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ISSN: 0973-9165APRIL 2014 - SEPTEMBER 2014 Vol: 10. No: 1
www.ifimbschool.com
Soumendra K. Dash, Ph.D, African Development Bank, HQs, Tunisia
Dhekra Azouzi, Tunis El Manar University, Tunisia
AN EMPIRICAL
ANALYSIS TO ASSESS
INTANGIBLE ASSETS
IN TUNISIA AND
ITS RELEVANCE
IN THE KNOWLEDGE
-BASED ECONOMY
-
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2
Contact Address:
The Editor, FOCUS:
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IFIM International Journal of Management FOCUS April 2014 - September 2014|
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Editorial Board:
1. Mr. Sanjay Padode, Secretary, Centre for Developmental Education, Bangalore
2. Dr. Madhumita Chatterji, Director, IFIM Bangalore
3. Dr. R. Satish Kumar, Professor, Marketing and Dean (Research & International
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Business Administration, Northeastern University, Boston, USA
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Hall, College of Business, Tennessee Technological University, Cookeville, TN 38505, USA, is
our representative for outside India
Editorial Committee (Operations):
1. Chief Editor,
2.
3. Dr. Sridevi, Associate Professor, Finance, IFIM Bangalore
4. Prof. M H Sharieff, Associate Professor, IB & Strategy area, IFIM Bangalore
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Enterprencship and Mannagement IFIM, Bangalore
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Ghaziabad
Chief Editor,
Dr. R. Satish Kumar, Professor - Marketing and Dean (Research & International
Relations), IFIM Bangalore
Dr. M. R. Gopalan
3
Published by Dr. R. Satish Kumar
on behalf of Institute of
Finance and International
Management, No-8 (P) & 9 (P),
KIADB Industrial Area,
Ist Phase, Electronics City,
Bangalore - 560100.
Email:
satish.kumar@ifimbschool.com
IFIM International Journal of Management FOCUS April 2014 - September 2014|
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IFIM Business School situated in IT hub of India Electronics City, Bangalore. It was
established in the year 1995 by CDE Society and is going to complete 20 years in the year
2015. The Focus was launched in the year 2005 and is going to complete ten years in the
year 2015. In the past 19 years IFIM strived hard to meet upto the expectations of
students, parents and recruiters. To meet the expectation of our stakeholders, we at IFIM
B-School have come out with a few innovative measures. This also helped our Business
School in getting ISO 9001 Certification, and prestigious SAQS Accreditation. We have
set up state of- the art Business Analytics Lab in association with IBM and Finance Lab
in association with Prabhudas Lilladher. Recently we have initiated setting up of
Innovation Lab and applied for AACSB Accreditation.
There are over 4000+ AICTE recognised B-Schools in India. There are innumerable
challenges ahead of B-Schools in attracting quality students, faculty members and in the
process transforming our students into professional managers of tomorrow.
The big concern for B-Schools is of imparting Quality education through continuous
improvement in management curriculum, adopting innovative pedagogy and teaching
tools such as Innovation Labs, Simulation and Management Games. Few challenges
before B-Schools in India are as follows:
1. Upgrading the Infrastructure: To ensure quality Management Education, B-Schools
have to upgrade their Infrastructure such as Classrooms, Computer labs and libraries.
Libraries should possess required quantity and quality of books with the Electronic
databases
2. Updating the Curriculum: MBA curriculum needs to be updated every two years to
ensure the quality management education and in turn make our students employable.
3. Attracting and retaining experienced Faculty: To attract and retain experienced
faculty members, the B-Schools need to offer salaries and other benefits on par with the
reputed B-Schools. It is imperative for the B-Schools to provide, MDP and Consulting
opportunities to motivate the faculty members and keep them abreast of current Industry
trends and practices.
From the Editor's Desk
4
Imparting Quality Management Education:
A Major Challenge for Indian B-Schools
IFIM International Journal of Management FOCUS April 2014 - September 2014|
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Chief Editor - FOCUS
Dr. R. Satish Kumar
4. Ranking of B-Schools: Ranking of B-Schools by various magazines and agencies have
become increasingly popular among the stakeholders and hence B-Schools have to
upgrade their capacities and enhance their performance to get competitive ranking.
5. Employability of MBA graduates: As per the recent studies, the employability level of
our MBA graduates is very low posing major challenges to the B-Schools in imparting
best of the knowledge, skills, attitude, and soft skills to students and make them job ready.
6. Academia-Industry Collaboration: It is high time for the B-Schools to collaborate
with Industry and involve Industry practitioners in Admission, Curriculum
Development, Teaching, obtaining Projects, Summer Placement and Final placement for
the students.
7. Research & Publications: In addition to all the above, in order to be contemporary,
B-schools have to engage in business research, training and consulting activities on an
ongoing basis to deliver their best to academia and industry.
The above initiatives will definitely help B-Schools in enhancing the quality of
Management Education and make our MBA graduates job ready.
IFIM International Journal of Management FOCUS April 2014 - September 2014| 5
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AN EMPIRICAL ANALYSIS TO ASSESS INTANGIBLE
ASSETS IN TUNISIAAND ITS RELEVANCE IN THE
KNOWLEDGE
-Soumendra K. Dash & Dhekra Azouzi
IS LEADERSHIP WITH RESPECT TO INDIAN CSR
STILL IN A CONFUSED STATE ?
-Prof. Sumona Ghosh
ATTITUDE OF EMPLOYEES TOWARDS
ETHICAL LEADERSHIP
-Dr. Radha. R
ETHICAL HUMAN RESOURCE PRACTICES
-Prof. Shampa Chakraberty
DO GRADE ASSIGNED TO COMPANIES AFFECT
UNDER PRICING?-A STOCHASTIC ANALYSIS
FROM THE INDIAN EQUITY MARKET
-Souvik Banerjee
THE PRICING PERFORMANCE PUZZLE OF INITIAL
PUBLIC OFFERINGS (IPOS)-EVIDENCE FROM
INDIAN IPO MARKET
-Dr.A.Satya Nandini & Leena Guruprasad
RUPEE VOLATILITY AND STOCK PERFORMANCE
-Dr. A. Satya Nandini & Mr. Ganesh Kumar.R
SUSTAINABILITY AND LONG TERM GROWTH
IN THE FINANCIAL MARKET SYSTEM
Dr. Aloy Soppe
THE IMPACT OF SPIRITUALITY ON INDIVIDUAL
ENTREPRENEURIAL ORIENTATION
-AN EMPIRICAL STUDY
-Dr. Muhammad Shahid Qureshi, Dr. Muhammad Mubashir
Mukhtar & Mr. Adnan Hussaion
INTERVIEW WITH AJAI CHOWDHRY
CAPITAL IN THE 21st CENTUARY (BOOK REVIEW)
-Abhishek Narasimha
Index
07-12
S.No. Title and Name of the Author Page No.
IFIM International Journal of Management FOCUS April 2014 - September 2014|
1
2
3
4
5
6
7
8
9
10
11
13-44
45-49
50-59
60-65
66-75
76-84
85-94
95-103
104-109
110-113
6
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Cover Story
AN EMPIRICAL ANALYSIS
TO ASSESS INTANGIBLE
ASSETS IN TUNISIA
AND ITS RELEVANCE
IN THE KNOWLEDGE
-BASED ECONOMY
Abstract
It is the first work to measure intangible investment
in Tunisia based upon the CHS methodology and different
databases and statistics. Expenditures on intangibles in
Tunisia amounted to around 11 billion US dollar,
accounting for around 25% of GDP in 2008. This paper
attempts to find out how important intangible assets are in
the present knowledge based economy like Tunisia.
