historical perspective - 28th march

8/16/2019 Historical Perspective - 28th March

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CorporateSocial

Responsibility1)A Historical Perspective

from Industrial Revolutionto Social Activism

2)Moral Arguments for CSR


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!rom Industrial Revolutionto Social Activism

"HA# IS C$RP$RA#% S$CIA& R%SP$'SI(I&I#*CSR+,

Corporate Social Responsibility *CSR+ refersto t-e responsibility t-at businessorganisations *mainly companies+ ta.e upont-emselves to do good for t-e society/ #-isresponsibility re0uires t-e companies to

invest time and money in social proects t-atbenet society and people/ #-is responsibleact by companies is of great importance indeveloping and under developed countries/

Some countries -ave made CSR mandatory forcom anies t-rou - le al rovisions/


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!rom Industrial Revolutionto Social Activism

CSR means di3erent t-ings to di3erentpeople/ "-ile some loo. at it as purep-ilant-ropic or c-aritable 4or. bycompanies5 ot-ers vie4 it as compliance 4it-

la4s to survive in business/ A t-ird vie4 ofCSR could be t-e disc-arge of contractualobligations to4ards employees5 customers5suppliers5 etc/

I 4ould dene CSR as a set of functionsdisc-arged by companies5 eit-er voluntarilyor in compliance 4it- t-e la45 to provide

benets to t-at section of society 4-ic-needs it t-e most/


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Historical Perspective of CSR !romIndustrial Revolution to Social Activism

#H% $RI6I' $! CSR,

#-e !irst Industrial Revolution too. place bet4een1789 to 1:;9 4-ere t-e signicant transformation4as t-e movement from manual production to

mec-anised production/ #-e factory system alsocame into estage/


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Morrell Heald in -is boo.5 ?#-e SocialResponsibilities of (usiness@5 stated t-at t-epractice of Corporate Social ResponsibilityCSR) 4as alive and gro4ing from t-e 1Bt-

century itself/ (usiness giving and businessinvolvement in community issues 4ere verymuc- prevalent at t-at time/ (ig companiesused to get involved in t-ese community

activities5 as t-ey 4ere given t-eresponsibility of fullling public goals andpublic interest obectives/

#-us5 t-e origin of CSR seems to be rooted int-e eriod bet4een 1:29 to 1:79 !irst


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PR%>"$R&= "AR II %RA,

Heald notes t-at t-e ?trustees-ip concept@ of

business leaders-ip and responsibility 4asenunciated nearly 2D years before "orld "arII around 1B1D)/ Andre4 Carnegie o3ered aneven earlier statement of t-e trustee conceptin Eune 1::B in -is 'ort- American Revie4

article titled ?"ealt-/@ In 1B985 aleFniversity President5 Art-ur Hadley5 advisedbusiness leaders to remember t-at t-ey arealso trustees of t-e public interest and to

align t-eir sense of et-ics and obligationaccordin l /


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In t-e 1B29s5 t-e trustees-ip concept emerged boldly int-e 4ords and practices of $4en =/ oung and 6erardS4ope5 C-airman and President5 respectively5 of t-e6eneral %lectric Company/ In t-eir eyes5 s-are-olders 4ereonly one constituency to 4-om business leaders 4ere

responsible5 and as oung put it in 1B285 t-e public andemployees ran.ed a-ead of s-are-olders/ oung andS4ope envisioned and soug-t to bring about cooperationbet4een business5 labour5 government and community not open -ostilities/

#-us5 4ell before "orld "ar II5 t-e practices of givingp-ilant-ropy) and of community involvement 4ere 4ellestablis-ed in community c-est drives of t-e 1B29s alt-oug- certainly not embraced by all business leaders/


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#H% P$S#>"$R&= "AR II %ARS,

CSR activities gre4 in scope and intensity after t-e end oft-e Second "orld "ar in 1B;D/ %urope and America emergedfrom t-e "ar and modern businesses too. 4ings/ As t-e

1BD9s unfolded5 Heald describes business leaders movingbeyond p-ilant-ropy to substantive cooperation andoutrig-t leaders-ip on a range of community initiatives/ Hedeveloped e


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Carroll credits Ho4ard R/ (o4en5 aut-or of t-e boo.?Social Responsibilities of t-e (usinessman@ 1BDG)5 ast-e ?!at-er of corporate Social Responsibility@ because -isboo. dealt directly 4it- t-e concept of socialresponsibility/ (o4en asserted t-at social responsibility

?refers to t-e obligations of businessmen to pursue t-osepolicies5 to ma.e t-ose decisions5 or to follo4 t-ose linesof action 4-ic- are desirable in terms of t-e obectivesand values of our society/@

#-e past 79 post>"orld "ar II years 1B;D to 291D) -avebeen notable for t-e increasing attention given to t-econcept of CSR5 for its continuing evolution5 and for t-elac. of consensus on 4-at it means and even 4-et-er itis legitimate/


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At one e


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At t-e ot-er e


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Carrolls o4n denition of CSR embraced a fullrange of responsibilities, economic5 legal5et-ical and discretionary/ In Carrollsframe4or.5 economic functions are at t-e

