ifim focus sept 2015

ISSN: 0973-9165APRIL 2014 - SEPTEMBER 2014 Vol: 10. No: 1

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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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IFIM International Journal of Management FOCUS April 2014 - September 2014|

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3

Published by Dr. R. Satish Kumar

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trends and practices.

From the Editor's Desk

4

Imparting Quality Management Education:

A Major Challenge for Indian B-Schools


Chief Editor - FOCUS

Dr. R. Satish Kumar

4. Ranking of B-Schools: Ranking of B-Schools by various magazines and agencies have

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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

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.


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

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 [email protected] | ^^Tunis El Manar University, Tunisia , [email protected]

Soumendra K. Dash, Ph.D ^ | Dhekra Azouzi ^^


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

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


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.


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


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:


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


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.

14 IFIM International Journal of Management FOCUS April 2014 - September 2014|

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



15

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


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



17

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


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.


different CSR activities by all the decile groups, deciles being

characterized on the basis of absolute profit.


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



19

(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


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



21

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,


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

ifim focus sept 2015

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