Academic journal article IUP Journal of Corporate Governance

Do Corporates Have Social Responsibility? A Case Study of TVS Motor Company

Academic journal article IUP Journal of Corporate Governance

Do Corporates Have Social Responsibility? A Case Study of TVS Motor Company

Article excerpt

Introduction

The World Business Council for Sustainable Development (WBCSD) based in Geneva, Switzerland has defined Corporate Social Responsibility (CSR) as "businesses' commitment to contribute to sustainable economic development, working with employees, their families, the local community, and society at large to improve their quality of life". The WBCSD also indicates that "a coherent CSR strategy, based on integrity, sound values, and a long-term approach offers clear business benefits to business firms and contributes to the well-being of society". The European Commission advocates CSR as "being socially responsible means not only fulfilling legal expectations, but also going beyond compliance and investing more into human capital, the environment and relations with stakeholders". In essence, CSR aligns a company's business objectives and practices with social values and the welfare of the society. The interests of the stakeholders are included in this concept. This is referred to as 'the triple bottom line', which measures the social, environmental and financial success of a company. Transparency and accountability are essential to achieve this.

The debate to answer the question whether business corporations have social responsibility is not new and dates back to 1970s when there were questions about the social responsibility of the corporation. In the market-oriented economy, the corporate sector concentrates only on making profits and it is a theoretically acceptable argument. The influential essay of Milton Friedman 'Social Responsibility of Business' first published in 1970 supports this argument and according to Friedman, profits and social causes are inimical to each other. He argued that there is one and only one social responsibility of business to use its resources and engage in activities designed to increase profits.

With globalization and privatization, the role of public sector has been declining in several countries. This gave greater responsibility to the corporate sector to serve the community and provide services, which were hitherto provided by the state. Apart from this, the need for sustainable development requires multi-pronged approach in which corporate sector has to play an important role as the user of environmental resources. This leads to the social intervention of corporate sector ranging from poverty alleviation, rural development to environmental protection.

Another important factor for the increasing demand for CSR is the awareness of the stakeholders and public pressure. With increasing awareness about the business environment, stakeholders are demanding greater opportunity to participate in decisions and accountability. Companies are regarded as socially responsible only if they provide greater participation for stakeholders and take measures for the welfare of the employees.

Corporate Social Responsibility is regarded as one of the strategies for sustainable business by the companies. This improves the image of the companies. The concept and operationalization of CSR has grown considerably since its inception. According to Neubert and Stroup (1987), popular consensus on CSR has changed from corporations 'voluntarily doing good' to 'mandated' to now 'doing better by doing good'. In this context, this paper studies the CSR initiatives of TVS Company located at Nanjangud, Mysore district, Karnataka by following case study method. This paper mainly focuses on the CSR objectives of TVS Company, its capacity to identify social issues, social relevance of the issues addressed and the implementation strategy.

Primary data was collected from the beneficiaries located at Sindhuvally, Dadadahally, Byathahally, Chikkakanya and Doddakanya villages of Sindhuvally gram panchayat in Mysore taluk and local panchayat members and secondary data was collected from the records of TVS Company.

Models of CSR

Several models are proposed to understand the relationship between the corporate world and the society. …

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