Gap Analysis in Employees and Customers Perspective towards Community Development Effectiveness - A Study of Infosys

1. INTRODUCTION:

Corporate social responsibility has become a widespread practice all around the globe. The realization that companies have an ethical responsibility beyond mere profit- maximization, has led them to play an active role in environmental, ethical, social and economic causes. While CSR began as voluntary acts of goodwill and social charity, it has now taken the form of legal obligation in India. As per the Companies Act, 2013, Indian companies with a net worth of Rupees 500 crores, or a turnover of Rupees 1000 crores, or a net profit of Rupees 5 crores, are compulsorily required to spend a minimum of 2% of the average net profit for previous three financial years on CSR activities for doing good in the society (ITO, 2011). This mandatory nature of CSR and community development initiatives has been imposed by the Indian government in order to follow the principles of equity and fair income distribution (Hung et al., 2013). This legislation by India is a pioneering breakthrough in the field of corporate social responsibility, and carries further significance due to India's status as a developing country with a highly diverse socio-economic population (Karnani, 2013). Hence, it is crucial to look into the extent and nature of community development activities carried by major companies in India, and the strength of their performance in the same (Anarde, 2015). There is a crucial need to look into the effectiveness of

Infosys engages itself inbusiness consulting, information technology and outsourcingservices.It is ranked 653rd in the Forbes Global 2000 list (2018), [ ],it can easily be said to be a crown jewel in Indian industrial landscape. Infosys has 82 sales and marketing offices and 123 development centres across the world as at March 31, 2018, with major presence in India, United States, China, Australia, Japan, Middle East and Europe. Further, its headquarters in Bengaluru, India and located in major cities like Bhubaneshwar, Chandigarh,

mainly indulged in Health and sanitation, Women Empowerment, Animal Husbandry, Agriculture, Environmental Sustainability, Water management, Education, Skills Enrichment Programmes, Bridging Digital Divide and Rural Sports and Culture in vast no. of villages i.e, Kishangarh, Shastri Nagar Slum area, Saketriand so on. In our study we focused on Women Empowerment (Cutting and Tailoring Program), Healthcare Programmes, and Computer Training Courses. As per the Business Sustainability Report 2017-18 [1] published by Infosys , the company's total CSR spending at Rs.289.44 crores has been above the mandated 2 percent of its total turnover in the financial year. Thus, the core values of community development are ingrained into the very threads of Infosys. It has high aims to become the world‘s largest IT sector major while integrating community development policies into its operations. It therefore poses an interesting case study to discover the effectiveness of policies adopted by Infosys to contribute to economic development of the nation while uplifting the society, through the perception of its employees and managers.

The term community has had wide connotations in academic discussions (Popple & Quinney, 2002). Community, as under the vast ambit discussed by Wilmot (1989), can be viewed in terms of three commonalities: shared local territory, shared history or other interests, or shared issues and conditions. Community development is the process of developing active and sustainable communities based on social justice and mutual respect (Ismail, 2009). The widely used meaning of Community Development is the one given by the United Nations (United Nations, 1971) in which community development is an organized effort of individuals who decide that a community be conducted in such a way to help solve community problems with a minimum help from external organizations. Cavaye (2006) envisions that Community Development is a combination of this wholesome idea of community with the concept of development, which means building upon five different spheres that form the essence of community strengths (Hulchanski, 2010). These five spheres include- financial, physical, human, environmental and social capital. Such community decisions are based on employment of resources like labor, financial capital, infrastructure, living environment, natural resources and knowledge awareness. Community development therefore is focused on improving all aspects of functioning and

1How Companies are spending on CSR proesct. Retrieved from: . on 03 April2019.

