Changing CSR practices of corporates – a study of institutionalization of mandated corporate social responsibility in India

Abstract

PurposeGlobally, corporate social responsibility (CSR) has been a voluntary practice, but faced serious limitations in its institutionalization. Resultantly, India, through the Companies Act, 2013, mandates corporates to change voluntary and ad hoc CSR practices into strategic and systematic projects. This paper aims to explore the changes brought in CSR practices by corporates under the influence of CSR law. The goal is to fill the literature gap on qualitative changes brought in CSR practices by the mandate.Design/methodology/approachThis qualitative study used purposive sampling and conducted in-depth interviews of corporate officials, nongovernmental organization (NGO) officials and academicians. The findings are discussed with the theoretical framework of institutional isomorphism.FindingsThis paper presents changes in CSR practices in six themes: ad hoc to project-mode program designing and planning, stricter due diligence of NGOs, multi-stakeholder implementation of impact-driven projects, strict monitoring mechanisms, higher funding and rigorous reporting. These changes contribute to an understanding of the shift from voluntary to mandatory CSR in India, institutionalized through a mix of normative, coercive and mimetic pressures.Practical implicationsIndian corporates can adopt the systematic practices in their CSR programmatic cycle, as presented in this study. NGOs would gain insights into newer requirements of corporates to design effective collaborations. Future studies can be conducted to describe the extent of institutionalization of CSR practices in India.Originality/valueThis paper creates knowledge for multiple stakeholders of CSR in India and other developing countries by presenting changes brought in CSR practices by a legal mandate in comparison to voluntary CSR.