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Corporate social responsibilities

Project Report

On

“Corporate Social Responsibility"

Submitted by:

Mr. Saurabh Sandip Kambli

Submitted to,

University of Mumbai

In Partial Fulfilment of

Bachelor of Management Studies (BMS)

Under the Guidance of

(Asst. Prof.S. D. Angchekar)

Sant Rawool Maharaj Mahavidyalay,

Kudal

(2018-2019)

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DECLARATION

I, the undersigned hereby declare that I have carried out Project on the topic entitled
“Corporate Social Responsibility” is genuine & benefited work prepared by me under
the guidance of Asst. Prof. Sonali Angchekar is my original work. The empirical findings
in the report are based on the data collected by me. The matter presented in this project.
This work has not copied from any way the university authorities deem to be fit.
I further declare that this project work is based in my original work & no part of this
project has been published or submitted to anybody.
This work is humbly submitted to University of Mumbai for the award of the Bachelor of
Management Studies.

Date:
Place:

Project guide Student signature


Mr. Saurabh Sandip Kambli

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1. INTRODUCTION TO CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility is the continuing commitment by business to behave


ethically and contribute to economic development while improving the quality of life of
the workforce and their families and as well as the local community and society at large.
Corporate Social Responsibility focuses on the idea that a business has social obligations
above and beyond making a profit. It is company’s responsibility to produce an overall
positive impact on the society. Corporate Social Responsibility is the way of integrating
the social, economic and environmental imperatives of business activities. Shareholders,
analysts, regulators, labours, unions, employees, mass media and community
organizations hold companies to be accountable not only for their own performance but
for the performance of their entire supply chain. Issues like peace, sustainable
development, environmental quality, human rights and security are having performed
effect on business and its environment.
Corporate social responsibility (CSR, also called corporate sustainability,
sustainablebusiness, corporate conscience, corporate citizenship, conscious
capitalism, or responsiblebusiness) is a type of international private business self-
regulation. While once it was possible to describe CSR as an internal organisational
policy or a corporate ethic strategy that time has passed as various international laws have
been developed and various organisations have used their authority to push it beyond
individual or even industry-wide initiatives. While it has been considered a form
of corporate self-regulation for some time, over the last decade or so it has moved
considerably from voluntary decisions at the level of individual organisations, to
mandatory schemes at regional, national and even transnational levels.
Ethical behaviour and corporate social responsibility can bring significant benefits to
a business. The idea that business enterprises have some responsibilities to society beyond
that of making profits for shareholders has been around for centuries. This partly accounts
for the reason why the concept of Corporate Social Responsibility (CSR) has continued to
grow in importance and significance. One of the core beliefs is that business organizations
have a social and ethical responsibility, as well as, the economic mission of creating value
for shareholders or owners of businesses. Whereas, the economic responsibilities of a
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business are to produce goods and services that society needs and wants at a price that can
perpetuate the continuing existence of the business, and also satisfy its obligations to
investors; ethical responsibilities are those behaviours or activities expected of businesses
by society and other stakeholders such as employees.
Considered at the organisational level, CSR is generally understood as a private firm
policy. As such, it must align with and be integrated into a business model to be
successful. With some models, a firm's implementation of CSR goes beyond compliance
with regulatory requirements and engages in "actions that appear to further some social
good, beyond the interests of the firm and that which is required by law". The choices of
'complying' with the law, failing to comply, and 'going beyond' are three distinct strategic
organisational choices. While in many areas such as environmental or labour regulations,
employers may choose to comply with the law, or go beyond the law, other organisations
may choose to flout the law. These organisations are taking on clear legal risks. The
nature of the legal risk, however, changes when attention is paid to soft law. Soft law may
incur legal liability particularly when businesses make misleading claims about their
sustainability or other ethical credentials and practices. Overall, businesses may engage in
CSR for strategic or ethical purposes. From a strategic perspective, the aim is to increase
long-term profits and shareholder trust through positive public relations and high ethical
standards to reduce business and legal risk by taking responsibility for corporate actions.
CSR strategies encourage the company to make a positive impact on the environment
and stakeholders including consumers, employees, investors, communities, and
others. From an ethical perspective, some businesses will adopt CSR policies and
practices because of ethical beliefs of senior management. For example, a CEO may
believe that harming the environment is ethically objectionable.
CSR is titled to aid an organization's mission as well as serve as a guide to what the
company represents for its consumers. Business ethics is the part of applied ethics that
examines ethical principles and moral or ethical problems that can arise in a business
environment. ISO 26000 is the recognized international standard for CSR. Public sector
organizations (the United Nations for example) adhere to the triple bottom line (TBL). It
is widely accepted that CSR adheres to similar principles, but with no formal act of
legislation.

