TABLE OF CONTENTS

CHAPTER NO. TITLE

Section A Objectives and Research Methodology

Research Objectives
Research Methodology
Section B Theoretical Background and Literature
Review
1. Concept of Corporate Social Responsibility
1.1 CSR as a concept
1.2 Definitions of CSR
1.3 Nature of CSR
1.4 Meaning of Philanthropy
1.5 Difference between CSR and Philanthropy

2. Case for and against CSR

2.1 The Case for social responsibility
2.2 The Case against social responsibility
2.3 Benefits of CSR

3. Responsibilities towards various interest groups

3.1 Responsibilities towards Owners and Investors
3.2 Responsibilities towards Employee
3.3 Responsibilities towards Customer
3.4 Responsibilities towards the Community
3.5 Responsibilities towards Supplier and Competitor
3.6 Responsibilities towards Government
3.7 Responsibilities towards Environment

Section C Research and Observations

4. Primary Research
4.1 Research Design
4.2 Survey Design
4.3 Questionnaire and Sample Design
4.4 Summary of the findings
4.5 The need to address employee issues
4.6 The need to be responsible for the community (local
or disadvantaged
4.7 The emerging recognition of the role of the
environment and the potential as a tipping point
4.8 The stakeholder perspective
4.9 Benchmarking
4.10 Observation
5. Recommendations and Limitations
5.1 Recommendations
5.2 Limitations
Appendices
Appendix 1 Questionnaire
Appendix 2 Bibliography
Appendix 3 Curriculumvitae

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 SECTION A

OBJECTIVES AND RESEARCH

METHODOLOGY

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 RESEARCH OBJECTIVES

 To understand the concept of corporate social responsibility.

 To know about the social responsibilities of the companies towards various groups

 To understand what corporate responsibility mean for modern Indian business

 To know how Indian businesses are practicing the CSR policies

 To know the benefits of CSR or to know whether CSR relates to the success of
businesses

 To observe whether these benefits match up with what is being looked for by
potential employees (graduate and post graduate students) and how CSR influences their
choice of companies

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 RESEARCH METHODOLOGY

The research has been divided into two phases as follows:

 Desk- and web-based research
 Questionnaires with students (structured quantitative research)
1. Desk and web based research: A detailed search was conducted in Business journals,
market research sites, business newspapers, and publications to study their CSR activities,
CSR strategy and identify metrics used by them (if any).

2. Questionnaires with students:

 A structured questionnaire was prepared and distributed to graduates and post
graduates of India looking for jobs.

 The data from completed questionnaires was entered into a spreadsheet for analysis
as to what leading potential employees were looking for from companies in their job
and career selection and if CSR would influence their choice.

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 SECTION B

THEORETICAL BACKGROUND

AND

LITERATURE REVIEW

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 CHAPTER 1

CONCEPT OF CORPORATE SOCIAL

RESPONSIBILITY

1.1. CSR as a concept

Corporate social responsibility (CSR) describes an approach by which an organisation:

• Recognises that its activities have a wider impact on the society in which it operates
and that developments in society in turn impact on its ability to pursue its business
successfully;

• Actively manages the economic, social, environmental and human rights impact of
its activities across the world.

• Seeks to achieve these benefits by working closely with other groups and
organisations – local communities, civil society, other businesses and home and
host governments.

1.2. Definitions of CSR

“Social responsibility refers to the obligations (of businessmen) to pursue those policies to
make those decisions or to follow those lines of action which are desirable in terms of the
objectives and values of our society.”

Howard R. Bowen

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“In the real sense, the assumption of social responsibilities implies recognition and
understanding of the aspirations of the society and determination to contribute to its
achievement.”

George A. Steiner

“Social responsibility requires managers to consider whether their action is likely to

promote the public good, to advance the basic beliefs of our society, to contribute to its
stability, strength and harmony.”

Peter F. Drucker

“Social responsibility of business implies that the businessmen’s decisions and actions are
taken for reasons at least partially beyond the firm’s direct economic or technical interest.”

Keith Davis

“Corporate Social responsibility is about how companies manage the business processes to
produce an overall positive impact on society.”

Mallen Baker

Mallen Baker has explained his definition with the help of the following figure:

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 Figure 1.1

The above figure says that Companies need to answer to two aspects of their operations. 1.
The quality of their management – both in terms of people and processes (the inner circle).
2. The nature of and quantity of their impact on society in the various areas.

Outside stakeholders are taking an increasing interest in the activity of the company. Most
look to the outer circle – what the company has actually done, good or bad, in terms of its
products and services, in terms of its impact on the environment and on local communities,
or in how it treats and develops its workforce. Out of the various stakeholders, it is
financial analysts who are predominantly focused – as well as past financial performance –
on quality of management as an indicator of likely future performance.

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1.3. Nature of CSR

The following points explain the nature of social responsibilities of business:

• The concept of social responsibility is based on the premise that a business firm is
more than an economic institution. It is an organ of society and its activities
exercise significant influence on the public. Therefore, business should work
beyond the narrow goal of profit making.

• Social responsibility does not mean mere philanthropy where the consumer is
robbed to pay the owner. A business can be socially responsible without charity.

• In the long run, social responsibility is consistent with profit motive. By fulfilling its
social obligations, business creates an environment which is conducive to its
success.

• Social responsibility is a personal obligation. A business firm can discharge its

social responsibility only through the persons who manage and control it.

• Social responsibility is a reciprocal relationship. Just as business owes responsibility

to society, society also is responsible to business.

• Social responsibility is a continuing obligation. A business firm remains responsible

to the society throughout his life.

• The concept of social responsibility implies that business has responsibility towards
society which extends beyond economic and legal obligations.

1.4. Meaning of Philanthropy

Philanthropy is the act of donating money, goods, time or effort to support a charitable
cause, usually over an extended period of time and with a defined objective. In a more
general sense, philanthropy may encompass any altruistic activity intended to promote
good or improve human quality of life. Someone who is known for practicing philanthropy
may be called a philanthropist.

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The purpose of philanthropy is also debated. Some equate philanthropy with benevolence
and charity for the poor. Others hold that philanthropy can be any altruistic act that fulfills a
social need that is not served, is under-served, or is perceived as unserved or under-served
by the market.

1.5. Difference between CSR and Philanthropy

Social responsibility does not mean mere philanthropy where Peter (the customer) is
robbed to pay Paul(the owner).Philanthropy covers the charitable activities done by a
business for the society whereas CSR covers the responsible activities taken up by a
business towards the various interest groups such as consumers, employees, shareholders,
creditors, suppliers, competitors, environment, government and the community. A business
does not need to do philanthropy for practicing CSR. A business can be socially responsible
without charity.

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 CHAPTER 2

CASE FOR AND AGAINST CSR

Different businessmen have different views about CSR. Some find it a very important and
indispensable part of business activities whereas some call it a wasteful practice. Let us
here know what the experts say in favour of and against it.

2.1. THE CASE FOR SOCIAL RESPONSIBILITY

Experts say that business is expected to be responsible to society due to the following
reasons:

2.1.1 Self interest

In the long run, it is the interest of the business to assume social obligations. Enlightened
businessmen recognize that they can succeed better by fulfilling the demands and
aspirations of the society. People who have had a higher standard of living and have been
exposed to the environment conducive to healthy growth make better employees and
customers for business than those who are poor, ignorant and oppressed. For example,
provision of higher wages and good working conditions motivates workers to work hard
and produce more.

2.1.2 Creation of society

Business is a creation of society and uses the resources of society. Hence, it should fulfill
its obligations to society. Businessmen should meet the demands of the society and should
utilize the social resources at their command for the benefit of the people. In the long run a
successful business can be built on the foundations of a happy community and a satisfied
work force.

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2.1.3 Social Power

Businessmen have considerable social power. Their decisions and actions affect the lives of
all of us. Businessmen should assume social obligations commensurate with their social
power. Otherwise, their social power will be taken away by the society through government
controls and other regulations. It is therefore the moral and right thing for business
enterprises to assume social obligations.

2.1.4 Public Image

A business can improve its image in public by assuming social obligations. Good relations
with workers, consumers and suppliers help in the success of business. Social obligations
improve the confidence and faith of people in a business enterprise.

2.1.5 Social Awareness

Consumers and workers are well informed about their rights nowadays. Consumers expect
better quality products at reasonable prices. Similarly, workers desire fair wages and
benefits. They pressurize employers through trade unions. If the business does not fulfill its
obligations, there will be industrial unrest and conflict in society.

2.1.6 Free Enterprise

If businessmen do not accept and discharge their social obligations they will loose their
freedom. For instance, the government has passed the Consumer Protection Act to prevent
businessmen from indulging in adulteration, black marketing and other anti social practices.
Thus, social responsibilities are essential for avoiding governmental action against
business. Such action will reduce the freedom of decision making in business.

2.1.7 Law and Order

Business can survive and grow only when there is law and order in society. If business
exploits the weaker sections of society for too long, these sections will take the law in their
own hands. The resulting chaos will threaten the very survival of business.

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2.1.8 Socio-cultural Norms

India has a rich cultural heritage. Businessmen who help in preserving and promoting this
heritage will naturally enjoy the patronage of the society and the government. Business
should, therefore, promote equality of opportunity, healthy relations with employees and
customers.

