The concept of Corporate Social Responsibility (CSR) as a means of achieving sustainability has been fairly established as an integral part of the corporate strategy. Bowen (1953)[1] in his book states that social responsibilities of the businessman are obligations to pursue those policies, to make those decisions or to follow those lines of actions which are desirable in terms of the objectives and values of the society. CSR in this sense appears to be a voluntary initiative by the socially conscious companies. UNIDO states that “Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. CSR is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives while at the same time addressing the expectations of shareholders and stakeholders.”[2]Companies while pursuing profit motive also must ensure fairness to the other stakeholders and create positive impact on the society. India, in fact became the first country in the world to enforce mandatory CSR spending by incorporating Section 135 in the Companies Act, 2013.
Carrol (1979)[3] suggests four different dimensions of CSR – economic, legal, ethical and discretionary. The economic responsibility is to make profit by producing goods and services that the people want and are willing to pay for. The economic activities must be carried out within the legal framework. The legal responsibilities are to follow the applicable law in the letter and the spirit. The ethical dimension requires the companies to follow policies which may not be mandated by law but are reasonably expected of them. For example, not harming the environment, not using hazardous substances, making voluntary disclosures in the annual reports etc. may not be mandated by law but are expected of an ethical organization. The discretionary responsibilities are those which are not usually expected but are undertaken by the businesses to make a positive impact to the society. These activities may include supporting NGOs, donations for socially relevant programs, promoting inclusiveness and supporting weaker and disadvantaged sections of the society.
Dimensions of Corporate Social Responsibility
As corporate entities are expected to be socially responsible, do we as individuals have responsibilities towards society? Individual Social Responsibility (ISR) focusses on the commitment of an individual to be mindful of the impact of his actions on the objectives and values of the society. We can use the four dimensions of CSR as described above to identify social responsibilities of an individual.
- Economic Responsibilities –being able to meet the financial needs of self and the family, living within the means, maintaining contingency funds to meet any emergencies, having sufficient insurance to meet the risk of untimely death, having health insurance, saving enough to meet post-retirement expenses. This dimension is focused on the economic needs -both present and future – of the self and the family.
- Legal Responsibilities – to comply with applicable laws in the letter and the spirit, paying taxes correctly and on time, not to violate traffic rules, avoid cash transactions beyond the legal limits, insisting for invoice for your purchases.Obeying the law of the land and to operate with the legal boundaries are the legal responsibilities of very individual.
- Ethical Responsibilities – to conserve water, electricity and other societal resources, not to waste food, garbage segregation, say no to plastic, proper disposal of electronic waste, not to play loud music, minimize discomfort to your neighbors and fellow drivers on the road, showing respect to your fellow workers, being responsible on the social media, not to spread fake news, being helpful to your neighbors in need. Peaceful coexistence with your surroundings and environment is the focus of this dimension, things which are generally expected of every individual.
- Discretionary Responsibilities – devoting time to an NGO, making financial contribution to support social initiatives, supporting the weaker section of the society including your household help, teaching the underprivileged children, helping the local artisan in marketing their products, cleanliness drive in your neighborhood. The desire to make a positive impact to the society by devoting time, money and efforts, beyond what is expected as an individual is the focus of this dimension.
For a country of our size, it is unrealistic to expect that all the social problems will be solved by the government or the businesses. This became amply clear in the recent pandemic as well. It is important for each of us to understand our individual social responsibilities with the objective to minimize the negative impact and maximize the positive impact on the society. As Mahatma Gandhi said, “We but mirror the world. All the tendencies present in the outer world are to be found in the world of our body. If we could change ourselves, the tendencies in the world would also change. As a man changes his own nature, so does the attitude of the world change towards him. This is the divine mystery supreme. A wonderful thing it is and the source of our happiness. We need not wait to see what others do.”
CSR and ISR can complement and reinforce each other. As individuals become more socially responsible, CSR would become an integral part of the corporate culture rather than something being pushed from the top. Likewise, a socially responsible corporate would reinforce the belief amongst its employees that ISR is a way of life. For that to happen please start by asking a simple question – how socially responsible you are? List down your social responsibilities – economic, legal, ethical, and discretionary and make a resolve to make a positive contribution to the society. Be the change that you want to see the world.
References
[1] Bowen H R (1953). “Social Responsibilities of the Business” New York, Harper & Row.
[2] What is CSR; http://www.unido.org/what-we-do/advancing-economic-competitiveness/competitive-trade-capacities-and-corporate-responsibility/csr/o72054.html;
[3] Carroll A B (1979). “ A three dimensional conceptual model of corporate performance”, Academy of Management Review, 4(4)
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