Corporate Social Responsibility

INTRODUCTION
Business as it is said, is a product of environment. The nature of business, the location, volume the of product operation, to etc be is manufactured, size,

determined by the environment in which it operates. Similarly it has an impact on the environment in which it exists. The business decisions in an organization completely depend upon the environment and their impact. The environment can be divided into: Internal Environment External Environment

Busine
Internal Environme nt

ss Decisio n

External Environme nt

Social Responsibility of business refers to what business does over and above the statutory requirement for the benefit of the society. The word responsibility emphasizes that the business has some moral obligations towards the society. The term corporate citizenship is also commonly used to refer to the moral obligations of the business towards the

Corporate Social Responsibility

society. It implies that like individuals, corporates are also the part of the society and their behavior shall be guided by the social norms. Social Responsibility has been defined by Davis as follows: Social responsibilities refer to businessmans decision and actions taken to reason at least partially beyond the firms direct economic or technical interest. Still broader view has been suggested by Andrews when he says that: By social responsibility, we mean the intelligent and objective concern for the welfare of the society that restrains individual and corporate behavior from ultimately destructive activities, no mater how immediately profitable, and leads in the direction of positive contributions to human betterment, variously as the latter may be defined. There has been a growing acceptance of the plea that business should be socially responsible i.e. it should discharge its duties and responsibilities in enhancing the welfare of the society of which it is an integral part.

Corporate Social Responsibility

H. S. Singhania classifies CSR into two categories: The manner in which a business carries out its own business activity. The welfare activity that it takes upon itself as an additional function.

THE INTEREST GROUPS

Corporate Social Responsibility

Social Responsibility requires the identification of various interest groups, which may affect the functioning of a business organization and may also be affected by its functioning. Normally various groups associated with a business organization are shareholders, workers, customers, creditors, suppliers, government and society in general. The management owes responsibility towards all

these groups. Therefore, management should show a standardized norm of behavior.

Corporate Social Responsibility

Shareholders: The first responsibility of the management is to protect the interest of shareholders. The interests of majority of shareholders and large minority of shareholders are generally well protected through either direct participation in the management actions or they have real power to intervene, if necessary. They should be informed about the functioning of the organization adequately and timely. Therefore, management has a responsibility to provide proper safeguard to the money invested by shareholders.

Corporate Social Responsibility

Workers:
Workers have direct interest in an organization because by working there, they satisfy their needs. Thus, it is the managements responsibility to protect the interest of workers in the organization. This can be done by the management in the following ways: Management should treat workers as another wheel of the cart Management should develop administrative process in such a way that promotes cooperative endeavor between employers and employees. The management should adopt a progressive labor policy based on recognition of genuine trade union rights participation of workers in management, creating a sense of belongingness, improving their living and working conditions. Management should pay fair and reasonable wages and other financial benefits to workers.

Customers:
Management owes a primary obligation to give a fair deal to the customers. This can be done in the following ways:

Corporate Social Responsibility

Customers should be charged a fair and reasonable price. The supply of goods and services should be of uniform standard and of reasonable quality. Management should not indulge in profiteering, hoarding, or creating artificial scarcity. Management should not mislead the customers by false, misleading and exaggerated advertisements.

Creditors, Suppliers and Others:

They affect the organization in various ways. Therefore , the management is responsible to fulfill its obligations towards them. This can be done in the following ways. Management should create healthy and cooperative inter business relationship between different businesses. Management should provide accurate and relevant information to creditors and suppliers. Payments of price of materials, interest on borrowings, other charges should be prompt.

Government:
It is very closely related with the business system of the country. It provides various facilities for the development of

Corporate Social Responsibility

business. Government, no doubt, exercises control over business, but these controls are meant for overall development of business. Management can discharge its obligation to government by: Management should be a law-abiding citizen Management should pay taxes and other dues fully, timely & honestly. It should not corrupt government workers and public servants and the democratic process It should not buy political favors by any means

Society:
Organizations exist within a social system and get facilities from the system. Therefore, they owe obligations to the society as a whole. This can be done by: Management should maintain fair business policies and practices. It should play a proper role in civic affairs. It should provide and promote general amenities and help in creating better living conditions in general.

Corporate Social Responsibility

WHY SOCIAL RESPONSIBILITIES OF BUSINESS?

Why business should be concerned about social responsibilities? is a question that has attracted the attention of many thinkers, both from academics as well as from practitioners. There in have of been and arguments against and social counterarguments favour

responsibility of business.