Intangible assets are country's weightless wealth which helps
to obtain real growth and real profit for a company. Every
country should understand that paying needed attention to
knowledge management in general and to intangible assets
especially may help to understand and nurture its core
strength and competencies. This is how each developing and
underdeveloped countries can create their own competitive
advantage in the world market. More precisely, the country's
intangible assets should be priced at fair market value. The
strategic relevance of intangible assets management for a
country's competitiveness, understanding the way these
assets are converted into value is of paramount importance.
It is very vital for the country to harness the value from its
intangible assets. The further research in this field will
develop not only the direction of testing researched models
but also the direction of developing and testing other models
of intangible assets valuation, management and optimal
allocation of intangible assets in various countries.
1. Introduction
In today's economy, the intangible assets play a key
role and have become very important in achieving
sustainable development. The developed economies are
becoming knowledge based economy. These intangible
assets are generally obtained from traditional factors like
labour, land and capital. However, the differentiating factors
among the developing and developed countries have been
the quality of knowledge management and innovation
management. The main characteristics of innovation based
economies are: knowledge replaces traditional factors of
production land and labour as the fundamental factors of
production. Intangible assets create a significant part of the
value differentiator between countries. Intangible assets are
non-physical sources of value generated by discovery, unique
organisation designs, or rare human resource practices.
These are non-material sources or creating country's value
based on the cities capabilities, organisations' capabilities.
They are non-physical in nature, they are capable of
producing future economic benefits, and they are protected
legally through intellectual property rights. The country like
Tunisia has been able to harness economic benefits
significantly in the past but the momentum has been lost due
to changing socio-economic and political priorities.
^African Development Bank, HQs, Tunisia s.dash@afdb.org | ^^Tunis El Manar University, Tunisia , adhekra@yahoo.fr
Soumendra K. Dash, Ph.D ^ | Dhekra Azouzi ^^
IFIM International Journal of Management FOCUS April 2014 - September 2014| 7
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2. Measurement of investment in
intangibles
2.1. Computerized Information
Various definitions of intangible capital are associated
to various approaches to measuring intangibles: on the one
hand, definitions of intangibles are mostly due to
Schumpeter's classification based on product and process
development, organizational change, management,
marketing and finance (Schumpeter 1934). However, despite
this great variety in defining intangibles, the common and
durable problem is the 'invisibility' of many of these
intangible assets which makes their measurement difficult.
On the other hand, According to Sichel (2008), there are
three recent approaches that can be used to measure
intangibles; these approaches are the financial market
valuation (Hulten et al., 2008), the alternative performance
measures (Cummins, 2005) and the direct expenditure
approach (Nakamura, 1999 and 2001). The latter approach
was adopted by Corrado, Hulten and Sichel (CHS 2005;
2009) who developed a wide array of expenditure based
measures for many intangibles employed by American firms
and distinguished between three categories of intangible
assets: computerized information, innovative property, and
economic competencies.
Originally, the CHS method was applied to American data
and it has now been the corner stone of many studies focused
on different countries.
We use the same methodology as CHS (2005; 2009) for
Tunisia for the purpose of creating a set of estimates for
intangibles in Tunisia. It is worth to note that for some
intangibles, it has been very difficult to construct reliable
measures over time and it has been compulsory to make a
number of assumptions to cope with the limited available
information. Our estimates are a starting point in this area of
study as it is the first attempt to apply the CHS methodology
to measure intangibles in Tunisia.
According to Corrado et al. (2005), computerised
information consists of two elements: software and
computerized database. In other terms and according to
Miyagawa &Hisa (2013), 'Computerized information
consists of custom and packaged software, and own account
software'. For the custom and packaged software, we have no
indication about how to calculate their value. That's why; we
assume that this expenditure is about 35% of the total
Information and communication technology (ICT)
expenditure. These data is obtained from World Bank.
However, we have total Information and communication
technology expenditure per capita; to obtain the total of
these expenditures for the whole population, we multiply the
ICT expenditure by the population.
Since spending on software is not capitalized in the Tunisian
System of National Accounts, we use the Miyagawa & Hisa's
(2013) estimation method inspired from the JIP database.
Hence, we begin by estimating the number of workers who
are involved in the development of software for their own
firms and their salaries to be able to assess the value of own
account software. These data are obtained from the World
Bank and the National Institute of Statistics (INS); the
number of these workers is available for a period of four years
spanning from 2005 to 2008, but we have the wage data only
for 2007, this salary is in Tunisian dinars and we have to
convert it in US dollars. In these conditions, we have
assumed that the average monthly salary of each worker does
not fluctuate from 2005 to 2008. The next step is to multiply
the number of workers by the annual salary to obtain an
estimation of the own account software investment.
Two categories of innovative property: research &
development and oil & gas & mineral exploration. These
data are available from the World Bank and the National
Institute of Statistics (INS). However, data extracted from
INS are in Tunisian dinars and should be converted in US
dollars. It is worth to mention that the second category is the
sum of three groups as they are mentioned in the INS: oil and
natural gas extraction, mines and petroleum refining.
2.2. Innovative Property
IFIM International Journal of Management FOCUS April 2014 - September 2014|8
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As in Corrado et al. (2009) and Barnes & McClure (2009),
we find other categories of innovative property:
copyright and licence costs
development costs in nancial industry;
new architecture and engineering design;
and other science and engineering services
(purchased and own-account).
Copyright and licence costs are obtained from the World
Bank as charges paid for the use of intellectual property.
The nancial services industry consists in research and
development of new processes and products. Since it is not
explicitly observed, development costs in the nancial
industry are approximated by only 20% of the total of
financial services according to Corrado et al. (2005).
These data are obtained from the INS and are in Tunisian
dinars.
For new architecture and engineering design, Corrado et
al. (2005) estimated their value as 50% of total
expenditure on architectural and engineering. For our
work, these data are obtained from the INS and are in
Tunisian dinars.
Own-account other science and engineering investment is
given by 'internal expenditure in research & development'
calculated by the National Observatory of Science and
Technology. However, purchased other science and
engineering investment were taken into account in other
parts of expenditures as it is mentioned by Baldwin et al.
(2009).
The third category of intangible assets is economic
competencies. It consists of the brand equity, the rm
specic human capital and the organizational capital.
Inspired by anterior studies focused on intangible assets,
this study includes advertising expenditure as brand
equity, direct and indirect rm expenses on training as
rm-specic human capital and purchased and own-
account organizational capital in the economic
competencies category.
Advertising expenditures are estimated as 60% of total
expenditures on advertising services and products. These
2.3. Economic Competencies
data are due to Media Scan agency and Sigma Group.
Direct rm expenses are the costs of developing
workforce skills such as training and indirect expenses
consist of the opportunity cost of employee time spent
on formal and informal training. Only direct expenses
are available in the National accounts of Tunisia.
Hence, we consider that investment on rm-specic
human capital is given by the data on direct firm
expenses.
Investment in organizational capital is composed of
purchased investment in organizational structure and
own-account investment in organizational structure.
According to Corrado et al. (2005), purchased
investment in organizational structure is approximated
by the total revenue of the management consulting
services industry which is between 10 and 20 TND
million (UTICA Survey, 2011). To cope with this lack
of data, we consider that this expenditure is of 15 TND
million for the period of study. For the own-account
investment in organizational structure, it is estimated
as 20% of labour compensation of total management
IFIM International Journal of Management FOCUS April 2014 - September 2014| 9
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3. Results
In this part, we measure intangible assets in Tunisia in nominal terms for the period spanning from 2005 to 2008.
