Corporate Social Responsibility: Issues Challenges and Strategies for Indian Firms

Abstract

Today Businesses are an integral part of the society. Michael Sabia, President and Chief Executive Officer of BCE Inc., has said, Corporations are also social institutions. The role of business, according to this model, is to create value for its shareholders and also creates value for society, manifesting itself as a win-win proposition. Corporate success during these days is highly based on continued good relations with a wide range of individuals, groups and institutions. Corporate Social Responsibility plays vital role in winning the customer's confidence that will help growing the business. Many organizations actively conduct campaigns to create awareness among corporate, civic bodies, and government bodies about the importance of corporate social responsibility. The term corporate responsibility has been captioned under names including corporate citizenship, social responsibility. CSR as described by Lord Holme and Richard Watts in 'Making Good Business Sense'. Society began to expect business to voluntarily participate in solving societal problems whether they had caused those problems or not. Report on Business Magazine recently noted that many business leaders now believe that doing good for others means doing good for shareholders as well. Corporate social responsibility is a process in which all companies come together as one and take part in the welfare of the society. It is often referred to as business responsibility and an organization's action on environmental, ethical, social and economic issues. New legal mandates were imposed to ensure equal employment opportunities, product safety, worker safety, and environmental protection. Companies with high CSR standards are able to demonstrate their responsibilities to the stock holders, employees, customers, and the general public. As per United Nations and the European Commission, Corporate Social Responsibility (CSR) leads to triple bottom-line: profits, protection of environment and fight for social justice. Economist and philosopher Adam Smith suggested that the needs and desires of society could best be met by the free interaction of individuals and organizations in the marketplace. However, it is still in nascent stage in India. A recent survey reveals that 79 percent of Americans prefer to buy products of companies that actively engage in corporate social responsibility events. In this connection Indian business world should go beyond their economic and legal obligations to establish mutual trust and accept responsibilities related to the betterment of society. The papers discuss the role of corporate social responsibility. Paper also underlines the major issues/challenges faced by Indian firms, and suggests remedial measures for effective implementation of CSR initiatives. Important terms: Corporate social responsibility, issues, challenges, remedial measures