Arguments against Social Responsibility:

1. Profit Maximization: The first and the most important argument against CSR is that a business organizations primary objective is profit maximization. Since business operates in a world of poverty and hunger, the economic efficiency of the business is a matter of top priority and should be the sole mission of business. Its function is economic and not social and economic values should be the only criteria used to measure success. 2. Society has to pay the cost: Another argument is that the costs of social responsibility will be passed on to the society and it is the society, which

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has to bear its cost. The question is whether the society can afford these costs? 3. Lack of Social Skills: Business managers are best in managing matters related to business. They are not equally good at solving social problems. If society is going to depend on someone to work with social problems, why choose a group, which is not qualified to do it.

4. Lack of Accountability: Another point of view is that business has not direct accountability towards the people, so it is unwise to give the businessman the responsibility for areas he is not accountable. Until the society can develop mechanisms, which establish direct lines of social accountability from business to the public, it should pursue its goal of profit where it is directly accountable through the market system. 5. Friedmans Views: The most convincing criticism has been voiced by the economist Milton Friedman. Friedman based his arguments on two principal contentions, one economic and one legal. From the economic perspective, he asserted that if managers spend corporate funds on projects not intended to

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maximize profits, the efficiency of the market mechanism will be undermined and resources will be misallocated within the economy. On the legal side, Friedman contended that because managers are legal agents of the stockholders, their sole duty is to maximize the financial return to the stockholders. Hence if they spend corporate funds for social purposes they are essentially stealing from the stockholders.

Arguments for Social Responsibility:

1. Changed Public Expectations of Business: One of the most potent arguments for social responsibilities is that public expectations from business have changed. It is reasoned that the institution of business exists only because it satisfies the valuable need of the society. Society gave business its charter to exist, and the charter can be amended or revoked at any time that business fails to live up to societys expectations. Therefore, if business wishes to remain viable in the long run, it must respond to societys needs and give societys needs and give society what it wants. 2. Public Image:

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Another argument in favor of social responsibility is that it improves public image. Each individual firm seeks an enhanced public image so that it may gain more customers, better employees more responsive money market and other benefits. Affirm which seeks better public image should support social goal. 3. Avoidance of Government Regulation: It seeks to regulate business in the public interest. Government regulation is costly and denies the much needed freedom in decision-making. Before government stretches its long arms, business should discharge its obligation to society. 4. Business has the Resources: Another argument for social responsibility is that business has a vast pool of resources in terms of men, talents, fictional expertise and money. Probably, business is without peers in respect of the resources it possesses. With these resources at its command, business is in a better position to work for social goals 5. Prevention is Better then Cure: If business delays dealing with social problems now, it may find itself constantly occupied with social problems now, it may find itself constantly occupied with putting out social

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fires so that it has no time to accomplish its goal of producing goods and services. Since these social problems have to be dealt some time, it is actually more economical to deal with them before they develop into serious social breakdowns that consume management time. 6. Citizenship argument: If individual members of society have an obligation to improve society, corporations also have this responsibility. After all, corporations unlike citizens are created by the society. Corporations are citizens and citizens have civic duties and responsibilities. The proponents of social responsibility say that the old concept of profit maximization has vanished and even economists have accepted it. The have substituted profit maximization with satisfactory profit. Today, business decision making is a mixture of altruism, self interest and good citizenship. Managers do take actions, which are in the social interest even though there is a cost involved and the connection with the long-range profit is quite remote. Therefore, the responsibilities of a business can be represented as follows:

Economic Concern

Mutual Concern

Social Concern

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The figure shows that though there may be some cleary distinct economic and social goals of an organisation, there is always a common area. This is the area that provides a realistic view of the social responsibility of a business.

STANDARD CHARTERED BANK HISTORY

The Standard Chartered Group was formed in 1969 through a merger of two banks: The Standard Bank of British South Africa founded in 1863 and the Chartered Bank of India, Australia and China, founded in 1853. Both companies were keen to capitalize on the huge expansion of trade and to earn the handsome profits to be made from financing the movement of goods from Europe to the East and to Africa.

