Corporate Social Responsibility

Master of Business Economics [M.B.E.]

Semester – IV
in the subject of
Business Environment & Policy
Submitted by
Aghara Nimisha 01
Barot Dhruti 02
Bastawala Saloni 03
Bhavsar Hetal 04
Desai Mauni 05
Desai Rima 06
Dhanani Rajesh R 07
Doshi Yogin 08
Gajjar Sagar 09
Gandhi Ashish 10

Submitted to
DHAVAL PANDYA

DEPARTMENT OF ECONOMICS
VEER NARMAD SOUTH GUJARAT UNIVERSITY
SURAT – 395 007
Corporate social responsibility

What is Social responsibility

Social responsibility is an ethical ideology or theory that an entity, be it an organization or

individual, has an obligation to act to benefit society at large. This responsibility can be
passive, by avoiding engaging in socially harmful acts, or active, by performing activities
that directly advance social goals.

Manu's importance in Indian history lies in the fact that was he who gave the stamp of
sanctity and permanence to the socio-political institution of the land and left to the Indian
world the first code of civil and criminal laws. It serves as the chief authority on Hindu
jurisprudence.

Effective corporate social responsibility concept in Artha Sastra.

Chanakya has got many tricks and techniques for today's managers. Chanakya has advised
managers about how and when to do things and how to satisfy customers. "You can catch an
elephant during summer. There is always scarcity of water and elephants come out of the
deep forest searching water." The whole marketing strategy is hidden in these words. One
has to assess the market circumstances and satisfy the needs of the customers to become
successful in the business. Till recently all corporate strategies are spread around urban
customer base. Banks, Insurance companies, telecom service providers and beauty product
companies are now looking towards villages to enhance their customer base and grab new
markets. Chanakya has realized the potential of rural market and asserted that political power
or wealth comes only from villages.

Chanakya has given many suggestions with regard to human resource management also.
Recruitment, transfers, promotions, incentives and all other functions of HR Management are
described in Artha Sastra. You have to appoint functional specialist to head each department.
In today's companies, you can see functional specialists in HR, heading the departments.
Manager - Compensation and Benefits, Manager - Training and Development, Manager -
Learning and Development, Manager - Employee Relations are some of the designations,
which we are having today imagined by Chanakya thousands of years ago. Chanakya says
that nobody should be given absolute power as he knows very well that absolute power
corrupts absolutely.

Chanakya has defined development in four phases. First, one has to reach the target.
Secondly, the progress has to be sustained. Third, you have to expand the sustained growth.
Fourth, you have to take steps to share the fruits of expansion with all the stake holders. A
corporate honcho's responsibility does not end with building an organization. You have to
withstand the birth pangs while building the organization. You have to enhance the market
cap and become one of the top companies in the world. Your success should be shared
among the employees and Society by fulfilling the corporate social responsibility.

Any management book can teach you how to run a business. They are all just like sugar
coated ineffective pills. There is no depth in their teachings. But, Artha Sastra will teach you
about building a system with sustainable growth. It will also teach you on how to strengthen
the organizational structure from base.

If you wish to gather ten elephants, you have to just have one elephant. Elephant is a social
animal. It cannot live alone. It will always search for the herd of elephants. Then, you can
catch other elephants also. You can compare this to money making skills. First, you have to
earn some money. Then, the money will create more money. Present day investment
advisors' roots are lying in the wisdom of Chanakya's Artha Sastra, which was written three
thousand years ago.

Behavioral skills also mentioned by Chanakya wherein he cautions that 'if somebody is
giving you costly gift, beware, that he is expecting more from you'. Do not indulge in
unnecessary chatting which may harm you. Always try to control your anger; otherwise, it
will control you. Do not go to meet Guru like elders with empty hands. Take some fruits or
some sweets with you. It is better, if you bring up your kids in a proper and they come up in
life to take care of yourself. Do not try to earn lots of money through corrupt practices which
may not be with you. Always be critical about yourself and review your day-to-day actions.
What you have achieved till today; where you have to go tomorrow kind of review will give
you a clear picture of your future goals. There are many thousands of truths like this written
by Chanakya, which one has to emulate to become good and effective manager of all times.

