Corporate social responsibilities and

sustainable growth
Ms.Amruta Keshavrao Kokare
Abstract
This paper explores about the concept of the Corporate Social Responsibilities of the corporate.
Role of the corporate in engaging their resources in providing the solution to the complex social
problems, carrying out different programs for the welfare of the community in which they
operate have become one of the important factor for attracting financial investors and other
stakeholders.CSR practices can also help the corporate in building the strong brand name and
attaining competitive advantage over rivals.

There are different aspects of the CSR than just philanthropic, like environmental, social, and
economical activities. Any business as per provided in the law and being ethical should consider
CSR practices as the part of the main business strategy. Though primary objective of the
business is to become profitable or earn maximum profit, it should make CSR practices as their
regular practice as the responsibility of the business towards society and the impact they have on
society and environment while carrying out their business practices.

Therefore, CSR is strategic approach for business to acknowledge and address issues associated
with their interactions with others and, to succeed in their business.CSR can be very helpful to
gain profit and can prevent the loss of customers, shareholders, and even employees is becoming
important factor for the corporate.

Key words:
Corporate social responsibility, CSR, corporate sustainability.
Introduction
In terms of a commercial business paradigm, role of corporate can be understood, which thinks
of only economic parameters of the success. Corporate being the institutions that cater to the
market demand by providing products and services, and have the responsibilities for creating
jobs and wealth, their market position has been a function of profitability and financial
performance.

In past few years due to the results of rising globalization and pressing ecological issues, the role
of corporate in the broader societal context within which it operates, has been altered.
Stakeholders such as employees, community, suppliers and shareholders today are more concern
about the role of corporate taking into account the corporate’ responsibility towards society and
environment, beyond economic performance, and are taking updates on whether they are
conducting their role in an ethical and socially responsible manner. As a result of this shift that is
from purely economic to ‘economic with an added social dimension, many forums, institutions
and corporate are supporting and accepting the term Corporate Social Responsibility.
Even though the roots of CSR trace back to the emergence of business in general, the real
concept of it was formulated quite recently.
The era of corporate social responsibility and serious discussions about the topic began in 1950s
when “Social Responsibilities of the Businessman” the book by Howard R. Bowen, who is also
called “the Father of Corporate Social Responsibility,” was published. In that book Bowen says,
CSR means” the obligations of businessmen to pursue those policies, to make those decisions, or
to follow those action, which are desirable in terms of the objectives and values of our society”

CSR enables a business to respond quickly to the arising needs of a society, whether they are
economic, environmental, or social issues. The government is a secondary institution to have
these benefits, since successful corporate responsibility practices reduce the government’s
burden for handling a wide range of issues. In addition, when companies engage in CSR activity
they have a chance to establish a positive image for company in the views of society, which
helps advertise their products. Though CSR benefits the company, it requires coordinated action
from all stakeholders and non-governmental organizations in order to achieve sustainable
effects.
Sustainable development:
Our planet must be first sustainable to make our business profitable and sustainable; this has
been realized by the business in recent time. Directing our focus towards applying management
principle to solutions of complex social issues such as environmental sustainability , energy
security , access to healthcare etc, is what we should do in coming decade. this will also
emphasis on the need for increased interdisciplinary interaction and impact on business
management. The evidence of this growing engagement with issues of society and sustainability
is the increase in number of companies who have increased their CSR focus and the innovative
ways in which they have carried it. Steadily shift from corporate philanthropy to more direct and
effective engagement, companies have developed new models of extending a social footprint.

Corporate social responsibility:

