Scope of CSR for Contributing to Skill Development in India

October 10, 2023

“By social responsibility, we mean an intelligent and objective concern for society’s welfare that retrains individual and corporate behaviour away from ultimately destructive activities, no matter how immediately profitable, and leads to positive contributions to human betterment, as defined in various ways.” Andrews, Kenneth R. (1980).

While there is no commonly agreed definition of CSR, each definition that exists now underpins the impact that businesses have on society as a whole and the societal expectations that businesses must meet.

Although the origins of CSR can be traced back to corporate philanthropic activities (such as donations, charity, and relief work), the concept of CSR has evolved to include all related concepts such as the triple bottom line, corporate citizenship, philanthropy, strategic philanthropy, shared value, corporate sustainability, and business responsibility. Some of the definitions offered below reflect this: CSR is defined by the European Commission as “the responsibility of businesses for their social implications.” Enterprises “should put in place a method to incorporate social, environmental, ethical human rights, and consumer concerns into their business operations and core strategy in close partnership with their stakeholders” to fully meet their social obligation.

The World Business Council for Sustainable Progress defines CSR as “business’s ongoing commitment to contribute to economic development while improving the quality of life of employees and their families, as well as the community and society at large,” according to the WBCSD. “Corporate social responsibility is a management concept in which corporations integrate social and environmental issues into their business operations and interactions with its stakeholders,” according to the United Nations Industrial Development Organization. CSR is defined as the process through which a business achieves a balance of economic, environmental, and social imperatives while also meeting the needs of shareholders and stakeholders. In this regard, it’s crucial to distinguish CSR from charity, sponsorships, or philanthropy, which can be a strategic business management notion.

Even though the latter can make a significant contribution to poverty reduction and directly improve a company’s reputation and brand, the concept of CSR goes beyond that.” It is evident from the preceding definitions that:

The CSR strategy is comprehensive and integrated with the critical business strategy for dealing with social and environmental issues that firms face.

CSR must consider the interests of all stakeholders, not only the company’s stockholders.

Philanthropic activities are merely a small element of corporate social responsibility (CSR), which can encompass a much bigger set of techniques that result in strategic commercial benefits.

CSR has piqued the interest of organisations and stakeholders in terms of its advantages and definition since the 1960s. The Companies Act 2013, section 135, made India the first country to mandate CSR on April 1, 2014. Of course, there was little use of this phrase in earlier times. In this article, we’ll look at the arguments for CSR as a social benefit mechanism. The first step is to comprehend “what is CSR” and “how does it work.” On that basis, corporate social responsibility is a long-standing concept, albeit opinions on it have evolved over time.

The concept of corporate social responsibility is based on the premise that a company has societal responsibilities in addition to producing a profit.

It is the responsibility of businesses to have a societally constructive impact. We will examine the norms and concepts of CSR in order to do this.

The concept of social responsibility is based on the idea that a company is more than just a collection of financial transactions. It is a social organ whose actions have a substantial impact on the general public. This emphasises the importance of comprehending “why CSR is necessary, particularly in India.”

It’s a two-way street. Only through an effective instrument such as the media can a business firm fulfil its social obligation. We will learn about the role of the media in shaping CSR in India in this research.

To comprehend CSR, we must also evaluate the most important aspects of corporate responsibility, which include broader concerns like corporate governance, ethics, and the environment. Incorporate social responsibility, when the emphasis is mostly on social issues of company or giving back to society. As previously stated, CSR has expanded its fleet in India, and major corporations have released data on CSR activities and rankings, we will investigate if CSR is a success or a failure in India.

Finally, we will look at the reasons for and against corporate social responsibility in modern India.

Definitions appear and change over time.

In India, the Companies Act of 2013 has introduced various new regulations that have altered the face of corporate activity in the country. Corporate Social Responsibility is one of the new provisions. CSR is based on the philosophy of giving and taking. Companies extract resources from society in the form of raw materials, human resources, and so on. Companies are giving something back to society by participating in CSR activities.

