Today Corporate Social Responsibility has assumed great relevance and importance. In simple terms according to United Nations Industrial Development Organization (UNIDO), “Corporate Social Responsibility (CSR) is a management concept whereby companies integrate social and environmental concerns in their business operations and interaction with their stakeholders.”
When we go back to the days of Ancient India we find that this concept was very much prevalent wherein the king or Raja had a set of duties and responsibilities towards his Praja or people. This was something in the nature of Raj Dharma and this was firmly established as a code of conduct expected to be observed by a fair and honest king. In this essay we shall see how we can learn about CSR from the religious manuscripts of Ancient India. We will also study the significance of service as an important aspect of CSR now just as it was then.
Corporate Social Responsibility
Apart from the definition of CSR by UNIDO there is another one that defines it as a concept. In this concept organizations are expected to consider the interests of society. This is achieved by taking the responsibility for the impact caused by their activities on communities and customers besides shareholders and employees as well as the environment in every aspect of their operations.
Till the 1990s this was not the notion of CSR. Till then CSR was looked at more in the form of a charity associated with the really big organizations. However, once liberalization kicked in, there has been a shift from the ‘patronage model’ to a ‘stakeholder’ participation model. In the latter and present day model, society feels that companies have obligations and duties and these are to be performed in respect of non-financial arenas as well. Such arenas involve human rights and business ethics besides environmental policies, community development and corporate governance as well as corporate contributions and issues involving the workplace. It is now felt that organizations must be held accountable for not just the financial performance aspect but the social and environmental issues too.
CSR and Healthy Society
The view regarding business today is that it is an element of society. Business needs to operate with various resources of society. These resources include land, labor and material. Therefore, it stands to reason that society and its resources are vital necessities for business to survive. CSR is a way to compensate society for the use of its resources by businesses. It follows therefore that companies need to take care for the stability of society and the environment. Towards this task it is necessary for organizations to look after various aspects in respect of the workforce such as health care and education, good working conditions, lowering the chances of accidents and increasing the efficiency of the employees.
Improving the Productivity of Businesses
It is in the interest of businesses to participate in the efficient utilization of natural resources such as land, water and energy since this increases the productivity of businesses. For efficient growth, businesses need to concentrate on good governance while a scrupulous respect for property rights is absolutely indispensable for enhanced competence.
Observance of a healthy set of regulatory standards is good for the protection of rights of both the consumer and the company from exploitation. A company working on frugal financial management and efficient performance levels will ultimately meet the shareholder’s expectations. Innovative approach and appropriate technology together with the right kind of management-worker partnership will ultimately benefit both while bringing forth a consistent growth profile.
Key Areas of CSR
Today organizations have proven that they have it in them to be good corporate citizens by helping in diverse areas. Some of these areas include:
- The environment and ecology
- Planting of trees
- Conservation of wildlife
- Community and health
- Customers and the marketplace
- Employees and the workplace
- Growth of capital
- The nurturing and development of human capital
- Transparency in Financial statements
- Improvement of infrastructural support such as roads and water supply as well as electricity and telecom
- Offering to construct public latrines
- The promotion of education through better schools, funding of scholarships and the sponsorship of education programs
- Effective participation with the government in policy matters
- Curbing misinformation by ensuring truthful publicity and advertisements
- The effective sustenance of natural resources
- Providing accurate information regarding dangerous products
- Offering improved career prospects
- Abstaining from poisoning water bodies
- Ensuring the economical practice of recycling water and obsolete and waste material
- Avoiding unfair trade practices that include huge commissions and discounts
- Providing total job security and other benefits that include:
- Provident Fund
- Retirement benefits
- Respecting social values, human rights and local culture
- Total Quality Management
- Ethical research practices such as in animal testing
- Providing crèche facilities for women employees
- Ensuring safe practices that are free from the likelihood of accidents
- Payment of taxes due to the government
- Meticulous in providing the correct product in terms of weight and quality
- Providing transport, medical and the facility of meals within establishment
- Paying suitable compensation for people displaced especially in SEZs etc
CSR is Responsibility and not Charity
It must be appreciated that none of the points mentioned is to be construed as charity. A good company needs to be responsible to its society and environment. It must be understood that if the company is making use of resources belonging to the society then that company is duty bound to give back to the society in full measure. This is the reason why when we talk of Public Private Partnership it is incumbent on the private body to be totally supportive of the public in whatever manner it can. Then only can society as a whole move forward. The company must never act in a manner that can be construed to be detrimental to the society to which it belongs.
Awareness of CSR within India
There is an increasing awareness of CSR within India. However, much before CSR became a concern at the global level India, on account of its religious roots, has been aware of corporate social responsibility. In the earlier days prominent group of companies such as Tata and Birla have been well known as philanthropic institutions of great stature. However, these and other companies have now moved away from being merely donors of charity. Today these and many other Indian companies are focusing on initiatives that are for the welfare of communities.
Tata Group of Companies has therefore launched an effective program in rural development, social welfare and community development as well as water management and tribal development. Towards this, “7000 villages around Jamshedpur and Orissa benefit from development programs run by the Tata Steel Rural Development Society. These programs cover issues like education, irrigation, forestation, adult literacy, vocational training, handicrafts and rehabilitation of the handicapped persons.” Further, Tata Steel “carries out medical and health programs, blood donation drives, mass screening of tuberculosis patients immunization camps and drug de-addiction”.
Infosys similarly has “taken initiatives to work in the areas of research and education, community service, rural reach program, employment, welfare activities undertaken by the Infosys Foundation, healthcare for the poor, education and arts & culture.”
