Business and Development
Vol 22, No 3; Article by Ananya Mukherjee Reed and Darryl Reed; September 2010
The economic changes over the past few decades, particularly the acceleration of globalization and liberalisation, have led to a re-evaluation of the roles of the state and business in development, with businesses considering other avenues of contribution to development than through the generation of employment and economic growth. These ‘other’ avenues include: corporate social responsibility (CSR) initiatives; corporate accountability movements, which unlike CSR, focus on core business activities, and moving away from voluntary standards are seeking to establish a framework that ensures answerability, enforceability and universality, and transparency and governance initiatives; a reorientation of the roles of public sector enterprises to include CSR and corporate accountability initiatives; and, alternatives to conventional business models, such as social economy enterprises. Partnerships between stakeholders are vital to such development initiatives.
In this context, IIMB Management Review invited representatives from businesses and organisations across sectors to discuss their perspectives on and approaches towards business and development.
Anant Nadkarni, Vice President, Corporate Sustainability, Tata Council for Community Initiatives, explained the shift in the Tata group from CSR to corporate sustainability, with the organisation becoming part of the development process through a sense of commitment rather than compliance. The enablers that made this shift possible are: the ownership model of the business, the system of governance and control; the Tata leadership and the Tata Business Excellence Model which defines the organization’s value systems and provides processes; the process of volunteering which anchors the company’s sustainability efforts, as well as the programmes and partnerships through which the company’s skills and technologies are shared with the stakeholder communities.
Canara Bank’s commitment to CSR was enshrined in the founding principles of the bank, according to N Narasa Reddy, General Manager of Canara Bank’s Priority Credit Wing, and post nationalisation, after 1969, the bank has recorded profits continuously, while fulfilling its priority sector goals and making significant contributions to the financial inclusion process. Apart from meeting its mandatory requirements the bank has undertaken several voluntary initiatives, particularly in the field of rural development and women’s empowerment.
Despite initiatives such as triple bottom line reporting, where the economic objectives of a company are balanced against its social and environmental ones, as Narayan P S, General Manager, Eco Eye, Wipro Technologies points out, certain fundamental questions still persist, such as the inherent conflict between market economics and ecological and social compulsions, the need to evolve corporate accounting frameworks which incorporate ecological and social costs, and the rating of a company’s goods and services on parameters of social and ecological good. In resolving these issues, the active involvement of direct stakeholders and of investors and lending institutions is essential, as also government interventions through the right incentives and disincentives, and public-private partnerships . Wipro’s ‘good citizenship’ initiatives and programmes are guided by the Spirit of Wipro, which combines business with integrity, ecological sustainability, and social and community initiatives.
Gijs Spoor, Founding Director, Zameen Organic, a farmer owned fair-trade organic textile company, which links producer organisations to consumer-facing brands worldwide, explored the possibility of systems dynamics as a framework for bringing business and development together. Going beyond conventional modes, the Zameen model looks for new linkages and information connections which could yield different levels of leverage points for the optimal multiplier effect, and even propel the system towards different goals. Other than wealth, Zameen also looks at social capital and bio-diversity as stock, uses the market to ensure efficiency and actively partners with other organisations in pursuit of its goals.
Social entrepreneur Rohini Nilekani, (Chairperson, Arghyam, and Co-founder, Pratham Books) pointed out that globalisation has given people a sense of their common destiny and stakeholders are moving to ‘re-form’ (as against ‘reform’) the market with new demands for transparency and accountability. In this new dialogue, it is essential for industry organisations, business schools, companies—particularly the second-rung companies—to participate. Public discussions on our shrinking natural resource base and its exploitation are an urgent need.
The panel opined that once business and the community are seen as co-creators of wealth, with congruent goals, the perspective on ownership changes, as also the purpose of the enterprise, of profit and business. However, businesses need to learn to dialogue with all stakeholders, become ecologically literate, and acquire a broader bandwidth of leadership.