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2. FEATURES OF CORPORATE SOCIAL RESPONSIBILITY


 Public Image:
The activities of the business towards the welfare of the society earn goodwill and
reputation for the business. The earnings of business also depend on the public image of
its activities. People prefer to buy products of the company that engages itself in various
social welfare programmes. Again, good public image also attracts honest and competent
employees to work with such employers.
 Government Regulation:
To avoid government regulations businessmen should discharge their duties
voluntarily. For example, if any business firm pollutes the environment it will naturally
come under strict government regulation, which may ultimately force the firm to close
down its business. Instead, the business firm should engage itself in maintaining a
pollution free environment.
 Survival and Growth:
Every business is the part of the society. So for its survival and growth, support from
the society is very much essential. Business utilizes the available resources like power,
water, land, roads, etc. of the society. So it should be the responsibility of every business
to spend the parts of its profit for the welfare of the society.
 Employee Satisfaction:
Besides getting good salary and working in a healthy atmosphere, employees also
expect other facilities like proper accommodation, transportation, education and training.
The employers should try to fulfil all the expectations of the employees because the
employee satisfaction is directly related to productivity and it is also required for the long
term prosperity of the organization.
 Consumer Awareness:
Now-a-days consumers have become very much conscious about their rights. They
protest against the supply of inferior and harmful products by forming different groups.
This has made it obligatory for the business to protect the interests of the consumer by
providing quality products at the most competitive price.

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3. NEED FOR CORPORATE SOCIAL RESPONSIBILITY


 Improved reputation and branding :
CSR can help a company position itself in the marketplace as more responsible and
more sustainable than its competitors.
 Employee engagement, yielding greater productivity :
Companies that integrate CSR throughout the organization and treat their employees
well tend to provide an environment leading to increased employee loyalty. This helps in
recruiting and retaining staff, reducing absenteeism and helping employees develop skill.
 Enhanced relationships with the stakeholders and licence to operate :
Stakeholder dialogue and collaboration is central to good CSR strategy. By holding
open dialogue and demonstrating transparency with stakeholders through measurement
and reporting practices, a company will secure its ‘licence to operate’, improve its
prospects of being supported by the community over the long term and improve its
capacity to be more sustainable.
 Innovations of products and services :
Companies that understand current and future societal needs – the poor and the rich,
the young and the old, the North and the South – can innovate accordingly and access new
markets while also ensuring they are prepared for the future.
 Improved supplier profile :
More and more organizations want their suppliers to act responsible and to offer
more sustainable products. Increasing number of suppliers are screened on their CSR
performance. Some companies require suppliers to respect their codes of conduct in order
to do business. Others go even further and use CSR performance as a decisive selection
criterion alongside price and quality.
 Increased Profitability :
Direct gains can be achieved by optimising operational efficiency and applying the
motto ‘reduce, reuse, recycle’. Recycling, reducing waste, energy and material
consumption can generate environmental and economic benefits for the company.
Anticipating regulatory changes, preserving supply chains and managing potential risks
and liabilities more effectively through CSR can also reduce cost.

