Csr: From Policy to Practice

CSR

An organization is an aggregate of various people who come together to work for a common purpose. The people who are part of an organization have a common goal and strive to achieve it. The organization is not an isolated entity; it operates within the framework of society. Here, society can be thought of as its suppliers, employees, customers and shareholders.

The function of an organization is to effectively and efficiently convert inputs into outputs.

It takes in inputs in the form of natural resources, unskilled and skilled labour, entrepreneurial spirit and capital from the society and converts them to outputs in the form of consumable goods and services, which it attempts to sell at a profit. Thus companies strived for maximization of profits, which would justify their existence.

But that was a very narrow definition of an organization's existence as a profit maximizing entity. The alliance of society and organizations is not purely an economic one, where the organization pays the society for the resources it uses and is paid by the society for the goods and services consumed.

Organizations employ and are run by people, who bring in their own set of values, beliefs and cultures. All of these give rise to the organizational culture. Thus, an organization is a part of a larger system, the society, form where it derives its resources, structure and values.

It is imperative for the organization to work for the development of the society in which it operates, as their destinies are inextricably intertwined. An organization cannot succeed without the society and the society also depends on the organizations for its sustenance. Enter corporate social responsibility.

CSR Defined:

According to CSR Asia, CSR is "A company's commitment to operating in an economically, socially and environmentally sustainable manner while balancing the interests of diverse stakeholders."

According to HSBC, "CSR means managing our business responsibly and sensitively for long term success. Our goal is not, and never has been profit at any cost because we know that tomorrow's success depends on the trust we build today"

History of Corporate Social Initiatives

Businesses and firms, as we know them today, came into existence during the industrial revolution, with the development of various industries like textiles, mining, transportation, etc. Though these industries contributed immensely towards the development of the modern human society, they