By:Sharad AgarwalFPM , IIM Ranchisharadiitian@gmail.com
   Business for Social Responsibility: 2001 defines    CSR as „„operating in a manner that meets and    even exceeds the ...
   Indian government has proposed to implement    a bill which will make it mandatory for Indian    corporations either w...
   One of the oldest questions in moral philosophy    is whether it pays to be a morally good person   Many scholars, in...
   We are interested to investigate the difference    in CSR orientation of the companies on the    basis of the differen...
   Widely discussed in the literature about the    difference in need, behavior and expectations of    business customers...
   According to “Consumer culture theory” (CCT)    proposed    by    Arnould    and    Thompson    (2005), there exists t...
   Environmental protection is generally paid lot    of attention in the area of CSR, (Reinhardt    and. Stavins, 2010), ...
    Different industrial sectors are expected to    have varied impact on society and environment    for e.g Tobacco comp...
Hypothesis 3: The CSR orientation of the firms depends on the nature of their impact on environment i.e. manufacturing ind...
   Graves and Waddock (1994) and Johnson and    Greening (1999) document a relationship    between firm ownership structu...
   Hypothesis 4: The CSR orientation of public    sector firms is different from the CSR    orientation of private sector...
   We collected data regarding the CSR policies and    practices of top 200 public listed companies in India   Content a...
   We found that these companies worked on one    or more of the 100 areas and deployed any or a    combination of 38 met...
Activities                                     Explanation                    The companies working in the area of promoti...
The company states a policy of minimizing negative environmental                        impact or positively benefiting th...
Hypothesis     Description        Supported at p<0.05 in areas                                           Education,   H1  ...
    Greater proportions of companies with higher    Profits (PAT> 10 Billion) works in areas of    Education, Health and ...
   Agle, B., Mitchell, R. and Wood, D. (1999), “Who matters to CEOs? An investigation of    stakeholder attributes and sa...
Corporate Social Responsibility, CSR
Corporate Social Responsibility, CSR
Corporate Social Responsibility, CSR
Corporate Social Responsibility, CSR
Corporate Social Responsibility, CSR
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Corporate Social Responsibility, CSR

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Corporate Social Responsibility, CSR

