Corporate Social Responsibility and Sustainable Development: Strategies, Practices and Business Models 2020055926, 2020055927, 9780367273040, 9780367273057, 9780429295997

Table of contents :
Cover
Half Title
Title
Copyright
Contents
List of contributors
List of figures
List of tables
Foreword
Acknowledgements
Introduction
1 Indian corporates leveraging green marketing to promote CSR and sustainable development: implications and challenges
2 Sustainable development and business research: where we are and where we might go
3 Sustainability concerns, digitalization, and globalization: impact on marketing thought and practice
4 Impact of long-term CSR support
5 CSR initiatives by small and medium enterprises in the National Capital Region of India
6 Regulating the invisible hand: mandatory CSR in Mauritius
7 The obligation versus opportunity framework for corporate social responsibility implementation
8 Operations research and its role in environmental management: a review
9 The global reporting initiatives, business intelligence, and corporate sustainability: an analysis of Indian enterprise in the energy sector
10 CSR and its communication in multinational companies in India and the UK: dimensions and relationships
11 Creating a watchdog culture for ethical standards in Indian advertising
12 The role of CSR in skilling India: the sustainability of interventions by pharmaceutical companies
13 Microfinance as an instrument for achieving sustainable development: a research agenda
14 Leveraging social media to amplify CSR programmes
15 Building the Master Training programme: a case study
16 Transforming lives through education: a CSR case study of SRF foundation
17 Educating minds to empower the future: Capgemini
Index

Citation preview

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT

This book critically analyzes the role of corporate social responsibility (CSR) in achieving sustainable development in emerging economies. It brings together recent developments, effective frameworks, business models, and strategies adopted by companies and looks at how they contribute to sustainable business growth. The volume discusses diverse themes such as green marketing for promoting sustainable development, digitization and sustainability concerns, communication strategies for CSR, ethical standards in Indian advertising, microfinance as an instrument for achieving sustainable development, the role of CSR in the Skill India initiative, and CSR activities of Indian listed companies. It also provides solutions to challenges in achieving sustainable development goals at local and global levels. Drawing on in-depth case studies, the book will be an essential read for corporate professionals, students, and researchers of CSR, management studies, development studies, business studies, economics, environmental studies, green marketing, and sociology. It will also be relevant for policy makers, NGOs, public and private sector corporations, and consultants in sustainability reporting, business ethics, and sustainable development. Jitendra K. Das is Director of FORE School of Management, New Delhi, India. He has over 39 years of corporate and academic experience. He has many national and international publications and, through his research initiatives, has contributed immensely to the body of knowledge in the areas of marketing management, advanced marketing research, strategic internet marketing, and customer relationship management. He has taught courses at the Indian Institute of Management (IIM) Lucknow, IIM Ahmedabad and IIM Kozhikode, India. He also taught a marketing channel and distribution course at Danube Business School, Danube University Krems, Austria. He was Professor of Marketing at IIM Lucknow and has the distinction of being the founder and Dean of IIM Lucknow (Noida Campus). He has worked with various organizations including Wipro Information Technology Ltd. in New Delhi, Shriram Chemicals, and Kota, amongst others. He has been a consultant to the World Bank, IDRC (Canada), GWB (for GTZ Germany),

Coal India Ltd., and Globecast India (a division of France Telecom). He has served as a consultant to various ministries of the Government of India and is a member of several of its policy committees. He has also addressed distinguished gatherings at national and international forums and has received numerous awards and honours. Shallini Taneja is Associate Professor of Economics and Business Policy and Head of the Center for Sustainable Development at FORE School of Management, New Delhi, India. She has over 17  years of experience in teaching, research, and industry. She is a fellow with the Management Development Institute (MDI), Gurugram. She worked as a senior research fellow with her professors for an AICTE-sponsored National Research Project on “CSR Reporting Practices in Indian Companies.” She received sponsorships from ISDRS at Columbia University and The Wharton School, USA, for paper presentation and attending conferences. She has served as an honorary advisor to BRICS Chamber of Commerce and Industry, New Delhi, in the CSR wing. She is a guest faculty at the Indian Institute of Corporate Affairs (IICA) under the aegis of the Ministry of Corporate Affairs, GOI. She has conducted joint programmes on Sustainable Development Goals—Agenda 2030 for the United Nations Information Centre for India and Bhutan, based in New Delhi. She is a reviewer and guest editor for various national and international journals and has many national and international publications. Her research paper published in the Journal of Business Ethics (Impact factor: 4.141) has had more than 350 citations since 2011. She has conducted the International Training Program for EMBA Batch from Sichuan University, China, on business environment and corporate governance. She has also conducted various in-house and online Management Development Programs (MDPs) for companies including NHPC, GAIL, IRCTC, and JK Cement. /  Operations Hitesh Arora is Professor of Quantitative Techniques   Management and Dean (Academic Services) at FORE School of Management, New Delhi, India. A  graduate in mathematics and a postgraduate in operational research from the University of Delhi, he earned his doctorate in mathematical programming from the Department of Operational Research, University of Delhi. He has also worked as an actuarial consultant with a UK-based multinational company. As an actuarial consultant, his work involved data modelling and reserving for personal and commercial lines of different UK-based insurance companies. He has over two decades of experience in academia and industry. He has also conducted various in-house and online Management Development Programs (MDPs). He has worked extensively in the area of mathematical programming, and his present areas of research interest are measurement of productivity, service quality, and effect of information technology in ii

the Indian banking sector. He has authored numerous research papers published in national and international journals of repute. He has four co-edited books and has written an Indian adaptation book titled Business Statistics—BSTAT: A South-Asian Perspective (2016). He is also a reviewer of many international journals. Besides his teaching, research, and consultancy at FORE School of Management, he is also a member secretary of the Executive Board of FORE School of Management, New Delhi.

iii

CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABLE DEVELOPMENT Strategies, Practices and Business Models

Edited by Jitendra K. Das, Shallini Taneja and Hitesh Arora

First published 2021 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 605 Third Avenue, New York, NY 10158 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2021 selection and editorial matter, FORE School of Management, New Delhi; individual chapters, the contributors The right of Jitendra K. Das, Shallini Taneja and Hitesh Arora to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Das, Jitendra K. (Jitendra Kumar) editor. | Taneja, Shallini, editor. | Arora, Hitesh, editor. Title: Corporate social responsibility and sustainable development: strategies, practices and business models/edited by Jitendra K. Das, Shallini Taneja and Hitesh Arora. Description: 1 Edition. | New York: Taylor & Francis Group, 2021. | Includes bibliographical references and index. Identifiers: LCCN 2020055926 (print) | LCCN 2020055927 (ebook) | ISBN 9780367273040 (hardback) | ISBN 9780367273057 (paperback) | ISBN 9780429295997 (ebook) Subjects: LCSH: Social responsibility of business. | Sustainable development. Classification: LCC HD60. C692567 2021 (print) | LCC HD60 (ebook) | DDC 658.4/08—dc23 LC record available at https://lccn.loc.gov/2020055926 LC ebook record available at https://lccn.loc.gov/2020055927 ISBN: 978-0-367-27304-0 (hbk) ISBN: 978-0-367-27305-7 (pbk) ISBN: 978-0-429-29599-7 (ebk) Typeset in Sabon by Apex CoVantage, LLC

CONTENTS

List of contributorsx List of figuresxiv List of tablesxvi Forewordxvii JENNIFER J. GRIFFIN

Acknowledgementsxxi Introduction

1

  1 Indian corporates leveraging green marketing to promote CSR and sustainable development: implications and challenges

8

GEETA SACHDEVA

  2 Sustainable development and business research: where we are and where we might go

20

HARRY J. VAN BUREN III

  3 Sustainability concerns, digitalization, and globalization: impact on marketing thought and practice

30

JOFFI THOMAS

  4 Impact of long-term CSR support

43

CHERIE ANN SMITA PEREIRA

  5 CSR initiatives by small and medium enterprises in the National Capital Region of India ANITA TRIPATHY LAL

vii

61

C ontents

  6 Regulating the invisible hand: mandatory CSR in Mauritius

72

JYOTI DEVI MAHADEO

  7 The obligation versus opportunity framework for corporate social responsibility implementation

87

AASHNA SHARMA AND GURPARKASH SINGH

  8 Operations research and its role in environmental management: a review

101

A. J. MEITEI AND AKANKSHA SAINI

  9 The global reporting initiatives, business intelligence, and corporate sustainability: an analysis of Indian enterprise in the energy sector

115

REKHA MISHRA AND A. K. SAINI

10 CSR and its communication in multinational companies in India and the UK: dimensions and relationships

123

MARY LONGHURST

11 Creating a watchdog culture for ethical standards in Indian advertising140 FREDA SWAMINATHAN

12 The role of CSR in skilling India: the sustainability of interventions by pharmaceutical companies

153

PRIYANKA CHHAPARIA AND MUNMUN JHA

13 Microfinance as an instrument for achieving sustainable development: a research agenda

166

CHANDAN MEDATWAL AND AMAN KUMAR VERMA

14 Leveraging social media to amplify CSR programmes

179

UMESH RAO AND SHALLINI TANEJA

15 Building the Master Training programme: a case study MANISH KUMAR SINGH

viii

190

C ontents

16 Transforming lives through education: a CSR case study of SRF foundation

206

Y. SURESH REDDY

17 Educating minds to empower the future: Capgemini

227

KASHIKA MADAAN AND SURUCHI PAWAR

Index246

ix

CONTRIBUTORS

Priyanka Chhaparia is Research Fellow at the Centre for Responsible ­Business. She has completed her doctoral studies from IIT Kanpur, with specialization in CSR. As part of her thesis, she has undertaken extensive fieldwork to get an insight into various perspectives of CSR interventions. Munmun Jha is Professor of Sociology at the Indian Institute of Technology Kanpur, India. He received his PhD from the University of Glasgow University, where he was a Commonwealth Scholar. His teaching and research focus on human rights movements and issues. Anita Tripathy Lal is Professor at FORE School of Management, New Delhi, India. Her expertise lies in the areas of business communication, leadership, and entrepreneurship. She has a PhD from IIT Kanpur and has over 23  years of work experience in teaching, training, research, and consultancy. She has been visiting faculty to IIT Delhi, IIT Kanpur, IIM Ranchi, IIM Rohtak, MDI, and IIFT Delhi. Being a certified mentor from the London Business School, she has been successfully mentoring entrepreneurs. At FORE, she heads the Centre for Entrepreneurship Development. Mary Longhurst works as a consultant in London and has over 20 years of experience in communications and CSR. She is passionate about working with clients to create strategic social purpose and communication programmes. Kashika Madaan is associated with Capgemini, India CSR as Coordinator ofDigital Inclusion. She is also Consultant at PwC India Foundation. She has a master’s in development from Azim Premji University, India. She is an engineer turned development sector practitioner who loves to travel and engage in outdoor sports. Jyoti Devi Mahadeo is Senior Lecturer in Management at the University of Tasmania, Australia. Her research interests stand at the intersection of strategic management and sustainability reporting. In particular, she x

C ontributors

focuses on corporate governance, corporate social reporting, and sustainability management. She publishes in leading journals such as Business & Society and Journal of Business Ethics, amongst others. Chandan Medatwal is Assistant Professor, OB HR and Soft Skills, NIIT University, Neemrana. She has 12 years of corporate, teaching, and research experience and has many scholarly publications. She is the recipient of the “Young woman scholar” award by NFED. A. J. Meitei is Senior Faculty in the Department of Mathematics, Maharaja Agrasen College, University of Delhi, India. He has over 18 years of teaching experience both at postgraduate and undergraduate levels. He has a number of publications in national and international journals and has also co-authored a book. Rekha Mishra has over a decade of work experience in business research, data analysis, teaching, coaching, and consultancy in India and abroad. Her teaching and research interests include business intelligence and analytics, enterprise resource planning, financial technology, IT ­ strategy, e-business, project management, and sustainable development. Suruchi Pawar is associated with Capgemini Technology Services India Limited as Sr. Analyst of Digital Inclusion. She has a master’s degree in social work. The overall experience in this sector has enabled her to anchor education projects of Pan India by bringing in innovation for the holistic development of the communities. Cherie Ann Smita Pereira has been a social science researcher for over 12  years. She has in-depth experience in programme monitoring and evaluation with a focus on children and youth. Her educational background in social work coupled with a research degree gives her a robust base for social impact analysis. Umesh Rao is an educational entrepreneur and visiting faculty at various IIMs, FMS amongst others. He has over 28 years of expertise in leadership roles in the FMCG, rural e-services, and media. He has worked in India, North America, and MENA regions in brand management, sales and distribution, and digital marketing domains. Y. Suresh Reddy is an Aspire Fellow, CSR Lead—SRF Ltd. and Head of the NGO SRF Foundation (www.srf-foundation.org). He has a PhD in public administration from SV University, Tirupati, India. He has been associated with various academic, government, not-for-profit, and corporate foundations and has 24 years of experience in this field. He is the author of Co-operatives and Rural Development (1997) and Child Labor in India and has many research papers to his credit. xi

C ontributors

Geeta Sachdeva is Assistant Professor at NIT Kurukshetra, India. She has a PhD in management. She has published 20 research papers in national and international journals of repute. Her areas of interest are human resource management and corporate social responsibility. A. K. Saini is Professor of Information Systems in University School of Management Studies (USMS), Guru Gobind Singh Indraprastha University, New Delhi, India, and carries with him a blend of industrial and academic experience of more than 28 years. He is also the Director of Industry Interaction Cell of the University. He has served as Chairman of CSI Delhi and IETE Delhi Centre, and Governing Council member of IETE. His major interests include information systems, databases, technology and innovation management, knowledge management, and healthcare systems. Akanksha Saini is a research scholar in the Department of Operational Research, University of Delhi, India. Her areas of expertise are mathematics, statistics, and operational research. She is working on the applications of operations research in various social sectors. Aashna Sharma is a PhD candidate at LM Thapar School of Management, Thapar Institute of Engineering and Technology, India. Her thesis focuses on corporate social responsibility implementation. Her work has been presented at the 12th Corporate Responsibility Research Conference, FORE international sustainable development conference, and PRME on Asia Forum. Gurparkash Singh is Associate Professor at LM Thapar School of Management, Thapar Institute of Engineering and Technology, India. He completed his PhD from CQUniversity, Australia, in knowledge management. His areas of research include CSR and quality in higher education. His research work has been published in reputable journals and conferences such as AOM and EAIR. Manish Kumar Singh is a corporate social responsibility (CSR) professional with over 15 years of corporate and NGO experience. He is working with Everest Industries Limited as Head “CSR.” He has also worked with JK Organization, GMR Group, Smile Foundation, and Dr Reddy’s Foundation. Freda Swaminathan is Visiting Professor in Marketing. She has a unique mix of 25 years of industry experience in organizations like LINTAS and Goodyear and over 15  years of experience in academia, mainly from FORE School of Management, from where she has recently retired. Joffi Thomas is Associate Professor at Indian Institute of Management Kozhikode, India. He has over two decades of experience in teaching,

xii

C ontributors

research, and industry combined. His areas of research interests include marketing theory, sustainability marketing, branding, and customer trust. Harry J. Van Buren III is Visiting Professor of Business Ethics at the Suliman S. Olayan School of Business at the American University of Beirut and is on leave from the University of New Mexico’s Anderson School of Management, where he holds the Rust Professorship in Business Ethics. He is also Barbara and David A. Koch Endowed Chair of Business Ethics at Opus College of Business, University of St. Thomas, Minneapolis, Minnesota, USA. His doctorate in business environment, ethics, and public policy is from the University of Pittsburgh’s Katz Graduate School of Business. His research has been published or is in press at Academy of Management Review, Business and Human Rights Journal, Business & Society, Business and Society Review, Business Ethics Quarterly, Futures, Human Resource Management, Human Resource Management Review, Journal of Business Ethics, and Journal of Management Studies, amongst other journals. Aman Kumar Verma is a financial analyst in Wipro Limited, New Delhi, India. He received the “Young Achiever Award 2k19” by GLBIMR, Greater Noida. His research work has appeared in various journals. His research interests are forex, microfinance, and financial reporting.

xiii

FIGURES

3.1 Impact of sustainability concerns, digitalization, and globalization on marketing thought and practice 31 4.1 Impact of long-term CSR support 44 4.2 The Uddan Programme: Community female youth leaders (CYLs) as change-agents 50 4.3 Educational aspirations (per cent) 51 4.4 Pre- and post-intervention percentage difference 54 4.5 Awareness about having a legal age for marriage (per cent) 54 4.6 Female youth interested in training (per cent) 55 6.1 The pyramid of corporate social responsibility 77 6.2 Evolution of the CSR levy 83 7.1 “Obligation” versus “opportunity” framework 95 7.2 “Process-oriented” model for CSR implementation 98 10.1 The cross analysis between companies and countries allows for a four-way analytical process table 128 13.1 Interrelationship of microfinance and sustainable development170 15.1 Programme model of consultation process 192 15.2 Training delivery process 193 15.3 New age equipment use training 195 15.4 Complementing sustainable development goals nos. 8 and 9 198 15.5 Complementing sustainable development goals nos. 8 and 9 198 15.6 Complementing sustainable development goals nos. 8 and 9 199 15.7 Roof entrepreneurs development programme 203 16.1 MREP: Holistic transformation of schools and children 208 16.2 The collaborative framework 212 17.1 Budget allocation from the ministry 231 xiv

F igures

17.2 Statistics from HRD 17.3 Collaborative stakeholder model 17.4 School adoption phases 17.5 First phase of strategy 17.6 Phase 1 activities 17.7 School adoption outcome 17.8 School adoption outcome 17.9 Our reach—outcomes 17.10 Our reach—outcomes 17.11 Pedagogy adopted 17.12 Challenges and issues 17.13 Delivery plan—year 1 17.14 Addressing the SDGs

xv

231 232 233 234 236 237 237 238 238 239 239 242 244

TABLES

4.1 4.2 7.1 7.2 7.3 7.4 9.1 9.2 9.3 9.4 9.5 9.6 10.1 10.2 11.1 11.2 11.3 13.1 13.2 16.1 16.2 16.3 17.1 17.2 17.3

Demographic details of the respondents 49 Health and personal hygiene 53 Review of models for understanding CSR as practice 92 Defining obligation and opportunity 94 Activities for CSR contribution under Schedule VII of Companies Act 2013 96 Percentage of companies’ contribution towards CSR activities 97 Respondent profile by gender 119 Respondent profile by level in management 119 Respondent profile by area in management 119 Level of satisfaction with BI in the organization 120 Level of reporting as per GRI guidelines 120 Spearman’s correlation 121 Details of the interviewees and their respective positions 127 The motivations described in each of the contexts differed 130 Difference in perceptions of advertising for low involvement and high involvement products—advertising ethics147 ANOVA test analysis 148 Top ten national advertisers in India in 2016 149 Database search protocol 171 Most studied papers 172 MREP projects 209 Model school framework 222 Terminology and abbreviations list 225 Budget allocations for the MHRD (2017–2018) (in Rs crore) 228 Objectives and indicators adopted 234 Expected outcomes of the programme 243

xvi

FOREWORD

Mere compliance with the Indian CSR law—necessary yet not sufficient for inclusive sustainable development1 Jennifer J. Griffin This book, on indigenously Indian nine ways to create and sustain inclusive development, is long overdue for business executives operating in a complex twenty-first century. By demonstrating how individuals, communities, and organizations can pragmatically sustain inclusive development, this book charts a course for making the seemingly impossible, possible. A much-needed book, it is really quite remarkable in its focus, breadth, and depth. Its focus on putting people first is remarkable in its simplicity and effectiveness for achieving sustainable development and impactful CSR initiatives. Remarkably, its straightforward insight that only with, by, and for people does development become inclusive and sustainable. The breadth of impact is potentially huge as Indian company’s prosocial activities are now mandated under Section 135 of the Companies Act of 2013. Thus, the depth to which CSR initiatives can meaningfully come “alive” is potentially unlimited as some firms and organizations, as illustrated in this book, are engaging in far more than a tick box CSR exercise. Ah! Therein lies the crucial tension at the heart of this book. Mandating corporate CSR contributions, as the Indian law does, can make a genuine difference, but will it? That’s the crux of this book and the great sustainable development experiment occurring in India. A  mandate of global brands can certainly be a shakedown; another tax imposed on nameless, faceless big business. Thankfully, this book provides alternatives to this well-worn mantra by highlighting how some innovative leaders, forward-thinking companies, and outcome-oriented organizations are actively experimenting to make concerted impacts on the ground. Businesses interpreting the CSR law as an opportunity to innovate, however, rather than yet-another-­ compliance-hurdle are few and far between. The three lessons emerging at this early stage seem to be compliance is necessary yet not sufficient for sustainable, inclusive development; large pots of money may be necessary xvii

F oreword

yet are not sufficient to make a sustained impact; and, a few, innovative first movers are likely to outpace the crowd. Let’s deconstruct these three lessons emerging from the book, next. First, demonstrating social impact will be a key differentiator for businesses going forward. If every large business must comply with the Indian CSR law, then how a company uses the money (demonstrating tangible ­outcomes) will be a differentiator. The large and ever-growing, year-over-year, pot of gold mandated for company CSR initiatives—2 per cent of large business’s net profits are required to be spent on CSR programmes—it’s a question of when, not if, the questions for corporates change to: What have you done with this money? What impact has been made? What difference has been achieved for which communities and individuals? With corporate compliance to the Indian law at nearly 100 per cent and CSR contributions publicly disclosed by each brand, tangible improvements are possible. Yet as the authors of this book affirm, large firms can’t comply their way to greatness nor can they just engage in CSR talk (a solely symbolic or communications strategy). Merely meeting compliance requirements with communication touting compliance will be necessary yet not sufficient in a few years’ time as CSR walk will be demanded by core stakeholders (employees, consumers, financiers), regulators, and communities including Indian society. Second, as the stories and studies within the chapters of this carefully curated book demonstrate, money alone will not be enough. The firms combining rupees from their treasuries with business ingenuity, Indian jugaad (creativity), and innovative learning are likely to be the leaders, the difference makers. Putting people and profits together, in uniquely Indian combinations, will show individual communities, and perhaps surprise global brands, that doing well and doing good for/with others is not just needed for compliance; it is a vital option for business growth and sustainable inclusive development. Yet as history has taught us, only a few firms will lead the way. The world is watching to find out who will lead in the coming decades. Further, the lofty goals of the law include, but are not limited to, complex, multifaceted, entrenched “wicked” challenges: Eradicating extreme hunger and poverty, promoting education, promoting gender equality and empowering women, employment enhancing vocational skills; reducing child mortality and improving maternal health, amongst other initiatives. As the authors in this book rightly point out, it will be incumbent upon business, and especially the brands, to demonstrate tangible improvements—with adjacencies to a business’s scale, scope, competency, or products. Or, finding partner(s) having the requisite skill sets and reach. Even small improvements to these persistent challenges can make a significant difference in thousands of lives. Realizing the potential will separate a few leaders from a crowded field of imitators. xviii

F oreword

Third, indigenously Indian leadership can combine vast personal networks across fragmented or disjointed infrastructure voids with savvy tech disruptions to get CSR projects built on time, at cost, with concerted (although likely limited in the short term) social outcomes. In the next part, for example, addresses some of the marketing, communications, finance, and advertising capabilities that will be needed when businesses explicitly integrate goals of alleviating hunger and poverty, upskilling, or developing employable skills. Chapters on microfinance and social media outreach identify how these platforms can disrupt and potentially create multiplier effects with messages and momentum. Leveraging the momentum for good (and arresting the downward spiral when there’s a race to the bottom) will likely be cause for new Indian innovations. So, watch this space. Success is far guaranteed, but it begins with small steps. And, finally, as this book suggests, the innovators and disruptors might be surprising candidates. Foundations, smaller and medium-sized Indian businesses (SMEs), non-governmental organizations, social businesses, and/or family-owned firms have long-standing legacies of building trusting relationships, as highlighted thereafter. Adam Smith had it right: Division of labour alongside coordination with integration is required to thrive. Big businesses are fairly good at division of labour especially with consolidation of sectors. Yet SMEs, foundations, NGOs, and family firms as connectors may surprise us all as implementors or as partners that larger businesses may become dependent upon. A  turnaround, to be sure. Less reliant on traditional intermediaries with increased interconnections through trusted networks, these nimble, resilient organizations may lead technological disruptions with lessons for the world. Harkening back to the opening Chinese proverb: “One tree falling in a forest makes more noise than a thousand trees growing,” this book makes a rare contribution to those on the journey of trying and experimenting through business acumen and individual ingenuity to do good and do well, simultaneously. There’s simply not enough ink spilt nor stories about those organizations that are making the seemingly impossible, possible. This book illustrates it is quite simply in business’s, and especially India’s existing and emergent global brands’, best interests to grow with prosperity for people and profits. The downside risk is cavernous: Business risk is local, yet brand risk is global. Global brands have much to lose if they’re not out front pursuing new ideas, competing for top talent, and developing new ways of connecting consumers with government requirements and business practices. Overall, I’m simply quite bullish on the Indian jugaad (creativity) within large, small, and branded businesses that focus on social impact alongside profit-making. If businesses aren’t actively a part of the profits plus prosperity solution, they will alleviate inequalities in wealth and income, network while levelling the playing field through access, distribution of endowments, and/or rewards, and rewrite the business texts for the coming century. xix

F oreword

Experimenting, rejiggering, pivoting, and resilience will over time prove unique and indigenously Indian paths forward. Karo Sambhav (“make possible” in Hindi) is one such organization to keep an eye on. There are plenty others, too. As this book illustrates, some firms will take up the challenge to go beyond mere compliance with extant Indian CSR and extended producer responsibility (EPR) laws or will wait until they are overturned. Alternatively, some firms will create a new future, setting the bar high with nimbleness and disruption. Of course, other firms may sit on the sidelines and move only as fast as the law or as far as enforcement of the law requires. Time will tell. Which company do you want to work for? Which type of company do you want to create? Thanks to this timely book, the choices are growing. Jennifer J. Griffin Raymond C. Baumhart SJ Professor of Business Ethics and Professor of Strategy, Loyola University Chicago March 2020

Note 1 In Das, J.K., Taneja, S. and Arora, H. (Editors). 2021. CSR & Sustainable Development: Strategies, Practices & Business Models

xx

ACKNOWLEDGEMENTS

This book is an outcome of the FORE International Sustainable Development Conference 2018 in association with the International Association for Business and Society (IABS) from January 11–13, 2018. We would like to acknowledge the kind support extended by Dr B.B.L. Madhukar, Chairman, Executive Board of FORE School of Management; Dr Vinayshil Gautam, Vice Chairman, Executive Board of FORE School of Management; Dr Jitendra K. Das, Director, FORE School of Management; and members of the Executive Board of FORE School of Management, New Delhi, for successfully conducting this international conference and shaping this edited book. The infrastructural support provided by CSD, FORE School of Management, New Delhi in completing this edited book is highly acknowledged. We are extremely thankful to the IABS president and their members for adding value which served as rich grounds for our mutual learnings. We are very grateful to Dr. Rajat Panwar, member, IABS for his advice and insightful suggestions for shaping the FORE IABS International conference. We are also happy to acknowledge our sponsors IABS, the Power Grid Corporation of India Limited, Skill Champs, CIS, and Skill Council for Persons with Disability for their financial and intellectual support. We received overwhelming papers and case studies submissions from academia, Industry, and social sector during the conference. Only 17 selected papers and case studies are included in this edited version. We are grateful to all our chapter authors for their thought-provoking contributions that collectively provide a powerful account of CSR and sustainable development strategies, as well as practices and business models across emerging economies. We also thank Ms  Mareena Mathew (Ex-Senior Manager—Publications) for her diligent administrative work. Routledge has always been extremely supportive to us in this project. We remain ever grateful to them for their valuable editorial comments and constant guidance. At last, we thank each one who has helped us in making this project successful.

xxi

INTRODUCTION

The concept of businesses having a responsibility towards the societies they operate in can be traced back to medieval times; it re-emerged in the modern period with the Gandhian theory of trusteeship in the 1930s, which was thought of for an emerging economy like India. He believed that the acquisition of wealth should be used for the benefit of society at large. Corporate social responsibility (CSR) and sustainable development (SD) took an entirely new meaning and direction in the 1960s and 1970s. Academicians, lawyers, practitioners, and civil society have contributed to the development of CSR, governance, and SD models establishing sustainable market structures. The power structure of stakeholder groups has dynamically changed in the recent years. Companies do not want to engage in any unethical behaviour that could tarnish their brand image over time. Yet the notions of CSR, business ethics, and SD are filled with controversy. Despite this, most large companies publish weighty reports on their CSR and sustainability efforts to gauge the benefits on the bottom line. Researchers have discovered the positive impact of adapting CSR and sustainability practices within and outside company premises. It is regarded as a powerful tool to engage with stakeholders to gauge the benefit for the company at different levels. On the other hand, corruption, unethical behaviour, and bad corporate governance can put companies in financial trouble and also damage their reputation. Keeping that background in view, internationally recognized academicians, scholars, and practitioners in the area of CSR, sustainability, green marketing, and governance have contributed chapters in this edited book. This book focuses on the strategies, practices, and business models in the context of corporate behaviour towards sustainability in a holistic manner. The contributions have been covered in three sub-themes. In the first chapter, Geeta Sachdeva outlines the importance of green marketing and how it has gained a momentum amongst customers. She talks about the paradigm shift strategy in numerous corporations since it has changed the means by which an organization reaches out to its customers in the Indian context. She emphasizes the concept of green marketing along the strategies on which it is based, the green marketing mix, and how it can 1

I ntroduction

give a competitive advantage to companies that adopt green practices. She further discusses the initiatives taken by Indian companies and the problems they face in the implementation of green marketing, and she also suggests a framework. Chapter 2 by Harry J. Van Buren III proposes a new view of business. He asserts that businesses need to integrate sustainability in both environmental and social terms. There are numerous challenges facing business and society, such as rising economic inequality, climate change, and other environmental problems. He avers that the scholarship affects both academia and business. He highlights the crucial role of business school scholarship in the current situation, wherein business and capitalism face challenges, as does the legitimacy of business schools. He outlines the story in three parts, with the first part focusing on mutual value creation; the second part addressing the need to value natural, human, and social capital; and the third part shifting the focus of managerial activity away from exercising power over others and towards exercising power with them in ways that sustain value creation. He concludes that integrating sustainability, stakeholder thinking, and ethics into our teaching and research is essential for addressing the context that we all find ourselves in. We all must think of and propose new models of business that integrate both social and environmental sustainability, which will make management research relevant to both business and society. In Chapter 3, Joffi Thomas outlines the importance and impact of sustainable practices on marketing thought and practices. He discusses the developments in practice that have brought about shifts in the nature of offerings from goods and services to staging unique customer experiences, changes in firm orientation from market orientation to sustainable market orientation, and the transition in the role of marketing in the organization from tactics to strategy to culture. Customers across the globe are getting increasingly educated and conscious about the ecological as well as social implications of their consumption behaviour. He strongly poses the argument that the firms are now moving from firm orientation and market orientation to sustainable market orientation. He discusses the context by giving examples of leading global companies that have aligned their missions and goals with the sustainability imperative. He concludes by emphasizing that the three macro influencers of globalization, digitalization, and sustainability in combination are creating disruptions in many traditional markets as well as creating new opportunities in the marketplace. A deep understanding of their impact on marketing thought and practice would help the marketers, industry, and the economy. In Chapter 4, Cherie Ann Smita Pereira traces the philanthropic principle through a regulatory periphery in context to CSR, which is now mandatory under Section  135 of the Companies Act of 2013, and has brought to the forefront the need for corporates to meaningfully engage with the implementing organization in order to achieve a collective impact. Today, 2

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in the Indian context, CSR is aligned with the country’s national priorities, focusing on need-based initiatives, keeping in mind the triple bottom line of people, planet, and profit. In her research, she analyzed the social impact of the ongoing five-year partnership between Tata Motors Finance (TMF) and Magic Bus India Foundation (MBIF) to set up a programme for marginalized adolescent girls who are denied equal opportunities, preventing them from realizing their dreams. She conducted the study over a two-year period to understand how long-term corporate funding can serve not only as support but as an enabler for empowerment of the target group. She concluded with describing multidisciplinary issues on how to tackle the social problems at the field level, for the eventual achievement of objectives at a societal level. In Chapter 5, Anita Tripathy Lal examines the CSR initiatives by micro, small, and medium enterprises (MSMEs) in Indian companies. The author provides a brief overview of the significant contribution of the MSMEs in India’s economic growth. She provides a background to the types of CSR initiatives by various large industrial houses in developing nations, mostly in social development, such as investing in educational institutions, hospitals, and temples. Specifically, in India, she addresses the large-scale industries; the small- and medium-scale industries also are accountable significantly for the economic development of the nation. The paper attempts to identify the CSR initiatives being undertaken by SMEs and assess the extent to which the MSMEs are effective in implementing them. Jyoti Devi Mahadeo in Chapter 6 attempts to validate the novel CSR levy through the Carroll CSR framework and institutional theory in the context of an emerging nation. In her article, she posits that more than a decade has passed after the bold decision to enact a CSR law in Mauritius; now the Mauritian government, private sector, and NGOs must work towards the implementation strategies on the ground level. She makes a case for mandatory CSR in developing countries by citing the literature, which highlights that governments of developing nations have to exercise strategic moves in CSR contributions. Further, based upon her evaluation across several criteria, she formulated five propositions that could be validated by devising strategic survey instruments amongst different stakeholder groups. In Chapter  7, Aashna Sharma and Gurparkash Singh propose an obligation versus opportunity framework based upon the recent literature on CSR in practice. The authors note that the various theoretical models for understanding CSR practices developed by researchers and practitioners are usually descriptive in nature. They discuss the mandatory nature of CSR in India, which has led many practitioners to perceive CSR as an obligation rather than as a strategic intent and opportunity. Thus, it is widely accepted that the implementation of CSR in India is limited to recognizing it as an obligation. There is a great need to fill the gap by proposing how to implement these models, especially in the Indian context. This chapter enables a 3

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better understanding of CSR in practice by focusing on the implementation of the CSR process in the institutional environment. A. J. Meitei and Akanksha Saini trace the pathway to sustainable development and environmental issues through operations research in Chapter 8. They explain the interaction of operations research with environmental management through a review of the existing literature. They argue that the protection of the environment has become the highest priority at all levels of society. They also state that, with the help of various techniques, such as linear programming, game theory, decision theory, queuing theory, inventory management, simulation, Markov process, and network scheduling (PERT/CPM), decision makers can find solutions on how to deal with these environmental issues. The authors conclude by explaining the relevance of operations research modelling, linking with its contribution in various sectors, such as the agriculture, fisheries, forestry, and mining sectors, amongst others. They also indicate the impact of various stages of supply chain management on the environment and how they could be overcome by introducing the concept of green supply chain management. The second section focuses on the communication strategy for CSR and sustainable development. In their chapter, Rekha Mishra and A. K. Saini emphasize how the changing climatic situation demands that organizations become conscious of their impact on the environment and take measures to streamline their functioning to minimize environmental damage and adopt practices to enable corporate sustainability at the firm level. The authors provide an extensive literature review spanning from the year 2006 to 2018 on CSR and global reporting initiative (GRI) across various published sources. They conducted a survey with the help of a semi-structured questionnaire amongst the leading companies in the energy sector in India, wherein they collected 115 responses from managers in various companies. The objective was to understand the perception and acceptance level of these companies towards the GRIs, business intelligence (BI), and corporate sustainability indicators. The authors discussed interesting insights regarding the acceptance and the level of the reporting mechanism in the energy sector in India. Mary Longhurst, in Chapter  10, explores the dimensions of CSR and its communication in India and the UK through comparative case studies of Tata Steel and Shell. She posits that both countries have a tradition of philanthropy that has evolved into an increasing focus on CSR. Both countries also experience different contextual pressures that influence how they develop their CSR practice and how this is communicated to stakeholders. She explains by examining how, when in 2013, India became the first country in the world to mandate a minimum CSR spend for qualifying, larger, companies. International guidelines arguably promote integrated internationalization strategies that help generate efficiencies and responsiveness to particular needs. She analyzes the characteristics of, and influences on, CSR, its practices, and its communication that affect the CSR communication 4

