This article looks at the role Corporate Social Responsibility (CSR) has in community development. Besides a universally accepted role in philanthropic work of corporations, CSR projects are today achieving greater sustainability in their efforts resulting in growth and change in communities. This evolution has been possible due to the collaboration of corporations with the development sector, especially the NGOs. From the past fifty years the western world has been looking at several dimensions of CSR; legal, ethical as well as discretionary. But in India, It is only in recent years that dedicated CSR departments and staffs have appeared in companies. These trained professionals are designing effective community oriented projects which are transforming communities albeit in a small focussed manner. This article will carry a short case study of one such CSR project of a large Multinational corporation functioning in India. This article stresses on the potential that CSR projects have in the face of criticisms coming from certain quarters.
Keywords: Corporate Social Responsibility, Community development, Internal and External CSR, community oriented projects.
While it is still contested whether corporations should have social responsibilities beyond a wealth generating function (Friedman, 1962), the world is increasingly seeing corporations fulfilling broader social goals. These have been happening within business firms with initiatives like changing methods of production to reduce environmental impacts, changing employee relations both within the firm and across the firms’ supply chains. The initiatives outside the firm include making infrastructural investments in local communities or as more widely seen in philanthropic community initiatives (Aguilera et. al, 2007).
Earlier corporations found it difficult to understand the consequences of social and economic goals. Social goals were directed towards stakeholders and economic goals towards shareholders. It soon emerged that the development of the both these groups needed to be directly proportional and this led entrepreneurs to believe that profit making need not be the only corporate goal. As a result, companies started practising social responsibility activities on a voluntary basis to attain various results such as building strong company - stakeholder relationship, motivating employees to enhance production, influencing the community for development and reducing the threat to environment. Companies also have a history of adapting the approaches advocated in professional social work. This has resulted in good employee engagement practices besides the engagement of other stakeholders the deprived communities.
Community development in the CSR agenda
Community development is a multidimensional paradigm both in its scope and operation. In an attempt to give a definition to this concept, the Cambridge summary conference of (1948) in Hanachor (2009:5) stated that: “Community development is a movement designed to promote better living for the whole community with the active participation and if possible, on the initiative and if not forth coming spontaneously, by the use of techniques for arousing and stimulating it in order to ensure its active enthusiastic response to the movement.”
This definition of community development has implications to stakeholder perspective of CSR. Corporations can ensure sustainable rural and community development by ensuring community participation through “stakeholder dialogue” in strategy making and the implementation process.
Murry (1966) in Bello I.O. and Bola Oni S (1987:1) project another dimension of community development as “the utilization under a single programme of approaches and techniques which rely upon local communities as units of action which attempts to combine outside assistance with organized local self determination and effort which correspondingly seek to stimulate local initiative and leadership as the primary instrument of change”. The field of professional social work has standardised the process of engaging with the communities. Practice principles and approached have been well researched and presented in the contexts of several problem situations. Most agencies involved in bringing changes at the level of communities have incorporated one of the several approaches that social work advocates.
With the adoption of these approaches, especially those that rest on the perspective of “strengths found in all communities to uplift themselves”, mutual benefits can be achieved for both the corporate and the community. These practices as part of CSR promote the local community to become a development partner for the company rather than a passive recipient of philanthropy. The recent trends in corporate practices has motivated the practice of CSR due to its effectiveness, recognition of impacts in a global scenario, increase in capital flow and wide appreciations of various ventures. The positive outcomes from these include skill training, employment opportunities, access to markets, business linkages and so on. Most of the private sector initiated projects associated with community development programs has promised a community driven development strategy ensuring sustainability.
In its turn, CSR has also been evolving and projecting some of these features. Dahlsurd (2006) in his effort to analyse definitions of CSR has listed several with community development as a prominent component of CSR. World Business Council for Sustainable Development (2000) offers a perceptive definition “Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at large.” The NGOs India website states that “Corporate Social Responsibility is a business process wherein the institution and the individuals within are sensitive and careful about the direct and indirect effect of their work on internal and external communities, nature and outside world.” (2003)
These emerging definitions of CSR from the past decade clearly project that CSR is reaching beyond the narrow economic, technical and legal requirement to the accomplishment of significant social benefits in local communities.
Besides these emerging visions, business experts have also started redefining poverty as a business opportunity rather than a problem. The modern view of CSR as a business development tool targets poverty as a marketing opportunity. The argument is that business itself contributes for the community development through usual investments, creating employment opportunities and payment of tax. Even if the philanthropic aspect of business responsibility is nil, the end result of the contribution would be the same. This has in a very coherent way changed the perceptions of the corporations towards deprived communities.
