Corporate Social Responsibility (CSR): An Emerging Opportunity or a Forced Liability

Abstract

A significant number of studies have been conducted on Corporate Social Responsibility (CSR) and its impact on different business organizations. However, no such study has been witnessed so far that could explain the nature of the amount involved in the CSR spending. The main purpose of the study is to analyze the viewpoint of different organizations that how they consider this CSR spending. In a current scenario, organizations have failed to take responsibility for what they are operating, so it is needed to consider the real cost of their functioning which brings a focus toward the environmental and social concerns. On the other hand, CSR also became legitimate spending stipulated in the Indian companies act, 2013. According to the act, every business organization is a responsible player to build an equitable society and for that CSR should be a part of the DNA of every organization. Through this paper, we made an attempt to see the nature of CSR adopted by different organizations, whether it is voluntary or mandatory. We reviewed some survey reports made on CSR before and after the Indian companies act, 2013. These reports provide a perspective on CSR perceptions of different business organizations. For empirical analysis, we have analyzed 100 listed companies’ financial reports to know whether CSR mandate impact their performance or not. Using a difference-in-difference approach, we found that before the legitimation of CSR the performance found to be better than post CSR legislation. This paper is also an attempt to present a conceptual analysis of the CSR spending before and after its legitimation in India which will help us to determine whether it should be treated as an investment opportunity or a forced liability.