OBSTACLES FACED BY CORPORATES IN IMPLEMENTING CORPORATE SOCIAL RESPONSIBILITY IN COIMBATORE

OBSTACLES FACED BY CORPORATES IN IMPLEMENTING CORPORATE SOCIAL RESPONSIBILITY IN COIMBATORE 1 Mr. SHANKAR, R. 2 Ms. R. GAYATHRI 1 Assistant Professor in Commerce, Dr. Sns Rajalakshmi College of arts and science, Coimbatore, Tamil nadu. India. 2 M.com, Dr. Sns Rajalakshmi college of arts and science, Coimbatore, Tamil nadu, gayuravi34@gmail.com ABSTRACT It has been very well understood by organizations that government alone will not be able to succeed in its endeavour to uplift the downtrodden society. Hence, the implementation of Corporate Social Responsibility has filtered the myth that the ultimate goal is not profit making, rather trust building is viable and assertable with societal relationship and only long term survival mantra for any organization. Companies now become more transparent in accounting and other activities due to pressure from the various interest groups of the society. It is mandatory for companies to behave in ethical and responsible manner towards the various interest groups of the society and environment. The present research paper tries to analyse the CSR status in the selected corporates of Coimbatore, and it further provide an insight to what extent companies can follow the CSR. The sample companies are engaged in various aspects like casting, stationary, financing, steel and liquor. The research work tries to throw light on CSR of select organisations which would be helpful for both economic and social interest. This research work tries to focuses on the findings and reviewing of the issues and challenges faced by corporates with respective CSR. Keywords: Corporate social responsibility (CSR), Ethical, Financing, Societal relation. 1. Introduction Corporate social responsibility is an important activity which leads to the development of the society in turn the development of nation. Corporate social responsibility may include philanthropic efforts such as charitable donations or programs that encourage employee volunteerism by providing paid time off for such activities. In the civilized society, CSR in India has gone beyond merely charity and donations, and is approached in a more organized fashion. It has become an integral part of the corporate strategy. Recent incidents of ethics-based corporate scandals have also increased awareness of CSR. If the goal of the corporates has to be realized, their Corporate Social Responsibility approach has to be in line with their attitude towards mainstream business- companies setting clear objectives, undertaking potential investments, measuring and reporting performance publicly. Sustainability: This is concerned with the effect for which action taken in the present has upon the options available in the future. Since the year 2016, the companies are increasing investment in corporate social responsibility (CSR). This is because they care about building trust with consumers, partners, governments, and their employees.csr in India has grown as one of the most richest tradition among the world nations, past decade has witnessed. Much has been done in recent years to make Indian Entrepreneurs aware of social responsibility as an important segment of their business activity. 1.2. Review of literature There are many obstacles which are emerging while considering successful CSR strategies in making a business case for CSR, intricacy in integrating CSR with organizational values and practices, the lack of organizational buy-in and assurance to CSR. Other factor which hinders CSR is the lack of time and financial resources to follow CSR practices are directly related to the above three. When an organization finds it difficult to make a business case for CSR or its association with core organizational operations, it will be averse to commit and allocate resources or time to such practices. Moreover, these obstacles also point to another set of findings in the 186

report: respondents view CSR more so as a means to manage regulatory impacts, reduce risk, and respond to stakeholders concerns, and to a lesser extent as a strategic source of competitive advantage. McWilliams (2002) states that, CSR strategies, when backed by political framework & strategies can be used to develop strong firm with long-term competitive benefits. Marcel van Marrewijk (2003) believes that organizations should have a definition based on the stage of development, awareness and ambition of each organization rather than a one solution fits all approach. This is ill advised because it exacerbates the problem of corporations having great difficulty implementing programs that can be managed and measured effectively. Furthermore, in a time where organizations are implementing programs for the measurement of their CSR activities, such an approach allows for too many levels for CSR. Van Marrewijk s theories are best applied for corporations that need a roadmap for developing a successful CSR strategy. 1.3. Statement of problem The corporate belief that a company needs to be responsible for its actions: socially, ethically, and environmentally. The big corporates are fulfilling their responsibilities towards the society. Over the last 30 to 40 years, there has been a steady increase in concern expressed about CSR and the information produced by small and large organizational set up in relation to their social and environmental impactsbut the implementation of such activities has a lot of hindrance which affects the efficiency of the projects. When compared to large corporations, Small and Medium Entreprises play a limited role in CSR. There is a need for awareness about CSR amongst the general public to make CSR initiatives more effective. The companies act, 2013, provides for protection of interests of investors, especially small and minority shareholders. After the amendment of the provisions of the act, many representations were received from various stakeholders expressing difficulties in complying with some of the requirements laid down in the provisions and non availability of proper guidelines in implementing CSR. This research work tries to answer the following research questions based on above setting; 1. What are the obstacles faced by the corporates in implementing the CSR in their company? 2. Whether there are proper guidelines provided by the government assists the activities of CSR by the corporate? 1.4. Objectives of the study To analyse the obstacles faced by corporate come across in implementing CSR. To ascertain whether the corporates are provided with proper guidelines about CSR activity. To analyse whether the amount spent on CSR activities depends on capital employed by the company. To examine the relation between the size of the company and the fields in which they provide services. 1.5. Research methodology Source of data Primary data- A structured questionnaire is framed to collect data from the select companies. Secondary data- The profile of the company, data regarding CSR are taken from the various research articles, journals and websites through internet. Sample design As all the companies in the research area are taken as respondents, the following method is adopted: Census method Statistical tools used The collected data have been used for analysis with the help of statistical tools namely Percentage analysis, Chi- square, and Rank correlation. 1.6. Limitations of the study 1. The result of the study is applicable only to the selected region of the study and may not be to other parts of the country. 2. The investment factor of the company has not been taken into account. 1.7. Hypotheses of the study H 01- There is no association between the guidelines provided by the government and the efficiency of CSR activities. H 02- The amount spent on CSR activities do not depend on the capital employed by the company. H 03 - The fields in which companies provide CSR activities do not depend on the size of the company. H 04- The amount spent on CSR activities do not depend on the capital employed by the company. H 05 - The amounts spend of CSR activities do not depend on the fields in which the company provides CSR. H 06 - There is no significant difference between purpose of providing CSR by the company and the fields in which they provide CSR. 187

