1. 1.

Corporate Social ResponsibilityModule-7

2. 2. Lecture Outline: Corporate Social responsibility. Types and nature of social
responsibilities. CSR principles and strategies. Models of CSR. Best practices of
CSR. Need of CSR. Arguments for and against CSR.
3. 3. Person going from one side of the canyon to the other a lotof clouds like fog. The
point is going from one way of doingbusiness to another is very tough. Theres a lot
uncertainty.It takes a lot of skill, but we have to lift ourselves beyondthat, above the fog, and
thats not going to be a simpleexercise. CSR is about seeing the forest, the fog, and
seeinghow we can get on the other side, and how we can be well-equipped for doing that. So
probably we need to developadditional skills, knowledge, and understanding.
4. 4. The message is that whateverwe do today will have an impacton future generations.
Weshould not hope that the wallswe build to protect ourselveswill be tall enough to protectour
children. Only with veryconscious effort we can makethe world for them a better placeto
liveeven if we address ourmost selfish needs we have toaddress the needs of the
nextgeneration. Thats what CSR isabout.
5. 5. Meaning: Corporate social responsibility is a gesture of showing thecompanys concern
& commitment towards societyssustainability & development. CSR is the ethical behaviour
of a company towards society.
6. 6. WBCSD (World Business Council forSustainable Development)The continuing
commitment by business to behaveethically and contribute to sustainable
economicdevelopment while improving the quality of life of theworkforce and their families as
well as of the localcommunity and society.
7. 7. Basic Constituents of CSRContributetowards
asustainableeconomicdevelopmentMakedesirablesocialchangesImprovementof
socialenvironmentTowardsBusiness& Society
8. 8. Types of Social Responsibility
9. 9. Responsibility towards Society Carrying on business with moral& ethical standards.
Prevention of environmental pollution. Minimizing ecological imbalance. Contributing
towards the development of social health,education Making use of appropriate
technology. Overall development of locality.
10. 10. Responsibility towards Government Obey rules & regulations. Regular payment of
taxes. Cooperating with the Govt topromote social values. Not to take advantage
ofloopholes in business laws. Cooperating with the Govt foreconomic growth &
development.
11. 11. Responsibility towards Shareholders To ensure a reasonable rate ofreturn over time.
To work for the survival & thegrowth of the concern. To build reputation & goodwillof the
company. To remain transparent &accountable.
12. 12. Responsibility towards Employee To provide a healthy working environment. To grant
regular & fair wages. To provide welfare services. To provide training & promotion
facilities. To provide reasonable working standard &norms. To provide efficient
mechanism to redressworkers grievances. Proper recognition of efficiency & hard work.
13. 13. Responsibility towards consumers Supplying socially harmlessproducts. Supplying
the quality, standards,as promised. Adopt fair pricing. Provide after sales services.
Resisting black-marketing &profiteering. Maintaining consumersgrievances cell. Fair
competition.
14. 14. Nature of social responsibility CSR is normative in nature. CSR is a relative concept.
CSR may be started as a proactive or reactive. All firms do not follow the same patterns of
CSR. Legal & socially responsible. Legal but socially irresponsible. Illegal but socially
responsible. Illegal & socially irresponsible.
15. 15. CSR Principles & Strategies. Respect for human rights. Respect for the differences of
views. Diversity & non-discrimination should be the guidingprinciple. Make some social
contribution. Enter into e dialogue Self-realization & creativity. Fair dealings &
collaboration. Feedback from the community. Positive value- added Long term
economic & social development.
16. 16. Models of corporate socialresponsibility Friedman model Ackerman Model Carroll
Model Environmental Integrity & Community Model. Corporate Citizenship Model.
Stockholders & Stakeholders Model. New Model of CSR.
17. 17. Friedman Model(1962-73) A businessmen should perform his duty well, he
isperforming a social as well as a moral duty. A businessmen has no other social
responsibility to performexcept to serve his shareholders & stockholders.
