A DISCUSSION OF CORPORATE SOCIAL RESPONSIBILITY IN INDIA: A CASE SELECTION

SUBMITTED BY MANOJ KUMAR CHOUREY

HULT INTERNATIONAL BUSINESS SCHOOL

Hult International Business School (MBA-2012) Fenway

MBA-2012, FENWAY

Hult International Business School (MBA-2012) Fenway

Corporate Social Responsibility in India

Instructor: Professor Joanne Lawrence
Submitted By: Manoj Kumar Chourey
A. Corporate Social Responsibility in India 1. The three pillars of corporate social responsibility, individual, corporations, and society, all three plays active major roles in redefining CSR in India. Above all, government enforcement agencies are considered to be taking lead role to own and implement. Corporations, NGOs are taking initiative to new horizon to global standards, also individuals are now feeling more responsible towards pushing them towards greater grow. The government putting up a law for not providing free poly-bag in departmental stores helps society to behave in more responsible way than ever before. Corporations coming up with green initiatives and energy efficient products are making CSR possible in India, and at the same time a bundle of new innovative products are available within the reach of individual. NGOs role are much more important in India CSR, taking example of a recent moment Anna Hazares Anti-Corruption campaign is well supported by society thus pushing the government to set things right towards better CSR. All in all, we can very well understand that none of the three pillars can be left alone when we talk about a holistic CSR. 2. The Book talks about Engaging in economically sustainable business activities that go beyond legal requirements to protect the well being of employees, communities and the environment CSR in India can be very well comparable with this definition as we discussed in first the paragraph; initiatives from all pillars playing an active role towards globally standardized CSR practices in India. Going beyond the statutory obligations, corporations are finding sustainable business avenues to benefit individuals for example, TATA motors India is enhancing the cheapest car in the world Nano with electrically rechargeable capacity, that means a great going beyond the legal framework, and will defiantly be a boom to greener environment. Even the most popular means of individual transportation Two wheelers, are going electric, which means there is clear demand and positive from society as well towards acting more socially responsible. Considering the CSR pyramid, India definably has crossed economic barriers and is finding sustainable business solutions for socially awakened individuals. Legal systems are now trying harder than ever before to put minimum things across all industries. Corporations are becoming more and more ethically responsible, and India as a country is leading towards the top of the pyramid, thus discretionary obligations of individuals. 3. A recent reference from The Financial Express (1Jan2011) Tata Steel features as the first Indian company to be listed in Standard and Poors top 10 CSR ranking, amongst the top 100 companies in the world. This being the obvious reason to choose Tata Steel, a leading example for following best CSR practices in India. Looking deep in to companys CSR policies, according to their website, Tata Steel believes that a company should contribute to the communities in which it operates. As such Tata Steel spends 5-7% of its profit after tax on CSR initiatives, such as environmental sustainability and social development. Tata Steels CSR policy focuses on social sustainability, healthcare initiatives, environmental sustainability, and inclusive growth. This CSR vision is very well demonstrated, consider, Tata Steel head (social services and family initiatives) Shakti Sharma stated, that The Hult International Business School (MBA-2012) Fenway

company had invested over $ 2.8 Billion in social and environmental initiatives, he also added, Now, as we are setting up a new steel plant in Orissa and also enhancing capacity in Jamshedpur, we are also taking into account the social impact and the desired expenditure of this eight million additional capacity expansion. The company is committed to provide and maintain a safe, healthy and fair work place to all its stockholders, demonstrating positive actions towards reducing carbon footprint. Building Energy efficient infrastructure and a record production of more than 85% of recycled NatSteel products. Taking demonstrated initiatives towards society they are taking responsibilities of health, water and sanitation, education, human capital, agriculture, sports, and disaster relief. All these argument makes Tata steel a number one selection of implemented CSR, and a great example to follow. 4. www.karmyog.org, defines, analyze and rate top 1000 companies in India according to their CSR initiatives. Wyeth limited, a subsidiary of Pfizer, has been rated very low and has been placed at 989th position with overall ranking of 1 (lowest being 0). Wyeth Ltd. with 2.65 Billion revenue, karmayog recommends 132 USD to be set apart for CSR initiatives. According to the companys website they say We play an active role in making every community in which we operate a better place to live and work, knowing that its ongoing vitality has a direct impact on the long term health of our business. They show almost to nil initiatives towards paying the society back. This is in total contrast to parent company Pfizer, who actually contributes towards all areas of CSR, and also has crown accolades on international operations. Wyeths website shows almost nothing, but words which actually covers true sense of CSR. Organizational values i.e. work environment and related contribution to direct stockholders may be an exception to the findings.