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4. TYPES OF CORPORATE SOCIAL RESPONSIBILITIES

 Environment-Focused Corporate Social Responsibility


This type of CSR focuses on reducing detrimental effects of the corporation’s
operations on the environment. The corporation innovates in its manufacturing stage to
reduce the production of environment harming by-products. It also promotes the use of
non-renewable energy sources to prevent harm caused to the environment by burning of
fossil fuels.
 Community-Based Corporate Social Responsibility
The corporation joins hands with other organizations (usually Non-Profit ones) to
ensure the welfare of a local community’s people. These organizations either fund or
receive funding from corporations to perform tasks that can improve the living conditions
of the community’s people.
 Human Resource (HR)-Based Corporate Social Responsibility
Corporations focus on the well-being of their own staff and improve their living
conditions. The companies may extend compassionate leaves like paternity leaves so that
the employee can look after his newborn. They can also provide medical insurance to
their employees to take care of accidents caused due to occupational hazards.
 Charity Based Corporate Social Responsibility
In a charity-based CSR, corporations donate to organizations or individuals (usually
through a charity partner) to improve their financial condition and for their general
upliftment. This is the most common form of a CSR activity. Most corporations provide
direct financial support to organizations or individuals who require such assistance.

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ADVANTAGES OF CORPORATE SOCIAL RESPONSIBILITY

 Improvement In The Image Of The Corporation


The most obvious advantage that a corporation can obtain by implementing CSR
policies is that of an increased goodwill value. This serves a dual purpose – Firstly, people
will want to buy the product that the corporation is selling because of its good and clean
image. Secondly, other enterprises will want to do business and be associated with the
corporation. This increases the corporation’s prestige to such a high level that its name
may become synonymous with reliability and goodness.People always want to be
associated with the best and the most popular, so in that respect, the corporation rises in
stature and becomes an important player in its market.
 Increased Attraction And Retention Of Employees
Companies having solid CSR commitments find it easier to recruit and retain
employees. People want to work for companies that care about the well-being of their
employees and provide good working conditions. Compassionate attitude towards
employees is highly desired by both new recruits and old employees alike. Appraisals,
financial assistance in times of need, and attention given to personal achievements and
special days (like birthdays) make employees want to remain with the company.This is a
huge advantage when there is a tight labour market situation. This will reduce the cost of
training new recruits and free up incentives for existing employees. Incentives induce
efficient work out from employees. In short, if the company’s workforce is happy, the
company gets more profits due to increased efficiency in production.
 Regulatory Authorities Become Less Hostile
A corporation with strong CSR programs will not be scrutinized by regulatory
authorities as much as companies without CSR programs. The authorities will be lenient
in their regulation because they feel that the company must be complying with all
regulations as it is supported by firms and people alike for its welfare work. A company
with strong CSR programs will always work within regulations to get benefits (other than
profits) from these CSR programs.The authorities will give fast-track preference to this

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company. It may also forego cumbersome paperwork that is required to set up projects if
it thinks that this project is going to help the community to improve.

 Attracts More Capital Inflow From Various Sources


A company’s image plays a huge role in attracting investors. If the company is
engaged in CSR programs, its image gets a massive boost, and so, people invest in its
operations heavily. This company will attract capital even from abroad in the form of FII,
thus, helping the country to get valuable foreign exchange. It will also attract investment
from other firms and industries, and it will become a name that can be trusted easily.Even
the Government of the country may be willing to invest in the company, leading to lesser
regulation and red-tapism.
 Generation Of Clean And Renewable Energy From Environmental CSR
If the company has invested in an environmental CSR program, it will make sure that
its operations do not harm the environment in any way. Inventing machines and
techniques to reduce the harmful effects of its operational activities will give the
community a clean environment. It will also give the company a chance to explore the
usage of renewable energy for its operations.This will reduce the cost of acquiring fossil
fuels and can reduce the cost of production by a one-time investment in renewable energy
production.
 Positive Publicity
A popular business principle is that any publicity is good publicity. You should be
known to the people to sell your product. A good CSR program will always give good
publicity and even act as an advertisement for the company.It also sets the company apart
from its competitors. They may be selling a similar product at lower rates, but you are
keeping the interests of your environment and community intact, and so the people do not
mind a little extra charge for this thoughtfulness.

