Corporate Social Responsibility of the Indian ...

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expanded branches into Thailand such as Aditya Birla Groups, Indo Rama Groups, .... It was directed by Aditya Vikram Birla, a grandson of Ghanshyamdas.
Corporate Social Responsibility of the Indian Businesses in Thailand Sophana Srichampa Research Institute for Languges and Cultures of Asia Mahidol University, Thailand [email protected] Abstract Corporate Social Responsibility (CSR) is a relative new term widely used since the 1960s in the west. Indian businesses in Thailand have contributed to Thai society in various aspects according to the teachings of their religions. Quiet charity and social responsibility were hallmarks of Indian businesses practices well before the popular concept of CSR. They have regularly provided scholarships for Thai education from primary schools in remote areas to university levels. They have constructed schools in remote areas, provided equipment and supported them according to their needs. They have set up a team of medical doctors and offeredthe health services in the remote areas, free. Moreover, they have regularly contributed to the building and maintenance of Buddhist monasteries in the provinces. On special national occasions: King’s and Queen’s Birthday, free food and drink is provided every year. Nowadays, environmental issues are of serious concern so, some large Indian owned businesses and Thai-Indian partners have set up projects to taken care of the environment, by encouraging local people to plant trees, and plan the use of natural sources of energy such as wind and solar. Their contribution shows their care and responsibility to Thai society. Although the Thai public may not be generally aware, Thai recipients of Indian assistances are and feel very grateful.

At present, there are about 150,000-200,000 members of Indian diaspora in Thailand, mostly in big cities such as Bangkok, Chiangmai, Lampang, Pataya, and Phuket. Their principle business was at first, textiles, thanks to the expertise they brought with them from India. Over the next generations, their businesses expanded into various business sectors which presented a driving force for Thai domestic and international trade. The Indian diaspora in Thailand can be analysed according to Talcott Parsons’ concept of Structuralism and Functionalism (1902-1979) which states that "the social system is made up of the actions of individuals." His starting point is the interaction between two individuals faced with a variety of choices about how they might act, choices that are influenced and constrained by a number of physical and social factors. Parsons developed the idea of roles into collectivities of roles that

complement each other in fulfilling functions for society. Some roles are bound up in institutions and social structures (economic, educational, legal and even genderbased). These are functional in the sense that they assist society in operating and fulfil its functional needs so that society runs smoothly. (www. Structural functionalism Wikipedia, the free encyclopedia.mht) A brief history of the Indians migration to Thailand in current time The first Sikh migrant to Thailand was a Sehajdhari 1 who came to Thailand in 1884. He obtained an Arabian horse from the Maharaja of Kashmir and presented it to the King of Thailand. The King gave him an elephant in return. He took it back to the Maharaja of Kashmir who, in turn, gave this enterprising trader valuable gifts. After some time, he brought his wife’s nephews who were proper Sikhs to Thailand. A chain of migration started, with a nephew later bringing his own family and other relations. By the beginning of the 19th century, a trading community of Sikhs was established in Bangkok. Slowly, they spread to other provinces such as Chiang Mai, Khorat, Mae Sot, etc. When Australian and European mining operations started in Phuket in the south of Thailand, Sikh laborers were hired. Mostly of these were Jat Sikhs. (formerly farmers) (Sidhu, M.S. 1993: 1) A second wave of migration occurred after the Second World War, following the partition of India and Pakistan. Hundreds of thousands of Sikhs were forced to migrate from the western half of Punjab to East Punjab and other areas of India such as Delhi, Bombay, Utter Pradesh, etc. Not only the Sikhs but Hindus too from that area were forced to migrate outside India. A few hundred families with relatives in Thailand and Singapore came to work and stay with them. In the 1940s, nearly a third of the migrants migrated to Thailand. After 1948, because of tightened immigration laws in Thailand, the numbers of Indian migrants declined. (Ibid: 2) A third wave followed not more than fifty years ago. Indian businessmen from various places in Indian came to do business in Thailand. Some Indian companies expanded branches into Thailand such as Aditya Birla Groups, Indo Rama Groups, Tata Group, etc. Their business houses were set up in Thailand and they recruited

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Sehajdharis are those who have accepted Sikhism as his religion but has not formally taken Amrit

and do not wear a turban. (Sidhu, M.S. 1993: 1)

