Abstract
Prabhakaran Paleri, Corporate Social Responsibility: Concepts, Cases and Trends (New Delhi: Cengage Limited, 2020), xx + 443 pp.
Holding corporations responsible towards society and the environment (Agarwal, 2008: 14), Corporate Social Responsibility (CSR) as a globally recognised concept has spawned a huge literature. In a much-read review article, Agudelo et al. (2019) trace the evolution of CSR as a conceptual paradigm, presenting typically a more or less completely Eurocentric picture, largely focused on Anglo-American perspectives. More recently, under the label of SCSR, Strategic Corporate Social Responsibility has taken on global transnational characteristics, particularly UN-driven global strategies of pushing for 8 Millennium Development Goals (MDGs) in 2000 and 17 Social Development Goals in 2015 (Agudelo et al., 2019). In such broader contexts, South Asia seems forever doomed to be a troubled defaulter, as indicators devised in New York and other global power centres do not account sufficiently for the realities of the precarious demographic, socio-cultural and environmental conditions under which South Asian states and businesses have to work out how social welfare in its various dimensions should link to private and public commercial activities.
CSR is certainly not new to India (Agarwal, 2008) and other South Asian countries. Especially in the related field of consumer protection, Indian developments of the mid-1980s ‘have propelled the corporate sector in India to become more socially accountable than ever before’ (Singh, 1993: 1). Even if specific CSR literature can be traced back only to the 1930s, the underlying vision and philosophy of CSR itself are much older, probably as old as human civilisation. In South Asia, this is quite visible in the form of innumerable charitable and educational institutions (Agarwal, 2008: 11), often framed as ‘religious’. Rankin (2018), reviewed in South Asia Research 39(1), identified specifically that ‘traditional’ pragmatic business ethics among Jains never saw an inherent conflict between profit-oriented business and merit/salvation-based caring responsibility for others. Sutton and Dass (2016: 100–1) argue, similarly, that the principle of dharma as creative use of human intelligence is not necessarily ‘religious’, but reflects individual awareness of being connected to everything around the self. Apart from other principles, the shubh-labh (auspiciousness and profit) philosophy, a kind of Indian ‘do ut des’ bargain with higher entities, informs deeper layers of South Asian forms of business ethics.
A wider search identifies that the Oxford International Encyclopedia of Legal History has an entry under ‘Consumer Protection: Hindu Law’ (Singh, 2009), which starts with the poignant observation that ‘[a]lmost unnoticed by the world, India has become one of the most innovative jurisdictions in consumer protection’ (Singh, 2009: 173). During the 1980s and 1990s, in particular, led by Professor Manubhai Shah, the Consumer Education and Research Centre in Ahmedabad spearheaded a large number of public interest initiatives to hold businesses and government institutions to account, challenging monopolies and seeking to inculcate better corporate ethics through activism, teaching and publications (Saraf, 1993).
Such examples indicate that searching for CSR in India requires a wide lens. Elsewhere, too, in various cultural contexts, considerations of the value of doing business and making profits display many locality-specific variations that do not fit a sterile state-centric template or a uniform global approach. The management maxim ‘Think Global Act Local’ (Agarwal, 2008: 9) confirms this, but modern writing has systematically dismissed local variations as ‘traditional’ and ‘religious’, while modern CSR debates, concepts and approaches are heralded globally as secular western constructs, without explicitly saying so. Hence, purportedly ‘global’ overviews like Agudelo et al. (2019) somehow still largely ignore the Global South, suggesting that by the 1990s, CSR had become globalised, while by the turn of the millennium, international organisations increasingly took the lead in pushing for implementation agenda of a deemed holistic approach, which oddly looks more ‘traditional’ but is framed as postmodern.
