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Corporate Social Responsibility
Corporate Social Responsibility
to perform its economic functions effectively & provide goods & services to earn maximum profit & leave social function to other institutions of the society like government They believe that business has no other social responsibility except making profits within legal & moral rules set by society
responsible for promoting welfare of masses. It is imperative for businesses to be socially responsible. In this fast changing world, a businessman is judged on two counts- the social goals he meets, apart from profits he make.
responsible as they primarily exist to benefit society Citizens give them special rights, powers, privileges & protection on understanding that their activities will fulfill citizens purposes Corporations cannot exist without our letting to do so & we let exist only if they are beneficial to us
process to produce an overall impact on society. Companies need to answer 2 questions relating to their operations: 1. The quality of management- both in terms of people & processes (inner circle) 2. The nature & quality of their impact on society in various areas
Quality of management
Impact on Society
sake of society. If private enterprise are allowed to exist, it is because it is seen to contribute better than public enterprise to common good Private firm is not encouraged because individuals may accumulate wealth for their own selfish benefit at he expense of public
corporation has to donate generously towards causes of public welfare and must get itself directly involved in social welfare programmes.
DEFINITIONS OF CSR
It is a set of obligations to pursue those policies, to make
those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society. It is the overall relationship of the corporate with all of its stakeholders. Elements of social responsibility include investment in community outreach, creation and maintenance of employment, environmental stewardship and financial performance.
DEFINITIONS OF CSR
CSR is the continuing commitment by business to behave
ethically & contribute to economic development while improving the quality of workforce & their families as well as of the local community & society at large.
World Business Council for Sustainable Development
invisible hand promoted the public welfare The socio-economic model: Business is seen as one subsystem among many in a highly interdependent society. It recognizes that companies have stakeholders other than their stockholders. Business has an obligation to respond to the needs of all stakeholders while pursuing its profit. A stakeholder audit allows companies to systematically identify all parties that could possibly be impacted by the companys performance
SOME FACTS
WHILE 94% OF THE COMPANIES BELIEVE THAT
DEVELOPMENT OF CSR STRATEGIES CAN DELIVER REAL BUSINESS BENEFITS ONLY 11% MADE ANY SIGNIFICANT PROGRESS IN IMPLEMENTING STRATEGY IN THE ORGANIZATION CEOS ARE FAILING TO RECOGNIZE THE BENEFITS OF IMPLEMENTING CSR STRATEGIES DESPITE INCREASING PRESSURES TO DO SO CSR PROGRAMMES INFLUENCE 70% OF ALL CUSTOMER PURCHASING DECISIONS
is a set of obligations with which it has to protect, enhance, and otherwise work to the betterment of the society in which it functions. The concept of corporate social performance includes a business organisations Configuration of principles of social responsibility. Process of social responsiveness, and Policies, programmes, and observable outcomes as they relate to the firms societal relationships.
Implementation of CSR
The systematic implementation of CSR means:
The adoption of strong organizational values and norms depicting behaviours that are appropriate towards a variety of stakeholders. 2. The continuous generation of intelligence about stakeholder issues, along with positive responses to these issues.
1.
perspective by viewing corporation as a social institution with a corporate personality. Managers are the trustees of the corporation. The duty of the trustees is to sustain the corporations assets, expectations of customers & suppliers & company's reputation in the community. Mangers have to balance the conflicting interests of current & future stakeholders & to develop companys capacities in a long term perspective rather than focus on short term gains
corporation regards the company not as a private association united by individual property rights, but as a public association constituted through political and legal processes and as a social entity for pursuing collective goals with public objectives.
multiple interests of stakeholders, rather than shareholder interest alone. It argues that the corporation should serve and accommodate wider stakeholder interests in order to make the corporation more efficient and more legitimate.
