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V UNIT

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate social responsibility, often abbreviated "CSR," is a corporation's initiatives to assess and take
responsibility for the company's effects on environmental and social wellbeing. The term generally applies
to efforts that go beyond what may be required by regulators or environmental protection groups.

CSR may also be referred to as "corporate citizenship" and can involve incurring short-term costs that do not
provide an immediate financial benefit to the company, but instead promote positive social and environmental
change.

"Corporate Governance is about promoting corporate fairness, transparency and accountability". James D.
Wolfensohn (Ninth President World Bank).

Organization for Standardization’s Guidance Standard on Social Responsibility, ISO 26000, published in
2010. It says:

“Social responsibility is the responsibility of an organisation for the impacts of its decisions and activities on
society and the environment, through transparent and ethical behaviour that:

Contributes to sustainable development, including the health and the welfare of society

 Takes into account the expectations of stakeholders


 Is in compliance with applicable law and consistent with international norms of behaviour, and
 Is integrated throughout the organization and practiced in its relationships.”

Corporate Social Responsibility or CSR has been debated since the early twentieth century, but there has been
little agreement over its definition due to:

 Differences in national and cultural approaches to business


 Differences in motivation for CSR – doing it because it is morally correct or doing it because it makes
good business sense
 Differences in disciplinary backgrounds, perspectives and methods of scholars engaged with CSR

The corporate social responsibility (CSR) movement is not new and has been gathering momentum for well
over a decade (Crawford & Scaletta, 2005). CSR is about how companies manage their business processes to
produce an overall positive effect on society. This growth has raised questions—how to define the concept and
how to integrate it into the larger body of an organization’s goals and objectives. The Dow Jones Sustainability
Index created a commonly accepted definition of CSR: “a business approach that creates long-term shareholder
value by embracing opportunities and managing risks deriving from economic, environmental and social
developments (Sustainability, 2008).” Specifically, the Dow Jones Sustainability Index looks at competence in
five areas:
 Strategy: Integrating long-term economic, environmental, and social aspects in their business strategies
while maintaining global competitiveness and brand reputation.
 Financial: Meeting shareholders’ demands for sound financial returns, long-term economic growth,
open communication, and transparent financial accounting.
 Customer and Product: Fostering loyalty by investing in customer relationship management, and
product and service innovation that focuses on technologies and systems, which use financial, natural, and
social resources in an efficient, effective, and economic manner over the long term.
 Governance and Stakeholder: Setting the highest standards of corporate governance and stakeholder
engagement, including corporate codes of conduct and public reporting.
 Human: Managing human resources to maintain workforce capabilities and employee satisfaction
through best-in-class organizational learning and knowledge management practices and remuneration and
benefit programs.
ARGUEMENTS IN FAVOUR OF SOCIAL RESPONSIBILITIES:-

The arguments made to emphasize the social responsibility of business deals with the mutual benefits that both
the society and the business enterprise are likely to enjoy as a result of involvement of businesses in social
activities. There are implicit economic returns for explicit social responsiveness by the firms. The following five
arguments in favour of social responsibility made to emphasize the social responsibility on business:-

1. An important argument is that businesses exist because they satisfy important needs of society and therefore
businesses should change along with the changes in society. They should both cater to the needs of the society
and also create new needs. Thus, while being responsive, businesses should also be pro-active.

2. The second argument made to emphasize social responsibility is that if the results are beneficial to both the
society and business, social responsiveness should be encouraged. On account of social responsiveness,
businesses may benefit in terms of employer loyalty, improved QWL and increased public support for the
operations.

3. Thirdly, Business can avoid additional government regulation, which curtails business freedom, adds
economic cost and reduce flexibility in decision making.

