corporate social responsibility of firms in...
TRANSCRIPT
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CHAPTER – 4
CORPORATE SOCIAL RESPONSIBILITY OF FIRMS IN
MYSORE DISTRICT
4.1. Introduction
In this chapter the collected empirical data is analyzed with appropriate tools
and an attempt is made to evolve a new model to explain the CSR behavior of
companies located in Mysore district. This chapter starts with the description of
sample firms, the size composition, the policies and finding at the correlation between
size and nature of the firms and CSR initiatives.
4.2 Profile of the Sample Firms
The primary data was collected by administering a structured questionnaire to
sample firms to obtain the profile. The background data covered issues such as size of
firms, type of firms and nature of firms. Out of a total of 80 firms/corporations
contacted only 66 responded positively. The sample comprises both manufacturing
and services. Manufacturing includes electronics, auto ancillary, engineering, cotton,
pharmaceuticals, automobile component, cement, chemical, food item, heavy
engineering, metal, sugar and others. Service providing firms are mainly software,
telecommunication and IT Enable Services. All firms have insurance policy for
employee‘s family.
4.2.1 Distribution of Sample Firms based on Size of Employment
The definition adapted by the European Union based on the employment is
adapted for the present study (European commission, 2002). According to this
definition small firms are firms with less than 50 employees; medium- sized firms are
firms with less than 250 employees. Firm with more than 250 employees are
considered as large firm. The above definition is used in the present study for the
classification of industries. Sample firms were randomly selected from the list of
firms registered in Mysore district. A self-administered questionnaire was prepared
for the study and it was submitted to managers directly. It was aimed to reach 80
firms but only 66 firms responded positively.
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Size of the firms has direct relationship with CSR activities. The respondents
classified based on size of firm is presented in table 4.1.
Table - 4.1 : Distribution of sample firms based on size of employment
Size of Firm Number Percent
Large 30 45.5
Medium 20 30.3
Small 16 24.2
Total 66 100
Sources: Survey Data
There are three types of firms on the bases of size (Large-Medium-Small). The
results show that 45.5% of firms are in large group, 30.3% of firms are in medium
size and only 24.2% of firms belong to small size. It means majority of sample firms
are in large sized category.
4.2.2 Distribution of Sample Firms based on the Nature of Economic Activity
The nature of economic activity of the firms is classified into two groups i.e
manufacturing and services. The distribution of sample firms based on nature of
economic activity is presented below in table 4.2.
Table - 4.2 : Activity wise distribution of sample firms
Economic activity Number Percent
Manufacturing 62 93.9
Services 4 6.1
Total 66 100
Sources: Survey data
The results show that, 93.9% of the firms are manufacturing and only 6.1% of
them are services providers.
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4.2.3. Corporate Social Responsibility (CSR) Policy of Sample Firms
A specific CSR policy of the firms will place CSR initiatives on a sustainable
basis. The firm without a policy may initiate activities depending on the availability
of funds. In an attempt to understand the seriousness of the firms, an enquiring about
the policy was made.
Based on the data collected, it is observed that all the firms believed in CSR
activities. But only 54.5% of firms have separate policy for CSR initiatives. The other
45.5% of them have CSR initiatives, but there is no specific policy.
4.2.4. Corporate Social Responsibility Initiatives of Sample Firms
Different firms initiate different activities depending on the objective of the
firms, their vision and the CSR policy. The initiatives could be in the form of
promoting environment, taking care of health and educational needs of the employees
or community around the firms or taking measures to improve the safety at work
place etc. The responses from the sample firms is grouped into five categories and
presented in table 4.3
Table - 4.3 : Distribution of firms according to CSR initiatives
CSR Activities Large firms Medium
firms
Small
firms
Total
number Percent*
Environment 24 12 10 46 69.7
Health 18 4 4 26 39.4
Education 10 4 0 14 21
Social
philanthropy
4 2 0 6 9.1
Safety 2 2 4 8 12.1
Source: Survey data
* The total does not add to 100 due to multiple responses.
The results show that majority of the firms (69.7%) have CSR activities
addressing environmental issues. Second important category is healthcare with 39.4%
of the firms providing healthcare. Education initiatives are taken by 21% of the firms
and only (12.1%) of firms are working, on the safety initiatives. Social philanthropy is
the area of intervention for 9.1% of firms.
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4.2.5. Gains from Corporate Social Responsibility (CSR) Activities
Firms initiate CSR activities for varies reason like belief in giving back some
they to the community, improve the firms image, self satisfaction etc.
Table - 4.4 : Distribution of sample of firms based on perceived gains from CSR
initiatives
Gain by CSR Large
firms
Medium
firms
Small
firms
Total
number Percent*
Improve productivity 24 16 10 50 75.8
Self Satisfaction 18 18 10 46 69.7
Improve market image 20 6 8 34 51.5
Improve employer and employee
relationship
18 8 2 28 42.4
Source: Survey data
* The total does not add to 100 due to multiple responses.
The survey results indicate that there are four categories of gains to the firms
by CSR activities, as expressed by the managers. They range between improvement in
productivity to self satisfaction, improve market image, and improve employer and
employee relationship. Majority of the sample firms felt that CSR improves
productivity (75.8%), which is fundamental in maintaining and attracting employees
and new customers. Good productivity will bring financial benefit through improved
sales. Other corporate gains of having CSR activities is, self satisfaction which takes
second rank with 69.7%.
Another advantage of CSR activities is improving the market image which is
expressed by 51.5% of sample. Only 42.4% of sample firms expressed that it
improves relationship between employer and employees that help to keep and develop
human capital as well as improve their working performance. Todays employees
prefer to work for socially responsible firms (Smith, 2003).
4.2.6. Budget for CSR initiatives
CSR is observed in many firms interviewed. All the firms have supported the
concept of CSR and are willing to take it as a business strategy. Nearly 70% of the
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firms have a separate budget for CSR activities. For nearly 30% of the firms, budget
is flexible. There is no specific allocation for different CSR initiatives. The results
show that majority of the firms are operating with a specific budget for CSR.
Table - 4.5 : Distribution of firm according to budget for CSR initiatives
Specific Budget Total Number Percent
Yes 46 69.7
No 20 30.3
Total 66 100
Source: Survey data
4.2.7. Share of Expenditure on CSR Initiatives
Firms with a specific budget allocate funds for CSR activities from the profit.
The study has shown that majority of the firms have a specific budget .But, they are
not interested in revealing the share of CSR expenditure in the profits. Out of the total
66 firms, only 30 firms have revealed the percentage. From the data presented in table
4.6. It can be observed that ten firms are spending only 0.2 % and another 8 firms are
spending more than 1% of their profit on their CSR activities. The data also bring out
of an interesting observation that some of the medium and small firms are spending
more than 1% of their profit on CSR.
Table – 4.6 : Distribution of firms according to the share of CSR in profits
Percentage of Profit Spent on
CSR Activities
Large
firms
Medium
firms
Small
firms
Total
Number Percent
Less than 0.2 6 2 2 10 15.2
Between 0.2-0.5 2 4 0 6 9.1
Between 0.5-1 6 0 0 6 9.1
More than 1 0 6 2 8 12.1
No answer 16 8 12 36 54.5
Total 30 20 16 66 100
Source: Survey data
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4.2.8. Decisions about CSR Initiatives
Decisions about the amount to be spent and the type of initiatives influence the
impact of CSR. While some firms prefer to have a separate unit for planning and
implementing the CSR initiatives, some firms combine with the general management.
