Swati journal on Corporate Social Responsibility

Corporate Social
Responsibility in
‘INDIA’
Swathy Mendiratta
 Supervisor’s Name: Prof. Ruma Saha
Dr. Kunal chattopadhyay.
Prof. Manisha Telraja
(Vivekananda College of
empowerment)
2013
Swathy Mendiratta
Weekend M.B.A IInd Semester (Roll No: 06)
(Punjab Technical University)

Corporate Social Responsibilityin‘INDIA’ SwathyMendiratta (PunjabTechnical University)
pg. 2
Corporate Social
Responsibility in ‘INDIA’
Swathy Mendiratta
ABSTRACT : The study gives a detailed description of what C.S.R
actually stands for and majorly it views the general outlook weather
companies are really taking a genuine initiative towards the benefits of
the society or it’s just a way to portray a picture perfect image of the
company when they may be acting in unethical ways. Also
understanding the relationship between corporate social responsibility
and corporate governance.
By Swathy Mendiratta
Weekend M.B.A IInd Semester, Roll No:06

pg. 3
ACKNOWLEDGEMENT:
I would like to express my special heartiest thanks of gratitude to my
professor “Ruma Saha” who was my soul guide for my journal on
“Corporate Social Responsibility” and who has also taken the pain of
taking out her time and going through my entire journal and helping me
correct it with care and attention. My deep sense of gratitude goes to Dr.
Kunal Chattopadhyay who was always there to extend his hand of
assistance whenever required, also I owe the computer faculties and
library staff for allowing us to use the library books and facilities in a
liberal way that allowed me to explore the topic and do the further
required research for the thesis.
I would like to express my deepest feelings of appreciation
towards my institution, my college faculty members, and even non staff
members and college associates and friends who have always directly
and indirectly supported all of us students in a way or the other.
In addition, a thank you to Mr Arijit Mondal, Project Manager Tata
Steel, Sharmistha Mukherjee, H.R associate in Deloitte, Kavita
Mendiratta, Talent Acquisition in Emerson Design Engineering
Center, Pratyusha Ryali, Hr in Wipro, and Rahul Halder, Hr in
Yellow Box Hr Services Pvt Ltd, Kapil Mendiratta, Ex- business
analyst and software developer at E-valueserve, who have helped me
out a lot to explore the topic by sharing their crucial time with me
helping me learn a lot indeed. And also not to forget, I would like to
extend my gratitude towards my family members and well wishers for
their support throughout.
Date: 18 / 8 / 2013

pg. 4
CONTENTS:
1. Introduction: - - - - - - - Pg: 5-6
2. Relationship between Corporate
Governance and C.S.R: - - - - - - Pg: 7
3. Literature Review: - - - - - - Pg: 8-16
4. Hypothesis: - - - - - - - Pg: 17-19
5. Research Methodology: - - - - - Pg: 20-21
6. Findings & Analysis: - - - - - - Pg: 22-29
7. Inference: - - - - - - - - Pg: 30
8. Conclusion: - - - - - - - - Pg: 31
9. Limitations of Research: - - - - - Pg: 32
10. Future Direction: - - - - - - Pg: 33
11. Summary: - - - - - - - - Pg: 34
12. Bibliography: - - - - - - - Pg: 35

pg. 5
1. INTRODUCTION:
An overview into corporate governance and corporate social
responsibility:
The basic idea of Corporate Governance and Corporate Social
Responsibility (C.S.R) has arrived from the Western countries, where
their practices have developed tremendously in the last decade. During
this time the idea has spread to other parts of the globe mainly because
of the activities of Multinational National Companies. Corporate
Governance and C.S.R are actually two related and interrelated business
concepts that are engrossed in business practices. The concept of C.S.R
and Corporate Governance, therefore has an interrelationship, and are
also prevalent and practiced within legal and regulatory framework in
India. Companies at present date generally practice it with a view point
of business strategy and for the benefits that they receive on a long term
basis. India at present date is one of the first countries to legally adopt
the C.S.R practice. The Indian incorporates are not entirely happy with
the mandatory rule adopted by Indian governance however they
understand the long term benefits that they will be receiving through the
media of C.S.R. The idea of C.S.R is slowly taking its roots widely
through out on a global basis and is expected to promote the economic
and social development of developing and under developed countries
hand in hand with their respective government.
DEFINITIONS:
1.) CORPORATE SOCIAL RESPONSIBILITY :
C.S.R is about how companies manage the business processes to
produce an overall positive impact on society. There isn’t any globally
accepted definition for C.S.R. However the definition of C.S.R mainly
depends on two factors: Social contract and Stakeholder theory.