As it is shown in Table 1 and figure 1 and referring to Barnes and McClure's (2009) work, we can see a clear similarity between
Tunisia, Japan and Germany in the composition of intangible investment (in terms of the main categories) with an important
weight for the innovative property (Table 1). The share of the innovative property in the total amount of nominal investment in
intangibles was more than 60%. Scientific research & development is the most important component of the innovative
property. This result is, however, in contradiction with Muntean's (2013) findings mentioning that the economic competencies
are the dominant category in intangible assets. Computerised information and economic competencies have approximately
the same proportion in the composition of intangible assets in Tunisia.
IFIM International Journal of Management FOCUS April 2014 - September 2014|10
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Figure 1 gives us an idea about the evolution of the intangible assets, three categories between 2005 and 2008; it seems clearly
that only the innovation property has been growing during this period while computerised information and economic
competencies have known a steady stagnation. This can be explained by the government's efforts to encourage innovation.
To build just a small idea about the contribution of intangible investment to economic growth, we have calculated, in the last
row of table 1, the percentage of these assets in the GDP.
The corresponding percentages are so high and exceed the rates mentioned in anterior studies. In fact, intangible assets
account for 9% of GDP in Japan (Miyagawa and Hisa, 2013), 11% for United Kingdom in 2004 (Marrano and Haskel, 2006),
9.1% for Finland in 2005 (Jalavaand Alenen, 2007), 5.2% in Italy and Spain, 7.1% in Germany and 8.8% in France (Hao,
Manole and van Ark, 2008), 10% for the Netherlands over 2001-2004 (Van Rooijen et al., 2008), 13.2% for Canadain 2008
(Baldwin et al., 2011).
FIGURE 1. COMPOSITION OF THE TOTAL INTANGIBLE INVESTMENT IN TUNISIA
IFIM International Journal of Management FOCUS April 2014 - September 2014| 11
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occupations (Corrado et al., 2005). For this reason, we multiply the number of managers by their average salary. These data
are obtained from the INS. However, it is important to mention that we have only the average salary for 2007. That's why we
assume that this salary does not fluctuate for the period of study.
In Tunisia, it is found that innovation is playing a dominant role in intangible assets where are economic competencies and
computerized information do have very small contribution to the overall economic growth and both of them have very small
contribution. Intangible assets like Economic efficiencies and computerization, information & technology are not growing
over the years in Tunisia. However, it seems that the government does encourage the growth of one type of intangible assets to
improve i.e. innovation. The aggregate impact of intangible assets could be much more widely felt in the growth of Tunisian
economy if the government could understand and encourage the simultaneous growth of all the intangible assets in the
country. The knowledge, innovation are the intangible assets which have become a locomotive that defines the contemporary
development of all the countries in the modern knowledge based world.
Baldwin, J.R., W. Gu and R. Macdonald (2011), Intangible Capital and Productivity Growth in Canada, Statistics Canada, mimeo.
Barnes, P. & McClure, A. (2009), Investments in Intangible Assets and Australia's Productivity Growth, Productivity Commission Staff
Working Paper.
Corrado,C.,Hulten, C., &Sichel, D. MeasuringCapitalandTechnology:AnExpanded Framework, in C. Corrado, J. Haltiwanger, and D.
Sichel (eds), Measuring Capital in the New Economy, Studies in Income and Wealth, Vol. 65, University of Chicago Press, Chicago, 2005.
Corrado, C., Hulten, C., &Sichel, D. (2009).Intangible capital and U.S. economic growth, Review of Income and Wealth, International
Association for Research in Income and Wealth, 55 (3), 661- 685, 09.
Cummins, J. (2005), A new approach to the valuation of intangible capital, in C. Corrado, J. Haltiwanger and D. Sichel (eds), Measuring
Capital in the New Economy, National Bureau of Economic Research, Studies in Income and Wealth, Vol. 65, Chicago: University
Chicago Press, pp. 47-72.
Hao, J., V. Manole and B. van Ark (2008), Intangible Capital and Growth An International Comparison, Economics Program Working
Paper Series, EPWP No. 08-14, Conference Board Inc., New York, December.
Hulten, C. R., J. Hao, K. Jaeger (2008), Intangible Capital and the Valuation of Companies: A Comparison of German and US
Corporations (Interim report), The Conference Board, New York.
Jalava, J., Aulin-Ahmavaara, P. &Alanen, A. (2007). Intangible capital in the Finnish business sector, 1975-2005, ETLA Discussion Papers
no. 1103.
Marrano, M. G., Haskel, J., & Wallis, G. (2009). What happened to the knowledge economy? ICT, intangible investment and Britain's
productivity record revisited, The Review of Income and Wealth , 55 (3), September, 686-716.
Miyagawa, T. and S. Hisa. (2013). Measurement of Intangible Investment by Industry and Economic Growth in Japan, Japan, Public
Policy Review, 9 (2), pp. 405-432.
Muntean, M. T. (2013). Intangible Assets and Their Contribution to Productivity Growth in Ontario, Ontario Ministry of Finance.
Nakamura, L. (1999), Intangibles: What put the New in the New Economy?, Federal Reserve Bank of Philadelphia Business Review,
July/August, pp. 3-16.
Nakamura, L. (2001), What is the US Gross Investment in Intangibles? (At Least) One Trillion Dollars A Year!, Working Paper 01-15,
Federal Reserve Bank of Philadelphia, Philadelphia.
Sichel, D. (2008), Intangible capital, in S.N. Durlauf and L.E. Blume (eds), The New Palgrave Dictionary of Economics, 2nd edition,
6. Conclusion
References:
IFIM International Journal of Management FOCUS April 2014 - September 2014|12
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Abstract
Purpose This paper aims to explore in to the aspect of
establishment of a pattern of participation of CSR activities
amongst private sector companies as reflected in the
respective company documents in the public domain, taking
absolute profit as the parameter. The paper also focuses on
the policy implications that follow from the present study.
Design/methodology/approach An empirical and
analytical study was undertaken whereby the corporate
official websites of the companies were analyzed for the time
period 2006-2007 to 2008-2009. Data was then generated
from such an analysis using Qualitative Document Analysis.
For this study we used number of sentences as the unit for
measurement of CSR participation. Data were entered into
SPSS to generate descriptive statistics; Pearson's Correlation,
Multiple Regression Analysis and Conjoint Analysis were
used to analyze the data. Average sentences (mean) spent on
the various fields of CSR activities were calculated. Co-
efficient of variance was also calculated to study the level of
consistency or dispersion. Pearson's Correlation Analysis
was conducted to establish a pattern across deciles with
respect to CSR activities, deciles being characterized on the
basis of absolute profit. A Multiple Regression Analysis was
conducted to identify those attributes in the form of CSR
activities that had a significant impact on the deciles.
Conjoint analysis was performed to:
To estimate the relative importance attached to the
significant CSR activities by the deciles, deciles characterized
on the basis of absolute profit.
To estimate the relative importance attached to
different levels of the CSR activities by the deciles, deciles
characterized on the basis of absolute profit.
IS LEADERSHIP
WITH RESPECT
TO INDIAN CSR
STILL IN A
CONFUSED STATE A STUDY OF THE PARTICIPATION OF THE PRIVATE SECTOR COMPANIES OF INDIA
IN CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES.
^Assistant professor, Department of Commerce and Business Administration, St. Xavier's College, Kolkata, INDIA
FOCUS Research Papers
^Prof. Sumona Ghosh
IFIM International Journal of Management FOCUS April 2014 - September 2014| 13
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Findings The study showed that the most preferred CSR
activities were education, health and environment. Drinking
water and sanitation and urban upliftment were the least
preferred activities. A high level of dispersion was observed
with respect to the least preferred activities and a low level of
dispersion was observed with the most preferred activities.
Significant correlation was observed with respect to various
CSR activities that the companies were responsive to. The
activities which had a significant impact on the companies
divided into deciles at different levels as per the multiple
regression analysis were: Education, health, environment,
employability, rural upliftment, others and empowerment.