2.1.9 Moral Justification

In a large country like India, government alone cannot solve all the problems. Business has
money and talent with which it can assist the government in solving the problems. For
example, business can play a vital role in solving regional disparities, unemployment,
illiteracy, scarcity of foreign exchange and other such problems in the country. Moreover,
business has created some social problems such as pollution. Therefore, business should
help society in solving its problems.

2.1.10 Professionalisation

Management of business enterprises is being professionalized. An owner-manager nurses a

greater greed for profiteering because all the gains go to him. But a salaried and qualified
manager is less likely to be lured because he does not benefit from the profits earned
through questionable practices.

2.1.11 Trusteeship

Mahatma Gandhi suggested that “those who own money or property should hold and use it
in trust for the society”. Businessmen should run business firms not for their self-
enrichment but for the good of the society.

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2.2 THE CASE AGAINST SOCIAL RESPONSIBILITY

Some experts criticise the concept of social responsibility. They put forward the following
arguments against assumption of social responsibility business firms:

2.2.1 Vague Concept

The concept of social responsibility is very vague and amenable to different

interpretations. There is no consensus on its meaning and scope. In such a situation it would
be futile as well as risky to accept social responsibility.

2.2.2 Dilution of Business Goals

Involvement of business in social activities may dilute focus on economic productivity and
weaken its position in the market place. Businessmen may get confused abut their role in
society. As a result business may perform poorly in both economic and social roles.
Managers are the agents of owners and their sole mission should be to maximize profits
consistent with law and social customs.

2.2.3 Lack of Social Skill

Business firms and their managers may lack the perception and skills to handle social
issues. Their outlook is primarily economic and their skills are best suited for business
activities. They may mishandle social matters.

2.2.4 Costs of Social Involvement

Business cannot afford to invest considerable economic resources in social issues. If it does
so costs of doing business will increase. Business is likely to pass on the additional costs to
consumers by increasing prices. This would imply additional burden on consumers.

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2.2.5 Undermines free enterprise

According to Milton Friedman the concept of social responsibility is a subversive doctrine

because it undermines the principles of free enterprise. Businessmen can be held
accountable for social problems only when consumers, minorities, women,
environmentalists and other social groups are represented on the board of directors. Such a
diversity of interests would make the decision making process political thereby
undermining the free enterprise system.

2.2.6 Businessmen are not moral agents

Social responsibility is basically a moral concept. Business organizations are not moral
agents and cannot be expected to act on moral grounds.

2.2.7 Reduction on Competitive Position

Indian business firms are often not fully competitive in international markets. In case they
are asked to incur expenditure on social problems, their international competitiveness will
deteriorate.

2.2.8 Improper Role

The proper role of business is to use resources and energies efficiently so as to earn the best
possible return on investment within the confines of law and ethics. Business should
concentrate on economic performance leaving social service to other organizations.

2.2.9 Already Responsible

Business organizations are already serving society by providing goods and services,
generating employment, developing technology and contributing to public exchequer
through tax payments. It would be unjust to overburden them with further responsibilities.

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 The arguments against social responsibility suffer from two weaknesses. First they require
business firms to ignore social demands which they cannot do. Secondly, the critics are
over stressing the influence and power of practicing social responsibility in business. Today
the question is not whether or not to accept social responsibility but how much
responsibilities to assume.

After discussing the above points favouring social responsibility and the points against it,
we can come to a conclusion that social responsibility is a very important activity to be
practiced by businessmen as they are responsible towards the society in return of what they
take from the society. I also conclude that practicing CSR also brings many benefits for the
businesses practicing it.

2.3 BENEFITS OF CSR

By practicing CSR a business can reap many benefits for itself. Let us throw light on the
benefits attached with the practice of social responsibility by a business.

• Building good reputation: A business earns a good reputation in the society if it

practices social responsibility. Many consumers prefer to buy from ethical businesses.

• Customer satisfaction: If a business practices CSR then it creates more satisfaction

amongst its customers as they find the business more responsible towards the society. Some
customers don’t just prefer to deal with responsible companies, but insist on it.

• Reducing waste and emissions: Reducing waste and emissions doesn’t just help the
environment – it saves the money of the businesses too. By following CSR, businesses can
save the natural resources by using them judiciously and reducing their wastage.

• Increases employee motivation: Employees are better motivated and thus can be
more productive by following CSR. Employees stay longer hence reducing the costs and
disruption of recruitment and retraining.

• Activities such as involvement with the local community are ideal opportunities to
generate positive press coverage for the business.

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• CSR can make the business more competitive and reduces the risk of sudden
damage to its reputation (and sales). Investors recognize this and are more willing to
finance the business.

• Understanding the wider impact of a business can help it think up profitable new
products and services.

• CSR helps ensure a business comply with regulatory requirements.

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 CHAPTER 3

RESPONSIBILITIES TOWARDS VARIOUS

INTEREST GROUPS

Business operates in the society and during its operations it comes in contact various
groups such as employees, shareholders, customers, suppliers and competitors etc. Business
takes help from these various groups hence it becomes the duty of a business to take care of
the well being of these groups. Every business should realize that its actions affect the
various above mentioned groups also and thus there exists a responsibility of the business
to take care of them too. Business is responsible to all these interest groups in the following
ways:
3.1 RESPONSIBILITY TOWARDS OWNERS AND
INVESTORS

Shareholders are the true owners of a business as they provide capital to a business and bear
risks. Therefore, their concern with the activities and the responsibilities of a business is
very obvious. Hence, they have a direct stake in business and a business thus has the
following responsibilities towards them:
• to invest the capital of the shareholders judiciously.

• to ensure safety of investment made by shareholders.

• to provide regular interest and dividend.

• to provide accurate and adequate information on the financial position of the

business.
• to give opportunities to the shareholders for participation in policy decisions.

• to give equal treatment to all shareholders.

3.2 RESPONSIBILITIES TOWARDS EMPLOYEES

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 Employees are the work force of a business. They help achieve the goals of a business by
their service. Hence, employees are the greatest asset of a business and their well being is
an important responsibility of a business. Employees should be given respect by the
employers and a proper reward for their services should also be given to them. They should
be provided both economic and psychological satisfaction. A business has the following
responsibilities towards its employees:
• to pay a regular and proper wage or salary.

• to provide good and safe working conditions.

• to provide opportunities for training and self development.

• to develop a sense of belonging and dignity.

• to give facilities like housing, medical, insurance, social security etc

• to give freedom of religion and political views.

3.2.1 TATA

In this field, the Tata group has taken many relevant steps. The Tata Group’s commitment
to enhancing the knowledge and leadership quotient of its people has resulted in the
establishment of institutions such as the Tata Management Training Centre and the running
of programmes such as Tata Administrative Service (TAS).

TAS: This managerial development programme was conceived by JRD Tata, the late
chairman of the Tata Group, in the 1950s. The idea was to select and groom young
managers, provide them opportunities for professional growth, and make them part of a
talent pool that could be tapped by companies across the Tata organisation.

TMTC: The Tata Management Training Centre, set in a lush campus in Pune, helps Group
professionals add to their knowledge bank. Primarily an in-house learning centre for the
Group, its goal is to provide training to high performers, act as a cradle of change and
develop leadership qualities.

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 Tata Business Leadership Award: Initiated in 2004, this an annual business school event
organized by the Tata Group. It offers students from select management institutions a
unique opportunity to compete with the brightest and display their business acumen.
3.3 RESPONSIBILITIES TOWARDS CUSTOMERS

A business has several responsibilities towards its customers also as customers are the ones
who are the ultimate users of the products and services provided by a business. Hence, it
becomes the duty of a business to take the responsibility of its actions. The responsibilities
of a business towards its customers are:
• to provide good quality products.

• to provide the products at fair prices.

• to supply socially useful products that meets the needs of customers.

• to ensure a fair distribution of products at the time of shortage.

• to ensure an adequate supply of products.

• to provide a fair distribution of products all over the country.

• to offer a good service to the customers.

• to handle consumer complaints and grievances quickly.

• to avoid unfair trade practices like adulteration, hoarding, black marketing, false
advertising etc
• to supply useful information about new products and their uses.

• to give warnings about some products like expiry date of eatables etc

3.4 RESPONSIBILITIES TOWARDS THE COMMUNITY

Every business uses the resources of the community thus it’s the responsibility of a
business to think and work about the well being of the community as well. A business
should work for the social and economic well being of the community. It should try to work

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 for the society in solving its problems and in improving the quality of life of the people of
our society. The main responsibilities of a business towards the community and the public
are:
• To protect the environment from all kinds of pollution.

• To make the optimum utilization of natural resources.

• To generate more and more employment opportunities

• To help the government and the local bodies in providing and improving the

amenities like sanitation, drinking water etc.

• To preserve social and cultural values.

• To promote national integration.

• To provide assistance to hospitals, educational institutions etc

• To work for the weaker sections of the society like orphans, widows, disabled

persons etc

• Not to do any activity which is against the well being of the society and which

affects public welfare.