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DIS-ADVANTAGES OF CORPORATE SOCIAL RESPONSIBILITY

 Shift From The Profit-Making Objective


Milton Friedman, an economist, is the biggest critic of CSR. He says that CSR shifts
the focus of the company from the objective that made it a financial entity in the first
place – profit-making. The company forgets about its obligations towards its shareholders
that they have to make profits for them. Instead of focusing on making profits, they
engage in CSR programs and use up funds for community welfare.So basically, instead of
an income, the company is effecting an outflow of cash and not fulfilling its profit-making
obligations.
 Company Reputation Takes A Hit
According to CSR policies, companies have to disclose shortcomings of even their
own products if they are found to violate the CSR program. For example, car
manufacturing companies calling back their vehicles in large numbers when they find
glitches in the model after having sold them wallops their reputation.This creates
inconvenience to the customers, and they lose trust in the manufacturer.
 Customer Conviction
Initially, customers like to see the companies that they trust are engaged in social
welfare programs. They like the fact that these programs are for a good cause. Later, they
grow wary of it. If they don’t see instant results from these programs, they think that these
are nothing but PR stunts. So it becomes difficult to convince customers that the results
will take some time in coming and that they should continue believing in the good
intentions of the company.These attempts of convincing become fruitless day by day
because some customers are impatient and have a constant desire to be appeased.
 Increase In Cost Of Production
More often than not, CSR programs increase the expenditure of the company. This
increased expenditure is reflected in the increased prices of the product for which,
ultimately, the customers have to pay.Large corporations can absorb this increased
expenditure. They may not increase their products’ prices, but small businesses have no
other option but to increase their products’ prices to meet their increased expenses.

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8. EXAMPLES OF CSR ACTIVITIES

1. Google’s Corporate Social Responsibility Activities


Google has made commendable efforts to help in improving community conditions. It is
listed by Forbes as one of the companies with the best CSR activities.
Google’s Community Based CSR activity:
 Google China Social Innovation Cup for College Students is a competition whose winner
is funded by Google to implement their idea of social improvement. It aims to empower
Chinese youth to become agents of Social Development.
Google’s Environmental-Based CSR activity:
 Google Green is Google’s effort to use resources judiciously and support renewable
energy resources. Due to this initiative, Google has seen an overall drop in power
requirement by about 50 percent. The savings from this power drop can be channelized to
more innovations that will help the global people.
Google’s Charity-Based CSR activity:
 Google Grants allows free advertisement words for select charities. These advertisements
enable charities to project their cause and make the people aware. These include animal
rights to rights of the blind to HIV education. The variety is large, and it is all due to
Google that they have a greater outreach.
Effects: Google’s green initiatives have impacted power consumption by big firms. They
have all followed Google and are now consuming much less power. Google Grants have
furthered the cause of charities by allowing them to advertise on a big platform for no
extra costs. All these have made Google a great CSR activities company.

2. Microsoft’s Corporate Social Responsibility Activities


Microsoft has been known to contribute towards community development. Its owner Bill
Gates is a renowned philanthropist having given billions of dollars to charity. ‘The Bill
and Melinda Gates Foundation’ has helped millions of people with money, aid, and
funding breakthroughs in medical research.
Microsoft’s Community-based CSR activities:

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 During 2004-06, Microsoft launched two programs, ‘Partners in Learning,’ and ‘Partners
in Learning Grants.’ Both these programs were involved in providing technology and the
necessary training to operate such technology in schools. This was provided mainly to
those schools that did not and could not get access to such technologies and education.
 The Learning Grants program had invested $253 million in the training of teachers and
students to make them efficient in handling technology.
 Microsoft also helps to provide technology and training to schools that are
underdeveloped or are a part of underdeveloped and neglected areas.
 In 2012, Microsoft launched a program called ‘YouthSpark,’ which was an organizational
initiative that aimed to equip students with the tools to achieve success. As a part of this
initiative, Microsoft provided special software for the purpose of learning enhancement.
For example, they provided accessibility options in their applications to help the visually
impaired. The ‘Job Access With Speech (JAWS)’ screen-reading feature allowed blind
students like Ignacia Picas to read without getting text converted to Braille. This helped
her cope up with her visually unimpaired peers. This also saved her teachers a lot of time
as well because now they did not have to convert text to Braille for Ignacia to study.
 In 2013, Microsoft began distributing its software like ‘Office 365’ to eligible Non-Profit
Organizations for free. It distributed $55 million worth of software in 92 countries around
the world at a nominal price or even no fee at all.
Effects: Microsoft’s CSR activities have had a huge impact on community development
and employee happiness. According to a study, 86 percent of its employees would
recommend people to work at Microsoft. The same study reveals that 94 percent of
Microsoft’s employees believe they are treated justly by their superiors and that the
company is a good corporate citizen due to its efforts to improve human life in general.

3. Bosch’s Corporate Social Responsibility Activities


Bosch is a leading company in the automotive and industrial fields.
It is a German company which is highly determined to keep its operations adhering
strictly to environment norms —
Bosch’s HR-Based CSR activity:
 The company’s main sustainability activities are regulated by an ‘HSE Steering
Committee’ where HSE stands for Health, Safety, Environmental and Fire Protection and
Emergency Control. This panel comprises of officials from 12 regions and is in charge of
all the company’s environmental management and safety issues.

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Bosch’s Environmental-Based CSR activities:


 Bosch has acquired the leading producer of solar cells, Ersol Solar Energy,’ as a part of its
‘going green’ policy.
 Bosch Thermotechnik launched the ‘CO2-Flag’ indicator. This indicator shows how much
energy the company has saved in its operational processes. The quantification of energy
saved allows customers to know that they are buying energy saving products and
therefore, reducing wastage of energy.
Effects: People are now more aware of products that save energy because of Bosch’s
innovation technology. The environment around Bosch’s production sites has also
become cleaner due to the strict HSE controls imposed by Bosch itself.

4. Hewlett-Packard Germany Corporate Social Responsibility Activities


Hewlett-Packard (HP) is a leading IT company.
It has taken many steps to ensure that the IT Industry uses as less energy as possible with
its innovative approaches —
HP’s Environmental-Based CSR activities:
 HP is investing in Optical Wires to transmit electricity with 20 times more efficiency than
electrical wires made of copper. This technology will save Gigawatts of electricity.
 In 2008, an ‘Eco-Solutions Engagement Team’ was instituted. It encompasses all of its
business units and has the responsibility to identify innovation from the point of view of
clients.
 In 2008, in association with HP Education Services, the environmental management
developed ‘Eco Solutions Workshop.’ Its aim is to keep customers informed about clean
energy innovations at HP. It is focusing on:
 Green Data centre
 Environment and Workstations
 Purchasing Green IT solutions.
Effects: HP’s innovative green programs have helped clients and the general people to
know more about clean energy production and how to keep the environment clean.

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Nature of Corporate Social Responsibility:

1) Focus on business firms:


Though both business and non-business organisations should be responsible towards society,
the focus is more on business firms to look after social interests.

2) Deals with moral issues:


Companies have specific policies and programmes to look after interests of the employees
and other stakeholders. These programmes are devised from the need to do what is right and
just for the society as a whole.

3)Commensurate with the objective of profit maximization:


Social goals are discharged by economically sound organisations.A financially unviable
enterprise cannot look after interest of society. In fact, it may pass the costs of social
responsibility to consumers by increasing prices of goods and services.

4)Pervasive Activity:
Social responsibility is not just the obligation of top level managers. Managers at all levels
are involved in social responsibilities.

5)ContinuingActivity:
Social responsibility is not catering to the interests of society once or twice.it is important for
organizations to continiuosly engage in all social issues if they want to survive in the long
run. The economic and social issues,infact,go hand in hand.

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LEVELS OF SOCIAL RESPONSIBILITY:
A hierarchy of the extent to which business houses discharge social responsibilities is
developed by R. Joseph Monsen.