Companies belonging to the manufacturing sector and the
diversified sector have shown the highest responsiveness
towards such activities. It was observed that the relative
importance attached to different CSR activities varied across
all decile groups for private sector companies. We also
observed that the relative importance attached to different
levels of CSR activities varied across all decile groups for
private sector companies.
Implications: -This paper would throw light on to the
aspect of establishment of a pattern of participation of CSR
activities amongst private sector companies in India as
reflected in the respective company documents in the public
domain, since very limited study has been made regarding
this issue. It will also inspire the leaders to think how and in
what new different ways organization must engage in
dialogue with stakeholders to address their needs and
achieve synergy between claims of multiple stakeholders
In the western frontier the idea that top managers or
executives are drivers for corporate social responsibility came
from the business sector itself. According to Frederick
(2006), one of the first such calls came in 1951 from Frank
Abrams (Abrams, 1951), chairman of the board of directors
of Standard Oil of Jersey about the duties executives have to
society. Later, in 1971, the Committee for Economic
Development (CED, 1971), composed mainly of top level
corporate executives, encouraged business to adopt a
humane view of its functions in society. The myth that
corporate social responsibility advocates and business
representatives are in opposing camps is not well founded
given that business practitioners helped shape ideas about
the social role of business. With respect to India, we observe
that, it has always tried to exhibit the hallmark of a harmony-
with-nature relationship between humans and their
1. Introduction
environment. Chakravorty (1985) had shown the deep roots
of the Indian ethos from which Indian managers can develop
a structure of values on the basis of which they can develop
stakeholder policies. Gandhi's theory of social trusteeship
epitomizes this prosperity for all' attitude. His theory of
social trusteeship is a weapon to address economic
inequalities.
We find that many great ancient texts and scriptures
like Manusmriti, Ramayana, Shanti Parva and ViduraNeeti
of the Mahabharata and Kautilya'sArthashastra which dates
back to many millennia had already elaborated on the
stakeholder approach to management. These texts
elaborated on how the Kings (leaders) ensured the welfare of
all stakeholders within the kingdom before taking a decision.
Stakeholder management as given in a variety of Indian
scriptures has usually dealt with the aspects of relationship
between the leader and the stakeholders, reciprocation from
stakeholders, guidelines for stakeholder policies and
stakeholder policies. Therefore the belief that the companies
should look into the interest of all the stakeholders was
present in India for a long period of time too.
But we still experience pictures of dehumanizing
poverty in our country. Hanumanthappa of Rampura turned
out to be one of the rank holders of the secondary school
leaving certificate results of Kannada in spite of being a
coolie's son and being denied of some of the basic necessities
of life. Does this not ignite us to think further? Or improving
the social and economic conditions of our tribal and rural
areas in respect to health, education, employment, and the
other basic social primary indicators, not important for us?
These people are ready to develop and improve, it is for us to
take the initiatives like the tribal children of Shyadri Hills in
Karnataka, who requested Sudha Murty We have heard of
computers but we have not seen them except on TV. We want
to learn about computers. Do you have any book on
computers written in Kannada? (Sudha Murty, 2006). Such
alarming situations questions us Dare to reach out your
hand into the darkness to pull another hand into the light
(Norman B. Rice). Whose responsibility is it to address such
issues the government alone?
India is a country where a big percentage of people live
in absolute poverty. They are disadvantaged not only because
of a shortage of material resources but because social,
political and economic structures prevent them from
accessing and controlling the resources needed for a life of
dignity.
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It reminds us of an incident of an old women named
Veeramma living in one of the many huts in the leprosy
colony where Sudha Murthy used to pay her regular visits to
listen to the agonies, difficulties and frustrations of those
people, people who had lost their self-confidence and their
acceptability by the society due to this disease which has been
with mankind for many centuries.
In one of her visits, Sudha Murthy visited Veeramma.
On constant calling, when she got no response she entered
her hut shocked to see a frail, near to skeleton figure huddled
in one of the corners. In very low and depressed note
Veeramma stated that irrespective of her age she was unable
to come out in front of others without any clothes. It was
then Sudha Murthy realized that Veramma was almost
naked. It was a picture of dehumanizing poverty in our
country even after more than fifty years of independence and
it was this time Sudha Murthy stated I felt guilty wearing a
six-yard saree (Murthy, 2006).
India does not always mean technology, fashions,
malls, and films. The real India or Bharat is in the
neglected interiors of our country where helpless miserably
poor people live beyond the reach of any government. What
constitutes socially responsible behavior in an Indian (and
indeed any developing country) context is that it would
include all activities that a company undertakes that benefit
people and communities: Especially for those who are
socially and/or economically disadvantaged, like small and
marginal farmers, landless labourers, tribals, slum-dwellers
to name a few.
Governments have a central role to play in building the
policy framework to stimulate more inclusive forms of
growth. But there is a need of effective leadership and good
governance to implement such sustainable policies, which is
often missing. But business is uniquely positioned to
contribute towards fostering such an inclusion. It needs to do
so to ensure its own survival and sustenance. The current
prevalent business model-excessively focused on shareholder
value is flawed. Inclusive growth as a core and futuristic
strategic component of a business is essential because by
embracing this challenge they will not only be contributing
towards a secure collective future but will find new ways to re-
invent and re-vitalize themselves. If we want to transform
India to a Better India (as J.R.D Tata had envisioned A
happy India) the business ethos of corporate India needs to
focus on Inclusive growth which is not just profit driven
but is also value driven.
Bringing about such a change requires a new mind set in the
twenty-first century. Eminent global thinker C.K. Prahalad
had once stated being a developing country is just a
mindset. So with a vision based on strong sense of reality,
real commitment and leadership necessary transformation
can take place. This is where leadership has a major role to
play because the strategic use of CSR begs the question about
the role of the leaders in determining the propensity of firms
to engage in these activities. This study therefore explores the
extent of participation of the private sector companies in
CSR activities.
With the inclusion of this introduction, the paper has
been organized into seven sections. Section two gives a brief
insight into the aspect of development of corporate social
responsibility in India. Section three highlights on the
literature review. Section four outlines the objectives.
Section five outlines the theoretical frame work and
hypothesis. Section six states the methodology. Section seven
looks into the analysis. Section eight presents the conclusion
and section nine highlights the policy prescriptions. .
The development of CSR in India can be divided into
four main phases:
First phase: CSR motivated by charity and philanthropy.
The first phase of CSR was predominantly determined by
culture, religion, family tradition, and industrialization. In
the pre-industrial period up to the 1850s, merchants
committed themselves to society for religious reasons,
sharing their wealth, for instance, by building temples. The
merchant class in pre-industrial India played an important
role in laying the cornerstones of philanthropy in their
society. They built and maintained educational and religious
establishments, social infrastructures and donated from
their repositories at times of hardship (Sundar, 2000).
Religious undertones characterized these charitable efforts,
and were often restricted to members of the same caste. At
the turn of the 19th century, these charities expanded to
include all members of the society. The term corporate
social responsibility did not exist at that time, being coined
only in the 20th century. A company's engagement in social
aspects was rather seen as philanthropy, in times of crisis,
such as famine or epidemics throwing open go-downs of food
and treasure chests (Arora, 2004). Under colonial rule,
Western types of industrialization reached India and
2. Development of Corporate Social
Responsibility in India
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changed CSR from the 1850s onwards. The pioneers of
industrialization in the 19th century in India were a few
families such as the Tata, Birla, Bajaj, Lalbhai, Sarabhai,
Godrej, Shriram, Singhania, Modi, Naidu, Mahindra and
Annamali, who were strongly devoted to philanthropically
motivated CSR (Mohan, 2001).