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models adopted by companies, also as a means of inspiring and giving a sense of meaning and purpose to stakeholders. She concludes by highlighting that a deeper understanding in building frameworks is needed, considering the perception of the stakeholders. Freda Swaminathan, in Chapter 11, assesses the Indian consumers’ consciousness of the ethics in Indian advertising. The author highlights India’s diversity, where cultures vary according to religion, physical geography, rural-urban divides, and the phenomenon of caste. She outlines the extensive literature on ethics in advertising and talks about critical issues. She avers that advertising plays a key role in persuading consumers to purchase a product. She examines consumer opinion, whether the ethics of advertising vary according to the advertising of high involvement and low involvement products, with rational and emotional decision making. She also talks about how future managers perceive the concept of ethics in advertising. In addition to the perception amongst different stakeholders, she emphasizes the crucial role of social media in the current context. Freda maintains that ethical behaviour could be promoted in advertising through concepts such as social responsibility, good morals, being a good citizen, or being environmentally conscious. In Chapter 12, Priyanka Chhaparia and Munmun Jha focus on the status of skill development in India in the initial phase. In the second phase, the authors talk about initiatives undertaken by the corporations under their CSR strategy and how it is helping them in contributing to sustainable development. Using the stakeholder theory, they emphasized the extended responsibility of a corporation, not only towards its shareholders but also to other groups who directly or indirectly affect or get affected by the corporation’s actions. Two case studies have been presented in the chapter, which addresses the approaches followed by two Indian companies in running the CSR programmes in the skill development area under their foundations, with a special focus on the pharmaceutical industry. The primary data have been collected through semi-structured interviews, in-depth, focus group discussions, and observation. Their findings provide insights into the challenges of skill development projects, and they conclude by suggesting steps to take for a qualitatively superior outcome of CSR activities. Chandan Medatwal and Aman Kumar Verma, in Chapter  13, examine the different categories of schemes under the microfinance initiatives taken by various organizations. They aver that the provision of microfinance services to low-income poor and very poor self-employed people, especially in India, aims at reducing the inequalities at the bottom of the pyramid. The authors provide a systematic review of 58 papers from the literature, which provides examples of the shift happening in management studies. Simultaneously, the understanding of a corporation’s perspective towards microfinance activities has been understood by examining annual reports and industry journals. They posit the different classifications of issues and 5

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challenges that emerged in microfinance and that could be instrumental for the corporations to formulate their policies strategically to gauge the impact on key stakeholders. In Chapter 14, Umesh Rao and Shallini Taneja trace the pathway of cultural and corporate shift, which is taking place in the current economic climate and in the business world: The innovative practices of embracing social responsibility and sustainability through social media. There was a time when companies issued press releases and operated under the impression that they controlled the message of their brand, but those days are gone. The authors highlight the communication strategies of various companies on their social media platforms underlining the outreach of their CSR initiatives through an integrated framework, and how it is affecting their brand image. Businesses are leveraging social media to trigger a viral chain reaction of interest around their socially responsible activities and communicating it to customers and other key stakeholders with a positive impact around their community at large. The chapter outlines the interesting outcomes from the interviews undertaken with industry experts sharing their company’s experience using social media in improving its earth-friendly consciousness, and to engage with other parts of the information and communication technologies (ICTs) sector within and outside India. In the third section, Manish Kumar Singh in Chapter  15 discusses the importance of the skill development initiatives adopted by various companies in India under the Skill India initiative. In emerging economies, corporations are developing strategies for sustainable development, keeping business and society at the centre of the theme. The chapter underlined India’s challenge of supply and demand for a skilled workforce. In the construction sector itself, there will be a shortage of 33 million skilled workers by 2022. The author adopted a case study approach in highlighting how the Everest Foundation has developed the Building Master Training (BMT) programme to build a quality workforce in the market for its customers, and, at the same time, how the fabricators or installers may earn better incomes and generate jobs in the market while addressing sustainable development goals (SDGs). The chapter concludes by identifying the actions taken by the foundation to overcome the challenges that came their way during the effective implementation of BMT with their strong linkages at the grass roots. In Chapter  16, Y. Suresh Reddy focuses on the role of the foundations in promoting sustainable development through education. Family-owned companies in India play a significant role in the social and economic development to a large extent. The author, through the action research, casebased, discusses the impact created by one of the leading family groups, through their involvement in social engagement, transforming the lives through education beyond their products and profitability approach. He highlights the collaborative model adopted by their foundation through its cluster approach, technology innovation, and cultural customization, 6

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which has improvised education, leading to a self-sustainable and replicable model within the formal system. He also talks about the challenges faced by the foundation from the local community and the type of approach they adopted while addressing the issues at the ground level. At the end, the author indicates the multiple frameworks adopted by the foundation across different geographical locations in India to implement CSR initiatives. Kashika Madaan and Suruchi Pawar, in Chapter 17, focus on creating an ecosystem for good and effective education that has the power to change a life and is the right of every child. Being one of the fastest-growing economies, India has mostly focused on the input-driven educational system. Providing free and compulsory education to all citizens of the country is one of the state’s priorities. Keeping the Indian government’s flagship programmes for elementary education, Sarva Shiksha Abhiyan (SSA) in 2003, and Right to Education in 2009 in the background, the chapter discusses the innovative measures taken by the company’s CSR team to act as a catalyst to increase the enrolment rate of children while providing early childhood care and development of life skills for young students. Through the case study approach, the authors have outlined one of the leading consulting and technology services and digital transformation companies, Capgemini’s social efforts in the education sector, both at the community and national levels. The company has adopted 126 schools across six states and nine cities with a focus on bringing quality education through digital interventions. At the end, the authors posit their dynamic engagement strategies with government and other corporates to make sure that programmes that are affecting the lives of communities are sustained and replicated in the future. Each chapter in the book contains relevant and critical issues pertaining to CSR, ethics, corporate behaviour, and sustainability both from the academic and practical perspectives. The aim of the book is to bring together recent developments and effective frameworks, models, and strategies in order to provide solutions to challenges in emerging economies. We hope that this book will help the academic and practitioner community find the way to create an ecosystem by addressing the challenges in economic, environmental, and social perspectives in a globalized world.

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1 INDIAN CORPORATES LEVERAGING GREEN MARKETING TO PROMOTE CSR AND SUSTAINABLE DEVELOPMENT Implications and challenges Geeta Sachdeva

Introduction Banyte et al. (2010) have studied green marketing as a development tool for the formation of ideas in corporate social responsibility. It has been argued that the constantly changing orientations of consumers regarding environmental protection, the ecosystem, social responsibilities, and the transformation of consumption habits together force enterprises to look for new and alternative ways wherein the main principles of CSR would be integrated with the marketing strategies. This indicates that green marketing has evolved as a great tool in executing the CSR practices of any enterprise in this modern era. In this way, enterprises, to completely satisfy the needs of consumers, tend to analyze green marketing priorities, which would ultimately reflect the essential ideas of CSR. These types of green marketing activities seek to make the existence of the firms acceptable and useful for both the environment and society. Kärnä et al. (2003) have investigated the CSR aspects in the planning of environmental marketing and have interpreted that active green marketers are the most efficient in executing green marketing, willingly seeking competitive advantage for their firms by means of environmentally friendly initiatives. Competitive advantage of an organization refers to its “capability to get constant profits over opposing companies in the marketplace by supplying a service which cannot be matched simply.” Most of the organizations’ 8

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competitive advantage is discussed by the author Michael Porter in his work on competitive advantage and the forces of competition. He recognized adherence to a general strategy as well as cost, variation, or focus to get competitive advantage (Porter and Van der Linde, 1995). The approach of low cost includes offering a product or service at a comparatively low-cost price by dropping an organization’s cost. The strategy of differentiation involves offering an exclusive product that could obviously be differentiated from the prevailing products in the industry. The emphasis of strategy is meant at directing a selected group of customers, whose needs are being exclusively satisfied by purchase of a product. Strategy might comprise both a cost element and differentiation features. This type of strategy has stimulated much interest in the corporate world. It can be concluded that strategy is designed to be responsive to consumer needs. (Porter and Van der Linde, 1995). Crane (2000) stated that green marketing ensures that the marketing activities of organizations are directed to curtail environmental dangers. Moreover, it also fortifies a positive relationship with customers who take a keen interest in the protection of the environment. Nowadays, companies have started to acknowledge the worth of green marketing as a welcome step to catering to the needs of their customers. There is a paradigm shift in the number of organizations’ strategies wherein the organizations are changing its methods to reach out to the customers. Moreover, firms use green marketing as a competitive strategy to overcome the competition in the market. Therefore, it can be interpreted that green marketing is not only associated with concerns regarding ecology but is also used to gain competitive advantage in the market. Green marketing includes many activities, such as counting product variations, variations in the production procedure, packing changes, as well as altering publicity materials. However, describing green marketing is not an easy job where numerous senses interconnect and oppose each other; an instance of this would be the presence of changing social, ecological, and retail definitions associated with this term. Pride and Ferrell (1993) defined green marketing, also otherwise identified as environmental marketing and sustainable marketing, as a firm’s efforts to design, endorse, price, and distribute products that would not damage the environment. Polonsky and Rosenberger (2000) describe green marketing as all actions intended to produce and enable any exchanges proposed to gratify human requirements or wants, such that the gratification of these wants and desires occurs, with negligible harmful effect on the natural environment.

Evolution and background While analyzing green marketing priorities within the concept of CSR, four marketing activities fulfil the expectations of CSR, which are as follows: First, 9

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recognizing and satisfying the expectations of green consumers; second, predicting the reaction of green consumers towards green marketing decisions; third, maintaining the trust of green consumers in eco-friendly products; and last but not the least, maintaining the efficiency of promotion means with respect to the decision making of the green consumers (Banyte et al., 2010). The development of green marketing and the green consumer movement is “perhaps the biggest opportunity for enterprise and invention the industrial world has ever seen” (Cairncross, 1992). The green consumer is supposed to be more educated and richer in comparison to the average consumer. Laroche et al. (2001) established that there is a category of consumers, which exceeds socio-economic borders and is keen to pay for the moral credentials. In this upsurge in the ecological awareness amongst a diverse customer profile, there have been exertions commenced by organizations to “go green” by offering the notion of corporate environmentalism (Banerjee, 2003). A significant limitation to the expansion of green products is the absence of consumer trust and the lack of information (Cervellon et al., 2010). As per Doaee et al. (2006), green marketing is a means to create sustainable competition while considering social responsibility. More precisely, green marketing talks about different motives; its development includes three areas— ecological green marketing area, environmental area, and sustainability area— as well as the strategies and actions essential to implement this concept. In their study, Zuhairah and Noor (2015) found that, despite the readiness of customers to use more ecologically friendly products, research shows that less attention has been paid to green marketing. Amongst the ecological factors of green innovation, marketing and promotion of the green products if, considered appropriately, may have a positive impact on business performance. Menck and Filho (2014) established that green marketing and a commitment to social responsibility can be a strategic tool. In addition, green marketing can be adapted to decrease company costs and obtain a competitive advantage. The company must look for moral reasons for observing social issues and finally come to the conclusion that social activities are a foundation of competitive advantage. Green marketing approaches carry certain paybacks to a firm that could be used to gain strategic advantage. The paybacks have been found in the lowered cost of production as a green production procedure will bring down the costs, leading to reduced waste, reduced use of raw materials, and reduced energy costs. An important decrease in cost will increase the revenues of firms (Baker, 1999). The firm gains brand loyalty. Researchers have verified that consumers attach less significance to brand loyalty in the case of products that convey inherent benefits. A marvelous connection between green products and consumers develops. Price sensitivity will not be an issue for consumers because of increased brand loyalty. Customers will be willing to purchase the products even if the price of the products is relatively high (Baker, 1999). 10

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Green products create a good image for brands and the company. Going green might lead to an upsurge in consumer interest, and the firm might gain recognition amongst the population at large. Even customers who do not use the products of an organization might shift their loyalty. Firms producing green products will gain acceptance from regulators and the public at large will resort to them actively. It will serve as a unique selling proposition, so that a company will stand out against its competition (Baker, 1999). The production and sale of green products leads to pleasant company environs with a reduction in disordered corporate activities. It improves and strengthens the working atmosphere. Since the procedure of developing a green marketing strategy includes an all-inclusive approach to bring into line all the functions of the business, a strategic resemblance could be reached. Along with this, the strategy formulation will lead to healthier associations with employees, as their contribution is sought. Personnel commitment will rise, and, as a result, there will be a shared understanding amongst diverse stakeholders of a firm (Zintom and Frederick, 2001). A company will continue to benefit if it presents a resourceful environmental product to the market as customers could be enticed from prevailing goods in the marketplace. A  win-win situation can be the result for organizations if a green marketing strategy is adopted in the procedure. As a result, customers’ gratification rises as customers will get quality products at reasonable prices. It will lead to the inclusive well-being of an economy and a sustainable development would result from green marketing inventiveness (Baker, 1999). Therefore, from the previously discussed background, it can be interpreted that companies use green marketing as a sustainable and strategic approach, not only from the cost point of view but also to gain customer loyalty, build companies’ image in the market, and overcome competition by gaining competitive advantage. The chapter revolves around these broad objectives of the study: • To discuss green marketing strategies and the green marketing mix • To discuss the initiatives taken by the Indian government and various organizations to implement green marketing in India • To discuss the problems in implementing green marketing in India

Green marketing: Strategies, mix, initiatives, and problems The green marketing strategy includes two indispensable features: Organizations will have to produce a product that will gratify customers’ needs reasonably with the least negative effect on the environment, while enabling their customers to view it as a high-quality product that emphasizes the company’s desire to protect the environment (Menon and Menon, 1997). 11

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Thus, qualitative change in the relationship between customers and companies can be brought about if companies adopt a green marketing strategy. The functional and emotional benefits of the goods and services need to be emphasized while satiating consumer needs using this strategy, since most ecological apprehensions include the spiritual desires of customers. A green marketing strategy differs from a traditional marketing strategy because it focuses on a value-based, long-term oriented, and unified approach. According to Grant (2007), five important points help build an effective green marketing strategy. The theory of five I’s is a red line that firms must follow to avoid errors and greenwashing. 1 Intuitive—making improved options available and easy to hold: This means making green products or services seem normal. Enjoying life in a sustainable way seems too hard and difficult for most people. Marketers have to make it instinctive. They need more ideas, such as organic products (Grant, 2007). 2 Integrative—connecting commerce, technology, social effect, and ecology: The key idea is sustainability, by associating economic development with social and environmental development. It is also a move for commercial marketing, which has not in the past deliberated on green and social purposes, except as a means to a commercial end (Grant, 2007). 3 Innovative—creative novel products and new lifestyles: Most ­people are saying that green innovation and entrepreneurship in the following 20 years would be like the information and technology space over the last 20  years. For example, people have begun to use the term g-commerce, for green e-commerce. With the Internet, it is now possible to collaborate in design, build communities, and so on (Grant, 2007). 4 Inviting—a positive option, not a compulsion: Green now is partially a design challenge. A green product is improved, more effectual, longlasting, healthy, reasonable, etc. However, firms are also required to manage the culture of green lifestyles, generate novel mythologies and codes, which are ideal, thrilling, and fun, instead of appearing like an unfriendly remedy to avoid a dystopia (Grant, 2007). 5 Informed—absence of information is disturbing people’s behaviour: Green marketing is more about learning and contribution. There is an upheaval going on in health, enduring learning, and citizenship because of the innovative availability of information (Grant, 2007). Green marketing mix Recognizing the target consumer would help marketers to identify whether “greenness” is the correct marketing feature and how it should be combined into the marketing mix. Each organization has its own marketing mix. Some 12

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organizations follow the 4 P’s and others follow the 7 P’s of the marketing mix. The 4 P’s of green marketing are the same as those of conventional marketing, but the dare before marketers is to use the 4 P’s inventively if they want to embrace the policy of green marketing. •

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Green product: Green products are usually durable, non-toxic, made from reused materials, or negligibly packaged (Ottman, 1997). Green-based product strategies encompass any or an amalgamation of recycling, lessening of packaging materials, re-consumption, using sustainable raw materials, making more long-lasting products, designing products that are repairable, making products that are harmless for dumping, making compostable products and packaging, and making products that are harmless or more pleasing to use. The marketer’s role consists of giving product designers the latest marketdriven styles and customer requests for green product characteristics, such as energy saving, organic, green chemicals, local sourcing, and so on. Green price: Many customers assume that prices of green products are higher than traditional products (Polonsky, 2001). So, while pricing green products, the health of employees and societies are considered. Value can be added to it by altering its presence and functionality through customization, etc. Green place: It is all about handling logistics to reduce transport releases, thus targeting at bringing down the carbon footprint. For instance, rather than marketing an imported mango juice in India, it could be licensed for local production. This avoids shipping the product from far away, therefore dropping shipping cost and more prominently, the subsequent carbon emission by the ships and other modes of transport. Green promotion: As per Polonsky and Mintu (1997), green promotion assists consumers to overcome the “greatest environmental hazard,” that is, the lack of ecological information, by reducing this gap through promotion. Green marketing initiatives in India: Since the Indian government and private companies recognize the need to protect the environment for human habitation, they have taken “green initiatives” for environmental protection and sustainability. ITC Limited: ITC reinforced their commitment to green technologies by presenting “ozone-treated elemental chlorine free bleaching technology” for the first time in India. The outcome is a new variety of top green products and solutions. Tata Metaliks Limited (TML): Each day is Environment Day at TML, one of the top green firms in India. An applied example that made everybody sit up and take notice is the company’s policy to avoid working 13

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on Saturdays in the corporate office. Illuminations are also switched off during the day; the whole office relies on sunlight. State Bank of India: Green IT@SBI: SBI entered green service, recognized as “Green Channel Counter.” SBI is offering numerous services, such as paperless banking, no deposit slip, no withdrawal form, no checks, no money transactions forms. All these transactions are being done through SBI shopping and ATM cards. SBI turns to wind energy to decrease emissions. HCL Technologies: This IT major might be considered the icon of Indian green initiatives. HCL is dedicated to phasing out the dangerous vinyl plastic and brominated flame retardants from its products and has called for a Restriction of Hazardous Substances (RoHS) in India. Oil and Natural Gas Company (ONGC): India’s leading oil producer, ONGC, is all set to lead the list of top ten green Indian organizations with energy-efficient, green crematoriums that would soon substitute the traditional wooden fires across the country. ONGC’s Mokshada Green Cremation initiative will save 60 to 70 per cent of wood and a fourth of the burning time per cremation. Wipro’s Green Machines (in India only): It is India’s first firm to unveil environment-friendly computer peripherals. Wipro has launched a new variety of desktops and laptops called Wipro Greenware for the Indian market. These products are RoHS compliant, therefore dipping e-waste in the environment. Wipro also launched eco-friendly desktops, which were introduced under the Wipro Green Ware initiative, with an intention to cut down e-waste. The systems launched are toxin free and operate under a total recycling policy. McDonald’s Green Revolution: It substituted its clam shell packing with waxed paper because of amplified consumer apprehension relating to polystyrene production and ozone depletion. The paper towels and bags used in McDonald’s restaurants are made of recycled paper. Tata Group of companies: Tata Motors Ltd. has developed their showroom by using green items and elements in its design. It exudes an eco-friendly atmosphere that attracts people. They are also going to launch a low-cost water purifier, which is made of pure and natural elements. Voltas (Tata Group): It launched the “green range” of air-conditioners, subsequent to which it was made compulsory by the government to have energy star ratings for electronic home appliances. Energy Star is a well-known global standard for energy efficient consumer products. ACC: It recently launched its eco-friendly brand, “Concrete+.” This cement brand uses fly ash, a hazardous industrial waste. The disposal of fly ash is a major environmental problem; therefore, “Concrete” is an eco-friendly product. The new product has been designed to ensure high durability. 14

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Initiatives taken by the government RBI has requested the Non-Banking Financial Companies (NBFCs) to take active steps and initiatives to increase the usage of electronic payment systems and to progressively phase out cheques and remove post-dated cheques in their routine business transactions as a part of its “Green Initiative.” The finance minister set aside 600 crore for green initiatives in the Union Budget, 2011 primarily for the safety and regeneration of forests and for environmental management. The government has established numerous standards for environment security, such as energy efficiency standards for appliances, an energy conservation building code (ECBC), and fuel efficiency/emission norms for vehicles. The Ministry of Corporate Affairs (MCA), Government of India has taken a “Green Initiative in the Corporate Governance” (see its Circular Nos. 17/2011 dated April 21, 2011, and 18/2011 dated April 29, 2011), which allows the entity to deliver all significant documents to shareholders in an electronic form that has been registered with the depository participants, counting the communication of extraordinary general meetings, annual general meetings, director’s reports, and audited financial statements. In the government’s annual Indian economic survey 2011–2012, sustainable development and climate change were announced as a goal for the first time, where lower-carbon sustainable growth was projected as a central element of India’s twelfth five-year plan (Patankar, 2012). Problems in implementation Implementation of green marketing might pose some problems for an organization. Some of the problems that the firms might face are as follows: •

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High initial cost: The cost of embracing green practices in organizations is very high at this time, so small-scale organizations try to avoid accepting green practices because of their worry about short-run profits. However, accepting green practices in the long run safeguards profitability as well as growth. Welling and Chavan (2010) established that the adoption of green marketing might not be easy in the short run, but in the end, it would certainly have a positive impact on the organization. Price-sensitive customers: From the customers’ point of view, green products are expensive, as customers need to pay first-class prices for these products. Price is one of the significant concerns customers have while buying the products (Pillai, 2013). As the Indian market is pricesensitive, most of the customers might not be keen to pay high prices, and those who are ready to pay more are generally up to a limit of 5–10 per cent for green products (Pandurangarao et al., 2011). Therefore, the 15

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marketer should keep this in mind while developing a pricing strategy for green products. Little awareness amongst customers about Eco-Mark: In 1991, a voluntary labelling scheme, “Eco-Mark,” was announced by the Ministry of Environment and Forests (MoEF), Government of India for documentation of environment-friendly products by the Bureau of Indian Standards (BIS). However, the industries did not respond to this inventiveness, and only a few organizations took licenses from Eco-Mark. No initiative was taken by the industries to produce consciousness amongst customers; consequently awareness amongst customers about EcoMark is very low (Dey, 2007). Greenwashing or green sheen: Greenwashing or green sheen refers to erroneous environmental claims by companies about their products and services. Companies dishonestly state that most green marketing policies are ecologically friendly just to increase profits or to gain political support. It generates a negative perception amongst people about these products and services. Requirement for standardization: It is found that very few marketing messages from “Green” crusades are completely correct and there is an absence of standardization to validate these statements. Presently, there is no standardization to verify that a product is organic, unless regulatory bodies certify such a product as organic. There is a requirement to have a standard quality control board for such type of labelling or licensing. Novel concept: There is more awareness about the virtues of green products amongst the well-educated and urban customers. However, it is still a novel notion for the multitudes. The customer needs to be educated and made aware about ecological extortions. Novel green activities need to reach them; that would take a lot of time and energy. Indian customers do praise the significance of using natural and herbal beauty products as per India’s Ayurveda heritage. The Indian customer is exposed to healthy living lifestyles like yoga and natural food consumption. In those areas, the customer is already conscious and would be motivated to take the green products. Patience and persistence: Stockholders and organizations are required to see the environment as a most enduring investment prospect; the marketers need to look at the long-term paybacks from this green movement. It would involve a lot of patience and no instantaneous outcomes. As it is a novel concept and idea, it would have its own reception period. Evading green myopia: The first and foremost motive of green marketing is to concentrate on why consumers purchase green products. Customers are encouraged to shift brands or pay more for the greener alternative. It is not going to benefit companies if a product is developed, which is unquestionably green in numerous aspects, but does not 16

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meet the customer gratification standards. It would lead to green myopia. In addition, if the green products’ prices are extremely high, then again it would lose its market acceptability. The green dilemma: Harnessing customer power to effect positive environmental change is far easier said than done. The so-called “green consumer” activities in the nation have struggled to touch critical mass and to continue in the front of shoppers’ minds. One of green marketing’s problems is the dearth of standards or public accord about what constitutes “green.” This lack of agreement by customers, marketers, campaigners, controllers, and powerful people has reduced the progression of green products, because organizations are generally unwilling to endorse their green attributes, and customers are often cynical about claims. This concern has led more organizations to promote their commitment to decrease their carbon footprints and the effect this is having on their products and services.

Conclusion and discussion Green marketing is still in its early days, and many more studies need to be carried out on it to completely discover its potential. Consumers need to be made more conscious regarding the virtues of green products. There is a need to educate the customers and make them more aware of ecological dangers. It should be ensured that customers are aware about the issues that the product attempts to address. Green marketing campaigns and green promotions are a good step in the right direction. Customers must be inspired to shift brands or even pay extra for the greener substitute. Both will ensure that customers feel that they could make a difference. This is termed as “empowerment,” and due to this key reason customers will purchase greener products. Furthermore, steps should be taken to control false promises and claims by the company to ensure the legality and dependability of green products. It is not enough for an organization to green its products; customers suppose that the products they buy are pocket friendly and reduce the ecological damage affecting their own lives too. Consequently, more organizations should become responsive to customers’ ambitions. Green marketing is very low on the agenda of most of the organizations; thus, it is still an underleveraged unique selling proposition (USP). Moreover, for a real and efficient application of the idea of green marketing, the aspect that has a main role is the government. Unless the government makes precise and strict rules and uses its power to implement them, the idea cannot be conceptualized. If the customer, the organization, and the government work in unity towards the joint objective of minimalizing the harmful environmental impact of their activities, then they could confidently save this environment and make this sphere an improved place to live. 17

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References Baker, M. J. (Ed.) (1999). “One more time – What is marketing?” The marketing book, 4 ed. London: Butterworth-Heinemann. Banerjee, SB. (2003). “Who sustains whose development? Sustainable development and reinvention of nature.” Organization Studies, 24(1), 153–180. Banyte, J., Brazioniene, L., and Gadeikiene, A. (2010). “Investigation of green consumer profile: A  case of Lithuanian market of eco-friendly food products.” Ekonomika ir vadyba – Economics and Management, 15, 374–383. Cairncross, F. (1992). Costing the earth: The challenge for governments, the opportunities for business. Boston: Harvard Business School Press. Cervellon, M.-C., Hjerth, H., Ricard S., and Carey, L. (2010). Green in fashion? An exploratory study of national differences in consumers concern for ecofashion. Proceedings of 9th International Marketing Trends Conference, Venice, Jan 20th–21st. Crane, A. (2000). “Facing the backlash: Green marketing and strategic reorientation in the 1990s.” Journal of Strategic Marketing, 8(3), 277–296. Dey, D. (2007). Energy efficiency initiatives: Indian experience. ICFAI Business School, Kolkata. Retrieved from http://ebookbrowse.com/dey-paper-pdf-d173493648 Doaee, H., Fathi, A., and Sheykhian, K. (2006). “Green marketing, a way to sustainable competition.” Tadbir Monthly (in Persian), 173, 22–25. Ferrell, O. C., and Pride, William. (1993). Marketing: Concepts and Strategies, Boston: Houghton Mifflin Company, Eighth edition. Grant, J. (2007). The green marketing manifesto. Padstow: John Wiley & Sons, Ltd. Kärnä, J., Hansen, E., and Juslin, H. (2003). “Social responsibility in environmental marketing planning.” European Journal of Marketing, 37(5/6), 848–871. Laroche, M., Bergeron, J., and Barbaro-Forleo, G. (2001). “Targeting consumers who are willing to pay more for environmentally-friendly products.” Journal of Consumer Marketing, 18(6), 503–520. Menck, A., and Filho, J. (2014). “Green marketing and corporate social engagement as strategy tools – A conceptual framework.” International Journal of Humanities and Social Science, 2(5), 1–11. Menon, A., and Menon, A. (1997). “Enviropreneurial marketing strategy: The emergence of corporate environmentalism as market strategy.” Journal of Marketing, 61(1), 51–67. Ottman, J. A. (1997). “Green marketing, opportunity for innovation.” NTC Publishers, 45–126. Pandurangarao, D., Basha, S. C., and Satyakumar, K. V. R. (2011). “Consumer’s perception and purchase intention towards green products.” International Journal of Research in Commerce, IT & Management, 1(7), 63–66. Patankar, S. (2012). “Green IT to double to $70bn by 2015: Gartner.” The Times of India. Retrieved from http://timesofindia.indiatimes.com/ Pearce, Markandya, and Barbie. (1994). Sustainable development, Economics and Environment in the Third World, Earth Scan Publication Limited, 1–20. London: UK. Pillai, S. (2013). “Profiling Green Consumers based on their purchase behavior,” International Journal of Information, Business and Management, 5(3), 15.

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Polonsky, M. J. (2001). “Re-evaluating green marketing: A  strategic approach.” Business Horizons, 44(5), 21–30. Polonsky, M. J., and Mintu, A. (1997). “The future of environmental marketing: Food for thought.” Environmental Marketing Strategies, Practice, Theory and Research Haworthpg, 389–391. Polonsky, M. J., and Rosenberger III, P. J. (2000). Re-evaluating green marketing— A sophisticated strategic marketing approach. AMA Winter Educators’ Conference Proceedings. Porter, M. E., and Van der Linde, C. (1995). “Green and competitive: Ending the stalemate.” Harvard Business Review, 73(5), 120–134. Welling, M. N., and Chavan, A. S. (2010). “Analysing the feasibility of green marketing in SMEs.” Asia-Pacific Journal of Research in Business Management, 1(2). Zintom, M., and Frederick, R. (2001). “Marketing and advertising, A Deep Green Company.” The Journal of Corporate Citizenship, 1, 93–113. Zuhairah, H., and Noor, A. A. (2015). “The impact of green marketing strategy on the firm’s performance in Malaysia.” Procedia—Social and Behavioural Sciences, 172, 463–470.

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2 SUSTAINABLE DEVELOPMENT AND BUSINESS RESEARCH Where we are and where we might go Harry J. Van Buren III

Contemporary scholarship in the area of sustainable development is being conducted at an important time in economic and business history. On the one hand, economic growth facilitated by businesses has made prosperity available to more people than ever before. The growth of a sizable middle class in countries such as India and China (Baud, 2015; Kardes, 2016; Nathan, 2016) illustrates that economic development and business activity can promote the rise of consumerism as well as some level of human flourishing. From this perspective, business has made many people’s lives better. And yet the institution of business also faces significant challenges. Business and capitalism both face crises of legitimacy as many people call into question whether they are delivering just, shared, and sustainable prosperity. Three challenges illustrate the point: Rising economic inequality, global warming and other environmental challenges, and populist movements. • While more people are indeed more prosperous now than in previous generations, concerns about economic inequality have come to the fore in many places (Piketty, 2015). There is considerable evidence that economic inequality has deleterious effects on human health (Pickett and Wilkinson, 2015) and environmental sustainability (Masud et al., 2018). The role of business schools in promoting models of business (see Bapuji et al., 2018 on this point generally) that sustain such inequality merits greater examination (Fotaki and Prasad, 2015). • Global warming and its relationship to business activity have received continual attention for the past two decades (Reid and Toffel, 2009; Tang and Demeritt, 2018). But pollution and environmental degradation are also community-level phenomena (Yang and Kaffine, 2016). If a community or a country is growing economically but also experiencing increased environmental damage, any claim that its growth is 20

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sustainable merits critical analysis. Sustainability or the lack thereof affects both non-human nature and human-created communities. • The rise of populist movements in a number of countries poses a challenge to both business and to institutions generally (Bainbridge, 2018; Rodrik, 2018). Many people feel (often correctly), based on their own circumstances, that they are falling behind relative to their parents and that business is not creating genuinely shared and dispersed prosperity. When people believe that prosperity is not shared, populist movements are more likely to take root. Attitudes towards capitalism in the United States amongst younger people illustrate this crisis of legitimacy and confidence in business. A plurality of 18- to 29-year-olds in a 2011 Pew Center survey expressed frustration with capitalism and a majority of the same group in a 2016 Harvard University survey “supported socialism” over capitalism (Ehrenfreund, 2016). The director of the latter poll, in interviewing a subset of participants, concluded that “they’re not rejecting the concept [of capitalism]. The way in which capitalism is practiced today, in the minds of young people—that’s what they’re rejecting.” To extend this point further, it might be useful to look at one specific issue: Health and its social determinants. In the US, for example, life expectancy is declining in many communities. Some of the causes are related to problems of pollution and environmental injustice (Hill et al., 2019; McDonald and Jones, 2018). But social determinants of health also matter. Case and Deaton (2015; see also Marmot and Bell, 2019) discuss what they call “diseases of despair”: Increases in suicide, drug and alcohol abuse, and chronic liver disease that have led to reductions in life expectancy in some US communities. At a time when macroeconomic growth in the US was increasing overall, the effects of that growth were not being felt in many communities. Similarly, as the Indian economy has been growing, questions are being raised about whether that growth is having a positive effect on public health and its social determinants (Conibear et al., 2018; Dev, 2018). Air pollution, for example, has been a major contributor to mortality: “life expectancy in India would have been increased by 1·7 years if the pollution levels had been lower than the minimum levels associated with health loss” (Balakrishnan et al., 2019: e34). For any business and for the institution of business to be considered truly sustainable, it needs to advance both environmental and social sustainability while also bringing about widely shared prosperity and improvements in public health. In a 2013 Tedx Talk, stakeholder theorist Ed Freeman said: I really believe that we can be the generation that makes business better. To do that, we need a revolution. . . . We need a new story 21

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about business, a conceptual revolution. We need to tell a new story about business. We need to enact a new story about business. I would argue that a new story about business, whether constructed by academics or practitioners, needs to do three things. First, it needs to address the crisis of legitimacy facing business and capitalism, responding to the legitimate critiques of both. As a social institution, business is subject to the same social pressures as any other. While business has undoubtedly done much good around the world, it also has contributed to much harm. Critiques of business that address concerns about social and environmental sustainability particularly merit a response now, as it is precisely those critiques that if unanswered are corrosive to business’s legitimacy. Second, a new story about business needs to integrate sustainability in both environmental and social terms. Sustainability of course has an environmental component, and the natural environment itself is a stakeholder in business (Starik and Rands, 1995). However, social sustainability also needs to be brought explicitly into the discussion of responsible business behaviour (Roca-Puig, 2019), and the relationships between environmental and social sustainability merit further examination (Dyllick and Hockerts, 2002). Finally, a new story about business needs to sustain realistic hope and optimism. It is all too easy to either become an uncritical cheerleader for business or an unalloyed critic of it. Neither stance, however, is helpful. Business is the dominant social institution of our time. If there is ever to be any hope of making our economies and world sustainable, a new model of business that is realistic and hopeful needs be developed that pushes businesses and managers towards greater reflection and action. Business school scholarship has an important role to play in the present moment, a moment in which challenges to business and to capitalism in turn challenge the legitimacy of what business schools do. Measures such as gross domestic product (GDP) or business profitability do not capture the extent to which people believe that businesses are behaving responsibly. Attributions of business sustainability are made, individual by individual and community by community, on the basis of whether business is not only harming or protecting the environment, but also whether it is creating genuinely shared prosperity or greater economic inequality. If capitalism and the institution of business are both illegitimate, by extension so are the business schools who teach future managers and conduct research about businesses. However, business school scholarship has a positive role to play, but in so doing needs to address the crisis of legitimacy facing capitalism, integrate environmental and social sustainability into business strategy, and sustain realistic hope and optimism. In this chapter, I  discuss three ideas that might be helpful in this regard: (a) mutual value creation; (b) valuing

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natural, human, and social capital; and (c) shifting the focus of managerial action from “power over” to “power with.” I’ll conclude by discussing the role that management scholarship can and should play in the wider debate about sustainable business and business ethics.