4. Fourthly, a socially responsive business organization will have a good public image.
5. Lastly, it is the moral obligation of business to solve social problems and help both the society & the
government.
ARGUMENTS AGAINST OF SOCIAL RESPONSIBILITIES:-
The most important economic argument made against corporate social responsibility is that of the economic
doctrine of profit maximization. When business maximizes profit by improving efficiency and reducing the
cost, it is the society which benefits in the ultimate analysis. Thus, the society will benefit much more if
business is left to do its own business. The topmost priority of business must be economic efficiency and mixing
up the economic function with the social function will only reduce the economic efficiency of business for there
is an opportunity cost involved in social involvement and the return on social involvement cannot be cardinally
measured or explicitly accounted. Hence, economic criteria can only be the criteria to measure the success of
business.
MILTON RRIEDMAN says, if business followed a socially responsive course, their actions would raise the
price for customers or reduce the wages of employees and hence the only responsibility of business is to
maximize profit. Business person should therefore concentrate on shareholders demands and expectation.
According to Friedman, the four basic obligations of business to society are:
(1) Obey the law,
(2) Provide goods and services,
(3) Employ resources efficiently and
(4) Pay resources owners fairly in accordance with the market.
Following Friedman’s argument, it can be concluded that the result of social involvement will be a net
economic loss to the business. Another argument made against social responsibility is that as a result of social
involvement, business will become weak and defunct. A more charitable view on corporate social
responsibilities is that business could spend small amount of its resources in social obligations and that business
cannot afford major commitments for social involvement unless the cost is born by another institutions.
Excessive social involvement would increase the economics costs and reduce the competitiveness of business.
Some thinkers vies that business is a powerful organization and social involvement of business will only
enhance the power of business which is not a very desirable idea. Further, business people are found wanting in
skills and perceptions to effectively deal with social issues.
Business has no direct responsibility to both employees and society and here there is no valid reason for social
involvement of business. Business should therefore keep away from social involvement and pursue the sole goal
of profit maximization until society develops rules that establish social accountability of business. Finally, it is
argued that social involvement of business lacks support from all quarters of the society. Social involvement of
business would encourage stockholders dissent and would adversely affect the pursuit of economic objectives.
Importance of CSR:
Corporate Social Responsibility is a self-regulatory form of corporate conscience included into business models
whereby it is guaranteed that the business is keenly accommodating with the force of law and ethical standards
according to national and international norms. The term has been in use since the 1960s and maintained its
usage extensively to shield legal and moral responsibility. Ever since its inception this sustainability strategy has
been opted by companies to reflect their competitiveness. Their overall aim is to impact the society positively
while get the most out of the creation of shared value for the shareholders, stakeholders and even employees.
However CSR has two threads – the first type holding the common definition of CSR by the public in general.
For example, companies providing funding for valuable social causes. The second type is more headed for
laying down a real plan like employment creation and economic development through environmental initiatives,
manufacturing products, using safe materials, etc. To site a bright example of this, we may bring in light the
“cola wars” between Coke and Pepsi, one of the oldest rivalries in business. Both have a vigorous approach
towards market share yet their CSR strategies are slightly different, if not all similar, like introduction of
sustainable packaging as well as policy of zero net water usage.

Despite CSR’s capacity of fetching a lot to the corporate desk, a fair number of companies show high
dissatisfaction towards this responsibility with some disclosing to have adopted CSR in the first place as
marketing tactic and some, considering CSR as a coerced burden whose absence may have brought much more
to the companies in the long run. Hence, to understand what importance CSR holds in today’s era and whether
its graft is worth the outcome or not, we must look at some of the following points.

Advanced Public Image

Companies which are perceived as less self-regarding are actually favored by customers. It may be
psychological but somehow people find companies with social responsibilities as more approachable. Sending
out messages about your corporation’s philanthropic attitude will do good to design the public image as it
reflects an empathetic side of the company. Corporations can do that by supporting nonprofit organizations or
through donations.

Boosts Government Relations

To be in the good books of politicians and government regulators, companies must present a positive public
perception on its seriousness about social responsibility. This is not only the best way to make easier contacts
with government officials but also to avoid various investigations and probes or even public campaigns.
Customer & Employee Engagement

It becomes easier to talk to customers or pursue them when you have a rather good message to share. When
customers get interested eventually in your cause, they’re slowly going to believe the ambitions of your
company. Obviously this is no maneuvering but with a little effort on social responsibilities, a company reaches
more public in new ways than it might do without CSR. Likewise, today’s generation is ambitious and they’re
in the constant lookout for being associated with companies that have a good public image and is always in the
media for its positive decisions.

Brand Distinction

This is one of the reasons why companies from past incorporated CSR in the first place. But since it is a
common phenomenon now, corporations are trying out new ways to build up their goodwill by experimenting
on their social responsibilities. They’re not only taking it seriously but bringing in a lot of creativity so that they
serve their visionary purpose along with creating a distinct image for themselves in the market.

