From philanthropy to strategic corporate sustainability: a case study in India

Abstract

Purpose This paper aims to explore the drivers and barriers in the transition of the social responsibility agenda of large, emerging economy (EE) firms from non-strategic philanthropy to strategic corporate sustainability. This study also suggests a strategy that such firms may adopt for obtaining the desired corporate social responsibility (CSR) manifestation. Design/methodology/approach The paper follows an in-depth case study approach of a large, family-managed Indian firm in a pollutant industry – Sudarshan Chemicals. The article is based on direct observation and in-depth interviews with key stakeholders, namely, senior management, employees and the local community members (villagers) in the company’s plant in Maharashtra. Findings The study exposes a lack of alignment between firm size (large) and firm CSR manifestation (small) as the key challenge that EE firms face in transforming their social responsibility agenda. Stuck in the mould of non-strategic corporate philanthropy, even large EE companies are not exposed to the three essential elements of the Western conceptualization of CSR, namely, stakeholder pressure, environmental concerns and integration into core business. Sudarshan’s small-firm CSR orientation can be seen as symptomatic of most Indian companies which are family-led, family-managed businesses. Practical implications Faced with strong drivers to incorporate CSR, EE firms can strategize to leap-frog from philanthropy to corporate sustainability through obtaining the desired CSR manifestation. Originality/value The significance of this paper lies in the “on the ground”, detailed and empirical study of the drivers and challenges faced by a large Indian company, as it proactively sought to transition from the philanthropy orientation towards strategic CSR/sustainability. The paper identifies the major challenge large, Indian corporates are likely to face going forward, as they respond to drivers in a globalized business environment.

Sustainability Initiatives in Emerging Economies: A Socio-Cultural Perspective

“…The literature suggests that the emerging economy SSCM research requires constructs that reflect the emerging economy's technological and infrastructure development [42], government regulation [9], available skill levels [41], resources [43], and research and design capability [44]. A greater understanding of the constructs that affect SSCM in emerging economies is likely to provide improved standards of living [45,46], use of resources [47], sustainable policy development [42], industry innovation, and local capability development [4], as well as reduce the current rate of resource consumption [48]. Identifying the actors, their motives, and the actions that constitute SSCM initiatives in emerging economies will provide the best basis for developing these constructs [23,49].…”

Analysis of corporate sustainability performance and corporate financial performance causal linkage in the Indian context

“…The Indian government is projecting CSR to enhance economic equality in India and advises the corporates to use CSR for positioning the positive image to compensate for the social/environmental damages caused in the course of business activities (Sharma 2013). Changes in Companies Act 2013 that mandates a particular class of firms to devote a minimum of 2% of the last 3 years' average profit towards CSR provides an opportunity for organizations to transition from philanthropic CSR to strategic CSR (Jayakumar 2016). However, it is criticized for being an instrument used by the government to abdicate its social responsibility (Deodhar 2016) by directly putting a tax of 2% on corporates rather than mandating them to spend it on CSR activities.…”

Rethinking the role of management education in developing a “new” locus of CSR responsibility

“…The concept of social responsibility was not new to India. The Indian CSR traditionrooted in business ethics, religion, and spiritualityhad deep philanthropic underpinnings captured in Indian scriptures (Agarwal, 2008;Balasubramanian et al, 2005;Jayakumar, 2016;Khan, 2008;Mohan, 2001). Traditionally, Indian companies viewed CSR as a non-strategic and religious philanthropic activity, to be undertaken in areas or activities determined by the individual owner's preferences (Bain and Co. Inc., 2013;Charities Aid Foundation, 2012;Dasra, 2012).…”