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Starting from the lowest level, there are four levels of hierarchy:
1)Obey the law:
Managers feel discharging social responsibility is merely obeying the law.

2) Cater to public expectations:


Framework of the country, social responsibility also caters to public expectations from the
business enterprises (for example, providing job opportunities, quality goods, controlling
pollution etc.).

3) Anticipate public expectations:


At a still higher level, companies not only fulfill what society expects but also anticipate
needs of the society and devise programmes to fulfill those needs.

4) Create public expectations:


At the highest level of hierarchy, managers not only cater to public demands but also set
standards of social responsibilities and want the society to be benefited by those standards.
Business enterprises are moving from lower to higher levels of this hierarchy.

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HISTORICAL PERSPECTIVES OF SOCIAL RESPONSIBILITY:


Expectations of society from business firms as regards corporate social responsibility has
gone through three phases:

1) Profit maximization:
Historically,public viewed business enterprises as institutions which mainly looked after the
interests of owners. Social responsibility was discharged to the extent of maximising profits
within the boundaries of legal framework.

2) Trusteeship management:
During later years, the concept of social responsibility got widened from mere satisfaction of
owners’ interests to the interests of other stakeholders also, like employees, consumers,
creditors etc. Providing good working conditions, goods of the right quality and quantity,
timely repayment of loans etc. Were the essential aspects of social responsibility. Managers
were trustees of business property, holding it in trust for the welfare of society.

3) Quality of life management:


A still wider perspective of social responsibility developed in 1960s. It viewed business
enterprises as institutions to remove social ills and work for upliftment of society. Business
enterprises were supposed to change the quality of society

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PRINCIPLES OF CORPORATE SOCIAL RESPONSIBILITY:


1) Supply chain responsibilities:
Social responsibilities should cover all those whom the companies contact irrespective of the
relationship (formal or informal), product/service, or geographic location. These may include
suppliers, contractors, alliances etc. Companies mustdo everything they can in promoting
CSR practices throughout their chain of operation.

2) Stakeholder involvement:
Companies must engage in dialogues with stakeholders (workers, suppliers, local population,
consumers, social organisations, public authorities etc.) to know their concerns regarding
consequences of company behaviour. There should be ongoing exchange of information
between company and its stakeholders regarding CSR policies where mutually accepted
agreements about company norms, values, rights and obligations are reached.

3) Transparency and reporting:


Companies must be transparent and open with respect to their policies and social conduct.
Reporting requires informing stakeholders about the effects of their conduct and
consequences of these effects on other stakeholders.Information can be made available
through:

(a) Regular public reports

(b) Assessment reports, annual reports and meetings,

(c) Publication of data and consultation.

4) Independent verification:

Companies must verify, that is, internally monitor the CSR policies, quality of its reports,
management systems and processes. This verification should be carried out by organisations
not linked to companies and have full trust of shareholders involved. Outcome of the
verification procedures should be made public in a proper manner.

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DIMENSIONS OF CORPORATE SOCIAL RESPONSIBILITY:


Business is the creation of society and must give back to society what it wants. Management
should set examples by developing values towards society. The society comprises of various
stakeholders like shareholders, employees, customer government etc.Business organizations
are responsible to the following groups:

1. Shareholders

2. Employees

3. Customers

4. Community

5. Organizations

6. Government

(1)Shareholders:
To which their interests are secured.Shareholders bring capital for the business enterprise
and facilitate its smooth functioning.The business enterprise, in turn, owes the following
responsibilities to shareholders:

1) Payment of fair and regular dividends:


Shareholders give money to the company in return for dividends. The companies must,
therefore, ensure regular payment of dividends to them.

2) Increase in the value of investment:


Shareholders not only want regular dividends, they also want increase in the rate of
dividends. The companies must, therefore, attempt to increase the dividends each succeeding
year.

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3) Safety of investment:
Equity shareholders are the last claimants of assets in the event of winding up. Companies
must maintain sufficient assets to ensure safety of their investment during winding up.