Let us see how some of the leading companies of India have perceived the issue of
corporate social responsibility and what they have done in this direction.
3.4.1 ITC

In 2000, harnessing the empowering force of information technology and its scalability,
ITC launched e-Choupal – a knowledge portal providing farmers with a range of
information and services. Designed to enable them to bargain collectively and enhance their
transactive power, e-Choupal became the much needed and easily adoptable tool farmers
had been waiting for. Today e-Choupal is a vibrant and rapidly growing zone of business
and interaction for over 4 million farmers.
ITC’s other activities in the field of CSR are:

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• ITC’s businesses generate livelihoods for over 5 million people.
• ITC’s globally recognized e-Choupal initiative is the world’s largest rural digital
infrastructure benefiting over 4 million farming families.
• ITC’s Social and Farm Forestry initiative has greened over 80,000 hectares creating
an estimated 35 million person days of employment among the disadvantaged.
• ITC’s Watershed Development Initiative brings precious water to nearly 35,000
hectares of dry lands and moisture-stressed areas.
• ITC’s Sustainable Community Development initiatives include women
empowerment, supplementary education, integrated animal husbandry programmes.

3.4.2 RELIANCE

Dahanu power station is a power generating wing set up by the Reliance group of
companies. It is a significant contributor to the betterment of the community at Dahanu. It
promotes and supports many programs that help the community in terms of education,
employment and other aspects.

As a responsible corporate citizen DTPS has undertaken various Community initiatives and
social activities in and around Dahanu Taluka which is a predominant Tribal area. There
are focused activities in the field of Education, Health and other community needs. Regular,
Permanent and Service projects are carried out for supporting the mass community there.

Community Initiatives

• The company has constructed an Anti Sea Erosion Bund with a length of 700
meters at Diwa Dandi. The bund has effectively stopped erosion of soil and has saved the
livelihood of the villagers. The total expenditure on the construction of the bund amounted
to Rs. 75 lacs.
• Construction of Water Storage check dams under ground water conservation
programme at Saravali / Savata / Ashagad village around Dahanu. With these check dams
more than 12,000 nearby villagers are benefited.

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 Employment Initiatives

The Fly Ash Brick making project was instituted in 1995 and provides employment to
many tribal youth.
Educational Initiatives

In keeping with the corporate belief that education and training are primary enablers for the
society, the Dahanu TPS of Reliance Group has actively contributed towards making
quality education available in the vicinity of the company’s operations.

Specific Educational initiatives undertaken by the company include:

• Establishing DTPS Junior College of Science in the year 1998 and DTPS junior
college of Arts in 2004.

• The building and handing over of 8 Municipality schools to the Zilla Parishad at
Dahanu.

• The construction of an Audiometric Room & Computer lab for Dumb and Deaf
school children.

• An annual program that has been in place since 1995, under school children is given
Stationary & Educational material free of cost.

• Institution of the Merit Scholarship for Eng. and Medical Students since 1998 in
association with Rotary Club. Eight students have been awarded this scholarship to date.

• A Scholarship for tribal students from the Industrial Training Institute, Vanagaon,
was instituted in 1990, for promoting enrollment in vocational courses.

• An ongoing program to distribute note books at subsidized rates. This initiative is

undertaken by the company in association with the Rotary club and has been in place since
1995.

Health Initiatives

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Community health is one of the prime areas of the company’s social concerns and the
company is an active contributor to community health programs.

• An annual Health Check up Camp has been instituted by the company and a local
NGO for the benefit of the rural community in the vicinity of the plant.

• The company sponsors an annual Eye Check Up and Cataract Operation Camp, in
association with the Lions Club.

• Since 1996, the company has been an active participant in the Annual Pulse Polio
Program.

• To ensure supply of clean and fresh drinking water, the company has undertaken
construction & maintenance of 70 Tube Wells in 30 villages. This has brought
welcome relief to the villagers who previously had to walk long distances to get
fresh drinking water.

• Mobile dispensary van for local tribals for serving community in far lung areas
under Vanvasi 23ustom Kendra, Talasari.

Reliance Energy’s Dahanu Thermal Power Station has won the Golden Peacock award for
corporate social responsibility for the year 2007.

3.4.3 TATA

Tata group of companies has always been very active in the field of social responsibility.
To serve the society the company has made the following efforts:

Tata Council for Community Services: Tata group of companies has set up a separate
council known as the Tata Council for Community Initiatives which is the umbrella agency
that guides and supports Tata Group companies with their community development
initiatives. TCCI has a charter that embraces social development, environmental
management, biodiversity restoration and employee volunteering.

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Tata Index for Sustainability: The Tata index for sustainable human development is a
pioneering effort aimed at directing, measuring and improving the social uplift programmes
that Group enterprises undertake. The index provides guidelines for Tata companies
looking to fulfill their social responsibilities, and is built around the Tata Business
Excellence Model.

Tata group of companies has set up various trusts also to take care of its actions in the
area of CSR. It has the following trusts:

Sir Dorabji Tata and allied trusts: The Sir Dorabji Tata Trust was established in 1932 by
Sir Dorab Tata, the elder son of Tata Group founder Jamshedji Tata, and is one of the
oldest social organisations in India.

The grant-making pattern of the Trust involves three broad areas: endowment grants (grants
to institutions), grants to non-governmental organisations (NGOs) and grants to individual
(medical and educational grants).

Endowment grants

The Trust has promoted, and continued to support, several institutions of learning, research
and culture in India. These include the Tata Institute of Social Sciences, Mumbai, the Tata
Memorial Centre for Cancer Research and Treatment, Mumbai, the Tata Institute of
Fundamental Research, Mumbai, the Tata Agricultural and Rural Training Centre for the
Blind, Phansa, and the National Centre for the Performing Arts, Mumbai.

The Trust has also helped in establishing the Sir Dorabji Tata Trust Centre for Research in
Tropical Diseases at the Indian Institute of Science, Bangalore, the JRD Tata Eco
technology Centre, Chennai, and the National Institute of Advanced Studies, Bangalore.

NGO grants

The Trust makes grants to NGOs in five social development sectors:

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 • Management of natural resources: The Trust supports projects related to water
and water resources, land degradation and better methods of cultivating and
harvesting crops.

• Livelihoods: The Trust has backed several projects in this sector, covering
unorganized labourers, capacity building of grassroots groups, and business
development of a variety of people-based organisations.

• Education: The Trust has supported initiatives in the field of education, focusing on
children, adolescents and adults (within and outside the formal education system).

• Health: The Trust has made contributions in creating and upgrading medical
infrastructure and healthcare facilities across India, while focusing on training
community health workers. The Trust also supports research studies in alternative
systems of medicine such as ayurveda.

• Social development initiatives: These cover many areas, including community

development, human rights, family welfare, civil society, art and culture, and relief
work.

Individual grants
The Trust gives merit and need-based educational and medical grants to individuals.

• Medical: Financial help is extended to individuals for the treatment of diseases and
to solve other health problems.

• Education: The Trust offers scholarships for higher education and travel grants for
studying abroad and for attending conferences, as well as for sports activities.

The Allied Trusts

The Allied Trusts are, primarily, smaller trusts; while some have a specific mandate, the
rest are broad-based in their approach to grant-making. The Sir Dorabji Tata Trust
administers the Allied Trusts.

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Sir Ratan Tata Trust: The Sir Ratan Tata Trust was established in 1918 following the
death of Sir Ratan Tata, the younger son of Group founder Jamshedji Tata and it operates in
accordance with his will.

The trust makes, broadly speaking, two types of grants: institutional grants, under which
come programme grants, endowment grants and small grants; and individual grants, which
are medical and educational grants.

Institutional grants

• Programme grants: These cover rural livelihoods and communities, education,

health, art and culture, and civil society and governance.

• Endowment grants: The trust supports institutions that work within the thematic
areas that it focuses on.

• Small grants: This caters to the needs of small, welfare-oriented organisations, and
those needing support to implement innovative ideas.

Individual grants
• Medical grants: Grants are disbursed to patients requiring help to meet treatment
expenses.

• Educational grants: The trust supports individuals pursuing higher education

through its ‘studies in India’ programme and through travel grants.

Educational Initiatives
Lady Meherbai Tata Education Trust: Set up in 1932, the Trust grants scholarships to
young Indian women graduates of recognized Indian universities to pursue higher studies
abroad in the fields of social work and public health.

JN Tata Endowment: The first of the Tata trusts, it was established by Group founder
Jamshedji Tata, in 1892 to provide scholarship loans to individuals for the pursuit of higher

26
studies abroad. Over 120 students are selected every year from across India as JN Tata
scholars.

Lady Tata Memorial Trust: Established by Sir Dorabji Tata in 1932 in memory of his
wife, Lady Meherbai, who died of leukemia in 1930, the Trust spends four-fifths of its
income on international research in leukemia. The Trust also supports institutional research
carried out by recognized Indian institutions, with the emphasis on leukemia research.

Indian Institute of Science: IISc has produced Nobel laureates, trained many of India’s
greatest scientists and helped nurture some of the country’s finest scientific institutions.
Housed in a 375-acre campus in Bangalore, this trailblazing institution has 40 departments
and centres pursuing R&D and teaching in all departments of science, engineering and
technology

Tata Institute of Fundamental Research: The need to improve India’s scientific temper
and strengthen the nation’s science infrastructure were the objectives that drove scientist
Homi J Bhabha and JRD Tata, the late chairman of the Tata Group, to pursue their vision of
establishing TIFR in Bombay back in 1945.