18. 18. Ackerman Model (1976) The model has emphasized on the internal policy goals &
theirrelation to the CSR. Four stages involved in CSR. Managers of the company get to
know the mostcommon social problem & then express awillingness to take a particular
project which willsolve some social problems. Intensive study of the problem by hiring
experts &getting their suggestions to make it operational. Managers take up the project
actively & workhard. Evaluating of the project by addressing the issues.
19. 19. Contd. Six Strategies in the adoption of CSR. Rejection strategy Adversary
strategy Resistance strategy Compliance strategy Accommodation strategy Proactive
strategy
20. 20. Carroll Model(1991)
21. 21. Philanthropic requirements: Donation, gifts, helpingthe poor. It ensure goodwill & social
welfare. Ethical responsibility: Follow moral & ethical valuesto deal with all the
stakeholders. Economic responsibility: Maximize the shareholdersvalue by paying good
return. Legal responsibility: Abiding the laws of the land.Carroll Model(1991)
22. 22. Environmental Integrity & CommunityHealth Model. This model developed by
Redman. Many corporate in US adopted this model. Corporate contribution towards
environmental integrity &human health, there will be greater expansion opportunities.
Healthy people can work more & earn more. CSR is beneficial for the corporate sector.
CSR in a particular form is welcome.
23. 23. Corporate Citizenship Model To be a corporate citizen, a corporate firm has to satisfy
fourconditions: Consistently satisfactory Sustainable economic performance Ethical
actions Behaviour. A particular firms commitment to corporate citizenshiprequires the
fulfillment of certain social responsibilty.
24. 24. Stockholders & Stakeholders Model1Productivism2Progressivism3Philanthropy4Ethical
IdealismSelfDutyInterestStakeholderModelStockholdersModelMoralORIENTATIONMOTIVES
25. 25. Contd. Productvists believe that the only mission of a firm is tomaximize the
profit. Philanthropists who entertain the stockholders. CSR isdominated by moral
obligations & not self-interest. Progressivists believes the corporate behaviour
basicallymotivated by self interest & should have ability to transformthe society for good.
Ethical Idealism concern with sharing of corporate profits forhumanitarian activities.
26. 26. New Model of CSRCSR (+) CSR(-)CSR(-) CSR(-)Ethical
RootingFinancialCapabilityStrong PoorStrongPoor
27. 27. Best Practices of CSR To set a feasible, Viable & measureable goal. Build a long
lasting relationship with the community. Retain the community core values. The impact of
the CSR needs to be assessed. Reporting the impact. Create community awareness.
28. 28. Need for Corporate Social Responsibility To reduce the social cost. To enhance the
performance of employees. It a type of investment. It leads to industrial peace. It
improves the public image. Can generate more profit. To provide moral justification. It
satisfies the stakeholders. Helps to avoid government regulations & control. Enhance the
health by non polluting measures.
29. 29. Arguments for & against the CSR Corporate should have some moral & social
obligations toundertake for the welfare of the society. Proper use of resources, capability &
competence. The expenditure on CSR is a sort of investment. Company can avoid many
legal complications. It create a better impression. Corporate should return a part of
wealth.
30. 30. Fundamental principles of business gets violated. It vey expensive for business
houses. CSR projects will not be successful. There are not the special areas of any
business. CSR is to induce them to steal away the shareholders money.Arguments against
the CSR
31. 31. Indian Perspective. The Sachar committee was appointed in 1978 to look intocorporate
social responsibility issues concerning Indiancompanies . The company must behave &
function as a responsiblemember of society. Committee suggests openness in corporate
affairs &behaviour. Some business houses have established social institutions likeSchools,
colleges, charitable hospitals etc. Corporate sectors have not made significant
contributions.(Polluting Environment).
32. 32. CSR EXAMPLES IBM UK - Reinventing Education Partnership programmeInteractions
and sharing of knowledge through a web-basedtechnology - the Learning Village software.
