"Corporate Social Responsibility- Indian Perspective"
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01-03-2009, 01:28 PM
"Corporate Social Responsibility- Indian Perspective"
FIRST CONCERN OF A COMPANY IS THE HAPPINESS TO PEOPLE CONNECTED TO IT
"THE FIRST CONCERN OF A COMPANY IS THE HAPPINESS TO PEOPLE CONNECTED TO IT."
The modern scenario is no longer based upon the ethics of past, the competitive revolution among the organizations has changed the perception of employees. The technology savvy producers have kept many welfare options infront of the employees, which have attracted employees to work and to adopt the culture. The options which got created by the employees or by the organizations set a benchmark infront of them to practice the similar for all other organizations. Government and different Government bodies discovered the reliable ways by keeping the welfare aspect as the motivation factor. In other terms if we say then, the concept of corporate social responsibility is not new to Indian companies. Corporate social Responsibility activities have their advantages. The benefits are in terms of building a positive image and encouraging social involvement of employees, which in turn develops a sense of loyalty for the organization. The companies have understood that the retention of market depends upon productivity, goodwill, quality of their product, which can be expected from the people associated to them. This whole project and implimentation-"The first concern of a company is the happiness to people connected to it" explains clearly about the major concern related to people of the organization, future challenges, corporate insight and corporate involvement in a community. The related subtopics collected and analysed from various sources provides a clear concept about the organizational concern for their people. The sub topic corporate scrutiny brought out the major understanding for the people from the corporate aspect which can help to understand clearly about the importance in this competitive scenario.
Business is facing challenging times world-wide. Management of business has progressed rapidly in last 50 years. It has now thoroughly matured to higher levels of performance. The present age is a money-dominated age. Every one is running after money. Business enterprises are coming up with new strategies to earn more and more profits. Economists are bringing new philosophies to enhance prosperity. Today the efforts and energy of the world is being spent on increasing the organizational wealth. Increased competition and commercial pressure are combining with rising regulatory standards and consumer demand to create a whole new playing field for business. Traditional expectations of business are also changing. It is no longer enough to simply employ people, make a profit and pay taxes. The entities with maximum wealth are the most powerful in the present era and capable of safe guarding their economic interests leading to the gap between rich and poor widening. It is leading to a complex situation, where some people try to find out unfair means to quickly fill this gap. It gives rise to unrest in the human mind and quickly erodes the feeling of satisfaction and happiness. Quality expert Kaoru Ishikawa emphasizes on the role of company to keep its employees happy by stating, ''the first concern of a company is the happiness of the people connected to it. If the people do not feel happy, . . . that company does not deserve to exist'' (Ishikawa, 1985)1.
Companies no more consider human capital as commodity but as an asset. In the age of globalization, corporations and business enterprises are no longer confined to the traditional boundaries of the nation-state. One of the key characteristics of globalization is the spread of the market and the change in the mode of production. The centralized mode of production has given way to a highly decentralized mode of production spread across the world. In the last 20 years, multinational corporations have played a key role in defining markets and influencing the behavior of a large number of consumers. The rules of corporate governance have changed too. And there has been a range of reactions to this change. On the one hand globalization and liberalization have provided a great opportunity for corporations to be globally competitive by expanding their production-base and market share. On the other hand, the same situation poses a great challenge to the sustainability and viability of such mega-businesses, particularly in the context of the emerging discontent against multinational corporations in different parts of the world. Laborers, marginalized consumers, environmental activists and social activists have protested against the unprecedented predominance of multinational corporations. The ongoing revolution in communication technology and the effectiveness of knowledge-based economies has created a new model of business and corporate governance. A growing awareness about the need for ecological sustainability and the New Economy framework, with an unprecedented stress on communication and image merchandising, have paved the way for a new generation of business leaders concerned about the responses of the community and the sustainability of the environment. It is in this context that we need to understand the new trends in corporate social responsibility.so,the picture of human resource in front of the corporate leaders is clear that without human resource nothing is possible in this ever changing world and the nation.
Today, business organizations increasingly concern themselves with a host public issue that are international in nature including trade legislation, regulations against corruption and growing concern about global issues based on industries.
