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Purpose of the Article

Can an organization make profits and contribute to social development as well? The question might seem to be a paradox as well profits and social developments often do not complement each other.

But this was proved wrong by many business organizations like, Ford motors, Amul, Reliance, Aravind eye care, ITC et al. some other examples which can be coated towards social responsibility are Azim Premji foundation has committed $ 125 million in trying to improve government run primary schools in rural areas by providing training to teachers and upgrading the curriculum. Anil Agarwal Chairman of Vendanta resources committed $ 1 billion towards university in 6000 acres. Kiran Mazumdhar Shah of Bio-tech donates 50 per cent of dividends earned by her to projects working to provide drugs and health care to poor. This clearly that now a days the business organizations realized that they are depending on society for everything and they are responsible towards society.

What is CSR?

Corporate social responsibility (CSR), also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business (SRB), or corporate social performance, is a form of corporate self - regulation integrated into a business model. CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure their adherence to law, ethical standards, and international norms. Business would embrace responsibility for the impact of their activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, business would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. Essentially, CSR is the deliberate inclusion of public interest into corporate decision making, and the honoring of a triple bottom line: People, Planet, and Profit.

Arguments Underpinning CSR

Arguments offered favour of CSR can be broadly classified into two camps - moral and economic.

1. A Moral Argument for CSR

While recognizing that profits are necessary for any business entity to exist, all groups in society should strive to add value and make life better. Businesses rely on the society within which they operate and could not exist or prosper in isolation.

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* Contributed by: -
Prof. T. Srinivasa Rao has done M.Com, M.Phil. ICWAI (F) & EMBA. Also has Diploma in Export Management. He is currently working as Lecturer in Commerce at Andhra Loyola College Vijayawada, Andhra Pradesh.