Second phase: CSR for India's social development
(1914-1960): The second phase of Indian CSR (1914-1960)
was dominated by the country's struggle for independence
and influenced fundamentally by Gandhi's theory of
trusteeship, the aim of which was to consolidate and amplify
social development. During the struggle for independence,
Indian businesses actively engaged in the reform process. Not
only did companies see the country's economic development
as a protest against colonial rule; they also participated in its
institutional and social development (India Partnership
Forum 2002, 11).The corporate sector's involvement was
stimulated by the vision of a modern and free India. Gandhi
introduced the notion of trusteeship in order to make
companies the temples of modern India: businesses
(especially well established family businesses) set up trusts for
schools and colleges; they also established training and
scientific institutes (Mohan, 2001). The heads of the
companies largely aligned the activities of their trusts with
Gandhi's reform programmes. These programmes included
activities that sought in particular the abolition of
untouchability, women's empowerment and rural
development (Arora, 2000).
A strong nationalistic element was visible among the
philanthropic practices, and many of the upcoming and
prominent business leaders contributed to the causes of
social reforms, poverty alleviation, women empowerment,
caste systems, etc. (Sundar, 2000). After independence in
1947, the overall socio-political goal focused on building a
solid industrial base while nuturing the Indian cultural
traditions. This led to a highly centralized economy ( Davies,
2002) and saw a rapid growth in capital intensive
manufacturing plants. Consequently, by the 1960s Indian
economy had entered an era of focused growth and
protectionism for the domestic industries ( Nag, Ganesh,
Pathak, and Sharma, 2003), and the government took on
many social obligations. Kumar et al. (2001) calls this
'NehruvianStatism,' after India's first premier Jawaharlal
Nehru, who introduced this practice.
Third phase: CSR under the paradigm of the mixed
economy (1960-1980): The paradigm of the mixed
economy, with the emergence of PSUs and ample
legislation on labour and environmental standards, affected
the third phase of Indian CSR (1960-1980). This phase is also
characterized by a shift from corporate self-regulation to
strict legal and public regulation of business activities. Under
the paradigm of the mixed economy, the role of the private
sector in advancing India receded. The 1960s have been
described as an era of command and control, because strict
legal regulations determined the activities of the private
sector (Arora, 2004). The increased encouragement for
domestic industries also led to a concentration on
maximizing profit, resulting in corruption and unethical
practices by many companies (Sundar, 2000). As a result,
corporate governance, labour and environmental issues rose
on the political agenda and quickly became the subject of
legislation. In 1970s, India began to adopt industrial
pollution control measures, and the first set of
environmental regulations began to emerge (Sawhney,
2004). However, the assumption and anticipation that the
public sector could tackle developmental challenges
effectively materialized to only a limited extent.
Consequently, what was expected of the private sector grew,
and the need for its involvement in socio-economic
development became indispensable.
The fourth phase: CSR at the interface between
philanthropic and business approaches. (1980 onwards): In
the fourth phase (1980 until the present) Indian companies
and stakeholders began abandoning traditional
philanthropic engagement and, to some extent, integrated
CSR into a coherent and sustainable business strategy, partly
adopting the multi-stakeholder approach. In the 1990s, the
Indian government initiated reforms to liberalize and
deregulate the Indian economy by tackling the shortcomings
of the mixed economy and tried to integrate India into the
global market. The Indian economy experienced a
pronounced boom, which has persisted until today. (Arora
and Puranik, 2004). This rapid growth did not lead to a
reduction in philanthropic donations; on the contrary, the
increased profitability also increased business willingness as
well as ability to give, along with a surge in public and
government expectations of businesses (Arora,2004).
However Indian companies realized that if it had to compete
with the western market they need to comply with
international standards. So from 90s onwards the companies
started adopting the modern approach with its underlying
objective, doing all that we can to do the most good, not just
some good since it supports corporate objectives as well.
This was regarded as a win-win situation for all because when
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a particular company does well to the society genuinely and
for a cause, it has to be good and along with this process, it
succeeds in building a name for itself.
Corporate India has always boasted a strong tradition
of corporate philanthropy, and the Indian society had viewed
its business leaders as leaders of social development (Mohan,
2001). Regardless of this strong tradition on philanthropy,
the CSR research in India in the recent past has primarily
focused on identifying the ideal 'how to carry out CSR,' often
leading to contradictory findings on the related practices
(e.g. Ruud, 2002; Kumar, Murphy, Balsari, 2001). Although
CSR has been steadily gaining exposure in India in the recent
past but empirical evidence from CSR research in India
suggests that there are differences with regard to India's
perceptions, operationalization, and expectations of CSR
practices when compared to those of the West (Kumar et al.,
2001; Mohan, 2001). Several studies e.g. ( Arora andPuranik,
2004) found CSR policies to be positioned far from the core
corporate activities and are regarded as philanthropy, with
companies not expecting much in (immediate financial)
return for their CSR efforts. As a result, and despite being
around for a while, CSR is not as yet a popular term in the
Indian business parlance.
In 2002, a survey, this time under the joint patronage
of the Confederation of Indian Industry CII), United
Nations Development Programme (UNDP), British Council
and Price Waterhouse Coopers (PWC), the CSR Survey
2002 India, (UNDP 2002) noted some improved trends and
concluded that. According to this study social responsibility
is not the exclusive domain of the government and 'passive
philanthropy' alone no longer constitutes CSR. A desire to
be a good corporate citizen and improved brand image were
the drivers for CSR. More than 90 per cent of the
respondents believed that investors would demand greater
transparency in disclosure of financial and non- financial
information. More than 90 per cent and 63 per cent of the
respondents expected to be more transparent in reporting
financial and non- financial information respectively.
In 2003, Partners in Change (PIC) conducted its third
survey on CSR in India in partnership with the research
group IMRB (Arora & Puranik 2004). The survey captured
the views of 536 companies, with annual turnover exceeding
rupees 25 billion across the country. The 2003 Survey also
included the views of other key stakeholders such as
3. Literature review
government, media, NGOs and other civil society
organizations (CSOs). The survey concluded that for the
majority of companies (64 per cent), the main CSR driver
was philanthropy, followed by image building (42 per cent),
employee morale and ethics (30 per cent each). It also found
that only one out of five PSUs (public sector units), and very
few MNCs (21 per cent) and Indian companies (14 per cent)
have a CSR policy document (Deo 2004).These are found
largely among business sectors such as infrastructure,
finance, food & beverages, pharmaceutical and chemical
Industries.
PIC (2004) concluded that CSR in India has moved
beyond corporate philanthropy, and has become more
methodical in its approach. The CEO and other members of
the top management team emerged as the principal initiator
of CSR activities in a company (PIC, 2004), in a nod to the
tenets of transformational leadership theory (Waldman,
Siegel, &Javidan, 2004). If we therefore assume that CSR
in India has moved beyond corporate philanthropy, and has
become more methodical in its approach then the 2009
report from Karmayog, a Mumbai-based online organization,
which found that while 51 percent of Indian companies
practice CSR in some form, only 2 percent publishes a
separate sustainability report, and only 3 percent report the
amount they spent on CSR and the Emerging Markets
Disclosure (EMD) Project of the US-based Social Investment
Forum (SIF), Lessons Learned: The Emerging Markets
Disclosure Project, 2008 2012,showing that Indian
companies were among those in emerging markets with the
lowest disclosure rate on CSR rating and in adhering to CSR
benchmarks and goals, would really be an eye raiser.
