corporate social Responsibility, Education and Technology Background Paper Saswati Chanda Moderator, Session-II
“Corporate executives have an obligation as global citizens to play a role on the world stage, but they should understand that this role requires them to balance two, extremely delicate, sets of responsibilities: they must address the urgent issues of our times, without overstepping the boundaries of democratic legitimacy, and they must contribute to the public welfare, without neglecting their primary role as generators of private wealth. We are both leaders and statesmen. Although there are those who would like us to be neither.” James D. Wolfensohn, President, World Bank, Washington DC.
“What is so thrilling about our time is that the privilege of information is now an instant and globally accessible privilege. It is our duty and responsibility to see that gift bestowed on all world’s people so that many may live lives of ‘knowledge’ and understanding”.
Kofi Anan, United Nations Secretary General.
Introduction The journey of ‘Knowledge’ from the Socratic dictum ‘Knowledge is Virtue’ to Michael Foucault’s post-modernist understanding of knowledge as ‘Knowledge is Power’, has not only been interesting but has also generated a large number of interpretations as to what constitutes knowledge? What is the role of knowledge in society? Whether knowledge has the momentum of its own to obliterate the existing asymmetries, namely the digital divide in different nook and corner of the world? Could knowledge be a viable instrument to reduce and finally mitigate the divide? Does socio-economic conditions help shape knowledge? And last but not the least, how is knowledge produced and what role do governments and business play in the production of knowledge? Such questions become more pertinent when one comprehends the fact that the world has traveled a tortuous trek from the Greek ‘City-State’ to the present day ‘KnowledgeSociety’. Knowledge, thus has come to play an important role not only in the socio-economic development of any state but also in enhancing the level of maturity of a society in tackling the problem of its vulnerability in this globalised world, which in due course can lead to protracted conflicts of various kinds. Asia, unfortunately is failing to understand the emergence of
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“Knowledge-State” hence it has not taken adequate steps in this direction. This has seriously undermined the prospects of economic prosperity, peace and stability of the countries and manifold development people of the region. Hence, there is an imperative to comprehend the impediments towards the development of a viable ‘Knowledge-Society,’ which can help the countries of this region to build-up a fast-track ‘Knowledge-Economy’ and transform itself into a ‘Knowledge-State’. The paper starts with an analysis of the role of knowledge/information in human history with specific reference to its role in the era of globalisation marked by the development and advancement of information communication technologies. Given the transnational character of corporations, in this era the concept of corporate social responsibility emerges as a key determinant in bridging the digital divide, an outcome of the need for a successful management of this process. The paper outlines the role of corporations, as crucial for a successful transition for developing and underdeveloped countries to a knowledge economy and subsequently knowledge society, in order to bridge the digital divide and remove the existing asymmetries at varied levels. The aim of this paper is to identify the successful role that businesses have so far played in bridging the digital divide to whatever extent possible through investments in the sphere of education (with specific reference to India) in order to develop sustainable business models and achieve social returns on investment. The paper outlines the future challenges that corporation could face in this direction.
... knowledge which is capable of effecting change. Society’, the second term of the concept, ‘information society’ ... and the economy The emergence of the information society heralds new ... society to see our high level of dependence on information. In addition, (Webster p. 19) points out, “We have achieved an information society ... their systems. Additionally, in countries where technological innovation is ...
What is Knowledge? Different philosophers have approached the question of what comprises knowledge differently i.e., best reflected by a comparative analysis of the views of Karl Popper, Thomas Kuhn, Michel Foucault and Karl Popper, which revolves around two essential questions: • • How do we produce knowledge? Is this knowledge a socio-economic construction?
