Thursday, July 2, 2009

Corporate Social Responsibility: The Change Mechanism

During a training session, the trainer asked us to close our eyes and think about a machine. He asked us to think about its surroundings, its vicinity, the people around it and everything else around it. Then he asked us to open our eyes and tell him what each one of us saw. All of us had different answers for the machines but the answer for its vicinity was the same – a factory churning out smoke and filthy water. When asked about the people in the vicinity, most of us saw workers working on those machines in heat and sweat, but the owners sitting in air-conditioned rooms supervising the work from there.
I am not of the view that the companies have not changed from this scenario to a much better one, but what has not changed is the perception of a factory in the minds of the people. A common man still believes that a business house can never do any good to the mankind and the owners of the companies care only about the profits. To some extent this is true as well. To change this perception of the people about the companies, the leading business houses of the world have pioneered to become Corporate Citizens and perform Corporate Social Responsibility.
Bringing about a sudden change in the minds of people is very difficult. And what’s even tougher is to measure the magnitude of change that the efforts have brought about. For instance, it is difficult to measure how many voters in India voted due to the awareness created by Jaago Re campaign by Tata Tea. Similarly, it is not possible to measure the amount of Critical Thinking induced in the students of New York City by the iSchool initiative of Cisco.
So, how should the companies change the perception of people about the companies? I propose a three step process:
• Work with and work for the people
The mission statement of Shell reads as ‘To safely market and distribute energy and petrochemical products while offering innovative value added services.’ Similarly, the vision statement of Citi Institutional Consulting says, ”We believe that excellence in consulting requires client advocacy and stewardship, a passion for leading-edge investment solutions and the delivery of experienced consulting services in a way that helps us exceed our clients’ expectations every day.”1 Though there’s nothing wrong with this mission and vision, but none of them talks about the environment that they are operating in or the people whose lives are being affected by their operations but who are not their ‘clients’. To transform into a responsible Corporate Citizen, the first step is to orient the company towards a people-oriented organization that works to solve the problems of the society. For instance, the vision of Philips Electronics is, “In a world where complexity increasingly touches every aspect of our daily lives, we will lead in bringing sense and simplicity to people.”2

• Empower the down-trodden, don’t pity them
It has always been a notion among the people to HELP the down-trodden sector of the society as a part of the CSR initiative. Many organizations do this through donations to charities, direct donation to the people and sponsorship programs. But sadly, this category of initiatives doesn’t do any good to the society in the long run. Infact, they lay a foundation for a dependent community and hence a dependent country. As Ms. Sharmila Katre puts it, Corporate Social Responsibility is about empowerment, and does not mean ‘giving’ but ‘encouraging, developing, nurturing and sustaining’.3 Initiatives like ‘Cloth for Work’ and ‘School to School’ run by Goonj.. ( in New Delhi are perfect examples of the type of CSR programs that should be executed by the corporate houses. These will not only empower the people at the bottom of the pyramid but also create a potential customer base or atleast a valid referral for the companies and thereby act as powerful change agents for the perception change discussed earlier in the article.

• Build a brand, not a trademark
Companies need to be very careful in assessing the impact of the projects taken up by them or the business deals undertaken by them. It takes years to build a brand that represents trust and confidence but one wrong move brings the process of change to a halt. Tata, for example, is undoubtedly the most trusted brand in India and represents the most philanthropic business house- Tata Sons. But Greenpeace International has claimed that the port being built by Tata Steel at Dhamra is a serious threat to the turtles’ nesting grounds and the issue has been done a serious damage to the image of Tatas in India.4 So, while trying to bring about a change in the perceptions of people, the organizations should carefully select the projects keeping all the stakeholders in confidence and working for the mutual benefit for all of them.
Corporate Social Responsibility as a business model is still in its nascent stages and is a developing form of business. Still, the seriousness of the regulatory bodies all over the world, the legislations and the corporate governance policies of the governments indicate that CSR will emerge as the major agent of change for the corporate image.