Mutual value creation Part of what might be called the “exploitation narrative” (or perhaps the “business sucks” story; Freeman, 2018) of business goes something like this: Businesses are profitable because they exploit some people for the benefit of other people. In this story, profit for some can come only at the expense of others, the corollary being that there is a fixed pie of value for any business and everyone is fighting everyone else for a larger share. This narrative often focuses on ideas of shareholder centrality and the proposition that managers are primarily responsible for making owners better off over and above any other objective function (Friedman, 1962/1982; Sundaram and Inkpen, 2004, although to be fair neither would argue in favour of exploitation of stakeholders by managers). Of course, examples of businesses that extract value from some stakeholders—such as employees or communities—to make owners better off are not difficult to find. Whether such exploitation and appropriation of value take the form of dangerous working conditions and low pay for employees, pollution of economically and socially vulnerable communities, or hiding information from consumers that allows them to defend their interests, some corporations do act as if there was an inevitable trade-off between the interests of shareholders and non-shareholder stakeholders. Such examples of business malfeasance harm not only the stakeholders involved but also the legitimacy of the institution of business and capitalism generally. For business to be understood as sustainable, it needs to create value for all stakeholders and not just for owners. In some sense, part of the problem is that business strategy is sometimes seen—not just by practitioners, but often by other business-school scholars and perhaps even by ourselves, at least sometimes—as separate from concerns about ethical and sustainable business conduct. To the extent that we give into the separation thesis—the proposition that “the discourse of business and the discourse of ethics can be separated so that sentences like, ‘x is a business decision’ have no moral content, and ‘x is a moral decision’ have no business content” (Freeman, 1994)—we fail to interrogate those business practices that harm some subset of business stakeholders for the benefit of managers and owners while also failing to advance models of business that are truly both ethical and sustainable. Business scholarship and teaching need not, and indeed must not, pit profitability against sustainability or strategy against sustainability. This is not to say that businesses don’t or can’t harm the physical environment or extract value from stakeholders,

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but rather that a fulsome model of business should seek to bring together strategy with sustainability in all of the latter’s forms. The better story—better here being understood not only in normative, but also in strategic, terms—is a story that focuses on mutual value creation between managers and stakeholders for the benefit of all. Clarkson (1995; see also Jones and Wicks, 1999; Freeman et  al., 2004) argued that businesses could only create value for owners if they also create value for primary stakeholder groups such as employees and customers. More recently, work in stakeholder theory has sought to develop new models of business that explicitly account for the co-creation by managers and stakeholders of mutual value (Dembek et al., 2018; Mitchell et al., 2015; Schaltegger et al., 2017). Work in business sustainability might usefully address the ways in which value is co-created as well as the barriers to co-creation and collaboration between managers and stakeholders. Such work might also explicitly integrate sustainability into analyses of value creation (Aquilani et al., 2018), and in so doing challenge narratives of value creation that assume exploitation of and value extraction from stakeholders for the benefit of other stakeholders—including value extraction from the physical environment that sustains all business activity.

Valuing natural, human, and social capital Second, a new model of business should take the valuation of natural, human, and physical capital seriously. Shareholders and other financial capital providers, of course, receive a disproportionate amount of attention from managers, in large part because they supposedly take on risks that other stakeholders do not (Sundaram and Inkpen, 2004). Part of the privileging of shareholders vis-à-vis managerial responsibility comes out of a privileging of financial capital and capital owners. Of course, financial capital owners are important stakeholders of businesses. However, there are other capital providers that make businesses successful. No business can operate outside of the physical environment, of course. But employees bring their human capital to bear, and the ways in which employees relate to each other create the social capital that allows for the value of other forms of capital to be realized (Leana and Van Buren, 1999). Any stakeholder that provides capital to a business is taking on a risk for which it should receive a commensurate reward. In short, any business has multiple investors, all of which are necessary for it to thrive. Devaluing non-financial capital is not only harmful to businesses; it also makes economic and social sustainability far less likely. Dyllick and Muff (2016: 10–11) propose that sustainability needs to move from business-as-usual to truly sustainable business, which they define in terms of a shift in “perspective from seeking to minimize its negative impacts to understanding how it can create a significant positive impact in 24

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critical and relevant areas for society and the planet.” In this respect, “creating a positive impact” is consistent with valuing natural capital in ways that promote genuine sustainability. More to the point, broadening the kinds of capital and capital holders that managers pay attention to—as well as owe ethical duties to—would do much to reorient the conversation away from short-term financial gain and towards a greater consideration of sustainability for the business itself, for the natural environment, and for communities that have an interest in social sustainability.

From “power over” to “power with” to sustain mutual value creation A new model of business, as noted previously, needs to focus on mutual value creation between a business and its stakeholders. But how does mutual value creation occur, and how does orienting managerial action around it change the essential task of management? Here, Mary Parker Follett’s conceptualization between power-over and power-with is useful. Management, and the ways management is taught, will have to change dramatically if business is to progress towards new models of business sustainability. Follett was an administrative theorist writing in the late nineteenth and early twentieth centuries in a variety of fields, including business and government. Power over denoted a kind of domination by one over another (Eylon, 1998; Follett, 1925; Schilling, 2000), in which exploitation was almost certain. Power with represented a kind of jointly held and exercised power that works to the benefit of all (Berman and Van Buren, 2015); in Follett’s (1925) original conceptualization, power with involved the joint sharing of power between employers and employees. Managers, of course, would generally seek to exercise power over so that they could limit conflict and in so doing protect their prerogatives. In contrast, the exercise of power with allowed for integration: The creation of something entirely new that would not have been possible in the absence of conflict. Rather than seek to reduce or manage conflict, Follett viewed it as an opportunity for creativity through integration. Arguably, part of the reason why businesses have not been as sustainable as they could have been is because of the exercise of power over by managers. Managers often seek to protect their autonomy and privilege, but in so doing act in ways that make their businesses less sustainable and less just towards stakeholders. Power over is inconsistent with the kinds of mutual value creation previously discussed, and power over is also unlikely to generate the kinds of creativity through integration that is needed for businesses to move towards true environmental and social sustainability. Sustaining mutual value creation will, I suggest, require that managers manage differently. It will require them to become aware of the multiplicity of values and perspectives about sustainability, and to move from power over 25

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to power with. It will also require them to exercise power differently: Less in terms of domination and autonomy for its own sake, more in terms of viewing conflict and values-related differences as opportunities for mutual value creation through a focus on sustainability in all of its forms. Of course, old ways of managing will not be easy to change, as are old ways of teaching management. However, old ways of managing—with a shareholder- and manager-centric focus—have led us to the place where we are right now: Where concerns about sustainability are reaching an inflection point. Organizations will still need managers and management, as well as hierarchy and decision making. The challenge will be to develop new models of business and management that rely on the genuine sharing of power between managers and stakeholders that in turn will allow for the kinds of sustainability that respond to the social and environmental crises that confront us as managers, academics, and citizens alike.

Writing for a broader audience Business-school scholarship is often written for a narrow audience of fellow academics in one’s field. Especially in research-oriented institutions, faculty members are evaluated based on their success in publishing articles in journals that are only read by other academics. As is the case in many fields, business school academics are not rewarded by their institutions when they write for a popular audience. However, there is a deeper problem beyond the dissemination of academic research. Debates about responsible business behaviour and the place of business in society are of critical importance. The knowledge of sustainability and business ethics scholars, for example, should be part of such debates. It should influence public policy and be accessible to both managers and the wider public. Put another way, if sustainability scholars (amongst others with a scholarly interest in responsible business behaviour) are only writing for each other, their knowledge is unlikely to diffuse to the world of practice beyond their work in teaching— important as that is. What I  am advocating, therefore, is that we think about writing for a broader audience. When we have knowledge about how to make business more sustainable, we should not just be writing for an audience of fellow academics. Rather, we should be looking for ways to engage with a variety of audiences, including managers and policy makers, while also being reflexive about our research and its impact (Janssens and Steyaert, 2009). Doing so need not come at the expense of scholarly rigour; Van Buren and Greenwood (2009) cite the example of industrial relations scholarship in support of the proposition that academic work can simultaneously take a public stance and be highly rigorous. Put another way, engaging with wider audiences is not at odds with good scholarship. Indeed, in an applied field such as management studies, such engagement is likely to make scholarship 26

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better and more reflective of real business practice. Further, management scholarship in the domains of ethics and sustainability should seek to inform public policy and the wider debate about the place of business in society (Tiemstra, 2003). And finally, business-school research should seek to take sustainability more seriously and as central to the task of management rather than ancillary to it.

Conclusion We can, and must, be part of the generation of management scholars who seek to make business better. Integrating sustainability, stakeholder thinking, and ethics into our teaching and research is essential for addressing the context that we all find ourselves in. Thinking about new models of business that take environmental and social sustainability would do much to make management research truly relevant, both to business and to society.

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McDonald, Y. J., and Jones, N. E. (2018). “Drinking water violations and environmental justice in the United States, 2011–2015.” American Journal of Public Health, 108(10), 1401–1407. Mitchell, R. K., Van Buren III, H. J., Greenwood, M., and Freeman, R. E. (2015). “Stakeholder inclusion and accounting for stakeholders.” Journal of Management Studies, 52(7), 851–877. Nathan, A. J. (2016). “The puzzle of the Chinese middle class.” Journal of Democracy, 27(2), 5–19. Pickett, K. E., and Wilkinson, R. G. (2015). “Income inequality and health: A causal review.” Social Science & Medicine, 128, 316–326. Piketty, T. (2015). “About capital in the twenty-first century.” American Economic Review, 105(5), 48–53. Reid, E. M., and Toffel, M. W. (2009). “Responding to public and private politics: Corporate disclosure of climate change strategies.” Strategic Management Journal, 30(11), 1157–1178. Roca-Puig, V. (2019). “The circular path of social sustainability: An empirical analysis.” Journal of Cleaner Production, 212, 916–924. Rodrik, D. (2018). “Populism and the economics of globalization.” Journal of International Business Policy, 1, 1–22. Schaltegger, S., Hörisch, J., and Freeman, R. E. (2017). “Business cases for sustainability: A stakeholder theory perspective.” Organization & Environment. https:// doi.org/10.1177/1086026617722882, accessed February 21, 2019. Schilling, M. A. (2000). “Decades ahead of her time: Advancing stakeholder theory through the ideas of Mary Parker Follett.” Journal of Management History, 6(5), 224–242. Starik, M., and Rands, G. P. (1995). “Weaving an integrated web: Multilevel and multisystem perspectives of ecologically sustainable organizations.” Academy of Management Review, 20(4), 908–935. Sundaram, A. K., and Inkpen, A. C. (2004). “The corporate objective revisited.” Organization Science, 15(3), 350–363. Tang, S., and Demeritt, D. (2018). “Climate change and mandatory carbon reporting: Impacts on business process and performance.”  Business Strategy and the Environment, 27(4), 437–455. Tiemstra, J. P. (2003). “Environmental policy for business and government.” Business and Society Review, 108(1), 61–69. Van Buren, H. J., and Greenwood, M. (2009). “Stakeholder voice: A  problem, a solution and a challenge for managers and academics.” Philosophy of Management, 8(3), 15–23. Yang, P., and Kaffine, D. T. (2016). “Community-based tradable permits for localized pollution.” Environmental and Resource Economics, 65(4), 773–788.

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3 SUSTAINABILITY CONCERNS, DIGITALIZATION, AND GLOBALIZATION Impact on marketing thought and practice Joffi Thomas

The macro-environmental forces of sustainability, digitalization, and globalization, acting at the level of the economy, industry, market, and society and at the level of the customer and firm, have transformed marketing thought and practice, especially in the last few decades. The fundamental shifts in marketing thought could be summarized as a shift in approach from a goods to a service-centred view, a shift in focus from the economic processes underlying consumption to include the social processes underlying consumption, and a shift in scope from value creation for customers to including all stakeholders, such as society at large. The developments in practice have brought about shifts in the nature of offerings from goods and services to staging unique customer experiences, employing emerging digital technologies, a change in firm orientation from market orientation to sustainable market orientation, and a change in the role of marketing in the organization from tactics to strategy to culture. The influence of the sustainability megatrend, as well as the impact of digitalization, globalization, and protectionist forces on the economy, industry, markets, firms, and customers, is examined in this chapter by extending an existing framework by Thomas and Gupta (2005) to better appreciate their impact on marketing thought and practice (see Figure 3.1).

The macro-environmental force of sustainability and its influence Sustainability has emerged as one of the most significant issues facing today’s global society and business, more so in the last few decades. It is already seen as an emerging megatrend (Lubin and Esty, 2010), and innovative 30

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Macro env. influences: Sustainability, digitalization, and globalization

Sustainability concerns (Social and ecological)

Technological advances Digitalization

Globalization and protectionism Guarded globalization

Changes at different levels: Economy, markets, and customer Economy • Economically driven to ecologically driven • Connected knowledge economy • Borderless global economy to guarded globalization

Industry • From profit focus to triple bottom line considerations; including implications to society and planet • Globalizing, converging, consolidating, digitally connected industries Market • Sustainability emerging as a value-creating dimension for product and corporate brands • Fragmenting and Homogenizing market Customers • Active, informed, connected, demanding, and increasingly conscious about the social and natural environment • New competition; new choices with digital integration

Developments in marketing: Thought and practice Developments in marketing thought Shift in approach: From goods to service-centred view Shift in focus: Increased focus on the social processes influencing consumption in addition to the economic process Shift in scope: Perspective shift from value creation to customers as well to other stakeholders Developments in Practice Shift in the nature of offerings: Co-creating unique customer value and shift to experiential offerings Shift in the firm orientation: From market orientation to sustainable market orientation; Sustainability emerging as a key dimension of the value proposition Shift in the role of marketing in the firm From tactics to strategy to culture Multiple roles of marketing being examined; for example, role as instigator, innovator, integrator, and implementer in GE

Figure 3.1 Impact of sustainability concerns, digitalization, and globalization on marketing thought and practice

organizations around the globe are making sustainability the core of their strategy. It poses challenges in managing both the production and consumption processes (Oates et al., 2016) and hence has a lasting impact on marketing thought and practice. Sustainability concerns are transforming the global economy to be socially and ecologically driven, rather than just economically driven, forcing industry to balance profitability, people, and the planet. These developments are affecting different markets in varying ways. Customers across the globe are getting increasingly educated and conscious about the ecological as well as social implications of their consumption behaviour. 31

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The sustainability concerns of the planet we live in is forcing national governments and multinational businesses to come together and act collectively to achieve common goals. On September  25, 2015, during the UN Sustainable Development Summit, 193 countries adopted a set of goals to end poverty, protect the planet, and ensure prosperity for all as part of a new sustainable development agenda. Each goal has specific targets to be achieved over the next 15 years. While the SDGs are not legally binding, governments are expected to take ownership and establish national frameworks for the achievement of the 17 UN Sustainable Development Goals, 2016. On the need to transform the global economy, Maurice Strong, Secretary of the Rio Earth Summit, 2012 stated, “What we really need is a transformation of our economy. It has been economically driven; it has to be ecologically driven.” Björn Stigson, former president at the World Business Council for Sustainable Development, comments on what this transformation entails, “Transforming the world’s economic systems will require more than just shifting corporate behaviour though. There will need to be a shift in governance systems and tax regimes as well as a change in culture” (Purt, 2012). These changes at the economic level have created disruptions in existing business, as well as opportunities for new businesses. At the industrial level, the challenge for businesses is to strike a balance between the goals of profits, society’s well-being, and conserving the planet ecosystem for future generations. The initiatives taken by corporates in this direction include a focus on a triple bottom line (profits, people, and planet) and steps towards sustainability reporting. Sustainability has begun to become a significant dimension of value proposition in some markets. A McKinsey sustainability survey in 2011 and its analysis brought out the potential value from different sustainability activities, namely, growth, returns on capital, and risk management for four types of industries: Energy, extractive industries, high tech, telecom, and retail. Customers in many countries are increasingly finding value in sustainability initiatives; this could be a key source of competitive advantage for firms.

Digitalization and globalization: Impact on business and marketing Technological advances in various arenas of production have in fact led to the emergence of the industrial world from an agricultural-based economy from the middle of the eighteenth century onwards. However, the emergence of information technology—personal computers, Internet, mobile, and, more recently, Internet of Things (IoT) technologies—has transformed the way businesses were managed from the 1980s onwards. These 32

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technological advances have shaped the economy, industry, markets, and the individual customer in various ways. In contemporary times, digitalization of businesses employing the IoT, social media, analytics, cloud (SMAC) computing, and Artificial Intelligence (AI) are recognized as powerful forces disrupting and re-shaping different industries. Digital technology is becoming ubiquitous in today’s world; connections, sensors, and data are revolutionizing business (Iansiti and Lakhani, 2014). There has been an exponential increase in computer gear, accelerating the digitalization of the economy, which Brynjolfsson and McAfee (2014) call the “second machine age.” They identify the generation of digital information and the integration, analysis, and use of social and sensor data for creating value, along with the exponential increase in digital hardware, as the three forces shaping the second machine age of the digitalization of the economy. More recently, Weill and Woerner (2015) proposed that digitalization is moving companies’ business models on two dimensions: From value chains to digital ecosystems, and from a fuzzy understanding of the needs of end customers to a sharper one. They proposed four distinct business models, each with different capabilities: (a) Supplier, (b) omni-channel, (c) modular producer, and (d) ecosystem driver. The framework helps companies clarify where firms are currently in an increasingly digital business landscape and highlights what’s needed to move towards another, higher-value digital business model. Jeff Immelt, past president and CEO of GE for 16 years, commented in an interview about the impact of information technology and IoT on the business: “Industrial companies are in the information business whether they want to be or not.” The statement indicates the ubiquitous nature of digitalization. GE has made multi-billion dollars’ investments in the industrial Internet in 2011, which resulted in generating incremental revenues of $800MM in 2013 and increasing in later years. Globalization as a macro-force has been exerting its influence from the latter half of the twentieth century; however, these forces were unleashed in greater force in the last decades across the world. At the same time, there emerged forces limiting globalization in response to the adverse economic and social conditions, because globalization and growing consumerism have posed problems, especially in the inequity (perceived as well as actual) in the distribution of the gains of globalization, as well as on the ecosystem. Triggered by the global economic crisis and later, “in the aftermath of UK’s Brexit vote and Donald Trump’s election in the U.S., globalization is seen as a political hot potato rather than a hot ticket to prosperity” (Ghemawat, 2017). Globalization, now seen as the cause for economic/employment problems, social problems, and ecological problems by a large proportion of the population, has resulted in a populist backlash. These developments have resulted in a new phase of globalisation that Bremmer (2014) termed as “guarded globalization.” 33

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Although the three macro forces of digitalization, globalization, and sustainability concerns exert their influence on businesses independently, it is even more challenging to envision the changes they bring about when they act in tandem at the same time. Technological advances in digital technology and globalization offer multiple alternatives to innovatively address the challenges sustainable concerns pose on the consumption and production processes. Although experts have differing opinions on whether digitalization would counter the anti-globalization forces (Ghemawat, 2017; Goldin and Kutarna, 2016), it could facilitate globalization in certain aspects, including offering opportunities for businesses to scale up leveraging technologies by creating new offerings and superior value and offering more export opportunities to firms. Digital technologies and demand aggregation at a much larger scale than before could offer opportunities for scalable innovations to address the challenges posed by sustainability concerns. Emerging entrepreneurial ventures have already started exploiting these opportunities, ushering disruption in many industries, resulting in turbulent business scenarios. The disruptions envisaged in the automobile, petrochemical, energy, urban transportation, retail, and entertainment industries in a decade or two (Heineke et al., 2019), triggered by the multiple concerns of rising fuel costs and its depletion, vehicle parking concerns, traffic, safety, and pollution concerns, are an indication of the impending transformation of various other industries as well.

Developments in marketing thought and practice Impact on marketing thought Marketing theory and practice has evolved with the influence of the three macro-environmental forces; namely, technological advances, globalization, and sustainability, especially in the last two decades. It resulted in fundamental shifts in the marketing discipline, a change in research focus areas, and, at the same time, changes in marketing practice. The fundamental shift in the marketing perspective has been from a goodsto service-centered view; a shift in focus from the economic processes underlying consumption to include the social processes underlying consumption; and a shift in scope from value creation for customers to value creation considering the impact on all stakeholders, including society at large. Perspective shift from goods- to service-centered view The dominant logic of marketing from its inception years primarily focused on tangible resources, embedded value, and transactions, which is evident in the importance given to the tactical decisions of marketing, as captured in the 4 P’s framework. Over the past several decades, new perspectives 34

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have emerged that have a revised logic of marketing focused on intangible resources, the co-creation of value, and relationships (Vargo and Lusch, 2004). Society is concerned with sustainability, keeping in mind prevailing business practices and the increasing consumption of goods and services. This concern increases with the faster growth of emerging economies and other developing economies in the last two decades. All these developments have made a lasting impact on marketing thought and practice. They observed that the new perspectives are converging to form a new dominant logic for marketing, one in which service provision rather than goods is fundamental to economic exchange. They defined services as the application of specialized competences (knowledge and skills) through deeds, processes, and performances for the benefit of another entity or the entity itself. “Activities render services and things render services. The shift in focus to services is a shift from the means and the producer perspective to the utilization and the customer perspective” (Gummesson, 1995: 250–51). The service-centred view of marketing offers a new paradigm for marketing based on the continuous nature of relationships amongst marketing actors, compared to the focus on the transactional aspect of marketing, expressed in the tactical decisions of 4 P’s in marketing. The service-centred view of marketing, which considers the underlying intangibles, specialized skills and knowledge, and marketing process, offers a comprehensive and inclusive logic that integrates goods with services and provides a richer foundation for the development of marketing thought and practice (Vargo and Lusch, 2004). The service-centred view of exchange implies that the goal of marketing is to customize offerings to offer superior value, to recognize customers as co-producers, and to strive to maximize consumer involvement in the customization to better fit needs. This fundamental shift in marketing thought has the potential to alter concepts of markets, giving rise to the foundation of a theory of the market from which many normative theories of marketing could arise (Vargo and Lusch, 2016). It could also transform many key concepts, including branding, service quality, and customer equity, to specify a few. It could result in a shift in emphasis; customer equity over brand equity, relationship over transactions, perceived quality over product quality, and need to develop continuous customer engagement process rather than sporadic communication campaigns (Vargo and Lusch, 2004). Shift in focus There could be a shift in focus from an emphasis on economic processes to social processes and the institutional ecosystem underlying consumption. Consumption is influenced by individual psychological characteristics and also by influence at the group level. The group influences of marketing have been captured under consumer culture theory in consumer research. 35

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However, institutions and institutional arrangements have received relatively little attention in marketing literature, even though they are prevalent in the related economic, organizational, and sociological literatures with some exception (e.g., Alderson, 1965: 57; Araujo and Spring, 2006; Arndt, 1981; Carson et al., 1999; Duddy and Revzan, 1953; Giesler, 2008; Heide and John, 1992; Humphreys, 2010; Hunt, 1983) as cited in Vargo and Lusch (2016: 6). Recently, the AMA 2007 definition of marketing recognizes marketing as a set of institutions. Vargo and Lusch (2016) updated and extended the service-dominant logic proposed by them in 2004 by proposing a fifth axiom recognizing the role of actor-generated institutions and institutional arrangements in the value creation process. They used “institution” to refer to a relatively isolatable individual rule (e.g., norm, meaning, symbol, practice) and “institutional arrangements” to refer to interrelated sets of institutions that facilitates the coordination of activities in valuecreating service ecosystems. The narrative of value co-creation is ­developing into one of resource-integrating, reciprocal-service providing actors, co-creating value through holistic, meaningful experiences invested and overlapping service ecosystems, governed and evaluated through their institutional arrangements (Vargo and Lusch, 2016). Shift in scope There has been a shift in scope from customers to include multiple stakeholders, including the society at large. The goal of marketing was traditionally conceptualized primarily to serve the interest of the firm and its customers. However, recent developments in marketing have revealed the need to recognize multiple stakeholders or actors in the network. The responsibility of the firm (actor) to multiple actors, including the society at large, was highlighted in recent decades. Firms like Nike and Coca-Cola faced a backlash from consumers and the local society, respectively, at the start of the last decade for not paying adequate attention to social and ecological concerns (child labour in case of Nike and Coca-Cola’s contribution to water scarcity problems for the community living near its bottling plant), and this has forced marketers to take note. The realization that meeting customer needs alone will not be sufficient to grow and maintain strong brands has resulted in a change in the goal of marketing to create value for not only customers and firms but for other stakeholders, including the society at large, which is reflected in the revised marketing definition brought out by AMA in 2004 and 2007. These changes in thought led the evolution of the marketing concept itself in the last two decades. The forces of sustainability concerns coupled with the new “active, connected, and informed customer” (Prahalad and Ramaswamy, 2004) have resulted in redefining the very concept of marketing. The AMA 1985 definition of marketing was predominantly based on the 36

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marketing mix paradigm—it defined marketing as “the process of planning and executing the conception, pricing, promotion, and distribution of goods, ideas, and services to create exchanges that satisfy individual and organizational goals.” Marketing was also seen more as a set of decisions/ actions to meet an organization’s objectives by meeting customer needs. This definition of marketing has undergone a drastic transformation in 2004 when AMA revised the definition as “Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.” Major changes to the 1985 AMA definition included bringing forward value management as the central concept of marketing and recognizing that the responsibility of marketing was not just to create value for a firm and its customers but for all other partners (stakeholders), including society. However, this definition also invited much criticism as it was felt by the academe as well the practitioner community that defining marketing as “a function” was not doing justice to the role it should play and is playing in effectively managed organizations. The phrase wherein marketing was viewed as “a function” in the AMA 2004 definition was reworded as marketing as an activity performed by the entire organization and not just by a select group of specialists in the organization. Further explicit recognition of consumption and marketing as a social process was emphasized with consumption/marketing being recognized as involving a set of social and cultural institutions, rather than being determined by the firm and the customers alone in the AMA definition of marketing announced in 2004. AMA in 2007 revised the definition of marketing as follows: “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” What the revised conceptualization of marketing did was to expand the idea of marketing to include institutions and all activities that have an effect on creating and delivering value to not just customers and the firm but also to other stakeholders, including society. Hence, from the very definition of marketing, it emerges that it has to provide value to customers, society, and other stakeholders. This requires an assessment of the impact of marketing on society and that of society on marketing, on both a short-term as well as long-term basis. Mitchell et al. (2010) bring out the inadequacies of the traditional market orientation of corporates and argue for the adoption of sustainable market orientation. They synthesized the concepts of market orientation, macro-marketing, corporate social responsibility, and sustainable development management and formulated the concept of sustainable market orientation (SMO). Multiple management problems arising from the adverse ecological, social, and economic impacts that have arisen from globally significant, market-driven events have made it imperative for firms 37

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to take a broader view of their firm’s interaction with society. The emphasis on corporate social responsibility and increased concern for social issues, as well as the ecological concerns of corporations towards the end of the second millennium, have contributed to the recognition of marketing-societal institutions interactions in the revised marketing concept.

Impact on marketing practice The developments in practice have brought about shifts in the nature of offerings from goods and service to staging unique customer experiences, a change in firm orientation from market orientation to sustainable market orientation, and a transition in the role of marketing in the organization from tactics to strategy to culture. Shifts in the nature of offerings With Internet access, mobile technology, and connectivity, customers have become more active and informed in their relationships with suppliers. At the same time, the firms can connect with individual customers directly or through customer communities to co-create value. As Prahalad and Ramaswamy (2004) have pointed out, this ability of firms to co-create value by staging unique customer experiences, leveraging the advances in technologies, factoring sustainability concerns, and appreciation of co-creating value with customers in the institutional ecosystem, has become one of the key levers for gaining competitive advantage in the marketplace. Branding efforts across organizations are aligned to provide customers a superior experience through internal as well as external branding activities. In line with the service-centred view of marketing, firms have started focusing on improving the customer experience, rather than just focusing on the quality of their goods or the quality of their service offerings. Increased attention in the areas of corporate branding and corporate social responsibility activities could be seen as an outcome of this shift in practice. Changes in firm orientation A parallel impact of the developments in marketing thought on marketing practice was the realization that customer or market orientation as the foundation of corporate marketing strategy was not doing justice to address the societal long-term concerns of “people” and “planet.” At the same time, businesses were making an effort to make sustainability a core strategy (Bonini and Görner, 2011; Lubin and Esty, 2010). It is in response to this realization that Mitchell et al. (2010) proposed a broader conceptualization of the market orientation concept as sustainable market orientation (SMO), incorporating three key sustainable development concerns: Economic, 38

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social, and ecological. Leading organizations have aligned their missions and goals to align with the sustainability imperative. Examples of such initiatives are quite evident in the consumer goods industry, especially in the case of globally leading firms. Given next are the sustainability-related goals as stated in the websites of Nestle, Procter and Gamble, Unilever, McDonald’s, and Mondalez International. Nestle published 42 commitments in their website to hold themselves publicly accountable for their performance. They report annually to show progress. All the 42 commitments are directly aligned with their business, and the majority are now supported by objectives towards 2020. (Nestle corporate website accessed on January 8, 2018). These public commitments were related to addressing sustainability concerns in nutrition, health and wellness, rural development, water, environmental sustainability, human rights and compliance, and employees. P&G puts its thinking on sustainability as “We want to make it possible for consumers to make more sustainable choices and feel good when they put a P&G brand into their cart.” The Unilever mission, as stated on its website, incorporates sustainability: “Unilever has a simple but clear purpose—to make sustainable living commonplace. We believe this is the best long-term way for our business to grow.” The mission further elaborates  “reducing environmental footprint and increasing positive social impact” as key goals. McDonald’s puts its sustainability goals in the following manner: “Everyday all around the globe, McDonald’s is putting people, processes and practices into place to make sustainability the new normal—for our business, society and the world at large.” Mondalez International states its mission and purpose as: Our future is rooted in helping people snack in balance and enjoy life with products that are safely and sustainably sourced, produced, and delivered. To realize this purpose, we empower the well-being of our colleagues, communities, farmers, and consumers while making smart and sustainable use of natural resources to reduce our environmental footprint. These publicly articulated mission statements and commitments demonstrate the impact of sustainability concerns on business strategy and how organizations are trying to weave sustainability into the core of their strategy. Transition in the role of marketing in the organization In the initial phase of its growth till the 1980s, marketing practice was primarily engaged with a set of activities it has to perform as a specialized 39

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organizational function. Marketers were seen as mixers of ingredients that were called the marketing mix (Borden, 1964) and taking decisions on the 4 P’s (McCarthy and Brogowicz, 1981). The managerial tasks/tactics that needed to be executed were the focus in this period. The development of the positioning concept, customer orientation, and focus on customer value during the 1980s contributed in shifting the role of marketing from a tactical to a more strategic role in the organization (Webster, 1992). Decisions on which customers to focus on and what value to offer made the marketing activity a top management concern rather than a task separately handled by a team of specialists. However, with intensifying competition, globalization, and increasingly “active, connected, and informed customers” (Prahalad and Ramaswamy, 2004), it became necessary for organizations to consider marketing as a value creation and delivery process to which each member of the organization had to contribute. In successful organizations, customer orientation became a part of the organizational culture, influencing the cross-functional processes of customer value creation and delivery. The traditional role marketing played in the organization is being critically analyzed, and organizations are experimenting with new ways of management. A case in point is the transformation of marketing in GE under the leadership of its previous Chairman Jeff Immelt and Vice Chair Beth Comstock. Research into what skills contribute to the making of an effective CMO in GE led to the identification of four key roles effective marketers perform in the organization: An instigator, innovator, integrator, and implementer (Comstock et al., 2010). The organization’s principles, people, and process were then restructured to meet its strategic goals, thus making customer value orientation a part of GE culture. In practice, the digital technologies had an all-pervasive influence and the increasing complexities in managing the marketplace has resulted in re-examining the role of marketing in organizations. The three macro influences of globalization, digitalization, and sustainability in combination are creating disruptions in many traditional markets, as well as creating new opportunities in the marketplace. The globalization and protectionist forces want business to be concerned about global issues and opportunities as well as local issues at the same time. The digitalization of business makes it imperative for all businesses to leverage digital technologies to bring up innovation, which creates value for multiple stakeholders and build a sustainable business at the same time. Given the uncertainty of the future as expressed by the CEOs (Ferraro and Cassiman, 2014), the variety of forces to be balanced—economic, social, and ecological—resulting in ambiguity in different decision-making situations, the complexity of the decision-making situation is further enhanced by the volatility of the environmental dynamics. Thus, managing the volatile, uncertain, complex, and ambiguous (VUCA) world is only getting more challenging. In this scenario, 40

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a deeper understanding of the forces that affect marketing thought and practice could help; systematically examining the impact of the macro forces on the economy, industry, and markets is an attempt in this direction.

References Alderson, W. (1965). Dynamic marketing behavior. Homewood: Richard D. Irwin. Araujo, L., and Spring, M. (2006). “Services, products, and the institutional structure of production.” Industrial Marketing Management, 35(7),797–805. Arndt, H. W. (1981). “Economic Development: A Semantic History.” Economic Development and Cultural Change, 1981, 29(3), 457–466. Bonini, S., and Görner, S. (2011). “McKinsey survey (October).” The Business of Sustainability. Retrieved from www.mckinsey.com/business-functions/sustainability/ our-insights/the-business-of-sustainability-mckinsey-global-survey-results. Borden, N. H. (1964). “The concept of the marketing mix.” Journal of Advertising Research, 2–7. Bremmer, I. (2014). “The new rules of globalisation.” Harvard Business Review, 92(1–2), 103–107. Brynjolfsson, E., and McAfee, A. (2014). The second machine age: Work, progress, and prosperity in a time of brilliant technologies. W W Norton & Co. New York: United States. Carson, S. J., Devinney, T. M., Dowling, G. R., and John, G. (1999). “Understanding institutional designs within marketing value systems.” The Journal of Marketing, 63(Special Issue), 115–130. Comstock, B., Gulati, R., and Liguori, S. (2010). “Unleashing the power of marketing.” Harvard Business Review, 88(10), 90–98. Duddy, E. A., and Revzan, D. A. (1953). Marketing: An institutional approach. New York: McGraw-Hill. Ferraro, F., and Cassiman, B. (2014). “Three trends that will change how you manage.” IESE Insight Magazine, 23, 23–30. Ghemawat, P. (2017). “Even in a digital world, globalization is not inevitable.” Harvard Business Review, February. Giesler, M. (2008). “Conflict and compromise: Drama in marketplace evolution.” Journal of Consumer Research, 34(April), 739–753. Goldin, I., and Kutarna, C. (2016). Age of discovery: Navigating the risks and rewards of our new renaissance. London: Bloomsbury. Gummesson, E. (1995). “Relationship marketing: Its role in the service economy.” In William J. Glynn and James G. Barnes (Eds.), Understanding services management, 244–268. New York: John Wiley & Sons. Heide, J. B., and John, G. (1992). “Do norms matter in marketing relationships?” The Journal of Marketing, 56(2), 32–44. Humphreys, A. (2010). “Mega marketing: the creation of markets as asocial process.” Journal of Marketing, 74, 1–19. Hunt, S. D. (1983). “General theories and the fundamental explananda of marketing.” Journal of Marketing, 47, 9–17. Iansiti, M., and Lakhani, K. R. (2014). “Digital ubiquity: How connections, sensors, and data are revolutionizing business.” Harvard Business Review, 92(11), 91–99.

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Kersten Heineke, Benedikt Kloss, and Darius Scurtu. (2019). “Micromobility’s 15,000-mile checkup.” Article. Retrieved from https://www.mckinsey.com/ industries/automotive-and-assembly/our-insights/micromobilitys-15000-milecheckup, accessed January 29, 2019. Lubin, D. A., and Esty, D. C. (2010). “The sustainability imperative.” Harvard Business Review, 88(5), 42–50. Mitchell, R. W., Wooliscroft, B., and Higham, J. (2010). “Sustainable market orientation: A new approach to managing marketing strategy.” Journal of Macromarketing, 30(2), 160–170. Oates, C., Alevizou, P., and McDonald, S. (2016). “Challenges for marketers in sustainable production and consumption.” Sustainability (Online), 8(1). Prahalad, C., and Ramaswamy, V. (2004). “Co-creation experiences: The next practice in value creation.” Journal of Interactive Marketing, 18, 5–14. Purt, J. (2012). “Talk point: Rethinking the global economic system. “The Guardian, April  4. Retrieved from www.theguardian.com/sustainable-business/ rethinking-global-economic-system-sustainable-capitalism, accessed December 15, 2017. Thomas, J., and Gupta, R. (2005). “Marketing theory and practice: Evolving through turbulent times.” Global Business Review, 6(1), 95–112. UN Sustainable Development Goals (2016). Retrieved from https://academicimpact. un.org/ content/sustainable-development-goals, accessed December 15, 2017. Vargo, S. L., and Lusch, R. F. (2004). “Evolving to a new dominant logic for marketing.” Journal of Marketing, 68(1), 1–17. Vargo, S. L., and Lusch, R. F. (2016). “Institutions and axioms: An extension and update of service-dominant logic.”  Journal of the Academy of Marketing Science, 44(1), 5–23. Webster Jr, F. E. (1992). “The changing role of marketing in the corporation.” Journal of Marketing, 56(4), 1–17. Weill, P., and Woerner, S. (2015). “Thriving in a increasingly digital ecosytem.” MIT Sloan Management Review, 56(4), 27–34. Weill, P., and Woerner, S. (2018). “Is your company ready for a digital future.” MIT Sloan Management Review, (Winter), 21–25.