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4) Disclosure:
Companies must disclose their financial position in the annual reports so that shareholders
know the progress of the company and the extent

(2) Employees:
Employees help in smooth administration of business and effective conversion of inputs into
outputs.The business organizations must, therefore, discharge the following obligations
towards employees:

1)Proper working conditions:


They should ensure proper working conditions for their employees. Basic facilities like
lighting, ventilation and sanitation should be provided as good and healthy working
conditions promote industrial productivity.

2) Financial benefits:
Financial benefits like pension, provident fund and perquisites like medical and recreational
facilities must be provided in the organization for fulfillment of their physiological needs and
a secured future.

3) Participation in decision-making processes:


Workers should be allowed to participate in managerial decision-making processes and
express their views on organizational matters. This develops their thinking and provides
management with useful and constructive suggestions.

4) Training and motivation:


Training programmes should be regularly conducted to update their knowledge and
motivators (financial and non-financial) should be provided to increase their individual
output.

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5) Recognition of rights:
Management should recognize the right of workers to form trade unions and bargain with
managers about the wages,working hours and working conditions.

6) Obey the labour laws:

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Management should obey labour laws with respect to wages, settlement of industrial
disputes; payment of bonus, gratuity, compensation etc. Adherence to legislative measures
ensures protection of workers’ rights.

7) Job security:
Not only should organizations protect workers’ rights; they must also provide them job
security. Secured jobs promote satisfaction and greater output.

(3) Customers:
“Customer is the king” in the marketing world. Unless the customer buys goods, the company
cannot exist.

Business firms owe the following responsibilities to customers:


1) Provide quality goods:
Firms should provide goods of the right quality, at the right price, in the right quantity and the
right place. This will satisfy customers’ needs, and provide regular clientele to the firms.

2) Complete information:
Complete information about use and quality of goods should be given in the advertisement.
The advertisement must express both, positive and negative features of the product.

3) Customer service:
After-sales services like installation, repair, warranty etc. promote goodwill and sale in the
market.

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4) Need-based products:
Companies should produce goods that satisfy needs of the customers rather than those that
maximize their profits.

5) Regular supply of goods:


Business firms should avoid practices like hoarding and black marketing and ensure steady
supply of goods in the market. Customers should be able to buy the goods when needed.

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6) Safety of products:
The products should conform to health and safety standards. Their consumption should be
safe and not lead to health hazards.

(4) Community:
Various resources (financial and non-financial) are provided by the community and,
therefore, their interests should be protected by the business organisations:

1) Pollution-free environment:
The industrial machinery may produce noise and air pollution against health and safety of the
community. Business firms should conform to pollution standards and provide clean and
healthy environment to the community at large.

2) Promote art and culture:


Firms should donate funds for artistic and cultural development of community.

3) Urban and rural planning and development:


Business enterprises should assist the Government in urban and rural planning and
development to raise the standard of the community and the nation.

4) Support local health-careprogrammes:


Business support for healthcare programmes will result in a healthy society. Healthy society
will provide healthy workers and developed organizations.

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5) Employment opportunities:
Though capital-intensive technology develops an organization, it must also ensure enough
employment opportunities for the people of its community.

6) Optimum utilization of resources:


Physical and financial resources are provided by the community members. It becomes the
duty of business enterprises to optimally utilize these resources to produce maximum output
at minimum cost.

7) Social programmes:

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Business organizations should conduct social programmes like career counselling and
provide career opportunities to people.

8) Solve social problems:


Business enterprises can solve social problems like untouchability, poverty, racism etc. as
much as non-business organization can.

9) Conform to business ethics:


Business houses should conform to business ethics and a socially acceptable code of conduct.
Unfair practices like hoarding, speculation and adulteration should be avoided.

(5) Organizations:
organizationsof the same trade compete for scarce resources.

They should be responsible towards each other in the following areas:


1) Healthy competition:
Firms should avoid cut-throat competition. Healthy competition will promote interests of
firms in the same industry.

2)Sharing of resources:
The resources being scarce, organisations should share them to carry their productive and
administrative processes smoothly.