Section 135 and Schedule VII of the Companies Act, as well as the terms of the Companies Corporate Social Responsibility Policy Rules, 2014, were recently notified by the Ministry of Corporate Affairs, and went into effect on April 1, 2014.

Committe and Policy on Corporate Social Responsibility (CSR):

Every eligible company must devote at least 2% of its average net earnings over the previous three financial years to CSR initiatives. In addition, the qualified corporation must form a Board of Directors (Board) committee (CSR Committee) with three or more directors. The CSR Committee is responsible for developing and recommending to the Board of Directors a policy that specifies the activities to be carried out (CSR Policy), as well as recommending the amount of expenditure to be made on the mentioned activities and monitoring the company’s CSR Policy. The company’s CSR Policy will be approved once the Board considers the CSR Committee’s suggestions.

Now, as with most of our policies, the concept of corporate social responsibility was taken from the west. The western world has its own experience with CSR and was taking it to new heights; we are just getting started. Allows us to comprehend the function rather than the culture.

cholars like Bowen 1953, Carroll 1979, Davis and Blomstrom 1975 provided a range of definitions in the 1950s and 1970s, and these definitions have continued to evolve. Earlier definitions of CSR stressed basic features of CSR, such as reaching corporate economic objectives and adhering to legal norms, whereas more current definitions have emphasised social benefits and stakeholders’ wellbeing. For example, social responsibility is placed in the context of economic and legal goals, with the philosophy of social responsibility stating that the corporation has not only economic and legal obligations, but also specific societal responsibilities that go beyond these.

Carroll’s (1979) definition of CSR as encompassing economic, legal, ethical, and philanthropic aspects is one of the most comprehensive and extensively utilised. Economic responsibility, in particular, necessitates that a company be profitable and create goods and services that society values. Monitoring employee productivity or dealing with consumer complaints are two examples of economically responsible actions. Meeting society’s expectations as outlined by law is what legal obligation entails. Initiatives aimed at establishing legal responsibility include training sessions about sexual harassment and workplace fairness. Businesses must pursue ethically correct behaviour in order to fulfil their ethical responsibilities. Businesses can use ethics codes to assist them fulfil their ethical obligations.

Philanthropic efforts include work-family programmes, business volunteerism, and cultural sponsorships. The difference between moral and ethical responsibilities and philanthropic responsibilities is that the latter is not required. Communities, for example, want and expect businesses to provide money, facilities, and staff time to humanitarian organisations or causes, but they do not consider a company unethical if it does not deliver these services at the necessary levels. We can better understand CSR trends over time when we use such a broad term of CSR.

India's Corporate Social Responsibility Principles

Every business should operate and manage in a transparent, ethical, and accountable manner.

2. Businesses are expected to provide goods and services that are safe and contribute to sustainability throughout the life cycle.

3. All employees’ well-being should be ensured and promoted by the company.

4. Respect for all stakeholders’ interests and responsiveness, particularly those who are poor, vulnerable, or marginalised.

5. Businesses that respect and promote human rights.

6. Respect the environment, protect it, and work to restore it.

7. Promotion of your public image.

Customers frequently choose organisations that are perceived as being less self-centered. It could be a comprehensive psychological understanding, but individuals find it easier to contact and access corporations with social responsibility. Companies that send out signals about and about their charitable attitude do an excellent job of designing their public image and adding to their current goodwill since it represents a compassionate aspect of the organisation. Corporations can achieve this by donating or supporting non-profit groups.

Promotion of your public image

Workplace Culture that Is Positive

Corporations must consider the lives of those who reside outside their walls. Employees are inspired and motivated to come to work every day with a smile on their faces. This improves the interaction between upper management and lower-paid employees. Other benefits of establishing CSR include keeping investors who want to know that their money is being used wisely all of the time, forming solid partnerships between non-profits and businesses, and attracting the best employees. After all, with so many advantages and a desire to be a company that people admire, every corporation’s ultimate goal must be to become a firm that people admire.