The drive of improvement never ends. The best culture, system and plans do not remain so far long. Economic conditions, competitor's behavior, market dynamics, technological advances and the political environment demand change. The global companies of tomorrow will have to actively work today to integrate social accountability issues into their key business processes in order to meet-and in some cases exceed-customer expectations. The 'neighbor -of â€œchoice strategy' must become an integral part of a company's culture. Companies will know that they have succeeded in organizing corporate social responsibility activities when they automatically include corporate social responsibility considerations in their decisions. In fact, the international nature of the business environment means that these responsibilities exist in those areas where business operates or seeks to operate. This is a global responsibility which lies at the heart of the business contract. The economic function of the business and its wider responsibilities are integral features of this contract. By crossing the boundary between business and the community , the community will become a key shareholder in business and business will be encouraged to give up the traditional mode of resource utilization and adopt a suitable mode for resource enrichment of the planet.
THE EMERGING CHALLENGES:
Clearly society expects many things from the corporate sector. Enterprise are being asked to move beyond the commercial sphere. Different stake holders place varying demands on organizations. Such demand varies over time and in different contexts. The primary expectation centers on wealth creation or profit function of the enterprise. But this not the only expectation. Beyond, this ,consumers continue to demand products that are safe, reliable and useful, services that are responsive to the changing needs, and advertising that is honest and informative. The public at large expects business to help project and implimentation the physical environment and the health and safety of all those who are exposed to dangerous technologies or substances. Issue such as corporate power and corporate compliance, corporate activities and corporate disclosures of information will continue to concern an increasing number of people in the community.
Clearly, the emerging multipurpose corporations will demand multipurpose goals and synergistic policies that accomplish more than a single goal at time. This compels organizations to develop new measures of performance. Instead of focusing on the single bottom line of profits as in the past, organizations are expected to focus attention on multiple bottom lines-social, environmental, political and ethical- which are all interconnected.
THROUGH CORPORATE SCRUTINY:
The concept of corporate social responsibility (CSR) is not new to Indian companies. However, what is new is the way it has caught on with Indian corporate and the direct involvement of employees in implementation of these project and implimentations. Dedicated departments in most organizations are looking into much more than just funding or getting involved in one-time project and implimentations. CSR activities have their advantages. The benefits are in terms of building a positive image and encouraging social involvement of employees, which in turn develops a sense of loyalty for the organization. CSR activities help bond employees as a team, and with the organization, which in turn helps in creating a dedicated workforce that is proud of its employer.
According to Associate Cement Company (ACC), they define Corporate Social Responsibility as the way a company balances its economic, social and environmental objectives while addressing stakeholder expectations and enhancing shareholder value. ACC has undertaken social volunteering practices almost from its inception, â€œ long before the term corporate social responsibility was coined. The company's earliest initiatives in community development date back to the 1940's in a village on the outskirts of Mumbai while the first formal Village Welfare Scheme was launched in 1952. The community living around many of our factories comprises the weakest sections of rural and tribal India with no access to basic amenities. The range of Community & Rural Welfare activities in ACC begins with educational and medical facilities and goes on to cover vocational guidance and supporting employment-oriented and income-generation project and implimentations like agriculture, animal husbandry, cottage industries by developing local skills, using local raw materials and helping create marketing outlets. In close consultation with the Confederation of Indian Industry (CII), the management of ACC decided to step forward to participate in the national effort to eradicate the HIV/AIDS virus. ACC consider people as their real work force to keep them alive in the real competitive age.
The trend is especially strong in IT companies with a young workforce that increasingly feels that they would like to contribute to the cause of creating a better society. Most of these companies are working on issues related to children and education. Voluntarism to them means taking technology to the grassroots levels and to bridge the digital divide. Whether it is TCS's Web-based solution for their adult literacy programme or Kale Consultants' (an airlines and banking verticals software maker) effort in creating a centralized data system on children for adoption.
