Business With A Heart

We live in an age in which companies call the shots and control much of the
earth's resources. Because the corporate houses intervene in so many areas of
social life, they must be responsible towards society and the environment.

In India, as in the rest of the world, there is a growing realization that
capital markets and corporations are, after all, created by society and must
therefore serve it, not merely profit from it. Organizations realize that people
with a stake in the company like clients, suppliers, employees, funding
organizations, advocacy groups, the community are expecting a company to go
beyond simply 'what is required', 'legislation and complying with rules and
regulations.'

They want to see that a company is transparent in the communication of its
performance, ethical, well managed, has strong governance procedures, is
responsive to the needs and views of its stakeholders, responsible in its
actions, attitudes and values, and is trustworthy.

This is what contributes to the idea of corporate social responsibility
(CSR). CSR is a concept whereby organizations consider the interests of society
by taking responsibility for the impact of their activities on customers,
employees, shareholders, communities and the environment in all aspects of their
operations.

This obligation is seen to extend beyond the statutory obligation to comply
with legislation and sees organizations voluntarily taking further steps to
improve the quality of life for employees and their families as well as for the
local community and society at large.

How and why

The debate about CSR is said to have begun in the early 20th century, amid
growing concerns about large corporations and their power. The term CSR itself
came in to common use in the early 1970s although it was seldom abbreviated.

The primary drive for ethical business and corporate social responsibility
came from the USA and Europe in the 80s and 90s, from campaigns run by pressure
groups such as Greenpeace and Friends of the Earth. The mid-90s, were the
watershed years for the new consciousness in international corporate polity.
This was the time when prominent MNCs were compelled by 'ethical market forces'
to re-orient their business attitudes.

The increased awareness of CSR also came about as a result of the United
Nations Millennium Development Goals, in which a major goal is the increased
contribution of assistance from large organizations, especially MNCs to help
alleviate poverty and hunger, and for businesses to be more aware of their
impact on society.

Corporate social responsi-bility is qualitatively different from the
traditional concept of corporate philanthropy. It acknowledges the debt that the
corporation owes to the community within which it operates, as a stakeholder in
corporate activity. It also defines the business corporation's partnership with
social action groups in providing financial and other resources to support
development plans, especially among disadvantaged communities.

The emerging perspective on CSR focuses on responsibility towards
stakeholders (shareholders, employees, management, consumers and community)
rather than on maximization of profit for shareholders. There is also more
stress on long-term sustainability of business and environment and the
distribution of well-being.

Benefits from CSR

The scale and nature of the benefits of CSR for an organization can vary
depending on the nature of the enterprise, and are difficult to quantify. From a
business perspective, corporate social responsibility is basically a new
business strategy to reduce investment risks and maximize profits by taking all
the key stakeholders into confidence. The proponents of this perspective often
include corporate social responsibility in their advertising and social
marketing initiatives.

The second is an eco-social perspective. The proponents of this perspective
are the new generation of corporations and the new-economy entrepreneurs who
created a tremendous amount of wealth in a relatively short span of time. They
recognize the fact that social and environmental stability and sustainability
are two important prerequisites for the sustainability of the market in the long
run. They also recognize the fact that increasing poverty can lead to social and
political instability. Such instability can, in turn, be detrimental to
business, which operates from a variety of socio-political and cultural
backgrounds.

Seen from the eco-social perspective, corporate social responsibility is both
a value and a strategy to ensuring the sustainability of business. It is a value
because it stresses the fact that business and markets are essentially aimed at
the well-being of society. It is a strategy because it helps to reduce social
tensions and facilitate markets.

There is a third and growing perspective that shapes the new principles and
practice of corporate social responsibility. This is a rights-based perspective
on corporate responsibility. This perspective stresses that consumers,
employees, affected communities and shareholders have a right to know about
corporations and their business.

 Corporations are private initiatives, but increasingly they are
becoming public institutions whose survival depends on the consumers who buy
their products and shareholders who invest in their stocks. This perspective
stresses accountability, transparency and social and environmental investment as
the key aspects of corporate social responsibility.

What SPs say

Do solution providers feel that CSR is an activity that gives them an
opportunity to return to society what they get as benefit or do they see it as a
social obligation and mere image enhancement?

According to Avinash K of Mumbai's Lauren Information Technologies, CSR is an
opportunity to give back to society in a small way. “Although one cannot
quantify and say how much one needs to do, one must contribute whatever one can
for the benefit of the society at large,” he felt.

Agreeing with him was Chennai's V Murali of Precision Infomatic who said,
“CSR is a social obligation for most of the corporate-especially the big
players. Smaller organizations can learn to embrace that in some way. At the end
of the day the objective is to contribute to the society and bring a humane
nature to our business.”

While accepting that CSR is a social obligation, B Mukund of Chennai-based,
Mukund Infoserve, noted, “Businesses that are doing well mostly indulge in CSR
activities. Not all companies may take a huge interest in it since the first
priority still would be to run business successfully. As and when time permits,
companies involve themselves in these activities.”