Therefore some researchers (Arora & Puranik, 2004,
Jamal &Mirshak, 2007; Husted & Allen, 2006; Waldman et
al, 2006, Ruud, 2002; Kumar, Murphy, Balsari, 2001) are of
the opinion that India's economic reforms and its rise to
become an emerging market and global player had not
resulted in a substantial change in its CSR approach.
Researchers had observed that companies had highlighted
on just how to carry on CSR. Contrary to various
expectations that India would adopt the global CSR agenda,
its present CSR approach still largely retains its own
characteristics, adopting only some aspects of global
mainstream CSR.
The government is trying to encourage the best
practices in corporate governance and corporate social
responsibility for which it had issued guidelines at the
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conclusion of the first India Corporate Week (December 14-
21, 2009). The guidelines set out six core elements for
companies. Companies should engage with all stakeholders,
it must function in an ethical manner, respect the rights of
workers in the areas of workplace environment, career
advancement, and freedom of association, should not
employ child or forced labor, and should maintain equality
of opportunities without discrimination, respect human
rights, adopt sustainable environmental policies, undertake
activities for economic and social development of
communities .What is noteworthy is the fact that the report
highlighted that in order to facilitate implementation of the
CSR guidelines, companies should disseminate
information on CSR policy, activities and progress in a
structured manner to all their stakeholders and the public at
large through their website, annual reports and other
communication media (First India Corporate Week
,December 14-21, 2009).
But unfortunately it failed to materialize the way it was
meant to be which again speaks of the necessity of
transformational and inspirational leadership here. A few
CSR studies on emerging economies (including India) that
has been carried out tend to rely on the companies' CSR
reporting. Chambers, Chapple, Moon, and Sullivan (2003)
reveal that although India leads in providing coverage to
their CSR practices in annual reports in Asia, only two
percent of Indian companies produce dedicated CSR
reports, and they point to Maitland's (2002) observations
that there is high probability of CSR repots to consist of
inconsequential information.
In a study conducted by Singh and Ahuja (1983) on 40
Indian public sector companies for the years 1975/1976, they
found that only 40 per cent of the companies disclosed about
30 per cent of the total social disclosure items included in
their survey. This is the first study in India on CSR that could
be found in international journals and is based on CSR
practices of the country 35 years ago.
Another study on CSR in India conducted by Hegde et
al. (1997) is a case study of the Steel Authority of India
Limited (SAIL) a public sector manufacturing company.
SAIL had a social balance sheet and income statement. They
also reported on human resources. In the most recent study
conducted by Raman (2006), the annual reports of the top
50 companies in India were examined to understand how the
top management perceived corporate social responsibility
and reported on it. This study found that the nature and
extent of such disclosures is varied with a large emphasis
placed on products and services and the development of
human resources. Community involvement is highlighted by
less than 50 per cent of the sample organizations.
Hossain&Reaz, (2007) examined determinants of voluntary
disclosure in annual reports for Indian banking companies.
Social disclosure represented one category of voluntary
disclosure categories. The empirical results, based on a
sample of 38 banking companies, show that corporate size
and assets in-place are significantly associated with
disclosure, while corporate age, multiple exchange listing,
business complexity, and board composition (percentage of
non-executive directors) are not associated with disclosure.
In a climate that is arguably marked by more informed
publics and a critical media, companies are facing more
clearly articulated expectations from customers and
consumers regarding their contributions to sustainable
development, which puts pressure on them to maintain
transparency and be proactive in communicating with its
publics. Dawkin, in 2004, had lamented that even though
CSR is an ongoing business priority now, communication
often remains the missing link in the practice of corporate
responsibility (p108). Manheim and Pratt (1986)
specifically, argued that the public either does not know
about or does not appreciate the effort and resources devoted
to the case of responsible corporate behaviour. Chambers, et
al. (2003) noticed that the greater the extent of the reporting
the more engaged the company is with CSR and the more
seriously it is taken therein (pg 20) because they do attest to
the amount of effort that the leaders of a company has put in
to communicate its commitment.
The problem with corporate social responsibility
(CSR) in India is that nobody is very clear about what exactly
it encompasses. Today, CSR to some companies means
providing lunch to employees. To others, it's about tackling
global warming and environmental issues, to some it is
organizing marathons and campaigns and collecting funds to
be given to trusts or NGO'S. Instead of defining CSR, the
Indian government recast it as "responsible business" in a set
of voluntary guidelines for firms; hence there are very limited
studies which have actually attempted to investigate into the
aspect of pattern of participation of CSR activities by the
private sector companies because of non clarity of the term
CSR and lack of detailed, transparent and effective
communication. Recently of course the Indian government
has made it mandatory for companies to spend at least 2% of
net profits on CSR through the new Companies Act of 2013
but its impact is yet to materialize and studied. The present
study would therefore attempt to fill the above gap by trying
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to establish a pattern of participation of CSR activities
amongst private sector companies in India.
In the light of the above discussion the main objective
of the study is to analyze the extent to which the group of
private sector companies have disclosed their proactiveness/
responsiveness towards various CSR activities and identify a
pattern across the private sector companies as reflected in the
respective company documents in the public domain. The
companies have been analyzed on the basis of absolute profit.
Apart from the main objective the study also intends to look
into the following:
To estimate the extent of information that the
companies had communicated with respect to their field of
CSR activities that they were responsive to.
To estimate those CSR activities that had a significant i
mpact on the private sector companies divided into decile
groups, deciles being characterized on the basis of absolute
profit.
To identify the sectors and their responsiveness
towards CSR activities.
To estimate the relative importance attached to
different CSR activities by all the decile groups, deciles being
characterized on the basis of absolute profit.
To estimate the relative importance attached to
different levels of the CSR activities by all the decile groups,
deciles being characterized on the basis of absolute profit.
The role of corporations is currently undergoing an
important transformation as stakeholders develop and
modify their perceptions of the place and responsibilities of
such organizations in society, (Brnn and Brnn, 2003). The
responsibility of business has become central to the agendas
of corporations, governments, supranational organizations,
such civil society groups as non-governmental organizations
(NGOs) and the general public. The appropriate
relationship between business and society has become the
focus of the debate (Schwartz and Carroll, 2003, p. 503). This
would help them to enter new markets and build up a
reputation which in turn would have a positive impact on
their products and their profitability. Many enterprises have
adopted CSR practices largely because they believe it will
4. Objectives
5. Theoretical Framework and Hypotheses
benefit their business in the long term (Herrmann, 2004, pp.
206-207) and improve their competitiveness (Porter and
Kramer, 2002, 2003, 2006; Porter, 2006). As Grayson and
Hodges (2004) pointed out, a genuine commitment to
sustainability and CSR can bring about opportunities for
new products and services, markets and business models. In
fact, some scholars (Jones, 2005, p. 93) even believe that
responsible behavior will only be permitted by shareholders
if it generates such benefits. However, for corporate
enterprises, the capacity to influence the CSR activities
taken up by them depends on the capacity to communicate
with different stakeholders and on the support obtained
from them. In fact, CSR has been defined as an extremely
complex web of interaction between an organization and its
stakeholders (Sjoberg, 2003, p. 192). So this study treated
CSR activity and action as interrelated rather than mutually
exclusive functions. We adhered to the following
explanation offered by Fukukawa and Moon (2004):
The communication of CSR does not necessarily
denote activity, and the activity levels that lie behind the
communication may well vary. By the same token, the
absence of communication of CSR does not necessarily
indicate non-activity. However, in the light of the assumption
that reporting, transparency and accountability are part and
parcel of CSR, there is reason to expect increasing
congruence between communication and action (p. 48).So
based on this the argument is that it would be the usual
behaviour of companies to be more responsiveness towards
CSR and its communication as the profits increased. The
following hypotheses have therefore been developed for this
study.
