A

PROJECT REPORT

ON

SOCIAL RELEVANCE

A STUDY ON CORPORATE SOCIAL RESPONSIBILITY PRACTICED BY

SMEs IN INDIA

A project Report submitted to the University of Mumbai in Partial Fulfillment

the award of degree of

Master of Management Studies

Specialization: Finance

By

(NEHA VAKILRAI RAJBHAR)

Roll No: 2022067

Batch: 2022-24

Under the Guidance of

Prof. Prathamesh A. Tiwari

ROHIDAS PATIL INSTITUTE OF MANAGEMENT STUDIES

Affiliated to the University of Mumbai,

Recognized by DTE, Govt. of Maharashtra,

Approved by AICTE, New Delhi.

February - 2024
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 Shree Shankar Narayan Educational Trust

Rohidas Patil Institute of Management Studies

(Affiliated to University of Mumbai, Approved by AICTE, New Delhi)

MahavidhyalayaMarg, Navghar Road, Bhayandar East, Thane – 401105.

CERTIFICATE

This is to certify that Neha Vakilrai Rajbhar is a Bonafide student of our Institute and the dissertation
entitled A Study On Corporate Social Responsibility Practiced By SEMs In India. submitted by
him/her is in partial fulfilment of semester IV for the Degree of MASTER OF MANAGEMENT
STUDIES in Finance by the University of Mumbai during the Academic Year 2022-24.

Place: Bhayandar, Thane Dr. Vanita Malik

Date: Director

Rohidas Patil Institute of Management Studies

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 GUIDE’S CERTIFICATE

This is to certify that the Dissertation entitled A Study On Corporate Social Responsibility Practiced
By SEMs In India. is a bonafide record of independent research work done by Neha Vakilrai
Rajbhar, Roll. No. 2022067 under my supervision during the Academic year 2021-2023, submitted to
the University of Mumbai in partial fulfilment of Semester IV for the Degree of MASTER OF
MANAGEMENT STUDIES in Finance.

Place: Bhayandar, Thane. _____________________

Date : Prof. Prathamesh A. Tiwari

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 Declaration

I Ms. Neha Vakilrai Rajbhar hereby declare that the dissertation A Study On Corporate
Social Responsibility Practiced By SEMs In India. submitted to the University of Mumbai in

partial fulfilment of the requirements for the Degree of MASTER OF

MANAGEMENT STUDIES IN FINANCE is an original work and that the dissertation
has not previously formed the basis for the award of any other degree, Diploma,
Associateship, Fellowship or other title.

Place: _____________________

Date:

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 EVALUATION OF DISSERTATION

1. Name of the Candidate : Neha Vakilrai Rajbhar

2. Registration / Seat Number : 2022067

3. Name / Code of the subject : Social Relevance

4. Title of the Dissertation : A Study On Corporate Social Responsibility Practiced

. By SMEs In India.

5. Evaluation:

Parameters Maximum Marks

Sr. No.
Marks Awarded
1 Situation analysis and Problem definition 10
2 Literature Review (secondary data) 10
3 Methodology of study 20
4 Data Analysis (Primary and Secondary data) 20
5 Conclusions and recommendations 15
6 Guide’s assessment of project progress 10
7 Viva Voce 15

Total 100

6. Name & Address of the Evaluator:

7. Signature of Evaluator with Date:

8. Signature of the Head of the Institution with seal:

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 ACKNOWLEDGEMENT

Apart from my efforts, the success of any project depends largely on the encouragement and guidelines

of many others. I take this opportunity to express my gratitude to the people who have been

instrumental in the successful completion of this project.

I would thank the Management of the Institute for providing valuable resources viz. Library, Computers

with Internet facility which is an essential pre-requisite in the successful completion of the project.

I would like to show my greatest appreciation to Prof. Prathamesh A. Tiwari, I can’t thank enough for

his/her tremendous support and help. I feel motivated and encouraged to execute my project under

his/her mentorship. Without his/her guidance this project would not have materialized.

The support received from all the respondents was vital for the success of the project. I am grateful for

their time and efforts.

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 EXECUTIVE SUMMARY

Companies are increasingly attracting the attention of media, academicians and policy makers around
the world from points of view of ethics and sustainability. Accordingly, companies take initiatives to
create positive image of them on the society in which they operate, as summarized by the phrase "trying
to look good, by doing good." Corporate Social Responsibility (CSR) is an integral part of business
strategy of companies across the globe. Of the 250 largest multinational corporations, 64% published
CSR reports in 2005, either within their annual report or in separate sustainability report. CSR is also an
issue of importance at the boardroom level. In 2005, 360 different CSR- related shareholder resolutions
were filed on issues ranging from labor conditions to global warming, (Michael, 2006).

CSR - practices adopted by large companies is an area which has been researched to a significant
extent. However, there exists limited research on CSR practices of small and medium enterprises
(SMEs), especially in the Indian context. While large companies are often motivated to conduct CSR
because of branding and the difference between SMEs and large companies in the resource availability.

SMEs are comparatively at a disadvantage in undertaking effective CSR practices as they have limited
staff and monetary resources. There is a need for specific SME knowledge on CSR engagement, that
can contribute to the development of understanding how to effectively promote CSR among SMEs, and
to develop relevant programs and policies, and, hence, to benefit from the huge potential for CSR
development. (Morsing, 2006). In this thesis, an attempt has been made to study SMEs approach and
issues which determines CSR practices among Indian SMEs. Further, this thesis tries to understand the
attitude of SMEs and the factors which affect selection of their CSR program. This thesis also examines
which kinds of CSR activities appeal SMEs.

A two-part questionnaire was specially devised for this purpose to scrupulously gauge the effectiveness
CSR practices adopted by SMEs. The questionnaire included to a large extent the major issues related to
CSR practices among SMEs. The questionnaire was administered to nearly 800 SMEs in western India
mainly from the industrial belt of Maharashtra and Gujarat. More than 300 fully-filled questionnaires
were received and authenticated. Data from these questionnaires were analyzed using 'Factor Analysis'
and several other statistical procedures to corroborate the reliability of the sampling techniques.

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 INDEX

Sr. No. Particulars Page

No.
1. Introduction to the Topic 1 – 26

2. Objectives of the Study 27

3. Literature Review 28 – 30

4. Problem Statement / Need of the Study 31

5. Research Methodology 32 – 34

6. Data Analysis & Interpretation 35 - 49

7. Observations & Findings 50

8. Suggestions / Recommendations 51

9. Further Scope of Study 52

10. Conclusion 53

11. Reference / bibliography / Webliography 54

12. Annexure I 55 - 58

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 1. INTRODUCTION

What is CSR?
Corporate social responsibility (CSR) is the idea that businesses should operate according to principles
and policies that make a positive impact on society and the environment.

Through CSR, companies make decisions driven by financial gain and profitability, and the impact of
their actions on their communities and the world at large. CSR goes beyond legal obligations: by
voluntarily adopting ethical, sustainable and responsible business practices, companies seek to deliver
benefits to consumers, shareholders, employees and society.

By practicing corporate social responsibility, also called corporate citizenship, companies are aware of
how they impact aspects of society, including economic, social, and environmental. Engaging in CSR
means a company operates in ways that enhance society and the environment instead of contributing
negatively to them.

Corporate Social Responsibility is a management concept whereby companies integrate social and
environmental concerns in their business operations and interactions with their stakeholders. CSR is
generally understood as being the way through which a company achieves a balance of economic,
environmental and social imperatives (“Triple-Bottom-Line- Approach”), while at the same time
addressing the expectations of shareholders and stakeholders. In this sense it is important to draw a
distinction between CSR, which can be a strategic business management concept, and charity,
sponsorships or philanthropy. Even though the latter can also make a valuable contribution to poverty
reduction, will directly enhance the reputation of a company and strengthen its brand, the concept of
CSR clearly goes beyond that.

Promoting the uptake of CSR amongst SMEs requires approaches that fit the respective needs and
capacities of these businesses, and do not adversely affect their economic viability. UNIDO based its
CSR programme on the Triple Bottom Line (TBL) Approach, which has proven to be a successful tool
for SMEs in the developing countries to assist them in meeting social and environmental standards
without compromising their competitiveness. The TBL approach is used as a framework for measuring
and reporting corporate performance against economic, social and environmental performance. It is an
attempt to align private enterprises to the goal of sustainable global development by providing them
with a more comprehensive set of working objectives than just profit alone. The perspective taken is

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that for an organization to be sustainable, it must be financially secure, minimize (or ideally eliminate)
its negative environmental impacts and act in conformity with societal expectations.

Key CSR issues: environmental management, eco-efficiency, responsible sourcing, stakeholder

engagement, labour standards and working conditions, employee and community relations, social
equity, gender balance, human rights, good governance, and anti-corruption measures.

A properly implemented CSR concept can bring along a variety of competitive advantages, such as
enhanced access to capital and markets, increased sales and profits, operational cost savings, improved
productivity and quality, efficient human resource base, improved brand image and reputation,
enhanced customer loyalty, better decision making and risk management processes.

Why CSR is important

Often, a company’s business model and practices are built around financial goals. However, CSR
programs encourage business leaders to consider corporate citizenship or the larger impact of the
business on society when making decisions. Corporate social responsibility helps companies ensure that
their operations are ethical, safe and delivering positive impact wherever possible. Through CSR
initiatives, companies work to limit environmental impact, contribute to solving societal problems (such
as poverty and inequality) and ensure their brand identity reflects their values.

