The Missing Philanthropists
Pushpa Sundar's book chronicles succinctly in 10 chapters the fascinating story of India's business and its foray into philanthropy and CSR.
India's growth is often compared with China's. The striking difference, however, is the history of India's merchant charity and its robust civil society. Interest in corporate social responsibility (CSR) is growing, now that the Companies Bill has been cleared by the Lok Sabha and is awaiting approval in the Rajya Sabha. Pushpa Sundar's book chronicles succinctly in 10 chapters the fascinating story of India's business and its foray into philanthropy and CSR. The growth of family enterprises saw India's leading business houses contribute to nation-building through world-class institutions. G.D. Birla founded the Birla Institute of Technology and Science (Pilani), the Bajajs set up the Jamnalal Bajaj Institute of Management, and the Tatas established the Indian Institute of Science—these are inspiring tales of the early philanthropists and their contribution to society. Some of these industrialists led frugal lives and built their wealth from scratch without much formal education.
It was Gandhi's concept of "trusteeship" that provided a means of transforming the capitalist order into an egalitarian one, preventing a violent revolution through self-reform by the owners of wealth. The 1990s and the winds of globalization led to new thinking on CSR following the rise of a business class comprising first-time billionaires. For many, CSR has been more about improving branding and the public perception of the firm than about responsible practice. As the Bhopal gas tragedy and other industrial disasters have shown, companies may bypass environmental, occupational, and safety practices, but at huge costs. Indeed, as the author points out, civil society activism, which has helped expose practices such as child labor or environmental damage, has led to landmark judgments—thereby making sustainability an important facet of CSR.
After 1990, the composition of the business sector changed. To the large Indian family businesses was added the presence of multinational corporations (MNCs) and small and medium enterprises (SMEs). But the unique feature of India is that family businesses still dominate. The non-dynastic private sector focused on business lines that were part of the New Economy. These entrepreneurs—such as the promoters of Infosys, Wipro, and so on—from middle-class backgrounds and non-business families brought middle-class values, including the concept of social obligation, but very few gave away personal wealth.
By 2010, India had 49 billionaires, many of them flaunting their wealth and conspicuously spending on weddings and mansions rather than on social causes while inequalities widened. Even as the billionaires' club grows, India ranks 134 in the Human Development Index and a low 65 in the Global Hunger Index. The question the author raises is, "Where are India's great philanthropists? How can a country with so much wealth, technical know-how, and management talent give back so little to its people?"
As scams grew in the last decade, so did trust deficits across the world, which, in turn, called for better corporate governance to expose how companies paid little heed to environmental and safety norms, how poor people continued to pay a price for negligence, and how MNCs discriminated between developed and developing countries in pursuit of profits. Crony capitalism and financial misadventures became the order of the day; in reaction, movements such as Occupy Wall Street spread in many countries. Mandating CSR is not a uniquely Indian practice, according to the author. In many European countries, firms are expected to fulfill legal obligations. If money on these obligations is spent wisely, it could reduce development deficits.
The traditional way was to give from surpluses with no questions asked, but contemporary CSR talks about responsible profit. Ethical deficits are visible in sectors such as realty, mining, pharmaceuticals, and SMEs. CEOs, the author says, and rightly so, must take the lead in socio-economic debates that could alter the structure of their business and the rules of engagement.
CSR in India has followed its path "with some western influences such as focus on supply chains and Human Rights". There have been some achievements, but there are many shortcomings, and the exercise is guided more by self-interest. There are also differences between what motivates indigenous, family-owned businesses and MNCs, which have extraterritorial loyalties. Their ties to society are impersonal and purely economic. The chapters on "Challenges" and "CSR as Trusteeship" offer deep insights into the trust deficits in the business-community interface and the many obstacles before CSR can become a transformative force. One agrees with the author that India's CSR must flow from its own history, culture, and needs. All in all, this book is a must-read for all managers, management students, faculty, and business and civil society leaders if they are to be located in their history and context.
Business and Community
The story of Corporate Social Responsibility in India
Pushpa Sundar
SAGE Publications; 408 pages; $45
From India, Mumbai
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305Pushpa Sundar's book chronicles succinctly in 10 chapters the fascinating story of India's business and its foray into philanthropy and CSR.
India's growth is often compared with China's. The striking difference, however, is the history of India's merchant charity and its robust civil society. Interest in corporate social responsibility (CSR) is growing, now that the Companies Bill has been cleared by the Lok Sabha and is awaiting approval in the Rajya Sabha. Pushpa Sundar's book chronicles succinctly in 10 chapters the fascinating story of India's business and its foray into philanthropy and CSR. The growth of family enterprises saw India's leading business houses contribute to nation-building through world-class institutions. G.D. Birla founded the Birla Institute of Technology and Science (Pilani), the Bajajs set up the Jamnalal Bajaj Institute of Management, and the Tatas established the Indian Institute of Science—these are inspiring tales of the early philanthropists and their contribution to society. Some of these industrialists led frugal lives and built their wealth from scratch without much formal education.
It was Gandhi's concept of "trusteeship" that provided a means of transforming the capitalist order into an egalitarian one, preventing a violent revolution through self-reform by the owners of wealth. The 1990s and the winds of globalization led to new thinking on CSR following the rise of a business class comprising first-time billionaires. For many, CSR has been more about improving branding and the public perception of the firm than about responsible practice. As the Bhopal gas tragedy and other industrial disasters have shown, companies may bypass environmental, occupational, and safety practices, but at huge costs. Indeed, as the author points out, civil society activism, which has helped expose practices such as child labor or environmental damage, has led to landmark judgments—thereby making sustainability an important facet of CSR.