Hypothesis1: Average sentences used to communicate
about their responsiveness towards different CSR activities
disclosed in the websites for the stakeholders is likely to be
higher amongst companies belonging to the higher deciles
than those belonging to the lower deciles for private sector
companies, under absolute profit .
Hypothesis2: Level of dispersion with respect to the
sentences used to communicate about their responsiveness
towards different CSR activities disclosed in the websites for
the stakeholders is likely to be less amongst companies
belonging to the higher deciles than those belonging to the
lower deciles for private sector companies under absolute
profit.
Hypothesis3: Pattern with respect to the attributes
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(CSR activities) varies across all decile groups for private
sector companies under absolute profit.
Hypothesis4: Responsiveness of the sectors towards
significant CSR activities is not uniform for private sector
companies under absolute profit.
Hyputhesis5: Relative importance attached to
significant CSR activities varies across all decile groups for
private sector companies under absolute profit.
Hypothesis6: Relative importance attached to
different levels of the CSR activities varies across all decile
groups for private sector companies under absolute profit.
6.1. Data source and Study design
An empirical and analytical study is undertaken for the
study. In our study we explored the opportunities of finding a
pattern of corporate social responsibility activities
undertaken by the private sector companies in India by
taking absolute profit for the year 2008-2009 as the
parameter, for the financial years 2006-07, 2007-08 and
2008-09. We had taken this as a parameter keeping this in
mind that it would be the usual behaviour of companies to be
more responsiveness towards CSR as the profit increased.
The study is based on secondary sources, i.e., by analyzing the
corporate official websites of the companies. Data is then
generated from such an analysis using Qualitative Document
Analysis. Qualitative Document Analysis according to
Glaser and Strauses (1967) described the meanings,
prominence and the theme of messages and emphasized the
understanding of the organization as well as how it is
presented. For this study, CSR has been defined as corporate
discourse and/or programs that constitute (1) responsibility
to the environment, and (2) responsibility to community
development (Besser, 1999). The array of terminology to be
used within the broad CSR realm includes corporate social
responsibility, corporate citizenship, stakeholder
engagement, community development, social contribution,
philanthropy. (Waddock,2004). Through Qualitative
Document Analysis we identified the dominant fields of
CSR activities and also the extent of information that the
companies had disclosed to communicate their
proactiveness/ responsiveness towards those activities.
Units of analysis under Qualitative Document
Analysis may be number of words, phrases, character, lines or
6. Methodology
sentences, pages or proportion of pages devoted to different
categories of social disclosure (Unerman 2000). For this
study we used number of sentences as the unit for
measurement of CSR, since, sentences provided complete,
meaningful and reliable information for further analysis
(Milne and Adler 1999). The measurement in terms of
sentences is justified in that; (1) sentences can be counted
with more accuracy than words, (2) sentences are used to
convey meaning whereas discerning the meaning of
individual words in isolation is problematic, (3) sentences
overcome the problem of allocation of portions of pages and
remove the need to account for the number of words, (4) in
addition, sentences are a more natural unit of written
English to count than words(Hackston& Milne, 1996:84-
85). Walden & Schwartz, (1997) argued that a sentence
consider conventional unit of speech and writing, while
portion of pages is not. We counted the number of sentences
the companies had dedicated for the various fields of
activities disclosed on their corporate websites.
6.2. Selection of companies
Top five hundred private sector companies were
selected from, the BT 500 list published in Business Today,
belonging to the India Today Group, for the years 2006-07
07-08 and 08-09 as per average market capitalization. Market
capitalization refers to stock price multiplied by the number
of outstanding shares. Average market capitalization is
chosen to rank the 500 most valuable companies since this
parameter gives us an indication of not only the present but
future prospects of the company as well. To arrive at the list
of India's most valuable companies, BT relied on the Center
for Monitoring Indian Economy's (CMIE's) Corporate
Database Prowess for all the years under consideration, for
the study. Now from the list of five hundred most valuable
companies for the years 2006-07, 2007-08 and 2008-09 the
common companies which had succeeded in maintaining its
rank and position within the list of 500 most valuable
companies for all the three years were selected. The total
data set consisted of three hundred and twenty nine
companies. From this total data set, companies with negative
or declining profit were excluded. After exclusion, the
comprehensive list (select data set) consisted of two hundred
and eight companies. The companies (select data set) were
grouped and ranked on the basis of absolute profit for the
year 2008-09. The two hundred and eight companies which
constituted the select data set were ranked on the basis of this
parameter, in the descending order. They were divided into
IFIM International Journal of Management FOCUS April 2014 - September 2014|20
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decile groups consisting of twenty one companies each i.e.
ten percent of the select data set. The companies under each
decile group were analyzed on the basis of the study design
specified above.
6.3. Empirical model
With reference to the sentences spent on the different
fields of CSR activities, the companies were first divided in to
decile groups consisting of 21 companies each i.e. 10% of the
select data set on the basis of absolute profit. Having
stratified, we calculated the average sentences (mean) spent
on the various fields of CSR activities disclosed by the
companies in their corporate websites with respect to all
decile groups. Co-efficient of variance was also calculated
with respect to the sentences spent on various fields of
activities to study the level of consistency or dispersion.
Pearson's correlation analysis was conducted to establish a
pattern with respect to the average number of sentences
spent on the various CSR activities by the companies across
deciles. Similarly Pearson's correlation analysis was also
conducted to establish a pattern with respect to the
Coefficient of Variance regarding the extent of information
disclosed and communicated by the companies in their
corporate websites about the various field of CSR activities
undertaken by them across deciles. A Multiple Regression
Analysis was conducted to identify those attributes in the
form of CSR activities that had a significant impact on the
deciles and the levels at which they had a significant impact
on the deciles where Level 1 indicated (Very high level),
Level 2 (High level), Level 3 (MediumLevel) and Level 4 (Low
Level). For conducting the regression analysis, we re-
calculated the average sentences (mean) spent by the
companies on various CSR activities that they were
responsive to for all the deciles under the parameters
specified above by removing the outliers. The model which is
used in this Conjoint Analysis is specified as under:
rank = 0 + 1 ED1+2 ED2 + 3 ED3 +4 H1 + 5 H2 +6 H3 + 7
EN1 + 8 EN2 +9 EN3+ 10EM1 +11EM2 +12EM3
13RU1+ 14RU2+ 15RU3+ 16EMP1+ 17EMP2+ 18EMP3 +
19O1+ 20O2+ 21O3 + error ,
where,rank = ordinal scaling of the parameter(
parameter defined by absolute profit) with highest integer
corresponding to lowest values of the parameter, next highest
integer corresponding to the next lowest value of the
parameter and so on , 0 = Constant term, ED i = i th level of
education, Hi = i th level of health, ENi = i th level of
environment,EMi= i th level of employability, RUi = i th level
of rural upliftment, EMP i = i th level of empowerment, Oi = i
th level of other activities and Epsilon
After analyzing the corporate websites we had found
that the companies had involved themselves mainly in the
fields of education, environment, rural upliftment,
employability, health, empowerment, disaster relief,
drinking water and sanitation, urban development. Besides
these, some companies had involved themselves in
volunteering programmes, sports, raising funds, protection
of art & culture which we had combined together and placed
them as other activities.
7.1. Comparative analysis of mean across deciles
In order to make a comparative analysis across deciles
with respect to the extent of information disclosed about the
various field of CSR activities in their corporate websites,
that they were involved in, the mean is calculated. This has
been represented in Table 1 (see Table 1). On the basis of
absolute profit the following is observed: average sentences
disclosed with respect to all the CSR activities is observed to
be the highest amongst companies with very high profits.