Through CSR programs, philanthropy, and volunteer efforts, businesses can benefit society while
boosting their brands. A socially responsible company is accountable to itself and its shareholders. CSR
is commonly a strategy employed by large corporations. The more visible and successful a corporation
is, the more responsibility it has to set standards of ethical behaviour for its peers, competition,
and industry.

There are many reasons for a company to embrace CSR practices.

1. It improves customers’ perception of your brand.

It’s increasingly important for companies to have a socially conscious image. Consumers, employees,
and stakeholders prioritize CSR when choosing a brand or company, and they hold corporations
accountable for effecting social change with their beliefs, practices, and profits.

“What the public thinks of your company is critical to its success,” said Katie Schmidt, founder and lead
designer of Passion Lilie. “By building a positive image that you believe in, you can make a name for
your company as being socially conscious.”

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2. It attracts and retains employees.

Consumers aren’t the only ones drawn to businesses that give back. Susan Cooney, head of
global diversity and inclusion at Symantec, said that sustainability strategy is a big factor in where
today’s top talent chooses to work.

“The next generation of employees is seeking out employers that are focused on the triple bottom line:
people, planet and revenue,” she said. “Coming out of the recession, corporate revenue has been getting
stronger. Companies are encouraged to put that increased profit into programs that give back.”

3. It increases your appeal to investors.

By demonstrating a developed CSR program and initiatives, your company is bound to become more
appealing to both current and future investors. CECP’s influential 2021 giving in Numbers report shows
that investors play a growing role as key stakeholders in corporate social responsibility. Almost 80% of
surveyed businesses were open to providing them with data and considering their perspectives on
sustainability. Just like customers, investors are holding businesses accountable when it comes to social
responsibility.

At the same time, a company that takes CSR seriously signals to both investors and partners that it’s
interested in long-term as well as short-term gain. CSR goes hand in hand with environmental, social,
and governance (ESG) metrics that help external analysts quantify the company’s social efforts, and
becomes a key factor for investors’ consideration and continued interest.

Types of CSR

 Environmental responsibility: Corporate social responsibility is rooted in preserving the

environment. A company can pursue environmental stewardship by reducing pollution and
emissions in manufacturing, recycling materials, replenishing natural resources like trees, or
creating product lines consistent with CSR.
 Ethical responsibility: Corporate social responsibility includes acting fairly and ethically.
Instances of ethical responsibility include fair treatment of all customers regardless of age, race,
culture, or sexual orientation, favorable pay and benefits for employees, vendor use across
demographics, full disclosures, and transparency for investors.
 Philanthropic responsibility: CSR requires a company to contribute to society, whether a
company donates profit to charities, enters into transactions only with suppliers or vendors that
align with the company philanthropically, supports employee philanthropic endeavors, or
sponsors fundraising events.

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  Financial responsibility: A company might make plans to be more environmentally, ethically,
and philanthropically focused, however, it must back these plans through financial investments
in programs, donations, or product research including research and development for products
that encourage sustainability, creating a diverse workforce, or implementing DEI, social
awareness, or environmental initiatives.

Benefits of CSR

According to a study published in the Journal of Consumer Psychology, consumers are more likely to
act favorably toward a company that has acted to benefit its customers. As a company engages in CSR,
it is more likely to receive favorable brand recognition. Additionally, workers are more likely to stay
with a company they believe in. This reduces employee turnover, disgruntled workers, and the total cost
of a new employee.
For companies looking to outperform the market, enacting CSR strategies may improve how investors
view the company's value. The Boston Consulting Group found that companies considered leaders in
environmental, social, or governance matters had an 11% valuation premium over their competitors.
CSR practices help companies mitigate risk by avoiding troubling situations. This includes preventing
adverse activities such as discrimination against employee groups, disregard for natural resources,
unethical use of company funds, and activity that leads to lawsuits, and litigation.

Business benefits

CSR can have a positive impact on an organization’s brand identity as well as its bottom line. Some
CSR efforts, such as improving energy efficiency, can reduce operating costs and might lead to savings
in the end. Consumers increasingly prefer brands that share their values, and CSR policies offer ways
for organizations to demonstrate those values, building trust and loyalty to fuel a competitive advantage.
CSR can also help attract top talent and drive employee engagement and retention, as more workers
seek employers whose values align with their own. Additionally, a proactive approach to ethical and
social issues has the potential to prevent legal problems, fines and reputational damage.

Consumer benefits

CSR initiatives can help people become more responsible consumers, making it easier for them to
access products and services that align with their values and educating them on issues of sustainability
and ethical consumption. It can encourage companies to prioritize and invest in testing, quality control

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and safety measures. CSR can also minimize the likelihood of defective or harmful products reaching
consumers.

Environmental benefits

CSR can have a positive impact on the overall health of the planet, as it encourages environmental
responsibility and sustainable practices. CSR initiatives can help companies reduce their greenhouse gas
emissions or pursue net-zero emissions goals that are key to slowing climate change. They might also
help conserve natural resources, reduce pollution and limit disruption of ecosystems. Additionally, a
focus on CSR can support investment in research and development of eco-friendly products and
practices.

Societal benefits

Corporate social responsibility can help support local communities and address societal issues, such as
poverty, inequality and environmental concerns. CSR initiatives can fuel economic growth by creating
jobs. They can also shape public opinion as companies leading the way inspire others to follow suit,
creating a positive ripple effect. A focus on ethical behaviour at the corporate level reinforces a broader
norm of ethical behaviour across other parts of society.

Scope of CSR

Initially, CSR emphasized the official behaviour of individual firms. Later, it expanded to include
supplier behaviour, the uses to which products were put, and how articles were disposed of after they
lost value. Malcolm McIntosh notes also that focussing on the identifiable behaviour of individual
businesses risks not including what he calls "unincorporated market behaviour" within the scope of
CSR - actions attributable to market processes, and also calls for other factors including "brand
citizenship" and "illegitimate, informal or illegal activity" to be considered as part of a more complete
picture.
The term "brand citizenship" has been put forward because the public perception of an organisation may
be associated with its branding rather than its corporate identity: McIntosh uses Virgin as an
example. Similarly, Anne Bahr Thompson uses the same term and observes that companies adopting
socially responsible behaviours are primarily investing in their reputations.

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Company Profile

Infosys Limited (Infosys or Company) has been an early adopter of corporate social responsibility
(CSR) initiatives. Along with sustained economic performance, environmental and social stewardship is
also a key factor for holistic business growth. The Company has established the Infosys Foundation and
it may establish/ partner with other eligible entity / organization to fulfil its CSR commitments (“CSR
Implementing Agencies) The Company’s focus has always been to contribute to the sustainable
development of society and the environment, and to make our planet more liveable for future
generations.

FOCUS AREAS

While the Company may undertake CSR activities which the Corporate Social Responsibility
Committee of the Board (CSR Committee) may decide from time to time, in any areas or subjects in
accordance with the requirements under the Companies Act, 2013 (the Act) and the rules / regulations
framed thereunder and circulars / clarifications issued thereunder (collectively, Applicable Law) Infosys
CSR activities, amongst others, will focus on:
 Hunger, Poverty, Malnutrition and Health
 Education
 Rural Development Projects
 Gender Equality and Empowerment of Women
 Environmental Sustainability
 National Heritage, Art and Culture
 Disaster Management

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UNDERTAKING CSR ACTIVITIES

Infosys will undertake its CSR activities (being projects / programs / other permitted activities) either
directly by itself or through CSR Implementing Agencies or in collaboration with other companies, as
approved by the CSR Committee, in accordance with the requirements of Applicable Law.
Identification and implementation of multi-year CSR projects / programs (ongoing projects) will be
monitored by the CSR Committee and the Board of Directors of the Company (Board) as required
under Applicable Law.

CSR ANNUAL ACTION PLAN AND LOCATION OF CSR EFFORTS

The CSR Committee shall decide on the locations for CSR activities and formulate and recommend to
the Board for approval a CSR annual action plan, which shall contain all matters which are required
under Applicable Law and any other matters as the CSR Committee may deem fit from time to time.

IMPACT ASSESSMENT

Impact assessment shall be undertaken by the Company or by recipient or by implementing agency as

required by and in the manner set out under Applicable Law, and the impact assessment report(s) shall
be placed before the CSR Committee and the Board, and shall be disclosed as legally required.

COMPOSITION OF CSR COMMITTEE AND DISCLOSURES

The CSR Committee shall be comprised in accordance with the requirements of Applicable Law.
ThisPolicy, details of the composition of the CSR Committee and projects approved by the Board shall
be hosted on the Company's website at www.infosys.com.

FUNDING, SELECTION AND MONITORING PROCESS

Infosys’ CSR Committee will evaluate proposals received for CSR projects from the Infosys
Foundations or other eligible implementing entities inter alia based on Company’s focus areas,
assessment of potential impact of such proposals and any other criteria as may be determined by the
CSR Committee and approve funding for any proposals for implementation at its discretion. Infosys
Foundation or other implementing / collaborating entity will work closely with and support the Board
and the CSR Committee in carrying out the CSR activities of the Company. Infosys Foundation or such

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other implementing / collaborating entity will assist the CSR Committee in identifying the areas of CSR
activities and execution of initiatives in such manner as may be mutually agreed. Infosys Foundation or
such other entity will also assist the Board and the CSR Committee in reporting the progress of
deployed initiatives and in making appropriate disclosures (internal / external) on a periodic basis.