SERVICES
Personal Banking Through our global network of over 1,750 branches and outlets, we offer personal financial solutions to meet the

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needs of more than 14 million customers across Asia, Africa and the Middle East. SME Banking Our SME Banking division offers a wide range of products and services to help small and medium-sized enterprises manage the demands of a growing business. Wholesale Banking Headquartered in Singapore and London, with on-the-ground expertise that spans our global network, our Wholesale Banking division provides corporate and institutional clients with innovative solutions in trade finance, cash management, securities services, foreign exchange and risk management, capital raising, and corporate finance.

Islamic Banking Standard Chartered Saadiq's dedicated Islamic Banking team provides comprehensive international banking services and a wide range of Shariah compliant financial products that are based on Islamic values. Private Banking Our Private Bank advisors and investment specialists provide customised solutions to meet the unique needs and aspirations of high net worth clients.

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PRINCIPLES & VALUES
At Standard Chartered success is built on teamwork, partnership and the diversity of their people. At the heart of their values lie diversity and inclusion. They are a fundamental part of culture, and constitute a long-term priority in their aim to become the world's best international bank. WHAT SCB STAND FOR: Strategic Intent The world's best international bank Leading the way in Asia, Africa and the Middle East BRAND PROMISE Leading by Example to be The Right Partner VALUES Responsive Trustworthy International Creative Courageous

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APPROACH Participation Focusing on attractive, growing markets where we can leverage our relationships and expertise Competitive positioning Combining global capability, deep local knowledge and creativity to outperform our competitors Management Discipline Continuously improving the way we work, balancing the pursuit of growth with firm control of costs and risks COMMITMENT TO STAKEHOLDERS Customers Passionate about the customers' success, delighting them with the quality of our service Our People Helping our people to grow, enabling individuals to make a difference and teams to win Communities Trusted and caring, dedicated to making a difference

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Investors A distinctive investment delivering outstanding performance and superior returns Regulators Exemplary governance and ethics wherever we are

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CORPORATE SOCIAL RESPONSIBILITIES
Standard Chartered employs 38,000 people in 950 locations in more than 50 countries in the Asia Pacific Region, South Asia, the Middle East, Africa, the United Kingdom and the United States of America. Standard Chartered is one of the world's most international banks, with employees representing 80 nationalities. Since SCB operates all around the globe and in such a diverse culture they face a variety of corporate responsibility issues. In June 2004 SCB carried out an audit of Corporate Responsibility activities through a cross section of the Banks operations. organizations The audit provided and a snapshot in the of area the of strength weakness

Corporate Responsibility and covered its approach and management of Corporate Responsibility related issues and the effectiveness of both its internal and external communication. SCB like most of the leading organizers sees Corporate Responsibility as an opportunity to make its brand stand out. Working on this, SCB has set some goals for itself for the year 2005 which were as follows: By the end of 2009 it aimed to have:

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An established governance structure for Corporate

Responsibility Raised awareness, internally and externally, of its

priorities and intentions Corporate Responsibility aspirations that are aligned with its business goals Established clear goals for all areas overseen by the Corporate Responsibility Committee Actively engaged all its employees in its Corporate Responsibility programme to spread understanding and best practice.

Community Partnership around the Globe

Seeing is Believing Seeing is believing is one of the major global community programmes conducted by SCB. It was launched in 2003 to help alleviate the issue of blindness across the globe. In first year of its functioning SCB raised enough money to restore the sight of 56,000 people. This achievement exceeded their goal of raising enough to restore sight to 28,000 people by World Sight Day on the 9th October 2003. Due to this overwhelming success, SCB has continued with its programme, in partnership with VISION 2020 the

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international body for the elimination of avoidable blindness - and together aim to raise US$ 6 million over the next three years which will help to restore sight of about one million people. The bank believed in discharging its social responsibility and so as part of the bank's 150th anniversary in 2003, a global fund raising campaign - 'Seeing is Believing' -- was launched that aimed to restore eyesight for nearly 30,000 persons globally (one for each Standard Chartered Bank employee). The Bank raised over US$ 1.44 million globally (enough to restore eyesight for 56,000 persons). In India, the Bank raised about US$ 200,000 from its staff and customers and is in the process of partnering with several organizations and NGOs across the country to restore eyesight to over 7,500 persons.

Living with HIV SCBs Living with HIV programme focuses on training all of its 30,000 plus employees in more than 50 countries on the facts about HIV/AIDS, how it spreads, how it can be prevented and how to care for those who are infected or affected by HIV.