Tata Institute of Social Sciences: Set up in 1936, TISS is a pioneer in the field of social-
work education in the Asia-Pacific region. The Institute, which offers postgraduate and
doctoral programmes, has made significant contributions in the domains of social policy
and planning, intervention strategies and human resource development.

Health Initiatives
Tata Memorial Centre: TMC is India’s best-known cancer hospital and research centre.
This global centre of excellence, where 70 per cent of patients get free primary care, was
established in Bombay in 1941, a time when there were only a handful of such institutions
in the world. It has added significantly to its capacity and capabilities since then

JRD Tata Eco technology Centre: The flag bearer of the eco technology movement in
India, JRDTEC is part of the MS Swaminathan Research Foundation, Chennai. Established

27
in 1996, it is devoted to seeding and encouraging sustainable development, one that
protects the environment while also benefiting the people who depend on it.

Tata Medical Centre: To be commissioned in 2009, Tata Medical Centre in Kolkata, in

eastern India, is being equipped with the most contemporary and state-of-the-art medical
equipments and will be one of the leading cancer care and research institutions in the
country.

3.5 RESPONSIBILITIES TOWARDS SUPPLIERS AND

COMPETITORS

Suppliers help in completing the process of production of a business by supplying the

required raw materials on time whereas competitors provide the impetus to a business to
work harder and to be ahead in their line of business. Thus a business should discharge the
following responsibilities towards its supplier, dealers and competitors:

• to make regular and fair payments to the suppliers.

• to adopt fair trade practices regarding pricing, quality, service etc

• to protect and promote small scale and cottage industries.

• to patronize trade associations and chambers of commerce.

3.6 RESPONSIBILITIES TOWARDS GOVERNMENT

A business has the following responsibilities towards the government:

• to pay the taxes regularly and promptly.

• to abide by the laws.

• to adopt fair dealings in foreign trade

• to assist or help government in solving national problems like poverty, illiteracy,

over population, etc

28
 • to avoid monopolistic and restrictive trade practices

• not to involve in corrupting public servants by giving them bribes for their own
interest.
3.7 RESPONSIBILITIES TOWARDS ENVIRONMENT

As citizens of a country, we have certain obligation towards our society, and the
environment we are living in and are leaving behind for the next generation. Similarly
companies also are committed to ensure a clean and healthy environment. Rapid
industrialization is causing a great damage to the environment which has to be taken care of
by the companies. In India, the government has enacted laws to prevent pollution of all
kinds. But companies also have to be active in this direction. Companies should take up the
following steps for this purpose:

• Set aside a significant part of revenue to ensure that all effluents and emissions are
pollution free.

• Foliage and gardens should occupy 1/3 rd of the total factory area contributing to a
green environment.

• Industrial houses should plant trees and maintain parks thereby providing for
greenery. But they should also make.

• proper arrangement for disposal of industrial waste should be made.

• well ventilated working place for the employees should be provided.

• companies should see to it that the rubbish is disposed off without polluting the
surroundings.
• The vehicles engaged for transportation of the products should regularly be sent for
Auto Emission Test and have the Pollution under control certificate.

29
Let us see what different companies have done to protect environment.

3.7.1 ITC

• ITC has been ‘Carbon Positive’ three years in a row (sequestering/storing twice the
amount of CO2 than the Company emits).

• ‘Water Positive’ six years in a row (creating three times more Rainwater Harvesting
potential than ITC’s net consumption).

• Close to 100% solid waste recycling.

• All Environment, Health and Safety Management Systems in ITC conform to the
best international standards.

3.7.2 Reliance

Reliance, Jamnagar is the largest grass root refinery set up with annual capacity of 27
million tons and the 3rd largest refinery in the world at any single location. At reliance
Jamnagar, a clean environment for sustainable development is of prime concern, and is an
important business objective achieved by every employee’s contribution and responsibility
towards environmental performance. Following are the major improvements achieved
during 2000-2008:

• Reduction in Emission of CO2.

• Planting of 4.0 million trees in and around the complex has already been done till
March 2005 which includes planting of 51,000 additional trees during 2004-05.

30
 • Plantation of 35,000 trees in the direction of further enhancement of benefits of
greening like CO2 absorption & improved microclimate etc during last year.

• Reduction of plastic cup consumption from 5.1 Lakhs cup (In 2000) per month to
3.2 Lakhs (2003) per month.

• Construction of landfill facility for the disposal of hazardous waste.

• Incinerator plant is installed of 200Kg/Hr capacity to incinerate the Hazardous

Waste like Oily Rags, Oily sludge & other oily contaminated material

Energy Awards

• Reliance, Jamnagar has bagged ICMA (Indian Chemical Manufacturers

Association) Award 2002 and 2005 for Excellence in Energy Conservation and
Energy Management.

• Reliance, Jamnagar has bagged award from BEE (Ministry of Power) for
Excellence in Energy Conservation and Energy Management in 2004, 05 & 06.

• It has received award for Excellence in Energy Management – 2002, 2003, 2004,
2005 and 2006 by CII (Confederation of Indian Industries).

• Reliance, Jamnagar has bagged award in the Large projects for Exemplary work in
Energy Conservation by PCRA (Petroleum Conservation Research Association) in
2005.

• Reliance, Jamnagar received Oil & Gas Conservation Fortnight-2005 Award from
Ministry of Petroleum & Natural gas for First prize in minimum Steam leaks.

31
 • Reliance, Jamnagar received Oil & Gas Conservation Fortnight-2006 Award from
Ministry of Petroleum & Natural gas for First prize for excellence in Boiler /
Furnace performance.

3.7.3 Tata

The Tatas have a separate wing known as the ‘Group environment network’ to guide its
companies and organisations on environmental issues. The Tata approach to environmental
management makes it mandatory for Group companies to do the following:
• Have a vision and mission statement that explicitly states its policy on
environmental management.

• define a corporate environment policy and communicate that to all employees.

• set up environmental management systems and programmes at the organizational

level and annual budget for environmental improvement.

• train its workforce on environmental issues and assign management representatives

and facilitators for the task of monitoring environmental systems.

• regularly scrutinize resource consumption and the quality of air, water and land in
and around the areas where it operates.

• review environmental performance at different levels in the management hierarchy.

• establish a convention for conducting impact-assessment surveys and periodic

audits.

• publish annual environmental performance in annual reports.

32
 SECTION C

RESEARCH AND OBSERVATIONS

33
 CHAPTER 4

RESEARCH METHODOLOGY

4.1. RESEARCH DESIGN

I have conducted exploratory research to achieve my objectives in this research.

Exploratory research will help me form relationships between various variables taken into
account and give recommendations on the basis of
the finding of the research.

4.2 SURVEY DESIGN

There were two phases of the research:

• Desk- and web-based research

• Questionnaire with students (structured quantitative research)

4.2.1 Desk and web based research:

1 An initial search was conducted within the public domain to review the CSR
reported practice of large Indian corporations, which are acknowledged to be at the
forefront of the engine of economic growth in India. This was established through
selecting leading growth sectors and reviewing the leading company in each sector.

2. To augment this, a detailed search was conducted in business journals, market

research sites, business newspapers, and publications to study their CSR activities and
CSR strategy. This was followed by comparing these leading companies across
sectors with the selected benchmark of the Tata group of companies.

34
The companies reviewed were:

Benchmark: Tata

Information Technology: Wipro, Infosys

Two-wheelers: Hero Honda, Bajaj

FMCG: Dabur, Godrej

Rural Marketing: Hindustan Unilever, ITC

Telecom: Airtel, BSNL

Real Estate: DLF

Oil and Gas: ONGC, IOC

4.2.2 Questionnaire with students:

A structured questionnaire was prepared and distributed to four leading graduate and post
graduate institutions in India. The data from completed questionnaires was entered into a
spreadsheet for analysis as to what leading potential employees were looking for from
companies in their job and career selection and if CSR would influence their choice.

4.3 QUESTIONAIRE AND SAMPLE DESIGN

The questionnaire was designed such that it helps in achieving the objective of the research
which is to know about the preferences of India’s potential employees and what they think
about practicing Corporate Social Responsibility. The questions are mostly objective so as
to make it simpler for the respondents to answer them and also make it easier to analyze the
results quantitatively so as to reach accurate results.

The sample chosen was 80 students of the four leading graduate and post graduate colleges
of Delhi.

35
4.4 SUMMARY OF THE FINDINGS

4.4.1 Corporate reporting – desk and web based review

The review of the findings shows programmes in the community, education, environment
and health areas but there are within those programmes four emerging themes as to how the
companies reviewed are responding with CSR to the issues in India. We have conducted
our study on some of the top corporate houses operating in various sectors of Indian
economy. In summary the review highlighted the following:

Community Environmen Education Health

ITC
HUL
Airtel
BSNL
Infosys
Wipro
IOC
ONGC
Godrej
Dabur
Bajaj
Hero Honda
DLF
Ta ta
The companies have been ranked high, medium
or low based on their focus as reflected by the
financials and organizational
High Med Low resources devoted to CSR causes, along with

Figure 4.1

36
 • Tatas have a high focus and level of involvement in community development,
education and environment space and has initiatives in all four themes, with special
focus on community and health and education initiatives.