Average sentences disclosed with respect to all the CSR
activities were observed to be the lowest amongst companies
with low profits. The most preferred activity on the basis of
mean value is observed to be education, health and
environment, out of which environment is most prominent
amongst most of the deciles. The least preferred activitieson
the basis of mean value with respect to the deciles were
observed to be mostly disaster relief, drinking water and
sanitation, empowerment and urban upliftment, out of
which drinking water and sanitation is least prominent
amongst most of the deciles.
7.2. Comparative analysis of Co-efficient of Variance across
deciles
In order to make a comparative analysis across deciles
Co-efficient of Variance was also calculated with respect to
the sentences spent on various field of activities to study the
level of consistency or dispersion under this parameter. A
high CV indicated a high level of dispersion and a low CV
indicated a high level of consistency. This has been
represented in Table 6 (see Table 6). On the basis of absolute
profit the following is observed: A high level of dispersion
7. Analysis
IFIM International Journal of Management FOCUS April 2014 - September 2014|
FOCUS Research Papers
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was observed amongst companies with low profit with
respect to education, health, employability, rural upliftment
and others. A high level of dispersion was observed
amongst companies with high profits with respect to
environment and both amongst companies with high level of
profits and very low level of profits with respect to disaster
relief and urban upliftment. It was noteworthy that a high
level of dispersion was observed amongst most of the deciles
with respect to drinking water and sanitation. A low level of
dispersion was observed amongst companies with high
profits with respect to all the CSR activities. Education,
health, environment, others were the activities with the
lowest level of dispersion as observed amongst the deciles.
Disaster relief, drinking water and sanitation and urban
upliftment were the activities with the highest level of
dispersionas observed amongst the deciles.
7.3. Analysis of the correlation results
Table3 (See Table 3) presents the correlation results
between the average numbers of sentences disclosed by the
companies for each of the CSR activities undertaken by them
and communicated in their corporate websites on the basis
of the above specified parameter. The following results were
noteworthy:
Positive correlation was observed between deciles and
average sentences disclosed by the companies about their
responsiveness towards environment, rural upliftment,
employability and livelihood, health, empowerment, disaster
relief, and others signifying an upward trend. Thus as we
moved from decile 1 to decile 10, average sentences disclosed
increased. A further analysis of the correlation table also
revealed the following:
In respect of average sentences spent, the combination
of education with health, environment, disaster relief,
employability, rural upliftment, others, empowerment and
urban upliftment is preferred by most of the companies. In
respect of average sentences spent, health with education,
environment, disaster relief, employability, rural upliftment,
others, empowerment and urban upliftment is preferred by
most of the companies. In respect of average sentences spent
environment with education, health, disaster relief,
employability, rural upliftment, others, empowerment and
urban upliftment is preferred by most of the companies. In
respect of average sentences spent disaster relief with
education, health, environment, employability, rural
upliftment, others, empowerment and urban upliftment is
preferred by most of the companies. In respect of average
sentences spent employability with education, health,
environment, disaster relief, rural upliftment, others and
empowerment is preferred by most of the companies. In
respect of average sentences spent rural upliftment with
education, health, environment, disaster relief,
employability, others, empowerment and urban upliftment
is preferred by most of the companies. In respect of average
sentences spent others with education, health, environment,
disaster relief, employability, rural uplif tment,
empowerment and urban upliftment is preferred by most of
the companies. In respect of average sentences spent
empowerment with education, health, environment, disaster
relief, employability, rural upliftment, others and urban
upliftment is preferred by most of the companies. In respect
of average sentences spent urban upliftment with education,
health, environment, rural upliftment, others and
empowerment is preferred by most of the companies.
Table4 (see Table 4) presents the correlation results
between coefficients of variance regarding the extent of
information disclosed and communicated by the companies
in their corporate websites about the various fields of CSR
activities undertaken by them on the basis of the above
specified parameter. The following results were noteworthy:
Significant negative correlation was observed between
deciles and the level of dispersion with respect to sentences
disclosed by the companies about their responsiveness
towards education, employability, others, empowerment and
rural upliftment signifying a downward trend. Thus as we
moved from decile 1 to decile 10, the level of dispersion
decreased. A further analysis of the correlation table
revealed the following:
It was observed that regarding coefficient of variance
with respect to average numbers of sentences disclosed by the
companies, disclosure on education is likely to be positively
associated with employability and drinking water and
sanitation. Similarly coefficient of variance with respect to
the average numbers of sentences disclosed on health is likely
to be positively associated with drinking water and
sanitation. Positive correlation was observed between
coefficient of variance with respect to the average numbers of
sentences disclosed on disaster relief and coefficient of
variance with respect to the average numbers of sentences
disclosed on employability, drinking water and sanitation
and rural upliftment. Positive correlation was observed
between employability and education, disaster relief,
IFIM International Journal of Management FOCUS April 2014 - September 2014|22
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7. Analysis
After analyzing the corporate websites we had found that the
companies had involved themselves mainly in the fields of
education, environment, rural upliftment, employability,
health, empowerment, disaster relief, drinking water and
sanitation, urban development. Besides these, some
companies had involved themselves in volunteering
programmes, sports, raising funds, protection of art &
culture which we had combined together and placed them as
other activities.
7.1. Comparative analysis of mean across deciles
In order to make a comparative analysis across deciles with
respect to the extent of information disclosed about the
various field of CSR activities in their corporate websites,
that they were involved in, the mean is calculated. This has
been represented in Table 1 (see Table 1). On the basis of
absolute profit the following is observed: average sentences
disclosed with respect to all the CSR activities is observed to
be the highest amongst companies with very high profits.
Average sentences disclosed with respect to all the CSR
activities were observed to be the lowest amongst companies
with low profits. The most preferred activity on the basis of
mean value is observed to be education, health and
environment, out of which environment is most prominent
amongst most of the deciles. The least preferred activitieson
the basis of mean value with respect to the deciles were
observed to be mostly disaster relief, drinking water and
sanitation, empowerment and urban upliftment, out of
which drinking water and sanitation is least prominent
amongst most of the deciles.
7.2. Comparative analysis of Co-efficient of Variance across
deciles
In order to make a comparative analysis across deciles Co-
efficient of Variance was also calculated with respect to the
sentences spent on various field of activities to study the level
of consistency or dispersion under this parameter. A high
CV indicated a high level of dispersion and a low CV
indicated a high level of consistency. This has been
represented in Table 6 (see Table 6). On the basis of absolute
profit the following is observed: A high level of dispersion
was observed amongst companies with low profit with
respect to education, health, employability, rural upliftment
and others. A high level of dispersion was observed
amongst companies with high profits with respect to
drinking water and sanitation, rural upliftment and
others. Positive correlation was observed between drinking
water and Sanitation and education, disaster relief,
employability, rural upliftment, empowerment and others.
Positive correlation was observed between rural upliftment
and disaster relief, employability, drinking water and
sanitation, others, empowerment and urban upliftment.
Positive correlation was observed between others and
employability and rural upliftment. Positive correlation was
observed between empowerment and drinking water and
sanitation, rural upliftment and urban upliftment. Positive
correlation was observed between urban upliftmentand
disaster relief, drinking water and sanitation, rural
upliftment and empowerment.
7.4. Regression analysis
A multiple regression analysis was conducted to
identify those attributes in the form of CSR activities that
had a significant impact on the deciles identified, on the
basis of absolute profit. For conducting the regression
analysis, we re-calculated the average sentences (mean) spent
by the companies on various CSR activities that they were
responsive to for all the deciles under this parameter by
removing the outliers. The re-calculated mean has been
presented in Table 5 (see Table 5) .Table 6 presents the model
specifications on the basis of the re-calculated mean (see
Table 6). Table 7 specifies the sectors and their
responsiveness towards activities that were found to be
significant as per the multiple regr
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