The emerging South Asian scholarship on CSR and related concepts, which must include social well-being (Brejning, 2012), even if few studies have explicitly indicated this, needs to research its own archives diligently for leads about earlier debates on CSR, prominently stirred up by the Bhopal gas leak in December 1984 (Baxi & Paul, 1986). The findings of such search are likely to be rich, provided one keeps an open mind, in view of the inherently holistic nature of CSR itself, ‘a concept which suggests that commercial corporations must fulfill their duty of providing care to the society’ (Agarwal, 2008: 12). It is hard work, but rewarding, to make the necessary connections, engaged in parallel reading of specialist Indian studies, for example, on corporate governance (Joshi, 2004; Sampath, 2006), consumer protection (Saraf, 1993; Singh, 1996), public interest litigation (Jain, 2002) and the future of human rights (Baxi, 2002).
Paleri’s new book, as the subtitle indicates, focuses on theories, concepts and cases of CSR and claims to provide a unique South Asian perspective, tracing its Indian genealogy and addressing issues of social well-being. Dividing the evolution of CSR into seven stages (p. 10), this attributes the first and last stage to Indian ethos, with the first stage, rooted in Vedic philosophies and principles of giving (dāna) and responsible action (dharma), while the last hypothesises how CSR is going to become legally mandated globally, following India’s tracks. India, and increasingly also Bangladesh, are certainly pushing hard to be heard globally in this field. Paleri concedes that his work is neither faultless nor inclusive, given that there are admittedly few sources cited from the abundant western scholarly literature.
Using numerous examples, citing frequently from his own earlier publications, Paleri also discusses how to develop a CSR architecture in a business from the ground up. The author’s considerable hands-on experience of service in government bodies and corporate boards helped in condensing this knowledge, accumulated over decades, into a book for Indian readers. With 12 chapters and a final section of 14 case studies, the volume is divided into three major sections, focused on concepts, practices and cases in CSR. Paleri’s work is inspired by the fact that CSR has been legally mandated in India since 2014, introducing the ‘two percent rule’ (pp. vi, 13), which requires that companies have to spend 2% of their net profits on CSR activities if they either have profits in excess of ₹5 crore, an annual turnover in excess of ₹1,000 crores or a net worth above ₹500 crore. The enactment came into force on 1 April 2014 through changes in the Companies Act of India, 2013 and the Companies (Corporate Social Responsibility) Rules in 2014, notably just prior to the beginning of BJP rule in India.
Maybe inspired by this change of dispensation at the centre in Delhi, Paleri offers a re-thinking of CSR from an Indian standpoint, linking modern CSR with India’s culture, history and present challenges, building concepts of Hinduism and Gandhian virtues into the scholarly exposition of a field dominated by American and European perspectives. He follows the traditional notion that CSR evolved from individual philanthropy, an approach that Agarwal (2008: 9) also observes as the general understanding in India, but identifies perceptively as shifting towards empowerment and building of partnerships (p. 11). But partnerships with whom? Are CSR analyses missing a whole stakeholder group, namely people as responsible citizens, who in turn might volunteer to work for the public good? The ongoing COVID scenario identifies in various ways, spearheading new private–public partnerships, that state-centric analysis or business-focused scrutiny have tended to overlook and sideline such evidence of a ‘third sector’. This fills rather crucial gaps and cracks between the big formal structures and local, informal management processes of conflicts and bottlenecks to secure a ‘good life’, even safety and survival, for more people (Choolayil & Putran, 2021), with wide-ranging political implications, too.
Paleri’s 7-stage evolution timeline (p. 10) is his tool of ‘how to think’ (p. vi). The first stage, with traditional Indian characteristics, extends from the dawn of civilisation until 1750. The remaining 5 stages cover the period from 1750 to the present date. Stage 7 is a hypothesised scenario based on the premise that CSR will be written into law globally, staking claims to an Indian voice and input in that process. Paleri argues that Indians are basically not opposed to giving, in fact, he identifies an Indian ‘donor ethic’ (p. 328), which reflects consciousness of interconnected living. He also emphasises corporate India’s ‘humanistic character’, backed by claims from a former finance minister in Parliament that India’s CSR spending is the fastest growing in the world (p. 329), in many cases exceeding the legal requirement. Paleri thus identifies, without giving much attention to the social dimension, a seamless transition of philanthropy from individuals to corporations, due to a specific socio-cultural system in which many businesses are run by families, dominated by ‘traditional’ individuals and their ethical frames of reference. He relates the origins of CSR to components of compassion, concern for others, charity and humanitarianism, all encompassed in the principles of dāna and dharma.