2. Analysis of data: Table 1: Percentage Table TITLE PARTICULARS FREQUENCY PERCENTAGE TRADING 14 29.17 NATURE OF THE MANUFACTURING 34 70.83 COMPANY SMALL SCALE 12 25 SIZE OF THE COMPANY MEDIUM SCALE 26 54.17 LARGE SCALE 10 20.83 50LAKHS- 1 CRORE 13 27.08 1 CRORE- 3 CRORE 14 29.17 CAPITAL EMPLOYED 3 CRORE- 5 CRORE 11 22.92 MORE THAN 5 CRORE 10 20.83 NO. OF YEARS INVOLVED IN CSR NECESSITY REASON FIELDS EFFICIENCY SOURCE: PRIMARY DATA 3 YRS- 5 YRS 18 37.5 6 YRS- 10 YRS 11 22.97 11 YRS- 15 YRS 12 25 15 YRS AND ABOVE 7 14.58 YES 42 87.5 NO 6 12.5 GOODWILL 19 39.58 SOCIETAL INTEREST 14 29.17 TAX DEDUCTION 10 20.83 GOVERNMENT RULE 5 10.42 EDUCATION 24 50 WOMEN AND CHILD WELFARE 12 25 RURAL DEVELOPMENT 10 20.83 OTHERS 2 4.17 YES 37 77.08 NO 11 22.92 The above table represent the per cent of respondents those prefer the particular choice in the various aspects like nature of the company, purpose of implementing CSR, size of the company, efficiency, capital employed, fields of CSR and various other aspects as follows: NATURE OF THE COMPANY: Among the samples selected, 29.17% respondents belong to trading company and the remaining 70.83% belongs to manufacturing company. SIZE OF THE COMPANY: 25% of the respondents are small scale enterprises, 54.17% are medium scale enterprises and remaining 20.83% respondents are large scale enterprises. CAPITAL EMPLOYED: Among the respondents, 27.08% of them had employed 50 lakhs to 1 crore as their capital, 29.17% of respondents had employed above 1 crore to 3 crores as their capital, 22.92% of respondents had employed 3 crores to 5 crores as their capital and 20.83% of respondents had employed more than 5 crores as their capital. NUMBER OF YEARS INVOLVED IN CSR: 37.5% of respondents are involved in CSR activities for 3 to 5 years, 22.97% of respondents are involved in CSR activities for 6 to 10 years, 25% of the respondents are involved in CSR between 11 to 15 years and remaining 14.58% of respondents are involved in CSR for more than 15 years. NECESSITITY: Among the selected samples, 87.5% of respondents said that implementation of CSR is necessary and the remaining 12.5% of respondents said that such implementation is not necessary. REASON: 39.58% had implemented CSR in order to earn goodwill among the customers, 29.17% of respondents had implemented CSR out of societal interest, 20.83% of respondents had implemented CSR in order to have tax deduction and the remaining 10.42% of respondents had implemented as it is a government rule. 188