Culture ofopenness and sharing of good practice AVON - a partnership with Breakthrough
Breast Cancer, andits Breast Cancer Crusade has raised over 10 million poundssince its
launch 12 years ago TOIs Lead India campaign, campaign for contributiontowards
educating the poor
33. 33. Companies in trouble Dasani mineral water (part of Coca-Cola). Cokes sale was
banned as the result of tests, includingthose by the Indian government, which found
highconcentrations of pesticides. Communities in India , around Coca-Colas
 bottlingoperations are facing severe shortages of water as a resultof the cola major sucking
huge amounts of water from thecommon groundwater source.
34. 34. Issues at NIKE Nike Inc producer of footwear, clothing, equipment and
accessoryproducts for the sports and athletic market. Selling to approximately 19,000 retail
accounts in the US, andapproximately 140 countries around the world. Manufactures in
China, Taiwan, Korea, Indonesia , Mexico as well asin the US and in Italy. People working -
58% young adults between 20 and 24 years old,83% - women. Few have work-related skills
when they arrive at the factory. Issue- unhealthy work environment debates heated
arguments,verbal abuse , 7.8% of workers reported receiving unwelcome sexualcomments,
and 3.3% reported being physically abused. In addition,sexual trade practices in recruitment
and promotion were reported
35. 35. Case StudyJack Cohen founded Tesco in 1919when he began to sell surplusgroceries
from a stall in the EastEnd of London.The Tesco brandfirst appeared in 1924. The
namecame about after Jack Cohenbought a shipment of tea from T.E.Stockwell. He made
new labelsusing the first three letters of thesuppliers name (TES), and the firsttwo letters of
his surname (CO),forming the word TESCO. The firstTesco store was opened in 1929
inBurnt Oak, Edgware, Middlesex.Tesco was floated on the LondonStock Exchange in 1947
as TescoStores (Holdings) Limited.
36. 36. Corporate Social Responsibility of Tesco Tesco has made a commitment to corporate
social responsibility, in the form ofcontributions of 1.87% in 2006 of its pre-tax profits to
charities/local communityorganisations. In 1992 Tesco started a "computers for schools
scheme", offering computers in returnfor schools and hospitals getting vouchers from people
who shopped at Tesco. Until2004, 92 million of equipment went to these organisations. The
scheme has been alsoimplemented in Poland. Starting during the 2005/2006 football
season the company now sponsors the TescoCup, a football competition for young players
throughout the UK. The cup now runs aboys competition at Under 13 level and two girls cups
at Under 14 level and Under 16level. Over 40,000 boys alone took part in the 2007/08
competitions. In 2009 Tesco used Change for Good as advertising, which is trade marked
byUnicef for charity usage but is not trademarked for commercial or retail use whichprompted
the agency to say "it is the first time in Unicefs history that a commercialentity has purposely
set out to capitalise on one of our campaigns and subsequentlydamage an income stream
which several of our programmes for children are dependenton.
37. 37. Vodafone promised to cut down their carbondioxide emissions in half by 2020
throughimproving the energy efficiency of itsglobal mobile -phone networks. Additionalpoints
for Vodafone on CSR because they areconstantly updating us with the results of
thecampaign; no matter whether its going well ornot.Future promises includes pledging to
recycle95% of network equipment waste and plans toreduce work-related accidents that
cause losttime by 10%. On top of that, Vodafone is aleading business in socially
responsibleproducts such as the text-to-speech softwarefor blind people and easy-to-use
handsets forthe elderly.
38. 38. The banks head of corporatesustainability, Teresa Au, has said thatdespite the economic
situation, HSBCwould continue to support itssustainability campaign. Initiativesinclude
 providing small businesses withsustainability insurance options anddeveloping an index for
climate change.The business has also boosted itsmanagement of ethical and
sociallyresponsible investing funds by 60% overthe last two years. HSBC has anAmerican
unit that is dedicated toassisting local communities bypromoting affordablehomeownership,
among other goals.