• After Tatas, the other companies that score high on CSR initiatives in India are ITC
and Godrej. ITC lays great stress on community and environmental initiatives, but is
low on the initiatives taken in education and health. Godrej focuses on environment
and health initiatives, while it has low involvement in community development and
education. Also, ITC is the only company in India which works on CSR programs
related to climate change.

• BSNL and DLF have the least number of CSR initiatives, with both focusing on
community initiatives. DLF is involved in the field of education but BSNL doesn’t
have presence in any other category.

• Companies in the automobile and oil & gas space have undertaken very few
initiatives in addressing the environmental concerns.

• Indian companies seem to be spending most of their time and effort on community
initiatives followed by education and environment. Health sector has the least
number of initiatives with four companies having no involvement in that category.
Specifically reviewing how the other companies have picked up on these issues the
following highlights emerge:

4.5. THE NEED TO ADDRESS EMPLOYEE ISSUES:

The Tata Group has huge employee base in India and across the globe. Tata were the
pioneers in employee benefits that were later mandated through legislation in India and
elsewhere in the world. The eight-hour working day, free medical aid, welfare departments,
grievance cells, leave with pay, provident fund, accident compensation, training institutes,

37
maternity benefits, bonus and gratuity were introduced by the group before any legal rules
were framed on them. Tata has created cities and towns – Jamshedpur, Mithapur, Babrala
and Mathigiri – around industrial facilities. Tata Steel maintains Jamshedpur’s public
utilities such as the local municipality and takes care of road maintenance, water and
electricity supply, streetlights, healthcare and sanitation.

Bajaj Auto provides interesting and explicit commitments to employees through its
company’s policies:
• The Company believes that equal opportunity in employment for all sections of the
society is a component of its growth and competitiveness.
• It recognises that diversity to reflect socially disadvantages sections of the society in the
workplace has a positive impact on business.
t• The Company is not biased against employing people from disadvantaged sections of the
society, if the applicant possesses competitive skills and job credentials.
• Its selection of business partners is not based on any considerations other than normal
business parameters. In case of equal business offers, the Company will select a business
partner belonging to a socially disadvantaged section of society.
• The Company makes all efforts for upgrading the skills and continual training of all its
employees to enhance their capabilities and competitive skills. It has a partnership program
with various educational institutions to support and aid employees and family members of
employees.

Infosys implemented health clubs and health programmes, such as health week, nutrition
programmes and ergonomics training. It also implemented safety programs to improve
awareness about precautions and measures to improve road and personal safety.

4.6. THE NEED TO BE RESPONSIBLE FOR THE

COMMUNITY (LOCAL OR DISADVANTAGED):

Tata Chemicals set up the Tata Chemicals Society for Rural Development (TCSRD) to
promote its social objectives for the communities in and around Mithapur and Babrala,

38
where its facilities are located. Some of the initiatives of TCSRD are: agricultural
development, education, women’s programmes, animal husbandry, rural energy, training,
watershed development, relief work and infrastructure. TCCI, in collaboration with the
United Nations Development Program (India), created the Tata Index for Sustainable
Human Development. This was aimed at directing, measuring and enhancing the
community work that group enterprises undertake.

BSNL is the only telecommunication service provider offering rural telephony as part of its
social responsibility. BSNL with support from government is in process of providing
broadband to all gram panchayats, secondary and higher secondary schools and public
health care centres. BSNL is offering special tariffs for rural subscribers by providing lower
rental and higher free calls as compared to urban area subscribers.

Bharti Airtel founded the Bharti Foundation in 2000, with the vision: “To help
underprivileged children and young people of our country realize their potential.” Through
the foundation, several initiatives were started such as the Bharti Computer Centers, which
have provided computer learning to more than 130,000 children in five states; the Bharti
Library Programme, aimed to encourage reading habits of children; and the Mid-day Meal
Programme, in which Bharti Foundation has supported Akshaya Para in providing meals to
43,000 children per day in 292 government schools. For the coming years, the Foundation
has plans to start a large number of primary schools in rural areas across the country. It will
also provide teachers’ training facilities.

Bajaj Auto’s CSR activities among the rural poor are carried out by a Trust, the Jankidevi
Bajaj Gram Vikas Sanstha (JBGVS). Established in 1987 by Ramkrishna Bajaj in memory
of his mother, Jankidevi Bajaj, this Trust acts as a catalyst to development at the grass root
level in 32 villages around its plants in Pune and Aurangabad. The trust initiates
sustainable, integrated development through long term projects in rural health, hygiene and
sanitation, education and adult literacy, improving agricultural and livestock yield,
watershed development and women’s empowerment. Through its poverty alleviation

39
schemes, the Trust provides micro-credit and income generation opportunities for the poor.
These projects have a positive impact on the quality of rural living standards.

Hero Honda is committed to community as “We must do something for the community
from whose land we generate our wealth”. (Quote from Chairperson Brijmohan Lall
Munjal)

Godrej funds the NAZ foundation which has evolved and implemented a holistic approach
to fight HIV, focusing on prevention as well as treatment. In 2004, Parmeshwar Godrej,
wife of Chairman Adi Godrej, launched a three-year Heroes Project which seeks to develop
coordinated campaigns to address the spread of HIV/AIDS and reduce stigma and
discrimination by educating the public. To fight AIDS, Godrej & Boyce has opened a clinic
at its Godrej Memorial Hospital in Mumbai.

Dabur has a vision of being company dedicated to the health and well being of every
household, drawing inspiration from its founder Dr. S. K. Burman, who said, “What is that
life worth which cannot bring comfort to others”. In 1993, Dabur India Ltd established
Sustainable Development Society (SUNDESH), a registered voluntary organisation,
integrating various aspects such as health, literacy, employment, and empowerment.
Through this, the company addresses the most deprived and weaker sections of the society
including women, children, illiterates, and the unemployed. Healthcare: The company
organizes camps, which include general OPDs, antenatal checkup, vaccination for children
aged 0-5 years, family welfare, health awareness through meetings, eye screening and eye
operation camps.

HUL launched Project Shakti in 2001 to create income-generating capabilities for

underprivileged rural women by providing a small-scale enterprise opportunity, and to
improve rural living standards through health and hygiene awareness. The project has been
extended to 15 states covering 80,000 villages. The company has launched ‘i-Shakti’ kiosks

40
– an IT-based rural information service developed to provide information and services to
meet rural needs in agriculture, education, vocational training, health, and hygiene. To
improve business skills of the rural population, especially women, extensive training
programmes are held. The total strength of Shakti Entrepreneurs has reached over 30,800.
Quoting ITC Chairman, Mr. Y.C.Deveshwar, “Envisioning a larger societal purpose (‘a
commitment beyond the market’) has always been a hallmark of ITC. The Company sees
no conflict between the twin goals of shareholder value enhancement and societal value
creation. The challenge lies in fashioning a corporate strategy that enables customized of
these goals in a mutually reinforcing and synergistic manner”. The groups focus is on rural
development. ITC’s e-Choupal empowers 3.5 million farmers by enabling them to access
customized crop-specific information in their native village, habitat and language.
Vernacular websites relating to each agricultural crop that the company deals in provide
ready and real time information to even marginal farmers on the prevailing Indian and
international prices and price trends for their crop, expert knowledge on best farming
practices, and micro level weather forecast.

Women Empowerment: ITC aims at micro-credit and skills training to generate alternate
employment opportunities for women to facilitate better nutrition, healthcare and education
for their children.

DLF’s major CSR focus is on the welfare of masses but does not report much on how and
where.

Wipro believes in two fundaments that have guided its engagement: “One, Wipro is a
socioeconomic citizen. Two, if you can do well, you must.” Its major thrust for CSR is
education.

Wipro Applying Thought in Schools: This initiative is aimed to rekindle the spirit of
curiosity in children, in order to develop critical, creative and caring citizens. The project
ranges from training programmes for teachers and principals to concerted efforts for
transforming entire schools. It started in 2001 and it has reached over 4,500 teachers and

41
principals from 241 schools in 4 states. Its Chairman Azim Premji has launched his own
Foundation – Azim Premji Foundation – with a focus on universalisation of education.

Infosys Foundation: It came into existence on 4 December 1996. Its main objective was to
fulfill the social responsibility of the company by supporting and encouraging the
underprivileged sections of society. The Foundation has been working on initiatives such
as: training destitute woman in tailoring and donation of sewing machines and material to
them to improve their livelihood; counseling centers to rehabilitate marginalized devadasis
in North Karnataka; relief work conducted after natural disasters; donation of aid
equipment to the physically challenged in rural areas of Karnataka; and construction of
orphanages in rural areas.

4.7. THE EMERGING RECOGNITION OF THE ROLE OF THE

ENVIRONMENT AND THE POTENTIAL AS A TIPPING
POINT:

Tata Steel has laid great emphasis, over the years, on creating a green environment in and
around its plants and on utilizing the waste generated in the process of manufacturing steel.
The company generates roughly 700 kg of various wastes (excluding fly ash) in the process
of producing one tone of rude steel. Of this, 83.16% is utilized either through recycling and
reuse in the company’s own processes or is sold as raw material to other industries. The rest
is sent for land filling.