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SCB in through their unique programme hopes to take away the stigma attached to HIV/AIDS in the hope that more people will come forward for testing and treatment, which they also offer to their staff members. In Botswana for example SCBs work with the youth organizations has helped to educate people about prevention and treatment. Similarly, in Malaysia, SCB is working with the student organization, AIESEC, and have trained 30 young people who will in turn train a further 3,000 counselors, thus spreading awareness in the country.

Community Partnership Programmes in India

International Marathon Standard Chartered had organized an International Marathon in Mumbai on 15th February 2004, as an innovative platform to bring together the corporates and the NGOs. What emerged from this initiative was a fun-filled way to channel funds to those in the country who needed it the most. Like, Give India, the charity partner for the event, raised an impressive figure close to Rs. 52,00,000/- for various causes. The funds are now been allotted to various causes as per the choices of the participants. They range from child welfare and education to aid for the blind and programmes for the elderly.

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SCB, through this marathon was able to bring closer donors like ICICI, McKinsey, celebrities and international sports personality to various NGOs like the Give India and National association for the Blind (NAB). The participants of the Marathon began at the start and ended at the finish line. But the funds generated began at the Marathon and ended in spurring social action for the under privileged. Following the choice of the donors and the variety of donation options, funds have found their way to a variety of causes. It took Rs 600 to sponsor a mid-day meal for 120 children, Rs700 to sponsor an artificial limb for a disabled child, Rs2000 to sponsor a blind childs education for a year, Rs5000 to sponsor a set of books and journals for a rural library and Rs11,250 to sponsor teacher training workshops for 25 women. The Nation Association for the Blind (NAB) has spread the Marathon generated funds for cataract operations, Braille presses and rehabilitation activities, while the Children Toy Foundation is busy formulating nutrition programmes, teaching aides, uniforms and libraries with it. 125 children are now assured of an education while 30 disabled people will have access to rehabilitation facilities. Dream a Dream will initiate the Dream Outdoor Programme, aimed at giving

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disadvantaged children exposure and empowerment through the means of outdoor activities. SCB will be arranging similar such marathons this year in Nairobi and Singapore and in Hong Kong the next year.

Ashray Centre: In continuing the Bank's pledge for providing support to HIV affected people Standard Chartered India has recently supported the children of Ashray Centre. Ashray centre is a local NGO which provides residential shelter for children of 0-12 years affected and infected by HIV /AIDS. A total of 60 children are currently housed at the centre. The Standard Chartered Branch staff donated generously for the mission along with money that was available out of selling old newspapers. School bags, notebooks and pencil were donated to each child. And as a token of their gratitude towards the Bank, the children, all trained by Shiamak Davar, entertained the Banks staff when the staff had visited the NGO to distribute the gift items. Mobile Medical Unit

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Corporate Social Responsibility

The Mobile Medicine Unit sponsored by Standard Chartered Bank to Helpage India has continued to render primary healthcare at the doorsteps of the poor and needy old persons living in slums and peripheral villages of Kanpur and Patna in India. During the period of April to June 2002, a total number of beneficiaries for treatments reached 12,521. Health education and awareness activities were also

undertaken by the Mobile Medical Unit to address eyes related problems and organizes preventive health-checking camps. Arrangements have also been made under which the patients can be referred for a secondary level and tertiary level health care. The Mobile Medicine Unit is believed to have fulfilled a long felt need of the disadvantaged older persons in the society who were otherwise neglected by the society. Central School for the Education of the Deaf The Bank is a strong supporter of the Central School for the Education of the Deaf - a registered society and public charitable trust founded in 1966. Its prime concern is to rehabilitate profoundly and severely deaf children by providing model teaching and training facilities, both in English and Marathi. In doing so, the School also endeavors to bring vocational and other employment opportunities,

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which would otherwise be denied to them, within the reach of deaf children. The Central School for the Deaf has 62 children divided into 6 classes. Education is imparted to the children free of charge and a school bus service is provided for bringing and taking the children to and from school. A balanced mid-day meal is also provided to the children free of cost. Regular medical and dental camps are conducted every year for the children and follow-up treatment is ensured. The school also offers assistance for the purchase of the individual hearing aids wherever necessary. The Bank provides ongoing assistance to the School, through cash donation, as well as the Standard Chartered Income Fund, in which the Bank's donations and the School's own funds are invested, and which interest returns fund the School.

Prem Dan Prem Dan, a charity run by Sister Felicity Morris in Mumbai, has three learning centers for children forced into living on the streets.