CORPORATE SOCIAL RESPONSIBILITY

1. 1. A Presentation by R.K.Sahoo 14 August 2012 1

2. 2. It takes 20 years to build a reputation and only 5minutes to ruin it. (Warren
Buffet).Business should not only be responsible morallyto the stakeholders but also to
thesociety, environment and towards a sustainableplanet at large. 14 August 2012 2
3. 3. Many other names are used to refer to CSR such as sociallyresponsible business,
responsible business conduct, responsibleentrepreneurship, corporate citizenship, corporate
accountability orcorporate sustainability.CSR is the continuing commitment by businesses to
behaveethically & contribute to economic development while improving thequality of life of
the workforce & their families ,local communitiesand the society at large. (World Business
Council) 14 August 2012 3
4. 4. CSR requires companies to acknowledge that they should be publicly accountable not
only for their financial performance but also for their social and environmental record. CSR
encompasses the extent to which companies should promote human
rights,democracy,community improvement and sustainable development objectives
throughout the world. (Confederation of British Industry,2001). CSR is the commitment of
businesses to contribute to sustainable economic development working with employees, their
families, the local community and society at large to improve their quality of life in ways that
are both for business and good for international development. World Bank,24 March 2004).
14 August 2012 4
5. 5. CSR is an extended model of corporate governancebased on the fiduciary duties owed to
all the firmsshareholders.CSR is about how companies manage the businessprocesses to
produce an overall positive impact on thesociety.CSR is the responsibility of corporations to
go above andbeyond what the law requires them to do.CSR is the responsibility of
corporations to contribute toa better society and cleaner environment. 14 August 2012 5
6. 6. Eradicate extreme poverty and hunger. Achieve universal Primary education. Promote
gender equality and empower women. Reduce child mortality. Improve maternal health.
Combat HIV/ AIDS, Malaria & other fatal diseases. Ensure environmental sustainability.
Develop a global partnership.Source:( United Nations Millennium Project). 14 August 2012 6
7. 7. DISCRETIONARY philanthropy RESPONSIBILITY ETHICAL License to operate
RESPONSIBILITIESAttain profits withinthe confines of the LEGAL RESPONSIBILITIES law.
Produce goods and ECONOMIC RESPONSIBILITIES services to earn profit. 14 August
2012 7
8. 8. Business Ethics, values and principles.Accountability and
transparency(Legalcompliance).Commitments to socio-economic
developments.Environmental concerns.Human rights.Workers rights and welfare.Market
relations.Sustainability.Corporate governance. 14 August 2012 8
9. 9. Influence of political systems on CSR. The liberal model of US and the european union
which based on individual equality and liberty. The nationalist model within which the
economic activities are subordinated to the goals of the state(e.g. Imperial Japan). The
Marxist model under which investment and enterprise is controlled by the state(e.g. China
and Cuba). Religion does influence the economic behavior. For believers the morally right
"thing to do is generally consistent with the notion of what God might have commanded and
conversely the morally wrong choice is what God might have forbidden. 14 August 2012 9
10. 10. Increased employee loyalty and retention.Increased quality of products and services
.Increased customer loyalty.Increased reputation and brand image.Greater productivity and
quality.Reduced regulatory oversight .Access to capital and market.Product safety and
decreased liability.Less volatile stock value. 14 August 2012 10
11. 11. ISSUES STANDARDSEnvironment Kyoto protocol ISO 14000 environmental
management seriesLabor Fair labor association workplace code of conduct.Corporation
governance OECD principles of corporate governance. Principles of Corporate governance
in commonwealth.Money laundering Basel committee on banking supervision. Wolfsburg
anti-money laundering principles.Bribery and Corruption OECD convention combating
bribery of foreign public officials in international business transactions.Human rights Amnesty
international Human right principles.Corporate Reporting Global reporting initiative2012
guidelines on social 14 August 11 ,economic and environmental reporting.