With serious money and human resources involved, how does it benefit the organization? It is not uncommon to hear of rumors that in many cases no actual work was done and project and implimentations were shown on paper to gain tax exemptions. Most companies however strongly deny such allegations as funds are strictly dedicated to such project and implimentations and monitored by company boards. CSR is increasingly becoming a part of corporate governance. However, one of the biggest advantages of such activities is the development of internal branding among employees. In almost all organizations these activities have major employee involvement. In fact, all organizations feel that the success of such initiatives always depends on employee participation. Besides, it makes leaders out of employees and helps them realize the concept of teamwork. With a growing feeling that corporates should also contribute to social activities, globally, and with a desire to improve the immediate environment where they work, many companies are taking keen interest in such activities. In reality, most companies have special departments to document the best practices of corporate social responsibility and integrate them into the organizational fabric. They are investing huge amounts in creating special foundations for the implementation of these practices with a view to making a huge difference to the people around them. They are also drafting special policies to ensure better working conditions and promote the family welfare of their workforce. Companies argue that getting associated with people related activities with a cause might create an apparent impact but that does not generate any tangible profits. While it does help develop their brand and convey to the public that it is a socially conscientious company, it is a natural fallout and not a deliberate attempt. one of the biggest advantages of such activities is the development of internal branding among employees. "Employees feel a sense of pride when they are involved in such activities which in turn help in retaining them. Similarly, such activities also in a small way contribute towards image building,"
INVOLVEMENT CORPORATE IN A COMMUNITY:
The involvement of corporate in a community generates trust in front of people which in a positive manner creates the identity in the nation. Corporate Community Involvement is about the impact your company has on the wider community. Companies can support the community through a number of activities that use both its staff and resources. People ,who are the part of the community always observe the community based activities done by the target industry of their locality. This could include making charitable donations, allowing staff to volunteer their skills to help community groups, or donating PCs and office equipment to organizations that need them
The following companies were listed as models by the survey Conducted by Centre for Social Markets. Of note, Infosys, Tata and Wipro were mentioned multiple times as models. The other companies were listed once each.7Refer appendix for detail company overview.8
* Birla Group of companies
* BSES (Bombay Suburban Electric Supply)
* DSP Merril Lynch
* Hindustan Lever
* ITC (Indian Tobacco Corporation)
* Larsen & Toubro
* Tata Consultancy Services
* TISCO (Tata Steel)
* Conagra Inc. in USA.
* Siemens training institute, Germany
* R&S, Germany
* Cisco Systems
TABLE A and B9
60 years of independent India, but we still haven't experienced a real economic growth and development. The government plans take a long time to get implemented and the policies are highly skewed. If the corporate houses choose to intervene, perhaps, the day wont be far when, India can boast of a real economic boom. The world map of happiness survey 2006, gave India 180 points. The only one reason, where it lagged behind other countries, was its inability to provide its people with basic education, healthcare, and reduce poverty. Every country should embrace the remarkable concept of individuals and businesses forming a partnership to support social causes. A successful modern Indian company also needs to be well managed, with a corporate culture that promotes integrity. This message was conveyed by half of those respondents who answered this question. Respondents referred to practicing ethical business values, values based management, participative leadership, and conduct[ing] business with integrity and honor as important conditions for business success. Professional management was mentioned as a criterion by several respondents. It is important for [management to be] agile and informed [and to] recognize the bottleneck in infrastructure and find methods to solve them. As one respondent summarizes, the role of a successful company is to contribute to national wealth, to generate employment opportunities, E-business and E-commerce, accountable employees, transparency of Managements policy, open communication, safe working environment, concern for society. In the context of India, such a partnership has enormous potential for strengthening society. The state broadly speaking was referred to by over a quarter of respondents as an obstacle to successful business. Problems included unclear, unpractical and poorly monitored regulations, poor infrastructure, a complicated tax system, and too much bureaucracy. The main obstacles, we think, are lenient attitude of the Government in enforcing Quality control measures. Interestingly, however, the state is also criticized for too much interference. Irresponsible & unpractical government regulations in sector that are best left to private hands, keeps the government to busy to understand the difficulties of an average small businessperson whose capabilities & spirit is being choked due to the lack of infrastructure. There were also references made to cleaning up the corporate governance structure and clamping down on corruption in India. Broad frameworks on corporate governance should be developed and followed. And, penalties for non-compliance should be strictly implemented. Benefit from corruption should be reduced. This is to be done by flattening the tax structure and reducing exclusive authority on Govt.agencies. In an era of increasing global competition, the need to create an image that shows that corporate are part of the community and care about it is growing. People as the part of community and a strong part of the workforce for the production in organizations plays important role and benefits acquired from them cannot be ignored as far as possible for growth.
1 Ishikawa, K. (1985), What is Total Quality Control?: The Japanese Way, Prentice-Hall, Englewood Cliffs, NJ, trans. by D.J. Lu, (2002).Kaoru Ishikawa (Ishikawa Kaoru ) (1915-1989) was a Japanese University professor and influential quality management innovator best known in North America for the Ishikawa or cause and effect diagram (also known as Fishbone Diagram) that are used in the analysis of industrial process. Ishikawa has emphasized include the seven Quality Control tools. As per his view and respecting the ideas that suggested by him-'' The first concern of a company is the happiness of the people connected to it".
