CORPORATE SOCIAL RESPONSIBILITY OF FIRMS IN...

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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 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 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


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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 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 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


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 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


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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


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


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


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


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


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.

http://en.wikipedia.org/wiki/Manufacturing

http://en.wikipedia.org/wiki/Irrigation

http://en.wikipedia.org/wiki/Environmental_pollution

http://en.wikipedia.org/wiki/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


.002

Within Groups .557

Legal


.009

Within Groups 7.879

Ethical


.000

Within Groups 1.124

Philanthropic


.000

Within Groups 7.373


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


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


.007

Within Groups 2.738

Environment

Between Groups .765 .979

.387

Within Groups .781

Legal


.349

Within Groups 10.081

Ethical


.005

Within Groups 1.378

Philanthropic


.028

Within Groups 12.352


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

142

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

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