In these firms the CSR initiatives are part of the management. But wherever separate
unit is exiting, normally the decisions are made by a specialist in community
development. The other type is charitable trust. These trusts are registered by the
firms as not–for–profit organization and community development initiatives are
implemented through these trusts.
Table – 4.7 : Firm wise distribution of sample for CSR initiatives are designed
Decisions Maker Large
firms
Medium
firms
Small
firms
Total
Number Percent *
Manager 10 4 10 24 36.6
Consultant 10 2 6 18 27.3
Separate head 14 10 2 26 39.4
Charitable trust 12 10 0 22 33.3
Source: Survey data
* The total does not add to 100 due to multiple responses
In the present study it is observed that out of the 66 firms surveyed (39.4%)
firms have a separate unit for community development initiatives. Registering a
charitable trust appear to be a practice followed by majority of the medium and large
firms.
Out of the total firms 33.3% have a charitable trust for the CSR initiatives.
Another 36% of the firms reported that the manager of the firm is responsible for
decision relating to CSR initiatives. Thirty three percent of the firms reported to have
a consultant to decide the kind of initiatives.
4.2.9. Changes in CSR Initiatives
A CSR initiative is a dynamic process. The interventions should be need based
and change according to the changing economic and social environment. The
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successes of these interventions depend on how appropriate the activities are. Firms
should be able to understand the macro policies and their impact on micro variable
and design appropriate initiatives. This results in changes in CSR policy and
initiatives.
Table – 4.8 : Distribution of firms according to changes in
CSR initiatives during the past five years
CSR Initiatives during the past
five years
Large
firms
Medium
firms
Small
firms
Total
Number Percent*
Increase spending 6 4 0 10 15.2
Collaboration with government 6 2 2 10 15.2
Collaboration with NGO 16 4 2 22 33.3
Become more professional 18 10 2 30 45.5
Increased CSR activities 26 14 4 44 66.7
Increase brand image 6 0 0 6 9.1
Spending less 4 0 0 4 6.1
Source: Survey data
* The total does not add to 100 due to multiple responses.
The survey shows that 66% of the firms have increased the type of
interventions over a period of five years. Another 45% have reported to gain
professionalism in their intervention. Only 15% reported to have increased their
spending. Another important finding is the collaboration between NGOs and firms.
Thirty three percent of firms reported an increase in the collaboration, which is very
welcoming trend because NGO have the skill to reach communities and at the same
time, it gives an opportunity for them to learn professionalism and appropriate
management techniques from the corporate sector. In recent time firms are increasing
their activities through NGOs and the NGOs have grown in number, power and
influence sine 1980 (keck and sikkink, 1998).
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4.3. Measuring CSR
Several models were developed to measure CSR and its contribution to the
community and the organization. One of the models proposed by Carroll is used in the
present study
The CSR pyramid (Carroll’s model) is based on a four-part dimension,
namely Economic, Legal, Ethical and Philanthropic. However in the present study
another dimension, viz environment dimension is added to broader the concept of
CSR. It felt that including of environmental dimension makes the model more
professional.
Economic responsibility is the most fundamental one since ―all other
business responsibilities are predicated upon the economic responsibility of the firm,
because without it the others become smooth considerations‖ (Carroll, 1991).
Legal responsibility suggested that businesses are expected to pursue their
economic responsibility within the framework of the legal one. At the same time
business is expected to comply with the laws and regulation promulgated by federal,
state and local governments as the ground rules under which business must operate.
(Andrew et al, 2008).
Ethical responsibility refers to those activities and practices that are expected
by societal members even if they are not codified into law. Those responsibilities are
about accepted norms, standards and expectations that reflect a concern for what
consumers, employees, shareholders, and the community regards as fair. It is simply
about respecting and protecting stockholder‘s moral rights. In some cases, ethical
norms and standards precedes the establishment of law. Ethical responsibility can also
seen as embracing new values and norms which businesses are expected to meet, even
if those values and norms may reflect on a standard performance that is higher and
that is not currently required by law.
Philanthropic responsibility refers to corporations acting as good corporate
citizens by contributing resources to the community and improves quality of life. The
distinction between ethical and philanthropic is that the philanthropic one is not
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expected in an ethical or moral sense. It is good if businesses give away charities, but
they are not seen as unethical corporations if they aren‘t engaged in those kind of
activities. Even though the above responsibilities have been explained and treated
separately, they are not mutually exclusive (Carroll, 1991).
Environment responsibility refers to management decision about physical
resources to conserved for future. Firm can have a significant effect on the external
environment in which it operates and can change that environment through its
activities.
4.4. Economic Responsibility
Economic responsibility is one important dimension of CSR, because all firms
irrespective of their size and ownership concentrate making profit. Profits are
important for the firm to be socially responsible. In other words the firm which is not
able to make minimum profit cannot afford to spend money as CSR activities.
Therefore making profit is a fundamental for each firm. Economic responsibility is
measured in terms of responsibility to all stakeholders in each firm and declaration
divided to stakeholders.
4.4.1. Major Stakeholder in the Firms
CSR can affect a variety of stakeholder, including employees, shareholders,
customers and suppliers for bring best result for business and stakeholders.
Table – 4.9 : Distribution of firms according to major stakeholder
Major
Stakeholder
Large
firms
Medium
firms
Small
firms
Total
Number Percent*
Employee 18 12 2 32 48.5
Shareholder 18 10 10 38 57.6
Customer 8 8 2 18 27.3
Supplier 4 4 0 8 12.1
Source: Survey data
* The total does not add to 100 due to multiple responses
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The results show that, the shareholders are important member of the business.
They can play crucial role in orienting the business to apply social responsibility.
Fifty eight percent of the firms have expressed that shareholder are the major
stakeholder. Another 48% of the firms felt that employees are the major stakeholder,
which shows the importance given to the employees by the firm. Being responsible to
employees in the form of providing safety measures at work place, training program
for capacity building, providing health facility for the employee and the family shows
the social responsibility of the firms. Some of the firms expressed that consumers are
the major stakeholder and the firm vows responsibility to their customers.
4.4.2. Declaration of Dividend to Stakeholders
The commitment by business to operate and provide benefit for stakeholder is
important in each business, because, it encourages more investment for further
production.
Table – 4.10 : Distribution of sample for declare dividend to stakeholders
Large
firms
Medium
firms
Small
firms
Total
Number Percent
No Answer 20 12 16 48 72.7
Less than 2% 0 2 0 2 3
Between 2-5% 2 2 0 4 6.1
Between 5-10% 6 4 0 10 15.2
More than 10% 2 0 0 2 3
Total 30 20 16 66 100
Source: Survey data
The results show that, only 27.3% of firms have declared dividend to their
stakeholder. However (72.7%) of firms have not answered to this question which
indicates that the firms are not transparent about the divided. The result also shows
that out of (27.3%), respondents, (15.2%) of sample are between 5-10%.
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4.5 Legal Responsibility
Legal responsibility is one aspect of CSR. It is not only expected from
business to pursue its economic responsibility, but also to do this within the
framework of legal requirements. For firms law-abiding is important. Profitability
must be achieved based on legal obligations but minimum legal requirements are
being implemented into business operations. Legal responsibility is measured in terms
of wage structure, avoiding child labour, encourage labour union, have over time
policy, wage equality between men and women, priority to local people recruitment,
providing insurance policy, have ISO and ISI.