The concept of CSR has continued to evolve since its inception in the 1950s.The CSR has its
roots in philanthropic activities like donations, charity, relief work, etc. of corporations.
Globally, the concept of CSR has evolved and now contains all related concepts such as triple
bottom line, corporate citizenship, philanthropy, strategic philanthropy, shared value, corporate
sustainability and business responsibility. CSR can be defined as “Corporate social responsibility
is a management concept whereby companies integrate social and environmental concerns in
their business operations and interactions with their stakeholders.”
The CSR approach is holistic and integrated with the core business strategy for taking
responsibilities of social and environmental impacts of businesses. CSR is not all about
philanthropy or doing charity services for the society. This is not to say that such activities are
not important. These actions on the part of a business can help establish good relations with
community members and leaders; however philanthropy and related actions are at best
superficial revelations of CSR. Restricting CSR to philanthropy can have a negative impact on
the organizational environment.
For example, employees may become cynical if organization, they work in, is generous in terms
of charities, it does not express sufficient sensitivity to working conditions or employees' safety;
If it turns out that the organization does not show responsibility to environmental issues, that
organization might have to face the public criticism. A firm that is carrying out practices for
employee development and empowerment is already practicing some components of CSR.
A firm that expressly shares information with employees about a move toward downsizing, and
then helps removed employees find new jobs, is efficiently practicing CSR. Moreover, a firm
that is producing without any compromise safe, reliable, and innovative products or services in
line with customer needs is strategically involved in CSR. CSR is, hence, a management
approach that takes into consideration a collective set of indicators that map the firm's impact
and reciprocal effects within the area of its economic, societal and environmental existence.
Aspects of CSR:
There are two main theories dominate the discussion about the corporate social responsibility:
stockholder theory and stakeholder theory. Stock holder theory states that profit for stock owners
represents the main moral obligation of the corporation. Stakeholder theory states that the groups
other than the stockholder, like community at large, have a interest in the management of the
corporation. The types of corporate social responsibility typically goes with the stakeholder
theory that corporation have responsibilities other than profit. These aspects of the CSR are as
follows:

Environmental
Environmental concern and sustainable development is a main pillar of the corporate social
responsibility. Businesses should be operate in ways that are not environmentally harmful.
Activists make corporations to voluntarily alter operating procedures to reduce environmental
effects and governmental impact, and government has now provides some rules to regulate
carbon emissions and apply stringent rules to waste disposal.

Corporate activity may have many types of effects on the environment. Usually environmental
impact refers to the negative effects occurring in the surrounding natural environmental due to
business operations. Such impacts may include: extensive use of natural, non-renewable
resources of energy, pollution wastage, degeneration of biodiversity, climate change,
deforestation etc. In order to commit to its environmental responsibilities a company should
change its traditional modes operation towards a more environmentally friendly one. The
environmentally more responsible perspective could include such issues as an emphasis on
increased resource productivity, cleaner production and active communication with the
company’s stakeholders. Quality, health and safety issues can also be collected under
environmental management.

Social
Many organizations are becoming increasingly active in referring social concerns and social
responsibility means being responsible for the social effects the company has on people
directly or indirectly. This includes the people within the company, in the supply chain of the
company, in the community the company is in and all customers of the company which
means all of stakeholder. It refers to the management’s decision to make
choices and take actions that will contribute to the welfare and interests of society as
well as profitable to the organization.

While dealing with the social aspect, corporate actions must be designed to promote human
welfare and goodwill, in order to meet society’s expectations that businesses should be good
corporate citizens. The concept of treating customers with respect and attention is not new to
business: often being responsible and attentive to customers has a direct positive effect on the
company’s profits and image. These responsibilities may include such issues as the safety and
durability of products or services; standard or after sales service; prompt and decent attention to
questions and complaints; sufficient supply of products or services; fair standards of
advertising and trading; and full information to potential customers. Businesses are major
contributors to the employment generation of the community. Companies should come up with
wider expectations that today’s employees have for the standard and quality of their working life.
Such expectations could be taking care of the personnel’s welfare and safety at work and
upholding their skills and motivation for the work. Except from these expectations, a socially
responsible and ethical company secures a just treatment and equal opportunities for all its
employees, regardless of gender, age, race, or religion.
Companies grow up on the health, stability, and prosperity of the communities in which
they operate. Many companies take part and involved in community causes,
for example by giving additional vocational training places, providing jobs for socially
excluded people, sponsoring local sports and cultural events, and through partnerships
with communities or donations to charitable activities.
Economic
The economic aspects of CSR consist of understanding the economic impacts of the
company’s operations. The economic part of the CSR activity should consider and work on the
direct and indirect economic impacts that the organization’s operations have on the surrounding
community and on the company’s stakeholders. That is what we called the corporate economic
responsibility. The economic performance of a company has direct and indirect impacts on all of
its stakeholders which includes its employees, local governments, non-profit organizations,
customers, suppliers, and the communities in which the companies operates.
Companies are main contributors to the well-being of the area surrounding their
operations, for example through the local tax base. Taxes have a considerable impact and
important way for the creation and distribution of wealth: avoiding tax, though perfectly legal,
deprives the community in the area of the company’s operation of well-being.
Some activities of the company leads to potential destruction to the trust earned
from the community. These should be avoided or at least carefully considered. Example of such
harmful company behavior contains: bribery and corruption, tax avoidance: and concentration of
rewards and incentives of the company’s performance to few individuals only instead of fair
distribution among the personnel.

