SOCIAL

RESPONSIBILITY OF A
BUSINESS
Submitted to: Prof. SK Chadha
Business Environment
Submitted by: Saloni Maheshwari
Roll no. 13
MBA Entrepreneurship
Submission date: 23 April 2020
ABOUT
• Also known as CORPORATE SOCIAL RESPONSIBILITY (CSR)
• Helps companies be socially accountable
• Necessary for eligible companies to give back to the society
• Philanthropic and environmental activities
• The production process of companies may negatively impact the society and
environment, thus they have to perform CSR activities as a result
• 2% of the average profits of last 3 Financial Years must be spent on CSR Activities
Eligibility
• As per Section 135 of Companies Act 2013, Companies must have either one of
the following requisites:
• Net Worth of Rs. 500 Crore or more
• Turnover of Rs. 1000 Crore or more
• Net Profit of Rs 5 Crore or more
• Meeting any one of the requirements means that company must form a CSR
Committee
• 3 Directors
• 1 Independent Director
World Business Council for Sustainable
Development
“the continuing commitment by business to
behave ethically and contribute to economic
development while improving the quality of life
of the workforce and their families as well as the
local community and society at large”
Nature of Social Responsibility
• Normative in Nature
• Relative
• Idealtype of business scenario – legal and socially
responsible
Types of Social Responsibilities
• Towards Society – holistic sustainable development of environment, community,
ecology, and overall social welfare
• Towards Employees – employee welfare activities and training programmes
• Towards Consumers – deliver non-hazardous and safe goods, no unfair trade
practices, good and services of proper quality and standard, satisfactory after-
sales services, consumer grievance cell
• Towards Government – follow rules and regulations, R&D for upliftment of the
nation
• Towards Shareholders – good conduct, reasonable ROI, transparency and
accountability of financial statements
3 Ps of CSR
• CSR takes into account 3Ps
• PEOPLE comes first
• transparency
• PLANET comes second
• Lower carbon footprint and less environment
damage
• PROFIT comes third
MODELS OF CSR
Friedman Model (1962-1973)
• Company has NO social responsibility to the public or society
• Responsibility only to its stockholders and shareholders
• “Profit Model”
Ackerman Model (1976)
• Emphasis on Internal policy goals and their relation to CSR
• Stage 1: Project Identification
• Suitable project selected through which CSR will be performed.
• Company decides which social problems must be solved and working strategies made accordingly
• Stage 2: Project Study
• Study feasibility, cost, time budgeting
• Intensive research and expert advice
• Stage 3: Project Implementation
• Be cautious and careful.
• Seek advice from government and other relevant authorities
• Stage 4: Project Evaluation
• What is gained and what is lost
Carroll Model (1991)
Environment Integrity & Community
Health Model
• Developed by Redman (2005)
• Adopted by many US Corporates
• Focus on community and their health
• Healthy individuals more productive and efficient
Stockholders and Stakeholders Model
• Economic Stockholders
• Productivism – Maximizing profits
• Philanthropy – CSR dominated by moral obligations

• Social Stakeholders
• Progressivism – belief that corporate behaviour is motivated by self
interest and should have the ability to transform the society for
good
• Ethical idealism – sharing of profits for humanitarian activities
Corporate Citizenship Model
• Company should function as a citizen
• Must fulfil ethical, philanthropic, legal and economic duties and
obligations
• Dutiesdone in good faith towards community create goodwill
and help organization to perform well in long term
• Important Criterion: fulfilment of certain social duties and
obligations
Ghosh Model (New Model)
Strategies for Adoption of CSR
• Reduction Strategy – initially firm tries to reject the project
• Adversary Strategy – Social Responsibility of business opposed till firm
pressurized
• Resistance Strategy – Firm half-heartedly adopts project and works slowly to
avoid it. When pressure added by government, works fast
• Compliance Strategy – Once project accepted, firm tries to complete it promptly
• Accommodation Strategy – Requests accommodated from different government
agencies and shareholders
• Proactive Strategy – finish project just in time
Need for CSR
• Improving public image and help create goodwill
• Type of investment
• Reducing social cost
• Create better understanding and industrial peace
• Creates better social environment
• Hope to create pollution free corporate environment
• Internalize the negative externalities
Arguments for Social Responsibility
• Socio-moral obligations of business
• Yields reasonable returns in long run
• Improve public image and goodwill of company
• Save company from unnecessary litigations, huge expenditures
and legal complications
• Creation of social capital and assets for benefit of society
• Follow the ethical, social and legal issues in daily functions
Arguments against social responsibilities
• Businessand ethical rooting don’t go hand in hand. Main goal is
profit-making
• Cannotbe held responsible for non-performance or failure of
any CSR project
• Good performance of business is itself a type of social
responsibility of business
• Friedman– managers have no right to spend shareholders’
money on social responsibility of business
INDIAN CSR PROJECTS