Infosys’ representatives will collaborate with the relevant implementing entity (Infosys Foundation or
others) to monitor the status and utilization of funds for each project and will report its findings to the
CSR Committee, the Board and the chief financial officer (CFO) of the Company periodically to enable
them to meet their reporting, monitoring and other legal obligations.

In any year, where the Company has spent in excess of its CSR obligation, such excess spending shall
be available for set off against the Company’s CSR obligations for up to the next three financial years in
accordance with Applicable Law, and the Board shall be competent to pass a resolution in this regard.

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CSR Activities held by Infosys

Education

The foundation partners with schools in rural India to enhance education and library facilities and to
promote primary education among underprivileged children. It has donated to various educational
institutes in India, such as the Chennai Mathematical Institute, and the Indian Institute of Science.

Healthcare

The foundation has augmented existing healthcare infrastructure, access to primary healthcare,
awareness of basic hygiene, and treatment of underprivileged patients, and has donated more than 50
crore rupees to expand the capacity of hospitals across India.
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Arts and culture

The foundation assists underprivileged artists and authors by offering financial assistance, promoting
their art, or helping them receive recognition. It contributed 70 lakh rupees (about $100,000) for the
academy established by the Bhavan's Tiruchi Kendra. Underprivileged and talented young artists will be
promoted by the bhavan by providing them a platform.

Destitute Care

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The foundation supports programs of NGOs in rural areas across India. It provides vocational training
to help the destitute to live with dignity and earn a livelihood, and partners with NGOs to support
destitute children and women.

Rural Development

The foundation undertakes programs to improve the welfare of people in rural India and has donated
more than 40 crore rupees for rural development and livelihood projects such as awareness campaigns
on hygiene, sanitation, vocational training and entrepreneurship, It works with local administration to
achieve community development goals. The foundation constructs roads, provides drainage systems and
electricity, and rehabilitates flood-affected victims in rural areas.

Ethical behaviour of businesses around the world is on the radar of all stakeholders. Business refers to
economic organizations making economic decisions, whereas decisions based on principles of ethics
take into consideration non-economic reasons including rights and justice (Boat right, 2008). The word
ethics is derived from the Greek word "ethos" meaning character. Ethics is the science of morals, and
recognized rule of conduct, (Pojman, 2006).

"Morality" refers to a code of conduct put forward by a society. Ethics in the individual context means
moral values of the individual but when observed by organizations in decision-making is called as
business ethics (Francis, 2009). Ethical behavior of businesses culminates in many forms of which one
of most recent is the phenomenon of Corporate Social Responsibility. During the past decade,
Corporate Social Responsibility (CSR) has gained significant importance globally, although responsible

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behaviour of firms has a long history (Sarbutts, 2003). CSR in the present context is seen beyond the
philanthropic context. It is not just a buzzword but rather is looked upon as a tool for sustainable
business growth. CSR is perhaps as old as business itself and in some societies one cannot do business
without being socially responsible (Asongu, 2007/ Businesses in the twenty-first century must not only
provide goods and services to satisfy customer needs, they must also satisfy the overall needs of the
society. Multiple stakeholders judge companies based on a variety of criteria.

Governments want companies to adhere to all regulations, consumers want companies to supply fair
priced and safe products and services, and society wants companies to have sound, sustainable and
ethical actions. It is now widely believed that businesses and society are mutually dependent on each
other (Porter, 2006). Today, companies are also required to take into consideration the impact of their
actions on society. Companies are certainly required to adhere to regulations relating to environment,
health and safety and labour standards. In addition, they are also required to pro-actively support,
sustain and give back to the society.

Companies today are considered to be responsible for the impact they create on the environment. Some
of the prominent examples include, Wal-Mart which is working towards zero waste by 2025. General
Electric is investing in cleaner-technology research. Coca-Cola is trying to reduce raw materials it uses
in packaging and meeting its own water requirement by rain water harvesting. Tata Group of
Companies started the Indian Institute of Science, the Tata Institute of Social Sciences (TISS), and the

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Tata Institute of Fundamental Research (TIFR), for facilitating the development of science and
technology in the country.

Importance of CSR

Businesses are increasingly becoming more proactive to create a positive impact on society by
undertaking and managing CSR programs. In a dynamic business world, CSR can also be used as a
strategy to gain competitive advantage over competitors, by creating a positive image of the company in
the minds of their stakeholders. CSR programs can be used for enhancing the credibility and visibility
of companies in the society. Companies also undertake CSR programs, because of their self-awareness
that they are both efficient and effective to create maximum social benefit at the minimum cost. Simon
Zadek, 2001, describes the development of CSR broadly in terms of three generations:

1. The first generation of CSR showed that companies can be responsible in ways that do not detract
from commercial success. The most prominent changes included adoption of a strategic approach to
philanthropy, expansion of the geographic focus of corporates and evolving of measurement tools.

2. The second generation of CSR is focusing on CSR as an integral part of long term business strategy.

3. The third generation of CSR. that is still to come, is expected to make a significant contribution to
address issues such as poverty, exclusion and environmental degradation.

This will involve both partnerships with civil society and changes in public policy. Till 1990, business
and ethics were considered as oxymoron. It was well accepted that the business of business was only to
make profits. Since 1990s, the size of large corporations has grown tremendously. The world's 100
largest economic entities consist of 63 countries and 37 companies, (Nooyi, 2006). Since the 1990s, a
number of developments such as increasing democrafization of governments, creation of newer social
and economic institutions, rapid growth of volunteerism in the form of non-profit organizations,
increasing consumer awareness.

Focus on the need of reducing poverty, dealing with the human rights issues, among others, have
reinforced the need to articulate policies and actions to include corporate social action and emphasize
the concept and practice of corporate responsiveness. Since corporations have social obligations, the
concept of corporate social performance has been advocated which would enable corporations to focus
on the required content of corporate social action, (McWilliams, 2001). Modern companies have
considerable influence on civil society and the economy of nations. Since 1990, there is tremendous
change in the way companies operate. The markets are more global, and large companies procure their
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supplies from different countries of the world. The world indeed is becoming boundary-less and flat as
described by Thomas Friedman (2005) in his book 'The Flat World'.

There is fierce competition among companies globally and that tends to pressurize some companies to
adopt shortcuts at the cost of ethical values and welfare of the society. In recent times ethical behaviour
of the companies is becoming significant to all stakeholders. Sales graphs of soft beverages companies
like Pepsi and Coke's took a nosedive for the period when both these companies were accused of
exploiting underground water for their bottling plants, without being responsible towards the society for
the quality of water, which was deprived of water resources.

Businesses, which are insensitive towards societal issues, suffer financially as well as their goodwill and
brand image get negatively affected. Johns- Manville Corporation, an asbestos producing company,
paid $500 million to people who got affected by lung disease in 2004. Pacific Gas and Electric paid
$333 million, the largest settlement ever paid in a direct action lawsuit in the U.S. history, to people
who got affected in the southern California town of Hinkley in the year 1996, as they consumed
drinking water in that area which was contaminated with poisonous chromium.

The company eventually spent more funds in later years in order to rectify its image by sponsoring
events for protection of the environment. A decision-making process of companies has an impact not
only on shareholders but also on consumers and society at large. An increasingly boundary less world
has made it all the more necessary for multinational companies to be ethical in their operations and to
affect the societies in which they operate positively. Ethical business practice in today's globalised
world is called by many names such as socially responsible behaviour (SRB), corporate citizenship
(CC), corporate social responsibility (CSR), corporate sustainability (CS) and the most recent is Triple
Bottom line (TBL).

TBL mainly addresses the issue of ESG - environmental, social and governance - issues in the
organizations. Businesses are viewed with respect to these parameters for judging ethical decision
making in their operations. One of the most well-known and commonly utilized triple bottom-line
reporting models is the Global Reporting Initiative (GRI) Guidelines. The GRI's specific goals, as stated
in their Guidelines document, are to offer report formats to account for sustainability; to assist
corporations in presenting a balanced picture of their organizations to stakeholders; to promote the
comparability of corporate sustainability reports; to stimulate benchmarking and the verifiable
assessment of sustainability performance; and to facilitate stakeholder engagement, (Hartman, 2007).
Tata Consultancy Services (TCS) became the first company in India to go for GRI certification and got

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an A+ rating, which is the top grade a company can get under GRI. This was followed by companies
like L&T, Infosys and Reliance. Many businesses also go for ISO 26000, getting certified as socially
responsible companies. Of the 250 largest multinational corporations in the world, 64% published CSR
reports in 2005, either within their annual report or as separate sustainability reports. In 2005, 360
different CSR related shareholder resolutions were filed on issues ranging from labour condition to
global warming, (Porter, 2006). More than 80% of the Fortune 500 companies specifically cite CSR

spending in their annual report (Bhattacharya, 2004).

