Social responsibility is an ethical or ideological theory that an entity whether it is a

government, corporation, organization or individual has a responsibility to society. This

responsibility can be "negative," in that it is a responsibility to refrain from acting
(resistance stance) or it can be "positive," meaning there is a responsibility to act
(proactive stance). While primarily associated with business and governmental practices,
activist groups and local communities can also be associated with social responsibility,
not only business or governmental entities.

There is a large inequality in the means and roles of different entities to fulfill their
claimed responsibility. This would imply the different entities have different
responsibilities, in so much as states should ensure the civil rights of their citizens, that
corporations should respect and encourage the human rights of their employees and that
citizens should abide with written laws. But social responsibility can mean more than
these examples. Many NGOs accept that their role and the responsibility of their
members as citizens is to help improve society by taking a proactive stance in their
societal roles. It can also imply that corporations have an implicit obligation to give back
to society (such as is claimed as part of corporate social responsibility and/or stakeholder
theory).

Social responsibility is voluntary; it is about going above and beyond what is called for
by the law(legal responsibility). It involves an idea that it is better to be proactive toward
a problem rather than reactive to a problem. Social responsibility means eliminating
corrupt, irresponsible or unethical behavior that might bring harm to the community, its
people, or the environment before the behavior happens.

In today’s society a business must maintain ethical principles in order to be successful.

(Kaliski, 2001) Businesses can use ethical decision making to strengthen their businesses
in three main ways. The first way is to use their ethical decision making to increase
productivity. This can be done through programs that employees feel directly enhance
their benefits given by the corporation, like better health care or a better pension program.
One thing that all companies must keep in mind is that employees are stakeholders in the
business. They have a vested interest in what the company does and how it is run. When
the company is perceived to feel that their employees are a valuable asset and the
employees feel they are being treated and such, productivity increases.

A second way that businesses can use ethical decision making to strengthen their
businesses is by making decisions that affect its health as seen to those stakeholders that
are outside of the business environment. (Kaliski, 2001) Customers and Suppliers are two
examples of such stakeholders. If we were to look at companies like Johnson & Johnson,
their strong sense of responsibility to the public is well known. (Hogue, 2001) In
particular, take for instance Johnson & Johnson and the Tylenol scare of 1982. When
people realized that some bottles of Tylenol contained cyanide they quit buying Tylenol,
stocks dropped and Johnson & Johnson lost a lot of money. But they chose to loose even
more money and invest in new tamper resistant seals and announce a major recall of their
product. There was no “certain amount” for this situation; Johnson & Johnson had to lose
money to be socially responsible. But in the long run they gained the trust of their
customers. Now when people look at other products, there is a sense of faith and trust in
that Johnson & Johnson would not allow a product to harm people just to meet their own
bottom line.

A third way that business can use ethical decision making to secure their businesses is by
making decisions that allow for government agencies to minimize their involvement with
the corporation. (Kaliski, 2001) For instance if a company is proactive and follows the
EPA guidelines for admissions on dangerous pollutants and even goes an extra step to get
involved in the community and address those concerns that the public might have; they
would be less likely to have the EPA investigate them for environmental concerns. “A
significant element of current thinking about privacy, however, stresses "self-regulation"
rather than market or government mechanisms for protecting personal information”
(Swire , 1997) Most rules and regulations are formed due to public outcry, if there is not
outcry there often will be limited regulation.

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Corporate Social Responsibility

CII and Ficci must speak out on Gujarat
Posted online: Saturday, April 20, 2002 at 0000 hours IST

Many leaders of Indian industry have raised the issue of corporate social responsibility
in the context of the communal violence in Gujarat. While some have been bold enough
to be willing to be quoted, in reports appearing in this newspaper and The Indian
Express, many others have echoed these sentiments in private, afraid to go on record.
At a recent meeting of a premier industry organisation a concerned CEO spoke
eloquently about the need to take a public stance condemning communal violence and
the government’s handling of it. Others present at the meeting preferred to gloss over
the issue and not get drawn into what some think may be a purely political issue. A pity.

Influential industry associations like the Confederation of Indian Industry and the
Federation of Indian Chambers of Commerce and Industry have in recent years tried to
keep in step with the global trend of corporates playing a socially responsible role. Both
organisations, as indeed other such chambers, have willingly adopted a range of codes
on corporate social responsibility, willing to be pro-active on issues such as
environmental damage, poverty reduction, women’s empowerment and so on. The
assurance of communal harmony should also come within the purview of CSR. The CII
could make a good beginning in this direction by making a pointed reference to it at its
annual session next week.

After all, business has been hurt badly in Gujarat. Not only has it been directly hurt by
the targeted destruction of shops, factories and work premises, but also by the reckless
looting of shops and the prolonged imposition of curfew thereafter in many parts.
Political parties have protested, the media has made its mind known, non-governmental
organisations have been pro-active. Surely it is time for the corporate sector to do its bit
too. Industry chambers have tried hard to convince the public that they are not self-
serving lobbyists of sectarian interests. Sure they lobby the government to improve the
environment for business, but they do more. This year Ficci’s annual meeting was
devoted to a discussion on economics and national security. Perhaps some association
should devote its next session to a discussion of communalism and the environment for
business.

In a sense the two are related, that is national security and communalism. Communal
violence threatens national security which in turn hurts the environment for business.
There cannot be a better example of CSR than campaigning against communalism. As
one CEO has said, as reported in this newspaper, the violence in Gujarat has hurt not
just the economy of the state but that of India as a whole both directly, through the
disruption of economic activity at key ports in the state, and indirectly, with foreign
investment scared away from the rest of the country. If the crisis in Afghanistan could
turn investors bearish
towards India, it is easy to
see what Gujarat would
have done to sentiment.
Going beyond expressions
of concern and
chastisement of
government, Indian
corporates must donate
handsomely for the relief
and rehabilitation effort
without fear, favour or
prejudice. Innocent
people, especially women
and children, who have
been hurt physically or
economically, must be
helped irrespective of their
religion and creed. India
Inc must do its bit, apart from speaking up.

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