FIELDS: Majority of 50% of respondents are providing CSR in the field of education, 25% of the respondents provide CSR in women and child welfare field, 20.83% of respondents involved in the field of rural development and remaining 4.17% involved in some other fields. EFFICIENCY: 77.08% of respondents said that the CSR activities of their companies are working out efficiently and the remaining 22.92% of the respondents said that the current CSR projects of their companies are not working out efficiently. Table 2: Ranks Of Obstacles: S.No. OBSTACLES RANK 1 HIGH COST 9 2 EFFECT IN PROFIT 7 3 LACK OF TRAINED EMPLOYEES 3 4 COMPETITION 5 5 LACK OF FINANACIAL RESOURCES 8 6 LACK OF AWRENESS AMONG PUBLIC 2 7 NON- AVAILABILITY OF NGO s ASSISTANCE 4 8 LACK OF TRANSPERANCY 10 9 LACK OF PROPER GUIDELINESS 1 10 GROWING INVESTORS PRESSURE 6 SOURCE: PRIMARY DATA. The table 2 states the ranking of obstacles in implementing CSR. Majority of the respondents have ranked lack of proper guidelines as their first obstacle in implementing CSR activities, next to that lack of awareness among public is their major obstacle, thirdly lack of trained employees is their obstacle, next to that non- availability of NGO s assistance is their threat, fifthly they felt that competition is their hindrance in implementing CSR, growing investor pressure is their next obstacle. The select corporate felt that effect in their profit is the next problem in implementing CSR, next to that lack of financial resources is their problem, high cost of implementing is also a problem to be considered and lastly lack of transparency is their hindrance in implementing CSR activities. S.NO HYPOTHESIS There is no association between the 1. guidelines provided by the government and the efficiency of CSR activities. There is no connectivity between the nature 2. of the company and numbers of years they are involved in CSR activities. The fields in which companies provide CSR 3. activities do not depend on the size of the company. The amount spent on CSR activities do not 4. depend on the capital employed by the company. The amount spent of CSR activities do not 5. depend on the fields in which the company provides CSR. There is no significant difference between 6. purpose of providing CSR by the company and the fields in which they provide CSR. SOURCE: PRIMARY DATA Table 3: Chi- Square PEARSON CHI- SQUARE VALUE SIG. VALUE S/NS A/ R 4.773 a.868 Not significa Rejected.237 a 0.038 Significant Accepted.491 a 0.246 Not significa Rejected.364 a 0.467 Not Significa Rejected 2.671 a 0.126 Not significa Rejected. 1.24 a 0.421 Not significa Rejected The above table represent the chi- square relationship between several variables as follows: The rejection of first hypothesis indicates that the efficiency of CSR activities largely depends on the guidelines provided by the government. The acceptance of the second hypothesis implies that there is no connection between the nature of the company and the years of involvement in CSR. The fields in which companies provide CSR largely depends on the size of the company. This statement is proven by rejecting its null hypothesis. The rejection of fourth hypothesis implies that the amount spent on CSR activities depends on the capital of the company. The rejection of fifth hypothesis indicates that the amount spent on CSR activities depends on the fields in which the companies provide CSR. There is no connection between purpose of implementing CSR and fields of providing CSR. 189

2.1. Suggestions The following suggestions are given to make CSR implementing more effective: Increasing the finance for investing in CSR from which returns are expected in terms of goodwill for the company. Monitoring CSR activities and cooperating with NGO s in implementing CSR to ensure that initiatives really deliver the desired outcomes. The government of India should concentrate more on laws that govern the companies act and must formulate proper guidelines in order to make the CSR projects of corporates a successful one. The employees of the corporates must be given certified training which leads to increase in efficiency of the CSR projects. It is found that there is a need for creation of awareness about CSR amongst the general public to make CSR initiatives more effective..when compared to large corporations, SME play a limited role in CSR. So they have to be encouraged to contribute and reap the benefits of CSR. 3. Conclusion Profit is important for a business to survive, but profit should not be the sole aim of an enterprise. These employees put their best effort for the benefit of the business. Therefore, it is the prime responsibility of every business to take care of the interest of their employees. Identification of reasons and benefits of practicing Corporate Social Responsibility can have a scope for further research along with development of company ethics programme, integration of business ethics and ethics training to the staff. Like individuals, businesses also need to live in the real world, i.e., in society. Therefore, to be successful in business, companies also need to look after the basic needs of the society, minimise harmful effects to environment, contribute in nation-building and comply with the law of the land.when acting ethically in the business decision- making process then this is ensure more effective and productive utilisation of economic resources of India. The government should also make additional efforts to enhance the CSR activities by corporate. References 1. Ahuja, V(2016).Corporate Social Responsibility: Issues & Challenges In India. International Journal of Organizational Behaviour & Management Perspectives, 2(4), 657-660. 2. Arora, R., &Richa, G. D(2013).Corporate Social Responsibility Issues and Challenges in India. International Journal of Research in Finance & Marketing, 3(2). (2013) 3. C.A. NehaSaxena(2016)-Corporate Social Responsibility: Issues & Challenges. 4. ParveenMaan (2014)-CSR- key issues and challenges in India. International Journal of Science, Environment. 190