CSR by Large Corporations

Philip Kotler and Nancy Lee, (2005) in their book on Corporate Social Responsibility have mentioned
that large companies undertake CSR in mainly six ways.

a. Cause Promotion

Corporates may undertake persuasive advertisement of a particular cause, provide statistics about the
cause or create informational website where the public can get the information about the cause and
contribute to it. The intention is to create awareness about the cause among people. Tata Tea's Jago Re
campaign is very good example of cause promotion. The campaign encouraged voting behaviour among
the citizens during election times and also took up the issue of eradicating bribes from the system.

b. Corporate Philanthropy

It is a very traditional method of giving by corporates whereby they directly contribute to the cause or
charity by giving cash grants and donations. The selection of the project typically depends upon the
cause chosen by the company and its management. A cash resource provided by corporates in the form
of philanthropy is very essential for survival and operations of a number of NGOs. It also includes
awarding scholarship, donating products as well as services.

c. Corporate Social Marketing

Corporate Social Marketing is about influencing the behaviour of the general public for getting the
positive outcome, e.g. it can be for actions like promoting family planning or vote in election, get rid of
tobacco habit or about keeping a city clean.

d. Cause - related Marketing (CRM)

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The company takes up social cause and undertakes to pay for the cause out of revenue generated by
selling their product for. CRM was started in 1983 by American Express Bank with their campaign to
restore Statue of Liberty. American Express would donate a penny for any credit card transaction and a
dollar for each new card issued. CRM is defined as "as the process of formulating and implementing
marketing activities that are characterized by an offer from the firm to contribute a specified amount to
a designated cause when customers engage in revenue providing exchanges that satisfy original and
individual objectives", (Varadarajan, 1988).

e. Socially Responsible Business Practices

There are consumers who buy products only from companies known for socially responsible business
practices, which are in the interest of the society and not only for generating profits. Some companies
use only clean energy in the manufacturing process, others use only organic food ingredients so that use
of chemicals and fertilizers is minimized.

f. Community Volunteering

Many companies encourage their employees, their distribution channels and also their vendors to give
volunteer time for specific project undertaken by company. Companies like Infosys and Wipro motivate
their staff to do voluntary work on weekends, to undertake projects in the rural areas which are in
proximity to their locations. This also helps in inculcating an attitude of giving to society among the
employees.

CSR and Small and Medium Enterprises (SMEs)

There is research done on large businesses and their CSR practices but very little research has been
done on CSR within the SME sector which contributes more than 7% of India's GDP. As per the Third
All-India Census of Small Scale Industries conducted in 2004, the number of SMEs has increased from
about 80,000 units in the 1940's to about 10.52 million units by 2004. The total employment by SMEs is
about 25 million. They constitute 90% of the industrial units in the country and also contribute to about
35% of India's exports (Pandey, 2007). SME sector is a thriving sector of India's economy contributing
in the form of innovation, employment and entrepreneurial activities. World over, the SME sector is
seen as an emerging sector not only in terms of the economic impact they have on an economy of any
country but also the social impact it create on the local societies in which they operate. Small and
Medium enterprises make up more than 90% of the businesses worldwide and account for 50 to 60 % of
employment. European Union estimates for 2003 indicate that more than 20 million SME's account for
over 80 million jobs. In the United States 99.7 percept of all firms fall into the "small business" category
accounting for half the nation's job and contribute more than 50% of non-farm GDP, (Vives, 2005).
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Almost half of the European SMEs are, to different degrees, involved in socially responsible activities,
(Perrini, 2006).

The CORE Bill 145 (2002) has introduced following requirements on the companies operating in UK:

A. Mandatory Reporting: Companies with a turnover greater than 5 million pounds would be
required to produce and publish reports on their economic, environmental and societal impact.

B. Stakeholders Dialogue: Companies would have to consul affected stakeholders Before launching
major projects.

C. Directors: Directors would be required to better consider the impact of their business on the
environment and society.

There are also views against this bill as it will create additional burden on the small and upcoming
businesses. As David Frost, Director General of the British Chambers of Commerce, for instance,
argued that Bill 145 in the UK presented a threat to small and medium-sized enterprises (SMEs) and
that it did not adequately take into account the huge burden that this would place on SMEs, who he
estimated were already struggling under £21bn of extra regulations since 1997.

Small and Medium Enterprises

Small firm ethics and corporate social responsibility emerged in the business literature in the USA
during the 1970s and 1980s. In the beginning, this literature was mainly concerned with moral issues of
employee behavior and other areas of social responsibility (Spence 1999). Small and Medium
Enterprises (SMEs) have played a significant role in India's economic growth since Independence. The
positive impact of the SME sector on the Indian economy and society may be summarized as follows:
Almost 7% of India's gross domestic product (GDP) is contributed by SMEs, which account for the
largest employment base of around 20 million persons, next only to Agriculture.

It has been estimated that every Rs 100,000 of investment in fixed assets in the small-scale sector
generates employment for 4 persons. During the period 1991 - 1997, the increase in jobs per annum for
the SME sector was 3.5% whereas it was 0.8% in case of the organized sector .(including
government)The SME sector plays a major role in India's current export performance. 45%-50% of the
Indian Exports is contributed by SME sector. Direct exports from the SME sector accounts for nearly
35% of total exports. Besides direct exports, it is estimated that smallscale industrial units contribute
around 15% to exports indirectly.

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The SME sector fosters an entrepreneurial environment in the country by encouraging individual
initiatives which in turn helps both the individuals undertaking risk and the country as a whole. SME
enterprises are found in all part of the India, thereby helping in reducing regional disparities and
ensuring well balanced growth in the whole of India. Due to the large employment base, SMEs serve as
good training ground for managerial as well as technical talent in the country.

SMEs are typically less capital intensive than large industries.

SMEs are different from the large companies in many ways, for example:

a. Most SMEs in India are family-owned and managed.. Large percentages of enterprises are
proprietorships or partnerships, fewer percentage represent private companies and still lesser number of
organizations are public companies.

b. As SMEs are closely-controlled by the family of the entrepreneur, starting a, SME, owning and
managing it rests in the hands of the family.

c. In case of CSR, the decision making processes of the enterprise is very strongly affected by the
values, education and, attitudes of the entrepreneur who started it. Thus philanthropy or decisions for
social welfare is also influenced by the characteristics of the person who started it.

d. In SMEs, the profit may not be the sole motive behind starting an enterprise.

e. The passion of an entrepreneur who undertakes manufacturing of products or rendering of services

which may satisfy his intellectual need with definitely reasonable profit. For example Arvind Eye
Hospital of Madurai started by Dr. Govindappa Venkataswamy developed contact lenses that cost half
of what were imported at that time. This reduced their cost of operations and in turn helped them to
cater to more people at the bottom of the pyramid, (Rangan, 2007).

Growth of SMEs in India

After independence, India's industrialization was more dependent on large scale businesses. Mahatma
Gandhi had espoused the importance of developing Small scale Industries but his focus was more on
craft and cottage industries and development of rural area through these small scale industries which
would make villages in India self-sufficient and would also solve the problem of migration.

In the Second Five Year Plan it was Prof Mahalanobis who gave boost to the Small Scale Industry
(SSI) as supplier of consumer goods to the workers working in the large scale sector. For many years,

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small scale industries were non-competitive and technologically obsolete. The Industrial Policy of 1985
focused on small scale and ancillary industries with the view to enhancing the development of rural and
backward areas. It made incremental changes like investment ceilings, which was raised to Rs. 3.5
million for small scale industries (SSI), and to Rs. 4.5 million for ancillaries. (Venkataramanaiah et al,
2007). From 1990 to 2007, the SME sector has seen a sea change, due to numerous reasons. The
protected businesses in India faced very strong competition when the Liberalization process was
undertaken in the year 1991.

It was followed by implementation of policy as directed by the World Trade Organization in the year
1995 onwards. The Indian market saw final change when domestic economy policies also had to be
changed to keep pace with the process of liberalization and globalization. All these lead to fierce
competition in the country making it unavoidable for the SMEs to change themselves in this ever
changing and dynamic business environment. During 1991-2005, there was increase in the flow of FDI
into India across all the sectors, due to which cost of transportation and communication decreased
substantially. This made inflow of goods, services, knowledge and capital very easy for the domestic
SME sector.

With the increasing flow of FDI in the country, competition and the possibility of more and more
outsourcing work coming to India also increased thanks to the cheap labor which keeps production costs
very competitive among other developed countries of the world. The protection given to SME sector till
1990 from participating in the open market was further diluted by the government reducing the number
of items kept as reserved for SMEs, which was gradually brought down from 842 in 1991 to 675 in
2003 and in 1999 the list was further reduced to 358 items. Reservation of items was phased out
substituting with promotional support to strengthen their globalization efforts Those SMEs who have
strong technological base, international business outlook, competitive spirit and willingness to
restructure themselves shall withstand the present challenges and come out with shining colours to
make their own contribution to the Indian economy.

Source: Annual Report 2008-2009 Ministry of SSI Projected

The above table shows Growth of SSI/SME sector from 1991 to 2008. The number of units has
increased from 67.87 lakhs to 123.42 lakhs in this period, growing at the rate of 5.84 annually. Fixed
investment has also increased many folds from 93.55 crores in 1991 to 1, 88,113 corers in the year
2006. In terms of employment generation, this sector is next only to the agriculture sector with a total
employment potential of 295 corers. This sector contributes to 39% of the gross industrial value added
to the economy. Around 34% of total manufactured exports of the country are directly credited to the

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SME sector. The service sector emerged as the dominant component of the total SME sector with a
share of 44% of the units (Kulkarni, 2008).

Type of Products for SMEs.

Source: Annual Report 2008-2009 Ministry of SSI

SMEs have maintained an overall higher growth rate compared to the industrial growth rate in our
country. This is very clearly seen from the table given below.

Comparison of SMEs with Industrial Sector

Source; Annual Report 2008-2009 Ministry of SSI Projectecl

In 2002-03 the growth rate in the SME sector was 8.68% p.a. compared to 5.7% of industry. However
the difference had substantially come down in 2006 where the SMEs growth rate was only 1% higher
than that of the industry. But in 2007-08, the growth rate of SMEs is projected to be double than that of
the industry.