This holistic element, in secular garb, appears also in the comprehensive literature review of Agudelo et al. (2019), but Paleri’s close attention to culture-specific South Asian principles permits him to weave together facets of Indian mythology and Gandhian principles, illustrating in later sections how these views are reflected in modern management. Paleri’s view of CSR closely resonates with global ideas of sustainable governance, with CSR seen as both its producer and outcome.
The three opening chapters, which comprise the book’s first section, discuss the evolution of CSR through the seven above-mentioned stages. This highlights claims (which may be questioned) that India was the first country in the world to make CSR a legally binding requirement for large corporations (p. 13). Paleri expounds CSR as originating from within the ‘centrum’ of the Business–Government–Society triad (BGS) as a foundational principle for strategic alignment (pp. 4, 9), focused on social well-being. This BGS framework as the central theme enables Paleri to use four different models to explain the BGS triad (pp. 60–2). His work crucially separates notions of obligations from mandate, exploring the intervention of government and the resulting ethical outcomes (p. 64–72), a theme covered in further detail in Chapter 7 (pp. 189–227). Chapter 3 presents a study of the business environment in a global economy. This emphasises the dynamism of potential new areas for CSR, discussing the MDGs, impact of globalisation, and effects on CSR for transnational corporations, global and international organisations.
The second section (Chapters 4–12) introduces various theories of CSR. Here, Gandhian values on trusteeship form a unique contribution (pp. 121–6, 282, 314). Paleri also discusses various facets of the BGS triad such as stakeholders, CSR strategy and implementation, as well as metrics for measuring CSR and codes, guidelines and governmental norms for CSR. Both voluntary and regulatory codes are examined in Chapter 8 (pp. 227–48). Trends and drivers in CSR and barriers to their implementation feature in Chapter 9, one of the briefest parts of the book, providing only a bird’s eye view rather than in-depth exploration. Along the way, the author includes his own theories and concepts and introduces a set of taxonomies of stakeholder types (pp. 137–9, 148), taken from Mitchell et al. (1997) and organisations (p. 68), relying on DiMaggio and Powell (1983).
Chapters 11 and 12 are devoted exclusively to the Indian context. Paleri includes here his own views, attempting to connect present-day concepts of CSR with Hindu ethics and presenting Kautilya’s Arthaśāstra, the ancient handbook on how to manage worldly affairs, as a progenitor of Indian CSR. Paleri notes that the Confederation of Indian Industry initiated the first moral code for CSR in 1998, substantially quoting this text (pp. 278, 287). Paleri’s own views that India is the world’s oldest continuum (pp. 278–80) and that Indian corporations are inherently pursuing CSR for the greater good, a different way to talk about ‘public interest’ with specific Indian characteristics, are concepts which modern scholars may wish to challenge. Significant portions of these two chapters focus on the post-liberalisation period, and Chapter 11 (pp. 309–37) provides snippets of CSR initiatives of 20 major Indian corporate players. This part contains particularly useful material for Indian managers seeking to formulate a CSR vision for their organisation.
The last section covers 14 unique cases, some of which deal with fraud and other forms of corporate malfeasance. Only three cases properly discuss CSR, while others only touch this core topic briefly. This case section lacks attention to detail and the analytical finesse seen throughout the first two sections, making this final part a disappointing end to the book, as the author appears in a hurry to finish the manuscript.