pg. 6
a.) SOCIAL CONTRACT:
(Donaldson, 1982; Donaldson and Dunfee, 1999) –
There is a tacit social contract between the firm and society; the contract
bestows certain rights in exchange for certain responsibilities.
b.) STAKEHOLDER THEORY:
(Freeman, 1984) –
A stakeholder is “any group or individual who can affect or is affected
by the achievement of an organization’s purpose.” ‘Argues that it is in
the company’s strategic interest to respect the interests of all its
stakeholders.’
“It means that a firm needs to take into account the interests of all
stakeholders in a corporation’s existence, and not just shareholders”
2.) CORPORATE GOVERNANCE:
The concept of corporate governance was almost non-existent in India.
In late 90’s the concept of corporate governance was introduced in India
by the Securities and Exchange Board of India (SEBI) through Listing
Agreement, which is applicable to the listing companies only. According
to OECD the Corporate Governance structure specifies the distribution
of rights and responsibilities among different participants in the
corporation, such as, the Board, managers, shareholders and other
stakeholders spells out the rules and procedures for making decisions on
corporate affairs.
“Corporate governance should be recognized as set of
standards, which aims to improve a company’s image, efficiency,
effectiveness and social responsibility” – As defined by Nigel Kendall.
According to Sir Adrian Cadbury, “Corporate Governance is the system
by which companies are directed and controlled……”
Corporate governance may be defined as the broad range of policies and
ethical practices which are adopted by an organization in its dealing with
the stakeholders who are majorly comprised of employees, customers,
investors, community, natural environment, and suppliers.
2. RESEARCH PROBLEM:

pg. 7
The research problem is centered on the topic of Corporate Social
Responsibility. Here we discuss on how corporate social responsibility
developed and took its roots in India.
The research problem is majorly and wholly centered around weather
the reason behind corporate social responsibility being followed is of
philanthropic nature and for the growth and development of our Nation
‘or’ the industrialists consider it to be just a part of the business strategy
for the benefit of their own business growth objectives.
Also, on a small scale here it has been
discussed how corporate governance and corporate social responsibility
are interlinked and how their objectives and benefits are somewhat
similar in nature to have a better understanding into the world of C.S.R.
The research problem to be summarized in a short question is:
Is C.S.R a genuine effort towards national development by the
industrialists or is it just a mere dressing window for their organization?
3. LITERATURE REVIEW:

pg. 8
Corporate governance refers to the system by which corporations are
directed and controlled.
Corporate Social Responsibility (C.S.R) is a basically form of corporate
self regulation integrated into a business model.
Reference to the articles in the following given website:
http://www.academia.edu/1954005/IOSR-JBM_www.iosrjournals.org_
C.S.R and Corporate Governance although being two different terms,
they have always been interlinked and considered to be the same for the
very basic reasons of their objectives and benefits being the same.
C.S.R. was earlier just confined to charitable terms. But slowly it got
infused into companies and corporate governance practices.
But earlier in India according to clause 49 of the listing agreement,
C.S.R had been made totally optional.
Whereas, C.S.R is based on the concept of self governance which is
related to external legal and regulatory mechanism, Corporate
Governance is a widest control mechanism within which a company
takes its management decisions.
C.S.R can be broadly divided into the following four categories:
1. Environmental C.S.R: It focuses on eco- issues such as climate
changes.
2. Community based C.S.R: Here, businesses work with other
organizations to improve the quality of life of the people in the
local community.
3. HR based C.S.R: It includes projects that improve the wellbeing
of the staff.
4. Philanthropy: Here, businesses donate money to a good cause,
usually through a charity partner.
After a detailed study I’ve summed up the benefits of C.S.R that a
company derives which are as follows:

pg. 9
a. Reduction in wastage and proper utilization of resources:
Cutting utility bills and waste disposal costs helps the environment
benefits as well as bring in cash benefits for the organization.
b. Better reputation with satisfied and loyal workforce: A good
reputation makes it easier to recruit employees. Employees may stay
longer, reducing the costs and disruption of recruitment and
retraining. Employees are better motivated and more productive.
c. Helps meet regulatory requirements and draws positive
attention and PR: C.S.R helps ensure the companies to comply with
regulatory requirements. Activities such as involvement with the local
community are ideal opportunities to generate positive press coverage.
d. Smooth functioning of business with scope of further
development: Good relationships with local authorities makes doing
business much easier. Also, Understanding the wider impact of the
business helps develop new products and services or improvise on the
existing ones.
e. Building a competitive strength: C.S.R helps the business to be
more competitive in nature and reduce the risk of sudden damage to its
reputation (and sales). Investors can recognize this and it makes them
more willing to finance in the company.
f. Satisfied Customers: It is a well known fact that customers like to
buy more products or services of a company they preferably like. C.S.R
creates a positive impact on company’s reputation and hence attracts
more and more customers towards the company.
g. More business opportunities: A C.S.R program requires an open,
outside oriented approach which means that the business is always in
constant positive relations with the customers, suppliers and other
parties that affect the organization. Because of the continuous interaction
of the business with other parties, it is easier to get to know fast and first
about new business opportunities.
h. Avoidance of government regulations: When a business is
unable to fulfill its social roles, it invites more government intervention
in the business system. Therefore, in order to avoid government
regulation of business, it is preferable to participate in C.S.R activities.

pg. 10
i. Long run self interest of the business: C.S.R activities ensures
long run self interest of the business by creating a strong goodwill for
the company, and a better public image among various interest groups.
j. Conscious customers: The customers are well informed. They
expect higher and good quality products at reasonable rates. If they don’t
get fair treatment from the business, they may bad mouth and not buy
the companies products.
k. Strong trade unions: The level of education among the workers
has been increasing. They understand the need of organizing themselves
into unions to advance their economic and social interests. The
government has also enacted social security measures due to which it
becomes difficult for the business to ignore the interests of the workers.
l. Shareholder expectations: Historically, publicly-owned
companies primarily aimed at maximizing the shareholder value. At
present date, companies must balance the financial expectations of
owners with the social and environmental requirements of other
stakeholder groups. Some shareholders are happy to invest in companies
that operate with high integrity. Others may not approve of the
aforementioned expenses of operating under C.S.R guidelines.
However long list of benefits there may be, still there are many
arguments also against C.S.R activities which the industrialists have,
they are summed up as follows:
1. Conflicting Consideration: Hard core profit making policies of
firm are opposite to following C.S.R. A business manager is
guided by two consideration, namely private market mechanism &
social consideration, which are opposite to each other. If he
considers following C.S.R entirely then the profit objectives of the
firm has to be put at stake.
2. Arbitrary power: Too much involvement in C.S.R activities and
allocation of resources in the welfare of the society allows
managers to get an arbitrary power. They should have no right to
interfere with the external environment of the business.