4.5.1. Wage Structure in the Organization
Wages are the remuneration to the labour. Wage structure indicates the share
of return that go to the labour. Implementation of fairer wage structure is one of the
indicators to the CSR. The survey shows that, all of the firms don‘t have any
difference in wage structure between men and women and also 66.3% of the sample
have specific, well defined wage structure. But 33.7% of the firms have adapted
minimum wage fixed by the government. The evidence also shows that 75.8% firms
are implementing the weightage policy to local people in recruitments.
4.5.2. Revision to Wage Structure
The nature of job may affect the wage structure and also Memorandum of
Understanding (MOU) can affect the wage structure. Many firms and government
agencies use MOUs to define a relationship between departments, employees and
other factors. Not only providing a well structure wages, there should be either a built-
in- mechanism for wage revision or the wages should be revised whenever the cost of
living increase. By providing such a wage structure, the employee will be protected
from the changing prices
Table 4.11. Distribution of firms according to revision of wage structure
Wage Structure Large
firms
Medium
firms
Small
firms
Total
Number Percent*
Staff Every year 28 20 12 60 90.9
Employee Every year 4 8 6 18 27.3
Employee three year 18 8 6 32 48.5
Employee four year 6 4 0 10 15.2
Source: Survey data
* The total does not add to 100 due to multiple responses.
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Employees are divided into two main categories i.e. staff employees and
operation employees. According to the survey 91% of the firms have the provision for
the revision of staff salaries. Majority of firms (48.5%) have reviewed the wage
structure for operation employees in every three year. Twenty seven percent of them
do review their operation employee wage structure every year.
4.5.3. Firm Policy to Abolish Child labour
The results show that, all of the firm (100%) have policy to abolish child
labour. However, firms can create kid‘s care club in which children will have
opportunity to do some good action like helping the poor, educating a child,
distributing clothes and food to the poor children and visiting orphanage.
4.5.4. Encouragement to Labour Unions
Labour unions play an important role in ensuring better condition for the
labour. These labour unions can influence the management decisions about the
working conditions. Encouragement for the formation of labour union shows the
attitude of the management towards employees‘ rights. This is considered as the legal
aspect of CSR in the present study.
Table – 4.12 : Distribution of firms according to encouragement to labour unions
Encourage
Labor
Unions
Large
firms
Medium
firms
Small
firms
Total
Number Percent
Yes 22 14 0 36 54.5
No 8 6 16 30 45.5
Total 30 20 16 66 100
Source: Survey data
Results show that only 54% of the firms are encouraging the formation of
labour union in their firms .This means another 45% of firms are not allowing the
labour to form a union. This is in contradiction to the earlier results showing that all
the firms in the sample are conscious of CSR. It appears that some of the firms
support the concept of CSR only in the form of initiatives and some labour friendly
programs. But they are not willing to give freedom to the employees to form unions.
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4.5.5. Disciplinary Action by the Firms
Firms react to their employees when they don‘t report on time. On the basis of
Industrial Relation (IR) policy, firm reactions are divided into four categories: advice,
warning, salary reduction and stop promotion
Table – 4.13 : Distribution of firms according to disciplinary action
Action for Doesn’t Report on
Time Large
firms
Medium
firms
Small
firms
Total
number Percent*
Advise 22 12 12 46 69.7
Warning 18 10 10 38 57.6
Salary reduction 8 0 2 10 15.2
Stop promotion 2 6 0 8 12.1
Source: Survey data
* The total does not add to 100 due to multiple responses.
The evidence shows that, majority of sample firms believe in advice (69.75%)
and warning (57.6%). Salary reduction is followed by 15.2% and stop promotion by
12.1% of firms
Figure – 4.1 : Disciplinary Action by firms
The figure also shows that majority of firms used the advise policy. This
indicates the concern of the employers toward their employees.
0 10 20 30 40 50 60 70
Advise
Warning
Salary reduction
Stop to promotion
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4.5.6. Overtime Policy
Overtime working is a practice in several production units. But only few firms
have a fixed policy for payment to the overtime. Firms which are socially responsible
pay more for overtime because the employee in foregoing leisure for work.
Table – 4.14 : Distribution of firms according to overtime policy
Overtime
Policy
Large
firms
Medium
firms
Small
firms
Total
number Percent
No reply 4 2 2 8 12.1
Not applicable 0 0 2 2 3
1 time 0 0 10 10 15.5
1 1/2 times 0 2 2 4 6.1
2 times 26 16 0 42 63.6
Total 30 20 16 66 100
The result shows that 87.9% of firms have overtime policy and only 12.1% of
firms don‘t have this policy. The evidence shows that majority of firms have accepted
this policy. The payment for overtime were various from one to two times. Majority
of the firms (63.6%) have paid 2 times more for the over time.
4.5.7. ISI Standard
The ISI was set up in 1947. It occupies the position of National Standards
Organization of India. Its main aim is to lay down national standards for commodities,
materials, practices and processes. ISI promotes standardization, quality control and
simplification in industry and technology. The institution also operates in ISI
Certification Marks Scheme under the Indian Standards Institution. The result shows
that (60.6%) of the sample firms have ISI standard and 39.4% of respondent don‘t
have any ISI standard.
4.5.8. ISO Standard
International Standard Organization (ISO) is a worldwide federation of
national standards bodies, with 140 members, one in each country. The objectives of
ISO is to promote the development of standardization and related activities in the
world with a view to facilitating international exchange of goods and services, and to
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developing cooperation in the spheres of intellectual, scientific, technological and
economic activity. The results of ISO technical work are published as International
Standards. ISO and it is made up of four core standards:
ISO 9000:2000, including standards are applicable to all types of organizations
ISO 9001:2000, including Quality Management Systems Requirements.
ISO 14001, including Environmental Management Systems
ISO14021:1999, including Environmental labels and declaration.
The new international standard in 2010 is, ISO 26000:2010. Guidance on
social responsibility, provides harmonized globally relevant guidance for private and
public sector organizations of all types based on international consensus among expert
representatives of the main stakeholder groups, and so encourage the implementation
of best practice in social responsibility worldwide. ISO 26000 is an ISO International
Standard giving guidance on Social Responsibility. It is intended for use by
organizations of all types, in both public and private sectors, in developed and
developing countries, as well as in economies in transition. It will assist them in their
efforts to operate in the socially responsible manner that society increasingly
demands. ISO 26000 contains voluntary guidance, and therefore is not for use as a
certification standard like ISO 9001:2008 and ISO 14001:2004 (www.iso.org).
The results show that, 93.9% of firms have ISO standard and only 6.1% of firms don‘t
have any ISO standard.
4.6. Ethical Responsibility
For a firm, it is not enough to be responsible in economic or legal aspect
without being ethically responsible. Every firm is obliged to follow the law and in
some way pursue economic responsibility, but in the end it all falls back on a
corporation‘s ethical responsibility which may reflect on performance that is higher
than required by law. It is when you take ethics into consideration when making
decisions that the corporation can make profit (Forselius, 2006). Ethical norms may
not be compromised in order to achieve corporate goals. Instead corporate goals
should be accomplished through ethical norms and standards. Being ethical is a way
of being a good corporate citizenship and doing what is expected morally or ethically.
Ethical responsibility refers to be responsible for all their activities and by that leave
this world a better place to live.
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Ethical responsibility is one of the important aspects of CSR. In the present
study the Ethical responsibility is measure by understanding the encouragement for
wage negotiations, ensuring occupation safety at workplace and healthcare policy for
employees, facilities for culture activities, competitions, and providing special
provision for women employees and ensuring warranties for the product given by the
sample firms.