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4 IMPACT OF LONG-TERM CSR SUPPORT Cherie Ann Smita Pereira

Social Change relates to the positive changes for individuals, communities and wider society that result from activities run by organisations addressing social issues. It is driven by both, non-profit organisations that work directly in the communities and by the funders and networks that support these organisations.1

Corporate social responsibility (CSR) During the past few years, CSR as a key ingredient for social change has increasingly been the topic for several discussions and research. The most commonly used definition of CSR has been given by the European Union which describes it as the concept that an enterprise is accountable for its impact on all relevant stakeholders. It is the continuing commitment by business to behave fairly and responsibly and contribute to economic development while improving the quality of life of the work force and their families as well as of the local community and society at large. The basic aim of CSR is to maximize the company’s overall impact on society and the stakeholders while considering environment and overall sustainability. Larger corporations have also realized the significance of implementing their CSR initiatives at locations that are close to their business operations. In India, philanthropy, religion, and charity were the drivers of CSR in the pre-industrialized period; however, these were sporadic and not an integral part of any business. CSR came into common use in the 1970s where there was more direct involvement of business with mainstream development (Bajpai, 2001). Today, there has been a shift from the charity-based perspective towards more hands-on engagement of the corporate sector with the empowerment of disadvantaged groups. This has grown from an increasing realization that businesses cannot succeed in isolation and social progress is 43

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Partnership Development

Organizational Development

Systems and Behaviour Changes

Figure 4.1 Impact of long-term CSR support Source: Adapted from “Impact of CSR on Organizational Performance,” by S. Siddiq and S. Javed, 2014, European Journal of Business and Management, Volume, 6.27

essential for sustainable growth (Wu and Wang, 2014). CSR is now aligned with the country’s national priorities focusing on need-based initiatives, keeping in mind the triple bottom line of people, planet, and profit. One of the core activities of corporates today is effective CSR, now mandatory under Section  135 of the Companies Act, 2013 which motivates them to spend 2 per cent of their profit after tax (PAT) on CSR. This has only brought to the forefront the need for them to meaningfully partner with the implementing organization in order to achieve collective impact. In lieu of this, along with a shared vision to empower young girls and youth in rural India, Tata Motors Finance (TMF) identified Magic Bus India Foundation (MBIF) as their implementation partner to carry out an intervention for the “Empowerment of Girls” in 65 villages in Bhandara, Maharashtra, India.

The partnership MBIF is a 17-year-old organization that works with some of the world’s poorest children and youth, taking them from a childhood full of challenges 44

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to a life with a meaningful livelihood. The organization equips young people, especially girls, with the skills and knowledge they need to grow up and move out of poverty. Adolescents in the Magic Bus programme complete school and go on to enrol in vocational institutes or colleges. They successfully fend off destabilizers such as child marriage and child labour and become first-­generation income earners. The youth-centred Livelihood Programme builds up their employability skills and maps their job potential based on individual strengths and mobility, thus connecting the aspirations of young people to available market opportunities. Additionally, Magic Bus follows Urie Bronfenbrenner’s ecosystemic model for empowerment where engagement with the support structures in the environment, that is parents, teachers, the community at large, and local institutions is crucial for development of the social, emotional, and economic well-being for all young people living in that area. According to Henry David Thoreau, “Goodness is the only investment that never fails” and so in the latter half of 2015, not adhering to the typical funding cycle as followed by most corporates, TMF decided to invest all its faith and CSR funds in the implementer (MBIF) committing to a five-year period of funding at the outset, as they believe positive impact takes time and it is only a rigorous sustained intervention that will help achieve this common goal. Additionally, TMF wished to follow the journey of a girl along this continuum as she transitions from completing her education to attaining a livelihood, against all odds. At this juncture, there are three key aspects that have contributed to this successful partnership: 1 Concentration of CSR efforts: Despite limited time and resources, TMF invested all of its CSR funds into one initiative, where the potential for mutual benefit exists. This clearly indicates the importance given by the corporate towards the initiative and the efforts they are willing to put it to deliver effective results. 2 Build a deeper understanding of benefits: Having a shared goal is not always straightforward; for TMF and MBIF, the key was to find symmetry between both sides, be open, and understand the issues from a business and societal perspective. The partners invested their time and energy to meet and discuss pertinent issues to finally arrive at a consensus and put forward an outcome framework for this programme. 3 Finding the right partner: When both sides see a win-win situation, the motivation to realize the vision is stronger. The long-term TMF–MBIF relationship is built on an awareness and understanding of the strengths on both sides and also on the complementary nature of the partnership which will eventually lead to successful and sustainable impact. 45

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Any CSR activity is associated with several kinds of social returns on investment, such as awareness amongst the community, brand-building, mileage, focus on geographic locations, to name a few. On the other hand, nongovernmental organizations (NGOs) are uniquely positioned in the community, in touch with the target groups, abreast on their social problems, and perceived as trustworthy and reliable. In such a setting, having shared goals and concrete support, together with collaboration between the partners involved and alignment of specific strategies, will only serve to achieve maximum impact on investment. The objective of the TMF–MBIF partnership is to create an enabling environment conducive for sustainable behaviour change leading to empowerment of the girls in the programme. Thus, it is an epitome of a CSR initiative today and sets an example of how it is benefitting the company in several ways: 1 The initiative has helped strengthen relationships with stakeholders in the field and in managing their expectations 2 Projecting itself as a socially responsible company—a brand that people have come to admire and trust for their support at the grass roots 3 TMF has consistently encouraged innovation though this initiative wherein a mobile application (fitness app) has been developed for all the employees, whereby keeping themselves fit, they are made aware about the work being done, gain valuable points, and feel they are contributing towards the cause 4 Effective engagement of the employees has been a key element contributing to the success of this programme, where any hierarchy is set aside and they are encouraged to go to the field, volunteer, and participate in the events organized by the implementer

The context MBIF carried out a recce across India and identified a few locations as those in most need for such a programme for girls. Bhandara, a village in Maharashtra, was found to fulfil the criteria for such an intervention. This district is composed of 12 towns and has a total of 864 villages spread over seven tehsils, namely, Tumsar, Mohadi, Bhandara, Sakoli, Lakhani, Pauni, and Lakhandur. It is also one of the least urbanized districts as per the 2011 Census with a sex ratio of 982. The economy is mainly dependent on agriculture, mining, and forest products. Most of the cropped area is under rice cultivation, rice being the main crop of the district. This seemed like an ideal location for intervention for TMF, having its branch office located about 60 km away in Nagpur, serving as an effective platform to facilitate employee engagement with the programme and ensure easy and consistent field monitoring from their side.

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In September  2015, an official partnership between TMF and MBIF began with the launch of the project aptly entitled “Uddan” (“Flight” in Hindi) to work towards changing the ecosystem to support adolescent girls and young female youth to fight gender inequality, aspire, educate themselves, and become financially independent in order to make their own life choices. The intervention targeted 3,000 adolescent girls and 400 female youth from marginalized backgrounds, denied of equal opportunities that prevent them from realizing their aspirations. Keeping in alignment with the approach of MBIF, the intervention also aims to develop female youth as leaders in their communities who will go on to conduct experiential learning sessions for the adolescent girls and thus be the true catalysts for change.

Research stance MBIF pioneered the activity-based learning model in India which is currently the approach used as part of the intervention with a mentoring model for implementation. The use of activity facilitates a learning environment that is free from threat, is joyful, and enables prolonged engagement. The messaging given out during the sessions, exposures, and applications is based on the assumption that when individuals are empowered with information and tact, they are more capable of exercising control and choice in their own lives. TMF went a step ahead with their involvement in the case of Uddan, where the mentors have not just been the youth from the communities but also the TMF employees who have contributed, participated, helped, and guided the intervention along its way, ensuring adherence and movement towards the set goals. A baseline study was conducted at the outset, before the intervention, to understand the status quo of the girls, followed by an intermediary or midline study after two years of the programme to specifically answer the following questions: • •

How can long-term funding serve not only as support but as an enabler for empowerment of the target group? How can a participative relationship between the funder and the organization at every step of the programme help enhance the impact of the intervention?

The study hoped to gain an understanding of the outcome and impact of having a long-term participative relationship with a corporate partner. It aimed to produce results that will reinforce the need for sustained longterm partnerships between the corporate and the NGO. It also aimed to

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showcase how engagement, alignment, and transparency help affect social change.

Proposition/hypothesis The study proposed the following hypothesis: Long-term and participative corporate–NGO relationships lead to positive impact within the target group, resulting in sustainable social change. The progression is linear and moves as follows: Identification of a social problem



Activities are run to address the problem



Social change results from those activities

Approach Survey design, sampling, and analysis The Differences-in-Differences research design was adopted for this study which followed a mixed methodology, the quantitative component composed of an individual respondent questionnaire administered through face-to-face interviews using SurveyCTO as a platform for data collection. The qualitative component involved several focus group discussions (FGDs) and interviews with the participants and important stakeholders in the community. TMF and MBIF worked closely on the data collection tool and the indicators and also met with the agency conducting the research at the time of the baseline. The same questionnaire was used during the midline with an addition of a few more indicators relating to work readiness amongst the adolescents at this point. It was pre-tested on a group of respondents to ascertain the flow and sequence of the questions, suitability of language, appropriateness of logic, and the comprehensiveness of the issues in addressing the objectives of the study. On the basis of the pretest results, the tool was modified and finalized for data collection. Prior to data collection, field investigators were trained by the Impact team of MBIF on using the tools for data collection and ethical interviewing techniques. Table 4.1 shows details about the quantitative assessments for the adolescent respondents: The qualitative assessment involved focus group discussions and interviews with different groups of adolescents, female youth currently in or having passed out of the Livelihood Programme, scholarship recipients, teachers, parents, community youth leaders of Magic Bus, and village heads. 48

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Table 4.1  Demographic details of the respondents Data

Treatment (BL)

Sample size

558 (Confidence level—99%, Interval —5%) Village Block Bhandara Association with To be Magic Bus associated Girls (10–11 years) 64 Girls (12–14 years) 472 Girls (above 22 15 years)

Control (BL)

Treatment (ML)

Control (ML)

477

472 (243 old*) (Confidence level— 99%, Interval—6%) Bhandara Associated for over 20 months 71 353 48

380 (95 old*)

Mohadi Not associated 48 423 6

Mohadi Not associated 69 272 39

Treatment—Received intervention; Control—Not received intervention; BL—Baseline, ML— Midline *old—adolescents who were also part of the baseline study Source: Created by the author

The Uddan Programme: Community female youth leaders (CYLs) as change-agents Outcomes The findings of this assessment have been very encouraging. They only go on to reiterate the benefits of a stable and long-term partnership where the responsibility for the outcomes is shared. The following section summarizes the results: Education School enrolment The programme tried to build awareness of girls’ basic rights as enumerated in the Right to Education (RTE) Act, so that adolescents are encouraged to enrol in school, attend school regularly, and progress to higher grades. Almost all (99.4 per cent) adolescent girls were enrolled or re-enrolled in school, those who had dropped out (0.6 per cent) at some point earlier did so on account of the family’s economic condition and household chores. Awareness about RTE and provisions under RTE Findings show that 99.4 per cent of adolescents wished to continue their studies, of which 75.5 per cent wished to complete their graduation or study beyond that. This rose by almost 16 per cent since the baseline. With regard 49

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80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0

75.5 71.1 59.9 52.9 42.6 34.2 25.4 23.2 4

0.7 1.7 0.5 0.2 Grade VIII

5 1.1 1.9

SSC

HSC

Baseline (Treatment)

Baseline (Control)

Midline (Treatment)

Midline (Control)

Graduation and beyond

Figure 4.2 The Uddan Programme: Community female youth leaders (CYLs) as change-agents Source: Created by the author

to the RTE Act, half (50.4 per cent) of the respondents were aware about the act, while this data point was a meagre 7.4 per cent for the control group. Frequency of going to school When respondents from the treatment group were asked about the number of times they went to school in a week, a total of 96.8 per cent reported going to school five or more times a week at the time of the midline. This was a steep rise from the baseline value of 77.1 per cent for the same indicator. The girls in Uddan who attended school during menstruation shot up to 97.9 per cent from 85.9 per cent at the time of the baseline, while a little over half the number of girls (52.1 per cent) were aware of the reasons for menstruation which was still lower (33.4 per cent) in the control group. Educational aspirations Almost all the adolescents in both groups wished to pursue their higher education; however, the desire to graduate increased in the treatment and 50

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decreased in the control group. Figure 4.3 shows details about the level of education they desire to study. Perception on the benefits of an education Most respondents in both groups believed that an education helped them increase their knowledge, which increased by 11 points in the treatment group but decreased in the control across the two assessments. Employment was considered to be the second most important aspect which was mentioned by almost half (48.9 per cent) of the treatment group and 15.8 per cent of the control group during the study. Professional aspirations of the adolescents The top two preferred professions are becoming a doctor and joining the police force which most (60 per cent) of the respondents in both groups aspired towards. The other career choices included becoming a teacher, nurse, banker, or sportsperson. Remarkably, there was a 14.7 per cent rise in the number of girls in the treatment group who wish to become a professional sportswoman (an aspiration that could have been influenced by the focus on sport as one of the activity-based learning media used by MBIF).

20 10 0 -10

10

11.3

6.7

Aware about diarrhoea

4

Aware about anemia

-20

1.5

Consume IFA tablets -9.5

Visit Private Visit government Clinics when ill hospitals when ill

-30 -40 -50

-50.7

-60 -70

-68.4

-80 Treatment

Figure 4.3 Educational aspirations (per cent) Source: Created by the author

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15.1

Control

-16.1

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Scholarship programme TMF provided educational scholarships for a total of 50 girls belonging to the most marginalized sections of society. They were given financial support which enabled them to continue and complete their Secondary School Certificate (SSC) examination. The average SSC pass percentage of these girls was 70 per cent, with one of them topping with an overall of 91 per cent. For those who were eligible but did not receive the scholarship, it was just 58 per cent, with two girls in this group who did not manage to clear the exam. Additionally, the presenting of a scholarship event held jointly by TMF and MBIF provided an impetus to the girls to aim higher and continue with their higher education. These girls were very grateful for this programme; it had enabled them to complete their schooling, without which some of them might have also dropped out. It was only because of this support that they were able to pay their school and tuition fees. All of them wish to graduate and be financially independent; they also felt that one should continue one’s education after marriage and that a husband and wife should have the same level of education. On account of the regular visits by the MBIF community youth leaders (mentors), the girls’ parents too are now convinced about the impact of Uddan and have assured them support for their future, which is a rare occurrence in rural India. Socio-emotional skills Socio-emotional development includes the child’s experience, expression, and management of emotions and the ability to establish positive and rewarding relationships with others (Cohen et al., 2005). Early social emotional skills are related to how socially, emotionally, academically, and professionally skilled we are later in life. To bring about the holistic development of adolescents, it is important to strengthen their socio-emotional skills for managing themselves effectively and developing as responsible and well-equipped adults to lead productive and comfortable lives. It is extremely important that the targeted girls develop their socio-emotional skills so they can move towards their own empowerment. To understand this, the assessments covered various questions related to self-perception and awareness. Self-awareness This aspect was covered as part of the midline study to get an idea and check for any increase in the awareness about oneself and self-management. Apart from the increase in the ability to identify capabilities and set goals, there was an increase in the other aspects covered under this domain as well. Table 4.2 gives the baseline and midline values for treatment and control groups showing the change overtime. 52

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Table 4.2  Health and personal hygiene Indicator

Group

Baseline

Midline

Adolescents who feel they can identify their own strengths (what you do well) Adolescents who feel they can identify their own weakness (where you need to improve) Adolescents who feel they enjoy taking on challenges Adolescents who feel they can stick at things and try hard until they succeed Adolescents who feel they can easily talk with people more senior than them, in different situations

Treatment Control

66.8 76.5

75.4 31.6

Treatment Control

59.7 56.2

71 31.1

Treatment Control Treatment Control

86.9 87.2 87.5 89.3

87.5 64.5 88.3 66.6

Treatment

71.5

83.5

Control

72.5

65

Adolescents who feel they show self-control (control temper, show respect for self and others)

Treatment

80.3

86

Control

77.4

75.5

Adolescents who feel they can achieve their goals Adolescents who feel they have the power to change their life

Treatment Control Treatment Control

83.7 85.3 71.3 83.2

89.2 84.5 89.8 79.2

Source: Created by the author

Health and personal hygiene All the areas under the health and hygiene domain increased from the baseline to the midline as observed amongst the girls in the programme. Figure  4.4 shows that although the awareness about certain illnesses increased, work still needs to be done, as some levels like that of anemia awareness are still less than half (49.4 per cent). Apart from the previously mentioned indicators, the number of adolescent girls in the treatment group practising personal hygiene, such as bathing, brushing teeth, and washing hands at all times with soap, also recorded an increase. Perception on early marriage The adolescents were also asked about whether they were aware about the legal age of marriage in India as well as their perspective on early marriages and its consequences. Figure 4.5 showcases their response. 53

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96.2

100 90

79.7

80

89.2

84.3

70 60 50 40 30 20 10 0

Baseline

Midline Treatment

Control

Figure 4.4 Pre- and post-intervention percentage difference Source: Created by the author

100 80

92.6

83.6

79

50.8

60

33.2

40 20 0

5.6

15.4

Baseline (Treatment)

9.9 6.5 Baseline (Control)

15.8

2.3 5.1 Midline (Treatment)

Midline (Control)

Aware that there is a legal age for marriage Unaware that there is a legal age for marriage Don’t know Figure 4.5 Awareness about having a legal age for marriage (per cent) Source: Created by the author

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There was a drop of 37.7 per cent in the number of girls who believed that there are no adverse consequences of early marriages on the mothers, which was a shocking 54 per cent at the baseline. Similarly, there was a drop from 5 per cent to 0.2 per cent in the number of girls who are scared/unwilling to discuss any sexual reproductive health problem with someone else, while almost 80 per cent of the girls in the programme mentioned that they would discuss such issues with their mothers during the midline. Training In light of the vision, the need for adolescents to develop a keen sense of their short- and long-term goals forms an imperative part of the intervention. The two assessments and comparison between treatment and control groups clearly show the greater positive difference in the awareness about the need for training amongst girls in the treatment group. Additionally, the number of girls in the programme who felt that their career choice is their own wish rather than that of a family member or any influential person rose from 59.3 per cent in the baseline to 72.7 per cent in the midline assessment.

96.2

100 90 80

89.2

84.3

79.7

70 60 50 40 30 20 10 0

Baseline

Midline Treatment

Control

Figure 4.6 Female youth interested in training (per cent) Source: Created by the author

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Financial literacy Exploring the awareness levels of the adolescents about banks, savings, etc. forms another key aspect of the programme as it works towards enabling girls to become financially independent. Almost all (96 per cent) the girls in the programme have a bank account, opened with the help of their parents, yet 17.1 per cent of them are unaware about the benefits of having an account while 46.6 per cent of those in the control group were unaware about the same. In the case of the CYLs, all of them have bank accounts and believe it is the best way to save money. However, 14.8 per cent of them are unable to operate their accounts. Most (82.5 per cent) of them feel that they will be financially better off than their parents while almost 26 per cent are currently financially independent.

The Livelihood Programme for female youth This programme comprises the last stage before the young women step into the world of work. It completes the empowerment continuum where youth enhance their employability skills enabling them to be competent individuals on par with others (more privileged) applying for jobs. Almost all (94.2 per cent) of the youth in the programme belong to Scheduled Castes, Scheduled Tribes, and Other Backward Classes with 98.1 per cent of them hailing from families with a monthly income less than INR 5,000, while now 79.1 per cent of the young women earn salaries greater than this amount, with an average of INR 6,500. The young women now earn monthly salaries as high as INR 15,000. Over 10 per cent of them have taken the bold decision to move out of their villages to nearby towns for employment. Another interesting fact is that many of these employed young women have chosen to take up non-traditional roles such as a machine operator, assistant technician, or executive which they might not have considered before.

The community-connect programme The ecosystemic approach has incorporated the need to make the environment aware of and sensitive towards the needs of young girls in order to empower and provide them with access and opportunity to become independent; hence MBIF has worked extensively with the community. This has worked towards ensuring sustainability wherein the youth, the parents, and the village heads have assured the field team of carrying on with the programme even after Uddan has phased out. This level of support and trust has emerged on account of the rigorous home visits, interactions, meetings,

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sessions, tournaments, events, and other community activities that have made each household across the 65 intervention villages not only aware about the programme but also equal participants in its field-level functioning. The following are some of the highlights that emerged from the interactions with various sections of the community: Interactions with the female youth • A consciousness appears to have developed amongst the youth with a drive towards completion of education and attainment of employment • The strong MBIF/TMF employee–youth rapport has helped contribute to raising of issues and resolution of problems at the individual level • Experiences of change within oneself with regard to leadership, communication, and negotiation skills were highlighted Interaction with parents Parents of the adolescent girls formed an important component of the study. It is necessary to ascertain parents’ awareness and views on various dimensions related to their child since it determines the kind of environment a child is exposed to at home. This, in turn, has a direct influence on the child’s educational and social development. • A sense of being equally responsible for the intervention was experienced on account of their engagement with the planning and implementation of various activities and events • An unconventional attitude towards the future of their daughters was observed in terms of education levels where they stressed on girls being financially independent and on par with their male counterparts with regard to their education level, and thus able to make their own choices Interaction with stakeholders •

•

Initial doubts and suspicion about the partners and programme in one’s village was replaced by complete trust in the intervention and its outcomes. The positive differences seen in the girls and the schools have contributed to this change in mindsets. All stakeholders seemed satisfied with the programme and desire to continue with it even when MBIF and TMF phase out the intervention from the community. A total of 45 Sarpanchs have committed to taking up the ownership of this programme in the future.

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Key factors that have contributed to social change The findings of this assessment clearly indicate the enormous amount of change that has occurred at the mid-point of the intervention. The difference seen is evident of the consistent monitoring, reporting, and transparency between the two partners. However, there have been some key factors that have contributed to keeping this project on track steadily moving towards the joint vision. They are as follows: 1 Mutual trust Right from the outset, TMF based the partnership on trust investing all their CSR funds into this one organization having no other major CSR initiative. Additionally, the corporate assured the organization of a total funding for five years which is not normally seen with other corporate donors. Similarly, MBIF placed its faith in TMF by involving the leadership in the entire process of designing the outcome framework, field monitoring, monthly meetings, research tool designing, and other such activities which corporate partners are not normally a part of. 2 Commitment Bringing about positive change on long-term issues cannot be achieved through a quick-fix or band-aid type of project. The leadership team in TMF firmly committed to the cause of Girl Empowerment and was clear from the very start that this initiative would require time, rigour, and dedication. It is with such kind of insight from a partner and a mindset backed by solid commitment and measurable support and actions that have contributed to the success of this intervention. 3 Employee engagement CSR activities are taken very seriously by TMF which ensures that its employees have access to several opportunities to be aware, participate, and engage themselves in their activities. Employees are one of the greatest assets in any organization; in recent times CSR initiatives are gaining ground adding credibility, as potential employees choose to work with corporates whose values resonate with their own. Today, CSR initiatives are set up close to business operations so that employees get opportunities for engagement and service through various activities and events carried out by the organization for the target group. Thus, such systems and processes serve to improve motivation and loyalty and attract and retain talent within the corporate. 4 Equal partnership The partnership between TMF and MBIF is not only a smart one but also one where both form equal participants in this mutual giving and receiving relationship. The partnership focuses on key areas 58

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of impact mutually decided on, which uses creative solutions to achieve the outcomes as laid down in the impact framework. Additionally, it is encouraging results like that of this research study that aim to fulfil the requirements of both sides leading to a win-win situation. 5 Co-interest Since the inception of the project, TMF has involved itself in the ­programming, designing, and planning of the intervention. TMF continues to be stringent in its monitoring and analysis while MBIF remains consistent in its execution, delivery, and documentation. The complementary nature of the partnership, focus on minute details, and actions along with clear and transparent communication have moved towards enriching the programme and contributing to the positive change.

Discussion TMF and MBIF agreed that the intervention will help prevent girls from dropping out of school and getting married early. The approach involves intervening a year before adolescents complete elementary schooling to enable them to aspire higher, complete their education to ensure employment, while in the course of this, delaying the age of marriage. The findings clearly show an improvement in the treatment group as compared to the control under the various domains studied. The reliability and validity of this process have been utmost on account of the rigorous involvement of both the funding and implementation partners. This partnership only demonstrates that a corporate bringing in financial and non-financial support provides the stability and focus required for an organization to work successfully, while the NGO uses this opportunity to execute its multidisciplinary know-how to tackle the social problems in the intervention area, for eventual achievement of project goals and objectives.

Conclusion The execution of this intervention and its positive outcomes so far were possible on account of the long-term support by TMF which only reiterates that a sustained corporate–NGO partnership will help foster stability and quality in any intervention. An important learning during this process was the need to also involve the community stakeholders as part of the designing, planning, and execution of the intervention, which will help elicit their support during the phasing out of the programme and ensure sustainability. 59

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The two assessments conducted so far form part of a series which will attempt to answer the research questions and bring to the fore the impact of such a partnership and the change it brings about on behaviour and structure, as young girls transition into successful women.

Note 1 Keyte and Ridout (2017), 7 Steps to Measuring Social Change, in Focus Enterprises Ltd., United Kingdom.

References Bajpai, G. N. (2001). “Corporate social responsibility in India and Europe: Cross cultural perspective.” Retrieved from http://www.ficci.com, accessed January 12, 2009. Cohen, J. et al. (2005). Helping young children succeed: Strategies to promote early childhood social and emotional development. Washington, DC: National Conference of State Legislatures and Zero to Three. Keyte, T., and Ridout, H. (2017). 7 steps to measuring social change. London: Focus Enterprises Ltd. Siddiq, S., and Javed, S. (2014). “Impact of CSR on organisational performance.” European Journal of Business and Management, 6(27). Retrieved from www.iiste. org. ISSN 2222-1905 (Paper), ISSN 2222-2839 (Online). Wu, S., and Wang, W. (2014). “Impact of CSR perception on brand image, brand attitude and buying willingness: A study of a global café.” International Journal of Marketing Studies, 6(6). ISSN 1918-719X E-ISSN 1918-7203; Canadian Center of Science and Education.

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5 CSR INITIATIVES BY SMALL AND MEDIUM ENTERPRISES IN THE NATIONAL CAPITAL REGION OF INDIA Anita Tripathy Lal

Introduction The UNIDO website defines corporate social responsibility “as a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.” “Over 8,000 large companies complying to Corporate Social Responsibility  (CSR) has been a remarkable policy adoption by the Indian Government” (Jain, 2014). Corporate Social Responsibility became more prominent with the new Companies Act 2013 that mandated CSR spending of 2% of three-year average annual net profits for select companies. The standard of companies having a net profit of INR five crore and above set by the CSR clause in the Companies Act, 2013 makes the Small and Medium Enterprises (SMEs) qualify for the same excluding the micro-enterprises. (Handbook on Corporate Social Responsibility under the Companies Act, 2013) “This move has put India in league with countries like Sweden, Mauritius and Norway who have robust policies on  CSR  for industries” (Pandey, 2017). Employing close to 40% of India’s workforce and contributing 45% to India’s manufacturing output, SMEs play a critical role

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in generating millions of jobs, especially at the low-skill level. The country’s 1.3 million SMEs account for 40% of India’s total exports. (Goyal, 2013) This amendment has not only brought many new companies from the SME sector into the picture of spending on CSR for the first time for creating prospects for building sustainable development solutions but are also aligned with Sustainable Development Goals (SDG), in the areas that have been defined in Schedule VII of Section  135—environment sustainability, skill development, education, art & culture, rural sports, healthcare and sanitation, among others. (Ghosh, 2016a) The  SMEs  need to realize that  CSR  is not just about spending money. It is an “attitude”. The excuse of being small will only prevent the SME from becoming world class. SMEs are equally responsible towards making living conditions better for their employees and their families. What  SMEs  do not realize is that  CSR  is the only way through which the company can achieve a balance of economic, environmental and social goals. (Jain, 2014) According to the available literature, it is obvious that SMEs contribute largely to the “country’s economic growth. That is because these enterprises not only serve independently but are also ancillary to those larger units and hence generate employment and help industrialize the rural and backward regions of India” (Lahoti, 2015). Whereas, CSR as a concept is relatively new in developing countries like India where philanthropy and donations were considered as an extension of the business activity and were not a part of strategy and competitive survival for most business establishments (Tewari and Pathak, 2014). A  lot of SMEs view CSR and philanthropy as being the same. It is also obvious that many of the SMEs are either on the verge of collapse or struggling to establish themselves. They do not have the requisite manpower and resources to resolve these issues and therefore normally try to ignore them (Srinivasan, 2009). At the same time, many primary researchers confirm that if large-scale enterprises have well-formulated CSR policies in their organizational structure, then the SMEs have yet to adopt them formally into their structure and ensure that they reflect the interest of the stakeholders (Mehran and Azlan, 2009). Even Kumar’s (2004) research highlights that as the SMEs are centered around the owners who are the heads, on whose interest the various CSR initiatives depend. In most of the cases, CSR is not a priority because of the

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perpetual problems SMEs have to deal with. Many studies do cite positive views of SMEs having the scope of playing a significant role in shaping society through CSR activities. Jain (2014) in his article emphasizes that SMEs are equally responsible towards making living conditions better for their employees and their families. Since SMEs need to compete with large corporations, CSR adoption is not a choice, and therefore Tewari and Pathak (2014) argue that policy makers should consider and create provisions to support “collective corporate social responsibilities, (CCSR) through which a group of SMEs with similar sustainability needs, support and take up socially responsible activities, as a unit.” Sood (2014) also studied the significant contribution of the SMEs in the Indian economy and to what extent they are socially responsible. He also suggests developing sustainable CSR models to make SMEs compliant towards CSR initiatives. Even the UN through UNIDO continues to articulate very appropriately that A properly implemented  CSR  concept can bring along a variety of competitive advantages, such as enhanced access to capital and markets, increased sales and profits, operational cost savings, improved productivity and quality, efficient human resource base, improved brand image and reputation, enhanced customer loyalty, better decision making and risk management processes. (Jain, 2014) Joshi’s (2018) study aimed at examining CSR compliance by companies in the energy and metal sector under Section 135 of the Companies Act, 2013. Poddar and Narula (2019) in their study validate the organic link that exists between the corporate social responsibility (CSR) activities undertaken by the Indian corporate sector and their alignment with the Sustainable Development Goals (SDGs) from 2014–2016; the period after mandatory CSR came into existence as per Indian Companies Act. Thus, the brief review of the available literature suggests that many CSR-related studies, practices, and sustainable models have been conducted by the government, UN, policy makers, and researchers. At the same time, there has been quite a few research studies on SMEs’ role in CSR and have been posted as articles in various newspapers. Not many in-depth studies on CSR practices by SMEs have been conducted in the National Capital Region (NCR) of India, that is, in and around Delhi. So post the CSR Act (2013), it becomes pertinent to study CSR initiatives by SMEs in the NCR.

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To achieve the purpose of the study, the objectives of this study have been: • To identify the CSR initiatives being taken by SMEs • To assess to what extent the SMEs are being effective in implementing them

Design To carry out the study, data have been collected from both primary and secondary sources. The researcher has resorted to the SMEs in the National Capital Region (NCR) of India and adopted a convenient sampling method along with snowballing technique for the primary data collection. Three industrial estates in Delhi, Gurugram, and Noida were considered. However, there are about more than 1,000 SME owners in the Okhla-Delhi Industrial Area, Noida Industrial Area, and Kadipur Industrial Area Gurgaon. Only 250 responded; out of these, only 108 were ready for an interaction. Thirtysix SMEs from each industrial area were contacted. A structured interview schedule with closed- and open-ended questions were administered to the sample size. Besides this, focus group discussions have been conducted in the three industrial areas of NCR. Secondary data have been culled from various texts, documents, and company websites. Both qualitative and quantitative analyses have been carried out, resulting in the findings and suggestions of the study.

Profile of the SMEs In the last ten years, majority of the manufacturing enterprises have shifted to the outskirts of Delhi. There are only 250 SMEs in Okhla Industrial Area, in Phases 1 and 2 in Delhi. Forty per cent of the SMEs were garment exporters, 35 per cent were small-time manufacturers, and 25 per cent were service industries and other miscellaneous sections. Kadipur Industrial Area in Gurugram has some 338 SMEs, and 65 per cent of them were from manufacturing and exporting. Automobile spare parts and accessories and the rest were into service and other miscellaneous industries. Noida Industrial Area has 314 SMEs; about 80 per cent of them were into electronics and IT industries, and the rest were into service and other miscellaneous industries.

Findings and implications Based on the interactions with the SME owners, many interesting findings have emerged. Studies suggest that only few of the SMEs are doing great work by successfully implementing their initiatives. Some SMEs 64

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have not been successful because various challenges cropped up during the implementation phase. Moreover, most of the SMEs still interpret CSR initiative as charity; however, this isn’t a sustainable model, as such initiatives would suffer at the slightest pressure on the profitability of the enterprise. A recent survey conducted by Avian Media and PHD Chamber, Bolstering MSMEs for Make in India: With Special Emphasis on Corporate Social Responsibility, around the micro, small, and medium enterprises based in Delhi-NCR, has identified various challenges faced by the sector. These include effective management of resources, stringent conditions of raising finance, lack of skilled manpower, lack of technology upgradation, difficulty in procuring raw material from domestic as well as foreign markets, multiple taxes, lack of quality infrastructure, operational challenges and less focus on research and innovation among others. (Ghosh, 2016b) The significant findings and observations in the current study, based on the data collection during the interaction with the SME owners and its analysis, are discussed next. Significant findings and observations recorded while interacting with the SME owners Only 25 per cent of the total SMEs responded to the first round of mails sent regarding CSR activities, out of which around 57 per cent did not meet the profitability required to meet the CSR mandate. So only about 43 per cent were available for interactions where the interview schedule was administered. • While in the field, it was observed that out of the total lot of SME owners who responded, 5 per cent of them did not make profits regularly and were not able to carry out any CSR activities as they considered themselves to be “Hand to Mouth.” In fact, they said, “We do not make enough profits regularly to do Charity.” It became clear that many enterprise owners considered CSR as charity. • 10 per cent of them had no clear idea of the CSR norms and they said, “We want to know what CSR is all about.” • 20 per cent of the SMEs donated regularly to schools and colleges every year and believed that they were doing their share of CSR activities. • 10 per cent of the SME owners said, “We contribute to political parties and Industrial Associations. It is a curse to be an SME Owner.” 65

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• • •

•

•

10 per cent of them have built roads and pavements of their lanes in the respective industrial areas because according to them, “we should also benefit from the community services we do.” 20 per cent of them believed “in doing Langars (Community feeding in a Temple) on a regular basis.” Then there were few like the SME owners who could not enact and follow the CSR Act because every firm owner also had to act upon the GST (Goods and Services Trading) Act as it reflected in the profitability and credibility of their new business norms. About 10 percent of the SME owners moaned that “We were lost in GST.” At the same time, it was interesting to note that about 8 per cent of them blatantly did not believe in the CSR norms and said that “we believe in giving bonus to our people and that is better than doing some charity outside the company.” Last but not the least came a category in which about 7 per cent of the sample size said, “We give them lunch & dinner and what else.” Highlights of the focus group discussions with Okhla Phases 1 and 2–Delhi, Gurgaon, and Noida industrial association officials

The focus group discussions carried out in three different locations at Okhla (Delhi), Gurugram, and Noida with the respective industrial association members in their respective offices confirmed the awareness level of SME owners about the CSR Act. • Majority of the SME owners do not make enough profits to be in the category of carrying out CSR activities as desired by the government. • Most of them are not aware of when and how to implement the CSR Act. • Moreover, after the act, no such drive of follow-up on CSR has been conducted by the government and the then-new government kept on framing new business policies and laws. • Although the industrial association members were aware of the wider implications of the CSR mandate and the benefits it would render towards development of the community and society at large, they did not have the time to make every SME owner in the respective industrial areas practise it. In fact, they were interested and ready to contribute but did not have the time to make people aware and ready to organize CSR training programmes for the SME owners. • These officials also suggested that some NGO or some social enterprise can take up such activities on their behalf as they did not have enough staff to engage or initiate any CSR-led activities.