Indian CEOs, managers and officers locally. Some individuals too came to start private businesses in Thailand. The reasons for Indians migrating to Thailand can be summarized as i) for better trade opportunities ii) unsettled political situation in India and Pakistan iii) open policies for investment in Thailand Most migrants were from five main groups from various parts of India as follows: i) Hindus from Uttar Pradesh State: Laknow, Ayodhya and Varanasri. They worked delivering newspapers, selling cow’s milk, and as security guards for foreign companies such as the East Asiatic Company. ii) Hindus from Tamil Nadu and the north of Sri Lanka. They were English teachers, company employees and merchants. iii) Hindus and Sikhs from Sind and Punjab were merchants of clothes and textiles. They settled in the Sampheng and Pahurat areas. iv) Hindus from Gujarat and Rajasthan who set up jewelry businesses in the Silom and Sathorn areas. v) Hindus from Bengal who migrated from Kolkata, Dhaka and Chittagong during British colonial times. They sold beans, spices and scented products for religious purposes. Some were Muslim. Some followed Hinduism and settled together with Tamil groups in Silom. Following the establishment of diplomatic relations between Thailand and India on the 1st of August, 1947, Indian communities in Bangkok grew, encouraged by an open and free economy and increased migration by Hindus to Thailand in response to their relatives’ invitation or persuasion. (Dulyaphak Precharat. 2008: 4659). As recently fifty years ago, Indian Jains were attracted to Thailand working in various businesses such as cutting iron, gems and jewelries, accountants or engineer, or working in textile, hotel, tourism, plastic, lace making, parmaceutical and other industries and also in the residential and office property business, building material supply and IT sectors.

Historical waves of migration up to the present have been driven by business opportunities mainly and, from time to time, the situation in India related to global economis. There are two main types of business conducted by Indians. i) Individual or family businesses ii) Indian investment in Thailand 1.1 Individual or family business 2

Following the partition of India and Pakistan, many Indians migrated to Thailand. Most had relatives in Thailand. Primary business of Indians from Sind and 3

Panjab was textiles in the Pahurat area. And most immigrants from these regions worked in this business. Some worked with relatives for many years and patiently saved their money. Later finances allowing, many sought to open their own businesses often with the help of relatives who offered low or no-interest loans to get started. Those who did not have relatives in Thailand turned to fellow-villagers from Panjab for help. After staying at the Gurudwara (temple) for a while, soon learning some Thai, many found work as general salesmen or pedlars. Some Indians have continued in their original trades especially textiles and passed on skills to later generations. Many others however changed to do other businesses. Some expanded their business operations depending on the economic viability of each family. The new businesses of Indians in Thailand are, for example, restaurants, tailor shops, jewelry or gems import and export, tour agencies, hotels, property, school owners, insurance companies, furniture shops, factory owner, IT owner, stationary goods, agro-products, retailers, Indian goods shops-DVD, religious goods including statues of gods and goddesses, department store owner, etc. Since the post- World War II migration, Indians have expanded their businesses widely in many areas with success. Many were able to upgrade their economic and social status in Thai society. They have played a big role in helping Thai society move forward in terms of economy, society and culture.

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The popular way to Thailand was by sea via Calcatta until 1950s. Sikh Gurudwaras were a crucial staging post for early migrants offeringfree food and

accommodation.. The disembarkation point for early Sikhs traveling to Thailand was mainly via Penang. Post Second World War, they flew from Calcutta to Bangkok. Some came via Burma to Thailand by road to Tak Province and sailed down to Mae Nam Ping which joins the Chao Phraya River at Nakon Sawan which flows to Bangkok. Some went north to Thakhilek, Chiang Rai Province in the North of Thailand and moved to Chiang Mai Province in northern Thailand. This route was not common. (Ibid: 16-18) 3 Sikhs and Hindus immigration to Thailand were traders from West Panjab (now in Pakistan). The great majority of them came from the districts of Gujranwala and Sheikupura. Nearly 90% of them were Aroras who were generally traders by profession. (Ibid: 1)

ii) Indian investment in Thailand There are several Indian businessmen who have set up companies in Thailand and expanded them as a hub in Southeast Asia for examples. 2.1 The Aditya Birla Group (ABG)

