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Authors:
M.BALASUBRAMANIAN, PROF. DEPT. OF MANAGEMENT STUDIES,JJ COLLEGE OF ENGG &
TECH, TRICHY-09
&
MRS. P.Na.KANCHANA, ASST.PROF. DEPT. OF MANAGEMENT STUDIES, JJ COLLEGE OF
ENGG & TECH, TRICHY-09
INTRODUCTION:
India is one of the fastest growing and most high potential economies
in the world today. CSR has been basic to business philosophy. It has been an
intense but deliberately low profile activity based on the belief that social
responsibility is a privilege and not a portal for publicity. Today India’s
increasing prosperity is throwing up further social challenges that need to be
tackled, and we believe that businesses can and must play a role in
addressing these. Businesses are a part of wider social fabric. They cannot
possibly thrive as isolated islands of prosperity against a backdrop of
deprivation where large section of society are denied even basic amenities
such as water, housing , health care and education. This is an unacceptable
situation to every Indian. It is our conviction that India’s spectacular growth
provides companies, not only with a business opportunity but also with a
social opportunity to redress some of the weaknesses that exist in our social
fabric and human development infrastructure. The focus on CSR is
particularly on education. Employment and Environment. CSR cannot begin
and end with the allocation of funds. It depends how the projects are
identified and structured, employees are encouraged to make those
initiatives work. Through CSR every organization hope to have the privilege
of contributing, in a small way not to the Gross National Product but to the
Gross National Happiness as well.
This paper also focuses Prime Minister’s Ten-point social charter for
companies and how CSR is implemented by Mahindra & Mahindra and Tata
Tea.
Meaning of CSR:
CSR broadly represents the relationship between a company and the wider
community within which the company operates. It is recognition on the part
of the business that ‘for profit’ entities do not exist in a vacuum, and that a
large part of any success they enjoy is as much due to the context in which
they operate as factors internal to the company alone.
The entirety of CSR can be discerned from the three words contained within
its title phrase:
CSR is about businesses and other organizations going beyond the legal
obligations to manage the impact they have on the environment and society.
In particular, this could include how organizations interact with their
employees, suppliers, customers and the communities in which they operate,
as well as the extent they attempt to protect the environment.
• Corporate governance
• Patriotism
• Fair trade
Companies in particular industries have felt pressured to pay a ‘fair’ price for
the goods they purchase, over and above the market-driven price, directly to
the producer. This is particularly the case in many food industries, where the
world market prices may well have decreased over while costs have either
remained the same or increased.
• Diversity
The 2000 Census data has revealed that the ethnic make-up is changing
rapidly. Organizations need to adapt their traditional structures and mind-
sets, which prevent companies from marketing products effectively to
significant segments within the market.
Literally, CSR can creep into every decision that a company makes.
One sub-area of the issue of ‘diversity’ involves the equal treatment of men
and women. There are plenty of examples of both good and bad practice.
IMPORTANCE OF CSR:
“ I honestly believe that the winning companies of this century will be those
who prove with their actions that they can be profitable and increase social
value- companies that both do well and do good….Increasingly, shareowners,
customers, partners and employees are going to vote with their feet—
rewarding those companies that fuel social change through business. This is
simply the new reality of business- one that we should and must embrace”.
The business most likely to succeed in the globalizing world will be those
best able to combine the often conflicting interests of its multiple
stakeholders, and incorporate a wider spectrum of opinions and values within
the decision-making process and objectives of the organization. Lifestyle
brand firms, in particular, need to live the ideals they convey to their
consumers.
Consumers and society in general expect more from the companies whose
products they buy. This sense has increased in the light of recent corporate
scandals, which reduced public confidence in the ability of regulatory bodies
and organizations to control corporate excess.
• Increasing affluence
• Globalization
The result of this mix is that consumers today are better informed and feel
more empowered to put their beliefs into action. From the corporate point of
view, the market parameters within which companies must operate are
increasingly being shaped by bottom-up, grass-roots campaigns. NGOs and
consumer activities are feeding, and often driving, this changing relationship
between consumer and company.
CSR is therefore also something that a company should try and get right in
implementation.