4.6.1. Encouragement to Wage Negotiation
On the basis of IR Policy Firm could follow wage negotiations. After 1992,
the industrial relations policy began to change, and firms follow collective bargaining
.The survey shows that 72.2% respondents have encouraged wage negotiations and
only 27.3% of firms didn‘t encourage wage negotiations.
4.6.2. Gender Sensitive Policy
In recent times firms are taking welfare measures like recruitment of more
women in the work force, providing special incentives like maternity leave, flexible
times, providing babysitting and any other.
Table – 4.15 : Distribution of firm according to special provisions for the female
employees
Provisions for Female Large
firms
Medium
firms
Small
firms
Total
Number Percent*
Maternity leave 30 16 16 62 93.9
Flexible timings 10 4 0 14 21.2
Providing baby sitting 2 4 0 6 9.1
Any other 2 4 0 6 9.1
Source: Survey data
* The total does not add to 100 due to multiple responses.
The result shows that among the special provisions for the female employees,
maternity leave formed the major portion the sample accounting for 93.9% of the
sample. This was follow by flexible timing (21.2%), providing babysitting (6.1%) by
the sample firms.
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Figure – 4.2 : Special provisions for the female employees
The figure shows that, majority of firms support maternity leave for females.
4.6.3. Promotion to Cultural Events /Competition
Encouragement to organize cultural events and competitions brings employees
together and give an opportunity to bring out the talents.
Table – 4.16 : Firm wise distribution of events organized
Event Organized Large
firms
Medium
firms
Small
firms
Total
Number Percent*
Cultural Events 30 20 16 66 100
Competition 2 4 14 20 30.3
Both 28 16 2 46 69.7
Source: Survey data
* The total does not add to 100 due to multiple responses.
Firms are encouraging cultural events and competition. The result shows that
all the firms in different sizes have contributed to cultural event and only 30.3% are
involved in conducting competitions. But majority (69.7%) is organizing both cultural
event and also competitions. In other words most of the firms CSR activities are
associated with both cultural event and competitions.
0 20 40 60 80 100
Maternity leave
Flexible time
Baby sitting
Other
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4.6.4. Integrated Healthcare Policy for Employees
Providing healthcare facility in the form of insurance and reimbursement etc
are important for the employees as health expenditure is a major cost for the
employees at the lower cadres. Firms generally provide accident policy and medicine
claim polices. The result shows that 97% of the firms have healthcare policy for
employees based on the HR policy manual and only 3% of the firms don‘t have that
programme.
4.6.5. Warranty Clause for Replacement of Product
Warranty means, the firm is responsible to repair or sending replacement, or
another option from defective unit or components. Warranty clause from firms make
customer satisfies and create loyal customer to specific brand. The result shows that
nearly fifty percent (45.5%) of the sample of firms are not providing warranty. But
(54.5%) of the sample of firms have the warranty policy. Warranty is an important
component in providing brand image and it also shows the responsibility of the firms
towards the manufacturing defects of the product supplied by them.
4.7. Philanthropic Responsibility
Philanthropic is an altruistic activity designed to promote the good of society.
Philanthropic responsibility connects corporations with the communities in which
they operate. It creates a new condition to improve recruitment, enhance facility for
employees, strong relationship between managers and employees and customers
which helps to gain reputation for the firm. Since it is a voluntary response of the
firms, it differs from one firm to another firm.
Philanthropic responsibility is measured in terms of creating awareness about
the policies of the firm, encouragement to the employees to give suggestions to the
management, providing training programs within and outside the firm, giving
pension, organizing corporate events, facilities at workplace, initiating social projects
like village and school adaptation, health camps, support to the family members of the
employees and the implementation of community based programmes.
4.7.1. Awareness about the Policies of the Firm
Awareness/ knowledge about the policies adapted by the firm makes the
employees confident and secured. It gives an opportunity to them for taking informed
decisions. Firms adapt several measures to inform about the policies, viz organizing
awareness program, through display board or meeting face to face as and when it is
possible.
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Table – 4.17 : Distribution of firms according to the means of
creating awareness about policies
Means of Creating Awareness Large
firms
Mediu
m firms
Small
firms
Total
Number Percent*
Awareness programs 14 12 0 26 39.4
Display board 10 8 0 18 27.3
Meeting / Communicating face to face 20 10 16 46 69.7
Source: Survey data
* The total does not add to 100 due to multiple responses.
The result show that majority of the firms in Mysore district (69.7%) are
adopting the policy of meeting face to face and communicating with the employees as
a method to inform about their policy. Another 39.4% are organizing specific
programmes to inform about their policies. Very few (27.3%) have adopted display
board as a means to communicate with the employees. Display board is mainly used
by large and medium firms. Smaller firms find it easy to communicate face to face
with the employees.
4.7.2. Responses to Philanthropic Responsibility
Philanthropic responsibility of firms could be in the form of extending more
facilities to the employees, providing opportunity for them to give suggestion to the
management, encouragement to improve the skills etc. These activities act positivity
on the employees in improving their performance.
Table – 4.18 : Distribution of firm according to responses
to philanthropic responsibility
Responses to philanthropic responsibility Percent *
YES No
Encouraging staff to be responsible during and after the work 90.9 9.1
Encouraging employees to suggest to management 87.9 15.2
Providing provident fund /pension for employees 84.8 15.2
offer training programmes 100 0
Source: Survey data
* The total does not add to 100 due to multiple responses.
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The responses of the sample firms to the indicators for philanthropic
responsibility are tabulated and presented in table 4.18. From the responses it is clear
that most of the firms are philanthropic in nature. More than 80% of the firms are
adapting the philanthropic policy/activities for the welfare of their employees.
Encouragement to the staff to be responsible during and after the work is adapted by
91% of the firms. Eighty eight percent of the firms are promoting the participation of
employees in management by encouraging them to provide suggestion to the
management. This gives an opportunity for the employees to influence the
management in some of the decisions. Taking care of the employees once they are out
of the work shows the concern of the firm. Providing provident fund and pension are
the means through which the firm can help the retired employees. Majority of the
firms (85%) are having PF and pension facilities. Providing training opportunity for
the employees not only improves their productivity and further opportunities, but also
helps the firms in improving human capital. Funds allocated for this shows the
philanthropic nature of the employers.
4.7.3. Training Programs
Training program is one of the important factors to enhance the quality of
labour work and development of human resources. Education and appropriate
technology play an important role in economic empowerment, because training
program promotes quality of goods and services and it creates robust economical
ability. The training program could be organized either within or outside of the firm
or combination of both.
Table – 4.19 : Distribution of firms according training programs
Training
Programs Large
firms
Medium
firms
Small
firms
Total
number Percent
Within the firm 0 2 6 8 12.1
Outside of firm 0 0 2 2 3
Both 30 18 8 56 84.8
Source: Survey data
The result shows that, majority of the firms (84.8%) have training program
both within and outside of firm, and only 12.1% of sample have training program
within the firm only.
123
4.7.4. Organizing Corporate Events
Apart from organizing cultural events, firms show their philanthropic
responsibility by organizing tours or reimbursing travel expects of the employees and
organizing sponsor tournaments to develop healthy relationship outside the business
environment among the employees and also between employer and employees.
Table – 4.20 : Distribution of firm according to corporate events
Corporate Events Large
firms
Medium
firms
Small
firms
Total
Number Percent*
Travel 30 16 14 60 90.9
Tournament 36 16 4 50 75.8
Source: Survey data
* The total does not add to 100 due to multiple responses.
