CHAPTER I INTRODUCTION

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INTRODUCTION OF TOPIC
Corporate social responsibility (CSR) has variously been described as a motherhood issue (Ryan 2002, p. 302) the hot business issue o the nou!hties ("lyth 200#, p. 30) and the tal$ o the to%n in corporate circles these days (&ees ' "onham 200(). )here seems to be an in inite number o de initions o CSR, ran!in! rom the simplistic to the comple*, and a ran!e o associated terms and ideas (some used interchan!eably), includin! corporate sustainability, corporate citi+enship, corporate social investment, the triple bottom line, socially responsible investment, business sustainability and corporate !overnance (,rime &inister-s Community "usiness ,artnership). .t has been su!!ested that some/researchers/distort the de inition o corporate social responsibility or per ormance so much that the concept becomes morally vacuous, conceptually meanin!less, and utterly unreco!ni+able(0rlit+$y 200#)1 or CSR may be re!arded as the panacea %hich %ill solve the !lobal poverty !ap, social e*clusion and environmental de!radation (2an &arre%i3$ 2003). Corporate Social Responsibility is the continuin! commitment by business to behave ethically and contribute to economic development %hile improvin! the 4uality o li e o the %or$ orce and their amilies as %ell as o the local community and society at lar!e. )he study aims to detail the various corporate social responsibilities underta$en by 5r. Reddys lab or the %el are o public. )he concept o social licence is an abstract one, the interpretation o %hich varies. )his is understandable in a corporate %orld !rapplin! %ith varyin! de!rees o success %ith a ran!e o concepts such as CSR, triple bottom line,

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and socially responsible investment. 6o%ever, it is critical that corporations understand and embrace this relationship %ith the broader society in %hich they operate. 7 popular e*planation o the term CSR is the continuin! commitment by businesses to behave ethically and contribute to economic development, %hile improvin! the 4uality o li e o the %or$ orce and their amilies as %ell as o the local community and society at lar!e. 0ver the last years an increasin! number o companies %orld%ide started promotin! their business throu!h Corporate Social Responsibility strate!ies because the customers, the public and the investors e*pect them to act sustainable as %ell as responsible. .n some cases, CSR is a result o a variety o social, environmental and economic pressures %hile some other cases many lar!e corporations, it is primarily a strate!y to divert attention a%ay rom the ne!ative social and environmental impacts o their lives. .t enables the company to levera!e its products, employee stren!th, net%or$s and pro its and up to some e*tent to create a sustainable chan!e or mar!inali+ed communities

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TITLE OF TOPIC
)he topic is titled as 8Corporate Social Responsibility9 %ith speci ic re erence o 5r. Reddys :aboratory

OBJECTIVE OF THE STUDY

)o underta$e a !eneral research on corporate social responsibility underta$en by 5r. Reddys :aboratory

)o study the contribution o leadership and mana!ement practice in the area o corporate social responsibility.

)o acilitate the ac4uisition and dissemination o $no%led!e about practice in corporate social responsibility.

SCOPE OF THE STUDY

&any o the insi!hts and recommendations rom this report may also be relevant or local and national private sector en!a!ement1 ho%ever, the e*tent to %hich local and national private sector actors can contribute CSR is a topic that merits additional revie% 7 literature revie% has been complemented %hich provides insi!ht into the diversity o CSR approaches and their implementation.

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LIMITATION OF THE STUDY

)his study is based upon the literature present ' secondary data only, so the study in itsel is con ined up to a certain e*tent.

5ue to paucity o time and limits the CSR activities o companies are described in short and there is a scope o more detailed study.

)he comparison is based on the 4ualitative in ormation. )here is not much in ormation avai:aboratoryle on the CSR e*penditure o company and its brea$ up so the comparison is limited in its scope.

)here %as no interaction %ith any pro essional o the companies studied so study lac$s practical approach.