pg. 11
3. Disregard of market mechanism: Market mechanism is opposite
to the doctrine of social responsibility which firms prefer to put in
action towards allocation of scarce resources to alternate uses.
4. Responsibility of government: The industrialists believe it is the
government’s job to uplift the weaker sections of the society.
5. Inefficiency in system: There should be self interests attached
towards taking initiatives for social responsibility which is
inefficiency in our system.
Reference to the articles in the following given website:
http://articles.economictimes.indiatimes.com/keyword/corporate-governance
There are many examples of poor corporate governance in India which
proves that the amount contributed by industries is pint-sized compared
to the billions they receive in return of such activities, which is why the
new companies bill provisions has been introduced under the
supervision of the current Minister of Corporate Affairs, Sachin Pilot.
JRD Tata, was the first businessman who took the initial step towards
social responsibility. In 1970, all the major companies in Tata group
started following the concept of social responsibility. One of the efforts
of the Tata group which is known to almost all is Jamshedpur Tata steel
works which was established providing well built roads shaded with
trees and lot of other amenities like free housing, free hospitals, free
schools, sports stadiums and clean streets surrounding it making it a
people’s place and a proper planned city. In 2004, Jamshedpur was
chosen by U.N along with Melbourne and San Francisco as one of six
examples of urban-planning excellence.”
Slowly with time some other major industrialists also started to follow
the C.S.R concept.
There are in fact a lot of such examples we can site to which are not just
the efforts of the Tata Group but a lot of other existing and emerging
corporate. C.S.R has been taking shape in today’s current scenario and
the government also recognizes it to be a very crucial step towards
economic development.

pg. 12
Still if we want to have a broader look into the emergence of C.S.R in
India we can sum it up into five phases as described below:
 Ist PHASE: Here, C.S.R was in its very basic form of charity and
social work done by the then wealthy merchants. After the colonial
rule arrived in 1850’s, approach towards C.S.R changed. During
19th century, the industrial families of Tata, Birla, Bajaj, Godrej,
Modi, Singhania, came forward and contributed a lot towards
economic and social considerations but it was seen that their
contributions was not just because of selfless and religious motives
but also it was influenced by caste groups and political objectives.
 IIst PHASE: During the Independence Movement, Mahatma
Gandhi ji introduced the notion of trusteeship according to which
the industrial leaders had to manage their wealth so as to benefit
the common man. Gandhi ji’s efforts had put pressure on various
Industrialists to contribute to show their dedication towards
building the nation by, setting up temples, establish trusts for
schools and colleges, setting up of training and scientific
institutions, to help abolish untouchability, and encourage
empowerment of women and rural development, e.t.c.
 IIIrd PHASE: The third phase dates from 1960’s to 80’s where
public sector undertakings (PSU’s) set up by the government were
emerging to engage in C.S.R activities along with establishing
various laws relating to labor and environment standards. There
were stringent laws controlling the activities of private sectors. As
Public sector was single handedly not being able to contribute
effectively towards social and economic development private
sectors again emerged to act towards C.S.R. But in spite of all the
efforts C.S.R failed to catch the system during this phase.
 IVth PHASE: This phase dates from 1980’s till until recently
where Indian companies adopted C.S.R in the forms of their
business strategy. As the economy started to grow rapidly it was
beneficial for Indian companies to expand and grow as well, and
this made them contribute more towards social and economic

pg. 13
causes. C.S.R helped the industries capture the global market and
create a corporate brand for themselves.
 Vth PHASE: The fifth phase describes the current Indian scenario
we are in at present where C.S.R is concerned. The new companies
Bill 2012 approved by the parliament now, states that companies
up to a certain size will have to spend 2% of their three- year
average annual profit towards C.S.R. It is being considered as a big
leap towards national development.
Now let us have a look into the laws, provisions and efforts put in by the
government.
 C.S.R VOLUNTARY GUIDELINES 2009:
Companies Act consists of several acts and sections relating to how a
company should function. Relating to C.S.R a Companies Bill was
raised in 2008 but due to the dissolution of the Lok Sabha it had to be
reintroduced in 2009 which was referred to the standing committee for
its recommendations and after getting the suggestions it took the shape
of Companies Bill 2012 which was passed by the Lok Sabha on
18.12.2012 and by the Rajya Sabha on 08.08.2013. Due to this immense
delay of the Companies Bill being passed, Ministry of Corporate Affairs
introduced C.S.R voluntary guidelines in 2009, which is what we are
talking about right now.
These guidelines issued by the then Minister of Corporate affairs,
Salman Khurshid, say that:
“Each business entity should formulate a C.S.R policy to guide its
strategic planning and provide a roadmap for its C.S.R initiatives, which
should be an integral part of overall business policy and aligned with its
business goals. The policy should be framed with the participation of
various level executives and should be approved by the Board.”
The Core Elements of this guideline were:
1. Care for all Stakeholders
2. Ethical Functioning
3. Respect for Worker’s rights and welfare