B. Applied Business Ethics 5. Business behavior is fundamentally guided by three fundamental principals, respecting human values, local tradition and believes in the context. India is a diverse country with many belief, religions, and cast system, which makes it more complex to understand core human values in the Indian context. Recovering from the past, India now fully understood the importance of equal opportunity in the sense spreading just beyond direct owners and/ or stockholders, but also to the local community and individual. This is a right context and perfectly matching with current practices in India. Moving forward from traditional conception, India is embracing global tech-boom and accepting the fact that technology is actually changing their life and life style as well. For example, ITlization of industrial sector once was facing huge resistance from society in the fear of loosing jobs and making workers stranded in the middle of no where, but now they understand that it is actually needed to be efficient and productive on a global map. Those were days when humans were considered a tool for efficient production, in todays context is a great resource to every company operating for profit, and companies simply are not in position to ignore associated core values. Respect for local tradition is a challenging aspect of any business in India today, this is because of the vast variation in tradition across India. Companies even when they try to follow and match with particular tradition, they are going haywire in some Hult International Business School (MBA-2012) Fenway

other region. This issue may seem bigger but the answer is retained by the society itself. Indian traditional values are maturing beyond the regions they may not be the same across India, but they are more inclined and aligned with global perspective. However the underlying fact remains understood that traditional values are to be valued from top. Local belief in the context is another big concern for specific cases, let say a paper company, which uses tree for their product, has a contrast in local believe as many community worship tree as God and they are resisting to promote those companies. This same issue can be appreciated with the companies in the beef and cow meat production industry; India being a Hindu dominated country this very act is against their religious belief. Throwing industrial waste is doing the same kind of distrust with local belief. Corporate behavior is normally aligned with generally accepted business ethics, for sure; this we can say because of two reasons one, because they have been pushed by regulatory agencies to behave in responsible ways, also NGOs are much more in control to bring out fact of devil act of corporates social actions. Secondly the society is also proactively responding and literally dictating the product. These being the major reasons, global acceptance of their product is another core concern, as companies are more and more behaving in alignment with predominant business ethics to avoid boycott of the product in extreme conditions.

C. UN Global Principles 6. Eating vegetables, doing daily exercise, sleeping on time, drinking water etc, we all know by heart that these are the basics and fundamentals of healthy living. It is exactly the same with running a healthy business in long term, they key here is UNGB, UNGCs 10 principals are basically guidelines for maintaining and sustaining businesses in a long term. As a manager of a company I would insist to abide by these principals and its evaluations. I believe UNGC guidelines are nothing but an ideal way to human behavior and actions, indented to be fair in ones action, and not harming anyone else, the environment included. It also forbids practices which hold back equal opportunities to everyone. Bribery, a huge subject in India restricting developments across the country and also responsible as a core factor because of which the good intentions from great initiatives are not reaching to the intended individuals. Now India standing tall, public initiatives, NGOs efforts, empowered media, IT enabled society-making India much stronger in stand against these odds of core CSR. The latest Anti-Corruption bill is a leading example in support to writers argument, that volunteering CSR is the best way to become sustainable business entity in a long term. In any case, India is cruising towards idealistic peak, making things possible in every aspect of CSR, i.e. Human rights, Women empowerment, Anticorruption, work place ethics, food security, right of education, right of healthcare, elimination of child labor, elective child birth, and commitment to reduce carbon footprint. A life without water and air is impossible, and that is true in the business world as well. Without considering humanity, society, and the environment, business in todays world is impossible, and thus we shall preserve and prevent them from getting corrupted. India in the future can be seen as a leading business hub also has a potential to become a global CSR leader. Hult International Business School (MBA-2012) Fenway

Bibliography

Financial Express News article http://www.financialexpress.com/news/tata-steel-lone-indian-co-in-s&ps-csr-rankings/121214/0 -

Tata Steel, official webpage http://www.tatasteel.com/corporate-citizenship/index.asp

Hult International Business School (MBA-2012) Fenway