Knowledge is a complex phenomenon, which cannot be defined in one succinct sentence. The inclusion of a number of variables and categories make the task of defining it cumbersome. The paper is an attempt to trace the transition of developing countries (with specific reference to Asia and examples from India) into the knowledge economy and continued barriers to its success that starts with an understanding of the notion of knowledge society with particular focus on the growth of knowledge economy as discussed by Bell, Toffler, Cairncross and Leadbeater. The paper concludes with a brief discussion of the challenges to such transition and the future
opportunities that governments and business need to avail and the role that business can play if developing countries are to avail of the advantages of the knowledge-based economy. The Knowledge Economy In contemporary world the status of knowledge economy can be best determined by the frequency of ‘level of information’, where economy indicates the level of exchange available to individuals in interaction. Symmetry of information in society at different levels is an important prerequisite for the knowledge economy. The stage of equilibrium of knowledge economy is reached when the existing asymmetry moves towards a positive direction and attains symmetry. The very dynamics of the market economy depend on access to information. The individual can interact for an economic exchange only when they have access to right and adequate information. The asymmetry of the information between individuals or groups constitutes the level of information, which determines the price of the commodity for exchange. A low level of information or lack of access to information leads to exploitation by those having high levels of information. Knowledge economy is therefore an important prerequisite of market economy.
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One of the earliest and most influential exponents of the knowledge society developed out of the writings of a conservative American sociologist Daniel Bell in The Coming of Post industrial Society. Bell emphasizing on the centrality of theoretical knowledge observed that the balance of employment between agriculture/extractive manufacturing sectors of the economy and service sectors had been steadily shifting in favour of the service sector–a fact that is as much applicable to developing countries particularly in Asia since the 1980s. A quarter of a century after Bell’s work on knowledge society two of his key assumptions stand transformed. The first pertains to the fact that the key technologies of change are no longer automation processes alone they have been joined by the enormous range of information and communication technologies, advanced telecommunications, computers and their combination as the internet to the present wireless access to the internet. The second pertains to the centrality of theoretical knowledge at the core of the manufacturing economy leading to changes in the organization of production as well as transformation of what is produced. As a consequence in the late 1990s, new models of a post-industrial society have emerged, which embrace these profound socio-economic changes. The three important works of reckoning in the area are by Toffler, Cairncross and Leadbeater.1
Daniel Bell, Malcolm Waters, Routledge, London and New York, 1996. Also see David Goldblatt (ed), Knowledge and the Social Sciences: Theory, Method and Practice, Routledge, New York, 2000.
The core of Toffler’s argument is the shift in the location of power based on the possession of knowledge. In traditional societies power was based on accumulation of wealth, which in contemporary world has shifted to those who have adequate and requisite information or knowledge. According to Leadbeater’s argument, the asset base of the economy is changing from the tangible to the intangible. Leadbeater’s argument of the knowledge society is distinguished by its concern with how knowledge is produced and used within the economy, how knowledge has become the main source of information and how knowledge through the new communications technologies is transforming economic, political and social life. developing world and the knowledge economy In the last thirty years since Bell wrote, developing countries particularly Asia, has witnessed the growth of a whole new range of knowledge. However in every arena (old as well as new) enduring research work has not always been undertaken to the extent necessary. Neither have the communication technologies, the key to market economy, significantly revolutionized Asia. The location and size of major corporations operational in the region are no longer of significance with the emergence of relatively cost effective technologies coupled with global access to capital means a factor that has often worked to Asia’s disadvantage.
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The forces of globalisation have furthered the negative forces and strengthened the asymmetric nature of the region vis-a vis other regions of the world (creating a ‘digital divide’), failing to integrate it in a manner advantageous towards realising long term socio-economic development, peace, and stability. As mentioned earlier symmetry of information is the most important prerequisite for the knowledge economy and the ‘level of frequency of information’ is the determining factor. Symmetry in the level of information can be considered a favourable ingredient for a knowledge economy whereas the dangerous trend within it is the asymmetry in the level of frequency of information. The asymmetry here constitutes the wide gap between the levels of information (for example in the developing and underdeveloped countries there exists asymmetry between the center and the periphery so far as the level of information is concerned which leads to a consequent exploitation of the periphery at the hands of the center).
The phase of transition in Asia (with a few exceptions in certain parts and countries of the region like India) have been extremely slow to the point of being negligible. Corporate Social Responsibility (CSR) in the context of Globalisation Any analysis of CSR in the present context cannot avoid an understanding of the process of globalisation as marked by two distinct tendencies, one of increasing integration and
World' Countries today? Who should be held responsible for these problems? Why? What has Canada done to help 'Third World Countries'? There has always been a dominant country in the world that sets the economic standard throughout powerful countries. Canada has always been a top rated economic country, usually behind the United States and other large Commonwealth countries. Starting back in the ...
