Development Crossing

Corporate Social Responsibility (CSR) and Sustainability

Emerging Nonprofit - Business Partnerships in India-A new paradigm of the 21st century

Prof.Dr.J.Christopher Daniel,M.A.Ph.D
Executive Director
Goodwill Social work centre
Madurai
India


Introduction:

"We are living in a time when no organisation can succeed on its own. The development of results-focussed nonprofit and business creates a growing opportunity for these organisations to work together and create new possibilities that further their respective missions. Nonprofits know they must become more businesslike. Businesses know they must become more socially responsible. As we look around us in a new century, we realise that business and nonprofits in today’s interconnected world will neither thrive nor survive within the walls of their own organisations. They need to look beyond the walls and find partners who can help achieve greater results and build the vital communities to meet the challenges ahead" (Frances Hesselbein & John c. Whitehead, 1999).

Increasingly enough, the need for cross-sector partnering between businesses and nonprofits for social development efforts in rural and urban areas is greatly realized in almost all the developed and developing countries to respond to the development demands of humanity. To quote James Austin, "the problems facing our cities seem to defy solution. But the only certainty is that these increasingly complex challenges exceed the capabilities of any single sector—public, private, or nonprofit—to solve them alone."

Around the world, in particular developed countries, many businesses have been actively involving themselves in corporate giving either directly or though nonprofit sectors for community development initiatives. The importance of corporate partnership for community service was not only widely accepted but also very expressively demonstrated by many businesses by way of ‘corporate giving’, thanks to the management philosophy of Oliver Sheldon in 1923 who attempted to blend social ethics with the practicability of scientific management. In point of fact, his principles of the ‘ethics’ or ‘ought ness’ of industrial management and the human elements of corporate responsibility were widely accepted by the corporate sector in the 20th century and are now very much considered to be the need of the hour in every country in the present changing global cultures. Today, community service as a part of the business culture is very much practiced by many corporates in the developed and developing countries. James Campell, President of Norwest Bank, Minnesota, USA said “There’s something magical here, a feeling of responsibility, of giving back to the community and making everyone’s life better. It (service) is an ingrained expectation”. Indeed there is a growing recognition among corporations of the value of nonprofit-business collaboration for taking up community service programmes for developing healthy societies. But building cross sector relationships of business and nonprofits do not just happen. They are built. Such cross sector partnering will surely be a collaboration paradigm of the 21st century. Peter F. Drucker, the living legend in the field of management has stated "Today’s business/nonprofit partnerships are leading the biggest change in philanthropy since the rise of the foundations 100 years ago-the shift from philanthropy to investment. ----We are now talking about a true partnership to build community and produce people who are needed by healthy businesses and a healthy society.”

While many corporate sectors in India are directly or indirectly involved in building social infrastructure of a community namely education, health care, housing, economic development, culture, sports, civic measures, environment development and improvement of other human environments, the questions raised are? Are these corporate initiatives ensuring full participation of the poor, the marginalised and the disabled in the economic and developmental process? Are their rights and duties in a civil society enforced? Are their corporate partnership initiatives geared towards meeting the major social development issues namely I. Eradication of poverty II. Expansion of productive employment and reduction of unemployment and III. Fostering social integration? How do nonprofit business collaborations respond to these vital issues?

Corporate partnerships- Indian scenario:

There are many motivations that lead corporate sector to support cross sector collaboration. To quote from Larry Perlman “ a corporation in this world today carries with it a responsibility broader than just running the business every day. Business will not endure in a society that’s not functional, so in a sense it’s the most effective form of long-range strategic planning”.

In the Indian scenario, the religious tradition of philanthropy carried through ages has influenced corporate giving for community development. Historical evidences reveal that since 1893 there have been many large corporate groups in India which have had been organising social development activities and providing corporate care for community directly through their own foundations/trusts and also some corporate groups practicing ‘cheque book charity’ or giving funds to the ‘CEO’s wife’s charity’ for community care activities or donating material resources to various development organisations from time to time.

