation's core
main of infrastructure development.business but have full potential of exploit
Many of the corporate houses studied are
ing the existing market which is provided
by Dabur and also provide an assured
involved in infrastructure development be
income. KRIBHKO, a cooperative of
it building of roads, community centers,
farmers works and trains them on farm
schools, tube wells, providing technical
assistance and infrastructure facilities ining techniques thus helping them to build
electricity generation/ distribution in setheir strengths. Tata Indicom is training
lect villages that are without electricity.and employing visually challenged per
Some are also involved in enhancement sons for their call centers thus opening
of already existing infrastructures in avenues
the for employment for them. Much
community in the vicinity of the corpo of the initiatives in the field of education
rate house, for example adding roomsare orin the area of informal and adult lit
constructing separate toilets for the girlseracy and awareness building. Similarly,
in government school. Then come the Ansal API, which is into infrastructure
initiatives that can be called as those
development runs schools under their
aimed at empowering communities. CSRThe
initiative. Interestingly, initiatives
initiatives taken by the corporatetaken thatby Fortis Health group such as pro
come under this category includeviding skill on line medical tips, assistance and
counseling are considered part of their
building, vocational training, education,
CSR.
livelihood issues, training of rural sports
men, counseling to parents of school go
ing children or to the patients through help
None of these activities is sustain
lines, SHG formations and encouraging
able and is more in the form of fi
bee keeping and mushroom cultivation
nancial contribution or contribu
through them, capacity building of farm
tion in kind.
ers, training and employing visually chal
lenged people and improvement in exist

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 Corporate Social Responsibility in India

Overlap between Core to link firm's capabilities with external

Competencies & CSR environment which has to be scanned to
see where the organisation's resources
A very crucial and important element can provide maximum benefit to the
of CSR initiatives is reflected in the link stakeholders. This kind of overlap is seen
between these initiatives and core com in the CSR initiatives of following corpo
rate houses.
petencies of the firm. Management aims

Table 2: Complementariness between Organization's Strength & CSR Initiatives

Name of the organisation Main product/ service CSR Initiatives that are complemented
/Core competency by organisation's
strength

Infosys Technologies Software DevelopmentComputer literacy

Limited

NTPC Limited Decentralised Distributed

Generating and operating
Generation and Supply
power generation plants
and power consulting.
TATA Indicom Tele services Helpline for parents and teachers,
Interactive voice response system for
the blind

Maruti Suzuki Car manufacturing
Industries Limited
TATA Consultancy Software Consultancy
Services
Dabur India Limited Medicines using local
herbs and honey making
KRIBHCO Manufacture of Urea,
Ammonia and bio-fertilisers
of farmers
Road safety, safe driving and training
for becoming drivers
Computer donations, computer based
literacy and e -waste disposal
Health check ups, Self Help Groups -
bee keeping, mushroom cultivation,
food preservation.
Development of farm technology,
capacity building for agriculture

Fortis Healthcare Limited Health care Revival and upgradation of hospitals,

Dialysis support initiative, heart line.
North Delhi Power Limited Electricity distribution
Energy club for energy conservation
and Electrician training.

Table 2 indicates that eight corpoModels, Success, Reporting &

rate houses have a direct correlation be
Funding
tween their core competency/ main
thrust area and the CSR community in While nine organisations refused to
terventions. This enables the
divulge the amount earmarked for their
organisations to strengthen their CSR
CSR initiatives, four organisations have
indicated
initiatives as they encash on theirthat exist
a fixed 1-2 percentage of
ing strengths. their profits after tax is earmarked for