Positive Workplace Environment

Corporations that care about the lives outside the barriers of their business kind of inspire and motivate
employees to walk into work each day eagerly. This enhances the relationship between the highest management
to the lowest paid workers as they go on to believe that a united approach could do wonders.

Along with these there are other advantages of establishing CSR like retaining investors who want to constantly
know that their funds are being used properly, creating strong partnership between nonprofit organizations and
companies and dig out the best of their workforce. With so many benefits and a vision to be a company that
people look upon must be the ultimate goal of every corporation after all.
CSR AND CORPORATE SUSTAINABILITY

Many have continued to use Corporate Social Responsibility (CSR) and Business Sustainability
interchangeably, but in practice, they rarely mean the same thing even though they are quite interrelated. The
concept of CSR has been around since the 1950’s and has been called so many other names
including; Corporate Responsibility, Corporate Ethics, Corporate Citizenship, Corporate sustainability, and
Responsible Business. CSR is based on the premise that a business can only thrive if it operates within a
thriving society. In that way, the business depends on the community it operates within, and as such, has an
ethical and moral responsibility towards that community. Business sustainability takes this a bit further, and
explicitly encompasses other factors of environment and economics. It is based on the premise that businesses
operate in such a way that it uses limited resources to meet its needs today, while still ensuring that these
resources are still available to meet the needs of future generations.
So right off from these premises, we see some differences between CSR and business sustainability:

Business Sustainability is futuristic while CSR is antiquated


It is very easy to notice that Business Sustainability talks a lot about the future, forward thinking plans to sustain
a business and improve targets, for instance, waste reduction and innovative brand development are examples of
business sustainability projects, while CSR involves deeds that have been done in the past to support one
community project or the other like building a library to support literacy in a community, or providing a health
care centre for a community. Major oil companies in Africa are very good at initiating CSR projects basically
because they are mandated to give back to the communities where they extract their resources from.
CSR is about now while Business Sustainability is long-term
Many CSR projects satisfy a present community need, but they don’t always address the underlying issue. The
oil company that builds a health care centre for a community would not take into consideration the efforts and
resources required by the local government to sustain that centre by continuously paying the fees for the health
workers, maintaining the equipment and facilities, managing logistics and storage of medicines, etc. In this way,
many of them may not be well thought out, and in fact, provide further liabilities for the community and
promote a ‘dependency culture’ (e.g. the Niger Delta situation). Business Sustainability, on the other hand, is all
about long-term thinking. For example, the community may have been better off if the oil company changed
their methods of extraction for the better, and carried out some measure of replenishment upon each extraction.
CSR is therefore more of present philanthropy or “add-on” initiatives with limited strategic focus.
CSR doesn’t have to align with your business, but Business Sustainability does
Many businesses carry out their CSR initiatives by identifying an issue in the community, and providing
something to help ease the issue. But these initiatives don’t always align with the strategy of the business. This
increases the risk of the initiative being perceived as green washing, or as short-term with no long lasting
positive implications. For example, Etisalat Nigeria has a Fight Malaria Initiative where they provide insecticide
treated mosquito nets in Kano state. The project is not integrated into Etisalat’s business model, so it’s easy for
them not to be invested in the long term impacts of the project. Yes, this initiative is responsible, but it’s not
necessarily sustainable. On the other hand, if Etisalat analyzed their business to see where they could better
utilize resources (like how they collocate towers) or partner with others to send health educational messages
along with their standard status SMSs, then these could be seen as business sustainability initiatives as they are
more integrated into their core business.
CSR is mostly external while Business Sustainability is both internal and external
When companies carry out CSR, more often than not, they aim it at external stakeholders. For example, it
would be odd to hear an organization call an improved employee welfare system or a replacement plan for
energy saving bulbs a CSR project. Most times, CSR projects are targeted at specific demographics and groups
of people, e.g. people living in a community (like beautification of roundabout, roads and junctions by Fidelity
Bank); schools (like donations of buildings and vehicles to educational institutions by Wema Bank); sportsmen
(like sponsorship of a female basketball league by Zenith Bank); etc. Business sustainability, on the other hand,
also incorporates a business’ internal stakeholders as well as the way the company actually conducts its
business, e.g. incorporating a policy of flexible working hours for employees (like Action Aid Nigeria has done
with its staff where their work hours do not have to be the traditional 8 to 5); utilizing online training facilities
to reduce travel for training (like KPMG Nigeria has done to ensure continuous learning without the need to
travel or greatly disrupt staff); and building products around issues (like SME loan scheme by GT Bank).
There are other differences too
In addition to the above, we have seen other little differences between CSR and business sustainability as
companies attempt to practice these. For example, we find that CSR practitioners in organizations usually have
communication and marketing backgrounds, whereas sustainability practitioners may have operations
backgrounds in addition to the above. We also find that a main aim of CSR initiatives is to manage the
reputation of the company in the eyes of the public and other stakeholders. Business sustainability, on the other
hand, has the main aim of exploring opportunities for both profit and cost savings – reputation is just an
additional benefit. In light of this, many business people see CSR initiatives as an expense, but they are
increasingly seeing business sustainability initiatives as having a real business case that can provide their
companies with positive impacts on their bottom-line.
CSR AND BUSINESS ETHICS
Businesses aim to gain maximum profits for their owners and shareholders. However, this does not mean they
can do whatever it takes to get that maximum profitability. They can’t do crooked things just to get their desired
profit. This is where business ethics and social responsibility comes into the picture. There are much confusion
between these two terms and they tend to get used interchangeably. Social responsibility is easy to understand,
but the word ‘ethics’ causes much confusion. A company policy must be followed to benefit the community.
This is coined as the corporate social responsibility. However, when one talks about business ethics, it becomes
a very different thing, because ethics is based on conscience.