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This was the first Indian Company from India to establish branches in Thailand. It was directed by Aditya Vikram Birla, a grandson of Ghanshyamdas Birla who was one of Mahatma Gandhi financial supporters in India. Mr. Aditya graduated from the Massachusetts Institute of Technology (MIT). He has a global ambition far in excess of anything his father and grandfather had envisioned. During that time in India, there were many difficult rules and regulations to start any new industry. He saw little prospect of growth in India with the government unwilling to let large business houses expand without fetter. He was certain that the economies of Southeast Asia were set to flourish in the coming decades - an opportunity an early extrant would benefit most from. He also wanted to prove to his father and grandfather - in their own ways both strong, dominating men - that he could succeed entirely on his own, far removed geographically from the influence and wealth of the Birla Family. Therefore, he started a spinning factory named Indo-Thai Synthetics Ltd. in Thailand in 1970 with 3000 workers. (Merchant, M. 1997: 3, 13). After forty years of business in Thailand, there are now six companies operating in various central and eastern provinces of Thailand: -

Aditya Birla Chemicals (Thailand) Ltd.

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Thai Rayon

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Indo-Thai Synthetics

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Thai Acrylic Fibre

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Thai Carbon Black

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Thai Peroxide

Thailand is a hub in Southeast Asia. The group has expanded its businesses into Laos P.D.R, Malaysia, the Philippines, Indonesia, Singapore, Egypt, China,

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ABG is the world No. 1 in viscose staple fibre. It is also the world’s largest single location palm oil producer. ABG is a non-ferrous metals powerhouse

and among the world’s most cost efficient producers of aluminium and copper. It is also the world’s largest single location world-scale copper smelter as well as the world’s No. 1 in insulators, with its joint venture with NGK of Japan. Globally it is the fourth largest producer of carbon black and the 11th largest cement producer in the world and the seventh largest in Asia. ABG is India’s premier branded garments player. In domestic market ABG is India’s second largest producer of viscose filament yarn and the No. 2 private sector insurance company, and the fourth largest asset management company in India. (Parashar, S.P. and other, 2005: 2)

India, South Korea, Australia, Europe: France, Germany, Luxembourg, Switzerland, Italy, United Kingdom, and North America: The United States and Canada. 2.2 Indorama Ventures Public Company Limited M.L. Lohia founded the Indorama Group in Indonesia and gradually expanded it into Thailand and India. Each part of the group operates independently and each is listed on a local stock market. Indorama Ventures was established by Mr. Aloke Lohia about 20 years ago and was listed on the Thai bourse on 5 February 2010. This group is one of the largest vertically integrated polyester chain producers in the world and a leading global manufacturer of wool yarns. They are the largest polyester fiber producer in Thailand. They have expanded their business sites throughout the AsiaPacific region, U.S.A and Europe (Lithuania, the United Kingdom and the Netherlands). Their corporate structure comprises four business segments, PET, Polyester, PTA and wool. 5

2.3 Tata Group (Thailand) Tata in India is the headquarters. Tata companies have operations in every major international market, Africa, Asia-Pacific, China, Europe, Middle East, North America, South America, United Kingdom. Asia Pacific is a key market for the Tata group. The group enjoys a strong brand presence in many countries in this region and several Tata companies have a significant market share in the industry segments in which they operate. (Tata group Worldwide Tata in Asia Pacific.mht) 2.3.1 Tata Steel Limited Thailand The Company was established on July 12, 2002 as a holding company a part of a merger of businesses among NTS, SISC and SCSC, the last two of which were subsidiaries of Cementhai Holding Company Limited (“CHC”). The three companies operated a long steel production plant. The merger was in compliance with NTS’s rehabilitation plan with its history and development set out below. Tata Steel Limited bought the stock of Millennium Steel Co., Ltd. Plc from SVG Holding Co., Ltd. on April 4, 2006.