interdependence and the other of increasing disintegration and dependence. Corporate globalists thus see interdependence as an opportunity not only for profit making but also for economic development amongst the developing and underdeveloped countries. According to the UN Secretary General Kofi Annan, “If we cannot make globalisation work for all, in the end it will work for none. Thus it is essential to enlist the help of businesses in building the missing links in social infrastructure of the new global economy”. “Globalization has to create value for everyone, not just shareholders. Good corporate governance2 is essential for this to happen”, according to Jacques Manardo, Global Managing Partner for Strategic Clients at Deloitte Touche Tohmatsu, France during his address at the World Economic Forum. In practice, companies have to consider the interests of other stakeholders consumers, employees and civil society as a whole”. This “model” exists in some form or other in Europe and Japan. On the whole, companies are compelled to balance the interests of the various stakeholders as part of good business practice and legal obligations. From a philosophical viewpoint, “companies are there to serve society”.
Globalization could lead to benchmarks, better jobs, higher standards of living, but could result in some countries being left behind, with the gap between developed and developing countries broadening to the detriment of all. Thus, two key areas need to be managed by corporations, along with governments in the process of globalisation, talents (and the mobility of people with talents in demand) and trade. Developing countries need to learn to develop and also retain talent, and that requires a revamp of much of its culture including education infrastructure, legal systems, immigration policies and management policies, while arts and entertainment facilities will need to adapt to meet changing demands and more international tastes. A free and open trade and investment environment is necessary, but achieving agreement between many countries and cultures is difficult. A harmonious symbiosis of Global-Local approach incorporating a sense of social responsibility is required by corporations to help developing countries through their transition to knowledge societies.
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Corporate governance refers to the sets of rules that allow shareholders, i.e., owners, to shape a company’s actions and overall direction. In the present scenario, many shareholders, large and small are demanding accountability and transparency and exerting greater influence on how companies are governed. For an analysis of the concept of corporate governance see Anne Moore Odell, “Corporate Governance”, http://www.csrwire.com. Also see the proceedings of the first e-conference of the WBI and the background paper submitted for the first session for a detailed analysis of the concept.
Corporate Social Responsibility Whereas corporate governance reflects the interests of shareholders but not of other stakeholders, corporate social responsibility, however one chooses to define the term, implies that a company is responsible for its wider impact on society.3 In this era of globalisation necessitating effective corporate governance, corporations have increasingly come to realize the need to share a common vision of corporate social responsibility though the contents and issues which it would encompass and the priority accorded to them would differ. Successful businesses realize the benefits of deep community ties, creating path-ways of exchange of information, energy and ideas. Increasingly companies are separating community management from public relations by opening up separate offices. According to Jack Greenberg, President and chief executive officer of McDonald’s Corporation USA, “the company works with local governments, to touch people’s lives at the grassroots level on programmes ranging from waste recycling to support to the sick. Our commitment to social responsibility and to making profits are necessarily linked.” Corporations need to realize that good causes can help improve a company’s as well as a country’s image.
The notion of corporate social responsibility is especially crucial in the case of developing or underdeveloped countries. In the case of mining companies of Latin America their earlier paternalistic relations with local communities resulted in suppressing initiatives in education. That relationship has now changed to greater partnerships with local communities. Therefore social responsibility is a means of managing risk and avoiding a big price to pay for lack of involvement. The case of Microsoft’s investment in India in different ways in the sphere of education (Project Shiksha) and health (namely in terms of eradication of HIV/AIDS) are worth emulating by other corporations. The case of Malayampa natural gas power project in the Philippines is worth mentioning in Shell’s commitments towards sustainable development. SmithKline Beecham’s aim to eliminate elephantiasis, and Liz Claiborne’s efforts to increase awareness of domestic violence are some of the examples of corporations increasingly taking on the mantle of social responsibility.4 In this present era of globalisation as corporations are becoming more aware of their social responsibilities the traditional responses of companies contributing to good causes are dramatically changing from mere philanthropy. Despite the worthwhile support given by many corporations, an enormous amount could still be done. If companies each invest in one good
Is corporate social responsibility a PR invention, http://www.managementfirst.com. These examples are based on discussions that took place during the 3rd AFLF meet at Manila of which I was a delegate from India, sponsored by the WBI.
cause with the same fervour, which they invest in their bottom lines, a huge step could be taken towards easing many of the world’s social woes, particularly poverty eradication be it through investments in health education, knowledge management, etc. One of the key steps would be to thoroughly understand the local environment in which most companies operate. For corporations operating specially those operating from developed and developing countries in the developing and underdeveloped countries, bridging the divide (digital, economic, social or environmental) in order to eliminate poverty should be the essence of the social agenda.