For Airtel, 5,000 sites are using a green-shelter system that provides cooling for four hours
in the Base Transceiver Station. This system saves cost and reduces pollution.

Bajaj Auto’s has an Environmental management system, which is an integral part of the
overall management system at Bajaj Auto’s Aurangabad plant, was awarded ISO 14001
certification in 1997.

42
Hero Honda is certified for its Environmental Management Systems according to ISO
14001. The Green Rating conducted by the Centre for Science & Environment, New Delhi,
for all automobile companies in India, ranked Hero Honda as No.1 for its environmental
performance.
1999: Environment Management System of Dharuhera Plant was certified with ISO-14001
by DNV Holland and in 2000: Environment Management System of Gurgaon Plant was
certified with ISO-14001 by DNV Holland.

Godrej which “covers many aspects and areas, the greenery and mangroves are just one of
them,” according to the company. Godrej has been a key player in aiding education,
environment and the health verticals besides looking after its own employees. The company
strongly believes that the green environment enhances productivity and quality which has
been appreciated by all employees and visitors. The company has a mission of “Enriching
quality of life everyday everywhere”. The Soonabai Pirojsha Godrej Foundation has been
maintaining the western bank of the Thane Creek, the single largest mangrove belt in
Mumbai. The Sohrabji Godrej Green Business Centre launched the Green Business
Initiative in December 2005, which was aimed at facilitating the development of corporate
greenhouse gas inventories and subsequent investments in greenhouse gas mitigation
projects.

Dabur works towards developing sustainable cultivated source for herbal ingredients,
which would help in reducing the strain on natural habitat of these herbs. The company is
also involved in reforestation in the Himalayan range.
HUL is also committed to extending its efforts on water management to the larger
community, and engages in community projects in water adjacent to manufacturing sites.
The company has a management system conforming to ISO 14001.

ITC focuses on the use of renewable energy such as biomass and solar energy. A number
of units have installed solar thermal systems mainly for use in canteens and kitchens. It
claims it endeavours to be a carbon positive corporation. Its efforts in the field of energy
conservation, use of carbon neutral fuels and large scale tree plantations through social and

43
farm forestry have resulted in sequestering 85.6% of the Carbon Dioxide (CO2) emitted by
its operations. The Watershed Project, Government of Rajasthan and the ITC Rural
Development Trust, have signed a memorandum of understanding (MoU) for the project in
Kalyanpura village, over 250 km from the state capital, Jaipur. ITC’s watershed
development seeks to achieve two critical objectives: water conservation and soil
enrichment. All ITC Units and the four hotel properties owned by ITC (Maurya Sheraton,
Mughal Sheraton, Chola
Sheraton and Grand Maratha Sheraton) have obtained ISO 14001 certification for their
Environment Management Systems.

Indian Oil Corporation has been an active founder-member of the United Nations Global
Compact (UNGC), an international initiative that brings companies together with UN
agencies, labour and civil society to support universal environmental and social principles.
Indian Oil has included CSR in its vision and mission statement and has built its corporate
strategies around it. Environmental initiatives include: development of cleaner fuels such as
diesel with low sulphur content and biodegradable lube formulations; pollution control
programme, in which all refineries are provided with facilities to control pollution from
different sources; and ecological parks, which are scientifically designed green belts that
have been developed at Gujarat Panipat refineries, to serve as a pollution sink and to
enhance the aesthetic look of the refinery area. Indian Oil won the TERI Corporate
Environmental Award 2002-03 in category III (companies with an annual turnover
exceeding Rs.500 crore p.a.). This award has been presented to Indian Oil for installation of
Fuel Gas scrubbing (BELCO) system to treat flue gas from RFCC unit of Barauni Refinery
to remove particulate matter and sulphur dioxide. Seven refineries and the Indian Oil
Research & Development Centre at Faridabad have achieved the ISO 14001:1996
accreditation for Environment Management System.

In 1998-99, the Salaya-Mathura Pipeline and the Koyali-Ahmedabad Pipeline became the
first oil pipelines in the world to be accredited with ISO-14001 for Environment
Management System. Indian Oil’s Mathura Refinery has been certified for “Occupational

44
Health and Safety Management System (OHSMS)” by DNV – the first refinery worldwide
to receive this certification and Mathura Refinery was the first Refinery in Asia, and the
third in the world in the Petroleum Sector, to be certified ISO-14001 for its efficient
Environmental Management System.

ONGC has all its operational facilities certified for Quality, Occupational Health& Safety
and Environment Management (QHSE) based on ISO 9001, OHSAS 18001, ISRS and ISO
14001.

Infosys programmes on environment are being evaluated through the Ozone initiative, in
which Infosys Environmental Management System (EMS) is subject to third party
surveillance audits.

4.8. THE STAKEHOLDER PERSPECTIVE

Airtel: According to the company, “Corporate Social Responsibility is a way of life at

Bharti.” Airtel has been looking after the needs and interest of its stakeholders, including
employees, consumers, and communities, along with the environment. Its mission
recognises stakeholders: “Airtel is strongly committed to being a responsible corporate
citizen. Providing a platform to leverage the potential of the citizens of tomorrow and
concern for the environment are our top priorities.” (Sunil Bharti Mittal – Chairman and
Managing Director, quoted from the 2005-06 annual report)

Hero Honda: Motors takes considerable pride in its stakeholder relationships, especially
ones developed at the grassroots. The company believes it has managed to bring an
economically- and socially-backward region in Dharuhera, Haryana, into the national
economic mainstream.

HUL’s CSR philosophy is embedded in its commitment to all stakeholders, including

consumers and employees, the environment, and the society the company operates in.

45
ONGC is playing an important role in strengthening India’s corporate world with a tuned
sense of moral responsibility towards the community of people where it operates and the
country at large. In its vision/mission and the philosophy regarding CSR it claims that the
company feels responsible not only for wealth creation but also for social and
environmental good. It also aspires to abiding commitment to safety, health and
environment to enrich quality of community life and to imbibe high standards of business
ethics and organizational values. Its approach to CSR is summarized as “an approach to
business that exemplifies transparency and ethical behaviour, respect for stakeholder
groups and a commitment to add economic, social and environmental value”. Dr. Ashok
Kumar Balyan, joined the Board of
ONGC as Director (Human Resources) on August 23, 2003 and is currently responsible for
formulation and implementation of policies in tune with the strategies of ONGC. He is
actively leading the continuous change journey of ONGC called ‘Corporate Rejuvenation
Campaign’.

46
 4.9. BENCHMARKING

In order to compare the CSR performance of the companies with the leader (Tata) in CSR,
parameters such as the number of initiatives, spectrum of stakeholders addressed and the financial
outlay on CSR was studied.

Number of initiatives Stakeholders it addresses through

Company CSR Outlay
Community Environment Education Health Customer Employees Business Partners (in Rs.)

TATA’
S 8 3 3 1 14 1 1 420cr
Rural Marketing
ITC 4 4 1 6 3 54.25cr
HUL 4 1 2 1 8 N.A
Telecom
AIRTE
L 3 1 1 2 6 1 246cr
BSNL 3 2 1 N.A
IT
INFOS
YS 3 1 1 1 5 1 13.96cr
WIPRO 1 1 2 3 1 4cr
Oil and Gas
IOC 2 1 1 2 6 27.52cr
ONGC 5 2 1 1 9 96cr
FMCG
GODR 70cr (every
EJ 1 5 1 3 9 1 year)
DABU
R 2 1 2 1 6 N.A
Automobiles
10cr (every
BAJAJ 2 1 1 2 6 year)
HERO
HONDA 3 1 3 2 9 N.A
Real Estate
DLF 4 1 5 N.A

Table 4.1

47
Tata Group

Tata Group investment on CSR in 2006-07 was estimated to be Rs. 420 crore, spread across
education, health, environment, rural development, sports, arts and employee relations. Tata
Group contributes to environmental initiatives by the direct involvement of Tata companies
to preserve the environment and formation of Tata Trusts, which support non-governmental
organizations.
Community initiatives include formation of:
• educational institutions
• s ports facilities
• art and culture centers

Tata’s other initiatives encompass setting up of rural development societies and

organizations like Rallilove ACTS and Voltas for Women. It has created towns and cities
around industrial facilities for employee benefits. Tata group’s work has been lauded over
the years and has received numerous awards including the ‘Award for Corporate Social
Responsibility in Public Health – 2007 by USIBC’, ‘Golden Peacock Global Award for
Corporate Social Responsibility (Asia) – 2007’, ‘Civil Society Award2006 by
UNAIDS.’ The Tata Council for Community Initiatives in collaboration with the United
Nations Development Program, created the Tata Index for Sustainable Human
Development aimed at directing, measuring and enhancing the community work that group
enterprises undertake. It is a set of guidelines for Tata companies looking to fulfill their
social responsibilities.

Airtel – With primary CSR focus on education and environment, Bharti Airtel has
committed Rs 200 crore to support CSR initiatives over the 2006-08 period. Bharti Airtel
founded the Bharti Foundation to provide facilities like computer education, library, mid-
day meals etc. to help underprivileged children. Airtel launched the CII-Bharti Woman
Exemplar Award in 2005 to promote women’s empowerment at the grassroots. The
company has won several awards including India’s Most Customer Responsive Telecom
Company Award and the Golden Peacock Award for Corporate Social Responsibility.