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Tata Motors, a global organisation with over 50 years of automotive excellence, is the world's fourth largest medium and heavy truck manufacturer and the second largest heavy bus manufacturer. Over 4 million Tata Vehicles ply on international roads today. (TATA Motors (Thailand).mht)

It changed the Company name from Millennium Steel Public Company Limited to Tata Steel (Thailand) Public Company Limited. Accordingly, the company amended its Articles of Association (AOA) with Ministry of Commerce on December 14, 2006. (History of Tata Steel Thailand.mht) 2.3.2 Tata Motors (Thailand) Limited Tata Motors (Thailand) Limited commenced operations in Thailand in early 2008 in collaboration with Thonburi Automotive Group to introduce an energy saving pickup truck. According to the structure of society, Indian employees work as part of the Thai economic system. They function as businessmen. If we consider the assimilation of Indians into Thai society according to the four basic functions identified by Parson (Supang Chanthavanich 2010:165-171) these include Adaptation, Goal Attainment, Integration and Latency or Pattern Maintenance, the details of which can be analysed as follows: 1) Adaptation- The Indians in Thailand have managed to adapt to Thai society quite well. Their businesses have expanded and been extended into different sectors by later generations. They are a driving force being Thailand’s economic system which helps the country to grow up like other business sectors in Thailand. They are determined and work hard to reach annual targets. Most succeed. However some businesses such as textiles will only be able to compete with Chinese products if the Thai government subsidises or strongly supports this basic industry. Otherwise, the going will not be easy for businesses in this sector. 2) Goal Attainment- Society should fix a goal. All systems should function for goal attainment. In Thailand, free economic market with democracy is our goal. Therefore, Indian communities and businesses have to function for goal achievement as other social sectors which they can do well. People should have the same idea for the same goal attainment. 3) Integration- Indian businessmen have the wide network connecting various related sectors. They are members of many business associations including governmental ones. They have integrated well into Thai society by way of their humble and peaceful conduct. Moreover, many Indians care for aspects of society such as the lack of opportunities for the poor, people in remote areas, the

underprivileged people living in industrial zones, etc. more of which will be mentioned in the next topic. 4) Latency or Pattern Maintenance-This means to maintain or revitalize individuals and society to move forward together by having a cultural system. When people have confidence and can rely on each other then this function can be served. Indian culture has influenced Thai society since the 3th century, therefore Indian culture and religion serve as a significant grounding for Thai society and life. Although most Indians in Thailand have maintained their culture and many practices, they have adjusted to suit Thai society in various ways. Social contact between Indians and Thai happens all the time. Indians and Thais get along together harmoniously and peacefully, and always have done. From the success of the Indian businesses in Thailand, the following teachings of Krishna to Arjuna in chapter three (the yoga of action) of the Bhagavad Gita, are notable: No one for even a moment Exists without doing action; Each is forced to perform action– E’en against his will–by gunas. (5) Perform your duty, for action Is far better than non-action. Even maintaining your body Cannot be done without action. (8) The world is bound by the actions Not done for sake of sacrifice; Hence for sacrifice, Arjuna, You should act without attachment. (9) Therefore, constantly unattached Perform that which is your duty. Indeed by unattached action Man surely attains the Supreme. (19) (http://www.atmajyoti.org/gi_bhagavad_gita_ch3.asp)

“Actions” in this sense is to do one’s duty without attachment. This teaching inspires Indian businessmen in Thailand to contribute their efforts to benefit society in various ways, and these will be mentioned next. 3. Corporate Social Responsibility (CSR) Corporate social responsibility is a relatively new term used in society. In the past, there were different terms such as corporate citizenship, corporate philanthropy, community relations/affairs, return benefit to the society, etc. However the simple meaning hidden in such terms is “Business should do good for society.” The World Business Council for Sustainable Development describes CSR as ‘business commitment to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life.’ (Save the children, “Social Responsibility for Children’s rights in South Asia”, p. 10). Corporate social responsibility (CSR) has three principles: i) Not violate stakeholders ii) Conduct Good Governance iii) Help society The CSR should be implemented in any size of business both large and SME (small and medium enterprises). According to the UN Global Compact, ten key principles in the areas of human rights, labour, environment and anti-corruption are set as the recognized standard for businesses in meeting their CSR as follows: Human Rights - Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and - Principle 2: make sure that they are not complicit in human rights abuses. Labour - Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; - Principle 4: the elimination of all forms of forced and compulsory labour; - Principle 5: the effective abolition of child labour; and occupation. Environment -Principle 7: Businesses should support a precautionary approach to environmental challenges; - Principle 8: undertake initiatives to promote greater environmental responsibility; and