PERIOD OF STUDY
)he study %as conducted or a duration o ( months i.e rom ;uly 20<3 to 0ctober 20<3.

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CHAPTER II PROFILE OF Dr. REDDYs LABORATORY

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INTRODUCTION - DRREDDY LABORATORIES

5r. Reddys :aboratories %as ounded by 5r 7n3i Reddy, an entrepreneur=scientist, in <>?(. )he 5@7 o the company is dra%n rom its ounder and his vision to establish .ndias irst discovery led !lobal pharmaceutical company. .n act, it is this spirit o entrepreneurship that has shaped the company to become %hat it is today. 5r 7n3i Reddy, havin! moved out o Standard 0r!anics :imited, a company he had success ully co= ounded, started 5r. Reddys :aboratories %ith A (0,000 in cash and A<20,000 in ban$ loanB )oday, the company %ith revenues o Rs.2, (2C crore (DS A#(E million), as o iscal year 200E, is .ndias second lar!est pharmaceutical company and the

youn!est amon! its peer !roup. )he company has several distinctions to its credit. "ein! the irst pharmaceutical company rom 7sia ,aci ic (outside ;apan) to be listed on the @e% For$ Stoc$ G*chan!e (on 7pril <<, 200<) is only one amon! them. 7nd as al%ays, 5r. Reddys chose to do it in the most di icult o circumstances a!ainst %idespread s$epticism. 5r. Reddys came up trumps not only havin! its stoc$ oversubscribed but also becomin! the best per ormin! .,0 that year.

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5r. 7n3i Reddy is %ell $no%n or his passion or research and dru! discovery. 5r. Reddys started its dru! discovery pro!ramme in <>>3 and %ithin three years it achieved its irst brea$throu!h by out licensin! an anti=diabetes molecule to @ovo @ordis$ in &arch <>>C. Hith this very small but si!ni icant step, the .ndian industry %ent throu!h a paradi!m shi t in its ima!e rom bein! $no%n as 3ust copycats to innovatorsB )hrou!h its success, 5r. Reddys pioneered dru! discovery in .ndia. )here are several such in lection points in the companys evolution rom a bul$ dru! (7,.) manu acturer into a vertically inte!rated !lobal pharmaceutical company today. )oday, the company manu actures and mar$ets 7,. ("ul$ 7ctives), Iinished 5osa!es and "iolo!ics in over <00 countries %orld%ide, in addition to havin! a very promisin! 5ru! 5iscovery ,ipeline. Hhen 5r. Reddys started its irst bi! move in <>?E rom manu acturin! and mar$etin! bul$ actives to the domestic (.ndian) mar$et to manu acturin! and e*portin! di icult=to=manu acture bul$ actives such as &ethyldopa to hi!hly re!ulated overseas mar$ets, it had to not only overcome re!ulatory and le!al hurdles but also battle deeply entrenched mind=set issues o .ndian ,harma bein! seen as producers o -cheap- and there ore lo% 4uality pharmaceuticals. )oday, the .ndian pharma industry, in star$ contrast, is $no%n !lobally or its proven hi!h 4uality=lo% cost advanta!e in deliverin! sa e and e ective pharmaceuticals. )his transition, a tou!h and o ten=perilous one, %as made possible than$s to the pioneerin! e orts o companies such as 5r. Reddys. )oday, 5r. Reddys continues its 3ourney. :evera!in! on its :o% Cost, 6i!h .ntellect advanta!e. Iorayin! into ne% mar$ets and ne% businesses. )a$in! on ne% challen!es and !ro%in! stron!er and more capable. Gach ailure and each success rene%in! the sense o purpose and helpin! the company evolve. 23

Hith over >#0 scientists %or$in! across the !lobe, around the cloc$, the company continues its relentless march or%ard to discover and deliver a brea$throu!h medicine to address an unmet medical need and ma$e a di erence to peoples lives %orld%ide. 7nd %hen it does that, it %ould only be the be!innin! and yet it %ould be the most important step. 7s :ao )+u %rote a lon! time a!o, Gven a <000 mile 3ourney starts %ith a sin!le step.