accumulate wealth for their own cause; They should participate in social welfare projects, which will improve their image in public esteem; They also have to make quality products and stick to delivery schedules while importing and exporting goods; and They should create employment opportunities for the disadvantaged. They have to pay taxes in full & on time, observe the laws of land Ensure a clean & healthy environment
Thus they should understand the fact that economic goals & social
responsibility objectives needs not be contradictory to each other & could be achieved simultaneously
Ethical
Statist
Mahatma Gandhi
Jawaharlal Nehru
Liberal Stakeholder
development, it goes to improve corporate performance:It offers multiple benefits to corporations both internally & externallyExternally it creates a positive image & goodwill among the public & earns a special respect amongst different stakeholders which go a long way in promoting long term shareholder value & sustainable development Internally it cultivates a sense of loyalty & trust amongst employees It provides workers a feeling of satisfaction & a meaning to their lives Thus because of all these positive factors that organizations involve themselves in socially responsible investing (SRI)
its action that have impacted the external environment The organization needs to compensate for the cost of damages caused by its action, by creating benefits that exceeds costs to all affected stakeholders
stakeholders truthfully without misguiding them in any manner This enables stakeholders to have a full & fair view of the situation
exhibit a sense of CSR and implement it, such as: 1. Improved financial performance 2. Enhanced brand image and reputation 3. Increased sales and customer loyalty 4. Increased ability to attract and retain employees 5. Reduced regulatory oversight 6. Innovation and learning 7. Easier access to capital
(evolution of areas of social responsibility) 1. Market forces : Need to respond to the demands of the market. Managerial decisions may involve business responding to the economics of the market by efficiently & effectively using resources. 2. Mandated actions: Managerial decisions may reflect business responses to government mandated requirements or pressure group stakeholder (unions)
CSR addresses the following issues: Assistance in solving community problems Health & welfare Education Human rights Natural environment Culture
following nine steps to attain Corporate Social Responsibility: 1. Confirm CEO/Board commitment to prioritize responsible business conduct 2. State company purpose and agree on company values 3. Identify key stakeholders 4. Define business principles and policies
CONTD-- AGAINST
GO HAND IN HAND
standards produced for business by governmental & nongovernmental organizations with a view to support, measure & assist in implementation & to create a platform for accountability for performance of CSR issues. These standards are necessary as companies do not have a clear vision about what constitutes CSR, how their investment on it is decided, how to evaluate the outcome & so on. Some standards address single issue (e.g. focused on environmental performance or corporate governance) while others address a range of CSR issues
(OECD) United Nations Global Compact Asian-Pacific Economic Cooperation (APEC) Business Code of Conduct The Global Reporting Initiative (GRI)
adopt CSR practices but Indian companies so far have not experienced any such pressures Indian companies are not legally bound to formally report CSR activities unlike developed countries which adhere to the Global Reporting Initiative (GRI) India ranks last in terms of the level of CSR demanded from companies, but according to the survey conducted by Centre of Social Markets, there has been a growing change in the attitude of Indian firms towards CSR
regulatory requirements and consistency in value delivery as the three most important factors that impact their social . reputation There is a transition from statist model & liberal model of CSR to ethical model Wider adoption of CSR in Indian companies will be enabled by: Provision of tax, duties & custom benefits, Inclusion of CSR performance of promoter as a parameter for fast track clearance to projects Depreciation benefits where asset investments are made
the new paradigm Creation of an enabling environment and an array of support measures. Business schools teaching CSR to facilitate this process Industry associations to share experiences and reward best practice Need to incorporate public policies into the Indian CSR. International agencies to share cross-country experience.
SOME INITIATIVES
IBM- UPLIFTMENT OF TRIBALS IN SASAN INDIAN PAINT INDUSTRY MAKING PAINTS MORE ENVIRONMENT
FRIENDLY FINANCIAL SERVICES-NEASING OF CARBON FOOTPRINTSRENEWABLE ENERGY ETC- HSBC, MAX NEWYORK LIFE, SCB E CHAUPAL ADOBE, KPMG, PROMOTING ENTREPRENEURSHIP RELIANCE- PROJECT DRISHTI NDTV-GREENATHON AIRCEL-SAVE THE TIGER COPENHAGEN- ENVIRONMENT ISSUES E WASTE MANAGEMENT
EMPLOYEES RESEARCH WHAT BUSINESS IS DOING PREPARE A MATRIX OF PROPOSED CSR ACTIONS DEVELOP ACTIONS FOR THEM DECIDE ON DIRECTION,APPROACH AND FOCUS AREAS.
STRUCTURE PREPARE AND IMPLEMENT CSR BUSINESS PLAN SET MEASURABLE TARGETS AND IDENTIFY PERFORMANCE MEASURES DESIGN AND CONDUCT CSR TRAINING ESTABLISH MECHANISMS FOR ADDRESSING PROBLEMATIC BEHAVIOUR CREATE INTERNAL AND EXTERNAL COMMUNICATION PLAN
HR
ENVIRONMENT
CG ECO DEVP
ETHICS
ACCOUNTABILITY
CSR