Corporate Social

Responsibility
Perspectives of Corporate Social Responsibility

There are three perspectives that

prompt corporate social responsibility.
These are:
•Business perspective
•Eco-social perspective
•Rights-based perspective
 Why Social Responsibility of Business?

• Accountability to Society
In a democratic society any kind of
enterprise exists for the sake of society.
• Corporations’ Debt to Society
A corporation has to behave as a good
citizen. The 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, employee relations, creation
and maintenance of employment, environmental
stewardship and financial performance.
 Definitions of CSR (Contd.)

The classical economic model: Adam Smith

believed that public interest was served best by
individuals pursuing their own self-interests.
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.
 Today’s Corporate Social Responsibility
The corporate social responsibility of an
organization today, 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 organization’s
• configuration of principles of social
responsibility
• process of social responsiveness, and
• policies, programmes, and observable
outcomes as they relate to the firm’s societal
 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.
● The continuous generation of intelligence about
stakeholder issues, along with positive
responses to these issues.
 Theoretical Justification
for CSR

Trusteeship Model adopts a realistic and

descriptive perspective in viewing the
current governing situation of a publicly
held corporation, drawing from the
continental European conception of the
corporation as a social institution with a
corporate personality.
 Theoretical Justification
for CSR (Contd.)

Social entity theory: The social entity

conception of the 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.
 Theoretical Justification
for CSR (Contd.)

The Pluralistic Model: This model

supports the idea of 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.
 What are Corporations Expected to Do?

Corporations need to erase the perception of

the public that they 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
 Models for Implementation of CSR

Model Emphasis Proponent

Ethical Voluntary commitment by Mahatma Gandhi

companies to public welfare

Statist State ownership and legal Jawaharlal Nehru

requirements determine
corporate responsibilities

Liberal Corporate responsibilities Milton Friedman

limited to private owners
(shareholders)
Stakeholder Companies respond to the R. Edward Freeman
needs of stakeholders –
customers, creditors,
employees, communities,
etc.
 Advantages of Corporate Social Responsibility

There are several advantages to corporations when they

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.Risk management
8.Easier access to capital
9.Reduced operating costs
 Scope of Corporate Social Responsibility

Three levels of social responsibility can

be identified (evolution of areas of social
responsibility)
1.Market forces
2.Mandated actions
3.Voluntary actions
 Understanding Social Responsibility of Business

1) Protecting and promoting stakeholders’

interests
a) to consumers and community
b) social responsibilities of business towards
employees
c) to owners and inter-business
establishments
2) Promotion of common welfare programmes
3) Philanthropy
 Understanding Social Responsibility of Business
(Contd.)

4) Good corporate governance

5) Render social service
6) Abiding by rules and regulations
7) Creation of wealth
8) Ensure ecological balance
 Understanding Social Responsibility of Business
(Contd.)

9) Focus on the human element

10) Improve productivity
11) Sponsor social and charitable causes
12) Supplement state efforts
 Steps to Corporate Social Responsibility

The International Chamber of Commerce

recommends the 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
 Steps to Corporate Social Responsibility (Contd.)

5. Establish implementation procedures

and management systems
6. Benchmark against selected external
codes and standards
7. Set up internal monitoring
8. Use language that everyone can
understand
9. Set pragmatic and realistic objectives.
 External Standards on CSR

• The Caux Round Table (CRT)

• Organization for Economic Cooperation and
Development (OECD)
• United Nations Global Compact
• Asian-Pacific Economic Cooperation
(APEC) Business Code of Conduct
• The Global Reporting Initiative (GRI)
 External Standards on CSR

• AA1000 Accountability
• Social Accountability 8000
• Principles for Global Corporate
Responsibility
• The Global Sullivan Principles
• The Keidanren Charter for Good
Corporate Behaviour
 India on the Ethical/CSR Matrix

Indian corporations consider business

ethics, compliance with regulatory
requirements and consistency in value
delivery as the three most important factors
that impact their social reputation.
 India on the Ethical/CSR Matrix (Contd.)
Wider adoption of CSR in Indian companies will
be enabled by:
• Provision of tax, duties and custom benefits.
• Inclusion of CSR performance of promoters as
a parameter in according fast track clearance to
projects.
• Decreased government interventions.
• Depreciation benefits where asset investments
are made.
• Development guidelines on estimation of socio-
economic impacts.
 Ethics and Social Responsibility of Business