Carroll’s pyramid of CSR:

Philanthropic responsibility

Be a good corporate citizen

Ethical responsibilities

Be ethical

Legal responsibilities

Obey the law

Economical responsibilities

Be profitable
Carroll’s CSR model is used as the main theoretical framework for examining CSR practices.
The model is being used as it is comprehensive and highlights important issues of the CSR. The
model focuses on main areas of CSR and their importance. Carroll defines CSR
as encompassing "economic, legal, ethical and discretionary expectations that society has
placed on organizations”. Carroll’s model of CSR states that there are four kinds of social
responsibilities makes up total CSR: economic, legal, ethical, and philanthropic
Economic responsibilities
Companies are economic entities established to provide goods and services to society. Profit
motive (profit maximization) is the primary consideration for entrepreneurship. Managers, who
are agents of the company owners, are bound to maximize shareholders wealth. Carroll’s
economic component highlights the need for a business organization to: perform in a
way which is consistent with maximizing earnings per share; be committed to being profitable as
possible.

Legal responsibilities
Firms are expected to follow and cooperate with laws and regulations. Legal responsibilities
consist of basic conduct of the fair operation of the business as per given by the constitution or
the local government. Carroll’s legal component underlines the need for a firm to: perform in a
manner consistent with expectations of government and law i.e. to become a low obedient
corporate citizen, to provide goods and services that meet minimal legal requirements and that
a successful firm should be defined as one that fulfils its legal requirements
Ethical responsibilities
Ethical responsibilities includes activities and practices that are acceptable or unacceptable
by the society, though not stated into law. Ethical responsibilities refer to strategic managers’
values about right and wrong business behavior or conduct. Ethics or values are dynamic and
are the base of the establishment of law. In other words, ethics are the driving force behind
the creation of laws or regulations. Moreover, ethical responsibilities gives importance to
society emerging values and norms which a business are expected to meet. Sometimes, such
values and norms may require a higher level of performance than required by law.
Philanthropic responsibilities
Philanthropy focuses on corporate actions, towards promoting human welfare or goodwill, in
response to society’s expectations that businesses should be good corporate citizens.
Philanthropic responsibilities are voluntarily taken into account by business; such as public
relations, good citizenship, and contribution to education of community. The main difference
between philanthropic and ethical responsibilities can be given as ethical components are
expected in an ethical or moral sense, but philanthropic components are not. Philanthropy is
voluntary or discretionary on the part of a business. Carroll’s philanthropic component focuses
on the requirement for a firm to: perform in a way which is consistent with philanthropic and
charitable expectations of society, and voluntarily assist projects that enhance a community's
standard of living.