OVERVIEW
5r. Reddys be!an as an 7,. manu acturer in <>?(, producin! hi!h=4uality 7,.s to irst the .ndian, and later, the international mar$ets. .n <>?C, %e started our ormulations operations and, a ter becomin! a orce to rec$on %ith in the .ndian ormulations mar$et, %ent international in <>><. )oday, our value proposition to our customers derives rom an optimal operatin! system in %hich operations, product development and mar$etin! ' sales are ully inte!rated. 0perations and the supply chain are ali!ned to ensure hi!h availability, pull based replenishment o products at the retail level and superior inventory turns to our customers. )his advanta!e is combined %ith a hi!hly e ective prescription !eneration detailin! e ort. 7 ield orce o over 2C00 motivated and $no%led!eable representatives supported by an inte!rated net%or$ o bac$=end services and armed %ith handheld devices or 4uic$ in ormation access add value to every customer call and interaction.

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5r. Reddys = .ndia today is more than a 200 million dollar venture %ith presence in almost all ma3or therapeutic areas. 0ur inished dosa!e business in .ndia started in <>?E %ith launch o @orilet (nor lo*acin). 0ur mar$et penetration throu!h nearly 3000 sales orce %ho connect to more than 3,00,000 doctors on a re!ular basis has yielded us reachin! all corners o the country and providin! a ordable and innovative medicines in all ma3or therapeutic areas li$e !astro=intestinal, oncolo!y, pain mana!ement, cardiovascular, dermatolo!y, diabetes, etc. Gi!ht o our brands eature in the top=300 brands in .ndia that include dru!s li$e Stamlo, Reditu*, 0me+ and Jetorol. 7lon!side the presence o end=to=end pharmaceutical capabilities %ithin the or!ani+ation helps us cater customer and patient needs much more e ectively. &edicines li$e or any other !eo!raphy, %e manu acture at our DSI57 approved inished dosa!e acility %ith utmost importance on 4uality and e icacy o the dru!s. Recently %e have deepened our ocus into the rural mar$ets in .ndia to ensure the e*pansion o our reach. .n this initiative %e have collaborated %ith our CSR %in!, 5r. Reddys Ioundation to help us reach the millions %ho are still a%ay rom e ective treatment and availability o the ri!ht medicines. 7part rom manu acturin! and

distribution o medicines %e also provide patient care throu!h our various initiatives li$e Sparsh, :i e at your 5oorstep, etc. (%here patients are !iven ree treatment and medicines), and educate and create a%areness amon! healthcare pro essionals throu!h 5RI6G to cater to the millions %ho are in need o proper treatment across the country.

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HISTORY

5r. J. 7n3i Reddy %as the Iounder=Chairman o 5r. Reddys :aboratories :imited head4uartered in 6yderabad, .ndia. 6e %as born in )adepalli in Kuntur district o 7ndhra ,radesh. 7 ter !raduatin! rom "ombay Dniversity in ".Sc. ()ech) %ith speciali+ation in ,harmaceutical Science and Iine Chemicals, 5r. Reddy obtained his ,h.5 in Chemical Gn!ineerin! rom @ational Chemical :aboratory, ,une. )hen came a stint at the state= o%ned .5,:, ollo%in! %hich he became an entrepreneur and ounded Dr. Reddys L !"r #"r$es in <>?(. Dnder 5r. Reddys leadership the company has evolved into a pioneer in the .ndian ,harmaceutical space.