The Indian Journal of Industrial Relations, Vol. 46, No. 4, April 2011

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 Seema Sharma

CSR initiatives. The remaining four have The reporting here is seen in the con
given rough estimates of the amounttext of whether the CSR initiatives are
reported both within the organisation and
spent on CSR during the previous year.
Of these seventeen corporate houses,
outside it. These reports act as check on
twelve are using non-governmental the
or CSR initiatives as there is a written
record of all the CSR activities and also
ganizations for implementation of their
used for enhancing company's image.
CSR initiatives, three use employee vol
While only eight organisations prepare
unteering and one operates through their
CSR department. One organisation di reports of their activities, more than an
equal number do not prepare reports. At
rectly works through village leaders and
community members. While those the global level, only six organisations are
corporates which work with NGOs for signatory to either Global Compact or
their CSR operations feel that NGOsGlobal Reporting Initiatives (GRI).
have the skill, knowledge and time to
implement their initiatives, those who use Conclusions
employee volunteering expect their em
ployees to devote some time in commu The study of seventeen corporate
nities or in identified institutions and houses in India demonstrates that there
organisations. There are some whoisen
diversity in understanding of the term
gage directly with communities. CSR. They look at CSR as an aid to busi
ness or philanthropy or as an ethical com
The success of the initiatives can bemitment. A majority looks at CSR as an
measured at two levels, one at the levelaid to business. There is also a diversity
of effective fund utilization and other at of activities that go in the name of CSR.
They vary from one time donations,
the level of impact. In the latter case, the
stakeholders play a crucial role as onlyorganising camps to sponsoring causes
they can give the correct feedback. The or institutions. The organisations may go
data analysis shows that only eightfor infrastructure development and also
organisations have audit of their fund utitake up initiatives that assist in empow
lization and only six get impact evaluaering communities. A glance at some of
tion of their programmes done. Of these,the CSR initiatives of the corporates
only four take feedback from the stake shows that these are the interventions that
the Government of India should under
holders to find out their opinions and
evaluation of the interventions. The re take. While construction and maintenance
maining three corporate houses did not
of roads is the responsibility of the gov
provide the required information. ernment for which taxes are collected,
adding some rooms or building boundary
wall or toilets for the government schools
Only six organisations are signa
may be welcomed by the children and
tory to either Global Compact orschool authorities but it amounts to mak
Global Reporting Initiatives (GRI).
ing the government less accountable at
least in areas for which the money comes

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 Corporate Social Responsibility in India

through budgetary allocations. In such NGOs one could get expertise to tackle
interventions, while the companies get those CSR initiatives that require in depth
credit in terms of brand image and good knowledge of the problems and issues.
will in the community, the state gets to Thus, this serves as a symbiotic relation
do away with its responsibility and may ship. The NGOs get funds to run their
not spend money on the very infrastruc programmes from the corporate and the
tures and improvements for which it has corporate get implementing partners. In
collected taxes from the citizens. It is the a country like India it is a big and debat
citizens who get to be on the debit sideable question whether the NGOs should
as the taxes paid by them may not betake up the role of implementing partners
effectively utilized. of the corporate as this co-option has
potential to weaken the resolve of the
While duplicity is seen in some
NGOs of to take up radical issues that are
the initiatives undertaken by the corpoto the basic structure of the soci
linked
rate in areas like for example education
ety.
and infrastructure development, yet there
is no collective effort by the corporate to
There are few impact evaluation
make a sound and concentrated impactand social audit exercises under
largely because whatever reasons the
taken by the corporate and very
corporate may give for their CSR initia
few prepare reports of their CSR
tives, it is an exercise in image building
initiatives.
and hence each corporate would like to
be separately known for it.
Social responsibility is increasingly
becoming an accountable process, yet
The study also shows that corporates
the study shows that there are few im
lack clarity on who their stakeholders are
and consequently their interventions pact evaluation and social audit exer
through CSR may lack focus. Most cises
ofundertaken by the corporate and
very few prepare reports of their CSR
the initiatives get their life in closed board
rooms and are then implemented. initiatives.
Inter
estingly, for many CSR implies initiatives
that reach out to communities, to the Noex discussion on CSR in India is com
plete
ternal institutions and does not imply covwithout bringing into focus the spe
ering their own staff. The organisations cific context in which CSR is taking
are also, in many cases, relying on NGOs shape in India. While the concept of
to fulfil their obligations. The reasons welfare state in India is gradually giving
cited for the same are that these way to an increasing role of the private
organisations are rooted in the commu sector in all aspects of life, thus leaving
nities and hence best know the commu a huge arena for private players to dem
nities, their resources, issues and needs.onstrate their strength. Globalisation of
the economy also has its share in the
Also, as there are NGOs specialising in
spread of the present form of CSR in
specific issues and causes, by engaging

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 Seema Sharma

CSR, while at the level of action "when

India. The state is increasingly looking
commercial interests and broader social
for private players to bridge the existing
gaps in the attempted inclusive growth welfare collide, profit comes first," and
and development amongst sections of thus "for most companies, CSR does not
go very deep." Looking at the Indian
society and looks up to corporate for pub
lic private partnerships. While the de scenario in CSR, one may not find a very
mand of the Indian society from a so different situation because many of the
corporate houses divert a fixed percent
cially responsible corporate in India would
in all likelihood be employment genera age of their profits to CSR thus making
tion, that can ease out unemployment andit a dependent variable rather than an in
tegral part of the business.
poverty situation, the globalised economy
on the other hand is putting pressure on
the Indian corporate houses to developReferences

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