The primary function of a business is to create wealth and value for its customers, shareholders, employees and society at large. Today, this role of the positive contribution of an entrepreneurial initiative to the environmental and social progress is increasingly recognized worldwide. The main goal or purpose of a business is to serve a need and become profitable in the process. But to go further and say that every enterprise owes an obligation and social responsibility to the community is open to debate. Commercial success is no longer the sole measure for a successful business today. Its impact on society - good or bad, is also considered.

We see a lot of different definitions of what is generally known as "Corporate Social Responsibility. But no matter what we call it, the best companies clearly agree that success in the world today means doing business in a socially responsible and ethical manner.It means respecting the law. It means respecting human rights. It means helping the communities where we work. It means respecting the environment while working to meet the world's growing new economic demands. 


Corporate Social Responsibility: Implications to the community

Today the trend of disinvestment and privatization has led to a belief that the free market will take care of corporate responsibility. Since the late ‘80s and through the ‘90s, there has been increasing realization that a business has a social responsibility. Companies like Nike have been sourcing raw material from developing countries. There were allegations of sweatshops being run by Nike and it had to change its practices. Corporate responsibility now means ethical and environment-friendly practices. Companies are expected to stick to the Triple Bottom-line approach — of economic, social and environmental responsibility towards workers, the shareholders and the community. 

One example of poor Corporate Responsibility is BP, who under cost control measures ignored several safety standard measures on an offshore Oil rig in 2010. The consequences of such ignorance was death, injuries of  employees onboard the oil rig, damage to the aquatic ecosystem in the gulf of Mexico where the oil rig was situated. Such incidents lead to mistrust in organizations in the community they work in and eventually they may perish either through loss of revenue or through foreclosure due to poor standards. 

As we entered the twenty-first century, the world has grown smaller. People worldwide have become almost one community. Political and military alliances have created large multinational groups; industrial and international trade has produced a global economy. Worldwide communications are eliminating barriers of distance, language and race. We are also being drawn together by the grave problems we face: overpopulation, dwindling natural resources, and an environmental crisis that threatens our air, water, and trees. Industrialized agriculture, intensive animal husbandry methods, and over fishing are destroying traditional farming, poisoning the planet and all living beings. Subsidized exports, artificially low prices, constant dumping, and even some food aid programs are increasing food insecurity and making people dependent on food they are unable to produce. The depletion of global grain stocks has increased market instability, to the detriment of small producers.


A move towards accountable & responsible organizations

Organizations cannot function and remain healthy unless when the bigger society remains healthy. The health of the society is therefore a necessary concern of organizations. The concern cannot be one of a passive observer. It has to actively contribute to the enhancement of the overall health of the society. By no means should it cause any deterioration in society. To meet the challenge of our times, human beings will have to develop a greater sense of social responsibility. Each of us must learn to work not just for his or her own sake, family or nation, but for the benefit of all mankind. Universal responsibility is the real key to human survival.

Organizations are subsystems of society. They are powerful subsystems and control a lot of technical, financial and human resources. Whichever way these resources are used, there will be an impact on the society. These impacts will have major economic consequences or sometimes be very subtle. An organization is a creation of Society. It gets its resources from Society. Its outputs are accepted and consumed by Society. Without the specific sanction of Society, no organization can prosper. Organizations are citizens of society and as citizens; they owe certain responsibilities to the society. The primary responsibility is to ensure that it does not cause any damage and the second responsibility is to contribute to its progress. Contemporary business organizations are much bigger now than in the past and the impact of their operations on society is more prevailing and long lasting. A vested self-interest in corporate goals, may blind them to excess. Therefore, there is a need to consciously transcend the limited interests of the corporation and ennoble its cause in terms of the greater good.

It is not good enough to redistribute wealth; instead we must create new wealth for the community. We believe our country’s strength comes from its rich diversity. We support organizations engaged in initiatives to open doors to the under-served population; breaking down barriers of racism, sexism and other forms of discrimination.

Few organizations such as Tata Steel, Maruthi Suzuki  and Mahindra & Mahindra have engaged with the community and led different CSR projects for the benefit of the communities where they operate . True it does not add to the company’s profitability; but promotes a collective effort for the wellbeing of the society. Such actions taken by successful companies also encourage other enterprises to give back to the community and contribute to the overall progress of the society. This is also helps the nation grow as one single community rather than a system consisting of few monopolizing organizations in a deprived community which is exploited.