Tuesday, January 8, 2008

Corporate Social Responsibility Initiatives by Indian Corporate Houses – The Way Ahead

The world business council for sustainable development defines “Corporate social responsibility (CSR) as the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large”. Most corporate houses in India have full fledged CSR initiatives, which are being managed by their trusts or foundations. When one glances through the recent annual reports of Hindustan Unilever Ltd (HUL) and ITC one can see the increased interest and coverage that such initiatives are getting.

Within the CSR initiatives one can see two distinct categories, one is the pure CSR initiatives in which the company has no business objectives attached to it, on the other hand there are the quasi initiatives, wherein there is a profit motive attached to the initiatives, though may not be in the short-term. Initiatives in education of Azim Premji Foundation and Infosys Foundation would fall into the first set of classification and so could be the Shiksha initiative of P& G. In the Quasi categories are initiative like Project Shakti of HUL and e-choupal of ITC, in both the cases though the initiatives are not totally profit oriented, they are linked to their businesses. In the case of Project Shakti HUL is using the Self Help groups in villages as an alternate channel of distribution and in e-choupal ITC is setting up kiosks in villages for procurement of agricultural commodities.

The positives of a CSR initiative are that it can draw upon the internal resources of the organization both in terms of finances as well as managerial talent and also attract right people to work on the initiatives. They also help in providing opportunities to field-test ideas and become a source of innovation in addressing pressing needs and problems of the society. The draw back is in terms of the scale of their initiatives which normally tend to small and benefits localized. The problems related to scaling up are also constrained by the fact that the value created by these initiative are not getting reflected in the market and thus there is a need to ensure that these initiatives are driven by market forces and not inspired by corporate conscience alone .

Thus looking at the initiatives by Corporate India one feels that the Indian society expects more from them and thus there is an urgent need to address the scaling-up the various CSR initiatives and also a need to build a mechanism through which such efforts are recognized and rewarded.

1 comments:

Hydroponics said...

The world business council for sustainable development defines “Corporate social responsibility (CSR) as the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large”. Most corporate houses in India have full fledged CSR initiatives, which are being managed by their trusts or foundations. When one glances through the recent annual reports of Hindustan Unilever Ltd (HUL) and ITC one can see the increased interest and coverage that such initiatives are getting.

Within the CSR initiatives one can see two distinct categories, one is the pure CSR initiatives in which the company has no business objectives attached to it, on the other hand there are the quasi initiatives, wherein there is a profit motive attached to the initiatives, though may not be in the short-term. Initiatives in education of Azim Premji Foundation and Infosys Foundation would fall into the first set of classification and so could be the Shiksha initiative of P& G. In the Quasi categories are initiative like Project Shakti of HUL and e-choupal of ITC, in both the cases though the initiatives are not totally profit oriented, they are linked to their businesses. In the case of Project Shakti HUL is using the Self Help groups in villages as an alternate channel of distribution and in e-choupal ITC is setting up kiosks in villages for procurement of agricultural commodities.

The positives of a CSR initiative are that it can draw upon the internal resources of the organization both in terms of finances as well as managerial talent and also attract right people to work on the initiatives. They also help in providing opportunities to field-test ideas and become a source of innovation in addressing pressing needs and problems of the society. The draw back is in terms of the scale of their initiatives which normally tend to small and benefits localized. The problems related to scaling up are also constrained by the fact that the value created by these initiative are not getting reflected in the market and thus there is a need to ensure that these initiatives are driven by market forces and not inspired by corporate conscience alone .

Thus looking at the initiatives by Corporate India one feels that the Indian society expects more from them and thus there is an urgent need to address the scaling-up the various CSR initiatives and also a need to build a mechanism through which such efforts are recognized and rewarded.

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