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Corporate Social Responsibility
Corporate Social Responsibility
Corporate Social Responsibility
Definition for CSR Components of CSR Concepts of CSR Key issues in CSR Implications CSR in Gujarat Awards CSR Management Sphere of Influence Business benefits & critics
Corporate social responsibility (CSR) is a form of corporate self-regulation aiming to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere.
CSR (Carrol , 1979) Firms have responsibilities to societies including economic, legal, ethical and discretionary (or philanthropic). - See also De George (1999) on the Myth of the Amoral Firm Social Contract (Donaldson, 1982; Donaldson and Dun fee , 1999) There is a tacit social contract between the firm and society; the contract bestows certain rights in exchange for certain responsibilities.
Stakeholder Theory (Freeman, 1984) A stakeholder is any group or individual who can affect or is affected by the achievement of an organizations purpose. Argues that it is in the companys strategic interest to respect the interests of all its stakeholders.
CSR
= political economy
Labor rights:
Environmental conditions
Human rights
cooperation with paramilitary forces complicity in extra-judicial killings job creation public revenues skills and technology
Poverty Alleviation
Liberalization of markets reduction of the regulatory approach Emergence of global giants, consolidation of market share
Facilitators: IT (esp. Internet), media, low cost travel Boycotts, brand damage, influence legislation, domino effect e.g. Shell in Nigeria, Exxon in Cameroon, Sinopec in Sudan, Apparel Industry (Nike, Gap), GMO, Wood Products, etc.
Foreign Direct Liability Alien Tort Claims Act (ATCA): human rights, environmental rights o Unocal Burma o Coca-Cola Columbia o Rio Tinto Papua New Guinea o Del Monte Guatemala o The Gap Saipan o Shell Nigeria Other tools: RICO, False Advertising
UN Global Compact
New social and product liability patterns Development of Codes of Conduct and CSR reporting
CSR Drivers
Transnational Corporations
How do companies address socio-environmental & legal compliance issues? Policies - Code of Conduct Systems - Compliance Management Reporting - Accounting and Reporting
CSR is titled to aid an organization's mission as well as a guide to what the company stands for and will uphold to its consumers. Development business ethics is one of the forms of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment . ISO 26000 is the recognized international standard for CSR. Public sector organizations (the United Nations for example) adhere to the triple bottom line (TBL). It is widely accepted that CSR adheres to similar principles but with no formal act of legislation. The UN has developed the Principles for Responsible Investment as guidelines for investing entities.
The government of Gujarat has, in its newly announced industrial policy, refrained from making corporate social responsibility (CSR) mandatory. Also rechristened CSR as Wealth with Social Health. Previously the Gujarat government had made it mandatory for state-run public sector enterprises to contribute 30% of profit before tax for social causes as part of their CSR that is now optional in the new industrial policy.
Secondary data analysis suggests that Gujarat is the most industrialized state in India, boasting the strongest economy. Its corporate sector and primary owners of big business houses have considerable political and financial clout in the state, nationally and internationally. This sector also upholds a tradition of philanthropy with CSR finding expressions in setting up NGOs, community based development projects and civil society organization. CSR is seen in many different ways in the society.
One of the popular perspectives is that which upholds Gandhi's concept of Trusteeship. According to this viewpoint we all are trustees, not owners of our wealth, labor, knowledge and skills and obliged to use it for social good. Thus, while the owner of a business is a trustee of the wealth that the business produces, the workers of the business are the trustees of their labor. Both are expected to use the fruits of their capital and skill for
(a) their own basic needs (b) needs of their business or enterprise (c) and the social good. Any surplus must be spread across all the three uses. Other common practices in gujarat include business houses sponsoring village rehabilitation after a disaster, supporting fodder distribution during a drought, opening sadavrat or food for all, always centers during famines and dan etc
The relationship between private sectors and other sectors in Gujarat is strong and multiple. Business interest in educational, charitable, health and other areas of social development is common and accepted. Various leading business families in the state reflect the above mentioned observation. In the field of education the Lalbhais the Ahmedabad Education Soc. The Sarkarlal family Gujarat University Ranchodlal chotalal founder of textile mills was responsible for putting up 1st Technical school.
In addition most of the colleges in Gujarat are run by trusts set up and managed by local business interests. Illy, leading hospitals like Shardabai Hospital and Vadilal Hospital were set up by leading business families for social purpose. In South Gujarat, the Marfatia family, once leaders in trade and financial, supported numerous public causes in the city. More recently, after independence, the Sarabhai family in Ahmedabad set up Indias leading national school of design, a physical research labarotory, the Indian Space Research Organization, an Institute for Mental Health,a Montessori school.
Last year, the company was able to reach out to over 1.2 million people in over 670 villages from 10 states across the country. Since all the issues tend to be interrelated, our approach has been aimed at dovetailing our efforts to respond to each of their issues. We raised the water table to a whopping 25 feet in Rajasthan
Also has carried out numerous activities like water harvesting and conservation to prevent salinity ingress in areas close to the sea, sustainable agriculture and animal husbandry, health & sanitation, HIV / AIDS programme, promotion of self-help groups of women for socioeconomic development and capacity building for enhancing skills of students, women and farmers in the villages adjoining all our locations, as our commitment to corporate social responsibility.
Larsen & Toubro Limited, in its corporate policy, philosophy and deeds has shown a commitment to social responsibility, with a range of activities as vast as it is varied - from environmental preservation, a field in which it has won laurels, to rural and social development. It has taken giant strides in promoting safety, health and hygiene, both within the corporation and externally.
L&T's rural development programmes touch the lives of people in remote villages and isolated communities. L&T offers a comprehensive package of medical services to the community. It has also set up several full-fledged school and runs nurseries of talent. The initiatives against HIV/AIDS are part of L&T's wide spectrum of health and welfare programmes for the community.
Rehabilitation Efforts L&T is among the first in the Indian corporate sector to join rescue and rehabilitation efforts for the victims of natural calamity. When Orissa, Gujarat and Bhutan were ravaged by the cyclone, ECC swung into action to provide shelter to the workforce including its employees and contractors' men and also provide relief to those people who became homeless.
L&T extended assistance in the form of men, machine and money during the earthquake in Gujarat. L&T redeployed equipment from its various construction sites in Gujarat and sent a multiskilled team of engineers for rescue and relief operations.
The Bombay Chamber of Commerce and Industry complimented L&T for its outstanding contribution to society by awarding Good Corporate Citizen Award 1994-95. In July 2002, the Federation of Indian Chamber of Commerce and Industry's Socio-economic Development Foundations (FICCI SEDF), Delhi presented appreciation certificate to L&T for programmes concerning women's empowerment, helping the elderly and AIDS prevention/control program of the company
Sustainable business development does not come about of its own accord. Rather, commitment to sustainability demands that corporate processes be reliably controlled and that everyone's actions - in finance as much as in environmental and social areas - be coordinated. Prerequisites for this are binding guidelines, unambiguous corporate goals and a clear organizational structure.
- Deutsche Telekom
Example: Chiquita
Do
Check
Measure progress
Audit Report
Who is to be influenced?
Lowering of tax rates Reducing regulatory interventions Improvement in market positions. Reputations of brand. Strengthen supplier relations. Cost saving. Improved relations with govt. authorities. Reduced interest rates.
Violations to profit maximization. Dilution of purpose. Costs. Too much power. Lack of skill. Lack of accountability. May make organization more vulnerable to revelation of bad/unethical business practice. A restriction to free trade.