  1. 1. By:Sharad AgarwalFPM , IIM Ranchisharadiitian@gmail.com
  2. 2.  Business for Social Responsibility: 2001 defines CSR as „„operating in a manner that meets and even exceeds the legal, ethical, commercial and public expectations that society has of business‟‟ It is proposed that the Indian firms, knowingly or unknowingly, conduct their CSR practices, oriented towards their stakeholder These CSR practices are aligned with their stakeholders‟ needs and expectations,
  3. 3.  Indian government has proposed to implement a bill which will make it mandatory for Indian corporations either with a turn over of INR 10 Billion or net profit of INR 50 million to spend 2% of the preceding three years profit on CSR CSR has a special relevance for India as India has a rich and living spiritual heritage to complement the “analytical ethics” from the West with her “intuitive” or “being” or “consciousness” ethics (Enderle, 1997)
  4. 4.  One of the oldest questions in moral philosophy is whether it pays to be a morally good person Many scholars, in the past, have tried to find the relation of CSR spending with the bottom line of the company and majority of them have found positive relationship between them The literature shows link between CSR and financial performances of the companies.
  5. 5.  We are interested to investigate the difference in CSR orientation of the companies on the basis of the difference in their profitsHypothesis 1: The CSR orientation of the firms differson the basis of the Profits (PAT) they make
  6. 6.  Widely discussed in the literature about the difference in need, behavior and expectations of business customers, with the non business customer to a large extent ( kreindler and rajguru, 2006) industrial marketing situations show unique characteristics that must be distinguished from consumer marketing: a small number of customers for any given supplier, buyer-seller interdependence and the existence of the durable customer supplier relationship (Bonoma and Johnston, 1978; Corey, 1976; Webster, 1979)
  7. 7.  According to “Consumer culture theory” (CCT) proposed by Arnould and Thompson (2005), there exists the dynamic relationships between consumer actions, the marketplace, and cultural meanings Hypothesis 2 :The CSR orientation of the firm depends on the nature of its costumer i.e. B to B firms has distinct CSR behavior to that of B to C firms
  8. 8.  Environmental protection is generally paid lot of attention in the area of CSR, (Reinhardt and. Stavins, 2010), probably because of the direct and indirect impact, the companies‟ activities can have on its stakeholders Bhopal gas Tragedy resulted in a loss of 10,000 lives and permanently disabled nearly 50,000 people and continued life-long misery for over 300,000 with certain genetic defects passed on to the next generation
  9. 9.  Different industrial sectors are expected to have varied impact on society and environment for e.g Tobacco companies , Auto and oil companies Deegan and Gordon (1996) noted that an industry whose activities modify or affect the environment might disclose more detailed social responsibility information than the companies in other industries
  10. 10. Hypothesis 3: The CSR orientation of the firms depends on the nature of their impact on environment i.e. manufacturing industries practice CSR distinctly when compared to non manufacturing or service industries
  11. 11.  Graves and Waddock (1994) and Johnson and Greening (1999) document a relationship between firm ownership structure and CSR Keim (1978), Ullmann (1985), and Roberts (1992) all document a positive relationship between dispersed corporate ownership and CSR disclosure in the context of developed countries. A recent study by Li and Zang, (2010), in China, found difference in behavior of the firms controlled by state towards CSR when compared with the non state firms
  12. 12.  Hypothesis 4: The CSR orientation of public sector firms is different from the CSR orientation of private sector firms in India
  13. 13.  We collected data regarding the CSR policies and practices of top 200 public listed companies in India Content analysis was used to generate the underlying data for our research. It is a „„technique for making inferences by objectively and systematically identifying specified characteristics of messages” We analyzed the websites, annual reports and sustainability reports of the companies in our sample
  14. 14.  We found that these companies worked on one or more of the 100 areas and deployed any or a combination of 38 methodologies We categorized those 100 areas into 8 broad areas those are „Education‟, „Health‟, „Community Welfare‟, „Entrepreneurship Development‟, „Environment‟, „Work Place‟, „Market Place‟, „Rural Development‟ Z test of proportions was used to test our hypothesis
  15. 15. Activities Explanation The companies working in the area of promoting education for e.g. Child Education education, girl education, providing scholarships , etc. The companies working in the area of health care for the needful for e.g. Health Rural health, preventing HIV/AIDS etc. The companies working for welfare of various sections of society for e.g.Community Welfare Philanthropic donations, promoting inclusive growth The companies working towards promotion of entrepreneurial activities or Entrepreneurship helping people to set up their own enterprises to earn their livelihood for Development e.g. Imparting technical know how, provision of start up capital, etc.
  16. 16. The company states a policy of minimizing negative environmental impact or positively benefiting the natural environment as a part of Environment their business practices. For e.g. Not lending to industries depleting Ozone layer The companies working in issues related to its market having impact on its Market Place business. For e.g. Provisions of micro finance in villages etc. The companies working in issues related to its workplace development, Work Place primarily aimed for the welfare of internal customers i.e. employees. For example education of employees’ children etc. The companies carrying out activities for the development of rural areas. ForRural Development e.g. Carrying out agriculture development activities, provisioning of street lights in rural areas etc.
  17. 17. Hypothesis Description Supported at p<0.05 in areas Education, H1 Profits (PAT) Health and Community welfare H2 B to B Vs B to C Community Welfare H3 Manf. Vs Non Manf. Health H4 Public Vs Private ‘None
  18. 18.  Greater proportions of companies with higher Profits (PAT> 10 Billion) works in areas of Education, Health and Community Welfare Larger proportions of B to B companies works for the cause of community welfare Greater proportions of Manufacturing industries work for the cause of Health, they should also focus on environment
  19. 19.  Agle, B., Mitchell, R. and Wood, D. (1999), “Who matters to CEOs? An investigation of stakeholder attributes and salience, corporate performance, and CEO values”, Academy of Management Journal, Vol. 42 No. 5, pp. 507-25. Brian Murphy, Paul Maguiness, Chris Pescott, Soren Wislang, Jingwu Ma, Rongmei Wang, (2005) "Stakeholder perceptions presage holistic stakeholder relationship marketing performance", European Journal of Marketing, Vol. 39 Iss: 9/10, pp.1049 – 1059 Fitchett, J. (2004), Buyers Be Wary: Marketing Stakeholder Values and the Consumer, Research Paper Series No. 19-2004, ICCSR, Nottingham University Business School, Nottingham. Galbreath, J. (2006), “Does primary stakeholder management positively affect the bottom line? Some evidence from Australia”, Management Decision, Vol. 44 No. 8, pp. 1106-21. Greenley, G. and Foxall, G. (1996), “Consumer and non-consumer stakeholder orientations in UK companies”, Journal of Business Research, Vol. 35, pp. 105-16. Polonsky, M. (1995), “A stakeholder theory approach to designing environmental marketing strategy”, Journal of Business and Industrial Marketing, Vol. 10 No. 3, pp. 29- 46. Polonsky, M., Carlson, L. and Fry, M. (2003), “The harm chain: a public policy development and stakeholder perspective”, Marketing Theory, Vol. 3 No. 3, pp. 345-64.

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