I. Management

• Definition: Coordination of resources within an organization to achieve goals through proper resource utilization. A part of an organization ensuring coordination between resources and driving them towards organizational objectives.

• Views on Management:

  • American View: Management is a part of administration (broader approach). Supporter: Robinsohn.
  • Anglo View: Management is broader than administration; administration is a part of management. Supporters: British scholars.
  • Third View: Administration and management are synonyms. Supporters: Fayol, Mooney, Gulick, Urwick (classical thinkers).

• Difference between Administration and Management (Oliver Sheldon, Philosophy of Management, 1923):

  Feature	Administration	Management
  Definition	Collective effort towards a goal.	Part of organization coordinating resource utilization.
  Scope	Broader	Narrower
  Focus	Leadership, coordination	Resource utilization
  Goal Setting	Determines goals and objectives	Implements effective work performance to achieve goals

II. Corporate Governance

• Origins: Emerged post-1991 LPG (Liberalization, Privatization, Globalization) reforms in India to address increased private sector activity and associated scandals (e.g., KingFisher Airlines, Nirav Modi). Needed to protect stakeholder and shareholder rights.

• Definition: Sum of ideas, goals, values, and principles inspiring the private/corporate sector towards transparency, accountability, responsibility, and impartiality.

• Basic Objective: Protect the rights of shareholders and stakeholders.

• Key Contributors:

  • Adolph A. Berle Jr. and Gardiner C. Means (The Modern Corporation and Private Property) – early explanation of the concept.
  • Cadbury Committee (UK) – popularized the concept.

• Regulatory Structure:

  • Shareholders: Numerous individuals owning company shares.
  • Board of Directors: Makes decisions on behalf of shareholders.
  • CEO: Heads company management and employees.
  • Management: Implements decisions.

• Stakeholders: Employees, suppliers, creditors, community, consumers.

• Features: Emphasizes transparency, accountability, responsibility, and impartiality in the private/corporate sector. Corporate entities should be a medium for public welfare. Supports development of codes of conduct and ethical values in the private sector. A multi-dimensional approach.

• Reasons for Origin: Impact of 1991 LPG reforms; need to protect shareholder and stakeholder rights; reduce scams and scandals; inspiration from bureaucratic reforms; impact of information technology.

• Impact/Importance: Ensures transparency, accountability, responsibility, and impartiality; reduces scams and scandals; increases reliability of the corporate sector; increases investment and profit; increases flow of international capital; enables environmental protection; enables private organizations to become mediums for public welfare; develops ethical values in the private sector.

• Government of India Efforts:

  • Committees: N.R. Narayana Murthy Committee (2003), Kumar Mangalam Birla Committee (1999), Uday Kotak Committee (2017), Narendra Kumar Committee (2002), M.N. Goiporia Committee (1997), and others.
  • Companies Act, 2013 (Section 135 – CSR provision).
  • SEBI (Securities and Exchange Board of India, 1988 – statutory status in 1992): Protects shareholder and investor rights.
  • ICAI (Institute of Chartered Accountants of India): Sets accounting standards.
  • ICSI (Institute of Company Secretaries of India): Sets standards for general meetings of corporate and private sectors.
  • NFCG (National Foundation for Corporate Governance): Government-sponsored organization to create awareness.

• Principles of Corporate Governance:

  1. Rights of Shareholders: Participation in decision-making, profit sharing, and access to company information.
  2. Equitable Treatment of Shareholders: Equal treatment in profit distribution.
  3. Rights of Stakeholders: Role in decision-making and legal rights protection.
  4. Responsibility of the Board of Directors: Accountability to shareholders.
  5. Disclosure and Transparency: Transparent appointment of board members, selection of audit firms, employee salaries, committee formation, and profit reporting.
  6. Integrity: Ethical values and integrity within corporate organizations; development of a code of conduct.

III. Corporate Social Responsibility (CSR)

• Legal Basis: Section 135 of the Companies Act, 2013.

• Definition: Activities undertaken by the private sector beyond profit generation, considering social and environmental impacts.

• Legal Binding: Companies with a turnover of ₹1000 crore, net worth of ₹500 crore, or average net profit of ₹5 crore over the preceding three years are legally required to spend 2% of their profits on CSR activities.

• CSR Committee: Advises company management on CSR activities.

• CSR Activities (as per Companies Act): Education, health, drinking water, environmental conservation, promotion of sports, sanitation, and promotion of renewable energy.

• Types of CSR: Environment-based (conservation, renewable energy, eco-friendly techniques), human resource-based (employee benefits, human rights protection, safety measures), community-based (education, health, sanitation, drinking water), philanthropic-based (donations, grants).

• Benefits of CSR (Social Level & Company Level):

  • Medium for public welfare and socio-economic change.
  • Reduces government workload.
  • Creates brand image and increases company credibility.
  • Increases investment and indirectly increases company profit.
  • Motivates employees.
  • Develops cordial relations between employees and management.
  • Improves political relations.
  • Ensures qualitative goods for consumers.
  • Aids in the implementation of corporate governance.

• Arguments Against Mandatory CSR: It's an ethical and moral duty, not a compulsory requirement; it's a new form of tax; it increases government interference in the private sector; companies need shareholder permission for expenditures.

• Limitations of CSR: Expenditure disproportionately focused on health and education; geographical disparities; lack of awareness; lack of strict provisions; lack of cooperation between local administration and companies.

• Suggestions for Improvement: Include CSR in school and college curricula; stricter penalties for non-compliance; mandatory CSR expenditure in rural areas; raise awareness; reduce geographical disparities; improve cooperation between local administration and companies.