-eart of t-e ?corporate social responsibilities@of business/ He later c-anged discretionary top-ilant-ropic5 but in eit-er case discretionary or p-ilant-ropic t-ese

responsibilities 4ere seen as voluntary/ Carrolldid not see t-ese responsibility categories asmutually e


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SFMMAR $! #H% %K$&F#I$' $! CSR 6&$(A&&,

"e -ave seen t-e origin of t-e concept of CSR from t-emid>1Bt- century/ #-e concept -as gro4n5 bot-academically and in practice5 t-roug-out t-e 29t- century

and more so in t-e last G9 to ;9 years/

"-ile sc-olars from t-e 1B79s into t-e 1BB9s 4restled4it- CSR concepts and developed sta.e-older t-eory5numerous business leaders -ad independently articulated

similar vie4s on t-e purpose of business/ #-roug-out t-isperiod sc-olars attempted to dene5 redene5 and clarifyt-e concept of corporate social responsibility t-at t-eysa4 being assumed by5 imposed upon5 and played out bybusiness/


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As noted earlier5 t-ere are many e


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#H% I'=IA' SC%'ARI$

#-e concept of CSR in India -as gro4n parallel to Indias-istorical and economic development/ #-e -istory of CSR inIndia -as four distinct p-ases5 4-ic- may -ave overlappingfeatures/

P-ase 1 In t-is p-ase5 c-arity and p-ilant-ropy 4ere t-emain drivers of CSR/ Culture5 religion and family valuesinLuenced t-e p-ilant-ropic activities of business groups/ Int-e pre>industrialisation period5 4-ic- lasted till 1:D95 4ealt-ymerc-ants donated t-eir 4ealt- for temple>building and

-andling famines and epidemics/ !rom 1:D9 on4ards5 4it- t-earrival of (ritis- Rule in India5 t-e approac- to CSR c-anged/Industrial families li.e t-e #atas5 (irlas5 Modis5 (aas5 etc/ -adsocial and economic considerations for ta.ing CSR initiatives/


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#H% I'=IA' SC%'ARI$ *Continued+

P-ase 2 #-is 4as t-e period of t-e !reedomMovement about 1::D to 1B;7) and t-eIndustrial -ouses 4ere e


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P-ase G #-is p-ase 1B89 to 1B:9) coincided4it- t-e rise of t-e Public SectorFnderta.ings PSFs) and t-e relative declineof t-e private sector/ &a4s 4ere amended tofavour t-e PSFs so t-at t-ey could ensureredistribution of 4ealt- 4it-in t-e Indian

economy/ Ho4ever5 t-is policy -ad limitedsuccess and t-e 6overnment of India realisedt-at t-e economy cannot gro4 4it-outpromoting t-e private sector too/ CSR

activities did not gro4 muc- in t-is p-asebecause of t-e e


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P-ase ; In t-is p-ase 1B:9 till date)5 CSR activitiesgot integrated 4it- business strategy/ As t-e Indian

economy 4as liberalised from 1BB1 on4ards5 t-eprivate sector 4as uns-ac.led/ Rapid gro4t- amongstprivate companies encouraged t-em to contributegenerously to4ards social causes/ #oday5 corporatesfeel t-at CSR is important to build a good reputationand increase business competitiveness/ #-ey -avespecialised CSR teams t-at formulate policies andstrategies for t-eir CSR initiatives/ #-ese initiativesrange from community development programs toprotection of environment and liveli-ood/


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C$'C&FSI$',

"e -ave seen t-at bot- in India andelse4-ere in t-e 4orld5 t-e concept of modern

CSR probably originated in t-e 1Bt- century during t-e !irst Industrial Revolution in%urope and t-e pre>Industrialisation period inIndia/ "-ile academics and business leaders

-ave completely di3erent vie4s on t-e utilityand legality of CSR5 it -as come to stay as animportant concept and tool in t-e interactionsbet4een business and society at large/


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Moral Arguments for CSR

CSR as a concept -as its s-are of detractorsbecause t-e concept is seen as bordering onillegality and somet-ing t-at is forced uponbusiness -ouses/ In fact5 4e -ave seen t-e

e


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1) Responsibility #o4ards %nvironment Corporates must invest in cleantec-nologies so as to avoid pollution/ #-eycannot let t-eir business interests damage

t-e already deteriorating environment/ It ist-eir moral obligation to save people fromenvironment>lin.ed diseases and save t-eeart- itself/

2) Helping t-e &ess Privileged Companiesmust step for4ard to s-are t-eir prots4it- t-e less privileged sections of oursocieties 4-o struggle to -ave a basic

standard of living/ Huge private 4ealt-


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G) It is t-e Rig-t #-ing to do (usiness et-ics andsocietal values demand t-at corporates s-ouldunderta.e activities t-at benet t-e poor/ #-ey 4ouldbe seen to be unet-ical and immoral if t-ey did nots-are a part of t-eir 4ealt- 4it- t-e deprived sections

of society/ #-is 4ould be a very strong argument in aneconomy t-at is not prosperous/

;) Corporate Commitment to Manage its Roles in Society Companies -ave multiple roles to play in society producer5 employer5 mar.eter5 citien5 etc/ in abalanced manner so as to positively impact lives/ #-eyneed to -ave a set of voluntary principles to e

historical perspective - 28th march

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