CSR, Education and Technology: Role of Corporations The world has undergone a tremendous change with the advent and proliferation of information and communication technologies (ICT) such as the internet, email and wireless communication, whose impact (both positive and negative) is perceived in every sector of society and every corner of the globe. In this new era of knowledge society that has emerged in the course of human history role of corporations are extremely crucial in complementing governments efforts. The Digital Decade (2000-2009), hype is not merely a short-term affair, as 2009 would far from signal the end of the information technology boom or for that matter the end of the IT decade. According to the Microsoft Chairman, Bill Gates, 2009 would rather herald the beginning of a new era of internet boom based on a long-term strategy adopted by Microsoft geared fully towards research and development. Businesses and governments must work together to manage the tremendous change information technologies are bringing to society today. Crucial to successful change management is a strong emphasis on education. This is because people can no longer either underestimate or overestimate the potential role that digital divide could play.
In this globalised economy, the role played by corporations engaged in such enterprise could reduce the asymmetries created by the digital divide within and amongst countries by utilizing the immense potential of ICT to the advantage of society per se the world over. Governments need to match the pace of change currently occurring in the world of information technology and e-commerce. But unlike businesses, governments are hindered in their ability to manage and lead change. Long-term strategies are forsaken in favour of short-term frameworks, which yield measurable outcomes. With any major social upheaval there is always the danger that traditional values will be cast aside. However, in the Asian context values will remain intact and perhaps become even more important. In this context it is essential that an increased value be placed on education with a strong emphasis on ensuring that all members of
society have access to the Internet. This means training teachers now, rather than waiting a generation until a new group of educators acquires computer and IT skills. Governments and businesses can help each other manage the social transformation. Politicians should openly embrace the changes and use information to empower people. Flexibility is required, as is a willingness to experiment with new ideas. By using the technology now available, governments can help bring about societal breakthroughs. Business will have to work with governments in dealing with crucial and complex issues. The new ethos of corporate social responsibility, that emerges from debates world over including those under the aegis of the World Bank suggest that the difficult choices politicians often have to make in the face of varied socio-economic constraints can be facilitated by businesses. The British Prime Minister Tony Blair during his address to the World Economic Forum observed, “Business can assist governments in sharing with people the tough choices, which must be made. A better dialogue must be established to effect change”.5 According to William H. Gates III, Chairman and Chief Software Architect, Microsoft Corporation, USA, “in an increasingly wired world, the roles of corporate manager and public citizen can’t be separated.
A firm like Microsoft is judged on the skills of its employees, meaning issues such as job training and educational reform are now competitive as well as social factors as the public expects business leaders to focus on issues that are legitimately connected to their economic responsibilities. It’s a healthy thing there are demonstrators in the streets. We need a discussion about whether the rich world is giving back what it should in the developing world. I think there is a legitimate question whether we are.”6 Rolf-Ernst Breuer, Spokesman, Group Board, Deutsche Bank, Germany, opines, “Deutsche Bank wrestled with the same dilemma, and concluded it must consider social and environmental issues — even if it means rejecting profitable business opportunities. Such behaviour isn’t entirely altruistic. Being a good corporate citizens pays”. Taizo Nishimuro, Chairman of the Board, Toshiba Corporation, Japan opines, “We are moving towards global standards and we have to be responsible as we help governments the world over establish those standards.”7
Based on excerpts of the discussions at the World Economic Forum, 2001 and 2002 Ibid. 7 Ibid.
