CORPORATE SOCIAL RESPONSIBILITY

DR.PAROMA MITRA MUKHERJEE

Meaning
CSR in developing countries to represent the formal and informal ways in which business makes a contribution to improving the governance, social, ethical, labour and environmental conditions of the developing countries in which they operate, while remaining sensitive to prevailing religious, historical and cultural contexts (Visser et al., 2007). H.S. Singhania classifies the nature of CSR into two categories: The manner in which organisation carries its own business The welfare activities taken as an additional function of the organisation

CSR pyramid for developing countries

Ethical responsibility
Legal responsibility Philanthropic responsibility

Economic responsibility

Contd..
Ethical Responsibilities -Adopt voluntary codes

of governance and ethics Legal Responsibilities -Ensure good relations with government officials Philanthropic Responsibilities helping people by giving money. For that they set aside funds for corporate social / community projects Economic Responsibilities-Provide investment, create jobs, and pay taxes

Corporate social Responsibility

Shareholders Employees Government Local community Supplier Customer

Primary Stakeholder

Business Organization

BO

Competitors Media Trade associations Public Interest Groups

Secondary Stakeholder

Responsibility towards shareholders

To protect their capital

To provide a fair or reasonable return to the

owners in the long run. To strive for a reasonable stability of the dividend income of the owners. To provide the information related how their resources are being used and how the business of the firm is conducted.

Responsibility towards employees

To provide a fair compensation system including

wages and salaries, facilities, amenities and prerequisites commensurate with work requirement and status. To set a fair work standards and welfare facilities including healthcare, sanitation, education and basic facilities like housing, water supply, electricity, phone connectivity etc. to provide suitable training and development facilities. To provide suitable reward and incentive system. To provide good working environment.

Responsibility towards consumer

Five fundamental consumer rights Right to safety Right to product knowledge and education Right to product choice Right to full value. Right to justice(compensation against loss or damage)

Contd.. Implications of the firms concern for consumer rights are that they should; Strive to improve product quality through research, development and innovation. Provide goods to consumers at fair or competitive prices Ensure adequate availability of products in the market. Provide satisfactory after sale and consumer-support services. Provide complete knowledge about the product, particularly its side or adverse effects Ensure right product standards Avoid exaggerated or misleading claims.

Responsibility towards suppliers

A good relationship with suppliers is essential for

lower cost and continuity of operations. An ethical business organization does not break contracts, makes timely payment, does not seek legal loopholes in supply contract

Responsibility towards competitors

A social responsible firm plays a fair game in

competition by learning the good business strategies and practices of its competitors

Responsibility towards government

Business

organization which are social responsible firms are fair and regular in the payment of various taxes and charges, provide data time to time to government and help them to take different schemes of the government. Good relation with government help them to get new licences, credit from public sector banks and supply orders from them.

Responsibility towards local community

It provide the image of the firm.

They must compensate directly or indirectly for

pollution(land , water, air, noise), control of agriculture productivity decline and shortage of water, power etc. They can compensate by providing local infrastructure( roads, water, etc), civic facility (park, sanitation, etc), establishing health and education institution etc.

Factors Affecting Social Orientation

Promoters and top management Board of Directors Stakeholders and internal power relationship Societal factors

Industry and trade association

Government and laws Political influences Competitors Resources Ethical influences

Some cases
Lupin India Ltd, Indias third largest manufacturer of

pharmaceuticals has started a project for providing sustainable development in 154 villages across Rajasthan. The scheme instead of providing for piecemeal assistance that does not lead to effective alleviation of poverty or adequate development is designed as a holistic action plan that includes an Agricultural Income Generation Scheme, land cultivation and fruit plantation programs, fodder preservation schemes, sericulture and water-recycling programs, establishment of medical and educational centers, adult literacy programs and credit schemes.

Case
Cipla, another Indian pharma major has found a

novel approach to fulfill its corporate social responsibility obligations by offerering to sell a cocktail of three anti-HIV drugs, Stavudine, Lamivudine and Nevirapine, to the Nobel Prizewinning voluntary agency Medicine Sans Frontieres (MSF) at a rate of $350, and at $600 per patient per year to other NGOs over the world. This offer has to led to an significant decrease in the prices of these drugs worldwide increasing the accessibility of these drugs especially in the developing countries.

Contd.
Ranbaxy, one of Indias major pharmaceutical firms

operates seven mobile healthcare vans and two urban welfare centers that reach over a lakh people in various parts of northern and central India as part of its corporate social responsibility initiative.

Case
Tata Consultancy Services (TCS) has set up a

fully-equipped computer training laboratory for children from the Society for the Welfare of the Physically Handicapped and Research Centre, in Pune for imparting basic computer knowledge. NIIT has launched a highly popular hole-in-thewall scheme where it places a computer on a public wall in urban and rural areas so that neighborhood children can learn computer basics using the play-way method.

Case
Bharat Electronics Ltd built cyclone proof houses

for the victims of the super cyclone in with the help of the victims themselves so that the houses are built according to their needs.

Public Sector Enterprises and Corporate Social Responsibility

In our narrative so far, we have focused on the private sector and its greater societal obligations. India, also, has a large public sector with several huge corporations. And companies operating in various sectors like petroleum, heavy industries, aviation, mining, steel, equipment manufacturing and shipping. The Indian public sector has had a long tradition of corporate social responsibility and the initiatives of corporations like the Oil and Natural Gas Commission (ONGC), Steel Authority of India Ltd (SAIL) and Gas Authority of India Ltd. (GAIL) have critical in the development of several backward regions of the country. Indian Airlines and Bharat Heavy Electronics have been widely acclaimed for their disaster management efforts.