CSR according to Mahesh Shah of Kolkata-based Pecon Infotech is an
opportunity to do something for the society because of which the companies are
prospering. It indirectly helps the company to build a brand image, increases
employee satisfaction and recruitment, as well as product marketing.

This means that the biggest advantage a company would stand to gain from CSR
is improvement in the perception of the company among its staff, particularly
when staff can become involved in the activities. In crowded marketplaces where
companies strive for a unique selling proposition (USP), which can separate them
from the competition in the minds of consumers, CSR can play a role in building
customer loyalty based on distinctive ethical values.

Does this mean that CSR is a prerogative of only large corporations? Can
smaller organizations and entrepreneurs also involve themselves in such
activities that benefit society on a large scale?

Commented Harish Shetty of Binary Systems, Bangalore, “While CSR becomes part
of the planning and budgeting in large organizations, in smaller set-ups, CSR
activities are lead by or represented by activities in which head of that
organization get involved in, be it charity or otherwise. In that sense CSR is
an activity that anyone can participate in.”

Agreeing with him was MS Sidhu of Apara Enterprise Solutions from Bangalore.
He said, “Small companies and entrepreneurs can be part of CSR depending on
their ability. CSR can be taken up by all individuals to contribute part of
their benefit to others. Basically it is about sharing and it can be done by
anyone in any form.”

For Sanjeev Bhavnani of Visesh Infotech, CSR is not about organization size
or scale but rather willingness on the part of the individual and the
organization to contribute for a cause. “Size and number of people or the
financials do not make a big difference if willingness is there,” he said.

Sharing similar sentiment was Ravi Verdes of Frontier Businesstech. “The size
of the company really does not matter. It is the willingness of a company to be
part of CSR that is important. To consciously look beyond our immediate business
environment and address larger societal issues should be the order of the day.
This concern springs from the fact that a true corporate vision must embrace a
wider community rather than just customers and suppliers,” he claimed.

SPs and CSR

Given the above said, solution provider organizations across the country are
involved in CSR activities of varied kinds.

Atul Hemani of Mumbai's Omnitech said that CSR is more of an individual than
company initiative and is completely voluntary. He felt that it is everyone's
duty to help the deprived so that society at large evolves into a better set-up.
While big companies do CSR activities in a structured way, smaller ones probably
do it on and adhoc basis, he believed.

Omnitech has begun an internal program called 'Manthan' whereby teams work on
CSR and other employee benefits that include blood donation and relief provision
to those affected by natural disasters. “This is a long-term initiative and we
feel that education and health are important to one and all. This is a one year
old initiative and we would like to associate ourselves with NGOs in such
activities in the future,” Hemani indicated.

Bangalore-based Vitage Group for example is involved in working with 'Makkala
Jagruti' an organization that works for the benefit of the underprivileged
children. Along with Wipro Care, Vitage Group has been sponsoring the activities
of the NGO for the last one and half years. On his association with Makkala
Jagruti, Satyen Vyas, Director and CEO, Vitage Systems said,” We genuinely
believe we need to give back to society, in some way or the other. The
organization that we work with, has children who are both emotionally and
socially deprived. Working with them gives us an opportunity to better their
lives in whatever small way we can. Employees at Vitage can chose to spend their
personal time with the children on a voluntary basis as and when they are free
during working days. I am on the strategy board of the organization and right
now we are setting up a website for them. We will put together some marketing
strategies to help them grow better.”

Similarly Mumbai-based Liberty Automation is involved in activities that
create awareness about thalassemia. Working along with Think Foundation and
Rotary Club, Liberty Automation conducts free thalassemia minor check ups for
graduate students in colleges across Mumbai. “Awareness about thalassemia minor
is very sparse even among the educated lot and we believe that this should
increase at grassroots levels. As a first step we are conducting free tests for
graduate students in colleges. We would also like to associate with marriage
bureaus, conduct similar tests and ensure that profiles of the candidates there
have ample information as regards thalassemia,” said Rajiv Sethi, of Liberty
Automation.

In addition, Liberty Automation also organizes blood donation camps and helps
to conduct thalassemia tests in colleges. In the future, Liberty Automation
would like to work with gynecologists and hematologists and spread awareness
about thalassemia and thalassemia minor among larger strata of society. “Part of
the problem with thalassemia is lack of awareness among the public that needs to
get better, and we would like to spread the information about thalassemia,” said
Sethi.

Frontier Businesstech on the other hand conducts activities where volunteers
from the organization spend time in children's homes/ old age homes and take
time to hold some kind of cultural activity for them. “We support organizations
like New Art Mission of India-an institution that supports beggars and the
destitute, financially and visits them to see what they do,” Verdes indicated.
Additionally, Frontier offers financial assistance to the Catholic Women League
to support the education of the girl child; supports a blind school in
Bangalore, which is dedicated to the education of abandoned blind children. They
also support an institution The Family, that works for the poor and orphans. In
fact, a team from Frontier comes together to decide on what needs to be done and
how employees can get involved in that.

“The message we want to send out is clear-creating profits can and should go
hand-in-hand with generating goodwill. We are committed to improving the quality
of life and the initiatives we address,” Verdes said.