Need for CSR activities

CSR activities are basically encouraged by charitable instincts, even though they may have
potential business benefits. CSR activities are symbiotic and carried out to benefit the
company’s bottom line, as well as the environmental or social virtue of one or more of their
value chain partners, including the supply chain, distribution channels, or production
operations.CSR programs are designed at fundamentally changing the business’s ecosystem.
This transformation is proposed to enhance the company’s long term business position, but
frequently constrains short-terms risks in order to create societal value. The major reasons for
CSR can be figured out as:
Globalization
In an increasingly growing global economy, CSR initiatives helps corporate to engage in more
meaningful and regular stakeholder communication and thus be in a better position to anticipate
and respond to regulatory, economic, social and environmental changes that may take place. In
order to have a sustainable global economy where markets, labor and communities are able to
function well together and companies have better access to capital and new markets.
Financial investors are increasingly considering social and environmental factors when making
decisions about where to invest their money, and are looking to maximize the social constrains of
the investment at local or regional levels
International Legal Instruments and Guidelines
In the recent past, certain indicators and guidelines such as, ISO26000 a guidance tool provided
by the ISO which gives organizations to understand the meaning and importance of social
responsibility. International agencies such as United Nations and the Organization for Economic
Co-operation and Development have developed compacts, declarations, guidelines, principles
and other instruments that specifies the social norms for organizations, though these are not
mandatory but advisory for organizations. Initiative such as Global Compact is being created to
instrumentalise CSR across all countries. The Global Compact is a framework for businesses that
are committed to having their business operations and strategies adjusted with ten universally
accepted principles that provides model that companies should embrace, support and enact, a set
of core values in the areas of human rights, labour standards, the environment, and anti-
corruption.
Changing Public Expectations of Business
Globally companies are expected to do more than just providing jobs and contribute to the
economy through taxes and employment. Consumers and society in general expect more from
the companies whose products they purchase. This is compatible with believing the idea that
whatever profit is generated is because of society, and hence mandates contributing a part of
business to the less privileged. This has resulted in an increasing expectation that companies will
be more open, more accountable and be prepared to report publicly on their performance in
social and environmental arenas.
Corporate brand
In an economy where corporate strugle for a unique selling proposition to differentiate
themselves from their rivals, CSR initiatives enable corporate to build a stronger brand that
resonates with key external stakeholders – customers, general public and the government.
Businesses are getting to know that adopting an effective approach to CSR can open up new
opportunities, and increasingly contribute to the corporate’ ability to attract passionate and
committed workforces.
Importance of CSR activities
Scientific researches are becoming increasingly clear with their findings about how CSR is
necessary for the long-term sustainability of a firm. Firms that blindly and narrowly believed in
the profit motive, without concern for the broad spectrum of Stakeholders that are relevant to the
long run, are increasingly shown to lack sustainability. Financial investors are increasingly
considering social and environmental aspects when making decisions about where to place their
money, and are looking to maximize the social constrains of the investment at local or regional
levels, thus managing CSR practices in order to empower the underprivileged part of the society
or to engage in providing solutions to social problems, will attract stakeholders.
CSR can give new opportunities, and increasingly contribute to the corporate’ ability to attract
passionate and committed workforces.

Conclusion
Today’s corporate social responsibility approaches attempts to implement the vision of
sustainable development at the corporate level. In fact, the term “corporate sustainability” may
be a more accurate descriptive label for these efforts. Ambitious governmental, business and
academic goals and corresponding efforts have been created.. Nonetheless, a truly satisfactory
application of the broad CSR concepts as well as the more specific challenges of the corporate
sustainability continue to be an elusive goal at the corporate management level.

Hence , in terms of business, CSR is basically a strategic approach for firms to understand and
solve issues associated with their interactions with others and, through those interactions, to
succeed in their business endeavors. The concept that CSR is significant to profitability and can
prevent the loss of customers, shareholders, and even employees is gaining increasing
acceptance. Further, CSR can help to boost the employee morale in the organization and create a
positive brand-oriented corporate environment in the organization. By developing and applying
CSR initiatives, corporate feel contented and proud, and this pride trickles down to their
employees.
References
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Leadership Greensboro, North Carolina
 Clair Moore “The relationship between stakeholders, corporations and CSR” (white
paper)
 Robert G. Eccles, Ioannis Ioannou, and George Serafeim “ The Impact of Corporate
Sustainability on Organizational Processes and Performance”
http://ssrn.com/abstract=196401
 Mohammed Belal Uddin, Md. Riad Hassan, Kazi Md. Tarique “Three Dimensional
Aspects of Corporate Social Responsibility”- Daffodil International University Journal of
Business and Economics, Vol. 3, No. 1, January 2008
 Carroll, A. B. The pyramid of corporate social responsibility: Toward the moral
management of organizational stakeholders.- Business Horizons,