Social Responsibility of

Business
LECTURE OUTLINE

• Introduction to CSR
• Social responsibility of business
towards different sections of
society
• Reasons for the development of
social responsibility concept
• Arguments for and against social
responsibility
• Social activities undertaken by
some companies
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 Introduction

• According to H.R. BOWEN, ”Social responsibility is to

pursue those policies and decisions or to follow those
lines of actions which are desirable in terms of its
objectives and values of our society.”

• Social responsibility refers to the obligations and duties of

the business towards the society.

• The aim of business is no longer only profit maximization

but also to be socially responsible.
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 Social responsibility of business
towards different sections of society:

Owners

Employees
Suppliers
Business Consumers
Community

Environment
Government

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 1. Towards owners or shareholders

•To safeguard the capital.

•To provide fair and regular return on the
capital employed.
•To ensure proper utilization of invested
capital.
•Timely payment of dividend.
•To provide regular information about the
company.

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 2. Towards employees

•Proper selection,training and promotion.

•Providing fair wages.

•Ensuring health, safety and comfortable working

conditions.

•Education of employees.

•Participative management.

•Providing an efficient complaint handling system.

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 3. Towards government

•To fulfill all legal requirements.

•Payment of taxes in time.
•Executing government contracts in a fair manner.
•To provide inputs to government about changes in policy
that can result in growth and development.

4. Towards suppliers

•To develop and maintain healthy relations with suppliers.

•Dealing with suppliers should be based on fair terms and
conditions.
•payment should also be made on time.
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 5. Towards consumers

•To provide goods in time and also efficient after sales services.

•To manufacture the product according to the needs of customers.

•produce and supply quality products at reasonable rates.

•To avoid misleading the consumers by improper advertising of the

products.

•To provide opportunity to consumers for making complaints and to

handle the genuine complaints.

•To prevent black marketing .

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 Reasons for the development of social responsibility
concept:

•Consumerism

•Government interference

•Trade unions

•Public opinion

•Awareness

•Professionalism

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 Reasons in favour of social
responsibility
• Use of society’s resources

• Long term business interest

• Social impact

• Conscious customers

• Competence

• Moral justification

• Professional conduct

• Better Public image

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 Reasons against social
responsibility of business
• Conflicting considerations (Dilution of
economic goals)
• Disregard of market mechanism
• Responsibility without power
• Sole responsibility of Government
• Lack of yard-stick
• Lack of self interest

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 Corporate Social Responsibility (CSR) Under
the Amended Companies Bill 2011

• An important provision of the new Companies Bill 2011 is

that it requires the profit-making corporate companies to
spend 2 per cent of their average net profits during
preceding three years on social responsibility activities if
they have net profit of Rs. 5 crore or more or net worth
more than Rs. 500 crore or turnover of 1000 crore in a year.
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 CSR contributions by corporates

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 MAHINDRA & MAHINDRA
• Mahindra Pride Schools provide livelihood training to youth
from socially and economically disadvantaged communities
and have trained over 13,000 youth in Pune, Chennai, Patna,
Chandigarh and Srinagar.
• M&M sponsors the Lifeline Express trains that take medical
treatment to far flung communities.
• Then there's Project Hariyali, which has planted 7.9 million
trees till date, including four million trees in the tribal belt of
Araku Valley.
• M&M has constructed 4,340 toilets in 1,171 locations ..

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 TATA STEEL
• Key CSR Areas: Education, healthcare, facilitation of
empowerment and sustainable livelihood opportunities,
preservation of ethnicity and culture of indigenous communities
and sports.

• Initiatives run across ten districts in Jharkhand, Odisha and

Chhattisgarh, covering nearly 500 core villages.

• Flagship Programme: Maternal and Newborn Survival

Initiative which is a public-private initiative, is being
implemented in 167 villages of the Seraikela block of
Jharkhand's Seraikela-Kharsawan district since 2009.

• The project goals are to reduce child and infant mortality.

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 TATA POWER
Flagship Programme: 'Act for Mahseer', .. a conservation
initiative started in 1975 for saving endangered species.

Tata Power set up a breeding centre in Lonavala as part of its

eco-restoration and eco-development project for the lakes.

The programme has produced and distributed in various water

bodies seeds of Mahseer in excess of 10 million in India and
internationally.

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 L&T
• Key CSR Areas: Water and sanitation, education, healthcare and skill building.

• L&T partners with local governments on health programmes focused on

reproductive health, tuberculosis & leprosy control, integrated counselling &
testing centres for HIV/ AIDS.

• L&T's community health centres are located at Mumbai, Thane, Ahmednagar,

Hazira, Vadodara, Coimbatore, Chennai, Lonavala and Kansbahal.

• L&T's Construction Skills Training Institutes provide skills training to rural youth.

• Flagship Programme: L&T recently committed to the construction of 50 check

dams in Talasari block of Palghar district in Maharashtra. This will benefit over
75,000 villagers.

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 Infosys
Key CSR areas: Works towards removing malnutrition,
improving healthcare infrastructure, supporting
primary education, rehabilitating abandoned women
and children and preserving Indian art and culture.

Flagship program: The Infosys Foundation mid-day

meal program, an initiative in partnership with the
Akshaya Patra Foundation, spans several states across
India.

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