Providing travel grant is the generally adopted policy and 91% of the sample
firms are adopting this. Tournaments are organized by 76% of the firms.
4.7.5. Facilities at workplace
Apart from giving appropriate wages, providing a better working environment
in work place is essential for the firm to improve productivity. The important facilities
which are generally neglected by the firms are rest room, separate bath rooms and
toilets, creation facility and babysitting facility. These facilities provide greater
opportunity for participation of more women in work place.
Table – 4.21 : Distribution of sample of firms according
to the facilities at workplace
Provide in the Workplace Large
firms
Medium
firms
Small
firms
Total
number Percent*
Rest room 28 18 12 58 87.9
Toilet/bathroom separately 30 20 12 62 93.9
Recreation facility 20 12 0 32 48.5
Baby sitting facility 2 6 0 8 12.1
Source: Survey data
* The total does not add to 100 due to multiple responses.
124
The survey shows that 88% of the firms have rest rooms and 94% have
separate bath rooms and toilet. However only 48% of the firms have recreation
facilities. Baby sitting facility does almost not exist in small firms. This facility is
very important for the young mothers to participate in the work. Large and medium
firms are providing better facilities.
Figure – 4.3 : Facilities at workplace
4.7.6. Social Projects of the Firms
Sponsoring social projects is one of the methods adapted by the firms to show
their CSR. These activities include Health camps, Village adaptation, and School
adaptation.
Table – 4.22 : Firm wise distribution of initiatives
Firm Sponsor Social Projects Large
firms
Medium
firms
Small
firms
Total
number Percent*
Village adoption 10 2 0 12 18.2
School adoption 20 10 0 30 45.5
Health camps 30 18 10 58 87.9
School adoption and Health camps 10 8 0 18 27.3
Three activities 10 2 0 12 18.2
Source: Survey data
* The total does not add to 100 due to multiple responses.
0 20 40 60 80 100
Rest room
Toilet/bathroom separately
Recreation facility
Baby sitting facility
125
The results indicate that, firms gave more importance to organize health camps
than other activities. School adaptation is another important social activity of several
firms to improve the education of people living near the firm. The result shows that
18.2% of firms have adapted all the three activities to help people living under
poverty line. While large and medium firms are adopting different method, small
firms are conducting only health camps.
4.7.7. Family Support Policies
Firms adopt family support services as part of their philanthropic activities in
the form of encouragement to talented children of the employees, support to parents
with disable child etc
Table – 4.23 : Distribution of firms according to Initiatives to Support family
Support to Family Members Large
firms
Medium
firms
Small
firms
Total
number Percent*
Scholarships to employee children 18 6 10 34 51.5
Gifts to encourage talent 24 20 4 48 72.7
Support to disabled child 8 0 2 10 15.2
Employment to children 4 0 2 6 9.1
Source: Survey data
* The total does not add to 100 due to multiple responses.
Figure – 4.4 : Support family member
0 10 20 30 40 50 60 70 80
Scholarships to employee children
Gifts to encourage talent
Support to disabled child
Employment to children
126
The result shows that all selected firms of different sizes have paid more
attention to supporting employees Children in the form of giving gifts to encourage
talent (72.7%). Another 51.5% of the firms are providing scholarship to the children
of employees. Apart from this, some firms are offering special assistance to the
employees with children who need special care due to disability. It is interesting to
observe that some of the large firms are providing employment to the children of
those employees who retire. This policy is observed in the case of four large firms and
two small firms.
4.7.8. Implementation Strategy of Community Based Programmes
Social responsibility initiatives of the corporate sector are designed at different
levels depending on the nature of the corporation. Similarly they are implemented
through different agencies.
Table – 4.24 : Distribution of firms according to implementation strategy
Programmes Implementation Large
firms
Medium
firms
Small
firms
Total
Number Percent*
With NGO 18 4 0 22 33.3
With community based organizations 6 0 2 8 12.1
With a special cell in the organization 20 14 6 40 60.6
Source: Survey data
* The total does not add to 100 due to multiple responses.
While some of the corporations seek the help of NGOs, some of them may
implement through community based organization, like caste based groups. SHGs,
etc. information regarding the strategy adopted by the firms in Mysore district is
presented in table 4.24. Among the sample firms 33% are teaming up with the NGOs
in the implantation of the programmes. Only 12% are doing through community
based organizations. But 61% of the firms are implementing neither with NGOs nor
with CBOs. They are having their special cell in the organization which is the
implementing agency for the community based program. This is the case with all type
of firms. But only large and medium firms are implementing through NGOs.
127
4.8. Environment Responsibility
The present study examined the environmental responsibility of the firms in
terms of environment conservation and environment protection. Each firm can have a
significant effect on the external environment in which it operates and can change that
environment through its activities (Abreu and David, 2004). Expansion of knowledge
about the environment and its ecosystem has caused more concern about a firm‘s
effect on the environment (Sahay, 2004). A focus on environmental performance can
lead to a number of advantages, such as better quality, reduced costs, improved image
and the opening of new markets (Maxwell et al., 1997). Furthermore, research has
shown that demand for environmental friendly products has become a powerful force
and can be a competitive resource for firms (Hart, 1995). Moreover, involvement in
environmental initiatives can advance a firm‘s performance (Corbett and Klassen,
2006; Porter and van der Linde, 1995).
4.8.1. Initiatives Taken to Conserve Resources of the Firm
Conservation of environment includes two important activities, viz, water
conservation and using renewable energy. The following table shows the
environmental conservation measures adopted by the sample firms.
Table – 4.25 : Distribution of firms according to conservation measures
Conservation Measures Large
firms
Medium
firms
Small
firms
Total
Number Percent
Nothing 0 2 2 4 6
Water conservation/recycling 20 16 14 50 75.8
Renewable energy 10 2 0 12 18.2
Total 30 20 16 66 100
Source: Survey data
Water conservation refers to reducing the usage of water and recycling of
waste for different purposes such as cleaning, manufacturing, and agricultural
irrigation. Water conservation helps to create a sustainable development in terms of
availability of resourced for future generations. The withdrawal of fresh water from
an ecosystem should not exceed its natural replacement rate to reduce environmental
pollution.
128
Result shows that all the selected firms in different sizes have paid more
attention to water conservation and recycling activities rather than using renewable
energy. While 75.8 percent of the firms are involved in water conservation are only
18.2% are using renewable energy. In other words most of the private firms have
more responsibility to water conservation.
4.8.2. Initiatives for Protecting Environment
Environmental protection is a practice of protecting the environment, at
individual, organizational or governmental level for sustainable development. For the
present study two environment activities are considered to understand the
environment concerns of the firms. These two are controlling pollution and
developing green belt. The results are presented in the below table.
Table – 4.26 : Distribution of firms according to protecting environment
Measures for Protecting
environment
Large
firms
Medium
firms
Small
firms
Total
Number Percent
Nothing 0 0 2 2 3
Controlling pollution air/water 0 2 2 4 6.1
Developing green belt 6 4 10 20 30.3
Both 24 14 2 40 60.6
Total 30 20 16 66 100
Source: Survey data
Greenbelt is defined as the large greenways; usually locate at urban suburb,
filled with various vegetations. The main functions of greenbelt were to limit urban
sprawl, evacuate centralized urban population and improve ecological environment
(Li Wei, 2004).
The result shows that all selected firms in different sizes have paid more
attention to developing green belt activities and controlling air or water pollution. It
can be observed that 56.52% of firms are involved in both activities and 35% are
involved in developing green belt. Only 4.34% of the firms are not contributing to
controlling pollution. It is interesting to observe that smaller firms are paying more
attention to developing green belt.