Another event has been noticed in countries such as China, Bangladesh and Argentina where companies are actively involved in promoting employment of the marginal communities. In South Africa, social action movements have forced the companies to think of their social responsibilities, leading to the growth of CSR in that continent. Researchers seem to see this occurrence as suggestive of CSR becoming a development tool to address social justice and community development. In becomes important in this context to understand what Blowfield and Frynas (2005) argue that the demands of developing nations are such that their solutions are to be looked from every possible source. These researchers report that companies have realised that CSR has to be conducted at the intersection of development, environment and human rights.
It is not surprising therefore that CSR has become a major focus of interest to the development practitioners, including professional social workers whose practices, principles and philosophies overlap with the emerging values being incorporated into the domain of CSR. Curriculum developed to training students in social work are looking at the emergence of CSR as a domain and are researching various aspects such as collaborations with NGOs and CBOs, the role of social workers in this domain and in the evaluation of the CSR projects. Apart from the development agenda of the governments and the NGOs, it is being realised in all schools of social work that CSR perspectives is worth pursuing and adapting into practice. This is reiterated by development agencies like the DFID of United Kingdom which states, that through CSR, the growth generated by corporations would be more inclusive, equitable and poverty reducing.
Vivos (2004) goes to the extent of stating that CSR by its very nature is development done by private sector and it perfectly complements the development efforts of governments and development agencies. In fact, both the UN and World Bank have made significant efforts in linking CSR with community development. Jenkins (2005) lists wide ranging development agencies collaborating with CSR initiatives such as SIDA- Swedish International Development Agency and UK’s DIFD- Department of International Development.
Table No. 1 Community development CSR projects in Bangalore (N =25)
In one of their ongoing research projects, the researchers noted the nature of CSR projects that companies in Bangalore are engaged in (N=25). Health and Education are the two major areas where companies are investing their CSR resources. More than half of the companies under the study have health and education projects. Rural and Agrarian projects are also being taken up in several companies. Some other companies have looked into the sustainability issues and they have projects on energy conservation and development of alternative source of energy. A few companies have citizen empowerment projects.
NGOs and CSR
The concept of Stakeholder Dialogue (Freeman, 1984) brings forth the idea of NGO’s partnership in CSR. By brainstorming with NGOs, companies can generate a better strategy of community involvement through the NGOs’ rapport and understanding of the community dynamics. Community development interventions are not just the provision of providing monitory and elementary resources to the community. It is a long process of continuous communication and empowerment through various development strategies such as capacity building, education, making communities understand their needs through participatory approach, and planning development strategies by considering differences between the felt need and actual needs.
In India, most CSR initiatives are being developed and implemented with the support of one or several NGOs. The Company NGO interphase is seen as vital in managing the logistics of a CSR projects. In fact some of the company volunteers are actively involved with NGOs in operating CSR projects. Besides this, it has to be remembered that in the developing country context, factors such as language, culture, education and pluralistic values of deprived communities pose problems for a direct stakeholder engagement between companies and communities (Blowfield and Frynas, 2005). Companies have to create collaborations with NGOs to reach to the deprived.
The early forms of business-NGO relations were mostly confrontational, with well-known anti-corporate campaigns. Today new forms of business-NGO engagement have emerged based on a combination of confrontation and collaboration strategies. Without abandoning advocacy and campaigning, today’s NGOs also engage corporations and business associations to identify and disseminate corporate best practices. They form partnerships to promote social and environmental actions, provide technical assistance to corporations, elaborate commonly agreed certification schemes, promote and design corporate social responsibility (CSR) standards as well as management and reporting processes, and participate in CSR monitoring and auditing. These new forms of collaboration between business and NGOs reflect broader changes in the overall governance environment, while contributing to the reconstitution of the global public domain where firms carry out their activity (Arenas et al, 2009).
Table No. 2: Company perceptions on NGO association in CSR practice
In an ongoing study it was found by the authors of the present paper that 60% companies gave their opinion that execution of CSR activities through NGOs is effective. NGOs have a key role to play in identifying the company’s interest and utilize the recourses in a productive manner for the beneficiaries. Thus, the NGOs can build the link between the company and its stakeholders by making use of their grass root knowledge and interventions techniques.
Some of companies covered under the study have a formal Memorandum of Understanding with their partnering NGOs. There are companies in India who are aware of the possibilities and scope of CSR through NGO association, though CSR is in a nascent stage in India. Companies feel that the partnerships with NGOs are made on the basis of issues of concern for the company and the expertise available with the NGOs.