• Business ethics in India today

• Why so much corruption?
• The license raj
• Black money
 Future of Indian CSR
There is a clear need for
• Transition from the present compliance centric
approach to 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.
CSR expenditure in India

• During 2017-18, the firms listed on NSE had spent Rs 10,179 crore.
• "CSR expenditure by companies listed at NSE has grown at a healthy
compounded annual growth rate of 17 per cent over the last 5 years," a
report by nseinfobase.com, a joint venture between NSE and PRIME
Database, said.
• Reliance Industries, ONGC, Indian Oil Corporation, HDFC Bank, Tata
Consultancy Services, Infosys, Tata Steel, ITC, NTPC and Power Grid
Corporation of India are the top 10 companies which spent the most on CSR
during financial year 2018-19, the report said.
• "The top 10 companies together spent 36 per cent of the total spend on
CSR," the report said.
• Besides, there were 488 companies which exceeded their prescribed
spending and 37 companies spent on CSR despite reporting a loss.
• "PSU spending saw an increase of 4 per cent from previous year. 57 PSUs
spent Rs 3,198 crore in 2018-19, up from Rs 2,710 crore spent by 54 PSUs in
2017-18," the report stated.
CSR expenditure in India

• India is the first country in the world to make corporate social

responsibility (CSR) mandatory, following an amendment to the
 Companies Act, 2013 in April 2014. Businesses can invest their
profits in areas such as education, poverty, gender equality, and
hunger as part of any CSR compliance.
• The amendment notified in the Companies Act, 2013 requires
companies with a net worth of INR 5 billion (US$70 million) or more,
or an annual turnover of INR 10 billion (US$140 million) or more, or
net profit of INR 50 million (US$699,125) or more, to spend 2 percent
of their average net profits of three years on CSR.
• CSR is the procedure for assessing an organization’s impact on society
and evaluating their responsibilities. It begins with an assessment of
the following aspects of each business:
• Customers;
• Suppliers;
• Environment;
• Communities; and,
• Employees.
•
Examples of CSR in India -Tata group
• The Tata Group conglomerate in India carries out
various CSR projects, most of which are community
improvement and poverty alleviation programs.
Through self-help groups, it has engaged in women
empowerment activities, income generation, rural
community development, and other social welfare
programs. In the field of education, the Tata Group
provides scholarships and endowments for numerous
institutions.
• The group also engages in healthcare projects, such as
the facilitation of child education, immunization, and
creation of awareness of AIDS. Other areas include
economic empowerment through agriculture programs,
environment protection, providing sports scholarships,
and infrastructure development, such as hospitals,
research centers, educational institutions, sports
academy, and cultural centers.
Ultratech Cement
• Ultratech Cement, India’s biggest cement company
is involved in social work across 407 villages in the
country aiming to create sustainability and self-
reliance. Its CSR activities focus on healthcare and
family welfare programs, education, infrastructure,
environment, social welfare, and sustainable
livelihood.
• The company has organized medical camps,
immunization programs, sanitization programs,
school enrollment, plantation drives, water
conservation programs, industrial training, and
organic farming programs.
Mahindra & Mahindra
•Indian automobile manufacturer
Mahindra & Mahindra (M&M)
established the K. C. Mahindra
Education Trust in 1954, followed by
Mahindra Foundation in 1969 with the
purpose of promoting education. The
company primarily focuses on education
programs to assist economically and
socially disadvantaged communities.
Top 10 highest spending
businesses on CSR
in FY 2018-19:
.1. Reliance Industries Ltd: Rs 849.3 crore

