Download - School of Management, KIIT University

Parikalpana - KIIT Journal of Management, Vol-9(II), 2013
An alternative Stakeholder Management Tool
Conflict-Consensus-Collaboration
1
Srikant Kumar Bhadra
Asst. Manager (CSR and R&R)
Aditya Aluminium (Hindalco)
srikant.bhadra@adityabirla.com
ABSTRACT
This paper is based upon the concept of stakeholder theory and integrated corporate
social responsibility. The paper has tried to present how interest of stakeholder has
been integrated in to the business interest through CSR. Community and community
groups have been taken as the main stakeholder in the process of formulating and
implementing Corporate Social Responsibility, which we usually mean in the context
of a social and philanthropic responsibility of a company. The crux of the paper is to
present two cases where in one case presents corporate social responsibility in
operational risk management approach and other one presents the CSR in a value
creation approach. Both the approaches in this paper has been presented as an
integration approach, one is integrated with business objective to manage the risk,
mostly in reactive way, where as the other one is integrated with core business value
chain and purpose in proactive way. Both approaches are equally necessary and if
can be combined in an integrated development approach becomes effective and
sustainable.
Introduction
The relationship between business
and the society has been studied since
decades with outcomes being influenced
by the prevailing economic paradigm at a
specific point in time. The idea that
business has duties towards society and
more specifically towards its identified
constituent (or stakeholder) is widely
acknowledged. Adam Smith’s 1976 opus,
The wealth of Nation is considered as
the landmark of modern capitalism (smith,
1991). Smith’s proposition states that when
business is free to pursue profits and
efficiency, it eventually benefits the
common good, that is, it serves both its
interest and those of society at best
(Lantos,2001). Milton Friedman’s neo
classical theory advocates on Smithian
argument by explaining that profitability is
the ultimate social responsibility of the
business if done in an ethical way and in
lawful manner. The classical view on CSR
is mostly based on the neoclassical
economic theory using notion such as the
free market, economic efficiency and profit
maximization, emphasizing on pure profit
making view and wealth creation for
company and shareholders. This theory