2 Leonard, D., McAdam, R. (2003), "Corporate social responsibility", Quality Progress: ASQ Magazine, No. October, pp.27-32.
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DEFINITIONS AND RELATIONSHIPS
Corporate social responsibility (CSR) is the process by which businesses negotiate their role in society
In the business world, ethics is the study of morally appropriate behaviors and decisions, examining what "should be done”
Although the two are linked in most firms, CSR activities are no guarantee of ethical behavior
REASONS FOR CSR ACTIVITIES
CSR activities are important to and even expected by the public
And they are easily monitored worldwide
CSR activities help organizations hire and retain the people they want
CSR activities contribute to business performance
CORPORATE SOCIAL RESPONSIBILITY (CSR) IN TNPL
TNPL, as a responsible corporate citizen, has ingrained the philosophy of Corporate Social Responsibility deeply into its value system. The company is consistently taking up various community welfare initiatives for the benefit of the people living in neighbouring villages. During the year 2009-10, the company has spent an amount of about Rs.2.63 Cr. for various CSR activities. For the year 2010-2011 an amount of Rs.3 Cr. has been allotted for various CSR activities.
CSR activities cover different sectors such as:
Career and Knowledge development
Medical and Public Health
Infrastructure and Road Improvements
Promotion of Sports and Recreation
Livestock and Cattle care
Greening the Environment
A modern school, accredited with Five Star Status by Bharathidasan University, Trichy, providing educational facilities upto 12th Standard, is functioning in the township catering to the educational needs of the children of employees and the children from the neighbourhood.
CAREER AND KNOWLEDGE DEVELOPMENT
It has been TNPL’s endeavor to provide various kinds of vocational training to the rural youth of the area. Accordingly, a Computer Training Centre has been set up to provide computer literacy to unemployed youth from the neighbouring villages. Based on aptitude, Advanced Training in computers is imparted to make the youth employable.
3,00,000 litres of drinking water is supplied to residents in the 7 neighbouring villages, viz; Pazhamapuram, Thathampalayam, Ponniyagoundanpudur, Pandipalayam, Moolimangalam, Velliyampalayam and Kariyampatti. Water tanks have been constructed and pipelines have been laid by the company at a cost of Rs.35 lakhs.Besides, the company has provided financial assistance to the tune of Rs. 125.10 lakhs to Tamil Nadu Water Supply and Drainage and other local bodies to augment supply of drinking water to the people.
MEDICAL AND PUBLIC HEALTH
TNPL regularly organizes Medical Camps in the neighbouring villages, through its Medical Officers and Para-Medical Staff. Medical personnel of the Government Primary Health Centre also join the team. Patients are screened for ailments and medicine is distributed free of cost for minor ailments. For major illness, financial assistance is given to the individuals.
INFRASTRUCTURE AND ROAD IMPROVEMENTS
TNPL has been contributing its resources liberally towards the improvement of infrastructure in the neighbouring areas. The company has constructed drains and retaining walls in the TNPL Effluent Water Lift Irrigation Society (TEWLIS) ayacut area by spending Rs.86 lakhs. Besides, several road improvement works have been done and public toilets constructed.
PROMOTION OF SPORTS AND RECREATION
TNPL has taken several steps to promote sports amongst the youngsters of the area. company has been conducting Volley ball and Kabaddi tournaments to encourage these rural sports. Company has instituted Rolling Shields to conduct these events every year.Besides, in 2007-08, an amount of Rs.10 lakhs was given to the District Administration, Karur for construction of Sports Complex in Karur.
LIVE STOCK AND CATTLE CARE
Livestock and Cattle Care Camps are held in neighbouring villages once in 2 months. Medical and Para-medical staff from Department of Animal Husbandry and Veterinary Services, Tamil Nadu Govt. provide the specialist support. TNPL sponsors the event by meeting all the expenditure incurred for the camp.
GREENING THE ENVIRONMENT
By way of increasing the area under green cover, 50,000 saplings of Neem, Vagai, Rain tree, Bamboo etc., were planted in the following Panchayat / Villages: Vettamangalam, Kuppam, Pavithram, Punjai Thottakurichi, Punjai Pugalur, Thirukkaduthurai, Nanjai Pugalur and Manmangalam on a single day ie: October 31, 2008. An amount of Rs. 20 lakhs had been spent for this purpose.