Corporate Social Reporting Practices of Top Indian Software Firms

By Murphy, V.; Abeysekera, I. | Australasian Accounting Business & Finance Journal, February 2008 | Go to article overview
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Corporate Social Reporting Practices of Top Indian Software Firms

Murphy, V., Abeysekera, I., Australasian Accounting Business & Finance Journal


This study examines the corporate social reporting practices and the motivations behind such practices of the top 16 software firms in India. The 2003-2004 annual reports were analysed using content analysis to examine social reporting relating to human resource and social relations, combined with 14 case study interviews that examined managerial motives behind corporate social reporting (CSR) relating to the sample firms. When findings were analysed using legitimation strategies, the results indicate that firms use dual strategies in reporting their human resource and social relations to legitimise their activities to stakeholders.

Keywords: community; corporate social reporting; human resource; India; legitimacy.


Firms are social creations whose survival is counted on the willingness of the society to support them (Reich, 1998). In order to have continuous support from society, firms need to undertake social activities and report such activities for the society to judge their performance. It is believed that industry sectors (such as Tobacco) that produce goods harmful to society engage in corporate social reporting (CSR) to legitimise their business activities and improve their image (Moerman & Van Der Laan, 2005). The manufacturing of chemicals, textiles and petroleum industry sectors that emits waste into the environment engages in CSR to negate their direct and indirect negative impact on society. On the contrary, we argue that firms in knowledge-based industries (eg. banking, finance, accounting, and software firms) create fewer social hazards as these industries provide services useful to the society with socially friendly management processes. This leads us to assume that unlike industries that produce goods harmful to the society or uses processes that eventually harm the society, knowledge-based industries may not be under pressure for CSR. The objective of this study is to examine the CSR practices disclosed in the annual reports of the top Indian software firms and the motivations behind engaging in CSR by interviewing the top executives of these firms.

To accomplish the objective, the following steps were carried out. First, the frequency of disclosure of CSR was analysed using content analysis in the top 16-software firms in India disclosed in annual reports. Second, the managerial practices were analysed by conducting semi-structured interviews with heads of human resources (HR) of 14 of the sample firms. Third, the intended outcomes of CSR were analysed using legitimation strategies outlined by Lindblom (1993).

Software firms were chosen for the study as they typifies a knowledge-based industry, engages in producing socially less harmful services, and has a growing importance to the Indian economy. With the inclusion of this introduction, the paper has been organised into seven sections. The second section provides an insight into CSR and software industry in the Indian context. Section 3 outlines the vacuum in the literature examining legitimation strategies of CSR in a knowledge-based industry such as software firms. Section 4 outlines the theoretical framework. Section 5 describes the content analysis and case study interview methodologies applied in this study. Section 6 offers the findings and interprets them in the context of legitimation strategies. In the concluding section, final remarks about legitimation strategies are made in the context of software firms acknowledging the limitations.


The economy of India is undergoing a substantial transformation since the country's independence in 1947. The aftermath of the British rule left Indian economy weak and vulnerable due problems such as low GDP growth, high population, low literacy, under nourished population and poverty. India inherited an economy that had grown at an annual pace of 0.7 percent in the previous 50 years, which was less than the rate of population increase.

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