Indian Scenario: Bridging the digital divide from the school level In this era of digital divide, the role of businesses entails joining forces with governments to help explain and promote long-term policies to affected populations. As a part of the India governments efforts a National Task Force on IT and Software Development was set up by the Prime Minister’s Office on May 22, 1998, under the Chairmanship of the Deputy Chairman of Planning Commission, with a mandate to formulate the draft of a National Informatics Policy, to make India an Information Technology superpower and one of the largest generators and exporters of software in the world within ten years. The 108 Recommendations of the IT Action Plan Part-I emphasize the Policy Framework required for creating an ambience for the accelerated flow of investment into the IT sector, with specific orientation towards the Software Industry. The Information Technology Action Plan Part-II furnishes 84 Policy instruments for the Development, Manufacture and Export of IT Hardware. The Task Force advocated that the software industry and the hardware industry are two sides of the gold coin representing India emerging as a global IT super power.
The success of one, whether it is export of software of $ 50 billion by the year 2008 or IT penetration drive for realizing IT for all by 2008, depends on the concomitant success of the other. The strategic policies for the IT industry, IT Research, Design and Development, IT Human Resource Development, Citizen-IT Interface,8 Content Creation and Content Industry, Micro Electronics, Mission mode creation of fibre-optic infrastructure, financing the IT sector and organizational structure have been analysed in detail in the report.9 In India there are many companies catering to IT education and training, like Infosys, Wipro, Tata Consultany Services (TCS), NIIT, CMC, APTECH, DOEACC, etc., (providing IT education both in terms of creating a skilled and trained workforce, from the perspective of companies needs as also to aid the process of computerization be it the railways, banking, insurance, health, etc. as also providing basic computer training in order to access the mine of information presently available through internet).
However, the problem that majority striving to gain access to computer education face is enormous expenditure incurred, much beyond the reach of the vast majority. For example, a three year course offered by say NIIT would approximately cost around 65,000-70,000 Indian Rupees, unlike a local grass-root organization, like NIC or say few cyber-kiosks, operating only in a particular Calcutta locality would be much less say around 10,000 Indian Rupees. The quality of education would vary if one were talking of creating an IT
These two sections in the IT strategy outline the importance and need of providing IT education right from the school level for both governments and businesses in order to evolve sustainable business models and achieve social returns on investments of both governments and businesses. 9 For a detailed analysis of the IT strategy of the India government see http://it-taskforce.nic.in
expert but it would not really matter if one were referring to an awareness of the basics of IT. Bridging the digital divide is not realized by merely creating a pool of IT experts but also through the spread of the basics of IT education and the usage of computers in a localized manner right from the school leveling a manner affordable and accessible to the teeming majority.10 For example, the touch screen computers and kiosks establish throughout Andhra Pradesh is a part of the governmental efforts in introducing e-governance is laudatory. However, in a state also marked by high suicide rates of farmers, poverty and absence of basic literacy in the rural interiors, such measures would only be effective in solving the plight of the farmers, if investments are also made in basic education and awareness and the usage of the computers, be it when farmers apply for a small loan or demand better irrigation facilities, or avail the benefits of ICT projects in rural areas, etc. Amongst multinational corporations Microsoft’s recently outlined future vision and activities in India is an example of the crucial role that MNCs can play in complementing governments efforts and realizing the vision laid out in India’s IT strategy of increasing citizen-IT interface through investments in education.
The Microsoft Chairman, Bill Gates during his recent visit to India, envisioned an India which in the course of its journey towards the end of the first decade of the new millennium, would be one where individuals would be increasingly getting used to computer usage be it storing music, photographs or information. The end result of this increasing interface, leading to a sort of dependence scenario would mean that in a country like India millions of people would be employed in the IT industry in high salaried positions. In a developing country like India marked by internal asymmetries that reinforces the digital divide, realization of the potential of the digital decade would entail enormous investments and structural changes at varied levels, namely spread of education (not merely basic literacy) at all levels, development of a reliable communication infrastructure and the software to connect the people of different communities with diverse socio-cultural, linguistic, religious and ethnic background. The Project Shiksha (Rs.100 crore or US 20million dollar), launched by Microsoft to improve computer education in India, aims at training 80,000 school teachers who would be educating 3.5 lakh students across the country is an important step in this direction. Apart from
For a further understanding of the activities of Infosys, WIPRO and TCS in IT education in India see http://www.wipro.com/ http://www.tcs.com/ .