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Standard Chartered Bank has committed an annual donation for a period of five years towards the Education and Nutrition Programme for the under privileged children in Mumbai. The children covered under programme are provided with a wholesome mid-day meal and are given free tuition classes to help them cope with their studies. This programme has helped the children because they leave their homes early morning and return home only in the night for their supper. The programme supports around 572 children in four local schools in Mumbai. Victoria Memorial School for the Blind In 1995, during the visit to India of Chairman Sir Patrick Gillam, the Bank undertook to sponsor the refurbishment of the central hall of the Victoria Memorial School for the Blind in Mumbai. The school required nearly five years to complete the renovation project, due to the meticulous care with which the renovation to an 86-year old Heritage building needed to be carried out. The hall, now complete and known as the Standard Chartered Hall, was inaugurated by Dr. P. C.

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Alexander, Governor of the state of Maharashtra, in January 2001.

Pratham Mumbai Initiative The Bank has made a three-year commitment to Pratham to contribute necessary funds towards the running of 50 balwadis (pre-primary schools) per year. Pratham is a registered public charitable trust, founded in 1994, and their successful model of tripartite collaboration between corporates, government and the voluntary sector is being replicated in Delhi, Bangalore, Pune, Vadodara, Surat, Ahmedabad and Patna. The model has three basic elements: supplementing and strengthening the government school system, working on a city or large regional scale and cost effectiveness expected of a catalyst. The uniqueness of Pratham is that the organization allows and encourages young executives to volunteer time to work in their balwadis which are pre-primary classes set up in slum colonies in Mumbai, with bridge courses and computer-assisted learning centre. Standard Chartered is the largest donor and supporter of the Balwadi programme and the bank is now exploring the possibility of taking on the role of the 'Leading Organization'

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in this ward. Standard Chartered India has increased its involvement with this organization, to embrace not only donations of funds, but also the inclusion of need-specific contributions, with the Bank donating old computers and furniture for the Mahila Mandals during the Pratham Mumbai Initiative in 2001.

SCB to fund Sankara Nethralaya Project Under its Seeing is Believing campaign, Standard

Chartered Bank has partnered with Sankara Nethralaya. In this project, with the help of SCB, the fund could conduct 1,000 free cataract surgeries for the poor and needy people in Tamil Nadu in 2004. Chris Low, then the CEO of Standard Chartered Bank, India Region, had presented a cheque of Rs. 12.50 lakh to Dr. S. S. Badrinath, President and Chairman, Sankara Nethralaya and also committed that the Bank would continue to fund the Nethralaya projects to perform surgeries for the poor. Scope International, a wholly-owned subsidiary of Standard Chartered Bank, UK, has also partnered with Sankara Nethralaya to support the cause of Pediatric Ophthalmology

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in the area of restorative surgeries for children. These surgeries vary from simple corrective surgeries to complicated cases such as retinal detachment, oculoplasty and vitreoretinal surgeries.

CONCLUSION
The concept of corporate social responsibility is not new in India. Right from the pre-independence times, the Gandhian model has been in practice. Many family owned businesses continue to engage in philanthropic activities. However with the passage of time and increased privatization and globalization, the stakeholder model is gaining more importance. Hence, corporate responsibility is becoming an integral part of the business strategy. A poll reveals a number of areas where further progress is needed for the

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business sector to keep pace with greater expectations for responsible, transparent and accountable corporate conduct from various stakeholders. High expectations from companies are not yet matched by judgments about CSRs. More trust is placed in media and NGOs than the industry. Finding creative ways to work in collaboration with the NGOs would help to enhance the corporate image. The emerging message to corporations seems quite clear. Take care of your customers; do not ignore your suppliers. Your employees are your most important partners in the wealth creation process: share your potential prosperity with your people. Meet your debt service obligations promptly and on schedule. All these are imperative in ensuring shareholder wealth maximization, which is indeed the primary goal of the corporation. Companies must focus on their prime responsibility to the shareholders, the owners of the company. But in order to sustain such achievements, working within and as part of society is all-important, failing which society will reject the socially unconscientiously corporation, often sooner rather than later. Such are the challenges and opportunities for corporations in quest of

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world-class standards of excellence in the twenty first century.

BIBLIOGRAPHY

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BOOKS: Principles and Practice of Management Business environment - Francis Cherunilam

Essentials of Business Environment - K. Aswathappa

WEBLIOGRAPHY:
www.infochangeindia.org http://www.standardchartered.com/corporateresponsibility/in dex.html

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