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•

The members seemed to be aware of the benefits and the implications of the CSR activities. They have even asked for details on the CSR Act to be mailed to them so that they could make a pamphlet and mail it to all the SMEs located in their industrial areas.

Suggestions The main findings depict that, while CSR takes on “an informal, non-­ structured character,” it has been incorporated into the organizational structure of around 40 per cent of the SMEs. Furthermore, contrary to what happens at large companies, CSR at SMEs is fundamentally internally focused and results from attention to the potential benefits to the business from gains in eco-efficiency, a better social climate, or a higher profile in the local community. Hence, the focus could be on the implementation of result-oriented SME-CSR activities which are technically feasible and economically viable. The following two suggestions could work towards gearing up CSR initiatives in the SME cluster in the Indian subcontinent. • Make the SMEs aware of the CSR Act: Here is a scope of various academic institutions and NGOs to take the lead and help the officials of SMEs to understand, appreciate, and eventually get going by carrying out numerous CSR activities. • Collective CSR to make a conducive environment for constructive production: SMEs do have various salient features (Leutkenhorst, 2004) (UNIDO, 2002), as they contribute positively towards employment and generation of income. It has also been reported that economies with large number of SMEs have low economic disparity which renders better social stability. SMEs are a seabed for fostering entrepreneurship both at the rural and urban localities. In every nation, SMEs are the backbone of the most of the Multinationals as they are a part of the Supply value chain; In the field of ICT, SMEs happen to be that in the field of ICT, SMEs are significant source of innovation as their products cater to niche markets; SMEs have lots of problems locally as they are located in clusters, through effective CSR activities can deal with the challenges; As SMEs are not very big, they have various constraints and cannot do many things voluntarily because of lack of resources, hence a law or a statutory mandate or unless they see any clear cut benefit both economically and socially won’t compel or motivate them to adopt CSR strategically. Getting all the SMEs of a cluster in a common platform is a challenge but once they are there, a common strategy for the implementation of CSR initiatives would be successful. This is the main

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point to make them understand the requirement and benefit of the adopting a good CSR strategy. Finally, continuous interaction with the MNCs driving successful CSR initiatives, Public Sectors or UN for that matter could motivate SMEs to meaningfully incorporate and engage in CSR activities. (UNIDO, 2002) Even the latest “CSR amendments under the Companies (Amendment) Act, 2019” in India suggest that Until now, if a company was unable to fully spend its CSR funds in a given year, it could carry the amount forward and spend it in the next fiscal, in addition to the money allotted for that year. The CSR amendments introduced under the Act now require companies to deposit the unspent CSR funds into a fund prescribed under Schedule VII of the Act within the end of the fiscal year. This amount must be utilized within three years from the date of transfer, failing which the fund must be deposited in to one of the specified funds. The new law prescribes for a monetary penalty as well as imprisonment in case of non-compliance. The penalty ranges from INR 50,000 (US $700) to INR 25 lakh (US $35,000) whereas the defaulting officer of the company may be liable to imprisonment for up to three years, or a fine up to INR 5 lakh (US $7,023), or both. The government, however, is reviewing these rules after the industry objected to the strict provisions, especially with respect to the jail terms for CSR violations, and is yet to operationalize them. (Shira and Associates, 2019) The Avian Report (Ghosh, 2016b) also recommends Corporate Social Responsibility as a way to address problems of MSMEs. By contributing CSR monies to these core areas, smallscale enterprises will not only improve the overall business environment, but also ensure better job opportunities, better productivity besides high-quality and sustainable products and services for the end customer, thereby meeting the needs of local and global markets. Tewari and Pathak’s (2014) suggestion on creating provisions to support collective corporate social responsibilities (CCSR) could be adopted by SMEs in the NCR of India and across the country to not to be penalized by the recent CSR amendments under the Companies Act, 2019. The following examples could help to develop the area and also enhance the credibility of the SMEs.

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Examples and scope of carrying out collaborative practices for CSR initiatives in Okhla-Delhi, Gurugram, and Noida industrial areas • • • • • • • • • •

Awareness training programmes on CSR for the SME owners Doing a makeover of the government schools in the area Providing drinking water Availability of health centres and dispensaries Rehabilitating nearby slums where the SME labourers reside Crèche and pre-school services for the children of SME labourers Reorganizing adult education and informal education for the labourers Skill development training for youth and women Waste management centre Rebuilding roads, sidewalks, and service lanes of the industrial areas

Even Poddar and Narula (2019) in their study have identified critical areas pertaining to SDG goals neglected by corporate sector as far as CSR investments are concerned. It has further confirmed that more CSR investments must be drawn towards climate change, biodiversity, Sustainable consumption and production, marine life and conserving flora and fauna. The sectoral analysis reveals that the companies falling under sectors that have a higher environmental footprint and impact are more concerned about taking up initiatives through CSR. The geographic analysis revealed that efforts need to be made to increase CSR expenditure in seven north-eastern states, Jammu and Kashmir, and Union Territories.

Conclusion The study further validates the findings and concludes with various suggestions to recognize CSR as a responsibility to society, and how SMEs should meaningfully interweave CSR initiatives with their organizational goals and implement the planned initiatives, which would result in the holistic development of the society at large. The various yearly CSR activities can further be tracked and monitored diligently by the company itself and this would help them to achieve the community goals. Joshi’s (2018) study further confirms how the energy sector companies had significantly improved in compliance with CSR initiatives in 2017 compared to 2015 by adopting health and education sectors as the primary areas of CSR spending followed by rural development.

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Today as one moves ahead in the twenty-first century, one is hopeful that, India, can achieve its dreams, and turn its burgeoning young population into an asset only if each company big or small takes on responsibility for social, educational and environmental upliftment at large. This will go a long way in creating harmony between workers and the management, while at the same time addressing the expectations of all stakeholders in business. Overall, the process of enhancing associations between large enterprises and SMEs will generate the desired results in the direction of making the initiative in India a great success while addressing at least some of the concerns faced by MSMEs today. This will only be a win-win situation, anyways that we look at it. (Ghosh, 2016a) Taking into account the recent amendments to CSR provisions, industry research estimates CSR compliance to improve and range between 97 and 98 per cent by FY 2019–2020 (Shira and Associates, 2019).

References Ghosh, S. (2016a). Channelizing CSR funds to the growth of micro, small and medium scale enterprises. Retrieved from www.businesstoday.in/opinion/columns/ channelising-csr-funds-micro-small-and-medium-scale-enterprises/story/231280. html Ghosh, S. (2016b). Right aligning CSR funds for growth of MSMEs. Retrieved from www.businessworld.in/article/Right-Aligning-CSR-Funds-For-Growth-OfMSMEs/29-08-2016-104979/ Goyal, M. (2013). ET bureau. Retrieved from from//economictimes.indiatimes. com/articleshow/20496337.cms?utm_source=contentofinterest&utm_medium= text&utm_campaign=cppst Handbook on Corporate Social Responsibility under the Companies Act (2013). Retrieved from www.pwc.in/assets/pdfs/publications/2013/handbook-on-corpo rate-social-responsibility-in-india.pdf Jain, S. (2014). CSR: An equal responsibility of SMEs. India CSR Network. Retrieved from https://indiacsr.in/csr-an-equal-responsibility-of-smes/ Joshi, G. S. (2018). “A study of corporate social responsibility reporting in India.” Journal of Management (JOM), 5(6), 129–136. Retrieved from www.iaeme.com/ MasterAdmin/uploadfolder/JOM_05_06_018/JOM_05_06_018.pdf Kumar, R. (2004). Acknowledging progress, prioritizing action. The State of CSR in India 2004, National Seminar on Corporate Social Responsibility. Retrieved from www.terieurope.org/docs/csr_state.pdf. 15. Lahoti, Y. (2015). Corporate social responsibility by SMEs. Retrieved from https:// blog.ipleaders.in/corporate-social-responsibility-smes/

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Leutkenhorst (2004). “Corporate Social Responsibility and the development agenda: The case for actively involving small and medium enterprises.” Inter Economics, May/June, 17. Mehran, N., and Azlan, A. (2009). “Corporate social responsibility and SMEs: Exploratory study on motivations from a Malaysian perspective.” Business Strategy Series, 10(5), 259–265. https://doi.org/10.1108/17515630910989150. Pandey, A. (2017). Corporate social responsibility—An overview for companies to opt for effective framework. Retrieved from https://blog.ipleaders.in/ corporate-social-responsibility-3/ Poddar, A., and Narula, S. A. (2019). “A  study of corporate social responsibility practices of the top Bombay Stock Exchange 500 companies in India and their alignment with the Sustainable Development Goals.” Corporate Social Responsibility and Environmental Management, 26(6). Retrieved from https://onlineli brary.wiley.com/doi/10.1002/csr.1741 Shira, D., and Associates (2019). “Corporate social responsibility in India.” Posted by India Briefing. Retrieved from www.india-briefing.com/news/corporate-socialresponsibility-india-5511.html/ Sood, M. (2014). “Corporate social responsibility and the role of SME’s in India.” International Journal of Latest Trends in Engineering and Technology (IJLTET), 5(1). Retrieved from https://www.ijltet.org/wp-content/uploads/2015/01/40.pdf Srinivasan, V. (2009). “CSR and ethics in MSMEs in India.” African Journal of Business Ethics. Retrieved from ajobe.journals.ac.za/pub/article/view File/69/80 Tewari, R., and Pathak, T. (2014). “Sustainable CSR for micro, small and medium enterprises.” Journal of Management & Public Policy, 6(1). Retrieved from http:// jmpp.in/wp-content/uploads/2016/01/Ruchi-Tewari-Taral-Pathak.pdf UNIDO Report (2002). Corporate social responsibility implication for small and medium enterprises in developing countries. Retrieved from https://open. unido.org/api/documents/4692413/download/CORPORATE%20SOCIAL%20 RESPONSIBILITY%20

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6 REGULATING THE INVISIBLE HAND Mandatory CSR in Mauritius Jyoti Devi Mahadeo

Introduction Should a company be called a responsible “corporate citizen,” even in cases when the responsibility goals of that company are solely self-serving and not aligned with those of the society in which it operates? A corporation is characterized as a good citizen when it abides by the laws of the country in which it operates (Diaz, 2011) while remaining socially responsible (Murphy, 2009). While the notion of corporate social responsibility (CSR) as a purely voluntary activity holds for developed nations, it does not fit with the realities of emerging ones. As Jamali and Mirshak (2007) point out, CSR initiatives that produced successful results for developed countries have not done so for developing countries. The challenges experienced by governments of developing nations to improve the overall welfare state of their countries render the case for mandatory CSR contributions even more concrete, as without the concerted contribution of the private sector it can be argued that it would be hard to raise and maintain a decent level of socio-economic welfare. As a result, we argue that, in the instance of developing countries, there is a strong case to regulate CSR contributions. Our claim is supported by the evolution of the definition of CSR by the European Commission (EC). The first definition of CSR by the EC was “a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with stakeholders on a voluntary basis” (EU Commission, 2001). Over time, corporate governance became a crucial denominator requiring a dialogue with stakeholders and as expected, CSR became the most appropriate vehicle to ensure this dialogue. Hence, governments began to encourage CSR goals in the form of established policy tools that align with sustainable development and improved governance. As a result, in 2011, the EC revised its CSR definition 72

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and adopted an expansive view and redefined CSR as “the responsibility of enterprises for their impacts on society” (EU Commission, 2001), thus eliminating the emphasis on voluntariness. Mauritius, a small island emerging nation, is one of the pioneers of “mandatory CSR” in the form of a CSR levy. This novel legislation has gained ground amongst other developing nations, namely, India and the Seychelles. While in the case of Mauritius, the CSR law has taken the shape of a tax law, in India it was adopted as a corporate law. The main difference lies in the fact that the regulation is more stringent in Mauritius while in India, company directors can still justify non-compliance if they provide a valid reason. Given that it is now a decade since the implementation of this bold move in Mauritius, we believe that its raison d’être has been accepted. The “policy incubation” stage (Polsby, 1985) has passed; specifically, it is believed that all actors concerned have had ample time to adopt, shape, and reshape it to place it in its current ethos. Thus, the aims of this study are to understand the implementation challenges met by the government to implement the levy and make a case for “mandatory” CSR by mapping it on the classic Carroll’s CSR framework and the more recent “Institutional theory,” and construct five propositions to support our argument in favour of mandatory CSR for developing nations.

Mandatory CSR in Mauritius CSR levy Mauritius applies a version of the free market economy as its economic model, whereby the state establishes the rules and makes available the physical and social infrastructure whilst the private sector is responsible for wealth creation and employment. Thus, the government and private sector have always worked together for the overall welfare of the country. Of the few CSR studies carried out on the island of Mauritius (Bissoon, 2018; Kinderman, 2016; Ramdhony, 2015; Pillay, 2015; Ramdhony and OogarahHanuman, 2012; Mahadeo et  al., 2011), we gather that the government started to pay increased attention to CSR matters with the advent of the first code of corporate governance in 2004 (NCCG, 2004), as one expectation of the code was that companies disclosed “policies and practices as regards social, ethical, safety, health, and environmental issues” (NCCG, 2004: 116). This emphasis on stakeholder orientation was further emphasized in the second version of the code of corporate governance in 2016. Although the recent CG code kept to the initial areas of reporting under “Principle 6: Reporting with Integrity” (NCCG, 2016: 30), namely, health and safety, the environment, social issues, CSR, charitable and political donations, and governance, it extended this section to include a narrative 73

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section comprising six key elements, namely, an organizational review, an external overview, the business model, risks, key performance indicators, performance and outlook, and sustainable development. Additionally, the new code extended its position on CSR-related matters to include an additional “Principle 8: Relations with Shareholders and Other Stakeholders,” which specifically requires that [t]he Board should be responsible for ensuring that an appropriate dialogue takes place among the organisation, its shareholders and other key stakeholders. The board should respect the interests of its shareholders and other key stakeholders within the context of its fundamental purpose. In 2007, following pre-budget discussions with representatives of the private sector, a voluntary contribution of 1 per cent of profit towards CSR was proposed in the budget of 2007–2008. However, partly due to noncompliance, a mandatory 2 per cent CSR levy was imposed the following year. Ten priority and intervention areas were identified: Socio-economic development as a means of poverty alleviation; educational support and training; social housing; supporting persons with disabilities; dealing with health problems; family protection, including gender-based violence; leisure and sports; environmental and sustainable development; peace and nationbuilding; and road safety and security. Predictably, the implementation of the guidelines has not been smooth as evidenced by pre-budget consultations between the government, private sector, and civil society representatives (Mauritius Employers Federation, 2011; Ragodoo, 2013; Pillay, 2015; Ah-Hen, 2016; Sannassee et al., 2017). Some challenges met were that several companies had to have recourse to the least preferred option of remitting their 2 per cent contribution to the Mauritius Revenue Authority; the difficulty of accessing the CSR funds by deserving NGOs and civil society organizations, due to the mushrooming of shady organizations; a diversion from the intended objectives of the levy; and the lack of monitoring and evaluation of CSR programmes (Budget speech 2015–2016). Past challenges tended to exist at the informal institutional level; for example, 1 the wild proliferation of shady NGOs when the law first came into force confounded the allocation tasks of the authorities, and 2 more formally, the Mauritius Employers’ Federation (MEF) carried out a survey that forcefully opposed the new legislation, claiming that this governmental tactic on CSR defies classic CSR definitions, which included the element of voluntariness. Moreover, the MEF stated in the same report that the position of the federation vis-a-vis the then newly introduced legislation remains strong. “CSR is voluntary and cannot be governed

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by legislation” (MEF, 2011: 4). However, Pillay (2015) contradicts the reported situation in her book where she stated, “the private sector has taken on board the initiative of the government quite well” (Pillay, 2015: 253). Consequently, in Mauritius, she affirmed “CSR has become firmly entrenched as a development strategy within a broadly neoliberal worldview” (Pillay, 2015: 262). This led Kinderman (2016) to question the veracity of the prevailing situation, that is, the reason that has assuaged business owners and he concluded that this was “due to the major corporate tax cut, which was implemented in conjunction with the CSR mandate there” (Kinderman, 2016: 40). In his six-country study (Mauritius, India, Indonesia, the US, South Africa, and the UK), he classified Mauritius as the country with the most “stringent regulation” and consequently the “strongest business opposition” while the UK was categorized as the “least stringent regulation” and “weakest business opposition” amongst the six nations (Kinderman, 2016). As a solution to the first problem, the government instituted the National CSR (NCSR) foundation in 2016 under the Foundations Act, 2012, under the patronage of the Ministry of Social Integration and Economic Empowerment. The NCSR Foundation is governed by a council made up of representatives coming from the three main sectors: Public, private, and civil society. The foundation’s latest annual report (2017–2018) reveals four strategic goals (G1: Ensure effectiveness of programmes and projects; G2: Promote stakeholder collaboration and coordination; G3: Empower NGOs to improve the impact and efficiency of their actions on the ground; G4: Build and uphold a principled, professional, and servicedriven organization culture and reputation), and seven key drivers (K1: Impactful programmes; K2: Evidence-based approach; K3: Effective coordination; K4: Strong image and reputation; K5: Positive stakeholder relationships; K6: Guidance and capacity building; and K7: Organizational efficiency). We interpret the timeline (see Appendix A) based on the notion of time (Bansal and DesJardine, 2014), thus revealing the ten national priorities have remained almost the same, albeit for small adjustments. But what persisted as a major issue was the implementation guidelines. The timeline reveals that, through the ten years, several governments have been in power (Labour Party and Militant Socialist Movement), none has been able to do away with the levy though the guidelines were removed in 2015, and companies were free to allocate the CSR funds as they chose to. However, the guidelines were reinstated in 2016. Hence, it is critical to find a sustainable solution that makes intertemporal trade-offs between long-term and short-term implementation issues. We, therefore, argue that “time” should remain central to any attempt to find a solution to the implementation problems.

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Overview CSR in developing countries Various studies on CSR in developing nations have argued that CSR initiatives that have produced favourable results for developed countries have not had similar successful outcomes for developing nations (Belal, 2001; Jamali and Mirshak, 2007). They ascribe the main grounds as being the weak drivers for CSR adoption, inadequate support for CSR, poor regulatory environment, and existing macroeconomic constraints contributing to deflect the attention of companies towards issues of basic economic viability. In addition, the need for CSR is manifest in developing countries due to the gaps in social provision and governance. As a result of this situation, companies are under increased obligations to fill those gaps (Baughn et al., 2007). This is substantiated by the study of Jamali (2007) who argues in favour of carrying out strategic CSR in developing countries, which will serve the dual purpose of achieving business success and social benefits. However, this view is not shared by Jones (1997), who describes strategic philanthropy as self-serving and insincere. Our study supports the stance that for the overall good of ­societies of developing nations, the state is in the best position to steer CSR contributions made by companies towards national priorities. CSR frameworks—Carroll’s pyramid Economic Carroll’s CSR pyramid (1991) (see Figure  6.1) has been one of the most popular tools used to depict CSR implementation in developing countries (Jamali, 2007; Visser, 2006; Shum and Yam, 2011; Dobers and Halme, 2009). Carroll (2016) forewarns that the four foundation stones of CSR dimensions (economic, legal, ethical, and philanthropic) of the pyramid are not mutually exclusive and managers remain constantly under pressure to reach equilibrium amongst these dissimilar types of obligations. Carroll stressed an instance (2016), when he explains that the “ethics” dimension permeates the whole pyramid. CSR as a management strategy has become commonplace, formalized, integrated, and deeply assimilated into organizational structures, policies, and practices. Primarily, via the “business case” reasoning, that is, “the idea of doing well by doing good,” CSR has quickly been adopted as a beneficial practice by both private companies and society (Carroll, 2016).

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PHILANTHROPIC Responsibilities

Be a good corporate citizen. Contribute resources to the community; improve quality of life. ETHICAL

Responsibilities Be ethical. Obligation to do what is right, just and, fair. Avoid harm. LEGAL Responsibilities

Obey the law. Law is society’s codification of right and wrong. Play by the rules of the game. ECONOMIC Responsibilities

Be pro itable. The foundation upon which all others rest.

Figure 6.1 The pyramid of corporate social responsibility Source: Adapted from Carroll, A. B. 1991, published in Business Horizons, p. 42

Legal In addition to endorsing businesses as economic entities, society has instituted the peripheral ground rules under which businesses are presumed to perform and function. As such, businesses are required to function within these set laws and regulations. Concisely, companies should be operating in a fashion that is in harmony with the government and law by, amongst others, abiding with local and international regulations, that is, acting as law-abiding corporate citizens, satisfying their legal obligations to societal stakeholders, and making available goods and services that meet minimum legal standards (Carroll, 1991). For instance, the

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company may not engage in child labour (ILO, 2015), that is, employing someone below 16 years old, the minimum legal age in Mauritius (www. dol.gov.org). Ethical Ethical considerations have gained prominence in the CSR sphere, in that companies are expected to operate in a steady fashion in congruence with societal mores and ethical expectations. They must be considerate to develop ethical/moral norms adopted by society as they evolve. Companies must ensure that norms of ethics are not conceded to gain business success. As a good corporate citizen, the company must always undertake what is expected morally and ethically. As such, business integrity and ethical behaviour go well beyond mere compliance with laws and regulations (Carroll, 1991). Philanthropic Corporate philanthropy is presumed to progressively shape the administering of company performance, because it helps it acquire socio-political legitimacy, which in turn allows it to draw positive stakeholder responses to achieve political access (Wang and Qian, 2011) with the various institutions. We concur with Visser (2011) that traditionally CSR has been equated with philanthropy in Africa. However, this is rapidly changing for some countries as is the case in Mauritius. Since philanthropy is seen as being essentially voluntary and companies have a moral contract with the society in which it operates in at a given point in time (Carroll, 1979), then there should not be any difference in the philanthropic priorities and the national priorities identified by the government. Until now, Carroll’s framework was tested solely in environments where “voluntary CSR” prevails. We now attempt to test the framework in “mandatory CSR” contributions in the context of developing nations. The previous sections have investigated the four building blocks of CSR, exemplified by Carroll’s pyramid. We now turn to the institutions responsible to ensure these four necessary blocks are catered for, that is, the funds are being effectively allocated. To do this, we now turn to the institutional theory. Institutional theory North (1991) described “institutions” as humanly devised constraints to shape political, economic, and social relations. They exist as both informal and formal restrictions. Informal constraints often take the form of customs, traditions, and codes while formal restrictions take the shape of 78

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constitutions, laws, and rights. Throughout history, both types of institutions have coexisted in society to maintain order and minimize uncertainty. The last two decades have witnessed an avalanche of interest in institutional theory, and researchers (Brammer et al., 2012) have concurred that it is not mere coincidence. One particular instance is what happens when CSR is removed from the scope of being exclusively voluntary and is used to successfully govern the economic development of developing countries. The “institutional theory” addresses the deeper and more resilient aspects of social structure. It considers the development through which structures, including schemas, rules, norms, and routines are converted as authoritative guidelines for social behaviour. In addition, it questions how these elements evolve over space and time, and how they fall into decline and disuse. Although the alleged focus is to even out social life, institutionalists have aspired not just for compliance but for opposition to change in social structures (Scott, 2004); this is akin to the decision taken by the government by removing CSR.

Role of governments and other institutions in CSR The last two decades have witnessed an increase in government collaborations with other stakeholders in taking up driver roles in CSR (Moon, 2004; Albareda et al., 2008). The UN Global Compact and European Commission were amongst the first international organizations to promote and endorse the CSR concept and to acknowledge the role of public administration and public policy initiatives in ensuring the growing significance of CSR. Existing literature reveals that the role of governments and CSR can be divided into two categories: (a) the link between CSR public policies and social and environmental challenges caused by trans-nationalization of businesses (for example, Schneider and Scherer, 2015), and (b) political initiatives developed, and roles adopted, by governments, in the promotion of political frameworks and implementation of those public policies (Albareda et al., 2008; Gond et al., 2011). The current study will concentrate on the latter role of governments. In 2001, Zadek pioneered the identification of government roles. He justified the incorporation of governments in the CSR framework and defined this stage as the third CSR generation, that is, the fundamental role played by the government in promoting CSR (Zadek, 2001). Since then, there has been a continuous debate on the issue of governments enacting laws to make CSR mandatory. In a World Bank report, Fox et al. (2002) classified governmental roles into four main categories: (a) mandating, (b) facilitating, (c) partnering, and (d) endorsing. Recent studies have resulted in the following findings: For example, the study of Aluko and Beddewela (2016), drawn on governmentality in developing countries, has supported the fact that government interventions in CSR initiatives can provide guidance to CSR directions amongst businesses through non-regulatory means. In addition, the investigation of Chan and colleagues 79

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(2016) demonstrates that the economic viability of sustainable social change necessitates cross-sectoral convergence between CSR-mainstreaming business strategy and market transformation and actions by not-for-profit actors and the government. We make the following five propositions, based on our appraisals of the two complementary and robust models (Carroll’s CSR framework and the institutional theory). The state has acknowledged the need for successful companies (for a list of contributing companies on the MRA webpage) to invest in CSR, since their success should be attributed to the society, they have been operating in. In this respect, the government of Mauritius saw the need to concretize this relationship: By requiring only profitable companies to pay the 2 per cent levy, it validates the importance of the “economic” success of the contributing company. In cases where companies have been making substantial donations for a cause that is not a national priority any more, they can carry on doing so, if they wish to, with the remaining 98 per cent of profit as long as the company donates 2 per cent to the current national priorities (which might have evolved by then). Our first proposition derives from Carroll’s model, that is, mandatory CSR contributions should target financially sound companies only. We are of the view that only financially healthy companies should be targeted for this new obligation, since it is vital that economic soundness in both the short and long term are considered. Proposition 1: Companies will be incentivized to behave in socially responsible ways if they are sufficiently financially strong, that is, they are making an adequate surplus to meet their immediate and future financial obligations. Our second proposition is a derivation of a combination of the legal dimension of Carroll’s legal framework and institutional theory. Companies will be boosted to adopt socially responsible ways when the regulations are made clear to them and they were part of its design and re-design. Up to now, the fuzzy state of the guidelines has been the major cause of non-compliance (Cominetti and Seele, 2016). This was predictable as previously mentioned, since the government chose to implement a paradoxical version of a CSR model. Proposition 2: Companies will be incentivized to behave in socially responsible ways if there are both soft and hard laws to warrant such behaviour. The remaining three propositions stem solely from institutional theory. The third proposition is a reflection on the importance of collaboration amongst various institutions when establishing laws which affect companies and the society in which they evolve. It makes a case of the necessity to raise the awareness of various institutions on the need to obtain feedback on how companies and NGOs/NPOs are solving (or not) the ten priority areas and propose solutions where they see deviations from intended goals to cope with both the short-term and long-term challenges. 80

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Proposition 3: Companies will be more likely to be incentivized to behave in socially responsible ways if there are independent institutions, including NGOs and NPOs who continuously monitor their progress. Companies are compelled implicitly to adopt good policies when they participate in competitions, such as the PwC Mauritius Corporate Reporting Awards organized by PwC for the last 20 years. Participation includes training provided by PwC staff to participating companies that ensures, amongst other things, that companies are cognizant of all 17 sustainable development goals (www.pwc.com/mu/en.html). When future managers are sensitized that successful economic activity is dependent on the success of the society in which they operate, they will be more inclined to provide help to those around them. They should be taught about the knock-on effect that their involvement in society will have on the future of their companies. The fourth proposition regards the promotion of the need of the new legislation, for instance, to introduce its importance in the curricula of MBA and related areas of studies (such as law schools, schools of science and technology, etc.) and/or courses run by the Institute of Directors. Students should be trained, through local and international cases, to work out both short- and long-term solutions. Proposition 4: Companies will be incentivized to behave in socially responsible ways if they function in an environment where such behaviour is the norm. A company with improper employment practices—for example, the treatment of Bangladeshi employees by textile companies (Ackbarally, 2019)— that are loathed by employees may not face the adverse consequences of its actions, if the jobs are crucial to the well-being of the local community and those employees have no other choices. Rigidly then, the firm could be perceived as contributing value if it is making available the best jobs for those who need them. The question is how firms construe this lack of resistance towards their actions. Do they understand this behaviour as an invite to preserve the status quo without consideration for any enduring misgivings? The rationale of a business is value creation for its stakeholders (Freeman,1970); hence, in a market system, its stakeholders are responsible for defining what value looks like in practice. In dire cases, governmental interventions are required. It is vital to underpin that all stakeholders, not only consumers, have influence over the firm and they must act. As an example, the role of the media plays a significant oversight. An infamous example is that of US regulators taking actions that exposed the attempts by Volkswagen to cheat emission-testing apparatus. This establishes what is possible when stakeholders act to determine the behaviour they require from corporations. Initially, the executives of VW informed Environmental Protection Agency (EPA) officers “for over a year” that their company’s cars, which passed emission checks but caused pollution while being driven, was because of a “technical error” rather than intentional manipulation. They confessed the 81

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truth only “when the EPA took the extraordinary action of threatening to withhold approval for the company’s 2016 Volkswagen” (Muller, 2015). The role of major stakeholders (employees, trade unions, and the community at large) are a sine qua non, as they are the real interface between CSR contributors and their CSR recipients. Thus, our fifth and last proposition is about a call to “bring together” stakeholders formally through regular workshops and brainstorming sessions to make sense of the past situation and make viable propositions in the future. Proposition 5: Companies will be more likely to be incentivized to behave in socially responsible ways if they are kept involved in institutionalized discussions with employees, trade unions, and the community.

Conclusion In sum, our theoretical contribution is two-fold: We critiqued and validated Carroll’s CSR framework and “institutional theory,” and based on the evaluation, we formulated five propositions. Future research could substantiate our propositions and make recommendations on the best way forward by devising survey instruments (interviews and/or questionnaires) based on our five propositions to obtain the perceptions of various stakeholders (employees, consumers, NGOs, private sector representatives, government officials, international experts, etc.) and delve into the abstract world of informal institutions and how they guide policy implementation in the developing world.

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Figure 6.2 Evolution of the CSR levy Source: Adapted from Ah-Hen, 2016

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References Ackbarally, N. (2019). Migration and refugees. Retrieved from www.ipsnews. net/2016/08/migrant-labour-fuels-tensions-in-mauritius/, accessed October  28, 2019. Ah-Hen, C. (2016). Mauritius CSR - a supplement to social protection system. Paper presented at the ASPEN and FES International Conference, Johannesburg, October. Albareda, L., Lozano, J. M., Tencati, A., Midttun, A., and Perrini, F. (2008). “The changing role of governments in corporate social responsibility: Drivers and responses.” Business Ethics: A European Review, 17(4), 347–363. Aluko, O., and Beddewela, E. (2016). “Governmentality and CSR: Exploring Governments Soft Power in CSR.” Academy of Management Proceedings, 2016(1), 16406, January. Academy of Management. Bansal, P., and DesJardine, M. R. (2014). “Business sustainability: It is about time.” Strategic Organization, 12(1), 70–78. Baughn, C. C., Bodie, N. L. D., and McIntosh, J. C. (2007). “Corporate social and environmental responsibility in Asian countries and other geographical regions.” Corporate Social Responsibility and Environmental Management, 14(4), 189–205. Belal, A. R. (2001). “A study of corporate social disclosures in Bangladesh.” Managerial Auditing Journal, 16(5), 274–289. Bissoon, O. (2018). “Corporate social responsibility in Mauritius: An analysis of annual reports of multinational hotel groups.” Asian Journal of Sustainability and Social Responsibility, 3(1), 1–19. Brammer, S., Jackson, G., and Matten, D. (2012). “Corporate social responsibility and institutional theory: New perspectives on private governance.”  Socioeconomic Review, 10(1), 3–28. Carroll, A. B. (1979). “A three-dimensional conceptual model of corporate social performance.” Academy of Management Review, 4, 497–505. Carroll, A. B. (1991). “The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders.” Business Horizons, 34(4), 39–48. Carroll, A. B. (2016). “Carroll’s pyramid of CSR: Taking another look.” International Journal of Corporate Social Responsibility, 1(1), 3. Chan, D., Struben, J., and Dube, L. (2016). “CSR-Mainstreamed innovation: Market transformation for scaled solutions to socio-economic inequity.” Academy of Management Proceedings, 2016(1), 17906, January. Academy of Management. Cominetti, M., and Seele, P. (2016). “Hard soft law or soft hard law? A  content analysis of CSR guidelines typologized along hybrid legal status.” Environmental Economy Forum, 24(2–3), 127–140. Diaz, C. G. (2011). “Corporate culpability as a limit to the over criminalization of corporate criminal liability: The interplay between self-regulation, corporate compliance and corporate citizenship.” New Criminal Law Review, 14, 78–96. Dobers, P., and Halme, M. (2009). “Corporate social responsibility and developing countries.”  Corporate Social Responsibility and Environmental Management, 16(5), 237–249. EU Commission (2001). “Green paper – Promoting a European framework for corporate social responsibility. ” COM, 366.

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Fox, T., Ward, H., and Howard, B. (2002). Public sector roles in strengthening corporate social responsibility: A baseline study. Washington, DC: World Bank. Freeman, M. (1970). “The social responsibility of business is to increase its profits.” New York Times Magazine, September 13, 32–33, 122, 126. Gond, J. P., Kang, N., and Moon, J. (2011). “The government of self-regulation: On the comparative dynamics of corporate social responsibility.” Economy and Society, 40(4), 640–671. ILO (2015). World economic and social outlook 2015. Geneva: International Labour Office. Jamali, D. (2007). “The case for strategic corporate social responsibility in developing countries.” Business and Society Review, 112(1), 1–27. Jamali, D., and Mirshak, R. (2007). “Corporate social responsibility (CSR): Theory and practice in a developing country context.” Journal of Business Ethics, 72(3), 243–262. Jones, D. (1997). “Good works, good business.” USA Today, April 25, 1B–2B. Kinderman, D. (2016). “Time for a reality check: Is business willing to support a smart mix of complementary regulation in private governance?” Policy and Society, 35(1), 29–42. Mahadeo, J. D., Oogarah-Hanuman, V., and Soobaroyen, T. (2011, September). “Changes in social and environmental reporting practices in an emerging economy (2004–2007): Exploring the relevance of stakeholder and legitimacy theories.” Accounting Forum, 35(3), 158–175. Mauritius Employers Federation (MEF) (2011). Survey report on the practical implementation of CSR under the new legislation. Mauritius Employers Federation. Port-Louis. Moon, J. A. (2004). A handbook of reflective and experiential learning: Theory and practice. London: Routledge. Muller, J. (2015). “VW’s $7  billion screw-up: A  lesson in how to destroy a brand.” Forbes, September  22. www.forbes.com/sites/joanmuller/2015/09/22/ vws-7-billion-screw-up-a-lesson-in-how-to-destroy-a-brand/ Murphy, M. E. (2009). “Restoring trust in corporate America: Toward a republican theory of corporate legitimacy.” New York University Journal of Law and Business, 5(2), 415–484. National CSR Foundation (2017/2018). Annual report 2017/2018. Port Louis, Mauritius. National Committee on Corporate Governance (NCCG) (2004). Report and code on corporate governance for Mauritius. Ministry of Finance and Economic Development. Port Louis, Mauritius. National Committee on Corporate Governance (NCCG) (2016). http://www.miod. mu/info-centre/new-code-of-corporate-governance-for-mauritius-2016, Accessed on April 2, 2021. North, D. C. (1991). “Institutions.”  Journal of Economic Perspectives,  5(1), 97–112. Pillay, R. (2015). The changing nature of corporate social responsibility: CSR and development–the case of Mauritius. London: Routledge. Polsby, N. W. (1985). Political innovation in America: The politics of policy initiation. New Haven & London: Yale University Press.

