Social Impact of CSR on contemporary Indian Society with reference to Industries in Pune

Abstract

The past two decades have witnessed a remarkable change in the way businesses run and operate, with the quest for excellence and all-round growth the primary objective of corporations. Pursuit of financial growth does not always lead to social advancement, and is often detrimental to the environment, resulting in unhealthy workplaces, exposure to toxic substances, urban decay and other similar issues. Managers and practitioners have often been criticized for being single minded about value maximization. The turn of events has pressurized firms to put serious efforts into a wide range of Corporate Social Responsibility (CSR) activities. CSR has become a critical aspect in strategic decision making of a firm primarily due to financial scandals and a drop in investors’ confidence. CSR has emerged as a view that can add to the financial performance of a company and suggests that corporate decision-makers must take care of a range of social and environmental affairs in order to maximize long-term financial returns. Every firm differs in the way it mplement CSR in strategic business practices, with its size, operating industry, stakeholder demands, historical CSR engagement, level of diversification, research and development and labour market conditions a few of the factors that determine this decision making. One side of the coin confirms the benefits colligated with good reputation, while the other indicates that a firm’s costs of adhering to ethical standards will translate into higher product prices, a competitive disadvantage and lower profitability. Even after deep exploration of the Corporate Social Performance (CSP) relationship, empirical evidence to date is somewhat conflicting. Globalization and liberalization in the Indian economy has shifted corporate goals from a socio - economic focus towards increasing shareholders value to the benefit of various stakeholders. Although extensive research on CSR-CFP has been carried out in developed countries, there is a paucity of such studies in India. The main thrust of the current study is to get intimate with this issue or devise a problem along with attaining new insights into it. This study intends to get to grips with and derive the perceptivity of corporate social behaviour towards its stakeholders along with justifying its triple bottom line benefits while filling the literary gap through replicating and extending previous findings on social performance of firms. In doing so, this study also attempts to analyze in detail the aforesaid relationship and discuss the effectiveness of social performance along with competitive performance of sample Indian companies. The results identify critical Indian CSR factors and determine their importance in shaping the CSP relationship, on the basis of which further research in sectors identified as weak may be carried out.