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Corporate Social

Responsibility

What is CSR ?
Corporate
Social
Responsibility
means
different things to different people. One end of
the spectrum is compliance with laws and other
is being philanthropic. Another way of looking
at it is who benefits The beneficiaries range
from employees to suppliers to customers to the
amorphous
entity
called
Community.
Complying with the law is the basic minimum
to legitimately stay in business.

What is CSR ?
Corporate Social Responsibility (CSR) is viewed as a
comprehensive set of policies, practices and programs
that are integrated into business operations, supply
chains, and decision-making processes throughout
the organization -- wherever the organization does
business -- and includes responsibility for current and
past actions as well as future impacts.
CSR involves addressing the legal, ethical,
commercial and other expectations society has for
business, and making decisions that fairly balance the
claims of all key stakeholders.

What is CSR ?
European Commission (2001) defines CSR as
a concept whereby companies decide
voluntarily to contribute to a better society
and cleaner environment and as a process by
which companies manage their relationship
with stakeholders.

CSR AT TISCO
Jamsedji Tata had instructed his son Dorabji : Be
sure to lay out wide streets planted with shady trees,
every other one of a quick growing variety. Be sure
there is plenty of space for lawns and gardens.
Reserve large areas for football, hockey and parks.
Earmark areas for Hindu temples, Mohammedan
mosques and Christian churches.
Eight hour shift in 1912
Free medical aid for employees and family in 1915
(ESI Act 1948)
A welfare department in 1917. (Provision in 1948
Factories Act)

CSR AT TISCO
Workers provident fund, leave with pay and
accident compensation in 1920 (EPF Act 1952)
A technical training institute in 1921
Maternity Benefit Scheme in 1928 (Maternity
Benefit Act 1961)
Bonus in 1934 (Payment of Bonus Act 1965)
Retirement gratuity in 1937 (Payment of Gratuity
Act 1972)
A school for the children of TISCO workers in
1917 (Even no provisions today)

Forces Inducing CSR


The pressure of organized labour
Growing public awareness about quality of life and the
need to remove all types of pollution
Public opinion stressing on business morality and
integrity to be observed by all organization in any field
of human endeavor
The threat of nationalization or of severe regulations
in business, to prevent public exploitation and evils of
monopoly
The development of consumerism in many countries,
insisting on consumer protection in the market place
The managerial revolution enabling managers to act
as trustees and to adopt an objective attitude in the
distribution of surplus among all the interested parties

Social Responsibilities of A Business

Optimum utilization of scarce national resources


Responsibility not to make losses
Improved quality of life
Responsibility of employment and income
Offering quality products at fair prices
Environmental protection
Fair trade practices
Local development

What they say for ?


Corporates foremost social responsibility is to create
maximum shareholder value working under the
circumstances where it is fair to all its stakeholdersworkers, consumers, the community, government and the
environment. By living in the harmony with the
community and environment around us and not cheating
our customers and workers, we might not gain anything in
the short run, but in the long term, it means greater value
and profit for the shareholders. N. R Narayana Murthy
CSR as a concept is different to different people in
different countries. Fundamentally, CSR is balancing the
conflicting
interests put on the corporations from
different stockholders with the objectives a commercial
organization in such a way that there is minimum loss to
anybody. Aman Mehta, HSBC, Hong Kong.

Argument for CSR

Public expenditure
Long run viability
Public image
Better environment
Avoidance of government regulation
Balance of responsibility and power
Let business try
Business has the resources
Prevention is better than cure
Shareholder interest

What they say against ?


If you find an executive who wants to take on
social responsibility, fire him fast. Peter
Drucker.
As an industrialist my job is to produce goods
to satisfy the demand. Let us be very clear
about it. Everyone has to do his job. My
commitment is to produce at the cheapest
price and the best quality. If you dabble in
everything then you make a mess of things. If
we can not take care of our employees and
shareholders and start worrying about the
world, then that is hypocrisy. Dhirubhai
Ambani

Arguments against CSR

Loss of profit maximization


Cost
Lack of skills
Dilution of purpose
Lack of broad support
Lack of accountability

Strategic utility of CSR


E-choupal
Project shakti

How To Do Good
The company can undertake a programme
independently
Tata Teas JAGO RE
Aircels Save Our Tigers

Partnering with an NGO


The company can outsource its business processes to
those really in need.
Titan enlists the help of an NGO to train physically challenged people for
watch repair and watch strap making work.

How To Do Good
Buy supplies from the needy
HLL buys its corrugated boxes from an NGO,
which works with the disabled.
Tata Motors and Bajaj Auto have tied up with poor
women in their communities to supply pickles and
chapattis in their canteens.

Voluntary work on an individual level


Matching donations

Factors Affecting Social Orientation

Promoters and top management


Board of directors
Stakeholders and internal power relationship
Societal factors & Ethical influences
Industry and trade associations
Government and laws
Political influences
Competitors
Resources

Consequences

Increased sales and market share


Strengthened brand positioning
Enhanced corporate image
Increased ability to attract, retain and
motivate employees
Decreased operating cost
Increased appeal to investors and financial
analysts

What is Ethics ?
The study of how our decisions affect
others
The study of peoples rights and duties
The moral rules that people apply in
decision making and the nature of the
relationships among people

Four Levels of Ethical


Questions

Societal
Stakeholders
Internal Policy
Personal

Tools of Ethics
Values
Relatively permanent desires that seem to be good in
themselves; peace or goodwill.
Answers to the WHY questions until you reach the
point where you no longer want something for the
sake of something else.
Corporations also have values like Size, profitability or
making a quality product.
http://www.marico.com/abt_marico/our_values.html

Tools of Ethics
Rights & Duties
A claim that entitles a person the room in
which to take action
Sphere of autonomy
The scope of individual rights is limited by the
rights of others
A duty is an obligation to take specific steps
pay taxes

Tools of Ethics
Moral Rules
- Morale rules are rules for behavior that
often become internalized as moral
values.
- Moral rules guide us through situations
where competing interests collide.

Tools of Ethics
Human Relationships
- Every human being is connected to others in a
web of relationship.
- These relationships exist because we need one
another for mutual support and to achieve our
goals.
- From a small childs relationship with parents,
managers relationship with an employee,
relationship are common aspect of moral life.

Continue.
- We constantly decide how to maintain and
cultivate them.
- These decisions reflect our values and our
concern for ethics. So, when we say that
management is about relationship we are
claiming that it has large ethical
component.

Ethics and equity and the


principle of justice do not
change with the
calendar.