where local people can not only create more jobs, higher income and advanced infrastructure, but also help their community become fundamentally more capable to manage change. It is through participation in their community that people rethink their problems and expand contacts and networks; building social capital. They also learn new skills, building human capital. Furthermore, they develop new economic options, building physical and financial capital. They also can improve their environment. Sometimes, however, community development endeavors are also shaped by contemporary political scenarios. In United Kingdom, early community development models evolved from its use as a colonial tool- to further the domination of local communities (Popple & Quinney, 2002). The study was a reflection of the top-down approach in community development that could be seen in the benevolent paternalism shown by churches, universities or bourgeois philanthropists towards the working classes. The top-down approach is associated with the principles of 'rescue' and 'charity', where the dominant groups are called upon to bring stabilization and sustainability by providing aid to the disadvantaged communities. On the other hand, the bottom-up approach is based on 'activism' and 'revolution' tendencies, where disadvantaged communities raise demands for change in policy and practice to achieve equality of rights and opportunities. In America, community development endeavors found a significant push by the Roosevelt administration in the 1930s, which strove to bring progressive reforms dedicated to rural regions. The community development initiatives came in the shape of electric power dams, public housing projects, advanced agricultural awareness, and town planning (Hoffman, 2012). Other theories that guide community development endeavors offer different perspectives in the form of structuralism theory, consensus theory or pluralist theory. However, some ground principles of community development endeavors that are shared between these differing views can be listed as- public participation, community partnership, sustainability and ethical conduct (Latopa & Saidu, 2015). Community development can be made effective through careful participation of all stakeholders. Companies look at the importance of community development programs as value-creation opportunity for its stakeholders, as vital to its operations as training for employees and product quality for customers (Porter and Kramer, 2011; Serafeim, 2013; Jain, 2014). Meanwhile, governments around the globe view community development endeavors as the fulfillment of the social contracts that forms the basis of their relationship with the citizens. Governments have been tasked with unending missions of maintaining

tax regulations, guidelines, or public schemes- forms the milestones that enable governments to secure public faith (Nidasio, 2004). Tuke et al. (2017) have examined community development initiatives as picked by local government authorities in Ethiopia. Researchers highlight that development practitioners, foreign donors and government officers are in consensus about the role of government bodies as valuable contributors to community development. According to the study, local government bodies serve as the center of economic, cultural, social, technological, and environmental development which effectively leads to community development. Individual sub-groups within the larger social community can also play important roles in initiatives for overall growth and advancement of the community. Such sub-groups are also seen as communities in themselves; researchers have looked at community development through the lens of educators (Brouwer et al, 2011), or virtual communities (Li, 2004). Community development is also brought on by institutions that preserve culture and heritage, such as libraries, museums and art centers. Thus, artists and local inhabitants are also included as important agents of community development (Tjarve and Zemite, 2016). Another stakeholder in community development initiatives is the corporate sector, which has witnessed a growing trend of community- centric projects of development through initiatives undertaken as part of corporate social responsibility (CSR). Companies' contribution to growth of community is not merely through profit- maximization, but also as proactive engagement with the social interests and issues of their stakeholders (Jamali & Mirshak, 2007). Visser (2006) states the importance of corporates as among the most well- equipped institutions to significantly contribute to improvement in social and environmental conditions of a community. Kundu (2014) has highlighted social awareness, ethical consumerism and philanthropy as key drivers of corporate initiatives for social development work. Ismail (2009) has linked CSR and community development in terms of employee engagement. Vastradmath (2015) has also called corporate efforts towards CSR as contribution to external community by fulfilling the needs of internal stakeholders such as employees. Thus, it is evident from existing research on this topic that to understand the factors that make community development endeavors successful, it is important to look at their significance for all major stakeholders- including corporates, governments and communities. However, every category of stakeholders has faced its own unique challenges and hurdles in achieving the optimum effectiveness of community development endeavors. For instance, researchers (Tuke et al., 2017; ) have pointed out that governments face several issues in bringing the case of corporate involvement in community development initiatives, researchers (Arevalo & Aravind, 2011) have claimed major hurdles to be in the form of lack of adequate funding, profit maximization challenges (Arato et al, 2016), or absence of a dedicated CSR team (Vastradmath, 2015). Schutte (2015) has studied the residents of a small community in Lebanon, to list the issues faced by them. Researcher discovered that a large number of people resignedly strived for economic survival, especially pensioners, or provision of common facilities like electricity, cheap public transport and medical care. Learning about these challenges and hurdles specific to every group is essential to identify the correct approach and solution to creating effective community development programs. Measures like good governance and autonomy to local government have been recommended to increase the success of community development endeavors. As per Loutit et al (2016), meaningful community involvement must be ensured in the decision- making process of initiating community development projects, especially where indigenous communities are involved as major stakeholders. However, corporate sector has much to contribute to the improvement of community development initiatives. Corporates that understand the responsibility of business that exists beyond the economic gains can prove to be an equipped caregiver of the community. Employees in the corporate industry are also an integral part of the community. In this scenario, the perception of company employees becomes an important area of interest. Previous studies have indicated that employees have much to say about the CSR policies adopted by the company they work in. As employees are a huge mutual connection between corporates and surrounding community, it cannot be wrong to say that employees from both the subject as well as the object of a company's efforts towards fulfilling greater social responsibilities (Siltaoja & Malin, 2004). It therefore follows that in terms of community development efforts, employees can provide crucial perspective towards the effectiveness of its performance. Employees are internal stakeholders within the companies (Rodrigo and Arenas, 2008), while they are also a huge part of the external community around them (Sarna, 2016). Employee perceptions also shape and mold the way a company partakes in CSR (Choi et al., 2018). Onkila (2013) examined that the emotions of pride or embarrassment of employees are tied to CSR policies for their companies and proposed that CSR is a more emotional issue for the businesses and needs more sensitive solutions.Similarly, Kiefer (2012) found that the