• In terms of scale and coverage, RIL has

the highest CSR spend, touching lives
across the most extensive territories in
India. The CSR initiative covers rural
transformation, health, education,
sports development, disaster response,
arts, culture, heritage, and urban
renewal.
 . 2.ONGC Ltd: Rs 614.6 crore
•The company exceeded its spending over
the previous year. Of this, the company
spent Rs 246 crores on health care which
included a 300-bed hospital in Shivsagar
district, Assam, part-financed a 455-bed
Cancer hospital in Nagpur, operated 31
mobile medical units covering 371
villages in 9 states,
•  3. IOC Ltd: Rs 490.61 crore
• The IOC ran several CSR programs, ‘Vidushi,’
‘Aaroyam,’ ‘Divyangjans,’ ‘Robotic Scavenging,’ and
‘Sports Scholarships.’
•  4. HDFC Bank Ltd: Rs 443.80 crore
• HDFC Bank increased its CSR spend by 20 per cent
over the previous year (FY17-18). The bank’s CSR
initiatives touched 5 million lives. It trained 7.6 lakh,
women, in Self-Help Groups (SHG), supplied 21,000
renewable energy units, built or renovated 7,000
sanitation facilities in schools, and collected 1 million
units of blood.
5. Tata Consultancy Ltd: Rs 434.0 crore

•TCS encourages internal volunteer

participation in CSR initiatives through
the Purpose4life platform through
which its employees collectively
contributed 6,50,000 employee hours.
Education and skill-building at the
school level remained a major focus
.  6. Infosys Ltd: Rs 342.0 crore
•The Infosys Foundation, established in
1996, carries out sustainable CSR
initiatives working with various NGOs
covering several focus programmes. In
Bengaluru city, the company spent Rs
102 crore in different programmes,
education, healthcare, malnutrition,
destitute care. The company also
supported disaster relief in Karnataka,
Kerala, and Tamil Nadu.
 7. Tata Steel Ltd: Rs 314.9 crore

• The Tata Group’s adoption of CSR as part of

its corporate philosophy dates back to its
foundation years, and Tata Steel has been at
the forefront of several ongoing community
development programmes. In FY 18-19, its
initiatives touched 1.1 million lives and aim
to exceed 2 million by 2025.
• Steel ran initiatives in Maternity and
newborn care, safe sexual health education
for rural adolescents, outreach healthcare
services
 8. ITC Ltd: Rs 307.0 crore

•The ITC spent Rs 123.16 crore on

Healthcare, Sanitation, and Well-Being
Out of Waste Program (WOW) covering
East Godavari in A.P., Kolkata,
Bengaluru, Chennai, and Ahmedabad.
• Rural Development; Social Forestry;
Primary Education; Vocational Training;
Empowerment of Women;
9. NTPC Ltd: Rs 285.46 Crore

•  The NTPC spent 2.41 per cent, thus exceeding

the mandated 2 per cent target for CSR spend.
The company has several ongoing CSR
programmes touching over 1 million lives in 500
villages and 450 schools across its plant and
office locations in India.Its activities covered
rural healthcare, education, girl child and
women’s development, community
development, drinking water initiatives,
sanitation programmes, sports and
infrastructure development in rural areas, and
cultural activities.
10. Power Grid Corporation Ltd: Rs 195.5
crore

•The company has committed to

spending Rs 360 crore over the coming
two-three years with a focus on rural
community development covering
healthcare, education, child and
women’s development, among others.
CSR classroom assignment-in groups of 5
students in break rooms
• Choose any company in which students of GLIM have been
placed. You may access the information from the net but
copy paste from the annual report of the company is not
allowed
• Plan the CSR project for the company having the following
components
• Objective
• Budget calculation
• Target groups, location and Activities
• Organization structure for CSR
• Mechanism for monitoring
• Mechanism for impact assessment
• The group assignment along with names and roll
numbers to be sent to coco by the end of the session;
who will consolidate and send it to me by e mail.
Ethical issues in society

•Business
•Government
•Politics
•Judiciary
•Police
•Education
• Family / Individuals
Ethical issues and their solution in society
•Major Components of society
•Business
•Government
•Politics
•Judiciary
•Any other sector

individuals
Identify Ethical issues and their solution in society
• Components of society
• Business
• Major ethical issues and their solutions
• Government
• Major ethical issues and their solutions

• Politics
• Major ethical issues and their solutions

• Judiciary
• Major ethical issues and their solutions
• Identify Common solutions to solve the problems in different
sectors of society
Class Assignment –time 60 minutes

• Groups of five students would go to in

different breakrooms.
• Each group would discuss and decide the
major components of society where ethics
have been violated grossly
• Identify the major ethical problems in all the
chosen sectors and their solutions
• Lastly identify few common solutions which
would solve the ethical problems in most of
the sectors of society
BECG-Session -19