48
Bharat Sanchar Nigam Limited – BSNL focuses its CSR activities primarily in the field
of employee’s welfare activities, assistance during natural calamities and offering rural
broadband plans. BSNL implements welfare programs and awards such as Bharat Sanchar
Sarathy and Sanchar Seva Padak. It also offers its employees corporate group Life
Insurance Policy. BSNL, with government support, plans to provide broadband to all gram
panchayats, secondary and higher secondary schools and public health care centers by the
end of 2007. BSNL is the only service provider offering rural telephony as part of its social
responsibility. It received the ‘Golden Peacock National Award 2005’ for its contribution
to the field of CSR, in connecting India’s remote areas and adhering to best labor practices.
The company has an ISO 9000 certified Telecom Training Institute.

Bajaj – Bajaj’s CSR policy focuses on women empowerment, income generation, health
programs, agricultural extension, animal husbandry, watershed development, drinking
water schemes, sanitation and education. The company set up the Jankidevi Bajaj Gram
Vikas Sanstha (JBGVS) to provide employment opportunities at grass-root level, Samaj
Seva Kendra to undertake social activities in the semi-urban areas and Kamalnayan Bajaj
Hospital in Aurangabad. Bajaj was awarded the Meritorious Performance in Industrial
Safety Award, consequently for three years (1998-2001) by the National Safety
Council. The Environmental management system at Bajaj Auto’s Aurangabad plant, was
awarded ISO 14001 certification in 1997.

Hero Honda – Hero Honda’s CSR focus is in the fields of education, rural healthcare,
vocational training, adult literacy and social support to girls of backward classes. Hero
Honda has set up an Integrated Rural Development Centre on the outskirts of Delhi. The
company’s other initiatives include construction of educational institutes, rural hospitals,
sports complex and vocational training centres. In 2006, Hero Honda was ranked No. 1
in the automobile industry by TNS Corporate Social Responsibility Award.

49
Godrej – Godrej’s major CSR initiatives include education, environment and health
donations and it spends more than Rs 70 crore annually. It has set up establishments like
Godrej Technical Institute at Bordi, Pirojsha Godrej Research Laboratory, and the Centre
for Excellence at Pirojshanagar under its education initiatives. The Soonabai Pirojsha
Godrej Foundation has been maintaining the western bank of the Thane Creek, the single
largest mangrove belt in Mumbai. Godrej supports the Foundation for Medical Research,
Mumbai for the cure of leprosy and funds the NAZ foundation which works for HIV.
Jamshed Godrej, Chairman and MD, Godrej and Boyce Manufacturing Company Limited
look after all the CSR. The Awareness program for Godrej and Boyce, Vikroli, Mumbai
was given the ISO 14001 certification.

Dabur – Dabur’s CSR policy is focused on healthcare, education, skill development and
income generation training, empowerment and environment issues. Dabur established the
Sustainable Development Society (SUNDESH), a voluntary organization, integrating
various aspects such as health, literacy, employment, and empowerment. Dabur was
among the ‘Top 10 Great Places to Work’ in 2004.

Indian Oil Corporation – Most of the Indian Oil Corporation’s CSR initiatives focus on
provision of drinking water and sanitation, health and family welfare, education, and
empowerment of women and other marginalized groups in rural and backward areas. It has
set up the Indian Oil Foundation to preserve and promote national heritage. It is working
with the Bill and Melinda Gates Foundation to spread awareness about HIV/AIDS. Indian
Oil’s Mathura Refinery won the 2006 National Energy Conservation Award. In
February 2007, the Forum of Women in Public Sector (WIPS) conferred the Best
Enterprise Award on Indian Oil for the Corporation’s pioneering efforts towards
Women development and related issues.

Oil and Natural Gas Corporation Limited – ONGC promotes education, healthcare and
entrepreneurship in the community and supports water management and disaster relief in
the country. From 2003, ONGC decided to allocate 0.75% of its net profits towards Social

50
and Economic Development programs. Under its project PURA, it undertakes initiatives for
system for management of schools, healthcare units, vocational training centers and
regional industrial units.
An Institute of Petroleum Safety, Health and Environment management (IPSHEM) was set
up in 1989.
ONGC was awarded the Golden Jubilee Award for Corporate Social Responsibility in
emerging Economies in 2006.

DLF – DLF’s CSR policy focuses on welfare of masses. The company organized fire
safety drill and women self defense programs for welfare of the masses. The company
along with DLF City residents, Gurgaon, organized an exhibition to create awareness
among the residents and highlight various measures that need to be undertaken to ensure
utmost safety.

HUL – HUL CSR initiatives primarily encompass areas like health and hygiene, education,
women empowerment, rehabilitation of special or underprivileged children, care for the
destitute, HIV-positive, and rural development. The company’s donations include Rs 80
million for tsunami-hit areas in 2005 and Rs 10 million for Mumbai flood relief in 2005.
HUL launched project Shakti in 2001 to encourage rural entrepreneurship and set up ‘i-
shakti’ kiosks to provide information and services to meet rural needs. Other initiatives
include inception of rural education programs, education centers for the handicapped,
health and hygiene programs in villages and women empowerment programs.
Approximately 9% of the company’s resources for community involvement come in the
form of employee time. HUL has won awards including Bombay Chamber of
Commerce and Industry Civic Award for Community Development 2005, Exemplary
Safety Performance from National Safety Council and the Government of Tamil Nadu
for Tatapuram and am Tindiindivanam factories in 2005 and 2003 TERI-CSR Special
Award for initiatives in sustainable development.

51
ITC – ITC is involved in CSR initiatives like environmental performance, primary
education, agriculture, women empowerment. But the group’s focus is on rural
development initiatives which include echaupal – aiming to provide agriculture-related
information through IT, wasteland management and livestock development. ITC provides
infrastructure facilities to select government schools under its “Project Classmate”. Its
environment initiatives focus on renewable energy, watershed project and energy
conservation. The company has received several awards such as the Golden Peacock
Award for ‘Corporate Social Responsibility (Asia)’ in 2007, award for ‘CSR in
Emerging Economies 2005’, and the inaugural ‘World Business Award’, instituted by
the UNDP.

Wipro – Wipro’s CSR focus is on education and it invested Rs. 3 crore on education
programs in 2002. Wipro’s initiative- ‘Applying thought in schools’ is aimed at wholesome
development of school children. ‘Wipro Cares’ is another endeavor aimed to rehabilitate
calamity-affected people and provide education to underprivileged children. Wipro’s
Chairman Azim Premji has launched his own Foundation – Azim Premji Foundation – with
a focus on universalization of education. In 2003, Wiprom received a certificate of honor
from the Business World FICCI-SEDF Corporate Social Responsibility Award for its
contributions in the field of CSR.

Infosys – The key areas of Infosys Foundation’s CSR drive are healthcare, social
rehabilitation and rural upliftment; learning and education; art and culture. Other initiatives
include construction of orphanages, vocational training centers for women, libraries for
rural schools and donation of aid equipment to the physically challenged. Infosys also has
programs for paper/water conservation and waste management. Infosys was declared the
‘Best Company to Work for In India 2005’.

52
4.9.1 Reason for choosing Tata as benchmark

Tata Group

The Tata group is known for aggressively pursuing several CSR initiatives in India. It has
adopted social responsibility as one of its integral values and has made concerted efforts to
link it with its overall strategy for achieving business excellence. The group has always laid
great importance on
CSR and is evident from its mission as stated by JRD Tata, “No success or achievement in
material terms is worthwhile unless it serves the needs or interests of the country and its
people.”
The group’s strong resolve regarding CSR shows as some of its companies such as Tata
Steel, do not buy from or sell to companies that do not measure up to its social
responsibility standards.

Institutionalizing the Concept

The Tata group has integrated its CSR initiatives through its trusts and group companies.
To institutionalize the concept, it has drawn up the CSR charter that has been inserted into
the group’s ‘Code of Conduct.’ All the group companies are signatories to this code under
which they have to actively assist in improving the quality of life in the communities in
which they operate.
Since inception, the Tata group has placed equal importance on maximizing financial
returns as on fulfilling its social and environmental responsibilities-Triple Bottom Line
(TBL). After decades of corporate philanthropy, the efforts of the group in recent years
have been directed towards synchronization of the TBL.
Through this, the group has aimed at harmonizing environmental factors by reducing the
negative impact of its commercial activities and initiating drives, which encourage
environment-friendly practices. In order to build social capital in the community, the group
has encouraged its employees to share their skills with others and work with community-
based organizations.

53
Setting Benchmark

The group has been actively involved in facilitating the development of this concept in
India by setting standards and benchmarks. The group companies have shown the way by
establishing a Tata Council for Community Initiatives to provide benchmarks for the
enterprises of the group, which help to quantify their efforts.

Financial Outlay

The group has played an active role in nation building and socio-economic development
since the early 1900s. A survey conducted by the website www.indianngos.com revealed
that Tatas spent Rs. 1.5 billion on community development and social services during the
fiscal 2001-02 – the highest by any corporate house in India. Despite adverse economic
conditions e.g. in the late 1990s, the financial commitment of the group towards social
activities kept on increasing, from Rs 670 million in 1997-98 to Rs 1.36 billion in 1999-
2000.