Getting involved:

Why do corporate sectors collaborate? To what extent are business sectors connected to the social purpose of the collaboration? What is the purpose of the collaboration? Where does the relationship fall on the collaboration continuum and where does each partner want it to be- philanthropic, transactional or integrative. Do both partners have written collaboration purpose statements? What are the missions, strategies and values of each partner what specific benefits will accrue to each partner from the collaboration? What resources of each partner are of value to the other? What is the level of organisational commitment to the partnership and how is this commitment demonstrated?
The literature surveyed by the author and the study reports and articles presented in the website: www.indianngos.com attempts to find answers to the above questions. There are many internal and external reasons, which have prompted corporate sectors in India to be socially responsible to society. The internal reasons being employee morale and customer and shareholder satisfaction, and the external reasons include satisfying local communities, publicity and tax benefits and enlightened self-interest etc. Interestingly enough, it was TATA family in India which was on the forefront in corporate giving in 1893,which was by followed many other enlightened corporate houses. The doyen of the Indian industry, Jamshedji Tata set up an endowment scheme for higher education and his heirs Ratan Tata and Dorab Tata carried the tradition of the Tata culture of corporate social responsibility. Following the clarion call given by Gandhiji, the father of our nation to the business communities in India during the freedom struggle movement, many corporate sectors came forward to contribute to social development sector through institution building roles. It is found that leading Indian companies namely Mahindra and Mahindra groups, the Birla, the Bajaj, Lupin etc have since then been involved in social development mission which have not only benefited the communities to economic stability and improved quality of life of the people but also added more credibility to the corporate image.

Data gathered from the website www.indianngos.com indicate that there are 135 Indian companies, which are involved in charity missions or social development work. These Corporates undertake programmes on various issues concerning children, women, health, disability, education, environment, disaster, communication, youth, rural development, water, multiple services and other human development activities. Further, it is noticed that there are 12 categories of Indian Corporates namely 1.Advertising and Communication 2.Manufacturing 3.Telecommunication 4.Airlines 5.Bank 6.Chemicals and Pharmaceuticals 7.Consulting and financial 8.FMCGS 9.Government Companies 10. Big Industrial Groups 11.Information Technology 12.Others, who are involved in promoting Corporate social responsibility in the rural and urban areas. Interestingly enough, the Confederation of Indian Industry is also involved in social development activities namely population and health, education and literacy and community development.

It is quite revealing that multinational and national corporate sectors like Citibank, Coca Cola India, Dupont South Asia Ltd, Balmer Lawrie, Bharat Petroleum, Indian Oil Corporation, Shell Foundation, Bank of America, Business standard, Proctor and Gamble, Hindustan Lever, ITC, Lalbhais, AMM Foundation, Bajaj Auto, Sarabhai, Videocon Group, Wockhardt Dr.Reddy’s Laboratories, Excel Industries etc have been taking up partnership programmes in India mostly through their direct service delivery networks. But nonetheless, there are many more corporate houses in India that have to be socially responsible and involve in social development efforts in both rural and urban areas. Interestingly enough, most of the Public sector undertakings have been actively involved in corporate giving/philanthropy or running direct and/or indirect programmes though various support activities in the fields of education, health, rural development, housing etc.

The survey conducted by the Indian Research Market Bureau (2000) has revealed that the concept of ‘corporate partnership’ was not understood nor the importance of corporate giving was realised by many companies in India. It was reported in the webpage www.indianngos.com that of the 600 companies surveyed, there was no indication of any upward trend as to the increasing role of the corporate sector in social development activities. Furthermore, nearly 70 per cent of the companies surveyed were undertaking social development activities by way of donations or directly or indirectly organising community services programmes through their own foundations/trusts. More than 80 per cent of such programmes were of a long-term nature. Sadly enough, cross- sector partnering between these companies and nonprofits was not very much evidenced. Even those few corporates, which are taking up community assistance programmes in alliance with nonprofits, they are not of long term in nature nor multi-year partnering. Surprisingly enough, there are many companies in India which are actively and indiscriminately involved in event sponsorships namely a cultural/music event, fashion show, beauty contest, sports etc, which mostly benefit their business rather than benefiting the community. These companies rarely get involved in cross sector partnering with nonprofit organisations in social development activities.

