Necessity or Luxury?

Right from the days of the Industrial Revolution,

businesses have been accused of being negligent to the human side of commerce in

their relentless pursuit of profit. Over the years though, pressure from

governments, societies and other not-for-profit organizations has brought a

gradual realization that businesses cannot work at cross-purposes to the

interests of a community, and yet hope to survive and prosper by providing goods

and services to it. This realization, now broadly termed as social

responsibility, is gathering momentum as a major trend in corporate behavior. It

is defined as a business commitment to contribute to “sustainable” economic

development by working with various stakeholders-employees, their families,

local communities and society at large-to improve quality of life, apart from

complying with legal and ethical standards of business practices.

While rest of Indian businesses have been slowly

transforming themselves into global challenges, the Indian IT industry has been

a trailblazer in global standards adoption-in HR management, quality processes

and financial transparency. Yet, there seems to be some lacunae in the area of

integrating social responsibility in their business vision. There is a scope for

learning on how to partner, operate and communicate with various stakeholders in

a changing world. Equally important is to realize that the stakeholders for a

business entity are not limited to shareholders, customers, employees and

vendors but also encompass communities, government, media and even social and

political groups who need to see an alignment of the entity's operations with

the overall development objectives of the society.

IBM's vision of encouraging diversity in its employees is

a classic example of how a corporate culture of the organization helps it to

understand better the need of its very diverse customer base spread across the

globe.

"Three core values-openness, integrity and generosity-form the heart of our commitment to good citizenship. We strive to reflect those values in everything we do, and we believe that they have been, and will continue to be, integral to the company's growth and profitability.'' -John Chambers, president and CEO, Cisco Systems

"The Indian IT industry is a classic example of spectacular growth. In order to sustain this growth the IT industry has to start acknowledging contributions of the various stakeholders, and realize their potential, no matter who they are. Through global citizenship efforts and local partnerships, one of the ways we are helping strengthen communities is by extending the benefits of technology to people who can benefit most." -Bill Gates, chairman and chief software architect, Microsoft

Another example comes from Dell's acknowledgement of the

issue of e-waste and how it is affecting the health and environment of

communities. The issue of e-waste prompted Dell to engage with three leading

universities in the US to conduct a computer collection event at the end of the

each academic calendar year, to coincide with the student move-out period. Their

commitment to control the quantity of e-waste has also generated many

innovations in the types of materials used for products, size of the product and

consequently the packaging used by the product.

HP's vision of social responsibility has seen their

engagement with the European Union (governments being key stakeholders in

business) to participate in all stages of the legislation process. This

engagement saw HP actively participate in launching a new European directive

that mandates the collection and recycling of e-waste. HP recycling centers

around the world already processes about 1.8 mn kg of computer related hardware.

Indian Scenario



In India, 2005 saw some protests by civil society organizations regarding

the disposal of e-waste in Bangalore, the nerve center of the IT industry.

Instead of arriving at short-term immediate solutions to appease critics, this

could have been used as an opportunity by the industry to develop long-term

solutions. By being socially responsible and engaging the regulatory

authorities, NGOs, discussions in the media, communities as well as its

customers to arrive at an environmentally sustainable solution, the industry

could have enhanced its credibility.

It took the gruesome murder of a BPO employee for the

companies, and the world at large, to sit up and acknowledge that the fear of

employees is genuine. A company can address the social issues of gender

sensitivity and personal safety by tapping and engaging the potential of various

stakeholders-groups working in the field of women empowerment, transporter

associations, law enforcement organizations, and families of employees, to just

name a few.

Getting Smart at Being Good



Many advocates of CSR argue that to make it work financially, a do-good plan

needs to have some connection to the mission of the business. Incorporating

social responsibility policy only as a reputation-management tool is a

short-term vision. A sustainable vision should genuinely contribute to the

company's business strategy for it to yield long term benefits

That approach doesn't endorse, for example, the generic

philanthropy embraced by many corporations-well intentioned though it may be.

Advocates of strategic responsibility argue that Ford Motor Co.'s support for

the Susan G. Komen breast-cancer fund, for which it has raised $84 million over

11 years, doesn't make much business sense. There is no clear link between

breast cancer and automobiles. After missing out on the early hybrid-car

opportunity, which was seized by Toyota and Honda, Ford is now reallocating a

growing portion of its CSR resources to alternative energy-something that

makes good business sense.

"I honestly believe that the winning companies of this century will be those who prove with their actions that they can be profitable and increase social value-companies that both do well and do good. Increasingly, shareowners, customers, partners and employees are going to vote with their feet-rewarding those companies that fuel social change through business. This is simply the new reality of business-one that we should and must embrace." -Carly Fiorina, former chairman and CEO, HP

Standards of measuring Social responsibility in the global

IT industry have become a reality. The partnership of HP, Dell, and IBM in

falloff 2004 to develop an Electronic Industry Code of Conduct (EICC) is a

landmark development. The code aims to establish and promote unified industry

expectations for socially responsible practices across the electronics

industry's global supply chain. The endorsement of the code by Cisco,

Microsoft and Intel is recognition of the value of collaborating on a common set

of expectations. It is important to realize that this code applies to all

suppliers in the global chain of the organization, whether these supply

electronic components or paper plates for the canteen.

The realization of the need to incorporate social

responsibility into business has led to the development of ISO 2600-the

guidelines for Social Responsibility, which will become a standard from 2008. A

business corporation's ability to meet these standards will greatly influence

the decision making of potential customers, global investors and employees

interest in the sector.

In this very globalized and flat world, the pressures from

these various stakeholders can pull a company in different directions. It will

take a company with mature social responsibility values in place to accommodate

the shift in the near-term economic priorities but also to continue to maintain

a long-term commitment to excellence in all areas in which the company is

involved. Since social responsibility can encompass just about every

relationship a company has, its success can be judged by adding up all the

details.

Global trends apart, Indian technology companies have to

find their own solutions for sustainable growth in incorporating social

responsibility into the core business vision. There are many instances of

philanthropic efforts by the Indian IT companies but for these efforts to be

beneficial, they need to be transformed from being mere philanthropy to a real

throbbing socially responsible culture of the organization.

Jyotsna Belliappa

works with GAP Inc as Manager, Social Responsibility



The views expressed here are personal and do not necessarily reflect that of the
organization.