Volume 14, Number 2 Article by Laxman Mohanty , Neharika Vohra June, 2002
Corporate Philanthropy as Business Strategy: An Indian Perspective :
There are differing points of view among management professionals on the responsibility of businesses towards society. On the one hand, it is believed that a firm serves public interest best when it serves its own private interest by providing effective services to customers, adequate profits to stockholders, fair working conditions for employees, and scrupulous observance of the law. On the other hand, the stakeholder theory takes the view that organisations have the responsibility to take into account the interests of all stakeholders such as investors/owners, customers, employees, trade associations, suppliers, governments, political groups, and communities. Out of these conflicting views among management theorists and industry practitioners, a generally accepted giving pattern that has emerged is that of strategic philanthropy. Strategic philanthropy is defined as the process by which money and resources allocated for philanthropy are targetted to serve business interests while also serving society at large.
The extent of philanthropy among the big business houses is well known in India. But has strategic philanthropy replaced corporate philanthropy in Indian corporations? Are Indian corporations strategically managing and evaluating the impact of their giving? What is the extent of giving in Indian corporations? How do the giving activities of Indian corporates compare with that of multinational corporations in India? In order to find answers to these questions, Laxman Mohanty and Neharika Vohra studied the websites of 309 corporations from a variety of sectors for information on their giving programme.
Overall, information regarding corporate philanthropy was not given prominence in the website. In more than 82% of the cases, the write-ups on corporate philanthropy and social responsibility are shown as a small part of the corporate profile. It is evident from the results that Indian corporates do not yet view philanthropy as an organised activity, and most of them do not consider philanthropy as business strategy. There is an urgent need to align corporate giving with corporate strategies to satisfy all stakeholders. This alignment would not only be useful for the corporations but would also benefit the causes they support more effectively.
Reprint No 02204