•Human ability to act

•Virtue ethics
•Global Reporting Initiative
•Ethical entrepreneurship
Human capability to act responsibly

•It depends on ability and Situation

Situation
• Capability

• Ability
Ability and situation

• Ability –Everybody is not like Atlas OR Nelson Mandela

• An insurer is able to comply with environment more as
compared to a chemical company
• SITUATION-
• A Millionaire is in a better situation to donate
• Managers at different levels are unable to take the same
decision at different levels
• Cultural difference-no pork , no beef
• Perception of top management and middle management
are different
Virtue ethics implies
moral strength and high character
• Ethical virtues qualify people to control their
• Ego ,Emotions and Desires
• Aristotle –virtue is the golden mean between two extremes of
vices
• Courage is golden mean between cowardice and
recklessness
• Generosity is the golden mean between miserly and
extravaganza
• Wisdom is golden mean between stupidity and arrogance
• Gita message of golden mean
• Virtues are acquired by practice till they become your habit
Courage needed to free a hostage from a
kidnapper

• Martial art expert

• Policeman

• book worm

• Cowardice Courage recklessness

Virtues in business- Nuclear plant

• Conservation organization

• Insurance company

• chemical coy.
• A C B

• Cowardice Courage recklessness

Training to develop virtues

•Silvia Schlageri -----Academy of values

•Acceptance
•Unselfishness
•Authenticity
•Awareness
•Integrity –the pursuit of accepted ideal
 Training to develop virtues
Integrity –the pursuit of accepted ideal
Compliance based Integrity based

Ethos Confirm to rules and laws Self control-accept

values and norms
Purpose Prevent criminal behaviour Enable self
responsibility
Methods Education Education
Leadership by rules Lead by example
Checking Convince people
Sanctions Evaluate
Human rights trustworthiness
Reward people
Human duty
Examples

•Levi’s , ABB , Daimler changed from

compliance to Integrity and improved
the performance of the organization
Global Reporting Institute-Boston –1997
Guidelines
• Economic performance
Environmental Social aspects
aspects
Materials Labour practices
Occupational health
Equal opportunity
Grievance mechanisms
Diversity and equal opportunity
• Water , biodiversity , emissions , effluents , transport , environmental
assessment
Global Reporting Institute-Boston –1997
Guidelines
• Market aspects

Energy Human rights

Non discrimination
Child labour
Forced labour
 Ethical
Entrepreneurship
Prof. S.K.Palhan
sk.Palhan@Greatlakes.edu.in
skpalhan@selfeffectiveness.com

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Issues in ethical entrepreneurship
• Product or service is useful to society
• Morally correct , socially acceptable
• Legal
• Green product –materials , processes , users , life
cycle environment impact
• Stakeholders management
• Employees
• Partners
• Customers
• environment

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 Green Product Design

• Inputs
• Health hazards
• Asbestos
• mercury
• Pesticide / insecticide /chemical fertilizers
• Pollution during production
• Tanneries - effluents
• Thermometers -mercury
• Thermal power generation-carbon dioxide , coal
ash
• Over exploitation of nature /people-child labour
 Green Product Design
• Process used
• Hazards in process of manufacture
• By-products
• Solid wastes
• Consumption / use problems
• Health -radiation
• Safety
• Pollution in air/ water / earth
• Life cycle pollution –plastics, lead , electronic waste
Green Product Design

• Biodegradable products
• Renewable resources
• Ozone depletion
• Green house effect
• Pollutants
• Sulfur, mercury, heavy metals,
asbestos,freon gases, co,nox etc
Steps in NAMASKAR model
• Identify the group of people
• Identify problems faced by the group
• ( if the problem is existing; it means that nobody has
solved it so far! )
• Identify a problem which you can solve in a
creative manner
• Solve the problem
• Check that the solution does not create further
problem
• Get paid
• Directly
• Indirectly
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Entrepreneurship

•How to ensure that entrepreneurship is

Ethical ?
.

• Nootan …..,uniqueness , new , creative

• Manushya…….target group
• Samasysa………….problem
• Objective
• Subjective
• Acute
• emerging
• Kaal ………..appropriate time

• Rath……reaching out to target group

• Location
• Medium
• What, how, when , where ?

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