After 1990, the composition of the business sector changed. To the large Indian family businesses was added the presence of multinational corporations (MNCs) and small and medium enterprises (SMEs). But the unique feature of India is that family businesses still dominate. The non-dynastic private sector focused on business lines that were part of the New Economy. These entrepreneurs—such as the promoters of Infosys, Wipro, and so on—from middle-class backgrounds and non-business families brought middle-class values, including the concept of social obligation, but very few gave away personal wealth.
By 2010, India had 49 billionaires, many of them flaunting their wealth and conspicuously spending on weddings and mansions rather than on social causes while inequalities widened. Even as the billionaires' club grows, India ranks 134 in the Human Development Index and a low 65 in the Global Hunger Index. The question the author raises is, "Where are India's great philanthropists? How can a country with so much wealth, technical know-how, and management talent give back so little to its people?"
As scams grew in the last decade, so did trust deficits across the world, which, in turn, called for better corporate governance to expose how companies paid little heed to environmental and safety norms, how poor people continued to pay a price for negligence, and how MNCs discriminated between developed and developing countries in pursuit of profits. Crony capitalism and financial misadventures became the order of the day; in reaction, movements such as Occupy Wall Street spread in many countries. Mandating CSR is not a uniquely Indian practice, according to the author. In many European countries, firms are expected to fulfill legal obligations. If money on these obligations is spent wisely, it could reduce development deficits.
The traditional way was to give from surpluses with no questions asked, but contemporary CSR talks about responsible profit. Ethical deficits are visible in sectors such as realty, mining, pharmaceuticals, and SMEs. CEOs, the author says, and rightly so, must take the lead in socio-economic debates that could alter the structure of their business and the rules of engagement.
CSR in India has followed its path "with some western influences such as focus on supply chains and Human Rights". There have been some achievements, but there are many shortcomings, and the exercise is guided more by self-interest. There are also differences between what motivates indigenous, family-owned businesses and MNCs, which have extraterritorial loyalties. Their ties to society are impersonal and purely economic. The chapters on "Challenges" and "CSR as Trusteeship" offer deep insights into the trust deficits in the business-community interface and the many obstacles before CSR can become a transformative force. One agrees with the author that India's CSR must flow from its own history, culture, and needs. All in all, this book is a must-read for all managers, management students, faculty, and business and civil society leaders if they are to be located in their history and context.
Business and Community
The story of Corporate Social Responsibility in India
Pushpa Sundar
SAGE Publications; 408 pages; $45
From India, Mumbai
Acknowledge(0)Amend(0)
The Need for Genuine CSR in Corporate India
When there is a law requiring companies to engage in CSR, a clear disparity often emerges between what is expected and what they actually want to do. Corporate India lacks empathy, primarily because many businesses rely on misuse and exploitation—of both people and the environment. This issue originates from top leadership and can only be addressed through political reform. It can be tackled with tax reform, social status adjustments, policy advisory roles, and connections with small enterprises. Corporate leaders need to be shown what to value—currently, this is dominated by corporate flattery and "sucking up," which is valued above everything else. The higher a corporate figure rises, the more "sucking up" they expect. This has to change, and it can change when something higher up, like the government, recognizes pure leadership and empathy.
India is not a single society; it's an amalgamation of many smaller societies, similar to how droplets of oil float around on water. They mix when it's convenient. CSR operates within these droplets and doesn't significantly affect the ecosystem as a whole.
Creating Effective CSR Policies
What we need to do is recognize how India functions and create rules that have a trickling effect on the entire ecosystem. One approach could be by creating mandatory categories for CSR, such as a food program, infrastructure development program, SMB training center program, and similar initiatives. Establishing such mandatory categories will make it difficult for companies to confine their CSR efforts to micro-societies and will create a far greater impact on the overall ecosystem.
Please correct me if I am wrong anywhere and do include your viewpoints.
From India, Gurgaon
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When there is a law requiring companies to engage in CSR, a clear disparity often emerges between what is expected and what they actually want to do. Corporate India lacks empathy, primarily because many businesses rely on misuse and exploitation—of both people and the environment. This issue originates from top leadership and can only be addressed through political reform. It can be tackled with tax reform, social status adjustments, policy advisory roles, and connections with small enterprises. Corporate leaders need to be shown what to value—currently, this is dominated by corporate flattery and "sucking up," which is valued above everything else. The higher a corporate figure rises, the more "sucking up" they expect. This has to change, and it can change when something higher up, like the government, recognizes pure leadership and empathy.
India is not a single society; it's an amalgamation of many smaller societies, similar to how droplets of oil float around on water. They mix when it's convenient. CSR operates within these droplets and doesn't significantly affect the ecosystem as a whole.
Creating Effective CSR Policies
What we need to do is recognize how India functions and create rules that have a trickling effect on the entire ecosystem. One approach could be by creating mandatory categories for CSR, such as a food program, infrastructure development program, SMB training center program, and similar initiatives. Establishing such mandatory categories will make it difficult for companies to confine their CSR efforts to micro-societies and will create a far greater impact on the overall ecosystem.
Please correct me if I am wrong anywhere and do include your viewpoints.
From India, Gurgaon
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CSR (Corporate Responsibility) .ppt
Social responsibility lecture.pdf