Peter Cappelli writes for Harvard Business Review today about the commitment of Indian leaders “to social goals that extend beyond the interests of their firms.” (“Indian Companies: Doing Well Because They Do Good”) Cappelli and his colleagues interviewed the leaders of the 100 largest companies in India. “Every executive we interviewed described the main objective of their company in terms of a social mission,” writes Cappelli, who contrasts the dark path American companies have taken (corporate lobbyists subverting the public good, excess executive compensation, second worst shareholder performance among developed countries over the last decade) with the bright future of Indian companies (second best overall growth rate in the world, competing and winning in high-skilled service industries, acquiring foreign companies that then perform better).

For Indian companies, “business strategy rests on the social mission.” Bharti Airtel’s business strategy focuses on getting cell phones into the hands of people who have no means to communicate. ICICI Bank’s business strategy focuses on providing financial help to those with no access to banking. Dr. Reddy’s business strategy focuses on addressing the healthcare needs of the poor worldwide.

Dr. Reddy’s, a pharmaceutical company, provides for the healthcare needs of 40,000 children. Such charitable support is another characteristic of Indian leaders and their companies. Infosys has built and staffed entire hospitals in different parts of the country. Tata Group gives 65% of its profits to charities.

Cappelli points to two reasons why Indian companies are doing well by doing good. First, by raising the quality of life for people in India, they are creating consumers who will buy their products and services. Second, they are motivating their employees. U.S. employers have noticed that young workers are attracted to and inspired by a strong social mission. We want to be part of a company that helps people. As Cappelli concludes, “mission drives performance, which drives strategy, and in turn drives organizational performance.”

There are several excellent books that lay out the case for corporate social responsibility in this broader context including:

• The Fortune at the Bottom of the Pyramid by C.K. Prahalad
• Capitalism at the Crossroads by Stuart L. Hart
• Creating a World Without Poverty by Muhammad Yunus
• The Power of Unreasonable People by John Elkington and Pamela Hartigan

To read more about corporate social responsibility, click on these articles:

• How to Build a Culture of Social Responsibility
• New Guidelines for Social Responsibility
• Supporting Your Communities

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