pg. 14
4. Respect for Human right’s
5. Activities for Social and Inclusive development.
As per these guidelines the companies were required to frame a C.S.R
policy, constitute a C.S.R committee, set aside funds for C.S.R activities
and finally execute the C.S.R projects.
 PROVISIONS IN THE NEW COMPANIES BILL:
The clause no. 135 of the Companies Bill deals with C.S.R provisions. It
states that a company must on a mandatory basis follow C.S.R activities
if it meets any one of the following given criteria’s:
1. It has a Net worth of Rs. 500 Crore or more,
2. It has a Turnover of Rs. 1000 Crore or more,
3. It has a Net Profit of Rs. 5 Crore or more during any financial year.
1. COMPLAINCE OF C.S.R ACTIVITIES AS PER THE NEW
COMPANIES BILL:
If any company meets up with the criteria mentioned in the Companies
bill as aforesaid, then it is required to form a C.S.R committee with 3 or
more Directors amongst which at least one of them has to be an
independent Director.
The functions of the committee are as follows:
2. The committee should formulate a C.S.R policy and indicate the
respective C.S.R activities to be undertaken.
3. The committee should recommend the amount of identified
expenditure for C.S.R activities.
4. The committee should monitor the C.S.R policy from time to time.
Now Let us talk about a few of the contributions made by the
corporate towards C.S.R which have been mentioned as follows:
1. Tata Group has always come forward taking numerous steps for
the economic development of our country. It has created
scholarship opportunities and has also provided endowment for
creation of national institutions, like TATA institute for social

pg. 15
sciences, Indian Institute of science, National Centre for
Performing arts, and a number of other higher education centers.
Standing today 2013, Tata Global beverages has been recognized
and well appreciated by mass for women empowerment as it
comprises of 40 % women and has also been awarded for its well
known ‘Jago re’ campaign. Also Tata Group was one of the
biggest contributors that had come forward to help towards
Uttrakhand tragedy that had recently struck and devastated the
whole place.
2. On 4th December, 1996 Infosis Foundation, the philanthropic arm
of Infosis Technologies Ltd came into existence for the purpose of
fulfilling the social responsibility of the company by supporting
the underprivileged sections of the society by opening around 5500
libraries in government schools across many villages, aiding
orphans and street children, providing medical facilities,
organizing novel pension schemes, reconstructing school
buildings, setting up science centers and schemes to provide
support to dying traditional art and cultural forms, e.t.c.
3. Lupin India Ltd is India’s third largest manufacturer of
pharmaceuticals which has started a project for providing
sustainable development in 154 villages across Rajasthan. The
scheme instead of providing for piece-meal assistance that does not
lead to effective alleviation of poverty or adequate development is
designed as a holistic action plan that includes an Agricultural
Income Generation Scheme, land cultivation and fruit plantation
programs, fodder preservation schemes, sericulture and water-
recycling programs, establishment of medical and educational
centers, adult literacy programs and credit schemes.
4. Tata Consultancy Services (TCS) has set up a fully-equipped
computer training laboratory for children from the Society for the
Welfare of the Physically Handicapped and Research Centre, in
Pune for imparting basic computer knowledge. NIIT has launched

pg. 16
a highly popular ‘hole-in-the-wall’ scheme where it places a
computer on a public wall in urban and rural areas so that
neighborhood children can learn computer basics using the play-
way method.
5. Cipla, another Indian pharmaceutical major has found a novel
approach to fulfill its corporate social responsibility obligations by
offerering to sell a cocktail of three anti-HIV drugs, Stavudine,
Lamivudine and Nevirapine, to the Nobel Prize-winning voluntary
agency Medicine Sans Frontieres (MSF) at a rate of $350, and at
$600 per patient per year to other NGOs over the world. This offer
has to lead to a significant decrease in the prices of these drugs
worldwide increasing the accessibility of these drugs especially in
the developing countries.
6. Ranbaxy, one of India’s major pharmaceutical firms operates
seven mobile healthcare vans and two urban welfare centers that
reach over a lakh people in various parts of northern and central
India as part of its corporate social responsibility initiative.
7. Bharat Electronics Ltd built cyclone proof houses for the victims
of the super cyclone in with the help of the victims themselves so
that the houses are built according to their needs.
8. Ion Exchange has founded a profitable venture for environmental
protection through water treatment, afforestation and organic
farming.
4. HYPOTHESIS:
If we come to think of it clearly the objectives and benefits are common
for both C.S.R and Corporate Governance however some of them are
listed below:

pg. 17
1. Rebuilding of public trust and confidence by increased
transparency in its financial as well as non-financial reporting and
thereby increasing the shareholder value.
2. Establishing strong brand reputation of the company.
3. Making substantial improvement in its relationship with various
stakeholders.
4. Contributing to the development of the region and the society
around its area of operation
5. Addressing the concerns of its various stakeholders in a balanced
way so as to maintaining a strong market position.
Around 8000 companies are expected to fall under the coverage of new
Companies bill (2013), and this means that there would be a sum of Rs.
12,000 – 15,000 crores annually raised for the purpose of social and
economic development. Although the companies are not very happy
with C.S.R activities being made compulsory however a large number of
the corporate feel that C.S.R is not just another form of indirect expense
but is important for protecting the goodwill and reputation, defending
attacks and increasing business competitiveness and the government
expects a positive trend and foresees this to add a new dimension in the
field of economic and social development of the country.
The C.S.R concept which was in its philanthropic nature has been
developed today and if we see it has been adopted by many industries
and a lot has been done also by them for the economic and social
developmental causes but if we come to see the reasons behind it, it was
majorly followed by these companies as a part of their business strategy
and political reasons. Talking about Corporate Social Responsibility in
general it is a business ideology which claims that businesses ought to
be responsible for social and environmental welfare. This can be a
disadvantage as it can hinder productivity and this can also impact on a
business' profitability.
But still from a broader perspective if we look there are many
advantages that C.S.R activities have to offer.