Collaboration continuum:

The forms of business collaboration with nonprofits are mostly ‘philanthropic’ and not ‘transactional’-when organisations carry out their resources exchanges through specific activities, such as cause-related marketing, event sponsorships, licensing and paid service arrangements, nor ‘integrative’-when collaborative relationship is developed and the partners’ missions, people and activities begin to experience more collective action and organisational integration. In Indian scenario, relatively not a substantial number of Nonprofits and companies have advanced to this degree of integration. Though many nonprofits in India are expectantly looking for business collaboration for social development activities in rural and urban areas, corporate partnerships have a long way to go before arriving at this integrative stage.

Cross-sector collaboration-The need of the hour;

If more companies in India were to involve in cross-sector collaboration with nonprofits for promoting the quality of life of children and women in particular through development efforts in and around the place where the companies/industries are located, much of the community needs could be fulfilled. Corporate giving to nonprofit organisations in India should become a part of every company’s strategy for it yields benefits to the company in four important areas: strategy management, human resource management, culture building, and business generation. To quote an example, Citicorp, a global financial services corporation has incorporated community service an integral part of its new worldwide corporate strategy and one of six key indicators to measure the company’s performance. ‘Citicorp’s management has described the rationale for this strategic engagement in this way: “We do this because it is the right thing to do and can offer profitable business opportunities. We also do this because we want a positive image with customers, potential customers, regulators, legislators, and community groups all of which supports our global image as a trusted brand name. We are talking here about how we run our business, not just about contributions, volunteerism and PR…It has moved from ‘nice to do’ to ‘need to do’ as part of our business strategy’. (James Austin: The Collaboration Challenge, Jossey-Bass Publishers, and USA, 2000)

Corporate sectors in India have to work in alliance with nonprofits on a long-term basis in the effectively delivering the community services such as 1.strengthening primary education especially in rural areas 2.primary health care initiatives 3.micro-enterprise lending programmes for the poor 4. Provision of drinking water 5. Environmental awareness and sustainable development programmes 6.promoting children’s rights 7.Preventive health education for adults on alcoholism and drug abuse, HIV/AIDS 8. Promoting peace and communal harmony in the community.

As the world communities are beginning to form a ‘global society’, nonprofits and businesses have their social responsibility. Peter Drucker has stated ‘Too few in our society truly understand the concept of partnership or the nature of the social sector. With government and business, the social sector is one of the three pillars on which modern society is based, and by far the most diverse… But no one sector can do its jobs alone; business cannot thrive in a sick society. All three must work together. We must establish the independence and the interdependence of each sector. The Drucker Foundation has viewed ‘A healthy society requires three vital sectors: a public sector of effective governments; a private sector of effective businesses; and a social sector of effective community organisations’.

References
• Anant G.Nadkarni, Development-driven business alone will survive and quality of life, www.indianngos.com
• James E Austin The Collaboration Challenge, Jossey-Bass Publishers, San Francisco, USA, 2000
• James E.Austin, Principles of Partnership, Leader to Leader, No.18 Fall 2000,The Peter F. Drucker Foundation, NY, USA
• Janaki Murali, Investing in Social betterment, The Hindu Business Line, March 21,2002

Views: 167

Comment by Henry Klen on February 18, 2008 at 4:34am
Interesting article. I agree that organization can't succeed on its own and need to collaborate.
Comment by Dr.J. Christopher Daniel,Ph.D on February 18, 2008 at 5:02am
Dear Henry:

Thank you so so much for your valuable comment.Best regards

Christopher

Comment

You need to be a member of Development Crossing to add comments!

Join Development Crossing

© 2019   Created by Development Crossing.   Powered by

Badges  |  Report an Issue  |  Terms of Service