building communities around it has an impact on the strategic thinking and decision- making of the company in terms of its direction towards enabling community development. The true success of community development endeavors does not lay in either the magnitude of its measures or even in goodness of intentions (Gangopadhyay, 2014). Community development endeavors can be claimed to be successful simply when such endeavors prove to be truly beneficial to the community, as perceived by the target community itself. When it comes to corporate strides in relation to community development goals, it cannot be denied that employees and customers of a company are also integral parts of the bigger community (Blunt, 2014). Existing research has focused on the role of community development outlooks in corporate strategy, but limited literature is available that addresses the issue of gap in its effectiveness as perceived by employees and managers in a company. Further, the research gap is even wider in terms of related studies in developing countries, where community development programs have crucial implications for both the industry and the society in general. Thus, there is evidently a need for analyzing customer and employee perspectives for gaps in the effectiveness scale of community development initiatives adopted by companies. The present research seeks to remove this limitation in research literature. Keeping in mind the above mentioned studies regarding community development and role of companies and employees in its journey, the researcher has presented a gap analysis in employees‘ and customers‘ perspective towards community development effectiveness. This research shall therefore be contributing to the existing literature in the field by providing fresh direction to the topic of community development.

3. OBJECTIVES:

The study seeks to attain following objectives: • To see how the employees of Infosys rate its community development endeavours. • To see how the community at large view Infosys endeavours aimed at its development • To find out if employees and community of Infosys keep similar opinion about its community development endeavours.

4. HYPOTHESIS:

Keeping in mind objective of study following hypothesis has been tested: programmes.

To see how the managers and employees view community development endeavours of Infosys and whether their views commensurate with each other, a self-structured and pre-tested questionnaire has been administered on employees and community members. Questionnaire includes ten statements derived after administering factor analysis on initial thought statements. The sample includes 50 employees of Infosys working at the level of manager and above. Similarly 100 community members chosen on basis of judgement of the researchers have constituted community sample. The data so collected have been analysed using t-test to see whether community members keep a same opinion about community development endeavours as company‘s managers keep. Doing so effectiveness of CD programmes has also been judged.

This section comprises the results of data analysis in detail. The main objective of the study was to measure the gap between the perceptions of employees and community members towards the Community development Programs of the Infosys. Gap has been analysed using independent sample t-test where community members and employees have been considered as the independent groups and p-value corresponding to the t-value shows the significant or insignificant difference in the perceptions of both the groups.

