The changing face of CSR
05 August 2010
While the concept of social responsibility is as old as human civilisation itself, it has evolved greatly, from just providing better working conditions, schools and hospitals to taking care of the environment as well. Samir Nazareth reports
The concept of the now much-touted term 'corporate social responsibility' evolved from the reciprocity seen in early tribes and animal groups, where sharing and protection kept social harmony and cohesiveness. As human groups evolved into different sections of society, the idea developed into benevolence.
The powerful kings for example, looked after the well-being of their subjects 'noblesse oblige' as the Europeans put it - and the subjects in return vowed allegiance to them. An off-shoot of this concept was philanthropy, where money was donated to the religious and those who helped the needy with the idea of either furthering the donor's status or as a form of thanksgiving.
The industrial revolution created another segment of society that people began to depend on - the industrialist. The industrial revolution saw technology being used as industrial processes and gave birth to the realisation for the need for systems to keep the workforce happy and healthy. Philanthropy via various institutions, including the religious, was no longer enough to keep a worker at his place, as he wanted to see his master being considerate to him and other workers.
This consideration for the worker was essential for another reason - the rise of labour unions. The need to be seen as a considerate employer was also necessary to attract new workers to meet the demands created by increasing consumption. This type of direct philanthropy saw the birth of CSR. It further evolved into efforts to create self-sustaining communities for workers. Industrialists built schools, houses and places of worship as people began living around places of work.
However, this concept of CSR was turned on its head after the Second World War when many colonies became independent. Fledgling countries needed to not only harness untapped natural resources and provide means for employment but also build a workforce in the shortest possible time.
Industry was no longer seen as a money-making machine but as a tool for social and geographical development. Nations like India created the 'public sector' with a micro and macroeconomic mandate. Instead of building industries near their inputs or markets for their outputs, industries were built in undeveloped regions of the country. The intention was to create a ripple effect - industries helped local communities by building schools, hospitals and providing employment. The distances between industries ensured the building of communication systems like roads and railways.