The partnering NGO in CSR is involved in the whole process of planning, implementation and evaluation of the development program. There are companies who completely entrust the project to the NGO. But many others partner with NGO at every step of the project management. To make CSR effective and result oriented, there must be the involvement of the representatives from both the parties, i.e., the company and NGO, as well as the other stakeholders.
Joint meetings are held on CSR project evaluations with NGOs. Joint project evaluations are important as this can give an overview of the effectiveness and drawbacks of the program. This can also increase the trust and coordination between the company and the NGO.
Around half of the (52%) companies reported that they fund selected projects of the NGOs that come under their CSR’s area of concern. In these companies NGO representatives are playing an advisory role in the planning of CSR projects. In the proposed amendment of Companies Act in India, it is recommended that the advisory board for CSR should consists of three directors and one among them should be from outside the company and that can be a member from the partnering NGO.
Indian law and CSR
In recent years the Indian state has been placing great impetus on CSR initiatives. In fact the recent amendments to the Company’s Act (2012) have been explicit in its expectations from CSR. The government of India has adopted the following activities under CSR:
1.Eradicating extreme hunger and poverty
2.Promotion of education
3.Promoting gender equality and empowering women
4.Reducing child mortality and improving maternal health
5.Combating human immunodeficiency virus, acquired immune deficiencySyndrome, malaria
and other diseases;
6.Ensuring environmental sustainability
7.Employment enhancing vocational skills
8.Social business projects
9.Contribution to the Prime Minister’s National Relief Fund or any other Fund set up by the
Central Government or the State Governments for Socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women
National Voluntary Guidelines published by Indian Ministry of Corporate Affairs (2012) clearly suggests the guidelines for Social, Environmental and Economic Responsibilities of Business. The guideline affirms the idea of “triple bottom-line approach” of business that gives importance to People, Planet and Profit. The nine principles stated in the guideline look into all the aspects of internal and external CSR activities with regulations on fair governance, safety and sustainability, employee welfare, stakeholder involvement, promotion of human rights, protection of environment, value of products etc. These initiatives will make CSR projects a tool for development process in India.
Professional social work and the development approach of CSR
The above discussions impel readers to perceive the overarching interest that professional social work has in this area. Whether one looks at the perspective of community development or the field of CSR, one gets the impression that social work, its philosophies and ideologies besides its approaches should be able to give a dominant thrust to the discussions and debates. The professional approaches of social work include the traditional welfare approach besides the rights approach, the systems approach as well as the strengths approach. These have shaped the interventions that social workers have designed and implemented. There is every reason for professionals involved in CSR to assimilate these into their projects. The case study that is presented as part of this paper shows how the inputs from professional social workers have enriched the CSR interventions.
Case study “Namma Halli”
This case study revolves around the efforts at Volvo, a major Swedish multinational company involved in the manufacture of construction machineries and working in information technology. The company has been in the forefront of several CSR projects around the world. Primarily the company’s effort is evident in the field of sustainability and environmental protection. In this case study the company’s community development initiative at its Bangalore plant is being presented. Community development as envisaged by this company is to help the community to get economically developed, educated and empowered to bring out the true potential of rural population.
The CSR projects have been operationalised by the company with the active support of a NGO floated by another company TVS Motors Ltd. The NGO is called SST- Srinivasan Services Trust, which is spearheading several development projects across South India. This NGO promotes a programme called “Namma Halli”, literally Our Village, across several villages. It is worthy to note that this NGO has been working for the past twenty years in 1056 villages covering the five states of Arunachal Pradesh, Maharashtra, Karnataka, Andhra Pradesh and Tamilnadu.
As part of its efforts, this NGO places one of its personnel in the corporate to have a continuous dialogue with the company as well as closely monitor the progress of the progress. At the Hoskote plant of this corporate, a representative of the NGO co-ordinates all the CSR efforts. Being a professional social worker, he is able to put in place practices found in the administration of projects within development sector. The presence of a development practitioner within the corporate ensures the continuous monitoring all the projects
The present case study was carried out in November 2012 in two villages called Manchappanahalli and Hedachanahalli, adopted for the implementation of its CSR projects by Volvo. Both the villages are situated within a two kilometre radius of the plant at Hoskote which is around 50 kilometres from Bangalore. Following the model of SST practiced across the villages of India, work is being carried out in these two villages also. The thrust areas of the project are Economic Development, Education, Health, Infrastructure and Environment covering the entire population especially children, women and farmers.
Under the head of economic development two groups are under focus: women and farmers.