- Principle 9: encourage the development and diffusion of environmentally friendly technologies. Anti-Corruption - Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery. (http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/index.html) 6

Doing business should have “Good Governance” : not violate the law, be honest, transparent and take care of benefit for stakeholders as follows: - shareholders: Business should take care of both big and small shareholders. - customers: Business should give a good service, provide a good quality goods according to the customers’ need with fair prices, etc. - employees: Business should take care of all employees with equity and inclusion without discrimination, consider the employees’ ideas and suggestion for company’s improvement, fair pay with the good welfare, develop employees’ capacity regularly, etc. - suppliers: Business should not take advantage from suppliers, procure the good quality of products, etc. - community and society: Business should not cause social and environmental problems, not take advantage from society, contribute benefit to society. - owner: Business should manage as best as they can, be honest, make the high benefit for business in the scope of good governance. - government: Business should operate according to the laws, do the real accounting, pay tax on time, etc. Corporate Social Responsibility (CSR) helps any business to be good and sustainable and although they do not share the benefit of any social activity, it still demonstrates their responsibility due to their performance according to the good governance concept mentioned above. Actually, many businesses conduct good

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Good governance has 8 major characteristics. It is participatory, consensus oriented, accountable, transparent, responsive, effective and efficient, equitable and inclusive and follows the rule of law. It assures that corruption is minimized, the views of minorities are taken into account and that the voices of the most vulnerable in society are heard in decision-making. It is also responsive to the present and future needs of society. (http://www.unescap.org/pdd/prs/ProjectActivities/Ongoing/gg/governance.asp)

governance and they may share the benefit of success to help society in many ways in a similar way as charity. In many religions, there are concepts for doing for others: Thai Buddhism has the concept of /tham-bun/ “to do merit”, /tham-ka n-kuso n/ “to do charity”. In Hinduism, there is the concept of ‘Dharmada’, Sikhs have ‘Daashaant’ and Muslims, ‘Zakaat’. Indian businesses in Thailand are successful because of their vision and mission which includes good governance. There are Indian religious principles that teach about helping others and doing charity and Indians are grateful to consider Thailand as their second happy home. Therefore, such religious concepts, together with their conduct of caring and sharing in society corresponds well to the concepts of CSR. Many Indian businesses have their own foundations in socioreligious activities. Donations to their temples are another source of common treasure reflections socio-cultural and religious traditions based on sharing. 4. What benefits do the Indians in Thailand contribute to society? Because of the economic status of Indians in Thailand, they have been able to share benefit by assisting society in many ways, ever before the new term CSR became familiar. There are many ways of doing charity; through collective associations, temples, individuals and companies. Their target recipients are mostly those who lack opportunities in society. But communities next to factories owned by Indian businesses, including other suffering communities, are also taken care of. Examples of such activities can be grouped as follows: i) Education - Building schools, libraries in the remote areas or provinces located near their factories such as in Sukhothai, Chiangmai in the North and in the provinces nearby factory sites such as Saraburi, Rayong. - Providing educational equipment to schools which are mostly in the provinces. - Providing scholarships to schools and universities both in the provinces and Bangkok. - Offering free training or short business courses in English to students, i.e. one company producing yarn gives an intensive lecture to Business students on how to do international trade. - Teaching English to slum children at Klongtoey, taught by the children of the Indian IT businessmen.

- Offering a consultation services to IT Park’students by outstanding junior IT company owners. - Building an occupational training centre and providing equipment such as sewing machines to people living near the Indian factory in Saraburi and collaborate with the provincial administration to train them. - Donating rice for lunches to schools annually in the central provinces located near the factories. - Supporting orphanage schools in the central provinces located near the factories. - Maintaining schools after floods in the central provinces located near the factories. - Donating computers from Indian companies to schools in the central provinces located near the factories. ii) Health care - Providing a team of doctors monthly to treat people in remote areas. -

iii) Environment maintenance - Encouraging people in the provinces where Indian factories or

businesses are located to plant trees both in the north and central provinces. - Promoting the use of wind energy more for green environment in factory areas in the central provinces. iv) Socio-culture and religious activities - Donating to social and religious activities in Thailand by many Indians. - Donaing to support the King’s projects by small and big companies - Donating for helping suffering people from natural calamity by many Indians both individual and groups. - Participating in the socio-cultural and religious activities in the factory areas including in public by small and big companies. - Providing free food and drink to public in the important National days by small and big companies.