129
4.9. Correlation among Different Dimension of CSR
An attempt is made to understand the linkages among the different dimensions
of corporate responsibility to understand if the firms which are economically
responsible are also those which are responsible in other dimensions. The result are
presented in table 4.27
Table – 4.27 : Correlation among different dimension of CSR
Dimension of CSR Economic Environment Legal Ethical Philanthropic
Economic 1 .484(**) .506(**) .534(**) .652(**)
Environment .484(**) 1 .349(*) .359(*) .578(**)
Legal .506(**) .349(*) 1 .421(*) .559(**)
Ethical .534(**) .359(*) .421(*) 1 .660(**)
Philanthropic .652(**) .578(**) .559(**) .660(**) 1
** Correlation is significant at the 0.01 level (2-tailed).
* Correlation is significant at the 0.05 level (2-tailed).
From the results it can be observed that economic responsibility has a positive
and significant (0.01 level) relationship with environment, legal, ethical and
philanthropic responsibilities. The correlation coefficient ranges from 0.48 to 0.65.
For example the correlation between economic and environment responsibility is 0.48
and between economic and philanthropic is 0.65. The analysis clearly shows that the
firms which are economically responsible are also socially responsible.
The correlation between environmental responsibility and legal responsibility
initiated by the firms under CSR activities shows a positive correlation. Firms which
are more involved in environmental responsibility are also involved more in, legal,
ethical and philanthropic responsibility. All the correlation coefficients obtained
between environment and other types of activities are founded to be the positive. The
correlation between legal and ethical responsibility is significant at 0.05 level and
between legal and philanthropic is significant at 0.01 level. Correlation between
ethical and environment responsibility is a weak at 0.36, though it is significant. The
correlation between legal and environment is also weak at 0.35. The correlation
coefficient ranged from 0.35 to 0.57.
130
The correlation between legal responsibility and ethical responsibility initiated
by the firms under CSR activities shows those firms which are more involved in legal
responsibility are also involved more in ethical and philanthropic responsibility, All
the correlation coefficients obtained between legal and other are founded to be the
positive. The correlation coefficients ranged from 0.42 to 0.56.
The correlation between ethical responsibility and philanthropic responsibility
is strong (0.66) and those significant indicating that, firms which are more involved in
ethical responsibility are also involved more in philanthropic activities.
4.10. Mean and Variation Among the Firms in Terms of Different
Dimensions of CSR
Based on the responses to different questions relating to economic,
environment, ethical, legal and philanthropic responsibilities, CSR of each firm was
calculated and means responsibility under different categories was calculated by
weighted average. The mean responsibility of all the firms together along with the
variation is presented in table 4.27
Table – 4.28 : Distribution of firms according coefficient variation
Dimensions Responsibility Mean Std. Deviation CV
Economic 34.84 18.89464 54.21
Environment 67.42 22.083369 32.74
Legal 75.90 15.16122 19.96
Ethical 69.70 15.02897 21.55
philanthropic 71.71 18.24730 25.43
Source: Survey data
The results show greater responsibility of firms in the case of legal and
philanthropic activities. Highest mean value of legal responsibility (75.90) indicates
that majority of the sample firms have undertaken steps/measures for ensuring legal
responsibility. The legal responsibility includes issues relating to wage structure,
promoting labour unions, abolishing child labour, appropriate over time policies,
wage equality between men and women, providing insurance policy, compliance to
ISO and ISI standards and giving priority to local people in recruitment.
131
Lower coefficient variation (19.96%) compared to other dimensions of CSR
also indicated the importance given to legal aspect by the firms.
Philanthropic responsibility is the other dimension which ranks second among
different dimensions. The means value of (71.71), shows that, it is given priority by
majority of the firms. Philanthropic responsibilities includes measures to disseminate
information about the policy of the firm among its employees, sensitize the employees
to be responsible both during and after the working hours, providing opportunity to
the employees to be part of the management, providing PF and pension to employees
productivity human resources development through training programs both, within
and outside firm, organize corporate events, providing enough facilities within firm,
sponsoring social project like adopting a village/school, etc and support to the family
members in the form of scholarships, gifts and special provision for children with
disabilities.
However, variation among the firms in terms of philanthropic responsibility is
higher at 25.43% compared to legal responsibility.
Ethical responsibility is another important aspect of CSR. This means that
firms, in the process of making profits, should be more ethical in their activities.
Ethical responsibility includes giving opportunities to the employees for wage
negotiations, providing special facilities for female employees to take care their
responsibilities, institutional mechanism for the safety at workplace and taking care of
health requirements through an integrated healthcare policy. Responsibility to the
consumers in the form of giving warranty for replacement of the product is also part
of the ethical responsibility. Mean value of ethical responsibility (69.70) is less
compared to legal and philanthropic responsibility. Variation among the firms in
terms of ethical responsibility is high and it is indicated by highest coefficient
variation (21.55%).
Economic and environmental responsibility of the sample firms is ranking low
compare to other aspects. While the mean value of economic responsibility is 34.84, it
is 67.42 in the case of environment responsibility. Economic responsibility places
greater emphasis on being responsible to all the stakeholders who include
shareholders, employees, suppliers and customers. The results show not only lower
132
average value of economic responsibility, but also higher coefficient of variation
among the firms. Highest CV (54.21%) shows greater variability indicating only few
firms are showing economic responsibility. The other aspect of CSR, Environment
responsibility also shows greater variability with 32.74% of CV.
Environment responsibility includes measures to conserve resources and
protect environment. There is a trade-off between economic and environmental
responsibility. Since costs are involved in maintaining environmental responsibility,
few firms give importance to by investing on conservation of resources and protecting
environment. This can cut the profits to the firm and dividends to the shareholders. If
a manager has to satisfy the shareholders with expected dividend, investment on
environment issues will be given secondary status. The results from the survey has
clearly brought out the differences among the firms in being economically and
environmentally responsible.
4.10.1. Differences Among Various Dimensions of CSR
An attempt is made to measure the significant differences among the given
aspects of CSR by testing the following hypothesis.
H0 = there are no significant differences among different dimension of CSR
H0 = 54321 XXXXX
H1 = 54321 XXXXX
1X = Mean of Economic Responsibility,
2X = Mean of Environment Responsibility,
3X = Mean of Ethical Responsibility,
4X = Mean of Legal, Responsibility,
5X = Mean of Philanthropic Responsibility
The result shows that the F test statistic (F= 54.987) is greater than the critical
value (F= 2.89), at 0.025 level of significance. We reject the null hypothesis that,
there is no significant difference in the mean values. This also shows that there is a
significant difference among the different aspects of CSR expressed by different
firms. The differences are highly significant.
133
4.10.2. Dependence Between Economic and Ethical Dimension of CSR
An attempt is made to test dependence between economic and ethical
dimension of CSR. The following hypothesis has been formulated.
H0= Economic and ethical dimension of CSR are not dependence
H1= Economic and ethical dimension of CSR are dependence.
To test above hypothesis, t test has been conducted. For pair of economic and
ethical responsibilities, the value of the t test statistic is (t =-11.967) is not between
the critical value (-3.385<t<3.385), at 0.001 level of significance, and consequently
we reject the null hypothesis. In other words economic dimension and ethical
dimension have influence on each other and there is a positive relationship between
these two variables.
4.11. CSR among Different Size Group of Firms
The aggregate picture of CSR presented, above indicates variation among the
firms. In order to identify which group of firms (large, medium, small) are more
responsible, analysis CSR by different group of firms is carried and the results are
presented in table 4.28.
