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"Corporate Social Responsibility (CSR) is a commitment by
a business to act ethically and contribute to the
economic development while improving the quality of life of the workforce
and their families as well as of the local community and society at
large." This approach makes
business houses partners for progress. Businesses have, so far, been
working with the single motive of earning profits for themselves and for
their shareholders. This concept has been replaced with a
different approach, one in which businesses partner with customers,
employees, investors, government, labor, NGOs and communities in such
a way that the partnership is beneficial to all. This inclusivity
is the hallmark of CSR.
It is important to distinguish CSR from charitable donations
and philanthropy. CSR is not just charity and goes much beyond it.
It requires the businesses to look beyond their motive of
profit making. It requires them to balance the needs of all stakeholders
with its need to make profits. It requires the companies to look at
long-term sustainability and not at making short-term profits.
Critics of CSR have often pointed out that, "the business of
business is business and hence businesses should not indulge in CSR".
Critics like Milton Friedman, the famous American Economist, have
even said that CSR is a `fundamentally subversive doctrine' in a free
society. According to critics of CSR, the sole social responsibility of business is
to increase profits. Critics base their arguments on two planks; first,
on pure business sense and second, on the doctrine of free choice. So,
why CSR? The answer basically lies in the relationship between
the society and business. It is the society which provides the charter
of existence to all businesses. Hence, it is in the interest of business
to meet the expectations of the society in which it exists. Business has
a social dimension today. Gone are the days of
`exploiter-exploited' markets. As Keith Dayton says,
"The ultimate aim of a business is to serve the society. If business does
not serve the society, society will not tolerate our profits or even
our existence." From another angle, CSR is an extension of
the democratic principles to the field of economic activity. |
