ISAS Insights

The concept of 'Corporate Social Responsibility' (CSR) is not new to the Indian corporate world. The recent proposal by India's Ministry of Corporate Affairs (MCA) to make philanthropy compulsory by law under the Companies Bill 2009, however, gave rise to a raging debate in the country. Many questions were raised including whether a rule-based approach to philanthropy is needed and whether making CSR spend mandatory by law would yield the desired outcomes? However, before one answers these questions, it is important to reflect on one fundamental aspect under the CSR debate. If socially responsible behaviour has become key to corporate agendas, then why have only some firms behaved in a socially responsible manner while others have not? This paper examines the factors that govern such behaviour on the part of firms and traces its relevance to the current CSR debate in India.