5r. Reddys passion or research had led Dr. Reddys L !"r #"r$es to ta$e up basic dru! discovery research in <>>3, thereby becomin! the irst pharmaceutical company in .ndia to do so. 5r. Reddys mission %as to provide innovative ne% medicines or healthier lives, at a price the common man can a ord. 5r. Reddy %as also the ounder o 6yderabad based .nstitute o :i e Sciences, a public=private partnership %ith the Kovernment o 7ndhra ,radesh ocused on cuttin! ed!e research in :i e Sciences. 7 humanitarian, 5r. Reddys %or$ in the ield o outcome based institutionali+ed philanthropy is le!endary. 6is sustained e orts in this area have had a tremendous impact

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on improvin! the lives o nearly # million underprivile!ed people in .ndia, especially youth and children.

Hith the intent to %or$ closely %ith the .ndian Kovernment and ul ill his vision o a poverty= ree .ndia, 5r. Reddy had set up @aandi Ioundation in <>>? as a ,ublic Charitable )rust. 0peratin! in multiple states, this is one o the bi!!est social enterprises in .ndia and provides clean drin$in! %ater and mid=day meals to children and armers. Sa e motherhood and ne%born care %ere very close to 5r. Reddys heart, %hich is %hy he had ounded @.CG Ioundation, dedicated to%ards improvin! maternal health and combatin! in ant and child mortality.

5r. Reddy served as a &ember o the ,rime &inisters Council on )rade ' .ndustry, Kovernment o .ndia. 6e %as a Iello% o the .ndian @ational 7cademy o Gn!ineerin! and the Chairman o 7ndhra ,radesh .ndustrial 5evelopment Corporation (7,.5C). 6e %as also the ,resident o )he .ndian ,harmaceutical 7lliance and had served as a "oard &ember o K7.@, S%it+erland (Klobal 7lliance or .mproved @utrition and a "oard o 5irector or )" 7lliance, @e% For$ (Klobal 7lliance or )" 5ru! 5evelopment).

5r. Reddy %as a recipient o several national and international reco!nitions and :i etime 7chievement 7%ards. .n 7pril 20<< the Kovernment o .ndia honored him %ith ,adma "hushan (the third hi!hest civilian a%ard in the country) or his contribution to the .ndian ,harmaceutical industry.

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CHAPTER III MEANIN% AND IMPORTANCE OF CORPORATE SOCIAL RESPONSIBILITY

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CORPORATE SOCIAL RESPONSIBILITY

&C"r'"r #e S"($ ) Res'"*s$!$)$#y $s #+e ("*#$*,$*- ("..$#.e*# !y !,s$*ess #" !e+ /e e#+$( ))y *d ("*#r$!,#e #" e("*".$( de/e)"'.e*# 0+$)e $.'r"/$*- #+e 1, )$#y "2 )$2e "2 #+e 0"r32"r(e *d #+e$r 2 .$)$es s 0e)) s "2 #+e )"( ) ("..,*$#y *d s"($e#y # ) r-e& )he same report !ave some evidence o the di erent perceptions o %hat this should mean rom a number o di erent societies across the %orld. 5e initions as di erent as &CSR $s !",# ( ' ($#y !,$)d$*- 2"r s,s# $* !)e )$/e)$+""ds. I# res'e(#s (,)#,r ) d$22ere*(es *d 2$*ds #+e !,s$*ess "''"r#,*$#$es $* !,$)d$*- #+e s3$))s "2 e.')"yees4 #+e ("..,*$#y *d #+e -"/er*.e*#& rom Khana, throu!h to &CSR $s !",# !,s$*ess -$/$*- ! (3 #" s"($e#y& rom the ,hillipines. "usiness and society have been coeval since time immemorial and also have been inter= dependant. )his relationship bet%een business and society is appreciated in Ri!veda also L 8Corporates should %or$ li$e a honeybee, %hich ta$es the nectar o a lo%er %ithout the lo%er bein! losin! its shape and ra!rance and provides honey or the %ellbein! o the society.9 .t means that both have to %or$ on a symbiosis manner or each ones survival and success. )he business history is replete %ith evidences to believe that business lourishes only %here society thrives. 0n the contrary, business dies %hen society condemns and re3ects it. @o business can survive %ithout societal approval and sanction. )he inter= dependant nature o relationship bet%een the business and the society is best illustrated by the mana!ement !uru ,eter 5ruc$er (<>#() by the e*ample o a ship and sea. 6e states that the relationship bet%een business and society is 5)$3e #+e re) #$"*s+$' !e#0ee* s+$' *d