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(6) Government:
Government provides numerous facilities to business enterprises like transportation,
electricity, water and sewerage, police and fire protection etc. Business organisations should
also be responsible towards the Government.

1)Pay taxes:
Firms should submit their yearly returns of income and pay taxes judiciously. Taxes are a
source of revenue for the Government used for promoting business interests.

2) Obey the law:


Government has introduced a number of legislative measures to smoothen the business
operations. The firms should obey the legislative machinery (income-tax law, company law,
labour, laws etc.) and support the Government.

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3) Contribute to national goals:


Business objectives should contribute to national goals to promote industrial image of the
country in the international market. This will also strengthen the foreign exchange reserves.

4)Compromise between Conflicting Groups:


Different groups want their returns to be maximised from business enterprises. While owners
want maximum profits, shareholders want maximum dividends, workers want high wages,
consumers want.

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ISSUES IN CORPORATE SOCIAL RESPONSIBILITY

 Human Rights
An enterprise’s responsibility to respect human rights relates to internationally
recognised human rights, particularly those of the United Nations. Human rights due
diligence enables enterprises to identify any adverse effects resulting from its activities
and in its value chain in good time and to prevent or reduce them. The shape it takes in
practice depends above all on the size of the enterprise and on certain risk factors such as
the region and sector.
 Working Conditions
By ensuring the best possible employment conditions based on the applicable
statutory provisions and international labour standards, in particular those of the
International Labour Organization, enterprises can play a role in creating high-quality
jobs. This primarily concerns the granting of trade union rights, the abolition of child and
forced labour and the elimination of employee discrimination (e.g. based on where they
come from, their social background, skin colour, religion or political views). Constructive
cooperation with social partners is also an important part of this.
 The Environment
Responsible environmental management aims to continuously improve an
enterprise’s impact on the environment. This includes a progressive internal
environmental management system based on high standards, environmental due diligence,
an environmentally friendly strategy with closed cycles, consistent reduction of
greenhouse gas emissions and a contingency plan for reducing harmful effects on the
environment.
 Combating Corruption
Corruption has an extremely harmful effect on democratic institutions, good
corporate governance, investments and international competition. Enterprises can play a
key role in combating corruption by introducing internal control mechanisms to avoid and
expose it. It is also important to publish the policy on combating corruption supported by
the management and to train employees.

 Disclosing Information
As part of a transparent reporting process, enterprises inform the public about their
business activities and their effects in terms of the economy, society and the environment.

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The regular, timely and pertinent disclosure of information improves an enterprise’s


transparency and credibility. The reporting process also gains the trust of the enterprise’s
stakeholders (e.g. shareholders, financial institutions, employees and interest groups) and
can facilitate access to capital.
 Corporate Governance
Good corporate governance involves striving towards transparency and a balanced
ratio of management and control while protecting the decision-making power and
efficiency at the topmost corporate level. These are underpinned by good accounting and
reporting practices, supervision by the Board of Directors and respect for shareholder
rights and the concerns of key stakeholders.
 Consumer Interests
For consumers, it has become increasingly difficult to compare products and services
and to make informed decisions about purchases, particularly due to the increasing
numbers of products on offer and the complexity of many markets. They are therefore
reliant on enterprises adopting fair business and marketing practices and guaranteeing the
safety and quality of their products and services. This involves providing accurate and
clear product information, promoting sustainable consumption.
 Occupational Integration
By identifying its employees’ health issues early on and quickly taking the
appropriate measures, enterprises can safeguard their staff's employability. This will
reduce the number of people leaving the job market due to health problems as much as
possible. Employees with a health problem should be supported throughout the
reintegration process.
 Taxes
If an enterprise lawfully pays its taxes both in Switzerland and also on its overseas
business transactions, it is contributing to public finances and to the development of its
host countries. It also avoids putting its finances, reputation and supervision by authorities
at risk. It is also important for enterprises to cooperate well with the competent authorities
so that these can apply the relevant taxes.

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Conclusion

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