CSR:
Introduction
Concept
CSR is a widely accepted management concept today.
Through CSR practices, business activities incorporate societal
and environmental commitments in an ethical manner for the
well-being of all stakeholders.
CSR/2019 2
Chapter 1
Introduction: Examining Corporate Social
Responsibility
Concept of CSR
• Usage: in business, government and society today
(Society 5.0)
• Deals with societal and environmental
commitments of organisations, primarily
corporations (social cost)
• Originated from charity, philanthropy and ethical
responsiveness of formal human systems (being
good to the society)
• To ensure society and environment do not get
affected negatively by acts of organisations
• Has ethical values and corporate benefits
CSR/2019 (alignment) 3
Chapter 1
Introduction: Examining Corporate Social
Responsibility
Evolution of CSR
• Evolved through dana, dharma, philanthropy,
charity… in early times in human systems as donor
behviour
• Follows historical time lines as identified by
scholars
• Seven stages identified here:
Stage 1 Ancient period till around 1750 BCE
Stage 2 Early period till around 1750 CE
Stage 3 Industrialisation period till around 1914
Stage 4 War and interwar periods (1914-1945)
Stage 5 1945-1970
CSR/2019 Stage 6 1970-todate 4
Chapter 1
Introduction: Examining Corporate Social
Responsibility
Mandate and obligation
• Though an obligation as donor behaviour, CSR is
also a mandate under soft law and legislation.
• India is the first country to legislate CSR.
• Section 135, Companies Act, 2013
• Section 2 (1) (c) of the Companies (Corporate
Social Responsibility) Rules, 2014 defines CSR
• The Act does not define CSR.
• Sabka sath Sabka Vikas; Swacch Bharat Abhiyan;
SAGAR
CSR/2019 5
Chapter 1
Introduction: Examining Corporate Social
Responsibility
‘Why’ and ‘what’ of CSR
• Continuously evolving concept
• In the interest of enterprises
• Promotes sustainability
• Enhances social values Business Governmen
t
• Stabilises BGS triad (see figure) Society
In some definitions, CSR is viewed as a movement.
Benefits stakeholders in three realms: Social,
economical and environmental
CSR/2019 6
Chapter 1
Introduction: Examining Corporate Social
Responsibility
Characteristics of CSR
• Evolving concept
• Business practice
• Stakeholder targeted
• Sustainability aimed
• Socially oriented
• Economically oriented
• Environment centred
• Adaptively defined
• Mandated by governance
CSR/2019 7
Chapter 1
Introduction: Examining Corporate Social
Responsibility
Characteristics of CSR (continued)
4 principle axes of CSR
Bottom lines (see figure next): triple bottom line
(TBL), quadruple bottom line (QBL) (Accounting
frameworks)
Pyramidal structure (ideated by Archie B Carroll)
Generations : first (past), second (present), third
(future)
Practices (towards sustainability through win-
win situations)
CSR/2019 8
Bottom lines (accounting frameworks)
People
People
Purpose/
Profit
Progress
Planet Profit
Planet
Triple bottom line (TBL)
Quadruple bottom line (QBL)
By John Elkington
CSR/2019 9
Pyramid of CSR
CSR/2019 10
CSR Generations
The First Generation: Philanthropic compliance.
The Second Generation: Strategic Integration.
The Third Generation: Leadership and Sustainable
Market Influence.
CSR/2019 11
CSR Practices
Setting measurable and navigable goals.
Engaging employees.
Engaging stakeholders.
Mapping sustainability issues.
Establishing CSR management information systems.
Assessing life cycle.
Reporting CSR.
Branding sustainability.
CSR/2019 12
Chapter 1
Introduction: Examining Corporate Social
Responsibility
Perspective of CSR
• Perspective of CSR is the relationship of its aspects
with other interactive elements and with itself.
• These aspects, in general, are the obligations to
stakeholders, environment, economics, ethics,
philanthropy and legal regime. Can change with
additions in future (see figure next).
CSR/2019 13
CSR obligations within the perspective of CSR
Stakeholder Compliance
Economics Ethics
Environment Philanthropy
? CSR ?
CSR/2019 14
Chapter 1
Introduction: Examining Corporate Social
Responsibility
Scope of CSR
• Scope provides boundaries to activities contained in
the concept. Includes…
a) Behaviour appropriate to a corporate citizen
b) Contributions to social development
c) Stakeholder focused activities
d) Compliance
e) Ethics
f) Growing with society
CSR/2019 15
Chapter 1
Introduction: Examining Corporate Social
Responsibility
Scope of CSR (continued)
g) Customer loyalty and goodwill
h) Environmental harmony
i) Social harmony
j) Dynamism
k) Whistleblowing system
l) Organisational self-assessment
m) Esprit de corps among employees
CSR/2019 16
Chapter 1
Introduction: Examining Corporate Social
Responsibility
Environment and CSR
• Natural environment today is also termed as a
stakeholder
• It is also termed natural capital
• Corporations engage in many environmental
activities today
• Environmental obligation of business can also be
termed corporate environmental responsibility
CSR/2019 17
Chapter 1
Introduction: Examining Corporate Social
Responsibility
Future of CSR (See figure next)
• Concept is expected to evolve dynamically in future
• In course of time…
legal mandate widens
Corporate responsibility spreads into other
terrains—ocean, airspace, outer space,
cyberspace…
Ethical practices under watchful eyes of
government and society
Global regime and global watch
CSR/2019 18
Future of CSR (hypothetical)
Further into
future
Global regime
and global
watch by
Corporate international
ethical practices agencies
under watchful
eyes of
Responsibility government and
streams society
around terrain Time
based topics--
ocean, air,
space, cyber
and genome,
Legal mandate on national
spreads wider governance.
More
emphasis on
natural
environment
Now
CSR/2019 19