Recognition

The dedicated CSR efforts by various Tata group companies have been globally
recognized. The different group companies have received several awards for their
fulfillment of social responsibility. The Tata Group case study shows how it is integrating
CSR with its business processes in the organization’s journey towards business excellence,
translated into vision into action.

54
4.10 OBSERVATIONS

4.10.1 SUMMARY OF STUDENTS QUESTIONAIRE RESULTS

Question 1: What are the parameters on which you would

choose a company for employment ?

Company's Location and benefits

they provide

Company's products or services

Company's support of the

Parameter of choosing company

community and environment

Company's values

Image of company (Brand name in

the market )

Job Description

Learning and Development

opportunities

Profitability

Salary

0 20 40 60 80
Number of responses

Figure 4.2

55
Question 2: How would you define CSR?

Key themes emergin

Improve company’s i
Make shareholders ha
Score political points
Payback to society
Demonstrating conce
Not causing harm soc
Welfare of the comm
Being sensitive to the
Playing its part in soc
Improve the condition
Question 3: What do you think are the benefits (Tangible/
All round economic d
intangible) of practicing CSR ?
Moral responsibility
Ensuring sustainabili
Social responsibility
Aiming to become a world player Silver lining for comp
society
Corporate reputation Helping the less fortu
Enhance their goodw
Responsibility to stak
Doing good! Mutual relationship –
Parameter for judging
Improved financial performance Helps increase aware
Employee facilities a
Increased ability to attract and retain Improving education
Benefits of doings CSR

employees Using influence and r

programmes for
Increased sales and customer social and environme
loyalty Gain feel good factor
Take into considerati
Increasing accountability
Not profit making – ‘
capable, well-off
Management of risk section of society
Beyond legal obligati
Well-measured appro
Reduced operating costs
Instilling motivation
Doing good, and aim
Reduced regulatory oversight Table
4.2
Satisfying growing investor
pressure

Satisfying Stake holders

056 20 40 60 80
Number of Responses
57
 Figure 4.3

Question 4: Do you think in the Indian context

CSR is a part of basic business framew ork of
the com panies ?

No answ er/
not sure
3%
Yes
29%

No
68%

Figure 4.4

58
COMMENTS: (content analysis)
YES – HOW?
Number of
Comments
Mentions
Customer retention 1
Increasing profits 1
Enhancing performance 1
Rural development 1
Don’t know 1

NO – WHY?
Number of
Comments
Mentions
Companies only look at profits 10
Fad to attract foreign Investment 1
Not many companies involved yet 11
Doesn’t include all aspects of CSR 1
Not legally binding 1
Lack of CSR knowledge 1
Not seen as important 3
Size/type of companies in India 2
For show – cosmetic only 1
Early stages of development 2
Don’t know 2

Table 4.3
Question 5: Would a high CSRinvolvment of a
companyinfluence your decision to join the
company?

Not
applicable/ no
answer
5%

NO
Yes
40%
55%

59
 Figure 4.5
COMMENTS: (content analysis)
YES – HOW?
Number of
Comments
Mentions
Respect, brand value, Satisfaction 2
Stronghold/future 2
Catch attention 1
Beneficial to society 1
Essential 1
NO – WHY?
Number of
Comments
Mentions
Money matters 1
Not inculcated in CSR way 1
Too selfish 1
CSR is cosmetic/for profits 3
Decision depends on parameters in Q1 1
Table 4.4

60
 Question 6: Would you prefer to join a high
ranked CSR involved Company ?
Not
Applicable
6%
No
27%
67%
Yes

Figure 4.6
COMMENTS: (content analysis)
YES – HOW?
Number
Comments of
Mentions
Good reputation = good profits 2
Better satisfaction 4
Preference 2
Perception that good to society means good to
employees/salaries 3
Learn integration of corporate work with social
responsibility 1
Reflects on company values/culture 3
Duty to help in holistic development of the economy 1
Brings public support 1
Accountable to social good of society (more than profits) 3
NO – WHY?
Number
Comments of
Mentions
Not priority for me 1
Profile of work (job description and salary)more important 2
Doesn’t make a good company/ no difference 2
Table 4.5

61
 Question 7: In your view which is the most "responsible"
company/companies in India? (Figures based on numbers
of mentions rather than ranking figures)

50
Number of Mentions

40
30
20
10
0

C
da
j
LF
L

ch

ro
j

ch
ur
el

re
ls

ja

s
U
N

IT
sy

ip
ab
rt

sa

te
Ba

on

ut
od
D

H
BS
Ai

W
fo
H

ni
D
An

H
G

In

U
o
er
H

Company

Figure 4.7

OTHER COMPANIES MENTIONED

Number of
Company Name
Mentions
Tata 14
Proctor and Gamble 1
Reliance 1
Birlas 1

Table 4.6

62
 Question8: Whatarethetopofmindissues thatcorporateIndianeeds to
takecareof?

Education
Number of Responses

Environm ent

Health Related ( canc er, HIV)

Chi ldren and Woman Health a nd Education

Human Rights

Community Upliftment

0 10 20 30 40 50 60 70

Top of Mind Issues

Figure 4.8

63
Question 9: What are the top of mind CSR Programmes that you can recall?

Number
Company / Programme of
Mention
Aashirwaad atta – water 1
Birlas – educational institutions 1
GE 1
HUL Shakti – primary education to rural kids under rural
development 12
Infosys – for education 2
ITC e-choupal 38
Lifebuoy Swasthya Chetna 2
Lupin – in Rajasthan 1
Microsoft anti-AIDS Programme 1
Navneel – good to society by saving paper 1
None – no examples given/Don’t know 46
Pepsi’s water harvesting activity 1
Project Shailesh 1
SI electronics – taking up are around the company for
maintenance 1
Standard Chartered AIDS Awareness Programme 2
TATA projects 4
TERI 1
TISS 1
WIPRO 1

Table 4.7

64
 CHAPTER 5

RECOMMENDATIONS AND LIMITATIONS

5.1 RECOMMENDATIONS

• CSR is a combined concept which covers social, ecological and economic issues.

• Profit earning should not be the core purpose of businesses; instead businesses must
render services to the society.

• The traditional expectations are being replaced by new ones and companies are
expected to act responsibly, be accountable and beneficial to the society.

• Practicing CSR is not wastage of money and resources but it adds to the goodwill,
prestige and credibility of a company.

• Potential employees of a country are not only influenced by the salary but are also

influenced by the CSR policies followed by a company.

5.2 LIMITATIONS

Although the study and the subsequent statistical analysis were done with careful proofing,
yet there are always some limitations to any research work done, and this one is no
exception. Some of the limitations of this work are as follows:

• The sample collected for primary research was a random one which may include
some non serious respondents ultimately decreasing the true essence of the research.

• The sample size was limited to 80 people out of which 9 respondents declined to fill
the questionnaire. A sample of over 100 would have given better and more
dependable results.

65
• The questions included in the questionnaire were limited to cover all the issues
related to CSR. More questions would have made the questionnaire boring and time
consuming for the respondents.

• Time constraint was a barrier in getting the most genuine responses from the
respondents.

66
 APPENDIX 1
QUESTIONAIRE

Question 1: What are the parameters on which you would choose a company for
employment?

Salary

Profitability

Learning and Development opportunities

Job Descript ion

Image of company (Brand name in the market)

Company’s values

Company’s support of the community and environment

Company’s product s or services

Company location and benefits they provide

Question 2: How would you define CSR?

Question 3: What do you think are the benefits (tangible and intangible) of doing CSR?

Satisfying stakeholders

Satisfying growing investor pressure

Reduced regulatory oversight

Reduced operating costs

Management of risk

Increasing accountability

Increased sales and customer loyalty

Increased ability to attract and retain employees

Improved financial performance

Doing good!

Corporate reputation

Aiming to become a world player

Question 4: Do you think that in the Indian context CSR is a part of the basic business
framework of companies?
Yes
No
No Answer/ Not Sure
Question 5: Would a high CSR involvement of the company influence your decision to join
the company?
Yes
No
No Answer/ Not Applicable

Question 6: Would you prefer to join a high ranked CSR involved company?
Yes
No
No Answer/ Not Applicable

68
Question 7: In your view which is the most “responsible” company/companies in India?
(Figures based on numbers of mentions rather than ranking figures.)

Airtel
Ansals
Bajaj
BSNL
Dabur
DLF
Godrej
Hero Honda
HUL
Hutch
Infosys
ITC
Unitech
Wipro

69
Question 8: What are the top of mind issues that corporate India needs to take care of?

Environment
Health Related (cancer, HIV)
Children/Women Health and Education
Human Rights
Community Upliftment
Education

Question 9: What are the top of mind CSR programmes that you can recall?

Name :

Age : Years.

Name of College :

Course :

Signature :

70
 BIBLIOGRAPHY

1 Dinkar Pagare, “Business Management”

2 C.B.Gupta, “Business Studies”
3 Sanjay Kumar Panda, “Corporate Social Responsibility in India : Past, Present And
Future”
4 Andrew Kakabadse, Nada Kakabadse. “CSR in Practice: Delving Deep”

71