12. 12. Shareholder value(Changes in stock price anddividend).Revenue(Changes in revenues
due to change inmarket share and new markets ).Operational efficiency.Access to debt and
equity capital.Customer attraction and retention.Creation of brand value and
reputation.Human capital.Risk management.Innovation.License to operate. 14 August 2012
12
13. 13. Agenda 21: A plan of action for governments, companies and civilsociety to address
human impacts on society.Beijing declaration: (www.un.org):An international declaration
onthe rights of women.CERES principles: A ten-point code of corporate
environmentalconduct for use as an environmental mission statement or ethics.
(www.ceres.org).Organization for Economic Co-operation and Development
(OECD)guidelines for multinational enterprises( www.oecd.org). 14 August 2012 13
14. 14. Wolfsburg anti-money laundering principles: Principles offer privatebanks to counter
money laundering.Social Accountability 8000:Workplace standard against which to
assureworker rights & welfare.(www.sa-intl.org).Principles of responsible investment:
Principles on environmental,social and corporate governance issues pertaining to investors.
(www.unpri.org)Global reporting initiative: A framework for reporting on social,environmental
and economic performance(www.globalreporting.org).Convention on biological diversity:
Principles for the conservation ofbiological diversity including sustainable use, sharing of
benefits andaccess to genetic resources(www.biodev.org). 14 August 2012 14
15. 15. Globalization.Power & Influence of business corporations.Growing access to education
and information.Growing awareness of environmental issues.Spread of corporate scandals
and publicdistrust. 14 August 2012 15
16. 16. According to Geoffrey Lantos:3 main types of CSR.Ethical CSR: Its about the
responsibility to avoidharms or social injuries.Altruistic CSR: Contributing to the common
good atthe possible expenses of the business for altruistic,humanitarian or philanthropic
causes.Strategic CSR: Its about firms social welfareresponsibilities that benefit both the
corporation andstakeholders. 14 August 2012 16
17. 17. Ethics concerns individual actions that can beassessed as right or wrong with reference
tomoral principles whereas CSR is about theorganizations obligation to all stakeholders
andnot just shareholders.CSR is about tangible corporate practices whilebusiness ethics is
more about the values drivingbusiness decisions. 14 August 2012 17
18. 18. Economic Responsibility(Profit).Social Responsibility (People).Environmental
Responsibility( Planet). 14 August 2012 18
19. 19. Financial profit, economic growth and asset creation.Economic impact through business
processes such asoutsourcing, knowledge innovation and social investments.Monetary
support for political parties.Stock exchange activities including insider trading.Economic
regulation and tax incentives.Intellectual property rights, patents, and trademarks
etc.Antitrust and competition.State contracts and state subsidies. 14 August 2012 19
20. 20. Labor rights: Slave,forced,child labor,non-discrimination,equalopportunities,minimum
wages ,health & safety.Right to work :Protecction against unjustified dismissals,
vocationaltraining /guidance.Right to hold opinions :Freedom of
expression,thought,conscienceand religion.Right to Privacy: Drug testing, Personal
information, Surveillanceetc.Cultural rights. Rights to take part in political life.Right to family
life. 14 August 2012 20
21. 21. UN convention on biodiversity: Ex situ & In situconservation & use of genetic material &
technologytransfer.Use and handling of genetically modified organisms.Greenhouse gas
emissions and global warming.Soil & water contamination.Treatment and reduction of waste
water.Eco-efficiency.Recycling and reuse of materials .Protection of forest resources. 14
August 2012 21
22. 22. Nike factories in Asia were criticized for employing youngchildren in extremely poor
working conditions. Explosion at Union Carbide Ltd-Bhopal ,India in Dec ,1984caused
thousands of deaths and rendered many people disableddue to leakage of MIC
gas.Fraudulent accounting manipulations led to collapse of Houstonbased Enron corporation