There is a significant difference between social responsibility and business ethics; and the best way to
differentiate the two is by defining both of them.

Before defining business ethics, it is best to understand the meaning of ethics first. Ethics means moral
character and comes from the Greek word ethos. Ethical behavior is an aspect concerning the good and right.
Ethics is focused on the good and bad, the right and wrong. Using it in business means the company must
follow the right behavior to benefit the good of everybody, including the shareholders, stakeholders, and even
the community. Even though making a profit is the most important thing in business, if making money is the
only concern of a certain business, then it is capitalism in its worst. Businesses should have good business ethics
to benefit the entire community or society. This is the main goal of business ethics. That the business activities
should not harm the people. Instead, it should benefit them. Businesses that do not have good business ethics
are penalized by the law, however, these sanctions are nothing compared to the immoral things that other
businesses are capable of doing and have actually done.
‘No man is an island,’ which means human beings are social beings. The behavior that man must display must
be according to the acceptable norms of the community or society. Comparing this scenario to business,
businesses must still perform its social obligations by performing activities that are according to the norms of
society or community. Even if businesses are more concerned on making profits for the company, it should still
have a social responsibility towards its community. This is the main meaning of social responsibility. It is more
of an obligation or a duty towards the people that the business affects. One of the main examples for this is,
reducing the pollution in the company, especially if that certain business is the one creating all the pollution.
CSR AND CORPORATE GOVERNANCE

India`s new Companies Act 2013 (Companies Act) has introduced several new provisions which change the
face of Indian corporate business" Companies Act 2013 (Companies Act) has introduced several new provisions
which change the face of Indian corporate business. One of such new provisions is Corporate Social
Responsibility (CSR). The concept of CSR rests on the ideology of give and take. Companies take resources in
the form of raw materials, human resources etc from the society. By performing the task of CSR activities, the
companies are giving something back to the society.

Ministry of Corporate Affairs has recently notified Section 135 and Schedule VII of the Companies Act as well
as the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014 (CRS Rules) which
has come into effect from 1 April 2014.

Applicability: Section 135 of the Companies Act provides the threshold limit for applicability of the CSR to a
Company i.e. (a) net worth of the company to be Rs 500 crore or more; (b) turnover of the company to be Rs
1000 crore or more; (c) net profit of the company to be Rs 5 crore or more. Further as per the CSR Rules, the
provisions of CSR are not only applicable to Indian companies, but also applicable to branch and project offices
of a foreign company in India.

CSR Committee and Policy: Every qualifying company requires spending of at least 2% of its average net profit
for the immediately preceding 3 financial years on CSR activities. Further, the qualifying company will be
required to constitute a committee (CSR Committee) of the Board of Directors (Board) consisting of 3 or more
directors. The CSR Committee shall formulate and recommend to the Board, a policy which shall indicate the
activities to be undertaken (CSR Policy); recommend the amount of expenditure to be incurred on the activities
referred and monitor the CSR Policy of the company. The Board shall take into account the recommendations
made by the CSR Committee and approve the CSR Policy of the company.