Source: Annual Report 2008-2009 Ministry of SSI

that contribution of SMEs is 6 times that of industry consistency, thus the SME sector has a great
impact on the GDP of the country.

Policy support by Government to SMEs sector in the recent years

The government policy of providing special incentives to the SME units, by way of reservation in terms
of items exclusively for the manufacturer of SSIs, supply of raw materials through State Small
Industries Development Corporations (SSIDCS), provision of finance on concessional terms to micro
and tiny units, fiscal relief in terms of excise duty, assistance in marketing their products and provision
of price preference have no doubt, helped in the rapid growth of the SME Sector. To further accelerate
the pace in the small-scale sector, the Government of India initiated certain important measures through
the budgets.

These measures are as follows:

a. Increase the limit of composite loan scheme from Rs. 2 lakh to Rs. 50 lakh to ease the operational
difficulties of the small borrowers. In addition, the provision of term loans and working capital through
a single window.

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b. Consider lending by banks to non-banking financial companies or other financial intermediaries for
the purposes of lending to the tiny sector as priority sector lending.

c. Formulate a new credit insurance scheme for small-scale units to provide adequate security to banks
and improve recovery.

d. Enable flow of funds to micro enterprises through the coverage of at least 50,000 SHGs at the behest
of SIDBI and NABARD. The government will provide grants to SIDBI to augment its Portfolio Risk
Fund for this purpose.

e. Credit-linked scheme for technology up gradation

f. Rationalization of customs duty.

g. Increase in project limit under National Equity Fund (NEF) to Rs. 50 lakh,

h. Upgrade schemes for industrial estates.

I. Market Development Assistance (MDA) scheme for SSI.

j. Task force for strengthening, factoring and bill culture.

k. In order to promote the agro-processing industries, 100% deduction of profit for five years and 25%
of profit for the next five years will be allowed in case of new agro-processing industries set up to
process, preserve and package fruits and vegetables.

L. the Ceiling for eligible loan limit under credit-linked capital subsidy for technology up gradation has
been raised from Rs. 40 lakh to 1 cr and the quantum of subsidy was raised from 12% to 15%.

m. Manufacturing competitive program has been announced, which will help SMEs to strengthen their
operations and sharpen competitiveness. (SME White Paper, 2009)

In addition to the above policy initiatives, the Government of India has created a Rs. 10,000crore SME
fund, through which direct assistance is being provided to SMEs at an interest rate of 2% below SIDBI's
Prime Lending Rates (PLRs). Refinance to State Financial Cooperation (SFCs) is available in the
interest band of 7.5 to 8.0% and to banks; it is available at an even lower rate. (SME White Paper,
2009).

Definitions

Small and Medium Enterprises in India

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With the growth of the service sector in India, which contributes 63% of GDP of India, there was a need
to change the term Small Scale Industries. With the new Act of Micro, Small and Medium (MSMED)
Act 2006, the formal definition of SME which along with manufacturing sector was also included for
service sector enterprises and same SSI term was changed to SME (Small and Medium Scales
Enterprises). "Enterprise" means an industrial undertaking or a business concern or any other
establishment engaged in the manufacture or production of goods, in any manner, pertaining to any
industry specified in the first schedule to the industries (Development and regulation) Act 1951.

Central Government by notification classifies association of persons, cooperative society, partnership

firm, company or undertaking, by whatever name called. In the manufacturing sector, the definition of
micro, small and medium scale enterprises as published by ministry of law and justice has been changed
by amending The Micro, Small and Medium Enterprises Development Act, 2006 are as follows.
(Annexure Attached).

The RBI Credit Policy 2005-06 embodies significant initiatives encouraging commercial banks to
establish a mechanism for better coordination between their branches and SIDBI. The statement
envisaged a scheme for strategic alliance covering a gamut of issues relating to rechristening the
existing SIDBI's branches as Small Enterprise Financial Centers (SEFCs) and their talking up of co-
financing with the commercial bank Branches. (Kulkarni, 2008) Micro enterprise: where the investment
in plant and machinery does not exceed Rs. 25 lacs.

A small enterprise: where the investment in plant and machinery is more than Rs. 25 lacs but does not
exceed Rs. 25 crores. Medium Enterprise: where the investment in plant and machinery is more than Rs.
5 crores but does not exceed Rs. 10 crores. The cost excludes that of land, building and items specified
by the Ministry of Small Scale Industries vide its notification S0722 (E) dated Oct.5. 2006). In the case
of enterprises engaged in providing or rendering of services. This included:

1. Small road and transport operators that can own a fleet of vehicles not exceeding ten in number

2. Small business, whose original cost price of the equipment used for the purpose of business, does not
exceed Rs.20 lacs.

3. Professional and self-employed persons, whose borrowing limits do not exceed Rs.lO lacs, of which
not more than Rs.2 lacs should be for working capital requirement.

4. Professionally qualified medical practitioners setting up practice in semi-urban and rural areas, whose
borrowing limits should not exceed Rs. 15 lacs with a subceiling of Rs. 3 lacs for working capital
requirement.

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Definition of SMEs in service sector is as follows:

1. A Micro enterprise is an enterprise wiiere the investment in equipment does not exceed Rs. 10 lacs.

2. A Small enterprise is an enterprise where the investment in equipment is more than Rs. 10 lacs, but
does not exceed Rs.2 crores.

3. A medium enterprise is an enterprise where investment in equipment is more than Rs. 2 crores, but
does not exceed Rs.5 crores. For calculating investment in plant and machinery, the cost of pollution
control, research and development, industrial safety devices and such other items that may be specified,
shall be excluded.(Ministry of Small Scale Industries vide its notification S0722 (E) dated Oct. 5. 2006).

International Definitions of SME

Definition in European Union

The definition of SMEs around the world is based on three criteria i.e. Investment, Turnover and
number of people employed in the enterprise. In some countries like U.K. there is a combination of the
two factors i.e. turnover as well as number of employees employed. Some of the international
definitions are listed below: Definition of SME in European Union is different from the Indian
definition where instead of number of employees and turnover or balance sheet, investment in plant and
machinery is taken into consideration.

Criteria for SMEs in EU

For classifying any undertaking as medium, small or micro, the following two criteria are important.
First, is head count, mainly as the table above shows greater than 250 headcount means it is a medium
size enterprise. Head count will include temporary or permanent employees, it will also include owner
of the enterprise or the partner but will not include any student working as an apprentice. Second
criteria will be either turnover or balance sheet figures. While calculating turnover, the total value of
sale of product and services will be taken into account for a particular financial year and deducting from
it the total rebate or concession which will be so received by the enterprise. For calculating turnover,
value-added tax and other indirect tax are not taken into consideration.

Balance sheet means value of total assets of the enterprise. An enterprise will be classified as medium
enterprise if the headcount is more than 250 and either turnover of greater than or equal to Euro 50

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million or balance sheet figure of assets is greater than or equal to Euro 43 million. Any one is
considered to classify an enterprise as medium, small or micro. The undertaking can be proprietorship,
partnership or a company but it should be engaged in economic activity, (EC 2003).

In Malaysia, small enterprises have turnover between RM. 2,50,000/- to RM. 1 million and medium
enterprises are those that have a turnover ranging between RM. 1 million and RM. 25 million the
average employee strength for small is 50 and for medium it should 150 employees. In China, small
enterprises are defined as those that employ 50 to 100 people and medium enterprises employ 101 to
150 people. In U.K. sec.247 and 249 of Companies Act 1985 defines a small enterprise as a unit that has
turnover of around £5.6 million and employs around 50 people. A medium-sized enterprise has a
turnover of not more than £ 22.8 million and employs 250 employees.

Canada defines micro enterprise as a business with fewer than 5 employees. Small businesses such as
these have around 50 to 100 employees depending on service or manufacturing respectively. A firm that
has around 500 employees is classified as a medium sized business. In Japan, for the manufacturing
sector, SME means a unit employing less than 300 people and have an invested capital of less than 100
million yen. In the service sector, SMEs in Japan are defined as those units that employ less than 50
people or have an invested capital of around 10 million yen. In the United States of America, an SME
means a unit consisting of 1,500 employees and has turnover of $ 0.75 to 29 million, depending upon
the type of business. (The SME White book, 2009)

CSR means different things to different people. There is no universally accepted definition of CSR, and
academicians and professionals try to explain the term differently. In 2003, Lunheim stated that the
corporate social responsibility (CSR) agenda suffers from lack of a clear definition and seems to be a
loosely defined umbrella embracing a vast array of concepts traditionally framed as environmental
concerns, public relations, corporate philanthropy, human resource management and community
relations The earliest modem contribution to the CSR concept came in the 1950s, when in 1953, Bowen
provided the first CSR definition: "Obligations of businessmen to pursue those policies, to make those
decisions, or to follow those lines of action which are desirable in terms of the objectives and values of
our society." Bowen talked about businessmen's conscience rather than social contribution of the
businesses.