There are similar examples of an effective culture of CSR in India by other companies. These include the Birla group of companies that has provided “extensive training to over 10,000 villagers in its Carpet Weaving Center.” It also includes Lupin India Ltd that has “started a project for providing sustainable development in 154 villages across Rajasthan” towards the alleviation of poverty among many more examples.
The Ancient Driving Force for CSR in India
Indian civilization goes back more than five thousand years. During the time of the Indus Valley civilization there were proper roads and drainage systems as well as the practice of agriculture. There was the semblance of an existing political system then too. With the advent of the Aryans the Indian civilization became nomadic but during the Vedic age one can find the existence of tribal kingdoms. The “basic unit of the political organization was family and a number of families formed a village.” Groups of villages headed by village heads combined to form a circle of clans “forming the tribe and their leader was Rajan or the Vedic king. He protected his people from enemies and was accompanied by a senani or commandant.” The king was “responsible for defense and maintaining law and order of their kingdoms.”
Dharma was the Crux
According to the ancient political system that existed in India both the king and his subjects were “bound by Dharma or the rule of law” and “though a king, yet he had limited powers. The king was required to take oath and be loyal to his people. It was much later that “the word of the king was law. Many large empires were seen extending almost all over the sub continent. Several empires such as the Mauryas and Guptas flourished.”
Dharma the Principle of Righteousness
“Dharma is the principle of righteousness.” “Anything that creates discord…and foments hatred is Adharma.” Further “self realization is the highest Dharma. God is the centre of Dharma.”The Vedas are the final authority of Hindus in the matter of Dharma. This is because the Vedas are the oldest scriptures in the world and are duly supported by learned scholars all over the world.
Dharma is different for men and women. It is also different for different Varna or caste and for the different Ashramas or the four stages in man’s life. However, there are certain elements of dharma that are common to all and these are non-violence, honesty and cleanliness besides being in full control of one’s senses.
Dharma is flexible too. It depends upon age and time, circumstances and the community to which one belongs besides the degree to which one has evolved. In the Bhagavad Gita Lord Krishna says:
Tasmachhatrang pramanang te
“Let the scriptures be the authority in determining what ought to be done and what ought not to be done”. It is obvious therefore that Dharma needs to be done according to the scriptures.
As a matter of fact one of the most profound shlokas of The Gita is when Lord Krishna says:
Yada yada hi dharmasya
Whenever there is a decline in Dharma O Arjuna, and rise of Adharma, I manifest Myself. (Gita Ch 4, Verse 7).
But, Dharma is dealt with in all religions as well. One will find mention of Dharma in different words but meaning much the same in Buddhism and Jainism besides Sikhism, Christianity and Islam as well as Zoroastrianism. All these and other religions have laid a lot of stress on duty and morality and righteousness.
The Vast Expanse of Dharma
Dharma classified under Samanya (general) and Visesha (specific) envelops:
- Spiritual knowledge
- Total honesty
- Control of senses
- Absence of anger and
- Contentment among others features under Samanya Dharma.
There are various kinds of Dharma too such as Purusha (men) Dharma and Stri (women) Dharma besides Raja-dharma (the duties of the king) and Prajadharma (duties of the citizen).
Raja Dharma is akin to the righteousness to be practiced by the CEO in today’s terminology. In Srimad-Bhagavatam it is clarified “Raja-dharma is a great science, unlike modern diplomacy for political supremacy. The kings were trained systematically to become munificent and not merely be tax collectors. They were trained to perform different sacrifices only for the prosperity of the subjects”.
One of the great duties of the king was to lead his subjects to the attainment of salvation. The biggest difference between today’s CEO and the king of yesteryears is that the former is not trained in his primary duties as the king is trained. In the case of the modern CEO his efficiency is judged in the manner in which the company he leads makes more profits.
In the case of the Raja the brahmanas are expected to give directions to him so that he could perform his duties as laid down in the scriptures such as the Manu Samhita. The king is elected so that he is the ideal for the subjects to follow. He is wise and pious, religious and chivalrous and generous. He is not merciful to dacoits in the name of ahimsa but they are punished by him in an exemplary manner. The taxation law was simple and the king took one-fourth of the produce of the subject. This acted as a buffer for the king in times of natural disasters when he would distribute it among the unfortunate. Under the system of the olden days, “vast amounts of money were also donated to temples” and these had the responsibility to do social work for the benefit of those that had need for help or welfare. As the CEO of his society, the duties of the Raja, in respect of CSR, were clearly established.
It is clear therefore, that the kings of the days gone by were not “self-seeking despots and dictators” but were benevolent rulers. They were far superior to today’s counterparts that are keener to amass power and wealth.
If we take a good hard look at the behavior of the Rajas in India and of their attitude toward their praja it is evident that there was a system present not only to train the raja to undertake his social responsibilities but also to assist and guide him in this practice. It is the same Raja Dharma that is expected of today’s corporate leaders.
1. Raja-Dharma (http://www.webzeest.com/article/1116/rajadharma) 13 November 2013 by Prasad in Shiva Yoga
2. Hindu Dharma by Swami Shivananda The Divine Life Society Rishikesh
3. The Five Elements of the best CSR Programs Frederick E Allen, Forbes Staff http://www.forbes.com/sites/csr/2011/04/26/the-five-elements-of-the-best-csr-programs/
4. Vedas and CSR Harekrishna Management 28 January 2009
5. Willis Harman, author of Global Mind Change
Leadership and Corporate Social Responsibility The Indian Way