T G MOHAN
SENIOR FINANCE MANAGER, CROMPTION GREAVES LTD

Large corporates today seem to have understood the bigger purpose of their existence. At one point of time, they discovered that the “customer satisfaction” alone would give them a chance for survival. But soon, they realised that survival alone could not be the purpose because it is not the only thing they aspired for. Then, came the revelation that their ventures should have perpetuity and this would be the secret of their success. Following this clue, they stumbled on one more precious fact; that customers may not be in a position to state all their needs and fulfilling their unstated needs alone would bring about the perpetuity. This paved the way for the shift in their focus to “customer delight”. This shift helped them to prosper and the resultant growth helped to satisfy the shareholders. Again, the corporates learnt yet another lesson, which proved to be invaluable; that the true success lies in taking care of all stakeholders and not shareholders alone. Thus, the theme of corporates got enlarged over a period of time. Today, most of the corporates have realised that they cannot isolate the society they form part of and this has led to the emergence of the concept called “Corporate Social Responsibility” or CSR in short. Thus, the coporates have evolved over a period of time and their thinking has transformed over a period of time.
The main idea behind CSR is to be a good corporate citizen and give back to the society something what they have taken from them. CSR is, indeed, a laudable concept because the underlying philosophy is to serve the society in order to bring about betterment in it. CSR envisages a voluntary activity on the part of corporates to contribute their mite to the society espousing a cause. Thus we see, many corporates have willingly adopted a cause today on their own and try to do full justice to their adopted cause. These voluntary actions by the corporates are most welcome especially at a time when the elected representatives of the people, whose responsibility it is to serve the society, have to be reminded about their basic duties of governance.
Thus, the spirit behind CSR is undoubtedly noble. The prosperity of the large corporates is sought to be spread across the layers of the society to ensure its well being. But behind this lofty principle, could there be a motive, which is selfish? Some argue that CSR is nothing but a brand building image undertaken by the corporates in the guise of fulfilling their social obligations. The protagonists opine that the corporates carry out CSR with a fundamental motive of enhancing their image and thus it is nothing but a business strategy of consolidating their position in the market place. Some others opine that CSR is either used as a platform by corporates for lobbying to get various concessions and favours or carried out to over-shadow some of their other unhealthy practices that have not met with the approval of certain sections of the society or authorities. There is apparently some logic in these arguments as it is a moot point if the corporates would actively involve in CSR activities in the absence their names not associated with the activities!
The arguments and opinions on the subject could be varied. And the debate on this would go on and on. And there cannot be a definite answer to this. Good intentions certainly bring about good results and the intentions that are otherwise would get exposed over a period of time. This is for sure. Whatever may be the motive, the society gets some respite at least in the short run and to this extent, nobody is a loser. Let us analyse the whole situation more objectively.
First, let us dwell on the subject as to what is the prime duty of corporates. It is all about wealth creation to their owners who are basically the shareholders. This is the basic philosophy of all corporates and is the corner stone of capitalistic set up. And, corporates do their best to serve this cause. There is nothing wrong at all in this and it should be remembered that the word “profit” is not a dirty word. The prime duty can be effectively fulfilled only when the organisation moves to the next level of responsibility i.e. ensuring that the stakeholders of the organisations are served well. This focus basically helps the corporates to have perpetuity of purpose. Having done these, they want to move on to the still higher level. And this is to serve the immediate society, which is an integral part of their existence though not directly connected with the business of the corporates. This focus acknowledges the fact that the society cannot be viewed in isolation and a portion of the prosperity should be shared with the society for the overall well being. Still the higher level would be to serve a particular cause chosen specifically which goes beyond the immediate society. This could also be a global phenomenon. These layers are very distinct. Invariably, corporates which are driven by clear vision move from one layer to another over a period of time so that they actualise their potentials. And when they do move one level to another, they ensure that the clash of interest between one layer and the other is avoided. This explains the success of so many large corporates who have successfully launched the CSR activities and carry these through over a period of time.
It is clear that the corporates, which do not have a clear vision, could jump the order and would rush headlong into adopting CSR. Obviously, the efforts cannot remain sustained in these cases and sooner or later, the organisations would be forced to backtrack their attempts. Corporates have to sustain the CSR activities over a period of time and should have enough muscle power to carry this out even in times of adverse business situations; more so, in today’s scenario of ups and downs in the business cycle. Since there is no compulsion from any quarters to carry out CSR, the feasibility of carrying out the responsibility should be thoroughly examined before venturing it out.
The corporates have certainly a basic duty to its customers in serving them with a quality product/ service backed by adequate support. Extending adequate warranty for the product is another. And, as the technology moves up, updation of quality of products/ services becomes a sort of moral duty. While the profit element is the key for success of any business venture, sharing a portion of the profits/ rewards with the customers also become the duty of the corporates. Added to all this, its duty to its suppliers, employees and other business associates cannot be under-estimated. The corporates have to be fair in their dealings and taxes and dues to the Government are to be paid honestly. Also, the corporates should believe in basic ethical values and norms and create a trust in the society at large. These values should be palpable in their day to day activities. It may be essential for the corporates to take certain remedial actions if their functioning cause problems to the society or environment. A typical example would be pollution control. Today, good corporate governance is much talked about subject and to some extent, the laws of the land also enforce this on corporates.
Having done all the basic work listed above, if the corporates talks in terms of CSR, there is certainly some meaning in it. The value system of the corporates should be such that CSR is viewed purely as an activity to benefit a common cause and is adopted without any ulterior motive attached to it. Most certainly, CSR activities should not be designed to cover the shortcomings of the ethical values of the corporates nor intended to camouflage their ugly spots. Thus, large corporates with maturity understand the significance behind these and tailor their CSR activities accordingly. And, they are the ones who sustain these activities even during adverse business situations because they have learnt the fine art of delinking their CSR efforts from their business efforts. Their sole aim is to keep contributing to the welfare of the society having moved into a higher plane of wisdom. Though, the responsibiity towards the betterment of the society lies with the Government, these little contributions from large corporates help a great deal and ultimately, the society is the sole beneficiary. And, this metamorphosis brings about prosperity to everyone and why should we grumble if the large corporates too benefit by this indirectly?