1. ‘Mission, Vision and Values’, Citi Institutional Consulting,
2. ‘Vision and Strategy’, Koninklijke Philips Electronics,
3. ‘CSR - Philanthropy or Empowerment’, by Sharmila Katre, Published on 'Third Eyesight' at
4. ‘Don't let TATA terminate the turtles’, Greenpeace India,

Copyright © 2009, Arun Sharma. All Rights Reserved.


  1. Very true! Companies should follow business ethics and moral psycology which is way ahead of just meeting client expectations

  2. Very well researched and put correctly. But, Arun, it is NOT the problem but effects of the problem. To reach to the problem, get into the very mind set that Britishers set in us. For that suffice to quote Cecil Hotel Simla signboard of pre-independence days ..."DOGS & INDIANS NOT ALLOWED" inside the area meant for britishers. We, even after independence, are governed in a scenario where the higher echelon thinks they are part of "britishers" and all below them are part of "dogs & Indians". The IAS cadre down to lowest all are in this syndrome .... which i say is Kapil Sibal's major HR prblem..lying hideen. When Corporate executive is in airconditioned environment and the worker who delive does not even equipped with tools, clothing, technology and environment to do the job ...the essence lies in Britishers vs Dogs & Indians. You can NOT solve the problem till you get this mindset out. That requires LOVE, Compassion and Listening capability which are not inculcated anywhere. To reach there, one needs to sacrifice nd for tht he is to be groomrd for long term ains BUT today's corporate lives in short term gains.... ONLY SOLUTION IS >>>GET OUT OF THE MINDSET of pre independence time. If you donot believe....that above is true.... let some research be done on why we beahve that way in india and dierently when ware ...even in singapore.....Lets all be ONE AND think AS one ...... ANSWER LIES THERE... thanks and God bless........ Air Commodore Sushil Soni (Veteran)

  3. Thanks Air Commodore Sushil Soni (Veteran) for reading and giving your valuable comments. Yes, you are right that we are still governed by the mentality of a British colony and not fully matured as an emerging super-power. And the mindset of the people needs to be changed through confidence building measures by the authorities. But at the same time, I feel that our corporate has played an immensly crucial role to do the same, as well. Where Mr. LN Mittal has expanded his kingdom over Europe and Tatas have shown their mettle by takeover of Corus and Jaguar-Land Rover, the sportspersons have started showing their presence at events like Olympics. Though there's a long way to go to completely change the mentality and though we are already very late to have made this change, but atleast we've started to move on the right path.
    Besides that, my article was basically about the role of corporates in bringing about a change in the mindset of the common man about industry. And the scope of this article expands to the global community and not India specific. I believe that it is the time we understand that we are not Indians any more. We are Global Citizens. And I think that change in mentality is as crucial as the one that you talked about.
    So, we have got a long way to go. Better all of us start together and act NOW.

  4. Thank you Arun for the mini-study on my comments. Good. Keep it up. That keeps us the veterans happy. I have only one request. Could you study "Why MBAs from IIMs are treated as Britishers and rest of the MBAs as part of "dogs & Indians'; .... by the ownership of corporates and through their HR, forget about the situation in your main study where Corporate execuives sit in air conditioned environent and worker on the machine....... I presume the mindset of global/indian evolves around the same tragedy...

  5. Air Commodore (Veteran) SK Soni, your comments have been instrumental in making me start my research for my next article. I'm sure I'll publish the results of this research very soon.

  6. Very well written Arun....
    As a working journalist, for the last several months, I can hardly recall a week when I didn't come across usage of "corporate social responsibility" and "inclusive growth" in corporate and government news releases.
    Few days back Bill Gates was in New Delhi for The Bill and Melinda Gates Foundation. The level of work he has done and the kind of commmitment these guys have, I can never ever ever imagine an Indian corporate doing the same. And that applies for both state-run PSU's and family owned businesses.
    Whatever you may say, the motto of business in India was and remains "profit making."
    It will require a generation for change of mindset...before we start relating machine and workers with things beyond sweatshops.