Following prominent conclusions can be drawn from the survey results as depicted in table 1

effectiveness of community development efforts of Infosys. Whereas, employees with a mean score of almost 6 plus (out of maximum 7) on all selected framework have been found satisfactorily that community development endeavours of the organization are highly effective in attaining their objective, community at large has been found more restricted in giving positive reputation to the organisation. • The results also indicated that community has positive response on over all aspect of economic development of society. • The community, however, has some doubt about the effectiveness of parameters the organization is taking to ensure that environment is not adversely impacted by its operations and thus not continue their operations in the region for its betterment. • It is contradictory to note that in-spite of just bit of appreciation Infosys has got on certain aspects of its community development endeavours, the community has doubts about it being better off with Infosys operating in the region. Further, community has shown no real inclination in Infosys continue to operate in the region for its betterment, Perhaps negative aspects of operation such as impurity in an environment and self-reliance among community are outweighing marginal positive results. The study indicated that community has some doubts about sustainability of community development endeavours of Infosys in the long run.

From the discussion, it may be concluded that community of Infosys is not as flamboyant in its opinion as its employees are in considering the organization as an effective Community Developer. It is in the interest of Infosys and other such companies indulging in Community Development to: • Continuously monitor their CD Endeavours. • Consider a penny spent on CD as important as penny spent on their core business. • Consider CD as an investment rather than a forced cost. • Make employees and community at large partners in CD initiatives limited to one company only i.e. Infosys, while it can be extended to other companies also who are involved in community development Programs. Further, the sample size of the study was limited to 50 employees only, and 100 community members which are very small in comparison to the employees working in the organization and community members who are living in the region. Sample size can be extended to have generalized results, as based on one company sample results cannot be generalized for other companies. Practical Implications: The study is mainly useful for the policy makers and the management who are involved in the planning of CSR activities of the company. Study clearly showed that community members do not have same opinions as of the employees of Infosys towards the CD programs. It shows that there are still many areas where the company need to work out for making its CD initiatives sustainable and beneficial for the community members. Major concern is related to the environment, as community members do not find the measures taken by Infosys adequate to reduce environmental harm. Under CSR activities environment protection should be the first and foremost area to be worked out by any company to benefit the community members.

1. Anarde, S. (2015). ―Investing in Strong Rural Communities‖, ABA Banking Journal, 15, pp. 31-33. 2. Arato, M., Speelman, S. and Van Huylenbroeck, G., 2016. Corporate Social Responsibility applied for rural development: An empirical analysis of firms from the American continent. Sustainability, 8(1), p.102. 3. Arevalo, J. A., & Aravind, D. (2011). Corporate social responsibility practices in India: approach, drivers, and barriers. Corporate Governance: The international journal of business in society, 11(4), pp. 399-414. 4. Blunt, P. (2014). ―Whose resources are they anyway? ‗Development assistance‘ and community development agreements in the Mongolian mining sector‖, Progress in Development Studies, 14 (4), pp. 383-399. 5. Brouwer, P., Brekelmans, M., Nieuwenhuis, L. and Simons, R.J. (2012). Community development in the school

