Corporate Social Responsibility

The importance of taking care of other stakeholders and making CSR integral to the company. Stakeholder theory emphasizes that a company’s real success lies in satisfying all its stakeholders. The problem of governing the corporation in today’s world must be viewed in terms of the entire grid of stakeholders (Primary, Secondary and Tertiary) and their power base. The boycott of Nike for labour practices in the 1990s and of Maggi Noodles on safety concerns in 2015 show how important it is for companies to effectively engage with stakeholders to mitigate social risk. CSR is a continuum approach which includes the elements (what is CSR); the principles (the purpose of CSR); the process of responsiveness (how CSR is to be done); the corporate social performance (the outcome of CSR); and its impact on stakeholders on each of the four elements—economic, legal, ethical and philanthropic. Socially responsible corporates contribute to economic development of the region while improving the quality of life of the workforce and their families as well as of the local community and society at large. The CSR movement has evolution from complete non-acceptance, to mere philanthropy, to creating value for all stakeholders. Business and society are interwoven. Spending on CSR benefits the company in the form of strengthened public relations, improved reputation, reduced risks, licence to operate and an opportunity for cause marketing. The success of Amul illustrates that if companies take care of its communities it can create value for themselves. Making CSR, an integral part of corporate strategy improves stakeholder perceptions and creates sustainable business. A company’s success and long-term continuity are dependent on its ability to adopt the CSR principles of legitimacy, public responsibility and managerial discretion. India has gone one step ahead and legally mandated companies to undertake CSR and share the government’s responsibility of economic and social upliftment of the poor and underprivileged. During crisis such as the global pandemic of 2021–22 the important of CSR magnifies manifold.