Does cultural economics affect country’s competitiveness?

Abstract

Corporate social responsibility is not just a mere philanthropy, it involves a commitment of company to manage itself and identify its role towards society in form of producer, customer, employer and a citizen in a responsible manner. If a firm is quite large there is more responsibility towards the society on it. Corporate social responsibility is a business model under which companies make an effort to operate in such a way that they can enhance the society and environment rather than harming it. Any failure in meeting the expectations of the stakeholder and society as a whole can result to the failure of the company and damage the reputation of firm. In recent times, national and international companies observed the power of Corporate Social Activities and explored its impact on Economic, Social and Environment sector and how it directly affects companies’ relationship with investors, employers and customers. In India, CSR is being done from ancient times in form of charity and it is now it is taking a broader view. It is being observed that flourishing companies act more responsibly towards the society and are also favored by the public. Corporate Social Responsibility in developing countries like India is a double edged tool, on one side shouldering the development burden and on the other side, the social credibility, integrity and competitive edge of the firms get further sharpened. (Swathi.M,2021). As far as development is concerned, it not only provides opportunities to express social wellbeing but also targets those groups which are excluded by the sections of the society. Therefore, it is mandatory for the companies to indulge in CSR activities, so that they can take part in development in a more creative way. In India, Corporate Social Responsibility activities of the companies are governed by the Clause 135 of Indian Companies Act 2013, which states that the companies which has net worth of more than Rs 500 crores or turnover more than Rs 1000 crores or net profit of more than Rs 5 crores will spend two percent of their average of preceding three year profit after tax on CSR. Under Subsection1 of the Act, a format of disclosure of CSR activities in the financial statements is mentioned. The companies are obligated to build CSR projects as a way to grow and have a strong partnership with local government. Having a strong CSR policy helps the business to capture the market and take advantage of business opportunities. The Act also pressures upon the fact that local collaboration and participation in Corporate Social Responsibility activities should be preferred. The business environment is always changing therefore considerable attention must be given to social, political, legal, economic and technological environment. (Acharrya, Moumita, 2014). In India, as Corporate Social Responsibility is mandatory it is very essential for Indian companies to adapt it. Due to globalization, Indian Companies be it Public or private are growing at a huge rate therefore along it earning profits it becomes essential for the companies to take part in CSR activities and contribute to the society as well. It is commonly believed that Public owned companies focus more on social welfare than Private companies. In India, largest Public companies include Indian Oil, Bharat Petroleum and State Bank of India and as far as private companies are concerned, Reliance, Tata and Infosys are the most powerful business houses.

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