Definition of the term CSR: The term CSR has been defined under the CSR Rules which includes but is not
limited to:

 Projects or programs relating to activities specified in the Schedule; or


 Projects or programs relating to activities undertaken by the Board in pursuance of recommendations of
the CSR Committee as per the declared CSR policy subject to the condition that such policy covers
subjects enumerated in the Schedule.

This definition of CSR assumes significance as it allows companies to engage in projects or programs relating
to activities enlisted under the Schedule. Flexibility is also permitted to the companies by allowing them to
choose their preferred CSR engagements that are in conformity with the CSR policy.

Activities under CSR: The activities that can be done by the company to achieve its CSR obligations include
eradicating extreme hunger and poverty, promotion of education, promoting gender equality and empowering
women, reducing child mortality and improving maternal health, combating human immunodeficiency virus,
acquired, immune deficiency syndrome, malaria and other diseases, ensuring environmental sustainability,
employment enhancing vocational skills, social business projects, 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 and such other matters as may be prescribed.

Local Area: Under the Companies Act, preference should be given to local areas and the areas where the
company operates. Company may also choose to associate with 2 or more companies for fulfilling the CSR
activities provided that they are able to report individually. The CSR Committee shall also prepare the CSR
Policy in which it includes the projects and programmes which is to be undertaken, prepare a list of projects and
programmes which a company plans to undertake during the implementation year and also focus on integrating
business models with social and environmental priorities and process in order to create share value.

The company can also make the annual report of CSR activities in which they mention the average net profit for
the 3 financial years and also prescribed CSR expenditure but if the company is unable to spend the minimum
required expenditure the company has to give the reasons in the Board Report for non compliance so that there
are no penal provisions are attracted by it.

ENVIRONMENTAL ASPECTS OF CSR

An environmental aspect of Corporate Social Responsibility (CSR) is the duty to cover environmental
consequences of a particular company’s operations, products and facilities.

The major ingredients of environmental CSR are elimination of waste and emissions, maximizing energy
efficiency and productivity and minimizing practices that may adversely affect use of natural resources by
coming generations.
Sustainability and carbon footprints occupy an increasingly important position on the corporate agenda around
the world. Many companies are realizing the importance of environmental initiatives in business development.

Decrease in energy and raw material usage combined with reduced emissions and waste generation can tackle
the environmental challenges facing the world.

Leading IT companies, like Microsoft, Adobe, Apple and Google, are investing in renewable sources of energy
that can generate power directly on-site. Clean manufacturing practices and energy-efficient design of
equipment are also hallmarks of environmental sustainability.

Let us take a close look at some of the major aspects of environmental sustainability.

Role of Packaging

Packaging is an important concern for consumers, particularly those who are interested in converting to eco-
friendly buying behaviors. Packaging plays a great role in environmental sustainability by protecting products,
preventing waste and enabling efficient business conduct. Reduction in the amount of packaging and use of eco-
friendly packaging material provide an attractive opportunity to promote environmental sustainability.

Sustainable packaging is a relatively new addition to the environmental considerations for CSR. Companies
using environment-friendly packaging materials are reducing their carbon footprint, using more recycled
materials and minimizing waste generation. Companies that highlight their environmental initiatives to
consumers can increase sales as well as boost product reputation.

For example, Cisco outsources all of its manufacturing and has over 600 suppliers. To avoid any problems,
Cisco’s packaging team undertakes a painstaking process to create more effective and environmentally friendly
packaging. In 2012, the company eliminated 757,000 pounds of paper and plastic waste for one product line
alone. For its total shipments during 2012, Cisco reduced its use of cardboard, plastic and paper by as much as
466 metric tons.

Role of Clean Energy

Deployment of renewable energy systems can make a big impact on CSR activities of companies as clean
energy is one of the best methods to mitigate climate changes. Decentralized power generation using renewable
resources is rapidly gaining popularity among world’s top companies.

Most of the world’s largest companies, like Microsoft, Apple and Google, are adopting renewable energy as it
makes good business sense to lower emissions, diversify energy supply, mitigate fuel cost and above all portray
a green image. Major IT companies are rushing to develop renewable energy projects to power their giant data
centers.
Google has entered a 10-year deal with utility company Grand River Dam Authority to supply 48 MW of wind
power to its Oklahoma data center. Apple’s data center in Maiden (North Carolina), which draws staggering
20MW power, will run entirely on solar energy and biogas.