Paleri suggests that Indian corporations will naturally yoke themselves with CSR practices due to cultural and religious factors, as a result of which enforcement is never going to be a problem (p. 328). Yet he also contends that Indian CSR laws are vague with respect to enforcement (p. 312). One troublesome issue is the view that CSR would allow for corporate cohabitation with government in nation-building and governance. Paleri seems to hold the view that in India, the BGS triad is oriented in the same direction as national governance, an approach which may be discounted by many readers and, as noted, disregards social dimensions of philanthropy and citizens’ initiatives. Especially in light of Prime Minister Modi’s maxim of
In terms of domestic relations, under the Nehruvian dispensation, the Indian state was a major entrepreneur, with insufficient safeguards of accountability, an issue which is certainly not resolved. Significantly, Agarwal (2008: 19) highlights that ‘[i]n many aspects, business leaders are ahead of politicians and even NGOs, and command more respect than them’, a situation confirmed also in a large global survey of 2005 by the World Economic Forum.
Of great relevance to debates regarding the Anthropocene and environmental concerns, Paleri implies that not enough is being done by Indian corporate houses for environmental initiatives. Citing the Brundtland Report of 1987, he raises issues of climate change, water use footprint and energy use (p. 34). Environmental CSR (p. 175), environmental impact assessments (pp. 90–1) and related environmental initiatives (p. 168), obligations (p. 33) and sustainability (pp. 23, 95) are briefly touched, but Paleri seems to find few initiatives from corporations and businesses in this domain. Moreover, despite dozens of major environmental agitations by the public against abuses by large corporations in recent years, these have been completely overlooked. Even the Bhopal Gas leak in 1984 is barely mentioned (pp. 93, 137) and not properly indexed. Yet, these are all instances where the P3 systems of People–Profit–Planet (p. 213) have suffered due to corporate neglect or exploitation, and state complicity. The omission of such incidents and evidence is difficult to accept in an otherwise interesting, thought-provoking book.
Linked to the above point, this book has been written in a politically correct manner, avoiding discussion of any issue that may be critical of the government or corporate houses. Paleri’s reluctance to push for a stronger advocacy role is evident from the miniscule ‘Telecoping CSR in India’ segment (p. 329), which suggests a significant number of areas where corporate businesses could focus more attention, but does not elaborate the coverage, maybe due to his long career as a public servant. Despite such shortcomings, the author has been creative in weaving CSR together with Indian mythology and Hindu writings, but readers will notice that this focus largely sidesteps the issue of reputation management in CSR, which some authors have advocated as a major issue. Paleri has preferred to view CSR as a win–win situation for supposedly righteous Indian corporations. A thorough reading of this study identifies that it is conceived as a primer for Indian entrepreneurs and corporate managers. The simplicity of the language and practice-focused presentation of the contents enhance the book’s readability, together with online support resources, which interlink CSR reporting to enforcement agencies and other regulatory bodies in India.
Paleri’s study, thus, cannot be considered as a full-fledged endorsement of CSR. The book is rather a project to present CSR philosophy from an Indian standpoint and somewhat utopian view of CSR. Yet the hidden merit of this study is that it raises deeper questions about how the Indian state is supposed to interact responsibly, and not oppressively, with commercial enterprises that are already contributing to the public interest through taxation, and how the state should deal with citizens’ initiatives and protest movements that cannot just be dismissed as anti-national, but have deeper ethical motivations.
Since the time for token contributions in the name of CSR and collusion between the state and businesses, as observed by Hiro (2015: 235) in the pre-COVID age, has now run out, the really big question is now to what extent various forms of business activities through CSR need to be further guided by India’s rhetorically strong constitutional framework with its huge variety of stakeholders, including of course a highly diverse citizenry with locally focused perceptions of what may be the right way forward.
All of this reflects huge challenges for the future of South Asia as an important part of the globe. The notion of sustainable development remains an illusionary catchphrase for those many millions of people who have to give up their homes and land due to partly unavoidable displacement (Agarwal, 2008: 21) because of development projects by the state and corporations. CSR initiatives and discourses will need to go much further than paying lip-service to Indic traditions in India or Islamic traditions in neighbouring countries, or tinkering here and there with problems of environmental pollution and various kinds of human suffering. How to manage an intensely diverse and highly competitive environment in this field, involving the state and corporations, all over South Asia, while not ignoring the voices of common citizens, who after all are also voters, will need to be explored, with some urgency, in future studies.