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Ragodoo, N. (2013). “Mandatory CSR.” In Encyclopaedia of corporate social responsibility, 1625–1630. Berlin-Heidelberg: Springer. Ramdhony, D. (2015). “Corporate social reporting by Mauritian banks.” International Journal of Accounting and Financial Reporting, 5(2), 56–73. Ramdhony, D., and Oogarah-Hanuman, V. (2012). “Improving CSR reporting in Mauritius-accountants’ perspectives.” World Journal of Social Sciences,  2(4), 195–207. Sannassee, R. V, Soobaroyen, T., and Pariag-Maraye, N. (2017). “The accountability and management control of CSR foundations (CSRFs) in Mauritius.” CIMA Research Executive Summary, 13(4). Schneider, A., and Scherer, A. G. (2015). “Corporate governance in a risk society.” Journal of Business Ethics, 126(2), 309–323. Scott, W. R. (2004). “Institutional theory.”  Encyclopaedia of Social Theory,  11, 408–414. Shum, P. K., and Yam, S. L. (2011). “Ethics and law: Guiding the invisible hand to correct corporate social responsibility externalities.” Journal of Business Ethics, 98(4), 549–571. Visser, W. (2006). “Revisiting Carroll’s CSR pyramid.”  Corporate Citizenship in Developing Countries, 29–56. Visser, W. (2011). The age of responsibility: CSR 2.0 and the new DNA of business. John Wiley & Sons. Chichester: United Kingdom. Wang, H., and Qian, C. (2011). “Corporate philanthropy and corporate financial performance: The roles of stakeholder response and political access.” Academy of Management Journal, 54(6), 1159–1181. Zadek, S. (2001). Third generation corporate citizenship. London: The Foreign Policy Centre & Accountability.

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7 THE OBLIGATION VERSUS OPPORTUNITY FRAMEWORK FOR CORPORATE SOCIAL RESPONSIBILITY IMPLEMENTATION Aashna Sharma and Gurparkash Singh

Introduction Corporate social responsibility (CSR) has grown significantly as a discipline and is still evolving in its understanding and interpretation. CSR practice is an ongoing commitment of business to behave ethically, contribute towards sustainable economic development, and enhance the quality of life of various stakeholders. The meaning of CSR as a global practice stresses that since businesses operate in a society and use natural resources, it is their responsibility to contribute positively towards society and be accountable for the sustainable use of resources (Holme and Watts, 2000). CSR, can therefore, be used by businesses to build their image, satisfy concerned and aware customers, and ultimately contribute positively towards all the stakeholders. CSR and sustainability are not only relevant for maintaining public relations or philanthropic activities, but they can be strategic initiatives for carefully aligning core business functions and social responsibility (Orlitzky et al., 2011). Thus, it is critical for businesses to engage in activities that are beyond the interest of the business and create shared value for both business and society (Porter and Kramer, 2006). Given the global importance of CSR practice, it is essential to understand CSR and how it can be leveraged by businesses. According to Carroll (1994: 14), CSR as a practice is “an eclectic field with loose boundaries, multiple memberships, and differing training/perspectives; broadly rather than focused, multidisciplinary; wide breadth; brings in a wider range of literature; and interdisciplinary.” Given the interdisciplinary nature of CSR, researchers and practitioners have developed various theoretical and 87

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conceptual models of CSR practice (Geva, 2008). However, there is little consensus amongst researchers and practitioners regarding how CSR practice is understood and its relationship with sustainability in terms of the strategic intent of a business (Porter and Kramer, 2006; PwC, 2013). Several studies suggest the need for providing practical insights on how CSR can be implemented strategically (Garriga and Mele, 2004; McWilliams et al., 2006). It is widely accepted that the understanding of CSR is theoretical in nature. More specifically, the focus is on “what to do” rather than “how to” implement CSR (Aguinis and Glavas, 2012). Another shortcoming in CSR literature is the lack of awareness of individual contributions to CSR outcomes (Orlitzky et al., 2011). In India, CSR is mandatory under the Companies Act 2013 (PwC, 2013), which makes Indian CSR context globally relevant as few countries have chosen to legally mandate CSR as part of business practice. However, the mandatory nature of CSR in India has led many practitioners to perceive CSR as an obligation rather than as a strategic intent and an opportunity (Porter and Kramer, 2006). Thus, it is widely accepted that the implementation of CSR in India is limited to recognizing it as an obligation (PwC, 2013; Sharma and Singh, 2016). This chapter aims to enrich the understanding of CSR practice and how businesses can strategically implement CSR. First, the chapter reviews seminal literature on CSR with the intent to better understand how CSR is understood as a practice. This is achieved by critically reviewing models of CSR such as “Carroll’s pyramid of CSR” (Carroll, 1991), stakeholder theory (Freeman, 1984), and more recent conceptualizations such as “Explicit and Implicit CSR” (Matten and Moon, 2008), “model of sustainable development” (Aras and Crowther, 2009), and “CSR 2.0” (Visser, 2010). Based on the limitations of the reviewed theories and models, the concepts of explicit and implicit CSR are used to provide practical implications for implementing CSR. Based on these concepts, a case is made for viewing CSR as an opportunity. A  framework is proposed whereby businesses can engage in CSR voluntarily (i.e., explicit CSR) along with fulfilling the legal requirements (i.e., implicit CSR). Second, the chapter reviews the Indian CSR scenario using secondary data from the reports on CSR based on “obligation versus opportunity” framework. Finally, the chapter discusses directions for future research by presenting a “process-oriented” model for CSR implementation. This model enables strategic and systematic implementation of CSR for achieving sustainable growth of business and society.

Understanding CSR practice CSR as a practice has developed significantly owing to various studies by researchers and practitioners, and the demands of informed societies. Given its interdisciplinary and practice-oriented nature, there are various models 88

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and frameworks suggested by researchers and practitioners. This section reviews the literature on CSR with the intent to better understand CSR practice. Stakeholder theory The stakeholder theory states that ‘‘businesses and the executives who manage them, actually do and should create value for customers, suppliers, employees, communities, and financiers (or shareholders)’’ (Freeman, 2008: 39). Stakeholders are defined as a group or an individual who have an effect and are affected by the goal achievement of business (Freeman, 1984). Although the stakeholder theory presents a broader view for understanding CSR, there are certain limitations of this theory. Stieb (2009) and Claydon (2011) criticize this theory as it does not clarify the role of businesses in a society. Another criticism is that the theory states that businesses should actively engage other stakeholders, since they are also affected by the actions of business; however, the shareholders enjoy most of the power in decisionmaking processes (Freeman, 1984). Thus, on a pragmatic level, this understanding of CSR is confusing for business managers when assessing who should be given priority in decision making. Carroll’s pyramid of CSR In the order of importance, Carroll’s pyramid of CSR consists of four components. These components are the key responsibilities of a business starting with “economic responsibility,” which is the essence of the business, that is, profit maximization. Then “legal responsibility,” which states that business is expected to abide by the laws and regulations formulated by the government. Then “ethical responsibility” informs the business about what is good and just for the protection of the moral rights of stakeholders. The final responsibility is the “philanthropic responsibility,” whereby business is expected to be a good citizen and do all that which will create maximum benefit for the business and society. However, there are some criticisms of this hierarchical representation of CSR. Aviva Geva (2008: 12) argued that “the four-part definition of CSR emphasizes the importance of the economic component as the foundation upon which all others rest. In other words, a company is defined as socially responsible, primarily if it is profitable.” Campbell (2007: 956) argued that “Corporations will be more likely to act in socially responsible ways if there is a system of well-organized and effective industrial self-regulation in place to ensure such behaviour.” He argues that the relationship between the corporate and economic performance is a result of various institutions that regulate the relationship between government, private, and non-government institutions. Another criticism of Carroll’s pyramid of CSR is that it does 89

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not take environmental sustainability into account (Visser, 2006). Therefore, Carroll’s pyramid of CSR does not provide a clear understanding of the relationship between society, environment, and business. Recent developments in understanding CSR as a practice This section discusses contemporary works, theories, and conceptualizations for understanding CSR as a practice. Implicit and explicit CSR Implicit and explicit CSR are recent viewpoints for understanding CSR as a practice. Implicit CSR can be understood as the country’s formal and informal institutions that specify the responsibility of the business towards the society (Matten and Moon, 2008). Implicit CSR comprises mandatory rules for the business to fulfil the stakeholder requirements and its obligation to act accordingly within the broader formal and informal institutions. Explicit CSR includes voluntary, self-interest driven policies, programmes, and strategies to address social issues that result in the mutual benefit of business and society. This concept of CSR is based on corporate discretion instead of formal and informal institutions (Matten and Moon, 2008). However, these concepts have some drawbacks. Implicit CSR provides mandatory CSR laws for the contribution of corporations towards society, but businesses in this setup only work according to the prescribed rules and thus CSR is perceived only as an obligation. Explicit CSR encourages businesses to voluntarily work for the society and create opportunities for both business and society. However, in the absence of some formal institutional rules and norms, corporations might not work appropriately. Therefore, for strategic CSR implementation and results, there is a need for a different conceptualization based on combining implicit and explicit CSR (Matten and Moon, 2008). Model of sustainable development Aras and Crowther emphasize the development of CSR models that incorporate the concept of sustainability (2009). Sustainability means ensuring the fulfilment of the needs of the present generation without compromising the ability of future generations to fulfil their own needs (Aras and Crowther, 2009). Aras and Crowther (2009) asserted that sustainable development is often perceived through the lens of environmental management. However, sustainability is a much broader concept as sustainable developmental policies include three policy areas—economic, environmental, and social. In this context, they presented a four-dimensional model of sustainable 90

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development, in which all three aspects are given equal importance. Furthermore, Aras and Crowther (2009) consider that the four aspects can be categorized as a two-dimensional matrix, which includes polarities of internal versus external focus and short-term versus long-term focus, leading to a complete representation of business performance. The components of the model of sustainable development are societal influence, which means the impact of society on business, which can be in terms of social contract and the influence of various stakeholders ensuring social justice and human rights; environmental, which means the impact of business on environment, as this is essential for the survival of future generations; organizational culture, which is the development of cultural values in the business, so that the social and corporate values are inclined at the individual level too; and finance, which is maintaining the economic activity of the business for survival (Aras and Crowther, 2009). However, there are certain criticisms of this model. First, the sustainability model stresses that business should benefit future generations, whereas in reality businesses focus more on existing stakeholders rather than the future generations. Second, the model stresses on what corporations should do, rather than how it should be done (Claydon, 2011). CSR 2.0 As proposed by Visser (2010), CSR 2.0 attempts to overcome the criticisms of the models discussed in previous sections. Visser asserts that the domains of CSR, sustainability, corporate citizenship, and business ethics are moving towards a new era of relationship between business and society. This relationship aspires to shift from the old concept of corporate social responsibility towards a new and integrated concept of corporate sustainability and responsibility. This view of understanding CSR as a global practice, integrating the ideas of sustainability and CSR, is also echoed by various researchers (Orlitzky et al., 2011) and practitioners (PwC, 2013). However, there are certain drawbacks of this model in terms of understanding CSR as a practice. It is argued that CSR 2.0 is still normative and not descriptive enough, as it does not provide practical tools for the implementation of this model. Further, it is said that “although this model fits in better with network theories, it is ambiguous as to how this model would actually work in practice” (Claydon, 2011: 413). Table  7.1 summarizes the discussion of the section. It is evident from Table 7.1 that a significant progress in understanding CSR as a global practice is evident in the evolution of the theories from the stakeholder theory to the CSR 2.0 model. It is important to note the findings of the review in column 3, which lists the shortcomings of existing literature on understanding CSR practice. However, what is common is that the reviewed theories provide what to do rather than how to do CSR. 91

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Table 7.1  Review of models for understanding CSR as practice Models for understanding CSR

Key ideas

Shortcomings

Stakeholder Theory (1984) R. Edward Freeman

The social responsibility of the business is towards the stakeholders of the business, that is, employees, customers, suppliers, community. Provides hierarchical understanding of CSR, where base of the pyramid is economic responsibility which is supported by legal responsibility and then contributes to the ethical and philanthropic responsibility. Implicit CSR provides the role of the corporation under institutional rules and regulations for CSR, and explicit CSR says that there should be voluntary programmes and strategies for performing CSR which will create opportunities for both business and society. This model considers the environmental aspect, and sustainability is considered as a major part of CSR activity of the business.

Unclear about the role of business in society. Uncertain about which stakeholders have decision-making capabilities. Focuses on economic profitability as basis or precursor of CSR activities. Asserts that social responsibility is the result of profitability. Corporate sustainability and environmental concerns are ignored. These concepts only provide what one should do but do not provide how it should be done. Individually, both these concepts lack something; to best use these conceptualizations, these should be used together. Stresses on the fulfilment of the needs of the future generations, whereas the organizations are more concerned about the present stakeholders. Normative in nature as model does not describe how CSR is to be implemented. Normative rather than being in terms of practical tools for implementation of CSR.

Caroll’s pyramid of CSR (1991) Archie B. Carroll

Explicit and implicit CSR (2008) Matten and Moon

Model of sustainable development (2009) Aras and Crowther

CSR 2.0 (2010) Wayne Visser

This model presents a new era of CSR, that is, corporate sustainability and responsibility.

Source: Author

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O bligation versus opportunity framework

Conceptualizing CSR practice as “obligation” versus “opportunity” Based on the review of literature on CSR, it is evident that the understanding of CSR is limited to a description of “what to do.” However, there are theoretical and practical limitations of understanding CSR practice, that is “how to do it.” To better understand the practical implications of CSR, the implicit and explicit view of CSR can be used to develop the case of conceptualizing CSR practice as an “opportunity” rather than as an “obligation.” Both these concepts help in understanding the practical implications of CSR within the institutional environment. Based on the previous discussion, we can define the “obligation” and “opportunity” aspects of CSR practice on the basis of meaning, definition, nature, scope, and theory (see Table 7.2).

“Obligation” versus “opportunity” framework CSR is a combination of various theories and concepts that develop an understanding of CSR as a practice (as discussed in previous sections). However, as shown in Table 7.1, CSR conceptualizations lack practical insights for its implementation. In many regions CSR is perceived as an obligation, whereby CSR is governed by law (implicit CSR), and in some regions CSR is perceived as an opportunity by strategically engaging in CSR activities and working towards long-term benefits for both business and society (explicit CSR). Therefore, it is beneficial to understand contemporary CSR based on either implicit or explicit CSR. Based on the review of literature (see Table  7.1) and the constructs defined in Table 7.2, the theoretical contributions in the field of CSR can be conceptualized along the “obligation” versus “opportunity” debate. The stakeholder theory and the pyramid of CSR are based on the idea that CSR is working for the betterment of stakeholders of business, which is the primary and direct responsibility. Thus, these theories can be categorized as “implicit CSR” or “obligation,” because some businesses contribute towards CSR to abide by the law and thus only invest towards fulfilling the needs of stakeholders. The model for sustainable development and CSR 2.0, which focus on the strategic use of CSR for the long-term benefit of the business and society, can be categorized as “explicit CSR” or “opportunity,” as these theories propose CSR practice with strategic intent. Based on the previous discussion, a framework is proposed which helps in understanding CSR as a global practice and provides practical implications of CSR (see Figure 7.1). However, this conceptualization is not limited to

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Table 7.2  Defining obligation and opportunity Basis for distinction

Obligation

Opportunity

1 Meaning

CSR activities which are required by law, also known as compliant CSR. Implicit CSR is embedded in the broader norms and regulations, and responsibilities are assigned by formal and informal institutions. CSR as an obligation is generally mandatory.

CSR activities which are beyond law and beyond compliance will create opportunity for the business. Explicit CSR assumes responsibilities for the interest of society.

When CSR is applicable through law, it is an implicit CSR which is seen as an obligation for corporate actors.

CSR, on the other hand, can be taken as an opportunity if corporate actors are voluntarily and strategically performing CSR activities which are explicit CSR. CSR as an opportunity is a broader movement of the global spread of management concepts, ideologies, and technologies. (Explicit CSR)

2 Implicit and explicit CSR

3 Voluntary and mandatory 4 Nature

5 Scope

6 Theoretical support

CSR as an obligation is a narrow concept where the CSR is a part of the institutional framework of countries and regions and it is different from country to country. (Implicit CSR) Mandatory CSR law in India is an obligation for the Indian companies, and companies only spend that much amount which is prescribed under law.

Source: Author

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CSR as an opportunity is voluntary.

In India, some companies are not only just abiding by the law to report CSR but also linking the CSR activities to the core business strategy and take it as an opportunity; for example, Maruti Suzuki addresses issue of road safety and lack of proper driver training under its CSR project Institute of Driving and Traffic Research, Maruti Driving School

O bligation versus opportunity framework

Evolving understanding of CSR

Models/concepts for understanding CSR

Explicit

Recent developments

• CSR 2.0 • Model for sustainable development

Implicit

Seminal works

• Pyramid of CSR • Stakeholder theory

Opportunity

Obligation

Figure 7.1 “Obligation” versus “opportunity” framework Source: Created by the authors

viewing CSR as an opportunity only; rather the framework proposes a case where the “obligation” and “opportunity” concepts coexist. The framework in Figure  7.1 shows the theoretical evolution in understanding CSR practice. As shown, the theoretical understanding is moving towards an explicit understanding of CSR. This understanding resonates with conceptualizing CSR as an opportunity whereby businesses can create shared value for business and society through strategic engagement in CSR.

CSR: Indian scenario CSR, in India, is not a new concept as it has been practised using various activities by businesses from ancient times. Historically, it is evident that CSR was a part of the businesses in India from the very beginning (PwC, 2013). In India, many people and businesses perceive CSR as a philanthropic activity. However, contemporary understanding of CSR practice has evolved and moved from institutional building, that is, research, education, and culture, to a broader aspiration for the development of the nation (PwC, 2013). Owing to the growing awareness about social and environmental issues and the responsibility of business towards society, the Companies Act has introduced CSR with a disclose-or-explain mandate for promoting greater transparency and disclosure (PwC, 2013). Under Section 135 of the Companies Act, 2013, any company with a net worth of INR 500 crores or more, or a turnover of INR 1,000 crores or more or a net profit of INR 5 crores or

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Table 7.3 Activities for CSR contribution under Schedule VII of Companies Act 2013 S.No. 1 2 3 4 5 6 7 8 9 10

List of Activities under Schedule VII Promotion of education Combating HIV-AIDS, malaria, and other diseases Eradication of extreme hunger and poverty Reducing child mortality and improving maternal health Gender equity and women empowerment Social business projects Contribution to prime minister’s relief fund and other such state and central funds Employment enhancing vocational skills Environmental sustainability And such other matters as may be prescribed

Source: PwC, 2013

more during any financial year, will contribute at least 2 per cent of its average net profits of the previous three years on specified CSR activities. Such a company should also constitute a CSR committee of the board, consisting of three or more directors, including at least one independent director. The act also provides a list of activities under Schedule VII (see Table 7.3) which can be the focus area of CSR investment. Businesses can implement CSR by engaging in any of these activities according to the local conditions and after the approval by the board. How Indian businesses perceive CSR practice The businesses in India are said to be moving forward by adopting other means of CSR rather than philanthropy. However, most of the businesses are mainly investing in the education and healthcare sector as CSR activities, which can be considered as a necessity for a country like India. Very few businesses are considering other activities. This is evident from the data in Table 7.4. Table 7.4, column 1 shows that, before the law was passed in 2012–2013, approximately 80 per cent of the top businesses were investing in the areas of education, sports, and healthcare, while only 20 per cent were investing in other activities. However, CSR initiatives in the areas, such as environment and livelihood generation, as proposed by CSR 2.0 and sustainable model, are lacking in the current Indian scenario (NASSCOM, 2015). This trend further continued in another survey of 2014–2015 (see column 2, Table  7.4), where 1,181 firms listed under Bombay Stock Exchange were analyzed. According to this report too, the maximum spending was in the areas of healthcare and education. This shows that firms are contributing 96

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Table 7.4  Percentage of companies’ contribution towards CSR activities CSR activities

% of top companies 2012–2013

% investment 2014–2015

Education Health (including nutrition) Livelihood and financial including Environment Skill enhancement Women empowerment Disaster relief Sports Urban slum development Heritage, art, and culture PM relief fund Armed forces Technology incubation fund Combination of above Others

96 78 53 47 44 29 16 7 – – – – – – –

70 66 – 29 – 15 – 9 – 9 14 2 1 16 24

Source: NASSCOM, 2015, The Confederation of Indian Industry, 2015

towards the basic needs of the stakeholders, instead of strategically contributing towards the shared benefit of business and society. This implies that Indian businesses approach CSR practice as an “obligation” or “implicit CSR” (see Figure 7.1). Implications for Indian CSR This section reviews CSR practice in India using the framework as basis. The intent is to review the reports on CSR practice based on the “obligation” versus “opportunity” conceptualization. A review of Indian CSR based on the framework enables an understanding of Indian CSR and provides the impetus for improvement. According to the findings, CSR in India is more inclined towards “obligation”; there is a need to move towards the “opportunity” conceptualization of CSR. Thus, there is scope for businesses to perform CSR with strategic intent and move towards explicit CSR. The framework not only encourages businesses to view CSR as an opportunity but also builds a case where the “obligation” and “opportunity” concepts of CSR can coexist for the mutual benefit of business and society. Although the proposed framework provides a practical understanding of CSR practice, yet to critically analyze the CSR implementation process, there is a need to investigate additional factors other than the institutional environment. Thus, the next section describes future research directions and discusses specific factors that need to be considered for understanding CSR implementation. 97

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Future research The “obligation” versus “opportunity” framework (see Figure 7.1) provides a road map for the businesses to understand CSR implementation based on the theories and concepts in the institutional environment. Using the framework, businesses can justify their CSR obligations and reconsider CSR as an opportunity. This can be done by aligning CSR practice with the strategic intent of business. However, CSR implementation is not only affected by the institutional environment. There are other factors which can be considered for enriching the understanding of CSR implementation. •

There are multiple levels in the CSR implementation process. CSR operates at institutional, organizational, and individual levels. This fact is substantiated by the macro-meso-micro level CSR research (Aguinis and Glavas, 2012). • There are predictors of CSR. As a practice, CSR is influenced and enabled by institutional and organizational factors. • There are mediating processes. CSR implementation is influenced by the processes between the predictors and outcomes of CSR. • There are outcomes of CSR activities. The CSR implementation process leads to consequences of CSR engagement across management levels.

Predictors of CSR

INSTITUTIONAL LEVEL Stakeholder pressures

Regulatory pressures

ORGANIZATIONAL LEVEL

Mediating processes

Outcomes of CSR

INSTITUTIONAL LEVEL

INSTITUTIONAL LEVEL

Customer satisfaction

Reputation

ORGANIZATIONAL LEVEL

Consumer loyalty

Firm’s intangible resources

Customer choice of company or product

Managerial interpretation of CSR as opportunity

Organizational Culture

Organizational leadership

INDIVIDUAL LEVEL

ORGANIZATIONAL LEVEL

Organizational identity

Financial performance

Corporate governance structure

Manager’s attitude and behaviour

Employee trust

Firm capabilities

INDIVIDUAL LEVEL Employee values

Meaningfulness of work

Reduced risk

Perceived organizational support

INDIVIDUAL LEVEL

Employee perception of CSR

Job satisfaction Employee engagement Organizational citizenship behaviour Organizational commitment

Figure 7.2 “Process-oriented” model for CSR implementation Source: Created by the authors

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Thus, future research should consider the integration of different levels of analysis on which the process of CSR operates. A “process-oriented” model is proposed for strategic and systematic CSR implementation and analysis (see Figure 7.2). CSR implementation cannot be thoroughly understood if the processes that enable the conversion of objectives into outcomes are not studied. This implies investigating specific outcome-driven processes that mediate the achievement of CSR outcomes across different levels of CSR analysis. Therefore, a “process-oriented” view provides a more rigorous approach for analyzing the implementation of CSR for the sustainable growth of businesses and society.

Conclusion In this chapter, an “obligation” versus “opportunity” framework is proposed based on a review of seminal literature and recent conceptual developments to better understand CSR practice and its implementation in the institutional environment. The understanding CSR practice globally can be grounded and extended using the proposed framework, which suggests the coexistence of explicit and implicit CSR for sustainable development of the business, as well as society. The future research suggests that, for strategic and systematic implementation of CSR in business, an integrated and multilevel “process-oriented” model is required, which will also include the mediating processes of CSR implementation. CSR, sustainability, strategy, triple bottom line, corporate governance, and ethics are all seen to be converging. Thus, academicians and industry should focus on and develop rigorous models for studying, analyzing, and eventually improving the CSR implementation process for the sustainable growth of the businesses and nation.

References Aguinis, H., and Glavas, A. (2012). “What we know and don’t know about corporate social responsibility: A review and research agenda.” Journal of Management, 38(4), 932–968. Aras, D., and Crowther, A. (2009). The durable corporation. Farnham: Gower Publishing. Campbell, J. L. (2007). “Why would corporations behave in socially responsible ways? An institutional theory of corporate social responsibilty.” Academy of Management Review, 32(3), 946–967. Carroll, A. B. (1991). “The pyramid of corporate social responsibility: Toward the moral management of organisational stakeholders.” Business Horizons, 34(4), 39–48. Carroll, A. B. (1994). “Social issues in management research: Experts’ views, analysis and commentary.” Business & Society, 33(1), 5–25. Claydon, J. (2011). “A new direction for CSR: The shortcomings of previous CSR models and the rationale for a new model.” Social Responsibility Journal, 7(3), 405–420.

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Freeman, R. E. (1984). Strategic management: A  stakeholder approach. London: Pitman Publishing. Freeman, R. E. (2008). “Managing for stakeholders.” Darden Case No. UVA-E0383. Retrieved from SSRN Electronic Journal. Garriga, E., and Mele, D. (2004). “Corporate social responsibility theories: Mapping the territory.” Journal of Business Ethics, 53(1–2), 51–71. Geva, A. (2008). “Three models of corporate social responsibility: Interrelationships between theory, research, and practice.” Business and Society Review, 113(1), 1–41. Holme, R., and Watts, P. (2000). Corporate social responsibility: Making good business sense. Geneva, Switzerland: World Business Council for Sustainable Development. Matten, D., and Moon, J. (2008). “ ‘Implicit’ and ‘Explicit’ CSR: A  conceptual framework for a comparative understanding of corporate social responsibility.” Academy of Management Review, 33(2), 404–424. McWilliams, A., Siegel, D. S., and Patrick, M. (2006). “Corporate social responsibility: Strategic implications.” Journal of Management Studies, 43(1), 0022–2380. NASSCOM (2015). Catalysing change through corporate social responsibility. New Delhi: NASSCOM and BCG, February 2. Orlitzky, M., Siegel, D. S., and Waldman, D. (2011). “Strategic corporate social responsibility and environmental sustainability.” Business and Society, 50(1), 6–27. Porter, M., and Kramer, M. (2006). “Strategy and society: The link between competitive advantage and corporate social responsibility.” Harvard Business Review, 84(12), 78–92. PwC (2013). Handbook on corporate social responsibility in India. Gurgaon, Haryana, India: PwC India and CII, December 9. Sharma, A., and Singh, G. (2016). Understanding corporate social responsibility: From obligation to opportunity. Corporate Responsibility Research Conference, Istanbul, Turkey. Stieb, J. A. (2009). “Assessing Freeman’s stakeholder theory.” Journal of Business Ethics, 87(3), 401–414. The Confederation of Indian Industry (2015). A billion dollar story of CSR spends in FY15. New Delhi: CII and CII-ITC Centre of Excellence for Sustainable Development works, December 21. Visser, W. (2006). Business frontiers: Social responsibility, sustainable development and economic justice. Hyderabad, India: DGM ICFAI Books. Visser, W. (2010). “The age of responsibility: CSR 2.0 and new DNA of business.” Journal of Business Systems, Governance and Ethics, 5(3), 1–17.

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8 OPERATIONS RESEARCH AND ITS ROLE IN ENVIRONMENTAL MANAGEMENT A review A. J. Meitei and Akanksha Saini

Introduction Operations research (OR) is an associative branch of applied mathematical sciences. It is the science of decision making which primarily focuses on business applications. OR methods and techniques include recognizing business problems and proposing the best possible situation out of the many available. OR has its origin in the second world war, where the first problem OR tackled was  how to set a time of fuse bomb to be dropped from an aircraft on the submarine. The military establishment in England summoned a group of scientists belonging to different fields for the analysis of strategic and tactical difficulties related to air and land defense of the country. England had faced some critical situations as there are limited resources left with them to win the war. The team of scientists developed a method to solve this problem and named it as “Linear programming” which had worked out well for them. Today, OR can be defined in many ways yet there is no particular definition of it. According to Churchman et  al. (1957), “OR as the application of scientific methods, techniques, and tools to problems involving the operations of a system to provide those in control of the system with an optimum solution to the problem.” T. L. Saaty (1961) defines “OR as an art of giving a bad answer to problems that otherwise deserve worse answers.” Saaty’s definition points out the decision-making aspect of OR, that is, the choice of best alternative amongst the list of alternatives. This technique helps to solve out the crucial business problems, such as identifying the warehouse location to minimize the transportation cost, allocation

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of delivery vehicle to meet customer demand while making the best use of drivers, impact on the production process by changes in machinery, etc. OR tools have the advantage of adapting approaches from more than one discipline such as economics, mathematics, engineering, statistics, and psychology. These variations in tools and techniques make OR more efficient to solve decision-related problems in the most relatable way as possible. So, we can say that the main purpose of OR is to provide an unbiased basis for decision making even in the absence of complete information. Therefore, OR can be treated as the science of understanding, describing, and predicting the system behaviour. OR techniques and methods have no limit to their applications. It can be applied to almost any kind of problem. Two of its noticeable applications are discussed next.

Industry Post Second World War was a difficult time for the industrial world as it faced many problems, including the problems of the Great Depression, which lasted until 1930s. It was during this time that many OR techniques were developed to overcome those impediments. These techniques include decision trees, sequencing and scheduling techniques, inventory, linear programming, transportation and assignment models, etc. Some problems addressed by OR are critical path analysis, giving a network representation of a complex project to identify and control the various issues relating to it; to reduce completion time by devising the layout of equipment in a plant or components on a computer chip; managing the route of buses so that more buses meet the requirement; managing cargo shipping and distribution system; controlling the movement of raw materials and products on unpredictable demand and many such situations.

Planning for economic growth The Indian economy is premised on the thought of planning since 1947. From 1951 to 2014, through the five-year plans, the planning commission of India was responsible for the execution and monitoring of all the economic programmes in the country. On January 1, 2015, it passed cabinet resolution to replace the planning commission with the newly formed NITI Aayog, where NITI stands for National Institute for Transforming India. The second plan (1956–1961) is mainly concerned with the public sector and “Rapid Industrialisation.” The plan attempts to determine the optimal allocation of expenditure amongst the productive sector to maximize longrun economic fullness. It used the prevalent state-of-the-art technique of 102

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OR. Prasanta Chandra Mahalanobis in 1953 successfully used OR techniques in the second five-year plan to answer questions like how many doctors, teachers, engineers, etc., are required in the future and defined their required qualifications to face future problems.

Various OR tools OR can use any suitable tool and technique available. However, it gives special focus on the development of techniques like linear programming, game theory, decision theory, queuing theory, inventory management, simulation, Markov process, network scheduling (PERT/CPM), etc. Some of these techniques are briefly explained next.

Linear programming It is a technique that optimizes the required defined objective within the assumed necessary constraints. In this optimization technique, the objective function and all the restrictions involved are in the form of linear equations and inequations.

Game theory It is a technique used to make decisions regarding more than one opponent/ player when the situation tends to conflict as the success of one player is at the cost of another player.

Decision theory It is a decision-making technique using the interdisciplinary approach under uncertain conditions to have the best possible solution to the given problem. Decision theory can be divided into two branches: Descriptive and normative. Descriptive decision theory analyzes and explains the balances in the decisions that people are influenced to execute. It also considers the factors influencing the decision maker. Normative decision theory analyzes the various outcomes and always tries to find the best possible decision when all the restrictions and assumption are given.

Queuing theory Queues today are very common; a long  queue discourages customers. Queuing theory is the study of queues; its main aim is to attempt to minimize the waiting time of individuals in a system, without increasing the service cost. 103

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Inventory models This is a subpart of supply chain management and helps in a smooth flow of goods to the producer to the warehouse and then finally to the end consumer. The inventory models will also help us decide the right quantity to produce or order so as to minimize out of stock and the total inventory carrying cost.

Simulation Simulation is another important of OR; it is today used in almost all tors. This involves designing a process or a model of some real system performing the experiment on it to understand the various behaviors performances or check different situations for the performance of the system.

secand and real

Markov process This is a stochastic process with the property where the prediction of any future behaviour depends only on the present and are independent of the past information. The Markov process has applications in a wide range of areas.

Network scheduling using PERT and CPM This technique is helpful in planning, scheduling, and monitoring projects on a large scale. The main objective for the study of network scheduling is to help the project manager in minimizing the trouble points like delay, interruption, etc. by representing the project through a directed network and identifying the various critical factors present in it. PERT and CPM are the two main tools for network scheduling. 1 PERT (Project Evaluation and Review Technique) is probabilistic where the timings of the various activities of the project are unknown and are estimated using a three-time estimate. This technique gives more emphasis on analyzing the activity times. 2 CPM (Critical Path Method) is deterministic by nature where the activity times are known beforehand. The main objective of this technique is to determine the project time where the total cost is minimum through the analysis of time-cost trade-off. Sustainable development and environmental quality have some conflicts from economic growth. Decision makers need to deal with these environmental issues. The protection of the environment has become the topmost 104

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priority at all levels of society today. Here, OR plays an important role. It helps decision makers to decide based on its scientific tools and algorithms. We see the first example of the application of OR in the mid-70s in the journal of environment and planning by Bottcher and Rembold (1977), and water resources research by Das and Haimes (1979). In the recent past, OR as a tool for sustainable management has received considerable attention from management science researchers. A  detailed discussion on design, modelling, and analysis of the sustainable operations management can be seen from Angappa Gunasekaran and Zahir Irani (2014). Walker et al. (2014) have also presented a review on the recent trends of sustainable operations management and its future directions. The contribution on the role of green supply chain and green procurement can be seen from Linton et al. (2007), Darnall et al. (2008), and Seuring and Müller (2008). Unfortunately, most of the research done so far has been limited to literature reviews, conceptual frameworks, case studies, and some empirical papers. However, OR as a subject requires developing a new model and analyzing it to measure its performance on various available options. It was rightly pointed out by White and Lee (2009) that the potential of OR as a tool for sustainable development is yet to be employed properly. Later this argument was supported by the use of OR in the analysis of developing economies by White et al. (2011). The applications of OR, along with environmental concerns, make the industrial sectors more nature-friendly. The main objective of this chapter is to help researchers and decision makers know the areas and scope of OR tools in environmental management. With the help of this chapter, one should be able to get a better understanding of the issues involved and how OR models are to be used to overcome these and test the decisions through analysis. The following are some areas of applications of the subject.

Green supply chain Green supply chain management is a combination of supply chain management with environmental logistics that involves all the stages of the production process, including product designing, sourcing, and selection of the materials, looking after the manufacturing process to the ultimate delivery of goods to the end consumers, and finally having proper management of the product after its useful life. The amount of waste and level of emission caused by the supply chain results in several serious environmental effects such as global warming, acid rain, unhealthy air for breathing, etc. The interaction of OR and environmental management can cause a clear formulation of these problems and new insights into the impacts of alternative policy measures. According to Kleiner (1991), the recycling operation should tackle the difficulties regarding the threat to the distribution system in the supply 105

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chain. He also mentioned the landfill as a warehouse with no reduction in inventory. He associated garbage freight ships and toxic train production-­ distribution networks. In the same year (1991), Sterman stated that whenever the problem to be solved is one of choosing the best from among a well-defined set of alternatives optimization should be considered. If the meaning of best is also well-defined and the system to be optimized is relatively static, and free from feedback, optimization may well be the best technique to use. The main focus of optimization techniques in case of waste management is on two major issues (a) Allocation of waste storage and (b) minimizing the distance of transportation from destination to these waste storage locations. Bottcher and Rembold (1977) analyzed the regional solid and waterwaste disposal optimal location facility. We can categorize the wide area of literature concerning waste treatment into three groups: Based on location, routing, and scheduling. The survey paper explaining risk analysis, routing, and scheduling and facility location published by List et al. (1991) highlights some important points. Batta and Chiu (1988) had studied the problem of analyzing the routing of hazardous waste. With waste disposal, the desirability (or undesirability) of a distinct spot usually has a high priority than costs involved, which is the reason that these sites have a maximum distance to the city population. Anandlingam and Westfall (1988) used a multi-attribute utility theory to select waste disposal alternatives. Revelle et al. (1991) proposed the solution of the two-criteria problem of minimizing the cost of transportation and perceived risk that includes the shortest path algorithm with zero-one location programme. Thierry et al. (1995) defined product recovery management (PRM) as the management of all used and abandoned products and other substances, and he also pointed out that the responsibility these lies with the manufacturing company. According to Flapper (1993), PRM has some uncertainties concerning quality, quantity, and time of returned products. He also pointed out the supply side uncertainties of these products is irregular. Kelle and Silver (1989) also suggested an approximation procedure by planning the chanceconstrained integer problem and solving it using dynamic programming.