Prime Minister Manmohan Singh issued a ten-point social charter for the
corporate sector last may, “In a modern society , business must realize its
social responsibility….. The time has come to ask wat can we give back to
India.” Complimenting credible CSR work, Singh appealed to companies to
engage extensively in activities that benefit society. He demanded current
efforts to make the youth employable be multiplied by 1000. “Corporates
can play a supportive role with more efficient government delivering systems
to the millions anxious to move out of Poverty,” Concurs Mitra.
MAINSTREAMING:
M&M’s Project Nanhi Kali supports the education of girls in the poorest and
most remote parts of the country, including tribal belts in Rajasthan, Madhya
Pradesh, Chhattisgarh and Andhra Pradesh.
It plans to reach out over 6,000 Nanhi Kali schools, which would benefit girls
from Class I to X supported over 38,000 disadvantaged girls since 1996. The
trust work with 25 NGOs, providing essentials, such as uniforms , books and
school bags, Mahindra employees are sent out there to be mentors of
students in such schools. This project helps to arrested the drop out rate
among girls in schools to 5 percent from an average of 40 percent.
The Mahindra Pride School, near Chinchwad outside Pune, provides livelihood
training to 600 young men every year from schedule castes, scheduled tribes
and other backward castes.
LIFELINE EXPRESS
Life Line Express, a central government aided hospital on rails, which travels
to Indian hinterland every month for performing cleft lip and cataract
surgeries, has become another popular volunteering option for Mahindra
group employees in Rudrapur. Impact India Foundation manages this train, a
UN-funded project.
Assisting doctors from the King George Medical College (KGMC) , Lucknow,
Mahindra engineers helped 647 patients benefit from surgery on board the
train in 2007
Other CSR initiatives include the Mahindra All India Talent scholarships are
awarded to deserving, economically disadvantaged students every year,
chosen through an exam.
3750 students have benefited from this scholarship since it began in ten
years ago.
It provides Rs25,000 to each student over a three years for pursuing job-
oriented diploma courses at recognized government polytechnic institutes.
The Mahindra United World College, on the outskirts of Pune, supported the
enrolment of three children from a near by village into American universities.
Then, M&M has also entered into a public-private partnership with the
Government of Rajasthan to set up a mid-day meal kitchen at a cost of Rs 1
crore to feed 25,000 children in Jaipur District’s Govindgarh.
The intent behind all these initiatives is also to enable Mahindra employees
to work with local communities.
Two years ago when M&M celebrated its 60th anniversary, its financial
commitment to CSR was raised to 1 percent of profit after tax. Last year,
M&M spent about 8 crore on its CSR initiatives; this year , the amount is
expected to be in the region of Rs 11 crore-12 crore. The enhanced funding
will enable the group to expand its CSR activities to states it could not cover
previously.
The Rs 1,070 crore Tata Tea now the world’s second largest branded tea
company. Many initiatives were taken by the 140 year old Tata Group. The
rehabilitation centres at Munnar- Shrishti, Aranya and Athu;ya have made
some headway.
MAINSTREAMING:
TATA TEA HAS CHANGED THE WORLD FOR MANY DISABLED MEN AND
WOMEN.
ENVIRONMENT FOOTPRINT:
The company’s stationery unit recycles tea waste to make paper. The entire
stationery requirement of KDHP is met by the handmade paper unit.
It supplies 150,000 paper bags every year to Tata tea for use in selling tea.
COMMUNITY DEVELOPMENT:
The company runs the Dare School to provide education based on kid’s
capabilities. It is a school which offers education to differently-abled children
below 18 years, after which they are trained in several vocations at the
centres.
CORPORATE GOVERNANCE:
The produce of these centres accrue to KDHP, the company that now owns
and runs the Munnar plantations of Tata Tea.
Tea plantations such as those in Munnar and the ones along the Brahmaputra
Valley – where too rehabilitation centres and other CSR initiatives specific to
the region are running form a negligible part of Tata Tea’s overall business.
Tata Tea fully funds and run them.
Conclusion:
At its best, CSR can be a strategic management tool that can lead
organisations through the current economic downturn and help them to
come out the other side better and more robust businesses, where many
traditional business tools will fail. At its heart, it is about risk minimisation,
and opportunity provision: key ingredients for successful business, and
ideally central to core organisational values.