The economic needs of women are being looked at mainly through the mechanisms of the Self help groups (SHGs). The interventions are designed to teach women the elements of Micro finance. Bank linkages have been created to create optimal support for the groups formed. Besides, to sustain the self help groups, some income generation programmes have been initiated. Around 60% of women of both the villages are involved in the self help groups. From studies across India it has been noted that SHG formation is a rich tool of women empowerment wherein skills like functional literacy, organizing skills, assertiveness and self confidence are inculcated. In the present study the areas that are evident include prevalence of functional literacy among all the participants. The savings practices seem to be well developed in all the groups besides some knowledge of the usage of financial institutions. This particular area of work has been implemented in these villages for the past three years. Professional social work principles would probably expect greater infusion of organizational elements in this programme. It has been witnessed in many projects that within this time period village SHGs are linked to zonal, cluster and some apex level structures. These are developments that have to be built into the present project to make it more viable and sustainable in future.
Coming to the farmers groups, the activities mainly created are educational programmes around modern agricultural practices and techniques. Much of this is achieved through the collaborations with agencies like UNICEF. Being an educational and awareness creation activity, the evidence of change is minimal and is expected to be slow to achieve.
This segment of their CSR efforts has the support of volunteers of the Volvo plant. In fact, it is entirely dependent on the efforts of the volunteers. This project is designed to infuse the regular interaction of the volunteers with the beneficiaries, who are school students in this case. Both middle and high school children benefit from this programme. The primary intervention is the continuous upgrading of computer skills in the school children through interaction with volunteers largely drawn from the IT segment of the industry. There have also been instances of certain extracurricular elements that are being designed and delivered to the students. Due to the structure of this intervention of regular interactions between the volunteers and the students, considerable enthusiasm and interest has been created among them. Quite unfortunately this programme is taken up in a third village where the other community activities are not taken up. Once there is withdrawal of the project from these villages, there may be issues related to sustaining the interest created. The officials have to build certain safeguards to prevent this from happening.
Health related intervention covers the entire population of the two villages along with some veterinary care. Periodic general health care camps, eye check up camps are conducted. As part of preventive and promotive aspects of health care, nutrition and vaccinations programmes are implemented and monitored in collaboration with the anganwadi created under the ICDS (Integrated child development scheme). Across the nation very few CSR health programmes are functioning outside the Public-Private Partnership model. It becomes essential to collaborate with the Primary health centres and the aganwadis to promote health care. The same model is being replicated here.
Infrastructure and environmental
Work has been taken up again through the involvement of volunteers to create certain infrastructure at the schools adopted at Tavarekere village. Here the volunteers from the Hoskote plant have designed the entire electrical installation of the computer centre of the school. Besides these all the equipment and computers for the schools have been provided by the volunteers. A compound wall has been constructed around the anganwadi besides a cement road through the village. In most of the Indian villages infrastructure creation fulfils several needs of the villagers. Though it appears to be an adhoc initiative with minimal investment, the utility of these projects is huge from the point of view of the beneficiaries. As a part of its environment initiatives, saplings have been distributed to many of the villagers to green these villages. This of course is neither a unique nor a new programme that has been created.
Looking at these initiatives taken up by Volvo industries, a few observations need to be made. All the CSR projects are identified based on the convenience factor rather than “Need”. This is an important argument from the point of view of social work in the creation of effective interventions. But, one also has to look at the involvement of the corporate as well as volunteers and their contribution to these projects. This would be almost impossible if projects of situated hundreds of miles away where need is felt. But it becomes necessary to state that companies would be wiser to keep the needs of the beneficiaries and the sustainability of the project in executing all of their CSR projects.
India is a country with many well constructed laws and policies but hardly followed with purposeful implementation and monitoring. CSR can be one of the effective tools for sustainable development process if it is well regulated and encouraged throughout the country. In a highly populated country like India, where government policies fail to reach common people, corporate can play a significant role in supporting the development process by their responsible contribution for the welfare of their stakeholders. There are a few companies of Indian origin which are making efforts for social development and understanding the importance of being socially responsible but, more voluntary efforts are needed. Lack of professional knowledge in social development and welfare and the application of the approaches developed by social work professionals among the corporations can be balanced through NGO involvements and having social work professionals in CSR committees or departments. Awareness on responsibilities and duties of corporate citizenship and better implementation of laws and policies on CSR can make changes in the attitude and approach of the corporate towards community development.
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PhD, is Associate Professor, Department of social work, Christ University
Manu Mathew is a research assistant in a major research project on CSR at Christ University
Lovis Praveen is a counsellor in a service providing company, PPC International.
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