Likewise, to meet tremendous energy needs, Adobe has invested in alternative energy sources that can generate
power directly on-site, such as wind turbines and fuel cells at its California facilities. Microsoft has also
unveiled plans to use biogas generated from wastewater treatment facilities to power its research center at
Wyoming.

Role of Environmental Reporting

Environmental reporting, voluntary as well as mandatory, is also getting prominence in the context of corporate
social responsibility. Environmental information like greenhouse gas emissions, waste generation, energy
consumption, use of transport can improve the transparency of industrial activities, thereby, providing a
powerful tool to fight environmental degradation. Business can save significant in areas like use of raw
materials and supplies, reduction in waste, water, energy use, transport, travel and packaging.

There are several countries in which the private sector is required to report greenhouse gas emissions and
energy consumption to the government. Australia’s National Greenhouse and Energy Reporting Act requires
corporations to report information on their greenhouse gas emissions, energy production and energy
consumption to the Greenhouse and Energy Data Officer.

The United Kingdom’s Carbon Reduction Commitment Energy Efficiency Scheme forces all organizations and
companies having electricity demand greater than 6,000 MWh per year to participate in the mandatory scheme,
which applies to more than 5,000 entities until now. The Perform, Achieve and Trade scheme in India has
established consumption targets for energy-intensive industries as well as the cap-and-trade structure.

CSR MODELS

CSR in India has traditionally been seen as a philanthropic activity. And in keeping with the Indian tradition, it
was an activity that was performed but not deliberated. As a result, there is limited documentation on specific
activities related to this concept. However, what was clearly evident was that much of this had a national
character encapsulated within it, whether it was endowing institutions to actively participating in India’s
freedom movement, and embedded in the idea of trusteeship.

As some observers have pointed out, the practice of CSR in India still remains within the philanthropic space,
but has moved from institutional building (educational, research and cultural) to community development
through various projects. Also, with global influences and with communities becoming more active and
demanding, there appears to be a discernible trend, that while CSR remains largely restricted to community
development, it is getting more strategic in nature (that is, getting linked with business) than philanthropy, and a
large number of companies are reporting the activities they are undertaking in this space in their official
websites, annual reports, sustainability reports and even published CSR reports.

The Companies Act, 2013 has introduced the idea of CSR to the forefront and through its disclose-or-explain
mandate, is promoting greater transparency and disclosure. Schedule VII of the Act, which lists out the CSR
activities, suggests communities to be the focal point. On the other hand, by discussing a company’s
relationship to its stakeholders and integrating CSR into its core operations, the draft rules suggest that CSR
needs to go beyond communities and beyond the concept of philanthropy. It will be interesting to observe the
ways in which this will translate into action at the ground level, and how the understanding of CSR is set to
undergo a change.

The 2001 State of Corporate Responsibility in India Poll, a survey conducted by Tata Energy Research Institute
(TERI), the evolution of CSR in India has followed a chronological evolution of four thinking approaches:

Ethical model (1930-1950): One significant aspect of this model is the promotion of trusteeship that was
revived and reinterpreted by Gandhi. Under this notion the businesses were motivated to manage their business
entities as a trust held in the interest of the community. The idea prompted many family run businesses to
contribute towards socio-economic development. The efforts of Tata group directed towards the well being of
the society are also worth mentioning in this model.

Statist model (1950-1970s): Under the aegis of Jawaharlal Nehru, this model came into being in the post-
independence era. The era was driven by a mixed and socialist kind of economy. The important feature of this
model was that the state ownership and legal requirements decided the corporate responsibilities.

Liberal model (1970s-1990s): The model was encapsulated by Milton Friedman. As Perth model, corporate
responsibility is confined to its economic bottom line. This implies that it is sufficient for business to obey the
law and generate wealth, which, through taxation and private charitable choices can be directed to social ends.

Stakeholder model (1990-present): The model came into existence during 1990s as a consequence of
realization that with growing economic profits, businesses also have certain societal roles to fulfill. The model
expects companies to perform according to “triple bottom line” approach. The businesses are also focusing on
accountability and transparency through several mechanisms CSR needs to be understood within this context
captured in the development oriented CSR framework

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