Table – 4.29 : Size wise distribution of firms according variation in CSR
Dimension Responsibility Large Medium Small
Mean CV Mean CV Mean CV
Economic 4.133 50.78 4.000 28.85 1.625 15.78
Environment 3.133 23.71 2.700 25 1.875 44.48
Legal 16.733 19.48 17.05 9.41 13.062 23.18
Ethical 6.667 17.62 6.900 15.94 4.750 14.88
philanthropic 17.40 16.79 15.200 18.02 10.500 20.98
Source: Survey data
The results presented in the table clearly show the differences among the
different group of firms. Average CSR of smaller firms is lower in all dimensions
compared to medium and large. There is a very marginal difference between the large
and medium sized firms. Within the group of smaller firms, legal and philanthropic
responsibility has greater values. In terms of variation, greater variation among
134
smaller firms could be observed in the case of environmental responsibility (44.48%).
A comparison of CSR among large and medium firms shows that there is a greater
consistency among the medium firms than among the large firms. For example, in the
case of economic responsibility though the average value is the same, greater
variation is observed in the case of large firms indicated by large CV (50.78%)
compared to medium size firms (28.25%). Same is the case with legal responsibility.
The mean value of legal responsibility among the large firms is 16.73 and medium
firms is 17.05. But it the case of large firms the variation is 19.48% compared to
9.41% of medium firms. This shows that the medium firms are more consistent
compare to large firm in legal responsibility. In the case of philanthropic
responsibility, large firms appear to be better than the medium sized firms.
4.12. Relationship between the Size of the Firm and CSR
Analysis of Variance (ANOVA) procedure was used to estimate the difference
among the firms of different sizes. The ANOVA test is applied by calculating two
estimates of the variance of group distribution, the variance between groups and the
variance within groups.
In the one way ANOVA test, the null hypothesis is that the means for all
groups are equal, and the alternative hypothesis is not all group means are equal.
Table – 4.30 : ANOVA test on bases of size of firms
Responsibility Mean Square F Sig.
Economic
Between Groups 18.317 7.081
.003
Within Groups 2.587
Environment
Between Groups 4.131 7.417
.002
Within Groups .557
Legal
Between Groups 44.001 5.584
.009
Within Groups 7.879
Ethical
Between Groups 12.406 11.033
.000
Within Groups 1.124
Philanthropic
Between Groups 124.339 16.863
.000
Within Groups 7.373
Sources: Survey data
135
Figure – 4.5 : Shows CSR activities in different size firms
The figure shows that Ethical, Legal, Philanthropic, Economic and
Environment activities in different size firms.
H0. There is no Significant Difference among the Different Size Group of Firms
in CSR
Economic responsibility
H0 = 321 XXX
H1 = 321 XXX
1X = Mean of Economic Responsibility of Small Firms
2X = Mean of Economic Responsibility of Medium Firms
3X = Mean of Economic Responsibility of large Firms
For economic responsibility since test statistic (F= 7.081) is greater than the
critical value (F= 3.32), at 0.005 level of significance, we reject the null hypothesis
and conclude that the mean number of economic activities by each group of firms is
not the same. In other words economic activities of large and medium firms are
significantly different from the small firms. This shows that large and medium sized
firms compare with small sized firms give more importance to economic
responsibility.
0 5 10 15 20
Economic
Environment
Legal
Ethical
Philanthropic
small
medium
large
136
Environment Responsibility
H0 = 321 XXX
H1 = 321 XXX
1X = Mean of Environment Responsibility of Small Firms
2X = Mean of Environment Responsibility of Medium Firms
3X = Mean of Environment Responsibility of large Firms
Test of differences in the case of environment responsibility shows that, since
test statistic (F= 7.417) is greater than the critical value (F= 3.32), at 0.005 level of
significance, we reject the null hypothesis and conclude that the mean number of
environment activities by each of firms is not the same. In other words, environment
activities of large and medium firms are significantly different from the small firms.
This shows that large and medium sized firms compare with small sized firms gave
more importance to environmental activities.
Legal Responsibility
H0 = 321 XXX
H1 = 321 XXX
1X = Mean of Legal Responsibility of Small Firms
2X = Mean of Legal Responsibility of Medium Firms
3X = Mean of Legal Responsibility of large Firms
In the case of, legal responsibility since test statistic (F= 5.584) is greater than
the critical value (F= 5.39), at 0.01 level of significance, we reject the null hypothesis
and conclude that the mean number of legal activities by each of firms is not the
same. In other words, legal activities of large and medium firms are significantly
different from the small firms. The result shows that legal activities of large and
medium firms are more than small firms. In the case of ethical activities also large and
medium firms performance is better than small firms.
137
Ethical Responsibility
H0 = 321 XXX
H1 = 321 XXX
1X = Mean of Ethical Responsibility of Small Firms
2X = Mean of Ethical Responsibility of Medium Firms
3X = Mean of Ethical Responsibility of large Firms
For ethical responsibility the value of the test statistic (F= 11.033) is greater
than the critical value (F= 3.32), at 0.005 level of significance, and consequently we
reject the null hypothesis and conclude that the mean number of ethical activities by
each of firms is not the same. In other words, medium and large size of firm have
more important ethical activities.
Philanthropic Responsibility
H0 = 321 XXX
H1 = 321 XXX
1X = Mean of Philanthropic Responsibility of Small Firms
2X = Mean of Philanthropic Responsibility of Medium Firms
3X = Mean of Philanthropic Responsibility of large Firms
The result in the case of, philanthropic responsibility, since test statistic (F=
16.863) is greater than the critical value (F= 6.35) at 0.005 level of significance, we
reject the null hypothesis and conclude that the mean number of environment
activities by each group of firms is not the same. In other words, philanthropic
activities of large and medium firms are significantly different from the small firms,
There is a positive relationship between the size of the firm and philanthropic
activities. In the case philanthropic activities also large and medium firms
performance is better than small firms, however philanthropic responsibility received
more attention compare to economic responsibility.
138
4.13. CSR Among Different Types of Firms
The present sample comprises firms established under public, private and also
partnership. Theoretically there can be differences among the firms from those
categories as they have different objectives and vision. While firms under private
sector have profit as a major objective, firms under public sector are expected to be
aiming at creating employment. Due to these differences the firm‘s attitude towards
CSR may be different. Mean values of different dimensions of CSR along with CV
for public, private and partnership firms is presented in table 4.31
Table – 4.31 : Type wise distribution of firms according coefficient of variation
Dimension of Responsibility Private Public Partnership
Mean CV Mean CV Mean CV
Economic 3.12 53.40 5.50 29.87 2.00 70.71
Environment 2.68 33.58 3.00 29.81 2.00 0
Legal 15.54 22.36 17.67 8.52 15.75 6.73
Ethical 6.20 20.82 7.33 7.04 4.00 0
philanthropic 15.24 23.90 16.50 19.45 8.50 8.32
Sources: Survey data
On the basis d of responses of the firms, variation could be observed among
these groups of firms (private, public, partnership).
The results show that public sector firms are more responsible than private
sector firms in all dimension of CSR. There are only marginal differences between
private and partnership firms. In the case of economic responsibility, public sector
shows a higher responsibility (5.50) compare to private (3.12) and partnership (2.00),
apart from higher mean value of economic responsibility, public sector firm show
consistency indicated by lower coefficient of variation (29.87%) compared to private
sector firms (53.40%) and partnership firms (70.71%). In the case of environment
responsibility only marginal differences could be observed in the mean value and also
in the variation. But, in the partnership category, there is no variation indicating that
all the firms in this category are following the same procedures.