In 1960, Davis gave a definition of CSR as "decisions and actions taken for the reasons at least partially
beyond the firm's direct economic or technical interest." where he laid more emphasis on business
allocating resources beyond their economic or technical interest. In 1992, Eells said "CSR refers to the
problems that arise when corporate enterprise casts its show on the social scene and the ethical
principles that ought to govern the relationship between the corporation and society"

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In 1971, the Committee for Economic Development used a "three concentric circles" approach for
defining CSR. The inner circle includes basic economic functions - growth, products, jobs, products,
jobs. The intermediate circle suggested that the economic functions must be exercised with a sensitive
awareness of changing social values and priorities. The outer circle outlined newly emerging and still
amorphous responsibilities that businesses should assume to become more actively involved in
improving the social environment.

In 1973, Davis defined CSR as "the firm's considerations of, and response to, issues beyond the narrow
economic, technical, and legal requirements of the firm to accomplish social [and environmental]
benefits along with the traditional economic gains which the firm seeks."

In 1980, Norwegian Prime Minister Gro Harlem Brudtland defined CSR as used by the World Business
Council for Sustainable Development, "Meeting the needs of the present without compromising the
ability of future generation to meet their own needs". In 1984, Drucker pointed out the positive
relationships between social responsibility and business opportunities in terms of market opportunities,
productivity, human competence and improvement of the competitive context i.e. the quality of the In
1990, Jones defined CSR as a paradigm that encompasses not only the final result of a process, but also
a process itself, to include in all decision making, and which needs to be evaluated and measured.

In 1991, Dunfee, said "today CSR is focused on a 'stakeholder model', which varies according to the
company's context of reference, but is dynamically linked to the different categories of stakeholders.

In 1991, Carroll, came out with very a wholesome definition of CSR where he very clearly
differentiated between legal responsibility of the businesses versus philanthropic responsibility and very
strongly brought out the difference between the two. Business environment where companies operate.

Pyramid of CSR

Carroll in 1991 talked about four responsibilities of businesses, starting with economic responsibility to
be profitable and ensure return to shareholders and employment to the employees of the organization.
The next level is legal responsibility i.e. to obey the law. The third level ethical responsibility which
talks about the ethical decision making while running the enterprise and at the top most level comes
philanthropic responsibility which mean to be good corporate by contributing to the society and taking
up social issues and become good corporate citizen of the country.

The EU's Green paper on CSR defines CSR as "concept whereby companies integrate social and
environmental concerns in their business operations and in their interaction with their stakeholders on a
voluntary basis" (Green Paper Promoting a European Framework for Corporate Social Responsibility,

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2001). The G-8 Evian Summit 2003 stated "consistent with the outcomes of the World Summit on
Sustainable Development, we support voluntary efforts to enhance corporate, social and environmental
responsibility. We will work with all interested countries on initiatives that support sustainable
economic growth, including the creation of an environment in which business can act responsibly.

We also welcome voluntary initiatives by companies that promote corporate social and environmental
responsibility, such as the OECD Guidelines for Multinational Enterprises and the UN Global Compact
principles consistent with their economic interest. We encourage companies to work with other parties
to complement and foster the implementation of existing instruments, such as the OECD Guidelines and
the ILO 1998 Declaration on Fundamental Principles and Rights at Work".

In 2003, Mallenbaker asserts that 'CSR is about how companies manage the business processes to
produce an overall positive impact on society'. In 2004, Castka defined CSR as "a concept to run
organizations profitably yet in a socially responsible way in order to achieve business sustainability and
stakeholder satisfaction."

CSR has been defined by Philip Kotler and Nancy Lee in 2005 as "CSR is a commitment to improve
community wellbeing through discretionary business practices and contribution of corporate resources."
As per this definition, CSR practices undertaken by corporates should be voluntary and if there is any
act mandated by the law, it will not fall in the category of CSR.

Porter et al in 2006 stated of the definition offered by Brudtland as "this definition is very relevant in
the recent business scenario where we are having serious environmental issues faced by the whole
world. Most of the businesses are operating by consuming natural resources like oil and gas, water,
wood, as if they are never going to end. If they continue acting in such an irresponsible manner there is
a threat of resource constraint on the future generation to come".

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 2. OBJECTIVE

The major objectives of the study include:

 Examine Infosys' CSR policies, objectives, and strategies to understand its approach towards
societal and environmental concerns.
 Investigate specific CSR initiatives undertaken by Infosys, including community development
programs, environmental sustainability efforts, and employee welfare activities.
 Explore how Infosys implements and manages its CSR programs, including resource allocation,
stakeholder engagement, and monitoring mechanisms.
 Assess the impact of Infosys' CSR initiatives on various stakeholders, such as employees,
communities, and the environment, and evaluate the effectiveness of these initiatives in
achieving their intended goals.
 Based on the findings, offer recommendations for Infosys to enhance its CSR practices, as well
as insights for other SMEs in India to develop and implement effective CSR strategies.

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 3. LITERATURE REVIEW

1. Stanford Encyclopedia of Philosophy, 2008, defines morality as is taken to refer to plays a crucial,
although often unacknowledged, role in formulating ethical theories.

The term "morality" can be used either

Descriptively to refer to a code of conduct put forward by a society or,

a. some other group, such as a religion, or

b. accepted by an individual for one's own behavior .

2. Hartman, 2007, Jeremy Bentham (1748-1832) and John Stuart Mill (1806-1873), were of the opinion
that the moral Tightness or wrongness of an action is a function of the amount of pleasure or pain that it
produced. Fernanda, 2008, said, the "greatest happiness" principle is the foundation of morals, that is,
actions are ethical if they promote happiness, wrong if they promote the opposite of happiness.
Immanuel Kant, 1724-1804, said about morality, "In considering origin of moral and morality, reason is
the final authority for morality.

3. John Boatright, 2008, said "It is important for people in business to be ethical, and being ethical in
business is no different than being ethical in private life. Business activity takes place within an
extensive framework of law and some holds that law is the only set of rules that applies to business
activity. People generally feel law, not ethics, is the only relevant guide. " Carroll, 2003, in his model
(Carroll's four part model) through the length of its bars suggests that the primary responsibilities of a
firm are economic and legal.

4. Carroll, 1991, categorized management as categorized in three categories i.e. Immoral, Amoral and
Moral: Immoral Management: This management cares only about the company's profitability and
success. They see legal standards as barriers or impediments. Their strategy is to exploit opportunities
for personal or corporate gain.

5.Russell, 1993, while surveying small firms in investigating the perceived gap between business goals,
professed values and their actual behavior found 'that ethical codes alone are insufficient to change
either attitudes or behavior because they have been notoriously difficult to implement'. The same study
concluded that the four most common attitudinal barriers to ethics among small firms are:

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Ethics and business don't mix It doesn't pay to be ethical

 If it's legal, it's ethical

 Compared to others this company is ethical

6. Porter, 2006, gives four arguments for adopting CSR:

Moral Obligation: Businesses have a duty to be good citizens and to "do the right thing". Sustainability:
Sustainability emphasizes environmental and community stewardship. License to operate: Every
company requires tacit or explicit permission from government, communities and numerous other
stakeholders to do business. Reputation: Many companies justify their CSR activities on the ground that
they will improve a company's image, strengthen its brand, enliven morale, and even raise the value of
the stock. The Strategic Advisory Group on CSR of the International Organization for Standardization
(ISO) describes it as "a balanced approach for organizations to address economic, social and
environmental issues in a way that aims to benefit people, community and society."

7. As per Peter Drucker, 1954, "the enterprise is an organ of society and its actions have a decisive
impact on the social scene. It is thus important for management to realize that it must consider the
impact of every business policy and business actions upon society. It has to consider whether the action
is likely to promote the public good, to advance the basic belief of society, to contribute to its stability,
strength and harmony." Infosys Chairman Narayan Murthy defines CSR as, "social responsibility is to
create maximum shareholder value working under the circumstances where it is fair to all its
stakeholders, workers, consumers, the community.

8. Government and the environment". Sharma, 2005, states that in the years to come, issues such as
corporate accountability, corporate ethics, and disclosure of relevant corporate information shall
become increasingly important center of attention. Besides, diversification and adopting synergistic
policies, corporations need to develop new measures of performance, new standards of ethics and a new
awareness of multiple bottom lines instead of concentrating only on profits as they did in the past.

9. Baxi, 2005, said "CSR in the present context is seen beyond the philanthropic concept. It is becoming
an integral part of most of businesses. It is not just a buzz word for the corporate but rather is looked
upon as a tool for sustainable business.Asongu, 2007, stated that CSR is perhaps as old as business itself
and in some societies one cannot do business without being socially responsible.

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10. Similarly, Carroll, in his model (Carroll's four part model) in 2003, suggests, that the primary
responsibilities of a firm are economic and legal. It must produce the goods and/or services that society
wants and in a lawful manner and must sell them at a profit. But still it has ethical as well as
discretionary bindings. Carroll opines that to the extent firms fail to acknowledge discretionary or
ethical responsibilities, society will assert and bring them under legal framework.

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 4. NEED OF THE STUDY

The objectives outlined for studying Infosys CSR initiatives seem quite comprehensive. Here's a
breakdown of why each objective is important:

 Evaluate Infosys' CSR policies, goals, and frameworks to comprehend its commitment to social
and environmental responsibility.
 Examine how Infosys implements and manages its CSR initiatives, including resource
allocation, stakeholder engagement practices, and monitoring and evaluation mechanisms.
 Assess the impact of Infosys' CSR activities on stakeholders, including employees,
communities, and the environment, and evaluate the effectiveness of these initiatives in
achieving their intended goals.
 Extract insights and lessons learned from Infosys' CSR experience that can be applied by other
SMEs in India, considering factors like scalability, adaptability, and sector-specific nuances.
 Based on the analysis, offer recommendations for Infosys to further enhance its CSR practices
and suggest actionable strategies for other SMEs in India to integrate CSR into their business
strategies effectively.