pg. 18
C.S.R activities helps a company grow building a corporate brand image
in the eyes of its stakeholders. In simple terms if we explain C.S.R
activities helps in national development and a company operating
within it will automatically grow if the economic condition of a country
is strong. Nowadays C.S.R is considered as a part of the business
strategy. C.S.R activities benefit the companies in achieving the
organizational objectives which is why C.S.R is being adopted and
implemented by the organizations today. To conclude finally, the
reasons that motivate organizations to involve in C.S.R activities are
discussed as follows:
1. C.S.R activities have formed an integral part of business strategy
which also helps in corporate branding and global recognition of
the companies. Also, for a corporation to function a developed
economy is required. If a society grows so does the corporate
sector.
2. The upcoming young generations of managers in the organization
want more than just the financial benefit. They feel sense of pride
to be connected with the organization which is socially
responsible. Hence, strong C.S.R practices can help in attracting,
recruiting and retaining the best young talent.
3. Responsible companies give greater priority to their customers.
With diminishing business boundaries across the world consumers
have become aware and more demanding in terms of information
regarding conditions in which the products and services are
produced along with the sustainability impact thereof.
4. C.S.R is about values and accountability which includes the
behavior of the people. Many potential clients who themselves
operate the C.S.R related activities expect that their suppliers will
be doing the similar kind of programmes. Sometimes the selection
is on the basis of social responsiveness of the supplier.

pg. 19
5. Globalization and universal expansion of the economies enhances
the consideration of image and reputation among organizations. An
organizations image and reputation can be ruined in days through
unregulated and unethical practices. So, imbibing C.S.R practices
becomes the strong foundation in image building.
6. Environment protection becomes an area of concern these days. A
C.S.R programmes that aims to conserve earth's natural resources,
avoiding pollution, water conservation and minimizing global
warming effects are the areas in which the companies take
initiative.
7. Legislators have introduced laws and regulations to force
businesses to act more responsibly whether that is in regard to the
environment, finance, health and safety, wellbeing or a variety of
other areas. Corporations by taking substantive voluntary steps
with respect to these issues can avoid government intervention
when seen as a pioneer in these areas rather than being forced by
law to comply.
8. C.S.R practices can help the organization to avoid the risk of
corruption scandals, environment disasters, child labor violations
and dangerous work environment. These incidents also draw
unwanted attention from regulators, courts, governments and
media. A genuine effort in playing straight and having good C.S.R
record with the right check insulates the companies from such
risks.
5. RESEARCH METHODOLOGY:
To understand the concept of research design properly we can look at
the definition given by Bernard Phillips which is:

pg. 20
“Research design is the blue print for the collection, measurement and
analysis of data”
My research on the topic of ‘C.S.R’ is majorly based on a qualitative
analysis and interpretive research and inductive reasoning, using
individual ideas and facts to give a general conclusion to the research
problem.
Through the help of collection and analysis of primarily non-numerical
activities, and a detailed study, a structured approach has been applied to
reach to the possible conclusion.
The research that has been conducted here on C.S.R is based on the
following methods:
1. Historical research: It included getting into the roots from where
C.S.R started to take a possible shape in India and the activities
that had been done relating to it.
2. Ethnography: It included collection of empirical data on the
human societies and cultures towards understanding the social life
of humans and their personal perspectives towards the concept of
C.S.R observing the benefits that the industrialists arrive from the
point of view of the subject.
3. Case study: It included deeper understanding of C.S.R and
analyzing it systematically in depth.
4. Ethology: It included the study of the set of ideas and attitudes of
the firms towards C.S.R comparing its origins, characteristics, and
culture of different societies.
5. Ethno methodology: It included studies of how the firms make
sense of their everyday activities in order to behave in socially
accepted ways by adopting C.S.R as a part of their business
strategies and creating a public image and corporate brand.
6. Grounded Theory: It included investigation and developing
theory based on the data collected looking at the specific and

pg. 21
relevant information and deriving theories and real motives of
industrialists behind following the concept of C.S.R.
7. Phenomenology: It includes detailed study of the events related to
C.S.R.
8. Symbolic interaction: It included word mouth interview session
conducted with a few people regarding their perspectives of C.S.R.
9. Action research: It included research done by observing the data
collected improving my view towards a better understanding of the
topic C.S.R.
I have done an exploratory research gaining adequate knowledge about
the topic “C.S.R.” My research is basically based on data collection,
existing national survey and also on the basis of selecting quotes that are
relevant and represent aspects related to C.S.R along with interviewing a
few working professionals leading towards my research findings.
6. FINDINGS AND ANALYSIS:
Part I: A word- mouth interview was conducted by me of a few
working professionals to know about their ideals in regards with C.SR
and the contributions of their companies related to it. Following are the
names of the people who gave their opinions on C.S.R:

pg. 22
1. Mr Arijit Mondal, Project Manager Tata Steel,
2. Sharmistha Mukherjee, H.R associate in Deloitte,
3. Kavita Mendiratta, Talent Acquisition in Emerson Design
Engineering Center,
4. Pratyusha Ryali, Hr in Wipro,
5. Rahul Halder, Hr in Yellow Box Hr Services Pvt Ltd,
6. Kapil Mendiratta, Ex- business analyst and software developer at
Evalueserve.
Given below are their statements which they conveyed relating to C.S.R:
1. Mr Arijit Mondal: “Following Corporate Social Responsibility has
always been a heritage culture at every Tata industries. Jamshedpur
steel city in fact is one of the biggest examples, it is a perfectly set up
and designed city with all the required amenities and facilities. Tata
Steel in fact spends in crores annually for C.S.R activities opening
new schools, spending for the benefit of the society; also recently we
have donated quite a lump sum amount towards the Uttarakhand
tragedy that had occurred. C.S.R is a very beneficial concept that has
been recently only made mandatory with its necessary provisions and
with this new advent I’m sure there will be scope for even more
progress and development of our economy.”
2. Sharmistha Mukherjee: “C.S.R is a form of corporate self-
regulation integrated into a business model. C.S.R policy functions as
a built-in, self-regulating mechanism whereby a business monitors
and ensures its active compliance with the spirit of the law, ethical
standards, and international norms.
Well if you ask me, I am in favor of the view. Every organization and
person should participate helping the society to grow and ours does
too as per my knowledge Deloitte is very much engaged in
conducting blood donation camps, and also setting up libraries and
supporting the children.”
3. Kavita Mendiratta: “C.S.R is a well known concept followed by
almost every operating industry in India. Emerson Design

pg. 23
Engineering Center is a global company. In India its horizons are
centered on working with the local communities. It contributes
towards community development focusing on the area of education,
school improvement programmes, orphanage support, rural
infrastructural development and promotion of better living standards
across India. My opinion is that it is the work of the government
majorly to contribute towards the growth and development of our
people we pay the government in terms of taxes and the money which
is not being utilized properly should be utilized. It’s not like the
government doesn’t do anything they do but they should try and
reduce money wastage and contribute more.”
4. Pratyusha Ryali: “C.S.R in Wipro is majorly centered around
education promotional activities and towards protecting the
environment. It is always engaged in health and wellness
programmes, building up schools and to avoid wastages and proper
utilization of natural resources. C.S.R is a developing concept in India
and I believe it is not just the corporate but also the employees that
have this responsibility to follow. India being a developing country
needs joining hands and working as a team which is kind of like a
dream more than reality but we should to play our parts well.”
5. Rahul Halder: “C.S.R is not just to be in charity level social
responsibility plays a major role also. According to my knowledge
my previous companies I have worked in be it Wipro or Vodafone,
they were very much into the C.S.R concept helping the flood victims
and establishing libraries or distributing books. My current company
is not however involved in C.S.R activities since it’s not exactly a
huge concern it only operates in three places Pune, Bangalore and
Kolkata. Whenever u have a proper Infrastructure and a very high
profit level u can think about involving into these activities. On a
personal level I very much support C.S.R activities and have also
involved myself with C.r.y and U.n.ic.e.f.”
6. Kapil Mendiratta: “Evalueserve is a global organization which has
always supported the C.S.R activities. It sponsors the education of
underprivileged children, and works with local schools, providing

pg. 24
training programs for small business owners and also supporting
communities affected by natural calamities, such as floods and
earthquakes, etc. I am in favor of corporate social responsibility as it
is very crucial for the economy to grow which in turn creates a stable
platform for the company to grow as well and if the company grows
the employees will also have more scope to grow.”
Part II: The Stakeholder theory states that a company should proceed
with its work keeping in mind the benefits of the company along with its
stakeholder’s.
However, the Theory of the firm has stated that the sole motive of a
company should be profit maximization.
In a developing country like India the Stakeholder’s theory holds no real
value because for the economy to develop profit maximization is also
required equally as much as the C.S.R activities.
Here, Jenson has enlightened the value maximization theory which
combining both Stakeholder’s Theory and Theory of the Firm states that
in order to create a sustainable firm, stakeholders need to be considered,
but in order to remain efficient, there needs to be a singular objective as
well for the firm to function.
Part III: Currently, a study by Oxford on Corporate Social
Responsibility in India, has stated that:
“Industry leaders in India have repeatedly blamed the government’s
poor performance in education for the dearth of qualified candidates
and the ‘poor quality’ of most engineering graduates, and argued that
steps should be taken to make young people from rural areas and lower
castes more competitive in the job market, especially by improving the
quality of school education.”
But still there are company groups and corporate who have begun to
take matters in their own hands.
India has the world’s largest population of youth. Sam Pitroda, head of
the Indian National Knowledge Commission spoke on the issue of