6. Cavaye, J. (2006). Understanding community development. Cavaye Community Development. 7. Choi, Y., Myung, J. and Kim, J. (2018). The Effect of Employees‘ Perceptions of CSR Activities on Employee Deviance: The Mediating Role of Anomie. Sustainability, 10(3), p. 601. 8. Dhavaleshwar, C. U., & Swadi, S. Y. (2018). Corporate Social Responsibility And Rural Development A Case Study Of Hindalco. Aarhat Multidisciplinary International Education Research Journal (AMIERJ), 7(10), pp. 147-158. 9. Gangopadhyay, Shubhashis, (2014). ―CSR, out of the box: Mandated corporate social responsibility hurts shareholders, not firms‖, Business Standard, 21. 10. Ho, Virginia Harper, (2013). ―Beyond Regulation: A Comparative Look at State-Centric Corporate Social Responsibility and the Law in China,” Vanderbilt Journal of Transnational Law, 46, pp. 377-440. 11. Hung, Mingyi, Jing Shi and Yongxiang Wang, (2013). ―The Effect of Mandatory CSR Disclosure on Information Asymmetry: Evidence from a Quasi-Natural Experiment in China‖. 12. Hulchanski, J. D. (2010). ―Community Development: Theory and Practice‖ 13. Improving social and financial performance in global corporations. (2011). ―Making Sustainability Work‖, (2), pp. 19-32. Introduction to Community Development Practice. C.S. Mott Foundation. 14. Ismail, M. (2009). Corporate Social Responsibility and its role in community development: An international perspective. Journal of International Social Research, 2(9). 15. ITO, S. (2011). ―Civic Duty for Community Development: A Case of Duty- Based Approaches in Japan‖, /dsd, 23, pp. 868–879. 16. Jamali, D., & Mirshak, R. (2007). Corporate social responsibility (CSR): Theory and practice in a developing country context. Journal of business ethics, 72(3), pp. 243-262. 18. Kaur, R. C. (2015). ―Corporate Social Responsibility spend by Corporate India and Its Composition‖, IUP Journal of consumer Behaviour, 5 (4), pp. 12-45. 19. Kundu, B. (2014). An Empirical Study Of Corporate Social Responsibility Practices In India In Changing Global Scenario And Its Impact On Companies Profitability. Doctoral dissertation, Dayal Bagh Education Institute (Deemed to be university) 20. Latopa, A.A., and Saidu, M. B. (2015). Analysis of Values and Principles of Community Development: A Response to the Challenges of Building a New Nigeria. Pass Campus, K. 21. Li, H. (2004). Virtual community studies: A literature review, synthesis and research agenda. AMCIS 2004 Proceedings, p.324. 22. Loutit, J., Mandelbaum, J., & Szoke-Burke, S. (2016). Emerging practices in community development agreements. Journal of Sustainable Development Law and Policy (The), 7(1), pp. 64-96. 23. Nidasio, C. (2004). Implementing CSR on a large scale: The role of government. 24. Onkila, T. (2013). Pride or embarrassment. Employees‟ Emotions and Corporate Social Responsibility. 25. Popple, K. and Quinney, A. (2002). Theory and practice of community development: a case study from the United Kingdom. Community Development, 33(1), pp.71-85. 26. Porter, M.E. and Kramer, M.R. (2011). The big idea: Creating shared value. 27. Rodrigo, P. and Arenas, D. (2008). Do employees care about CSR programs? A typology of employees according to their attitudes. Journal of Business Ethics, 83(2), pp.265-283. 28. Sarna, B., 2016. Voluntary CSR vs. mandatory CSR: the sound of employees. Master's Thesis. Jyväskylä University School of Business and Economics. 29. Schutte, D.W. (2015). The Basic Needs Theory for Community Development.

30. Serafeim, G., 2013. The role of the corporation in society: An alternative view and opportunities for future research. 31. Siltaoja, M., Malin, V. and Pyykkönen, M. (2015). ‗We are all responsible now‘: Governmentality and responsibilized subjects in corporate social responsibility. Management Learning, 46(4), pp.444-460. 32. Tjarve, B. and Zemīte, I. (2016). The Role of Cultural Activities in Community Development. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 64(6), pp. 2151-2160. 33. Tuke, T., Karunakaran, R., & Huka, R. (2017). Role of Local Government for Community Development – A Study in Aleta Wondo Town Administration, Sidama Zone, SNNPR State, Ethiopia, IOSR Journal of Humanities and Social Science, 9(14), pp. 64-71. 34. Vastradmath, N. (2015). The Role of Corporate Social Responsibility for an Inclusive Growth in the Society ―The practice of CSR in the context of rural development in India‖. International Journal of Scientific and Research Publications, 5(10), pp.1-5. 35. Von Hoffman, A. (2012). The past, present, and future of community development in the United States. Monograph.

kuhardeepti90@gmail.com