Thursday, December 24, 2009

Corporate Social Responsiblity- Epithet of Ethics

Recently we have completed the first corporate week (December14-December2009) in our country on behalf of Ministry of Corporate affairs, Government of India; the initiative indeed shown partially the optimization of politics and economics with a voice for practices of Corporate Social Responsibility (CSR).
In a recent survey of AC Nielson on CSR, India ranked on fourth position where Australia viewed as best place of CSR initiative; on cards at least it gives India a remarkable position in comparison of other surveys on social indices where its terribly lag behind from its actual occupation potential. Possibly some causes of such poor state of affairs could be attributed to the fragile civil consciousness and low CSR initiatives by most of the leading corporates who enjoyed the resource generating helm of affairs but remains oblivious with the near by abysmal conditions.

Few months back I was passing through survey of a leading Indian publication on the proportions of slums in major tier-I Indian city; it terribly struck me to know that over fifty six percent of India’s most affluent commercial city, Mumbai’s population is constituted through these inhuman slums…more or less this is an universal reality of other city as well nevertheless of the genuine fact that Indian nation state has meanwhile progressed a lot and able to create a solid middle class with substantial purchasing capacity in country.
Alas! If same attention could be materialized on this bottom of pyramid section on which the management thinker C.K.Prahlad found immense opportunities by upheavelling those from their very sad dwellings through major waves of innovations although temporarily we have only a virtual and Hollywood imposed celluloid vision of these viciousness through high techniques and commercially manipulated realities which widely accepted as blockbuster (Slum dog Millionaire)…this cinema eventually fetched some Oscars recognition to India and only after that grab the rapt attention of neighboring dwellers who hitherto have been not able to see the abject poverty from their posh housing societies.

What I mean to say by all these narration that our major chunk of population are being accustomed of virtual reality and they can be sensitized only through the virtual images rather spontaneity of their consine to oversee on any grave matters; unfortunately they are completely lacking the direct touch with the most of issues and even they also here missed to replicate their crucial bandwagon, western counterparts who support at best for any maneuvering of social security causes in their country.
Indeed we have urgent need to thrive and strive as priority to not shaping the CSR initiatives as pipe dream since peoples and planet is as important as earning profits or any other lucrative incentives; so it should never seen as a diversionary tactics nor only be practiced as boardroom phenomenon, its need of performing in real terms with finest intentions.

It’s worthwhile to note that corporate governance is mandatory practice in any company unlike the CSR which is entirely optional in nature with motives to strengthen the much needed tolerance between social and corporate interests; so practices of CSR most often struck with tougher realities.
Quotation of Milton Friedman could be sited in tune with the prevailing circumstances in corporate world “Corporates and corporate promoters have single constituency called stakeholders”- that’s enough to cover the canopied adverseness albeit we have some exceptions like- Tata, Amul, ITC-echaupal, Infosys, Microsoft, google etc where there dids compel us to differentiate between good corporates and fragile corporates.

Like many other things, it’s also visible in CSR case that India is the land of dual reality; we have both sort story in our record where Tata could be a formidable example of finest CSR practices through its numerous initiatives in town planning (Jamshedpur), Education (TIFR, TISS, IISc, TERI etc), health (Tata Memorial Hospitals) etc.
At many front they displayed their commitments for nation building and indeed tried best to converge corporate achievements with national pride, other side of story is strikingly contrast where we have to confront with the unethical face of governance and of- course bad CSR in most recent case of SATYAM INFOTECH where they even jeopardized their initial good works, and in past, U.S companies-UNION CARBIDES & DOW CHEMICALS which distorted the psyche of entire humanity through their havocking acts and cheating with the Bhopal gas tragedy.

It’s becoming very imperative to be more focused on social responsibility through a multi-pronged channel consists with active initiatives from government, industry, civil society, NGOs, individuals etc to impart a finer balances in our dual reality. We must strive for a successful society because a business or any other deliberation can’t be succeed in a rogue social atmosphere-every political theory, either its Utilitarianism, Communism and even Capitalism teach the basic principles of common goods and dreams for a healthy society.
After all we shouldn’t forget that the father of modern capitalism and its pioneer economic theorist-Adam Smith had written his first book named as “Theory of Moral Sentiments (1757)” much before the magnum opus “Wealth of Nation”-no doubt that he had been teaching through out his work, the self interest of business entities but his voice also happened equally resonant against the selfish interests of them…this subtle caveat is worthwhile of consideration today.

It would be a prudent move for the time being to all business players to look back in the basic principles of modern existing economic theories since we are really facing very hard time at the ethical sides of businesses-Wall Street crisis, Ponzi schemes, Dubai crisis and many more may be in near future since the bad gambling in financial sector is far from being halted, that necessitates to draw a lucid framework for adoption of CSR as a mandatory practices unlike the present optional mode.
In Indian case, role of the CSR is utmost strategic to address the plights of bottom of pyramids who hitherto have been dwelling in stark unfortunate circumstances-what they need an all round support and innovations like no-frills financial access and entrepreneurship qualities to raise themselves from the vicious circle of life. Wishing, to see CSR out of ceremonial facades and its better involvement with real developmental issues.

Atul Kumar Thakur
December24th 2009, New Delhi

1 comment:

  1. Comment by Sanjay Bhargava 1 hour ago
    Inclusive Growth will benefit a lot of companies especially those whose products will be bought by the bottom of the pyramid. Not too many companies see this very clearly but they are beginning to see this and maybe we will see more and more Indian companies supporting movements like UFA or starting some of their own. The intersection where CSR and the growth path are the same is the one where rapid impact can be expected.