pg. 25
India’s youth not being utilized fully to their capacity stating,
“Our youth can be an asset only if we invest in their capabilities. A
knowledge-driven generation will be an asset. Denied this investment, it
will become a social and economic liability.”
Yet many firms have recognized this issue and started projects to
involve youth in business, getting them properly trained and to utilize
their talent to the fullest.
The corporations that are doing work that is benefiting the society also
need to publicize and manage these projects effectively and efficiently in
order to maximize their profits. This is not the way it is happening
currently in India.
“Only 17 percent of the companies surveyed in India had a written
C.S.R policy while more than 80 percent of the surveyed companies
engage in C.S.R programs.”
Harvard Business school study warns that unless effectively managed
C.S.R can become a large waste of money. If management does not have
a concrete C.S.R plan consequences can be huge. HBS describes the
common situation of ill managed C.S.R in their study: “And then the
CEO wakes up one day and realizes that "we're doing $50 million worth
of charity work, and we don't seem to be getting credit for any of it."
“However, they advise that companies should not force the disparate
C.S.R programs into their business strategies. Instead, the goal should be
to “bring discipline and structure to the many fragmented components.”
To have the C.S.R projects that the people of India need to climb out of
poverty, management needs to be consistent and directed. Finally despite
all efforts of well-managed and effective C.S.R, sometimes the families
of corporate giants can single-handedly ruin entire programs
effectiveness. Traditionally, many C.S.R projects have aligned with the
families or CEO’s personal interests. However, for the benefit of the
Indian people and profits, personal wishes need to be set aside and an
unbiased, effective C.S.R program needs to be established.

pg. 26
The Negative press from the wealthy leaders can also override the
positive C.S.R press as warned by Prime Minister Dr Manmohan Singh:
“In a country with extreme poverty, industry needs to be moderate in the
emolument levels it adopts…The electronic media carries the lifestyles
of the rich and famous into every village and slum. Media often
highlights the vulgar display of their wealth…. An area of great concern
is the level of ostentatious expenditure on weddings and other family
events. Such vulgarity insults the poverty of the less privileged, it is
socially wasteful and it plants the seeds of resentment in the minds of the
have-nots…”
Creating an effective Corporate Social responsibility Program is much
harder than simply throwing money to charity. Firms need to consider
aspects of their managements and community, or they may in fact do
more harm than good to both parties.
Despite variants in the type or reason for C.S.R from firm to firm for
corporations rising in India, it can be a way of maximizing growth and
efficiency.
Based on conclusions in The Corporate Social Responsibility and the
Theory of the Firm,
"C.S.R may be in certain cases a necessary condition for wealth
maximization.”
Part III: As per a survey on the main drivers of C.S.R in India, “to build
a global brand” was found out to be one of the higher ranked reasons for
C.S.R being practiced by the companies.

pg. 27
If we talk on a global scale, Grant Thornton International Business
report reported states that 65% of privately held businesses have
considered worker retention as their main driver of keeping a C.S.R
program. If we come to think about it worker retention is one of the
major factors why C.S.R should be followed by companies as it will help
gain lifelong consumers and loyal employees along with a healthy
reputation in the market.

pg. 28
Part IV: On the basis of an internet found survey result:
Reference link: http://www.gbmr.ioksp.com/pdf/Gautam%20&%20Singh,%202010.pdf
As per a survey (Ref. link provided above) it was observed that 46%
companies got zero rating (no reporting), around 8% scored 3/5 & 4/5
Karmayog rating shown in the below table. About 49% companies out
of 500 largest Indian companies were reporting on C.S.R. Most of the
companies report on donations, renovating schools in villages, mid day
meals etc.
It is expected from a company to at least spend a minimum of 0.2% of
income on C.S.R activities annually. But in most reports there is no
mention of the amount spent in any of their balance sheets or annual
reports. Well defined expenditure on C.S.R has been shown by very few
companies. Companies reach for C.S.R activities was also unsatisfactory
in the sense only 25% companies C.S.R activities were for employees &
rest were focusing on vicinity & society at large.

pg. 29
Many companies are only making token gestures towards C.S.R in
tangential ways such as donations to charitable trusts or NGOs,
sponsorship of events, etc. believing that charity and philanthropy equals
to C.S.R. Most companies use C.S.R as a marketing tool to further
spread the word about their business, for instance, donation of a token
amount to some cause on purchase of a particular product. The fact that
companies are hiring advertising agencies for their C.S.R further
highlights this. Companies hesitate to state the processes followed by
them, the damage caused by these processes, and the steps taken to
minimize this damage.
A summary of C.S.R ratings of top 500 companies is given below:
Karmayog C.S.R Rating No. of Companies Companies with the given
rating
0/5 231 46%
1/5 92 18%
2/5 138 28%
3/5 35 7%
4/5 4 1%
5/5 0 0%
TOTAL: 500 100%
The results suggest that C.S.R is often guided by the commitment of the
top management. With compliance and enforcement slack, employee’s
care is just employers’ benevolence, environment care and total quality
management are driven by market forces and legislation, C.S.R is
considered as an additional activity of Human relation and public
relation department, provides a glimpse of C.S.R focus areas and
methodology adopted by 30 companies.
7. INFERENCE:
The inference drawn on the basis of the findings and analysis is
mentioned below:

pg. 30
1. As per the interview session with a few working professionals,
C.S.R is a well known but developing concept which was majorly
supported by them deeming it important for national growth. C.S.R
activities were also majorly followed by their companies and also
they expect the new mandatory law to e beneficial for the uplifting
of the society.
2. As per a survey on the main drivers of C.S.R in India, “to build a
global brand” was found out to be one of the higher ranked reasons
for C.S.R being practiced by the companies
3. On a global scale, Grant Thornton International Business report
stated that worker retention was the main driver of C.S.R
programs.
4. As per another survey it was observed that maximum companies
do not spend in any C.S.R activities and that C.S.R activities
should be made in a way that benefits the company’s reputation
and it should also contribute towards the economic development of
the country.
5. Some other studies based on the newspapers magazine’s and
reviews given in part III of findings and analysis we conclude that
proper education facilities should be provided to those
underprivileged with the same. Corporates generally involve in
monetary donations where they should be involved in some
productive operations in the field of health, education, e.t.c
8. CONCLUSIONS:
Corporate Social Responsibility (C.S.R) although interlinked to the term
Corporate governance is different to it but they both are mistakenly

pg. 31
considered the same because of their common benefits and advantages
that they offer.
C.S.R is considered a profit-maximizing attribute in globalizing
corporations. In our India, major C.S.R activities are concerned with
community development activities, particularly in the areas of health and
education because of the interdependency of the firms and their
environment.
C.S.R is mainly followed by the companies as it is supposed to help a
company gain lifelong customers or consumers and loyal dedicated
employees. Also, a company can gain a good reputation through the
medium of C.S.R which also helps in capturing the global market. In
general terms for a company to survive in the long term C.S.R activities
are very useful.
It is a very true fact that even though C.S.R activities itself incurs a
certain heavy amount of expenditure still through getting responsibly
involved in C.S.R activities a company can reduce its legal fees,
advertisement expenditure, and also it can cut down on various other
costs. In India, the firms are well known with the fact that C.S.R can
affect their global reputation as well as at home as because to commerce
trade globally also many companies need to fulfill certain laws related to
C.S.R. Still very few companies follow C.S.R and it is done for the
benefits of the company as a part of their business strategy.
Despite the current and potential benefits of C.S.R in India, there is
much that still needs to be improved, to maximize the profits of society
and that of the firm and even though the industrialists may be unhappy at
first with the C.S.R activities being mandatory but this is expected to
have positive outcome for the future.
9. LIMITATIONS OF RESEARCH:

pg. 32
There are several limitations of research that hasn’t allowed my research
work to be a completely perfect one. A few of the limitations I have
faced during my research work is mentioned as follows:
1. The research is based majorly on collected data as it was not
possibly to explore the practicality of the situation by going into
deep analysis by entering and observing the industrial world and
their application and perspectives about C.S.R.
2. The inadequate interaction with the university research
departments and research institutions is also another limitation I
have faced while conducting my research.
3. The inadequacy of continuous assistance for gaining in-depth
knowledge and computer assistance was also a sort of hindrance
for my research.
4. Since my research is qualitative in nature it is not as prescriptive
and as definite when compared to a quantitative research which is
based on mathematical calculations, scientific as well as graphical
measurements whose conclusions are more definite in nature.
5. Issues of anonymity and confidentiality may have occurred which
are unavoidable problems while conducting word-mouth
interviews rather than survey-questionnaire method.
10. FUTURE DIRECTION:

pg. 33
The aim of this thesis is to help develop a rational approach for the
motives behind C.S.R activities.
Further studies and researches can be based on the same topic by future
researches from their own desired perspectives. Through a methodical
and quantitative analysis several observations can be made for future
research in the field.
They can use Questionnaire survey method and approach a few
companies and do a more practical and detailed research on the same.
One can even do the study for future research focusing on prior firm
performance influencing the C.S.R agenda.
It is apparent that the information obtained is from a detailed study of
data collected and the same has been applied towards a better
understanding of the research problem but one can apply a more
different approach towards the same through hard-core field work.
With a project topic as large and varied as this, additional and intensive
studies can be done and results would likely to improve with a
diversified view. Results can also be drawn from other scientific
techniques also.
11. SUMMARY:

pg. 34
1. Introduction: An overview into corporate governance and
corporate social responsibility with definitions of C.S.R, Social
contract, Stakeholder Theory, Corporate Governance.
2. Research problem: Research is to find weather C.S.R a genuine
attempt made by industries towards the economy and weather
corporate governance and C.S.R are same terms or not.
3. Literature Review: A detailed description C.S.R, its evolutionary
phases with the benefits and shortcomings. It also includes C.S.R
voluntary guidelines 2009, provisions in the new companies bill
and examples of a few C.S.R activities done by some industries.
4. Hypothesis: Understanding the objectives and benefits of C.S.R
being same, and looking at the possible reasons for C.S.R being
followed.
5. Research Methodology: The methods used namely historical
research, ethnography, case study, ethology, ethno methodology,
grounded theory, phenomenology, symbolic interaction, and action
research.
6. Findings and Analysis: It includes word-mouth interview articles
and wordings about C.S.R and surveys and reports.
7. Inference: It contains the outcomes of findings and analysis which
is that C.S.R is majorly followed in India to build a corporate
brand image and that it is beneficial for the company although
many companies do not follow it.
8. Conclusion: C.S.R is done by the firms as a basis of profit
maximizing business strategy.
9. Limitations of the Research: The limitations faced were lack of
contact with the research departments, quantitative analysis,
scientific methods; practical field work, questionnaire survey
method.
10.Future Direction: One can do a more quantitative research based
on scientific and practical method.
12. BIBLIOGRAPHY:

pg. 35
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responsibility-the-rules-for-india-s-new-companies-act-113091400713_1.html
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corporate-social-responsibility-lessons-from-india
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to-corporate-social-responsibility-18242.asp
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

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