Understanding and Measuring Motivations for Indian Firms to Engage in Corporate Social Responsibility

Baron (2001) insisted that in order to receive a CSR label both motivation and performance are critical. Based on the review of literature, this paper observes the dichotomy of CSR perspectives and identifies two kinds of motivations for firms to engage in CSR activities: one driven by expectation of benefit named as strategic motivation and the other one without any such expectation named as altruistic CSR. It classifies the literature along the dichotomy and identifies a probable global trend towards strategic CSR based on the evidences from literature and industry practices. Indian CSR had traditionally not been strategic in nature and mostly driven by the trusteeship concept prevalent historically. In order to know whether Indian firms are also driven by strategic motive, the paper evolves ten-item scale to measure the motivations, validates it using data collected from 142 businesses professional. Analysis of the data using factor analysis and crosstabs is done to understand the motivations of Indian firms to engage in CSR. The analysis reveals and confirms the motivational categories of strategic and altruistic motivation. It also validates the scale measuring motivations. The key outcomes of the work are majority of Indian firms have not been predominantly driven by strategic motivation and altruistic perspective continues to dominate them. The paper also confirms the existence of an industry specific pattern of motivations to engage in CSR. This research is expected to contribute to building awareness amongst corporate about strategic CSR, and further the cause of CSR theory building efforts.