Agriculture The rapid rise in the world population calls for a corresponding improvement in daily food production. But there is a limitation of the land for agriculture. So, it is essential to find out the new options for improving agriculture yields at the earliest.

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In India, the recent structural changes in the agricultural sector have led to a crisis. Farmer suicide is common news in the newspaper these days. A  nation where the food-producing people are not satisfied cannot be a happy nation. The steady decline in the rate of growth of agricultural output can be seen in the recent past, resulting in a drop in the GDP contribution from the sector over the years. The root problem of these circumstances is that agriculture is now no longer considered a profitable profession. The causes include the rise in the global temperature resulting in climate change, which is the main cause for irregular rainfall; reduced agricultural subsidies by the government; lack of easy credit to agriculture resulting in heavy dependence on moneylenders by the farmers; and turning farmland into more profitable alternatives. Today, the primary concerns of the farmers are the factors that affect the efficiency of crop plantations and animal care, and this is where OR plays an important role. Many techniques of OR make these problems easy to solve and help us to make healthier choices. OR techniques  were initially used in agriculture planning in the early phase of 1950. Waugh (1951) was the first to implement OR tools in the sector. He proposed the linear programming technique to minimize the cost of feeding stuff and livestock rations, where the model was constrained by the specified nutritional level required. In 1954, Heady used the same linear programming techniques to optimize crop rotation on a farm. Many researchers later adopted Heady’s model extendedly. Game theory, dynamic programming, Monte Carlo simulation, and Markov  chain, etc. are useful in tackling the uncertainty involved in the sector. For a detailed study, one can refer to Hazell and Norton (1986), Kristensen (1994), Romero (2000), Yates and Rehman (1996), Rehman and Romero (2006), and Weintraub and Romero (2006). Some approaches in agricultural planning need a non-linear model and sometimes quadratic programming in particular. Such examples are Samuelson (1952), regional planning and greenhouse gas mitigation model combined by Schneider and McCarl (2000), and formulation of a regional model for agricultural policy by Heckelei and Britz (2000). The intercommunication between agriculture and the environment concerning sustainable management carries immense responsibility. Intricacies are the adoption of a crop simulation model that can measure the environmental repercussions, such as the level of the parasite or impact on soil erosion, and that can also connect with different management concerns. A recent endeavour in this case combines a geographical information system that highlights and measures the structural dimensions of agricultural planning models. Connecting OR techniques with these geographical information systems, majorly mathematical programming leads to a spatial decision support system that has shown promising results (Zekri and Boughanmi, 2007).

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The positive mathematical programming approach introduced by Howitt (1995a, 1995b) has been extensively used to highlight the effect of changes in several agricultural policies concerning the farmers’ behaviour. (See Judez et al., 2001). The multiple criteria decision-making method (MCDM) uses both continuous and discrete forms when talking about agriculture. In continuous form, there is a feasible set comprising infinite numbers of points defined by linear and non-linear constraints. The discrete model has a feasible set with a finite number of points. These points usually have small numbers of alternatives that present a potential solution to a decision-making problem. For a more comprehensive study on the utilization of MCDM, one can refer to Romero and Rehman’s (2003) for continuous and Hayashi’s (2007) for discrete applications.

Fisheries OR plays a pivotal role in fisheries. The initial contributions of OR are mainly on the development of the mathematical models to analyze the fish stock; estimate the technical efficiency of fishing vessels; analyze utilization capacity, fishermen’s behaviour, and many more. Some of the early applications OR in fishing industry started in the 1950s (Gordon (1954), Scot (1955)). Most biological and biochemical models connect population dynamics with the economics of fishing fleets, which assumes a continuous-time logistic growth function. They commonly use growth function that considers the rate of change in the fish population size to be a parabolic function of the current population size. Gordon in 1954 extended this work by including the concept of the economic model. The resulting model is the GordonSchaefer model, and we have extensively used this model for analyzing unrestricted open water fishing and extracting the maximum commercial yield. It was Scot (1955) who had proposed dynamic modelling features in fishing. An optimal stock level condition in a dynamic optimization with associated yield and energy level of fishing was considered by Clark and Munro (1975) applying the optimal control theory. The surplus model in this context is fish populations dynamics that considers the changes in biomass because of its growth and effect of fishing. For parameter estimation in this model, it limits the requirements of source data to time series and relative abundance index (captures per unit efforts). But the model’s applicability is still a matter of debate. If we talk about technical efficiency, it can be through parametric as well as non-parametric (also known as deterministic) techniques. The stochastic production frontier is the most common parametric technique. Whereas, in case of non-parametric technique, data envelopment analysis (DEA) is commonly used. Kirkley et al. (1995, 1998) started the measurements of technical efficiency by assessing it in the Mid-Atlantic sea

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scallop fishery using the stochastic frontier approach. Campbell and Hand (1999) and Sharma and Leung (1999) analyzed the technical efficiency of other fisheries using the same approach. Fisheries analysis is an important tool of efficiency measurements promoted by the Food and Agriculture Organisation (FAO), which suggests the best method to test capacity utilization in fisheries is the DEA (FAO, 1998, 2000). In 1972, McFadden estimated fishermen’s response to any new regulation by the management with the help of a discrete model selection. This chapter is subsequently extended by various researchers (Sampson, 1994). The behavioural model is another important area of application. This optimizes a log-likelihood function that appropriates various probabilities distributions. The behavioural models in fisheries are mostly applied to the exit and entry situations of the industry.

Forestry We have used various techniques of OR in forestry since the 1960s, with a focus mainly on efficient harvesting and management, which have recently become  relevant issues for  the environment. We can categorize forestry problems into strategic, tactical, and operations planning. Linear programming becomes the natural technique to manage the large areas in the forest (Navon (1971), Johnson and Scheurman (1977), and Weintraub and Andrés Weintraub and Carlos Romero (2006). Church (2007) explains tactical planning as an interface between the detailed operations decisions and conceptual strategic planning. The inadequate state forest service practised a mixed-integer programme with a heuristic; for a detailed discussion, refer to Kirby et al. (1986), Weintraub et al. (1994 (b)). Andalaft et al. (2003) did the Lagrangian relaxation formulation for discussing the problem concerning forest planning on pine plantations. The most common operations decision tackles problems like what area we should harvest within the planning horizon, how the tree should be cut into logs so that we can satisfy the required demands, problems related to the allocation of harvesting equipment, and many more. In countries like Brazil, Chile, and New Zealand, daily transportation totally depends on trucks hauling logs of different dimensions from forest harvesting locations to different destinations. These firms use a heuristic based on a simulation technique that quickly develops daily schedules. Ronnqvist and Ryan (1995) introduced the real-time truck dispatch system in New Zealand using the queuing and heuristic column generation. Wildlife preservation and prevention of soil erosion and water contamination are some of the major environmental concerns which can be handled by spatial characterization of harvesting areas.

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Mining We can explain mining as the exploitation of naturally occurring  nonrenewable  resources from the earth for a commercial purpose. Since the resources obtained by mining are non-renewable, we can easily say that it differs from other natural resource areas. There are chances that the site is permanently closed after miners have fully exploited the deposit. The beginning techniques of OR used in the mining field are mainly to tackle the problems regarding open pit designing particularly, ultimate pit limit designing and boundary designing that separate the national block responsible for profitable contribution from the national block of waste. Lerchs and Grossman (1965) developed the algorithm that helps to determine production schedule which was further improved by various researchers like Hochbaum and Chen (2000) and Underwood and Tolwinski (1998). Although ultimate pit limit problem is an important concept of production scheduling, it seems to be anachronistic in comparison to advanced algorithmic and computing techniques. The block sequencing problem present at the lower level of planning work can also be categorized in either strategic or tactical planning. There are some factors such as size of block, time horizon length, and assumption based on operational constraints, which are responsible for this categorization.

Conclusion Operations research is an essential part of environmental management and is responsible for the optimal consumption of required resources in almost every sector. In that way, OR is a technique that efficiently supports the sustainable development of natural resources, mainly in waste management, agriculture, forestry, fisheries, and mining. These techniques also become a prominent option to include the environmental aspects at each stage of product supply chain management. In this chapter, we have attempted to highlight the recent problem caused by the unrestricted use of resources for economic growth and review the operations research’s contribution by its modelling and algorithmic techniques. Product recovery management also has a large impact on the supply chain, which affects production planning, inventory control, and distribution. Finally, we can say that the use of OR becomes increasingly significant as mathematical modelling and technology in sustainable management. Future research should be into how academia, researchers, and practitioners can combine OR with the sustainable operation management. An attempt should be made to answer many unresolved questions through a wide variety of techniques, including conducting case studies, model development, and statistical investigation of hypotheses set up. 110

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Acknowledgement We thank the reviewers for their valuable inputs and careful reading of the manuscript.

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Rehman, T., and Romero, C. (2006). “Formulating generalised ‘goal games’ against nature: An illustration from decision making under the uncertainty in agriculture.” Applied Mathematics and Computation, 175(1), 486–496. Revelle, C., Cohon, J., and Shobrys, D. (1991). “Simultaneous siting and routing in the disposal of hazardous wastes.” Transportation Science, 25(2), 138–145. Romero, C. (2000). “Risk programming for agricultural resource allocation: A multidimensional risk approach.” Annals of Operations Research, 94(1–4), 57–68. Romero, C., and Rehman, T. (2003). Multiple criteria analysis for agricultural decisions. Amsterdam, Netherland: Elsevier. Ronnqvist, M., and Ryan, D. (1995). Solving truck despatch problem in the real time, 165–172. Wellington: The Operational Research Society of New Zealand. Saaty, T. L. (1961). Elements of queuing theory with applications. New York: McGraw Hill. Sampson, D. B. (1994). “Fishing tactics in a two-species fisheries model: The bioeconomics of bycatch.” Canadian Journal of Fisheries and Aquatic Sciences, 2688–2694. Samuelson, P. (1952). “Spatial price equilibrium and linear programming.” American Economic Review, 42(3), 283–303. Schneider, U., and McCarl, B. (2000). The agricultural sector and greenhouse gas mitigation model (ASMGHG). Unpublished paper, Department of Agricultural Economics, Texas A&M University. Scot, A. (1955). “The fishery: The objectives of sole ownership.” Journal of Political Economy, 63(2), 116–124. Seuring, S., and Müller, M. (2008). “From a literature review to a conceptual framework for sustainable supply chain management.” Journal of Cleaner Production, 16, 15. Sharma, K., and Leung, P. (1999). “Technical efficiency of the long-line fishery in Hawaii: An application of a stochastic production frontier.” Marine Resource Economics, 13(4), 259–274. Sterman, J. (1991). “A Sceptic’s guide to computer models.” In W. K. G. O. Barney (Ed.), Managing a nation, the Microcomputer software catalog. Boulder, CO: West View Press. Thierry, M., Salomon, M., Van Nunen, J., and Van Wassenhove, L. (1995). “Strategic production and operations management.” California Management Review, 37(2), 114–135. Underwood, R., and Tolwinski, B. (1998). “A  mathematical programming viewpoint for solving the ultimate pit problem.” European Journal of Operational Research, 107(1), 96–107. Walker, P.,  Seuring, P.,  Sarkis, P.,  and  Klassen, P.  (2014). “Sustainable operations management: Recent trends and future directions.”  International Journal of Operations & Production Management, 34(5). Waugh, F. (1951). “The minimum cost dairy feed.” Journal of Farm Economics, 33(3), 299–310. Weintraub, A., Jones, G., Meacham, M., and Kirby, M. (1994). “A  heuristic system to solve mixed integer forest planning models.” Operational Research, 42(6), 1010–1024.

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Weintraub, A., and Romero, C. (2006). “Operations research models and the management of agricultural and forestry resources: A review and comparison.” Interfaces, 36(5), 446–457. White, L., and Lee, G. J. (2009). “Operational research and sustainable development: Tackling the social dimension.” European Journal of Operational Research, 193(3), 683–682. White, L., Smith, H., and Currie, C. (2011). “OR in developing countries: A review.” European Journal of Operational Research, 208(1), 1–11. Yates, C., and Rehman, T. (1996). “Integration of Markov and linear programming models to assess the farmgate and national consequences of adopting new bovine reproductive technologies in the United Kingdom agriculture.” Journal of the Operational Research Society, 47(11), 1327–1342. Zekri, S., and Boughanmi, H. (2007). “Modeling the interactions between agriculture and the environment.” In C. R. A. Weintraub (Ed.), Operational research in natural resources, 69–91. New York: Springer.

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9 THE GLOBAL REPORTING INITIATIVES, BUSINESS INTELLIGENCE, AND CORPORATE SUSTAINABILITY An analysis of Indian enterprise in the energy sector Rekha Mishra and A. K. Saini

Introduction The globally changing climatic conditions are leading to extreme weather conditions across the globe. This situation demands that people and organizations become conscious about their impact on the environment and immediately take measures to streamline their functioning to minimize the harm being done to the environment and adopt practices that would ensure sustainability overall. In this context, organizations all over the world are gradually adopting the global reporting initiative (GRI) guidelines to report their critical impact—be it positive or negative—on the environment, society, and economy. By sharing this information publicly, the organization builds trust amongst customers and partners, controls risk, and thus also ensures financial profitability (GRI, 2018). Also after July 1, 2018, reporting with GRI standards had become mandatory for organizations globally to ensure compliance with regulations internationally. The large Indian companies, particularly those in the energy sector, are keeping pace to ensure implementation of the guidelines. The Government of India established Maharatna status for public-sector companies who had three of the annual profits of over 2,500 crores. These Maharatna companies are the major contributors to gross domestic product (GDP) in Indian economy; out of the seven Maharatna companies, five are in the energy sector. With increasing concerns regarding dwindling natural resources and the impact of their usage on our environment, it becomes imperative to investigate the efforts being made by these organizations in ensuring the 115

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sustainability of their businesses and the environment. Considering the size of the organization and complexity of the business, this task is challenging and calls for the deployment of sophisticated information technology systems that can help process a huge amount of data to draw insight for business reporting and decision-making purposes. Such systems are also called business intelligence (BI) systems. The business intelligence drawn from these systems can significantly help an organization achieve success in its GRI efforts. In this chapter, the authors present the findings drawn from a survey done in five big public-sector enterprises in the energy sector in India. The survey aimed to check the correlation between the overall satisfaction with business intelligence in the organization and the extent of the implementation of GRIs and corporate sustainability.

GRIs, corporate sustainability, and business intelligence Though there are several benchmarks and guidelines for CSR and sustainability reporting, global reporting initiative guidelines, formed in June 2000, have gained maximum importance as they have gone a step further by including financial and social reporting, unlike the previous ones which were concerned with environmental reporting only. They are being promoted by GRI itself and the United Nations Environment Programme (UNEP) (Morhardt, 2001). GRI guidelines serve as scoring systems on various financial, social, and environmental guidelines. The GRI G3 guidelines released in 2006 mentions reporting parameters, reporting principles, and standard disclosures, including a list of 79 performance indicators (Roca and Searcy, 2012). The G4 guidelines introduced in October 2016 supersede all other GRI guidelines as these are for all the industries and sectors (GRI, 2018). Studies have indicated that organizations use GRI guidelines only to achieve organizational legitimacy (Hahn and Kühnen, 2013). A  study by Vormedal and Ruud (2006) discussed the role of societal, political, and regulatory authorities in monitoring and enforcement of the environmental reporting legislation. Also, CSR reports and GRI guidelines are being used more for internal help only rather than for external communication. The study has further shown that GRI guidelines can assist organizations in understanding themselves to a great extent. Also, many organizations use GRI guidelines to draft their report but do not always mention all the points mentioned in the guidelines in their report (Hedberg and Von Malmborg, 2003). It has been observed that sustainability reporting is still not a voluntary effort on the part of the organizations and that disclosures on CSR finances and donations were not present (Sahay, 2004). In India, CSR really got recognition with organizations upon the introduction of Section  135 of the Companies Act, 2013. Interestingly, Indian public-sector units have been doing CSR for a long time now as it was made compulsory 116

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by Central Public Sector Enterprises, 2010 (issued by the Department of Public Enterprises). With the increased acceptance of GRI guidelines worldwide, they have found a place in organizations’ information systems and business processes. GRI, 2011 presents five guidelines for data compilation, presentation, metric, and standard usage (Marimon et al., 2012). The companies in the energy sector have shown significant growth over the years and across the globe. Interestingly, these very companies have shown increased adoption of CSR and sustainability reporting (Marimon et al., 2012). In India, the major companies in the energy sector are governed by the Department of Public Enterprises and have been compulsorily doing CSR and sustainability reporting, as mentioned in their annual reports (Gautam and Singh, 2010). In this context, we also look at business intelligence (BI), a concept composed of tools, technology, process, and methods for gathering, processing, exploring, and visualizing data to get information to support decision making in organizations. It is also being increasingly used to track and monitor organizations’ CSR and sustainability reporting agenda besides various other parameters in the organizations. Usage of BI systems helps to integrate organization and thus increases the visibility of the key performance indicators for businesses (Hertel and Wiesent, 2013). The decision environment of the organization has a role to play in the BI processes, and hence it is observed that those organizations having BI-driven decision environment have shown a higher level of BI system success or satisfaction (Mishra and Saini, 2017). It is thus proposed that organizations having satisfactory BI systems and BI-driven decision-making culture in place would also show increased adoption of and abidance by the GRI guidelines as it would assist in the diffusion of reporting guidelines amongst various departments in the organization. The objective of the study is to explore the relationship between business intelligence satisfaction level in the organization, GRIs, and corporate sustainability reporting.

Exploring the relationship between BI satisfaction level, GRIs, and corporate sustainability reporting The study has used a mixed method involving qualitative and quantitative methods to investigate and understand the topic. The literature review carried out was aimed at learning the status of GRI adoption across sector and industries worldwide and in Indian energy sector companies along with business intelligence system satisfaction level in these organizations. We have adopted the Fink (2010) method to carry out a literature review. At first step, we identified our research question and explored several studies around it. In the second step, we filtered those studies through the criteria suited for our research. In the third step, we further reviewed selected 117

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studies for the methodology used and finding, and finally, we prepared a write-up on our findings for further research. We interviewed 55 senior managers and decision makers from energy sector organizations, using a questionnaire prepared following extensive reviews of the latest literature on BI, GRIs, and corporate sustainability and having closed-ended or Likert type questions. The data obtained were analyzed using various techniques available in SPSS version 24 software.

Analysis and findings 1  Analysis from the literature reviewed A literature review spanning from the year 2006 to 2018 and using refereed journals, the annual reports of organizations, newspaper articles, and policy documents of public-sector organizations was carried on GRI adoption, CSR across industries and across the globe. The references presented in this chapter are the final studies taken for writing the literature. The studies discussed the role of political, societal, and organizational culture in CSR and sustainability reporting. The studies found that most organization take to reporting only to gain organizational legitimacy. Voluntary disclosure on all the parameters is still not the norm. The key determinant of sustainability reporting is still financial accounting and social effort disclosures, whereas GRI guidelines have a strong focus on environmental sustainability along with other forms of sustainability for organizations Hahn and Kühnen (2013). This implies that GRI guidelines are still not common amongst organizations, though some organizations have started to show that they are nearly in complete compliance with the GRI guidelines. 2  Descriptive analysis A total of 115 managers of Maharatna companies in the energy sector were interviewed for their views on GRI reporting, satisfaction level with the BI system, and corporate sustainability in their organizations. The names of the companies have not been disclosed due to the confidentiality agreement signed with them. The majority of the respondents in our survey were males as shown in Table 9.1. This is because the workforce in public-sector enterprise in the energy sector is still predominantly composed of male employees. The respondent profile by level in management as shown in Table  9.2 illustrates that 77 per cent of the respondents were from a middle management background, 15 per cent were from the executive level, and 8 per cent were from the operational level. A look at the respondent profile by area in management as shown in Table 9.3 shows that 30 per cent of the respondents were from finance and 118

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Table 9.1  Respondent profile by gender Gender

Frequency

Per cent

1 Male 2 Female Total

97 18 115

84.3 15.7 100.0

Source: Primary data analysis

Table 9.2  Respondent profile by level in management Level in management

Frequency

Per cent

1 Executive management 2 Middle management 3 Operational management Total

17 89 9 115

14.8 77.4 7.8 100.0

Source: Primary data analysis

Table 9.3  Respondent profile by area in management Area in management

Frequency

Per cent

1 Engineering 2 General management 3 Human resource management 4 Manufacturing/operations 5 Marketing/sales 6 Finance/accounting/planning 7 Information technology Total

17 24 7 4 9 35 19 115

14.8 20.9 6.1 3.5 7.8 30.4 16.5 100.0

Source: Primary data analysis

accounting, 21 per cent from general management, 16 per cent from information technology, 15 per cent from engineering, 8 per cent from marketing and sales, 6 per cent from human resource management, and only 3 per cent from manufacturing and operations. Business intelligence success was measured using a Likert type question having five options varying from strongly agree to strongly disagree: “Are you satisfied with the Business Intelligence in your organization?” As shown in Table 9.4, 52 per cent of the respondents said that they were somewhat satisfied, around 35 per cent were neutral, and only 9.6 per cent said that they were strongly satisfied. All the respondents answered positively when asked if they follow GRI guidelines for reporting. As shown in Table 9.5, 62.6 per cent said that they 119

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Table 9.4  Level of satisfaction with BI in the organization Level of satisfaction

Frequency

Per cent

2 Somewhat dissatisfied 3 Neither 4 Somewhat satisfied 5 Strongly satisfied Total

4 40 60 11 115

3.5 34.8 52.2 9.6 100.0

Source: Primary data analysis

Table 9.5  Level of reporting as per GRI guidelines Level of GRI

Frequency

Per cent

Level 2 Level 3 Total

72 43 115

62.6 37.4 100.0

Source: Primary data analysis

were reporting at GRI 2 level and only 37.4 said that they were reporting at GRI 3 level. As shown in Table 9.6, the correlation between BI success in the organization and level of GRI reporting is 0.63, which illustrates a positive relationship between the presence of a robust BI system in the organization and the amount or level of GRI reporting. From the result, we can infer that an organization that displays a higher level of GRI reporting also shows a higher level of satisfaction with the BI in their organization. Hence, it is recommended that for promoting adoption of a higher level of compliance with GRI reporting, organizations should ensure higher BI success in their organization. It is also recommended that the organizations make it a part of their BI strategy to incorporate GRI reporting in all their processes to ensure a higher level of GRI compliance. The annual reports of organizations and primary data analysis showed that corporate sustainability was higher in the organization that had a higher level of BI success. These findings thus point to the need to ensure greater satisfaction level in the organization with the quality of BI available in order to ensure higher compliance with GRI guidelines. (LiveMint; Economic Times, 2017; GRI, 2018; ONGC, 2017).

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Table 9.6  Spearman’s correlation Correlations Spearman’s rho BI Success

Correlation Coefficient Sig. (2-tailed) N Level of GRI Correlation Coefficient reporting Sig. (2-tailed) N

BI success

Level of GRI reporting

1.000 . 115 .630** .000 115

.630** .000 115 1.000 . 115

**. Correlation is significant at the 0.01 level (2-tailed). Source: Primary data analysis

Conclusion From these findings and discussion, we conclude that the GRI reporting has found acceptance with energy companies in the public sector in India, though satisfaction level with BI systems still varies from company to company. With a higher satisfaction level with BI, system organizations can hope to find a greater prevalence of GRI reporting. These findings are of immense value to the project managers and decisions makers in the similar and allied organizations in the energy sector, as they help to build a case for providing insight into the BI system success for implementation of global reporting initiatives and corporate sustainability. These findings will also serve as a road map to the BI solution developer in creating a successful BI system for global reporting initiatives. Finally, they will also help policy makers in government in designing and implementing policies that assist in the effective and efficient distribution of resources in the energy sector.

References “Analysis of O&G Sector CSR Spend 2014–15.” Retrieved from http://www. doonething.in/content-hub-archive/2016/3/16/ury3zpwra4v79uatdszlo7elx lkqwk/, accessed November 22, 2017. Arundhati Ramanathan. (2015). “LiveMint: The Energy Sector is the highest Spender on CSR.” Retrieved from www.livemint.com/Companies/hh5mAy QFUpcYma2e4BkzVJ/Energy-sector-is-the-highest-spender-on-CSR.html, accessed November 22, 2017. “Economic Times: Govt to assess the impact of CSR activities undertaken by PSUs.” Retrieved from http://energy.economictimes.indiatimes.com/news/power/

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govt-to-assess-impact-of-csr-activities-undertaken-by-psus/59130691, accessed November 22, 2017. Fink, A. (2010). Conducting research literature reviews: From the Internet to paper, 3rd ed. Thousand Oaks, CA: Sage Publications. Gautam, R., and Singh, A. (2010). “Corporate social responsibility practices in India: A study of top 500 companies.” Global Business and Management Research: An International Journal, 2(1), 41–56. GRI (2018). Retrieved from www.globalreporting.org/information/sustainabilityreporting/Pages/default.aspx, accessed December 22, 2018. Hahn, R., and Kühnen, M. (2013). “Determinants of sustainability reporting: A  review of results, trends, theory, and opportunities in an expanding field of research.” Journal of Cleaner Production, 59, 5–21. Hedberg, C., and Von Malmborg, F. (2003). “The global reporting initiative and corporate sustainability reporting in Swedish companies.” Corporate Social Responsibility and Environmental Management, 10(3), 153–164. Hertel, M., and Wiesent, J. (2013). “Investments in information systems: A contribution towards sustainability.” Information Systems Frontiers, 15(5), 815. Marimon, F., del Mar Alonso-Almeida, M., del Pilar Rodríguez, M., and Alejandro, K. A. C. (2012). “The worldwide diffusion of the global reporting initiative: What is the point?” Journal of Cleaner Production, 33, 132–144. Mishra, R., and Saini A. K. (2017). “An empirical investigation of role of decision environment in business intelligence process.” Business Perspective, 16(2), July– December. ISSN 0972-7612. Morhardt, J. E. (2001). “Scoring corporate environmental reports for comprehensiveness: A  comparison of three systems.” Environmental Management, 27(6), 881–892. ONGC. Retrieved from www.ongcindia.com/wps/wcm/connect/ongcindia/Home/ Initiatives/Corporate+Sustainability/, accessed November 22, 2017. Roca, L. C., and Searcy, C. (2012). “An analysis of indicators disclosed in corporate sustainability reports.” Journal of Cleaner Production, 20(1), 103–118. Sahay, A. (2004). “Environmental reporting by Indian corporations.” Corporate Social Responsibility and Environmental Management, 11(1), 12–22. Vormedal, I., and Ruud, A. (2009), “Sustainability Reporting in Norway – an Assessment of Performance in the Context of Legal Demands and Socio-Political Drivers.” Business Strategy and the Environment, 18, 207–222.

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10 CSR AND ITS COMMUNICATION IN MULTINATIONAL COMPANIES IN INDIA AND THE UK Dimensions and relationships Mary Longhurst

Introduction Both India and the UK have a tradition of philanthropy that has evolved into an increasing focus on CSR. Both countries also experience very different contextual pressures that influence both how they develop their CSR practice and how this is communicated to stakeholders. The analysis within this chapter contributes to an understanding of the company objectives for its CSR and communication, and how practices are developed and altered depending on the company and country setting. The research is designed to acknowledge the relevance of the contextspecific and ever-changing nature of CSR and its communication. To understand this evolutionary process, India and the UK have been selected. Using case study materials from Shell, a company incorporated in the UK and operating in India, and Tata Steel, founded in India and operating in the UK, these two companies in two different countries have been used to develop a four-way comparative analysis.

Motivation for the research CSR practice has become a major focus for government institutions, businesses, and non-governmental organizations (NGOs) across the globe. It is encouraged by authorities such as the World Bank, the Organisation for Economic Co-operation and Development (OECD), International Monetary Fund (IMF) and United Nations (UN), through the Global Compact launched in 2000 (Farashahi and Hafsi, 2009; Jenkins, 2005). This 123

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global support for CSR has, however, gone hand in hand with highly publicized scandals associated with some of the largest multinational companies (MNCs) in the world, some of which have received awards for their high-profile CSR programmes. These include Anderson, Coca-Cola, Enron, Satyam, Shell, the Tata Group, and WorldCom. These highly publicized scandals are indicators that CSR practice can no longer be just a superficial display of altruism. Yet the continued predominance of a voluntary code of CSR involvement (Fox, 2004; Palazzo and Scherer, 2008) has arguably led to a number of Western-owned companies being exposed for applying different standards in developing countries than they would at home. Cases such as Coca-Cola polluting water in India (Maira, 2008; Mitra, 2007) and Nike’s employment of child labour in Pakistan (Muller et al., 2008) have all had international exposure and alerted the commercial world to the transparent nature of their business and the ever-changing benchmark of acceptable company behaviour. Despite the criticisms of CSR, pressure remains on global businesses to pursue its possibilities, and, in 2013, India became the first country in the world to mandate a minimum CSR spend for qualifying larger companies. The concept, however, remains a “fuzzy” one (Lantos, 2001: 595), and every company in a specific country is under the influence of a prevailing institutional framework (Whitley, 1999), which will influence its practice and outcomes. International guidelines arguably promote integrated internationalization strategies that help generate efficiencies and responsiveness to particular needs (Ghoshal and Bartlett, 1990). When it comes to MNCs that have expanded their influence with the advent of globalization (Jamali, 2010), however, research has identified that local culture is ignored in the development of their CSR policy (Bondy and Starkey, 2012). By crossing borders and continents, MNCs therefore operate within complex business contexts and are presented with a wide range of business and social issues. This offers both unique opportunities and challenges (Ghoshal and Bartlett, 1990). As a global phenomenon, the CSR practice of these MNCs can play a fundamental role in the outcomes for these companies in terms of their stakeholder relationships. These interdependent relationships can therefore not be ignored by companies or stakeholders, and fundamental to these relationships is the role of communication, helping to define and shape the terms of these associations (Wright, 2010). The level of CSR communication has therefore risen with the increase in CSR activity (Hetze and Winistörfer, 2016; Lattemann et al., 2009) and the understanding that the perceptions of an organization are largely developed through an individual’s interaction with such narratives (Surma, 2004). CSR communication has become an extremely important aspect of corporate communications, conferring legitimacy on corporate actions and helping prevent the negativity associated with large companies and their activities 124

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(Jayakumar, 2013). Yet stakeholders can become intolerant if companies fail to fulfil their obligations (Dawkins and Lewis, 2003) or their information requirements are not satisfied (Dawkins, 2004). An expectation for appropriate communication therefore exists for companies to not only engage in CSR activity but also to communicate this engagement (Beckmann and Morsing, 2006). Yet companies frequently rely on the “transmission model of communication” (Schoeneborn and Trittin, 2013: 193), which arguably does not satisfy the desire for engagement. In certain contexts, companies also experience ethical dilemmas when communicating CSR activity and the paradox of stakeholders with a high regard for socially responsible companies and a low regard for companies’ “deliberate, conspicuous communication about CSR” (Ganga S. Dhanesh, 2015: 431). The research aims to develop a deeper understanding of current CSR practices and communication in India and the UK, considering how different contexts affect the approaches and how this is perceived by stakeholders within both countries. The master question is “What are the characteristics of, and influences on, CSR, its practices and its communication in India and the UK?” This is supported by the following sub-questions: • What are the objectives and characteristics of CSR for Tata Steel and Shell in India and the UK, as perceived by company managers and stakeholders? • What are the perceived objectives and characteristics of the CSR communication for Tata Steel and Shell, as perceived by company managers and stakeholders? • What are the perceived contextual influences on these practices?

Modus operandi To support the search for an understanding of meanings and perceptions from the company and stakeholder perspective, a methodology was required that would allow for the collection of subjective data. This research draws on an interpretative epistemology, influenced by phenomenology’s focus on understanding “lived experience” (Patton, 2002: 115). As such, the research is based on the collection of qualitative data with the analysis of interviews as the source of information (Siltaoja, 2006). To be able to explore the concepts and patterns of the phenomena of CSR and its communication, a case study approach has been adopted as a means of understanding the interaction between a phenomenon and its context (Dubois, 2002). It is relevant to the aim of uncovering the differing perspectives of these two disciplines. To obtain quality data, participants were chosen from the two country and company contexts with direct experience of the topics under discussion. India was chosen as an emerging Asian economy (G. S. Dhanesh, 2016) with a strong commercial tradition (Mitra, 2007) and a history of 125

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company involvement in socially responsible activities (Balasubramanian et  al., 2005). The UK was selected as a developed economy, also with a history of socially responsible activity (Pietrusiak, 2004) and, as part of Europe, within arguably the most “vibrant region” (Breitbarth et al., 2009: 239) for the development of CSR. The MNCs chosen for the case studies were selected for intrinsic and instrumental reasons (Daymon and Holloway, 2011). They have a tradition of CSR practice and CSR communication and access to significant budgets in order to implement complex programmes of communication in both these countries. They are also in the extractive industry and have operations in India and the UK. This selection allows for the comparison and contrast of activities and perceptions to be made between the two companies in two different countries. To provide data that allowed for cross-case analysis, the approach focused on in-depth, semi-structured interviews with ten senior managers within Tata Steel and Shell, in India and the UK. Within each country and each company, these sources included those actively responsible for the development and management of the CSR objectives, strategy, and planning, and those responsible for the setting of CSR communication objectives, strategy, and planning. This totalled approximately ten hours of recorded material. Interviews with stakeholders were also included in the data-gathering process. These included representatives from a diverse range of stakeholder groups, including ex-employees, journalists, academics, consultants, and NGOs, to obtain the contextual perceptions of people from a range of experiences and perspectives within each country context. This part of the research involved 15 interviews that could be used for research purposes, and more than 15 hours of recorded material. The data provided not only a different perspective to that of the companies, but also rich insights into the wider company context.

The analytical process The data were collected as oral data through the interview process, then transcribed into a series of management and stakeholder transcripts. The language contained within these texts provided the central means and medium by which we understand the world (Barker and Galasiński, 2001), so a method of analysis was required that would draw out the information held within them. Discourse analysis techniques were employed to allow the researcher to examine the assumptions and discourses with which they are associated (Fairclough, 2003). First, the transcripts were separated as they were relevant to the four contexts, by company and by country. Each transcript was read individually, identifying and highlighting similar ideas, topics, and phrases so they could be grouped together. This included the words used to describe their 126

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Table 10.1  Details of the interviewees and their respective positions Company interviews Tata Steel India Manager 1 Manager 2 Manager 3 Shell India Manager 4 Manager 5 Tata Steel UK and Europe Manager 6 Manager 7 Manager 8 Manager 9 Shell UK Manager 10 Stakeholder Interviews Stakeholder 1 Stakeholder 2 Stakeholder 3 Stakeholder 4 Stakeholder 5 Stakeholder 6 Stakeholder 7 Stakeholder 8 Stakeholder 9 Stakeholder 10 Stakeholder 11 Stakeholder 12 Stakeholder 13 Stakeholder 14 Stakeholder 15

Job title Brand Custodian and Chief Ethics Officer, Tata Sons Ltd Chief, Corporate Communications, Tata Steel, India and SEA Vice Chairman, Tata Steel (now retired) Corporate Head of Communications, Shell Group of Companies, India Project Manager, Road Safety Program, Shell India Group Director, Environment Head of Media Relations, Tata Steel Sponsorship and Donations Manager, Tata Steel Head of Corporate Branding, Europe Strategic Relations Manager, Shell International Position Chief Executive, Centre for the Advancement of Philanthropy (charity, India) Ex-employee, Vice President, Tata Council for Community Initiatives/CSR consultant, India Ex-employee, Chief, Corporate Affairs and Communications, Tata Steel/Business consultant, India Head of Business Programs, Initiatives of Change (charity, UK)/Journalist Publisher, Civil Society, India Editor, Civil Society, India Professor and Program Director (advertising and PR), India Institute of Mass Communication, New Delhi, India Founder Director, Tomorrow’s Company, UK Volunteering Development Manager, Voluntary Action, North Lancashire, UK Event Organizer, British Triathlon Trust Freelance Journalist and CSR consultant, UK Chairman, Edelman, Europe and CIS Freelance CSR Journalist, UK Freelance CSR Journalist, UK Ex-employee, market communications, Shell, UK

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definition of CSR and their interpretation of approaches, motivations, and activities relating to the subject matter. This process was repeated for each transcript, which allowed patterns of discourse to emerge from the text. The most dominant patterns, known as interpretative repertoire (Burr, 2003), were thus identified. Ideas, topics, and phrases were grouped together to reach an initial set of repertoires. These repertoires helped reveal how perceptions compared between the company and its stakeholders. The analysis of the discourse within the interview transcripts focused on the style of language, terminology, figures of speech, and metaphors used. The repetition of statements and strategies was also analyzed as these helped lead to the emergence and solidification of knowledge (Jager and Maier, 2009). Segments and quotes were scrutinized to identify how the various statements functioned at the level of language and the context that informs the arguments. Next, the analysis linked the themes occurring within the textual analysis with the economic and cultural dimensions of the relevant country and company concerned. This form offers a four-way analysis that compares and contrasts the findings between countries and companies (see Figure 10.1).