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 5. RESEARCH METHODOLOGY

This chapter focuses on the approach and methodology of the research. An attempt has been made here
to provide an insight on the procedure adopted explain how research work has been conducted, various
steps, methods and assumptions used in the study by throwing light on the problem, objective of the
study, state hypotheses justify the, need of the study research design, etc. The methodology employed in
the study is mainly of two types: desk research and field research.

Data Collection

Market research requires two kinds of data that is primary data and secondary data.

Primary Sources:

Primary data is collected using a well-structured questionnaire, surveys etc. Survey is carried out in
steps.

1) First visit

2) Appointment or personal interview Secondary Sources

Secondary Sources:

Here the source of information was library, reports, magazines, research papers, government
notifications, special report, newsletters, books, Internet bulletins, etc. Data research is basically the
collection of information from documentary sources, published or unpublished and the research for
these sources, whereas the field research is collecting the information primarily from SMEs, who were
practising CSR. Desk research lays the foundation for field research. The researcher, therefore, has
made the maximum use of desk research to reduce the time and money utilized in the field research.

Secondary Data is data collected by someone other than the user. Common sources of secondary data
include organizational records and qualitative methodologies or qualitative research.

The data for study has been collected through various sources:

1. Books

2. Internet Sources
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3. Online websites

4. References

5. Catalogue

Sampling design is a plan designed to select the appropriate sample in order to collect the right data so
as to achieve research objectives. A sample is a part of the universe that can be used as respondents to a
survey or for the purpose of experimentation, in order to collect relevant information to solve a
particular problem.

Donald Tull and Dell Hawkins define sample as "those individuals chosen from the population of
interest as subjects in an experiment or to be the respondents to a survey."

Sampling method- In this particular research study, convenience sampling is used.

Sample unit- Individual respondents

Sample size 50 respondents

Statistical tools used

The tools which are used in this study is pie chart diagram and line bar graph as mentioned in the
Google form which is prepared for the survey. Analyse the data and interpret the result by using
percentage analysis. Simple percentage analysis refers to a ratio. With the help of absolute figures, it
will be difficult to interpret any meaning from the collected data, but when percentage are found out
becomes easy to find the relative difference between two or more attributes.

Percentage No. of respondents + Total number of respondents x 100

Hypotheses

All hypothesis tests were done using the 5% level of significance. 5% level of significance is found to
be the right tradeoff between Type I Error and Type II error. Hypothesis

1. The most common CSR activity carried out by SMEs is philanthropy work which generally
consists of donation for religious purposes. The objective of the hypothesis is to find out the most
famous CSR activities among SMEs .From a theoretical construct, philanthropy which generally
consist of donation comes out to be the most common way of giving back to society by SMEs.
Hypothesis .

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2. SMEs carry out CSR activities for the purpose of tax saving, image building, employees' welfare
and philosophy of the entrepreneur. The objective of this hypothesis is to investigate the reasons
for which SMEs undertake CSR activities. The probable reason for which entrepreneurs
undertake CSR activities could be many fold such as tax savings, image building, employee's
welfare and philosophy of the entrepreneur. Hypothesis

3. SMEs carryout CSR activities on their own rather than joining any NGO or community
development organizations.

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 6. DATA ANALYSIS & INTERPRETATION

1. Age

Interpretation

It seems like you're providing age distribution data. In this case:

 96.4% of the group falls within the 18-24 age range.

 3.6% fall within the 25-34 age range.
 There are no individuals aged 35-54 or 55 and above in this data set.

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 2. Gender

Interpretation

 These percentages likely represent the distribution of genders within a specific context or
dataset.
 For example, if it's from a survey or demographic analysis, it suggests that within that
population, 60.7% identify as male and 39.3% identify as female.

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3. How aware are you of the concept of Corporate Social Responsibility (CSR)?

Interpretation

This seems to be a survey question gauging respondents' awareness of corporate social responsibility
(CSR). From the responses:

 35.7% are very aware.

 42.9% are somewhat aware.
 21.4% are neutral.
 0% are not aware at all.

It indicates that a significant portion of the respondents have some level of awareness about CSR, with a
majority falling into the "very aware" or "somewhat aware" categories.

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4. Does your SME have a dedicated CSR department or personnel responsible for
CSR activities?

Interpretation

This question likely pertains to small and medium-sized enterprises (SMEs) and their engagement with
corporate social responsibility (CSR). Here's the breakdown of responses:

 53.6% of SMEs have a dedicated CSR department or personnel.

 32.1% don't have a dedicated department but manage CSR activities through existing personnel.
 14.3% don't have any CSR activities.

This suggests that a majority of SMEs surveyed either have dedicated resources for CSR or integrate
CSR activities into existing departments, indicating a significant level of engagement with CSR
practices.

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5. Does your SME have a dedicated CSR department or personnel responsible for
CSR activities?

Interpretation

This question explores the primary types of corporate social responsibility (CSR) activities undertaken
by small and medium-sized enterprises (SMEs). Here's the breakdown:

 53.6% primarily engage in environmental sustainability initiatives.

 25% focus on community development programs
 21.4% prioritize employee welfare and development programs.
 0% emphasize philanthropic contributions.

This indicates that the majority of surveyed SMEs primarily focus on environmental sustainability
initiatives, followed by community development and employee welfare and development programs.

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6. What types of CSR activities does your SME primarily engage in?

Interpretation

This question assesses the perceived level of commitment of small and medium-sized enterprises
(SMEs) towards corporate social responsibility (CSR) initiatives. Here's the breakdown of responses:

 21.4% rated their SME's commitment as very high.

 53.6% rated it as high.
 17.9% rated it as moderate.
 7.1% rated it as low.

The majority of respondents perceive their SMEs to have a high or very high level of commitment
towards CSR initiatives, indicating a significant dedication to social responsibility within these
organizations.

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7. How would you rate the level of commitment of your SME towards CSR
initiatives?

Interpretation

This question assesses the perceived level of commitment of small and medium-sized enterprises
(SMEs) towards corporate social responsibility (CSR) initiatives. Here's the breakdown of responses:

 21.4% rated their SME's commitment as very high.

 53.6% rated it as high.
 17.9% rated it as moderate.
 7.1% rated it as low.

The majority of respondents perceive their SMEs to have a high or very high level of commitment
towards CSR initiatives, indicating a significant dedication to social responsibility within these
organizations

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8. Has your SME adopted any environmental sustainability practices as part of its
CSR initiatives?

Interpretation

This question explores the decision-making process of small and medium-sized enterprises (SMEs)
regarding which corporate social responsibility (CSR) initiatives to undertake. Here's the breakdown of
responses:

 29.6% base their decisions on community needs assessments.

 33.3% rely on employee suggestions.
 25.9% decide based on available resources.
 11.1% base their decisions on government regulations.

This indicates that SMEs primarily consider employee suggestions and community needs assessments
when deciding on CSR initiatives, while also factoring in available resources and, to a lesser extent,
government regulations.

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9. How does your SME decide which CSR initiatives to undertake?

Interpretation

This survey suggests that among SMEs:

 37% with significant budgets prioritize CSR initiatives.

 37% with modest budgets also prioritize CSR initiatives.
 14.8% allocate budgets based on project need.
 11.1% don't have specific budgets allocated for CSR.

In interpretation, it seems that regardless of budget size, many SMEs prioritize CSR, with some
adjusting budgets based on project needs and others not having specific allocations.

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10. Does your SME allocate a specific budget for CSR activities?

Interpretation

This survey indicates that among SMEs:

 25% prioritize allocating a specific budget for CSR activities to reach beneficiaries.
 35.7% prioritize positive changes in the community/environment.
 35.7% prioritize employee satisfaction and engagement.
 3.6% prioritize financial returns.

From this, it's evident that SMEs primarily allocate budgets for CSR to drive positive changes in the
community/environment and enhance employee satisfaction and engagement, while a smaller
percentage focus on reaching beneficiaries or expecting financial returns.

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11. How do you measure the impact of your SME's CSR activities?

Interpretation

This question explores the methods used by small and medium-sized enterprises (SMEs) to measure the
impact of their corporate social responsibility (CSR) activities. Here's the breakdown of responses:

 25% measure impact based on the number of beneficiaries reached.

 35.7% assess positive changes in the community or environment.
 35.7% gauge impact through employee satisfaction and engagement.
 3.6% measure impact based on financial returns.

This suggests that SMEs primarily measure the impact of their CSR activities by assessing positive
changes in the community or environment and through employee satisfaction and engagement, while a
smaller portion considers the number of beneficiaries reached or financial returns.

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12. Are your SME's CSR activities aligned with any Sustainable Development Goals
(SDGs) outlined by the United Nations?

Interpretation

From this survey, it seems:

 28.6% of SMEs align their CSR activities with Sustainable Development Goals (SDGs) through
annual CSR reports.
 46.4% do so through social media channels.
 25% do it via company websites and newsletters.
 0% engage in direct communication with stakeholders for this alignment.

The interpretation suggests that while various channels are used to align CSR activities with SDGs,
social media is the most popular, followed by annual CSR reports and company websites/newsletters.
However, direct communication with stakeholders seems underutilized for this purpose among the
surveyed SMEs.

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13. To what extent do you believe CSR activities positively impact your SME's
reputation?