#+e se 0+$(+ e*-$rds $# *d ( rr$es $#4 0+$(+ #+re #e*s $# 0$#+ s#"r. *d s+$'0re(34 0+$(+ + s #" !e (r"ssed !,# 0+$(+ $s ye# )$e* *d d$s# *#.6 @o doubt, business has been

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conducted primarily to earn pro it and M or create %ealth. 6o%ever, there are reasons and evidences to believe that the mindless obsession %ith pro it ma*imi+ation at any cost carried to any e*treme has led to spurt in sordid activities in business causin! harm to both the business and society and ultimately leadin! business to lounder and i++le out. Gnrons ,armalats, Dnion Carbide, and Horld.com are to name a e% representin! e*amples o such business collapses. "usiness history is also replete %ith e*amples that only the businesses that are conducted throu!h !ood or ri!ht practices en3oy societal sanction and survive and last or lon!. ;ohnson ' ;ohnson, &aruti :imited, Reliance .ndustries :imited, and )ata .ron and Steel Company are such e*amples that indicate that bein! !ood in conductin! business activities proves !ood or businesses also. 6ence, there has been increasin! concern or conductin! business in a !ood or ethical manner. )hou!h there has been a spurt in research activities on business ethics or ethics in business, not much research has so ar been conducted on %hat actually ma$es business ethics and ho% bein! ethical or !ood is !ood or business also. Corporate social responsibility (CSR, per ormance, also called corporate responsible conscience, corporate businessM Responsible

citi+enship, social

or sustainable

"usiness) is a orm o corporate sel =re!ulation inte!rated into a business model. CSR policy unctions as a built=in, sel =re!ulatin! mechanism %hereby a business monitors and ensures its active compliance %ith the spirit o the la%, ethical standards, and international norms. .n some models, a irm-s implementation o CSR !oes beyond compliance and en!a!es in Nactions that appear to urther some social !ood, beyond the interests o the irm and that %hich is re4uired by la%.N CSR is a process %ith the aim to embrace responsibility or the company-s actions and encoura!e a positive impact throu!h its activities on the environment, consumers, employees, communities, sta$eholders and all other members o the public sphere %ho may also be considered as sta$eholders. 23

)he term Ncorporate social responsibilityN came into common use in the late <>E0s and early <>C0s a ter many multinational corporations ormed the term sta$eholder, meanin! those on %hom an or!ani+ation-s activities have an impact. .t %as used to describe corporate o%ners beyond shareholders as a result o an in luential boo$ by R. Gd%ard Ireeman, Strate!ic mana!ementL a sta$eholder approach in <>?(.

,roponents ar!ue that corporations ma$e more lon! term pro its by operatin! %ith a perspective, %hile critics ar!ue that CSR distracts rom the economic role o businesses. &cHilliams and Sie!el-s article (2000) published in Strate!ic &ana!ement ;ournal, cited by over <000 academics, compared e*istin! econometric studies o the relationship bet%een social and inancial per ormance. )hey concluded that the contradictory results o previous studies reportin! positive, ne!ative, and neutral inancial impact, %ere due to

la%ed empirical analysis. &cHilliams and Sie!el demonstrated that %hen the model is properly speci ied1 that is, %hen you control or investment in Research and 5evelopment, an important determinant o outcomes. inancial per ormance, CSR has a neutral impact on inancial

.n his %idely=cited boo$ entitled &is!uided 2irtueL Ialse @otions o Corporate Social Responsibility (200<) 5avid 6enderson ar!ued orce ully a!ainst the %ay in %hich CSR bro$e rom traditional corporate value=settin!. 6e 4uestioned the Nlo tyN and sometimes Nunrealistic e*pectationsN in CSR.

