Kanan Jaswal's Blog on Leadership

Wednesday, April 16, 2008

Corporate social responsibility - reality or myth?

About ten years ago I wanted to do research on the effectiveness of leadership development programmes, in-house as well as those conducted by business schools, at the business management department of a reputed university. But a professor there told me that the department was more interested in research in the then upcoming field of corporate social responsibility and suggested to me to go with it on that. When I asked her what was there in the field to excite her and her colleagues, she said that for the first time the industry was going beyond earning profits for the shareholders and was trying to be helpful to the society at large. She gave the example of a well-known corporate group which had started a school specifically for children coming from the lowest economic stratum. The group had constructed the school building and was bearing all the running expenses and was even providing books, uniforms and mid-day meals to the children – about a thousand of them – at absolutely no cost to them.

How I wished that she had not mentioned the efforts of that particular group because my organisation had business dealings with it and was one of the sufferers when the group went back on its commitments, aggregating more than 200 million US dollars, to the banking system. The banks had proof of massive diversion of money but the ever slow legal machinery proved to be a reliable ally of the group. The professor looked a little shaken by the disclosure but she had already gone too much distance on the road to consider the futility of the journey. Her love for corporate social responsibility stayed.

I am not at all against the idea of corporate social responsibility but my definition of the term is different from the one generally accepted. For me it is not twisting the arms of the government to wrangle long term tax concessions; it is paying market price for the land to set up an industrial unit and not securing the government’s help in acquiring cheap scarce farm land much more than what is required. It is manufacturing by the most resource and energy efficient method, fully treating the industrial effluents before releasing them in the water streams, and using state of the art machinery to minimise air pollution. It is paying market wages to the workers, not retrenching them at the first sign of an industrial slow down, and not embezzling their provident fund. It is meeting all contractual obligations to suppliers, buyers and bankers. It is not steam-rolling over the interests of small investors. It is following and respecting the law of the land. And yes, after that and only after that, building and running schools for poor children, or, for that matter, maintaining public parks near the factory building and organising polo matches.

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