Apara Enterprise Solutions takes up very specific issues, which involve
medical treatment, clothing or any educational sponsorship for poor children or
meal for the poor. This is done regularly and the organization and its employees
take great pride in the fact that they contribute effectively for societal
betterment.

Lauren Information Technologies is associated with Cancer Patients Aid
Association where they have taken medical responsibility for a couple of
children and monitor their treatment and progress. Additionally, they are
associated with Stepping Stone, another children's' organization where they fund
treatment for children.

Harish Shetty of Binary Systems works along with the Bant Sangha a charitable
organization that works for the upliftment of the downtrodden women and rural
students. Among their several activities are providing assistance in terms of
infrastructure and funds for these groups as well as scholarships for students.
Also, work is done in area of women's health and help is provided for marriage.

Meanwhile, Spectra Computech, Chandigarh works with schools and colleges
especially rural schools and helps students in their various projects and also
helps in sponsoring various events there. “The idea behind the exercise is not
just to feel good but also generate employee interest and benefit the society.
We are happy that the various heads of these institutions join us in our
endeavor,” said Sandeep Vig of Spectra Computech.

Bhavnani said that Visesh Infotech regularly works with the community at
large and contributes their bit to help during natural calamities besides being
part of blood donation camps. “In fact, I am proud to say that our employees are
more than willing to contribute their one day salary or more as the situation
demands,” Bhavnani indicated. Visesh also works with Delhi's IT association-PCAIT
and contributes in terms of charity to rural schools.

“We have given away many PCs and systems to students in government schools to
help them benefit from technology. Also, we have given away many of our own
second hand machines to institutes and societies that work for the downtrodden,”
Bhavnani added.

Meanwhile, organizations like Mukund Infoserve and Precision Infomatique in
Chennai are involved in many charitable and CSR activities, but say they are too
small as yet to be spoken of. Some others like Fourth Dimension Technologies in
Chennai have plans to set-up a trust, where they will have the company and
employees voluntarily contribute to various charitable causes that benefit
society. “As far as employee interest is concerned, it is purely voluntary and
we expect the interest to be generated by sheer word of mouth,” said N Jagannath
of Fourth Dimension Technologies.

Pecon Infotech on the other hand, is not directly involved in CSR activities
although they work indirectly through Rotary and other NGOs and participate in
activities like heart surgery, providing artificial limbs to disabled persons
and blood donation camps. “As a step further we are contemplating employing
blind persons in our call center,” Mahesh Shah of Pecon indicated. He further
added, “We are associated with Compass, wherein, three computer education
centers are being run at a very minimal charge for unprivileged people. We also
place these candidates at our member organizations.”

Other benefits

While image building and a sense of responsibility are the biggest driving
factors for CSR, it is still an issue of considerable debate. There are some
people who claim that CSR cherry-picks the good activities a company is involved
with and ignores

the others, thus 'greenwashing' their image as a socially or environmentally
responsible company. There are some other people who argue that it inhibits free
markets. Critics of CSR will attribute other business motives, which the
companies would dispute. Some believe that CSR program are often undertaken in
an effort to distract the public from the ethical questions posed by their core
operations.

As for tax benefits, according to Prabha Narayan, Advisor, Max New York Life,
“Charitable activities of any organization do come with benefits of tax but
these are not significant enough to be the driving forces behind such activity.
Most corporate take up CSR as part of their responsibility to return to society,
the benefit they have got from it.”

In essence therefore, whatever critics say, CSR offers a two-way street to
companies. On the one hand it stimulates innovative business and technological
initiatives which open up new avenues for company operations in new market
zones, and on the other hand, it gives, a cleaner societal reputation and
socially responsible identity to companies, helping companies and their
employees in the long-term process of positive social transition Solution
providers it seems like to be part of that transition, CSR is here to stay.

Sanjeev Bhavnani, Visesh Infotech, New Delhi “CSR is not about organization size or scale but rather a willingness on the part of the individual and the organization therefore to contribute for a cause. Size and number of people or the financials do not make a big difference if willingness is there”	V Murali, Precision Infomatics, Chennai “CSR is a social obligation for most corporates- especially the big players, which smaller organiza-tions can learn to embrace. At the end of the day, the objective is to contribute to the society and bring a humane aspect to our business”

Ravi Verdes, Frontier Businesstech, Bangalore “To consciously look beyond our immediate business environment and address larger societal issues should be the order of the day. A true corporate vision must embrace wider community”	Satyen Vyas, Vitage Systems, Bangalore “The organization that we work with has children who are both emotionally and socially deprived. Vitage employees can chose to spend their personal time with deprived children on a voluntary basis”	Mahesh Shah, Pecon Infotech, Kolkata “CSR is an opportunity to do something for the society. It indirectly helps the company to build a brand image, increases employee satisfaction and recruitment as well as product marketing”

Subbalakshmi BM

subbalakshmibm@cybermedia.co.in

(With inputs from
Ravish Khapra, Piyali Guha and NR Sethuraman)