Project Shiksha, Microsoft’s strategy in India focus on localization efforts such that India adequately harnesses the benefits of the ongoing globalisation process by launching Windows XP and Office in Hindi within the next year (2003) and would also envisage Windows XP local language support to Bengali and Malayalam. Such initiatives can be categorized as far from mere altruism. They cannot be categorized as charity either as Microsoft also declared its intention to invest US $389 million (rs.1900) crore in India over the next three years, which accounts for the company’s largest investment outside the United States.11 Despite the plethora of companies engaged in IT education large medium and small including grass-root organizations, the challenge of bridging the digital divide and removal of asymmetries within different regions in India tailor-made to suit the varied diversities continue to persist if the long-term potential of India in the field of IT is to be realised. Efforts of Microsoft are indeed exemplary and go a long way to suggest that corporations the world over, through long-term investments in both research and the spread of information and communication technologies right at the school level, do have a crucial role to play in bridging the digital divide in terms of complementing existing governmental efforts.
Challenges encountered by business in the developing world The major challenges faced by business towards reducing the ‘digital divide’ existent within and amongst the countries of the developing world, including India can be identified as follows: • Governmental barriers arising from differences in forms of government and types of regime marked by excessive regulation in important spheres highlights the crucial issue of absence of good governance and requisite political will. • • • • Financial barriers dependent on the level of economic development due to lack of adequate resources and the failure to avail of cost-effective technologies. Technological barriers stemming from the non-availability of adequate infrastructural facilities. Social barriers that are a result of the economic and cultural disparities between the elite minority and the vast majority. Cultural barriers due to educational disparities raises the crucial issue of how to make the educational significance of Internet and the consequent access to plethora of information relevant to the majority of the world populace.
The Statesman, 12 and 13 November 2002, The Telegraph, 12 and 13 November 2002.
Conclusion “If you have an apple and I have a apple and we exchange these apples then you and I still have one apple. But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.”
George Bernard Shaw
Unlike many other resources that get depleted when shared amongst others, knowledge gets further enriched. In order to globally maintain prosperity, peace and stability in this global age of ICT’s, it is crucial that all key stakeholders contribute their bit in the process of global management through effective knowledge management, which is viewed as the key if not the sole differentiator. Efforts in this direction need to begin from the school level and corporations can contribute their bit through social investments in the educational sector for which the long term returns would be significant both for the government, corporations as also the community towards which it is directed. The aim of this session would be to identify how business can overcome the above identified challenges through examples of successful role that corporations either large, medium or small have played. Participants could also suggest future role that corporations could play in the sphere of education and thereby bridge the digital divide in order to develop sustainable business models and achieve social returns on investment. The participants are requested to address the following questions, with examples from their respective countries, in order to evolve a set of recommendation that could serve as future guidelines for corporations, such that all countries are able to achieve the reality and also fully access the benefits of a globalised-knowledge society: • • What does it mean to bridge the digital divide in schools? What are the desired outcomes? Why should corporations get involved? What are the requirements for digital divide projects to succeed from the recipients’ point of view/ How important is the involvement of the community? How can strategic and long-term partnerships be built? How can corporations ensure that recipients truly benefit from the technology they receive? How can projects aiming to bridge the digital divide achieve sustainable business models as well as social returns on investment?
Saswati Chanda India Moderator, Session-II
Email: firstname.lastname@example.org email@example.com
References Books, Newspapers and Websites • David Goldblatt (ed), Knowledge and the Social Sciences: Theory, Method and Practice, Routledge, New York, 2000. • Colin Mcginn, Knowledge and Reality, Clarendon Press, OUP, Oxford, 1999. • Daniel Bell, Malcolm Waters, Routledge, London and New York, 1996. • Frank Webster, Theories of the Information Society, Routledge, London and New York 2000. • Gordon Graham, The Internet: A Philosophical Inquiry, Routledge, London and New York, 1999. • John Wiley, Asia in Crisis: The Implosion of the Banking and Finance Systems, Asia Pvt Ltd, Singapore, 1998. • Michael Chissick and Alistair Kelman, Electronic Commerce: Law and Practice, Sweet and Maxwell, London, 1999. • Ferrera, Liechtenstein, Reader, August, Schiano, (ed), Cyber Law: Text and Cases, West Thomson Learning, London, 2001. • The Statesman, 12and 13 November 2002. • The Telegraph, 12 and 13 November 2002 • http://www.csrwire.com/ • • http://www.wipro.com • http://www.tcs.com • http://it-taskforce.nic.in • http://www.ciol.com