Figure 10.1 The cross analysis between companies and countries allows for a fourway analytical process table Source: Created by the authors

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Results and conclusions 1 What are the objectives and characteristics of CSR for Tata Steel and Shell in India and the UK, as perceived by company managers and stakeholders? Tata Steel India, Shell India, and Shell UK all related the companies’ CSR activities to the broader concept of sustainability or sustainable development, encompassing the economic, social, and environmental approaches. These related to company values and included both implicit and explicit (Matten and Moon, 2008) approaches to CSR. The implicit approaches included the management of complex issues related to supply chains, climate change, and energy usage. Explicit approaches ranged from unbranded philanthropic activities, to branded and sponsorship activity. Neither Tata Steel India, Tata Steel UK, nor Shell UK directly used the term CSR within their companies and had furthermore separately labelled different elements of their sustainability activity in terms more directly relevant to specific activities. For example, under this sustainability umbrella, both Tata Steel and Shell in the UK separately defined programmes of social investment. Tata Steel India defined its community involvement activity as Affirmative Action, Tata Steel UK described its social programmes under the banner of Future Generations, and Shell UK referred to social investment (SI), which included Strategic Social Investment (SSI). In these three contexts, there was evidence of a stakeholder management approach (Freeman, 1984), though there was also clear evidence that stakeholders were not managed equally by the company within its CSR programme. Indeed, stakeholder prioritization, in relation to the social investment activities, put the focus on the local community to existing or planned operations and employees. Shell India was the only company context that directly used the term CSR and that was because of the introduction of the Government of India’s CSR Act. Indeed, this act focuses specifically on social issues relevant to India which meant that Shell India’s main area of investment was planned for this area to meet legal criteria. Tata Steel in India and the UK and Shell in India all differentiated between their philanthropic activity and strategic CSR activity by the level of involvement the company had with its stakeholders. This specific identification of involvement is thus fundamental to the definition of CSR yet not explicitly articulated anywhere in the CSR literature on definitions, despite many references made to the importance of stakeholder relationships. For example, it is through high levels of involvement with local communities that Tata Steel India has developed its Affirmative Action programme which covers activity under the labels of education, employment, 129

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employability, entrepreneurship, and ethnicity. These areas of activity have been designed to add structure to the CSR activities “so the whole economy benefits.” This is driven by a “very strong sustainability ethos” and a founder who believed that “community is not just another stakeholder in business but in fact the purpose of its existence.” This reflects a company that acknowledges the interdependent nature of its relationship with its stakeholders, with particular emphasis on its community and the need for social involvement. The narratives used within Tata Steel India reveal links of an existential approach (Frankel, 2004)—“the purpose of its existence”—with the ethical—a “very strong sustainability ethos”—and the strategic (Lantos, 2002; Porter and Kramer, 2002). Indeed, the existential or psychotherapeutic (Frankel, 2004) use of language has echoes in the literature on spiritual leadership, whereby the enlightened leader focuses on service, not selfishness (Korac-Kakabadse et al., 2002), and identifies with what Stamp (1991) refers to as a sense of connectedness between the inner self and outer world, a company and its stakeholders. This closes the relationship space between the two parties and is reflected in the company narrative that describes a desire for it to be “one with society,” as “a social creature.” While Fleming and Jones (2012) identify the use of religious language in the normative rationale and Davila Gomez and Crowther (2006) discuss the relevance of purposeful human action in organizations, the value and effectiveness of achieving these spiritual and psychological benefits through CSR have not yet been explored. Tata Steel UK, Shell India, and Shell UK narratives differed from Tata Steel India in that they all identified an instrumental approach to CSR. This was explained through an acknowledged interdependent relationship between the companies and their stakeholders. Indeed, Tata UK explained, “we need each other.” This relationship, however, focused on developing strategic gain for the companies through a mutually beneficial relationship. Shell India described this as finding the “sweet spot.”

Table 10.2 The motivations described in each of the contexts differed Tata Steel India Shell India Tata Steel UK Shell UK

Sustainable development Spirituality and psychology CSR as social good Differentiation Sustainability Philosophy and values Differentiation Adding value Differentiation

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Tata Steel India identified a range of other motivations linked to the motivation of sustainable development, such as the development of positive reputation, the creation of brand ambassadors, and the management of risk. Such motivations have already been identified through the existing academic literature (Friedman and Miles, 2004; L’Etang and Pieczka, 2006; Surma, 2006; Watson, 2007). Tata Steel India, however, perceive these benefits as being linked to the integrity of its managers and, as such, integral to the business. Inherent in this focus on integrity is communication. As such, the company perceives action as a form of communication, making its implicit values explicit. In terms of spirituality and psychology, Tata Steel India described CSR as having a role in providing a sense of meaning for employees. The company encourages employees to engage in community projects that they feel are “meaningful.” As part of this process, the psychological concepts of selfesteem and self-realization (Maslow and Frager, 1987) are also raised by the company management as being motivators for its CSR activity. Indeed, it is through the relationship company individuals have with the community that a sense of meaning, enjoyment, and increased self-esteem is realized by both parties. While CSR for Shell India was being driven by the need for legal compliance, the company was in the process of deciding its own strategic approach. At the time of research, Shell India was thus using the CSR Act as a catalyst for change in approach. This was described as requiring a “paradigm shift,” to move from perceiving CSR as “giving” to one of “investment.” In terms of the perceived need to differentiate the Shell brand in India, this related specifically to the need for the company to compete in a highly competitive recruitment market. By offering existing and potential new employees, the company aimed to use CSR as a means of presenting “the opportunities you can provide to individuals to become fuller human beings.” The motivations of sustainability, philosophy, and values and differentiation are closely interlinked for Tata Steel UK. It is summed up in the statement from a senior manager who explains that the company is “very passionate about trying to demonstrate that Tata is different; that Tata stands for something different.” A stakeholder also perceived that the company aims to “maintain the vision that it is a caring organization.” Indeed, brand differentiation was seen to be achieved through stakeholder activities that “improve the way they live” or “improve their experience.” The differentiator thus needed to provide “experience,” linked to the company brand and CSR, translated through activities that “inspire.” As such, for the company, “branding and CSR are inextricably linked.” Shell UK identifies sustainability as a driver of added value for the company in a number of ways. Its practices involve community education and engagement as a means of supporting and remaining sensitive to the needs and expectations of its local community. It also involves using “local 131

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companies” and “local supply chains” where possible and, as such, is seen to be supporting its local communities. Indeed, these activities are linked to the company’s core values of “honesty, integrity and respect for people” and provide a means of making these implicit values explicit (Matten and Moon, 2008). Making them explicit is important for the company as “we want people to be proud of the company—your employees are your biggest asset in terms of reputation.” It is thus a means of sensitizing the company to its environment and managing the company reputation, thus revealing both proactive and reactive strategies (L’Etang, 1994). The motivation of differentiation is identified through Shell UK’s SSI programme. This creates “fantastic assets” that are branded for the company. Programmes such as Shell Livewire, focusing on enterprises, explicitly offer strategic benefit for the company through social investment which is focused on “delivering for the business.” These findings thus identify a number of new dimensions to the CSR narrative. First, it appears that the term itself is being subsumed by a broader focus on sustainability—a concept that focuses on the environment, people, and economy or profit (Elkington, 1998). Within this social investment, programmes can be identified under a range of labels which include Affirmative Action and Strategic Social Investment. A level of philanthropic activity is considered necessary, though the main focus is on the development of strategic activity that offers mutual value to both the company and its stakeholders, albeit that these stakeholders are prioritized in terms of perceived level of importance to the company. The element of the CSR definition, however, that separates it from philanthropy does not just lie in its strategic nature, as described in existing literature, but through the company’s direct involvement with its stakeholders. It is through this involvement that companies are now focused on creating a positive experience for its stakeholders that provides a sense of meaning and purpose to their work and indeed their lives. This existential (Frankel, 2004) approach also links to the development of self-esteem and selfrealization as identified through Maslow and Frager’s (1987) psychological framework. It highlights a focus on a transformative process as individuals are positively influenced by the company’s CSR approach. These transformative qualities aim to give meaning and value to both the company and the individual stakeholders and have an impact on the company’s approach to its communications. 2 What are the perceived objectives and characteristics of the CSR communication for Tata Steel and Shell, as perceived by company managers and stakeholders? Four main approaches to CSR communication have been identified within the Tata Steel India narratives. These include communication through 132

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action and behaviour; engagement; information and negotiation; and promotion and persuasion. The most significant element, in terms of adding new knowledge to the existing CSR communication literature, is that of the relationship between action and behaviour and the making of implicit activity explicit through action. Indeed, the behaviour of leadership is described by a senior manager as action that necessarily “comes from the heart, it has to be a conviction.” Furthermore, the company manager explains that “it is not so important for you to communicate it as long as you have done the right thing and you have satisfied yourself and you have satisfied society.” Indeed, the essential element here is involvement and, as such, the involvement or action becomes the communication and supports the desire for personal connectedness defined through the company’s CSR approach. This grounding of communication in action allows the implicit to become explicit (Matten and Moon, 2008) in a way that communicates integrity and thus supports the company values. It takes an inside-out approach to communications, ensuring employee commitment first (Morsing et  al., 2008) and allowing the process of engagement and relationship building to take place which are regularly discussed in the CSR literature. From here follow the other forms of CSR communication such as information and negotiation as well as promotion and persuasion. This desire for personal connectedness is also prevalent in Shell India’s narrative on CSR communication. The company describes its employee stakeholders as “inquisitive by nature” and indeed, they “challenge anything that you say.” As such, new approaches to engaging them are required. For Shell India, this means finding a way to “tell them stories in an interesting manner” and “put out the vulnerability of a business.” It is achieved through third-party endorsement—“the stories are told by the beneficiaries and the recipients” of the CSR activity. Processes of engagement and one-way communication are also used by Shell India, though the process of change from a one-way to a two-way communication (Grunig, 1992) is perceived as “a major effort” for the company. Yet the “two-way” communication process is perceived by the company to be an effective means of instilling knowledge and skills and thus, changing behaviour. The imbedded nature of communication in action is also one raised by Tata Steel UK. Indeed, the company took the view that it is not possible to “separate the actions from the communications.” As such, stakeholder involvement is the means by which the brand experience takes place and is thus communicated. Furthermore, using “CSR rhetoric” and “meaningless terms like triple bottom line” can mean you “lose a narrative about a company and why it’s different and what it cares about.” This statement again introduces the need for personal connectedness in communication which is described as being achieved through action. This manager described a company activity that received no publicity and explained, “my purpose for 133

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doing it was to make people feel good about the fact that our company is doing something to help but also to generate a team spirit and getting people working together.” Thus, the action becomes the communication and the engagement in the activity the means of creating the “feel good” factor the company wants associated with its brand and the company. The Tata Steel UK’s Future Generations programme also develops branded activities that are supported with promotional activity. These include the Tata Steel Chess Tournament, Kids of Steel Triathlon events, and Cast Iron Communities volunteering programme. The decisionmaking process to develop such programmes starts with the focus on involvement in “aspirational” activities. The branded communications, however, present a communication challenge described by a senior manager who adds: “I think sometimes there is a risk that if you promote it too much or talk about it too much people will be cynical.” It is for this reason that communication through third parties is considered to be the “greatest endorsement” and is most effective when the stakeholder is “personally involved.” As such, CSR communication for Tata Steel UK becomes a “balancing act.” Sustainability and engagement featured prominently in Shell UK’s narrative, as did the use of marketing communication techniques in relation to its SSI activity. The company’s engagement approach was instigated by its Brent Spa crisis which moved the company from a “process of decide, announce and defend” to one of “dialoguing, delivering and further dialoguing.” (In 1995, Shell was embroiled in a public dispute over the decommissioning and disposal of the Brent Spar, a redundant, oil storage installation in the North Sea. Despite the support of independent scientists for its proposed disposal, the company did not win public acceptance.) Engagement as a communication process thus has the potential to sensitize a company to its environment, and indeed Shell UK takes this approach locally through its “community engagement” activity. This involves creating an understanding of the company’s local operations. When issues are highly sensitive, however, and engagement is driven by contradictory actions or competing motivations, it will quite possibly fail. This indicates that engagement in itself is not a means of building trust. Indeed, it is a broad term that could be interpreted in many ways. Shell UK’s SSI activity, on the other hand, focuses on a marketing communication or promotional approach to explicitly communicate the company brand alongside socially supportive activities. Indeed, it must “deliver the good stuff” and the company has to be able to “tell people you’re delivering the good stuff.” Results are measured by brand awareness and media coverage, as well as social media activity. The explicit (Matten and Moon, 2008) nature of this branded activity means it is easily made visible to stakeholders. As such, it demands a less complex approach to its communication that focuses on a one-way promotional model (Grunig, 1992). 134

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The relationship between action and communication and thus the role of involvement presents a common theme across all contexts. Indeed, without involvement, the process of communicating values, implicit CSR (Matten and Moon, 2008), or complex issues become problematic. Furthermore, there is rarely news value inherent in these aspects of CSR, making the communication of a positive message difficult. When involvement between a company and its stakeholders takes place, however, transparency and thus trust are improved from which the other desired outcomes such as education, dialogue, and promotion can more effectively be achieved. 3  What are the perceived contextual influences on these practices? The contextual influences on these practices included national factors and company factors. Furthermore, as MNCs, these companies are also influenced by its global and national entity. India and the UK are both countries with a long history of philanthropy (Balasubramanian et  al., 2005; Harrison, 1971; Lala, 2007; Marinetto, 1999), yet their evolution from philanthropy to CSR has taken different paths. As part of the European Union since 1973, the UK has been part of the Union’s efforts to increasingly put pressure on member countries to take responsibility for their social impact (European Commission, 2016). Social pressure arising from highly publicized events such as Shell’s Brent Spa and Coca-Cola’s actions in India have raised awareness on the subject of corporate responsibility, as have the high levels of absolute poverty in India. Furthermore, in India the government has put pressure on companies to fill specific social needs (Moon et al., 2015). The Indian government, while being the first country in the world to make CSR activity law, only recently introduced its CSR Act in 2014. The act, however, does not define CSR, only the type of company that must invest, how much it should invest, and the areas of investment. This means that companies in India could invest in a way that is of a philanthropic style rather than being CSR. Companies such as Shell India, therefore, are left to decide on an approach that offers the company a return on its investment. It should be acknowledged, however, that Tata Steel and the Tata Group have a much greater commercial investment, portfolio of products and services, and market share in India than Shell and is thus under greater pressure to contribute to social goals. Indeed, Tata Steel India already invests in CSR above the now legal requirement. As well as its legal obligations, Shell India, as a foreign MNC in India, is also under pressure from Shell global to follow its global directives on CSR. Yet with a relatively small market share, Shell India is not so well known as Tata Steel in India which means that competing for employees is also more difficult. 135

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Communications is also affected by culture in India which was identified by Shell India. A senior manager adds that “in India people generally communicate one-way.” This means that the process of engagement and dialogue is more difficult and the move from this model to one of two-way communication is thus “a major effort” for the company. These issues surrounding engagement were not highlighted by Tata Steel in India though they did identify that the process of building trust with stakeholders affected by the development of new plants is a lengthy one, which can take up to ten years. It is clear, therefore, that the communication of CSR or sustainability practices can no more be ignored than the practices themselves. The challenges of traditional communication methods, however, are not always appropriate in the context of CSR, whatever the context. As such, the action itself is increasingly being seen as the form of communication—allowing it speak for itself and using it as a way of providing stakeholders with a sense of meaning and purpose.

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Korac-Kakabadse, N., Kouzmin, A., and Kakabadse, A. (2002). “Spirituality and leadership praxis.” Journal of Managerial Psychology, 17(3), 165–182. https:// doi.org/10.1108/02683940210423079 Lala, R. M. (2007). The romance of Tata Steel. New Delhi: Viking. Lantos, G. P. (2001). “The boundaries of strategic corporate social responsibility.” Journal of Consumer Marketing, 18(7), 595–630. Lantos, G. P. (2002). “The ethicality of altruistic corporate social responsibility.” Journal of Consumer Marketing, 19(2/3), 205–230. https://doi.org/10.1108/ 07363760210426049 Lattemann, C., Fetscherin, M., Alon, I., Shaomin, L., and Schneider, A.-M. (2009). “CSR communication intensity in Chinese and Indian multinational companies.” Corporate Governance: An International Review, 17(4), 426–442. https://doi. org/10.1111/j.1467-8683.2009.00758.x L’Etang, J. (1994). “Public relations and corporate social responsibility: Some issues arising”. Journal of Business Ethics, 13, 111–123. L’Etang, J., and Pieczka, M. (2006). Public relations: Critical debates and contemporary practice. Mahwah, NJ and London: Lawrence Erlbaum Associates. Maira, A. (2008). Transforming capitalism. New Delhi: Nimby Books. Marinetto, M. (1999). “The historical development of business philanthropy: Social responsibility in the new corporate economy.” Business History, 41(4), 1–20. Maslow, A. H., and Frager, R. (1987). Motivation and personality. New York and London: Harper & Row. Matten, D., and Moon, J. (2008). “ ‘Implicit’ and ‘explicit’ CSR: A  conceptual framework for a comparative understanding of corporate social responsibility.” Academy of Management Review, 33(2), 404–424. Mitra, M. (2007). It’s only business! India’s corporate social responsiveness in a globalized world. New Delhi and Oxford: Oxford University Press. Moon, J., Crane, A., and Matten, D. (2015). “Can corporations be citizens? Corporate citizenship as a metaphor for business participation in society.” Cambridge University Press. Morsing, M., Schultz, M., and Nielsen, K. U. (2008). “The ‘catch 22’ of communicating CSR: Findings from a Danish study.” Journal of Marketing Communications, 14(2), 97–111. https://doi.org/10.1080/13527260701856608 Muller, F., van Zoonen, L., and de Roode, L. (2008). “We can’t ‘Just do it’ alone! An analysis of Nike’s (potential) contributions to anti-racism in soccer.” Media, Culture & Society, 30(1), 23–39. https://doi.org/10.1177/0163443707084348 Palazzo, G., and Scherer, A. G. (2008). The future of global corporate citizenship: Toward a new theory of the firm as a political actor. New York: Edward Elgar Publishing Ltd. Patton, M. Q. (2002). Qualitative research and evaluation methods. London: Sage Publications. Pietrusiak, J. (2004). “The Local Philanthropy of the Reckitt Family, with particular reference to Hull Garden Village.” Quaker Studies, 8(2), 141–171. Porter, M. E., and Kramer, M. R. (2002). “The competitive advantage of corporate philanthropy.” Harvard Business Review, 80(12), 56–69. Schoeneborn, D., and Trittin, H. (2013). “Transcending transmission: Towards a constitutive perspective on CSR communication.” Corporate Communications:

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An International Journal, 18(2), 193–211. https://doi.org/10.1108/1356328 1311319481 Siltaoja, M. E. (2006). Value priorities as combining core factors between CSR and reputation: A qualitative study, 91. Stamp, K. (1991). “Spirituality and environmental education.” Australian Journal of Environmental Education, 7(1), 79–86. Surma, A. (2004). “Public relations and corporate social responsibility: Developing a moral narrative.” Asia Pacific Public Relations Journal, 5(2), 1–12. Surma, A. (2006). The rhetoric of reputation: Vision not visibility. Perth, Australia: Murdoch University. Watson, T. (2007). “Reputation and ethical behaviour in a crisis: Predicting survival.” Journal of Communication Management, 11(4), 371–384. Whitley, R. (1999). “Firms, institutions and management control: the comparative analysis of coordination and control systems”, Accounting, Organizations and Society, 24, 507–524. Wright, S. (2010). “Language, communication and the public sphere: Definitions.” In R. Wodak and Koller (Eds.), Handbook of communication in the public sphere. New York: Walter de Gruyter GmbH & Co.

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11 CREATING A WATCHDOG CULTURE FOR ETHICAL STANDARDS IN INDIAN ADVERTISING Freda Swaminathan

Introduction When Harry McCann opened an ad agency in 1912, he promised his clients that he would deliver the “truth, well told.” Even today, McCann Erickson, one of the world’s leading advertising agency, maintains this value proposition. Exaggeration in advertising is termed as “puffery,” and when this becomes too biased, the advertising becomes deceptive. The Indian advertising industry is over Rs. 50,000 crores in size, as per the PMAR study of 2018. A  major portion (over 70 per cent) of this is accounted for by print and television. The advertiser therefore has a responsibility of ensuring that the campaigns released help in the ethical marketing of the product. Advertising not only informs consumers about the product and brand, it plays a role in persuasion, from awareness to making consumers choose between a range of products and brands. Advertising is a major marketing tool for the marketer. To make advertising meet its objective, the advertising campaign needs creative ideas. These ideas often get criticized for stereotyping, creating a culture of materialism and inequality, creating demand for products that are not so important, manipulating not only adults but also children, using provocative sexuality, and generally not being sensitive to all sections of society in terms of cultural values and lifestyle. Ethics in advertising is quite subjective in nature. What is perceived as ethical in one culture may be perceived as unethical in another. India is also a diverse country where cultures vary according to religion, geographical states, communities, rural-urban divides, and the phenomenon of caste. Therefore, what is seen as ethical by one group of consumers may be

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unethical for another. The issues regarding ethics in advertising could cover the following issues: 1 Deceptive advertising: Here false claims and misrepresentations are made about the product or brand. These need to be truthful and honest. 2 Creation of stereotypes and prejudice: Very often advertising can be offensive, defamatory, and hazardous to society and overlooks sensitivity of religions, communities, countries, and groups of people; for example, the projection of women in a negative manner, the representation of certain races or communities, or the acceptance of the evils of society (like that of promoting dowry or creating preference for fair skin, etc.). 3 Targeting groups like children (who do not have the maturity to take decisions) to influence them in the purchase of products or brands. 4 Misleading prices where price is depicted as lower than what it really is. This needs to be fair to competition. 5 Deceptive labeling where features are exaggerated (for example, use of words like “healthy” or “eco-friendly”) or misrepresented. 6 Surrogate advertisements are very common but are used to subliminally promote products like liquor or tobacco, where advertising is not allowed because of its ill effects. 7 Anti-national and could incite violence. 8 Encourages superstition. The Ministry of Information and Broadcasting, Government of India is in overall charge of regulating the messages that appear in media and set their codes in their website. The advertising industry has to conform to the laws and regulations set up by the government and statutory bodies so that advertising messages meet ethical standards. In television, the storyboard and film have to be cleared by the channel concerned. In the case of print, advertisers have to ensure that they meet the laws set and do not come into controversy. For this purpose, the Advertising Standards Council of India (ASCI) was set up as a voluntary and self-regulatory body, consisting of advertisers, ad agencies, media owners, and the Indian Newspaper Society (INS) of India. This body has also set up a Consumer Complaints Council (CCC) to examine the complaints.

1 Objectives This paper will have the following objectives: 1 Assess Indian consumer’s consciousness of the ethics in Indian advertising 2 Find out consumer opinion whether the ethics of advertising vary according to the advertising of high involvement and low involvement products, with rational and emotional decision making

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3 Assess the ethical issues of advertising for the key advertisers in the Indian advertising industry 4 Assess the role of the regulatory bodies in India that control advertising in India The study will test the hypothesis on whether consumer opinion regarding the ethics of advertising will vary according to the advertising of high involvement and low involvement products, with rational and emotional decision making. Overall, the paper will identify dimensions of ethics that consumers need to be sensitive about when they are exposed to advertising. This will enable them to develop a watchdog perspective to advertising.

2 Methodology A secondary study will be undertaken to look at the research undertaken on the subject of ethics in advertising with special reference to India. Laws such as the Consumer Protection Act, the Monopolies and Restrictive Trade Practices (MRTP) Act, and the Drugs and Cosmetics Act will be studied. Further, the role of self-regulatory bodies like the ASCI will be assessed in terms of their role in bringing about ethics in advertising. The study will refer to primary research conducted on consumers’ understanding of culture and ethics in Indian advertising and will point out the ethical issues that emerge for four categories of product advertising with high involvement rational/emotional decision making and for those with low involvement rational/emotional decision making. High involvement/ rational product categories involve high financial risk and high price and includes expensive purchases like financial services. High involvement/ emotional purchases include jewelry, weddings, and holiday travel plans where decision making is emotional, despite the high price of the product. Low involvement/rational products are relatively lower priced yet are not products that are bought on pure impulse like fast-moving consumer goods (FMCG) products—coffee, hair colour, shampoos, and detergents. Low involvement/emotional products like soft drinks and chips are priced low, with low risks in purchase, and are purchased on an impulse. The paper will undertake a content study of major advertising campaigns created by major advertisers of the country and assess the ethical dimensions.

3  The role of ethics in advertising Drumwright and Murphy (2009) studied an industry and academia perspective of ethics in advertising. They referred to another study that cautioned that values are of most importance in advertising to the community at large. Practitioners were not very sensitive to the issue of ethics in advertising, while academicians were sensitive to deception in advertising. The study 142

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looked at the websites of some large advertising agencies and found that the dominant values centred around creativity, imagination, curiosity, and passion. The need to deal with ethical issues on the Internet was strongly felt. The study called for leaders in the advertising industry to take forward the issues of ethics in advertising. Broyles et al. (2006) pointed out that advertising may work in a subliminal or unconscious manner, and in this form, it could be more deceptive in terms of the message. Drumwright and Murphy (2004) researched advertising practitioners across eight countries to assess how practitioners view ethics in advertising. The study recognized a group of practitioners who were not sensitive to ethical issues and tended to be “mute” about the moral dimensions of the communications. They therefore faced “moral myopia,” tended to rationalize that consumers are smart to judge the ethical issues, that society and not them are responsible, and that they are not doing anything that is illegal when agencies over-identify with the client’s perspective. When one is ethically myopic, in fact, one has “the ostrich syndrome” where one does not think about the ethical issues in advertising. Moral muteness on ethical issues is also a phenomenon amongst practitioners. Here, practitioners put the responsibility on to the client and also detached themselves from the ethics in their work, as a requirement of the job. They tended to resist opening a “Pandora’s Box” and getting into controversy. The study reinforced the need to create a paradigm shift in the way practitioners and clients deal with ethical questions. The need to include this to educators was reinforced. Srivastava and Nandon (2010) researched how unethical advertising tend to lack truth and honesty, is offensive, discriminates, and is unacceptable to society (surrogate). The research indicated that advertising having messages that pose unfair competition tends not to be perceived as unfair. Snyder (2011) reinforced the need to enhance advertising ethics because of research that indicated that consumers do not trust research. Regulations set by the government and self-regulatory bodies need to be well understood. Advertising needs to be sensitive to the impact it has on children and must take extra care that nothing unethical is communicated to this vulnerable group. Advertising content should never be deceptively shown as editorial. Especially on the websites bloggers should be transparent if they are endorsing a brand when they are paid by the advertiser. These and other concerns of advertising ethics have been discussed in the paper with an appeal to industry to set down the guidelines of ethics in advertising communications to bring about high brand values and advertising effectiveness. Vollmer and Precourt (2008) raised issues to marketing professionals after referring to numerous studies conducted on the subject. His study pointed out that for successful marketing, a consumer perspective is most important. Academicians and practitioners need to be actively conscious about this. The use of celebrities was discussed, where it was seen that since celebrities 143

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are often perceived as strong influencers to consumers, ethics also need to be inculcated in the celebrities selected for an advertising programme. Kapoor and Chinmaya (2008) found that media usage, personality traits, price perception, and some demographic characteristics could be used to predict fashion involvement amongst consumers. The antecedents of involvement are the personal factor, the stimulus, and the situational factors of the consumers. Involvement in a product is influenced by the perceived importance of a product, the perception of negative consequences from mispurchase, the pleasure value of the product, and the perceived sign or symbolic value of the product. Gopal and Srinivasan (2006) in the Gallup survey found that Indians have moved towards consumerism and are open to change. Foreign and Indian brands (like Tata, Godrej, and Bajaj) are equally preferred by Indian consumers. Connecting at an Indian level has challenges because of the diversity and contradictions (of modern and traditional values) prevalent in Indian society. The research gave an example of this, where 83 per cent of Indians approve of working women and 74 per cent feel that women should delay marriages for education, while only 5 per cent approve of couples living together without marriage. Laxman and Krishnakumar (2013) studied a popular campaign by Vodafone, called “Happy to Help” and questioned the cultural identity that is being projected in Indian advertising. The visual cues used in the advertising seems to indicate the influence of Western culture in India and portrays a cultural fabric of India that is not in keeping with the value systems that are part of Indian culture. The study is qualitative in nature but raises important issues regarding the intellectual and cultural systems that are prevalent in India. Mehta (2010) researched a sample of Indian advertisements from the context of the Bhagavad Gita and classified them as righteous and unrighteous. These were evaluated in terms of the principles of Karmayoga (action pathway), Jnanayoga (knowledge pathway), and Bhaktiyog (pathway for active involvement). The study appreciated advertisements with harmonious communication and cautioned those with hostile communication. Mehta (2012) studied the use of comparative advertising in India, where a brand directly compares itself with a named competitor and shows superiority. Specific reference was given to the advertising of Rin and Tide and Complan and Horlicks. The study concluded that since comparative advertising is an individualistic behaviour pattern, when used in India, the strategy tends to tarnish the image of the brand undertaking such a strategy. On the other hand, positive communications, without hostile communications, tend to add to the brand’s imagery. Jain et al. (2010) in their study found that a majority of advertisements use celebrities. Film stars tend to be used more than sports stars since film stars are seen as having a longer celebrity life than sports stars. Men 144

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dominate most product categories, though women celebrities were used for beauty products. The research indicated the largest use of celebrities in the advertising was the implicit mode, where the celebrity verbally or physically communicates about the product. Celebrities are also used in the imperative mode, where the celebrity suggests the use of the product. The explicit announcement of the product by the celebrity is not common, while the celebrity being co-present with the product is used sometimes. The need for creative use of celebrities for products was reinforced. Joshi and Gupta (2012) studied the role that culture plays in the buying behaviour of Indian consumers. Since an organization’s marketing programme influences the buying behaviour of consumers, marketers need to cover all aspects in a culturally sensitive manner, whether it is the depiction of youth, the competition, environment, concept of cleanliness, risk-taking, how problems are solved, and time and cross-cultural orientation. Beltramini (2011) assessed that advertising ethics is a “fertile area for future research.” However, the paper expressed the need for more attention regarding issues of advertising ethics. Advertising plays a role in encouraging materialism and over-consumption. It often is intrusive in quality and intrudes in personal lives. Advertising claims are often deceptive, both when they are explicit and implicit, and give minimal support of information to claims stated. Emotional appeals in advertising result in unrealistic solutions and in fact turn “innocent encounters” of daily life to promotional events. Advertising very often causes unethical word of mouth communications. The paper raised the barriers to ethical advertising, namely, consumers tend to become numbed and indifferent, and practitioners lack commitment to advertising ethics. Moreover, regulatory agencies are not only few but tend to be economics- and legal-oriented rather than work with consumer research bodies and be consumer-oriented. The paper emphasized a need for both practitioners and academicians to move from platitudes to principles and made a “call for action.” It raised the importance of ethical advertising practices. Various issues have been raised, including the use of implied claims, withholding of information, use of “borrowed interest devices” like sexuality, violence, perpetuation of stereotypes, or manipulation through promotional events or social media. The paper reinforced that both academic and corporate need to work actively on the subject of advertising ethics.

4 Discussion A research was undertaken amongst 150 new entrants to an MBA programme to understand the concept of ethics in advertising. The participants felt that ethics in advertising meant that advertisers should not give messages 145

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that are not true and that they should not unduly exaggerate the claims in the advertising. Some degree of exaggeration was seen as acceptable. Ethical advertising meant that: • • • •

Advertising portrays a society that has good citizens Advertising encourages people to lead a moral life Advertising makes people socially responsible Advertising makes people environmentally conscious

The study tested the hypothesis that consumer opinion regarding the ethics of advertising will vary according to the advertising of high involvement and low involvement products, with rational and emotional decision making. When asked whether advertising is ethical for low involvement products (that are bought on impulse and where price and risks of purchase are low) and high involvement products (that are bought with rational thinking and where price and risks of purchase are high), the respondents felt that both types of advertising are similar in terms of ethics. The research specifically looked to see whether advertising is ethical. One must note that advertising for high involvement products (like cars) tends to be more informative and appeals to the reason of the consumer, whereas the advertising for low involvement products (like potato chips) tends to appeal to the emotions of consumers and uses stimuli that are more emotional. The differences between the two categories are almost not present except that the respondents’ opinion were that ethical values were conveyed in high involvement products more than low involvement products. This could be because of the information and rational appeal used in the communications. A comparison of consumer perceptions on both these categories of products was studied. While overall there was a difference in the perception, when asked about specific issues on good citizenship, morality, social responsibility, and environmental consciousness, there was no difference between high involvement products and low involvement products. The mean scores are depicted in Table 11.1 for the study on advertising ethics. To gain a greater insight, consumers were asked to give their views regarding the ethics of advertising for low involvement emotional products (LIEP—where decisions are heuristic and prices low), low involvement rational products (LIRP—where decisions are thought through and prices are not so low), high involvement emotional products (HIEP—where though prices are high, like that for a perfume, the decision making is largely emotional), and high involvement rational products (HIRP—where prices are high and decision making largely rational). An ANOVA test was undertaken to compare the differences of the means amongst the groups

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Table 11.1  Difference in perceptions of advertising for low involvement and high involvement products—advertising ethics No

Statements

Ad ethics 1 Advertising generally conveys ethical values 2 Advertising portrays a society that has good citizens 3 Advertising encourages people to lead a moral life 4 Advertising makes me socially responsible 5 Advertising makes me environmentally conscious

HI

LI

Significant difference*

3.1349

2.8487

Yes

3.5691

3.4638

No

2.9934

2.8841

No

2.7649

2.2785

No

2.8179

2.7086

No

* 2 tailed test of significance Source: Research was conducted by the author

and the variations within the groups. The next table indicates the following findings: 1 That advertising generally conveys ethical values is perceived differently for all four-product category advertising. The difference is largely contributed by LIEP and LIRP advertising. 2 The difference in the way advertising portrays a society of good citizens is contributed by LIRP and HIEP advertising. 3 That advertising encourages a moral life is different in all four categories except LIRP advertising. 4 Bringing about social responsibility is the difference contributed by LIRP and HIEP advertising. 5 There is no difference between the four-product category advertising on environmental consciousness. Table  11.2 details the previously mentioned findings of which types of advertisements are perceived as more ethical. The first area of research is to see what are the ethical issues of advertising for the major campaigns of the key advertisers in the Indian advertising industry. The key advertisers in India are given next in Table 11.3. The study looks into some of the ethical issues that each of the advertisers shown earlier deals with. The advertising may be looked at in terms of the ethical issues involved in some of the advertising of these key advertisers in

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Table 11.2  ANOVA test analysis Dimension Statement

Ethics

ANOVA Significance: Yes or No difference (