139
Legal and philanthropic dimensions stand out with higher mean value in all
categories. The mean value is highest (17.67) in the case of public sector firms. Lesser
variation could be observed in public (8.52%) and partnership (6.37%) firms. In the
case of philanthropic dimension, lower mean value could be observed among
partnership firms. There is a marginal difference in public (16.50) and private (15.24)
firms. However, greater variation (23.90%) is observed in the case of privet firms
compared to public sector firms (19.45%). Same is the case with ethical dimension of
CSR.
4.14. Relationship between the Type of the Firm and Different Dimension of CSR
Based on the ownership of firms, CSR activities of different type of firms
(public, private and partnership) is analyzed and presented in table 4.30.
Table – 4.32 : ANOVA test on bases of type of firms
Responsibility Mean Square F Sig.
Economic
Between Groups 16.051 5.862
.007
Within Groups 2.738
Environment
Between Groups .765 .979
.387
Within Groups .781
Legal
Between Groups 10.980 1.089
.349
Within Groups 10.081
Ethical
Between Groups 8.606 6.246
.005
Within Groups 1.378
Philanthropic
Between Groups 49.659 4.020
.028
Within Groups 12.352
Sources: Survey data
140
Figure – 4.6 : Shows CSR activities in different type of firms
The figure shows Ethical and Legal, Philanthropic, Economic and
Environment activities in different type of firms (public, private and partnership.
H0 : There is no Significant Difference among Public, Private and Partnership
Firms in CSR.
Economic Responsibility
H0 = 321 XXX
H1 = 321 XXX
1X = Mean of Economic Responsibility of Partnership Firms
2X = Mean of Economic Responsibility of Public Firms
3X = Mean of Economic Responsibility of Private Firms
The evidence shows that, for economic responsibility since test statistic (F=
5.682) is greater than the critical value (F= 5.39), at 0.01 level of significance, we
reject the null hypothesis and conclude that the mean number of economic activities
by each of firms is not the same. In the other words, economic responsibility of public
firms are significantly different from the private and partnership firms, that means
public firms compare to private and partnership gave more importance to economic
responsibility.
0 5 10 15
Economic
Environment
Legal
Ethical
Philanthropic
part
pub
pvt
141
Environment Responsibility
H0 = 321 XXX
H1 = 321 XXX
1X = Mean of Environment Responsibility of Partnership Firms
2X = Mean of Environment Responsibility of Public Firms
3X = Mean of Environment Responsibility of Private Firms
The evidence also shows that, environment responsibility in different type of
firms are same because test statistic (F=.979) is less than the critical value (F=3.32), at
0.05 level of significance and accepted the null hypotheses. In other words
environment activities of public firms are same to private and partnership firms.
Legal Responsibility
H0 = 321 XXX
H1 = 321 XXX
1X = Mean of Legal Responsibility of Partnership Firms
2X = Mean of Legal Responsibility of Public Firms
3X = Mean of Legal Responsibility of Private Firms
The result shows that, legal responsibility, accept the null hypothesis because
test statistic (F=1.89) is less than the critical value (F=3.32), at 0.05 level of
significance, therefore in legal activities in different type of firms it is same. In other
words legal activities of public firms is same to private and partnership firms
Ethical Responsibility
H0 = 321 XXX
H1 = 321 XXX
1X = Mean of Ethical Responsibility of Partnership Firms
2X = Mean of Ethical Responsibility of Public Firms
3X = Mean of Ethical Responsibility of Private Firms
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The evidence shows that for ethical responsibility, since test statistic (F=
6.246) is greater than the critical value (F= 5.39), at 0.01 level of significance, reject
the null hypothesis and conclude that the activities in different type of firms is not the
same, and also private and public firms are significantly different from the partnership
firms.
Philanthropic Responsibility
H0 = 321 XXX
H1 = 321 XXX
1X = Mean of Philanthropic Responsibility of Partnership Firms
2X = Mean of Philanthropic Responsibility of Public Firms
3X = Mean of Philanthropic Responsibility of Private Firms
The evidence also shows that for philanthropic responsibility, since test
statistic (F= 4.020) is greater than the critical value (F= 3.32), at 0.05 level of
significance , reject the null hypothesis and conclude that the activities in different
type of firms is not the same, and also private and public firms are significantly
different from the partnership firms.
Public firms remain as one of the best placed institutions to make a significant
positive contribution towards improving social, economic, philanthropic and
environmental conditions in India.
4.15. India’s CSR pyramid
Carroll‘s CSR pyramid is used as a framework, to explore the nature of
corporate social responsibility (CSR) in Indian context. Carroll‘s CSR Pyramid is
probably the most well-known model of CSR, with its four levels indicating the
relative importance of economic, legal, ethical and philanthropic responsibilities
respectively. Carroll‘s basic four-part model is accepted and added one more part
which is called ―Environment activities‖. Therefore five parts Indian carroll‘s model
has been established.
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Some of the reasons for selecting carroll‘s model are
1. The model is simple, easy to understand and has an intuitively appealing logic
2. Over the 25 years since Carroll first proposed the model, it has been frequently
reproduced in top management and CSR journals, mostly by Carroll himself
(Carroll, 1979, 1983, 1991, 1994, 1998, 2000, 2004)
3. The model has been empirically tested and largely supported by the findings
(Aupperle, Carroll, & Hatfield, 1985; Pinkston & Carroll, 1994).
Carroll‘s framework reflects the perceptions of business leaders about the
current relative importance of the four CSR categories, rather than an historical or
dependence perspective. This model emphasizes the role of the global compact
principle and specially pays attention to Indian firms to do CSR activities.
All levels of CSR play a role in India, There are five empirically interrelated,
but conceptually independent components of CSR, but they have different
significance, and furthermore are interlinked in a somewhat different manner.
In the case of industries located in Mysore district on the basis of the
responses received from the sample firms, it appears that legal responsibly is given
highest priority. Firms are very particular about following the legal rules imposed by
the government from time to time. Legal responsibility is the most essential piece of
CSR.
Philanthropic responsibility is one of the important aspects and it stands in
second place among the sample firms. According to Windsor, philanthropic
responsibility is not mandatory, but is voluntary .In this aspect, the firms in Mysore
district are progressive giving more weightage to the voluntary efforts of giving back
to community. Though it is not mandatory, it is followed by many firms. On the other
hands economic dimension and it is mandatory, but followed by few firms. The other
mandatory aspect is legal responsibility is given highest importance. Ethical
responsibility is not mandatory, but expected by the firms to follow ethical means of
production. Ethical responsibility is in the third rank.
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Economic responsibility finished last in the pyramid. Below that we can find
environment responsibility. From this analysis, it appears that economic responsibility
is given lower priority by the sample firms, but this does not mean that these firms are
irresponsible in economic activities. It is due to several factors. One of the important
factors is less reporting or no reporting of finical matters by firms. In the Indian
context, only few firms are reporting the finical matter. But many are responsible in
their legal, ethical and philanthropic activities. According to them this helps in
building the image of the firm.
Findings show that when compared to carrolls model, economic
responsibilities had decreased, while legal and philanthropic responsibilities have
appeared to be increased and ethical responsibilities, has not been changed. On the
other hand, economic responsibility had decreased in importance during this period.
This is illustrated in Figure 4.7.
Figure – 4.7 : CSR Model for Indian Firms