Interpretation

This question examines the perceived impact of corporate social responsibility (CSR) activities on the
reputation of small and medium-sized enterprises (SMEs). Here's the breakdown of responses:

 33.3% believe CSR activities significantly impact their SME's reputation.

 37% perceive a moderate positive impact on reputation.
 22.2% feel neutral about the impact.
 7.4% think CSR activities minimally affect their SME's reputation.

It suggests that a majority of respondents perceive CSR activities to positively impact their SME's
reputation, with varying degrees of significance.

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14. How does your SME communicate its CSR initiatives to stakeholders (e.g.,
employees, customers, investors)?

Interpretation

 The interpretation here is straightforward: 63% of SMEs communicate their CSR initiatives to
stakeholders, while 37% do not.
 This indicates a majority of SMEs prioritize transparency and engagement by sharing their CSR
efforts with employees, customers, and investors.

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15. Does your SME face any challenges in implementing CSR activities? If yes,
please specify

Interpretation

From this survey:

 29.6% of SMEs find their stakeholders to be very supportive in implementing CSR activities.
 44.4% find them to be supportive.
 22.2% are neutral about stakeholder support.
 0% perceive their stakeholders as not very supportive.

Overall, it seems that a majority of SMEs perceive at least some level of support from stakeholders in
implementing CSR activities, with only a small percentage expressing neutrality.

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 7. FINDING

Certainly, here are some key points from a study on Corporate Social Responsibility (CSR) practiced by
Small and Medium Enterprises (SMEs) in India:

 Infosys is likely to have a well-defined CSR framework that aligns with its business objectives
and values. This framework may include clear goals, policies, and strategies for addressing
social and environmental issues.
 Infosys is expected to engage in a diverse range of CSR initiatives spanning areas such as
education, healthcare, environmental sustainability, and rural development. These initiatives
may include partnerships with NGOs, government agencies, and local communities.
 Infosys may have several CSR programs focused on its employees' welfare and development,
including training and skill development programs, health and wellness initiatives, and
employee volunteering opportunities.
 Infosys may prioritize stakeholder engagement in its CSR activities, involving employees,
customers, suppliers, local communities, and government agencies in decision-making processes
and project implementation.
 Infosys may demonstrate a commitment to continuous improvement in its CSR practices,
responding to evolving social, environmental, and economic challenges and opportunities.

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 8. SUGGESTION

Certainly, here are some suggestions for a study on corporate social responsibility (CSR) practiced by
Small and Medium Enterprises (SMEs) in India:

 Leverage publicly available information such as annual CSR reports, sustainability disclosures,
and corporate websites to gather comprehensive data on Infosys' CSR initiatives, goals, and
outcomes.
 Compare Infosys' CSR practices with those of other SMEs in similar industries or regions to
identify common trends, differences in approaches, and potential areas for improvement or
collaboration.
 Collaborate with Infosys stakeholders, such as the CSR department or sustainability team, to
validate findings, solicit feedback, and ensure the study's relevance and accuracy.
 Consider conducting a longitudinal study to track the evolution of Infosys' CSR practices over
time, examining changes in priorities, strategies, and outcomes in response to internal and
external factors.
 Seek perspectives from diverse stakeholders, including government officials, industry experts,
civil society organizations, and local communities, to gain a holistic view of Infosys' CSR
contributions and their perceived impact.

These points should provide a comprehensive framework for conducting a study on CSR practiced by
SMEs in India.

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 9. FURTHER SCOPE OF STUDY

Certainly, here are concise points to further expand the scope of the study on corporate social
responsibility (CSR) practiced by small and medium-sized enterprises (SMEs) in India, specifically
focusing on Infosys:

 Compare Infosys' CSR practices with SMEs in other countries where Infosys operates, exploring
cross-cultural differences and CSR strategies.
 Investigate Infosys' efforts to promote CSR within its supply chain, examining supplier codes of
conduct and ethical sourcing practices.
 Explore how Infosys utilizes technology and innovation for CSR, particularly in areas like
digital inclusion and sustainability.
 Analyze Infosys' partnerships with government agencies, NGOs, and academia to address
societal challenges and their effectiveness.
 Study Infosys' employee engagement strategies and volunteering programs to assess their impact
on CSR values and skills development.

These points provide a succinct outline for extending the study's scope within Infosys, offering
opportunities for in-depth analysis and practical recommendations for advancing CSR among SMEs in
India.

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 10. CONCLUSION
In conclusion, the examination of Infosys' corporate social responsibility (CSR) practices within the
broader context of small and medium-sized enterprises (SMEs) in India has yielded invaluable insights.
Infosys stands as a beacon of exemplary CSR engagement, showcasing a multifaceted approach that
spans community development, environmental sustainability, and employee welfare initiatives.

Through robust frameworks, strategic partnerships, and a commitment to stakeholder engagement,

Infosys has demonstrated how CSR can be integrated into the core fabric of organizational culture,
driving positive social impact while fostering long-term business sustainability. As the findings of this
study underscore, Infosys serves as a compelling case study for SMEs across India, illustrating the
transformative potential of CSR in driving inclusive growth and societal well-being.

Moving forward, the lessons gleaned from Infosys' CSR journey offer actionable pathways for SMEs to
embrace responsible business practices, forge meaningful partnerships, and contribute meaningfully to
India's sustainable development agenda. As we envision a future where CSR becomes not just a
corporate obligation but a catalyst for positive change, the pioneering efforts of Infosys serve as an
inspiration and a testament to the transformative power of business for good.

Reiterate the significance of CSR as a driver of sustainable development and inclusive growth in India's
SME sector.

Stress the need for collective action and collaboration among businesses, government, civil society, and
academia to address pressing social and environmental challenges.

Express optimism about the potential of SMEs like Infosys to contribute meaningfully to India's CSR
landscape and create lasting positive impact in their communities and beyond.

By summarizing findings, drawing implications, and offering actionable recommendations, the

conclusion of the study serves to encapsulate the study's significance and pave the way for future
research and action in the field of CSR.

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 11. REFERENCE

BIBLIOGRAPHY

 Gokarn, S. (1996). Indian Capital Market Reforms, 1992-96: An Assessment. Economic and
Political Weekly, 956-961.

 Mishra, P. K. (2009). Indian capital market-Revisiting market efficiency. Indian Journal of

Capital Markets, 2(5).

 Vaidyanathan, R., & Gali, K. K. (1994). Efficiency of the Indian capital market. Indian
journal of finance and research, 5(2), 35-38.

WEBLIOGRPAHY

 http://ec.europa.eu/enterprise/enterprise_policy/sme_definition/index_en.htm
 http://www.malienbaicer.net/csr/CSRfiles
 http://mpra.ub.uni-muenchen.de/6086/
 Stanford http://plato.stanford.edu/entries/morality-definition/
 http://www.eximbankindia.com/Research_Brief-Sep-05.pdf

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 12. ANNEXURE

A STUDY ON “A STUDY ON CORPORATE SOCIAL RESPONSIBILITY PRACTICED BY SMEs

IN INDIA ”

Dear Participants,

Greetings! As parts of my masters in management studies program, I am conducting a research study

on the topic “A STUDY ON CORPORATE SOCIAL RESPONSIBILITY PRACTICED BY SMEs IN
INDIA” Your valuable insights and experiences will play a major role in contributing to the depth of
the study.

Thank you!

1. Email
________________

2. Name
_________________

3. Age:

 18-24
 25-34
 35-34
 55 above

4. Gender:
 Male
 Female

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5. How aware are you of the concept of corporate social responsibility (csr)?

A. Very aware
B. Somewhat aware
C. Neutral
D. Not every aware

6. Does your SME have a dedicated CSR department or personnel responsible for
CSR activities?

A. Yes, dedicated department/personnel

B. No, but CSR activities are managed by existing departments/personnel
C. No, we do not have any CSR activities

7. What types of CSR activities does your SME primarily engage in?

A) Environmental sustainability initiatives

B) Community development programs

C) Employee welfare and development programs

D) Philanthropic contributions

8. How would you rate the level of commitment of your SME towards CSR
initiatives?

A. Very high
B. High
C. Moderate
D. Low

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9. Has your SME adoptee any environmental sustainability practices as part of its
CSR initiative?

A) Yes, extensively
B) Yes, to some extent
C) No, not yet
D) No, not at all

10. How does your SME decide which CSR initiatives to undertake?
A) Based on community needs assessment
B) Based on employee suggestions
C) Based on available resources
D) Based on government regulations

11. Does your SME allocate a specific budget for CSR activities?
A) Yes, a significant budget
B) Yes, a modest budget
C) No, budget is allocated based on project needs
D) No, no specific budget allocated for CSR

12. How do you measure the impact of your SME's CSR activities?
A) Number of beneficiaries reached
B) Positive changes in the community/environment
C) Employee satisfaction and engagement
D) Financial returns

13. Are your SME's CSR activities aligned with any Sustainable Development Goals
(SDGs) outlined by the United Nations?
A) Yes, aligned with specific SDGS
B) No, not aligned with any SDGs
C) Not sure

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14. What extent do you believe CSR activities positively impact your SME's
reputation?

A) Significantly

B) Moderately

C) Neutral
D) Minimally

15. How does your SME communicate its CSR initiatives to stakeholders (e.g.,
employees, customers, investors)?

A) Through annual CSR reports

B) Through social media channels

C) Through company website and newsletters

D) Through direct communication with stakeholders

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