Some ar!ue that CSR is merely %indo%=dressin!, or an attempt to pre=empt the role o !overnments as a %atchdo! over po%er ul multinational corporations. 23

CSR is titled to aid an or!ani+ation-s mission as %ell as a !uide to %hat the company stands or and %ill uphold to its consumers. 5evelopment business ethics is one o the orms o applied ethics that e*amines ethical principles and moral or ethical problems that can arise in a business environment. .S0 2E000 is the reco!ni+ed international standard or CSR. ,ublic sector or!ani+ations (the Dnited @ations or e*ample) adhere to the triple bottom line ()":). .t is %idely accepted that CSR adheres to similar principles but %ith no ormal act o le!islation. )he D@ has developed the ,rinciples or Responsible .nvestment as !uidelines or investin! entities.

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CHAPTER IV MEANIN% AND IMPORTANCE OF CORPORATE SOCIAL RESPONSIBILITY

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CORPORATE SOCIAL RESPONSIBILITY INITIATIVES OF Dr. REDDYs LABORATORY

Hhile -SustainabilityL )he )riple "ottom :ine- as a term may have a contemporary rin! to it, the spirit underlyin! it has been relevant throu!h the a!es. .n <>?C, the Horld Commission on Gnvironment and 5evelopment (established by a resolution o D@ Keneral 7ssembly) de ined sustainability as "5evelopment %hich meets the needs o the present %ithout compromisin! the ability o uture !enerations to meet their o%n needs". .t also populari+ed the use o this term or resources rene% ability, desired business plan and a pro!ressive %ay o doin! thin!s. 7t 5r. Reddy-s, belie is that any hi!h per ormance sustainable or!ani+ation rests on the three pillars o economic, social and environmental per ormance. )o be a truly sustainable or!ani+ation, in the broadest de inition o its terms, an or!ani+ation must per orm %ell across all three dimensions. 7s a company, they are ully committed to the principles o sustainability. )hey see the s# 3e+")ders s s+ re+")ders, to %hom %e promise sustained economic per ormance, #+e s"($e#y = to %hom %e promise to create positive impact throu!h our activities both business as %ell as voluntary = and inally #+e e*/$r"*.e*#, %hich %e promise %ill be %ell protected and enriched rom our various activities. .n reco!nition o the conviction that the prosperity o communities is inte!ral to the success o companies, Social .nitiatives is hi!her on the a!enda o more companies no% than ever be ore.

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7t 5r Reddys, %e ta$e pride in the act that our products and %hat they are intended to achieve represent the core o Social .nitiatives O to help people lead healthier lives. )he company achieves this ob3ective throu!h increased access and a ordability o its !enerics, 7,. and branded !enerics products and addressin! unmet and undeserved medical needs by innovation throu!h its Specialty and @CG businesses. 7t 5r Reddys, Social .nitiatives represents an inte!ral component o Corporate Social Responsibility. )heir investments in the communities have e*tended beyond the adhoc disbursement o charity to a planned pro!ram in capability buildin!, helpin! e*tend the sporadic to the sustainable. )he various or!ani+ations that %e support areL DR. REDDY FOUNDATION NAANDIFOUNDATION

DR. REDDYS FOUNDATION FOR HEALTH EDUCATION 7DRFHE8 CENTRE FOR SOCIAL INITIATIVE AND MANA%EMENT 7CSIM8

7t the company, Social .nitiatives does not 3ust cover the community, but also employees. )his re=interpretation has happened or an important reasonL society represents a mi* o employees and non=employees. "y includin! employees in our de inition o Social .nitiatives, the company has demonstrated that no initiative can succeed unless i the initiators o the improvement do not i!ure amon! the bene iciaries themselves. .t is this comprehensive address O employees to communities O that enhances the impact o the companys social initiatives, stren!thenin! its case or true sustainability.

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