.James Hardie was criticized for its failure to providecompensation to people affected by
asbestos-related diseases. 22 14 August 2012
23. 23. Enron was voted Americas most innovative company.In 2001,Enrons board of directors
was named the 3rd best boardin US by Chief Executive Magazine.In Dec 2001,Enron filed
for bankruptcy with $63 billions inassets, and it became one of the largest bankruptcy case in
USas an epitome of corporate greed and dishonesty.94,000 jobs were lost putting the
investors and employees atirreparable loss.In order to restore public trust in American
corporations,congress passed the Sarbanes Oxley- Act(SOX Act) in 2002 inorder to protect
 the investors by improving the accuracy &reliability of corporate disclosures in accordance
withsecurities laws. 14 August 2012 23
24. 24. Green Buildings: The LEED certification by the US Green building Council hascaused the
growth of green building movement.Emphasis on green manufacturing in order to reduce the
emissions of greenhouse gases and environmental pollutions.Green products initiatives in
order to reduce the toxic chemicals.Product stewardship encourages everyone in the value
chain to contribute toproduct sustainability from producers to regulators to retailers to
consumersthereby achieving zero waste and sustainable production. 14 August 2012 24
25. 25. ALCOA: The Aluminum company, was rated as one ofthe most ethical companies by
Ethisphere magazine in2007.Corporate knights and Innovest rated ALCOA asglobal 100
most sustainable corporations in the world.General Electric Corporations Ecomagination
strategyfor developing a variety of green investment initiativesand eco-friendly products such
as solar panels, waterpurification systems and energy saving light bulbs.Coca-Cola: A
leading manufacturer of beverages,emphasizes global water stewardship,
sustainablepackaging ,climate protection, energy management andeco-innovation in
packaging . 14 August 2012 25
26. 26. Innovation in alternative transportation such as hybrid vehicles andelectric vehicles by
companies like Toyota,Nissan,Honda and TeslaMotors in order to curb the greenhouse gas
emissions and reduce theenvironmental hazards.Many companies like IBM,Staples and BP
are purchasing RenewableEnergy Credits (RECs) in order to support the clean energy
projects.Companies such as Ben & Jerry,IKEA,The Body Shop are promotingBiodiversity
conservation, sustainable forestry initiative, organicfarming and fair trade in order to balance
the need for both businessgrowth, sustaining and preserving the depleting natural resources.
14 August 2012 26
27. 27. Towards the goal of achieving a cleaner environment, usageof sustainable packaging
materials made of biodegradableplastics in stead of PVC plastics.Reducing or making the
productive use of waste in orderto achieve the ultimate goal of zero- waste by emphasizingon
recycling. 14 August 2012 27
28. 28. There are 1.28 billion mobile phone users across the globeand over 342 million phones
in UK alone. UK consumers get rid of their mobile phones on average every 18 months
leaving behind environmental hazards due to lithium ,platinum,copper and plastics. Fonebak
is the largest recycling company in UK that collects such mobile phones from operators,
retailers and corporations for recycling and has earned highest accolades for its
environmentally friendly business practices. 14 August 2012 28
29. 29. Corporate Citizenship Award.National Sustainable Development Award.Corporate
Environmental Protection Award.The Golden Peacock Global Award for CSR.Fortune Most
Admired Companies.World Business Green Business Award.Alcan Prize for Sustainability.
14 August 2012 29
30. 30. CSR is the heart and soul of modern corporations and is animportant standard for
corporate governance.CSR is an indispensible mechanism for both increased
corporateaccountability,profitability and environmental sustainability.CSR is the pole star for
modern corporations in order to maintainthe integrity of moral fabrics both inside and outside
thecorporation while conducting socially responsible business. 14 August 2012 30
31. 31. 14 August 2012 31