- Visiting villagers in the factory areas by a big company. i.e. Aditya Birla Group. - Maintaining the temples nearby the factory areas regularly by a big company. i.e. Aditya Birla Group. - Repairingthe broken transportations after flood by TATA Motors. - Welcoming visitors to the factory to assure them of the quality standard for environment maintenance and to exchange information. The examples given of corporate social responsibility by Indian businessmen in Thailand reflect the concept of attention and that business can flourish because of the positive qualities of the stakeholders in the society. Therefore helping society is a responsibility they accept without the need to proclaim it widely. Their actions conform to the religious teachings of both Hinduism and Sikhism. Jhingran (1999:99, 102-104) refers to the Manu which states “A man is said to be born with various debts (rna). His first debt is to the Vedic teachers which is symbolic of man’s indebtedness to the entire religio-cultural heritage. His second debt is to his ancestors which affirms the value of life and procreation. And his third debt is to the gods to whom he owes his life. He is also indebted to entire mankind and all other living beings. This affirms man’s solidarity with all his fellow humans and the entire creation. The concept of man’s indebtedness to the society and the entire creation is perhaps the most positive and morally meaningful concept, ever developed in the history of ethical thought. Sharing one’s wealth with others (samvibhāga) is a virtue often included in the description of an ideal man. The Mahabharata advises that one should spend one-third portion of one’s income for religio-moral duties (dharma) which include both ritualistic acts (ista) like sacrifices and philanthropic acts (purta) like digging wells, planting trees etc.” Sikhism stands on the cardinal principles of earning one’s bread by honest labor, sharing the earnings with the needy willingly and with pleasure, meditating on the Name of One God, singing His praises and by doing noble deeds. ( http://www.allaboutsikhs.com/sikh-principles/principles-of-sikhism.html) Indian businessmen who have exercised the corporate social responsibility have, for years, never felt a desire to publicize what they have done for Thai society. Therefore, only the recipients know what they have received. Mainstream society is, for the main part, unaware. Such acts of Indian businessmen are witness to their nonattachment to their property, their reputation from making merit, doing their duty for

mankind, as far as possible, and their virtue. They are strict to their religious practices in their daily life. They are united within their group as well as with others in the wider community. The weak in society will be taken care of by the fortunate in their view. That is why Indians in Thailand have conducted themselves well and make little trouble, preferring to live among others peacefully and securely. 5. What are holistic benefits? Any business which can operate with CSR, can obtain good credit, attract good people, create a good brand image for their products, maintain the long term loyalty of employees, offer benefits and be accountable. People or consumers will buy or use their products and services more. Businesses can turn healthy profits. CSR can help businesses to be sustainable. Therefore, many countries in the world are trying to promote CSR in the business sector. ISO 2006 is the international standard guarantee of CSR. However, the Thai government wants to attract businesses, especially medium and small enterprises, to share 10% of the benefit for CSR activities. Now only 2.5% of benefit is used. Tax reduction is a strategy that the government is studying. If ISO and tax reduction can be implemented together, it will attract more businesses to CSR. 6. Summary The Indian businessmen are business-oriented by nature since first coming to Thailand. The main purpose of migration for them was for better living. With their efforts in work, from generation to generation, their lives in Thailand are now settled and they are accepted in terms of social and economic status. Indian investors from big corporations in India and Thailand are also part of the new wave of Indian business in Southeast Asia and around the globe. They can accept their responsibilities well as a part of the socio-cultural and economic structure of Thai society. They can integrate fully into the Thai mainstream and be accepted as others. Their success in business comes from the stakeholders. The Corporate Social Responsibility of Indian businessmen goes back to when they first established their businesses in Thailand. Their concern for things such as education, health care, environment maintenance and socio-culture and religious activities without attachment and with no expectation of reward correlates with the teachings of their religions. It shows the harmony and solidarity of people in Thai society. It is a quiet

benevolence, such that most Thais many never become aware of the long-standing public contributions and charity of Indians in Thailand.

References

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