Corporate Social Responsibility - What does it mean?

One of the most frequently asked questions at this site - and probably for all those
individuals and organisations dealing with CSR issues is the obvious - just what does
"Corporate Social Responsibility" mean anyway? Is it a stalking horse for an anti-corporate
agenda? Something which, like original sin, you can never escape? Or what?

Different organisations have framed different definitions - although there is considerable

common ground between them. My own definition is that CSR is about how companies
manage the business processes to produce an overall positive impact on society.
Take the following illustration:

Companies need to answer to two aspects of their operations. 1. The quality of their
management - both in terms of people and processes (the inner circle). 2. The nature of, and
quantity of their impact on society in the various areas.

Outside stakeholders are taking an increasing interest in the activity of the company. Most
look to the outer circle - what the company has actually done, good or bad, in terms of its
products and services, in terms of its impact on the environment and on local communities,
or in how it treats and develops its workforce. Out of the various stakeholders, it is financial
analysts who are predominantly focused - as well as past financial performance - on quality
of management as an indicator of likely future performance.
Other definitions

The World Business Council for Sustainable Development in its publication "Making Good
Business Sense" by Lord Holme and Richard Watts, used the following definition.
"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 as well as of the local community and society at large"

The same report gave some evidence of the different perceptions of what this should mean
from a number of different societies across the world. Definitions as different as "CSR is
about capacity building for sustainable livelihoods. It respects cultural differences and
finds the business opportunities in building the skills of employees, the community and
the government" from Ghana, through to "CSR is about business giving back to society"
from the Phillipines.

Traditionally in the United States, CSR has been defined much more in terms of a
philanphropic model. Companies make profits, unhindered except by fulfilling their duty to
pay taxes. Then they donate a certain share of the profits to charitable causes. It is seen as
tainting the act for the company to receive any benefit from the giving.

The European model is much more focused on operating the core business in a socially
responsible way, complemented by investment in communities for solid business case
reasons. Personally, I believe this model is more sustainable because:

1. Social responsibility becomes an integral part of the wealth creation process - which
if managed properly should enhance the competitiveness of business and maximise
the value of wealth creation to society.
2. When times get hard, there is the incentive to practice CSR more and better - if it is a
philanphropic exercise which is peripheral to the main business, it will always be the
first thing to go when push comes to shove.

But as with any process based on the collective activities of communities of human beings
(as companies are) there is no "one size fits all". In different countries, there will be different
priorities, and values that will shape how business act. And even the observations above are
changing over time. The US has growing numbers of people looking towards core business
issues.

For instance, the CSR definition used by Business for Social Responsibility is: "Operating a
business in a manner that meets or exceeds the ethical, legal, commercial and public
expectations that society has of business

On the other hand, the European Commission hedges its bets with two definitions wrapped
into one: "A concept whereby companies decide voluntarily to contribute to a better
society and a cleaner environment. A concept whereby companies integrate social and
environmental concerns in their business operations and in their interaction with their
stakeholders on a voluntary basis".
When you review each of these, they broadly agree that the definition now focuses on the
impact of how you manage your core business. Some go further than others in prescribing
how far companies go beyond managing their own impact into the terrain of acting
specifically outside of that focus to make a contribution to the achievement of broader
societal goals. It is a key difference, when many business leaders feel that their companies
are ill equipped to pursue broaders societal goals, and activists argue that companies have no
democratic legitimacy to take such roles. That particular debate will continue.

Corporate social responsibility ("CSR" for short, and also called corporate conscience,
citizenship, social performance, or sustainable responsible business[1]) is a form of corporate
self-regulation integrated into a business model. CSR policy functions as a built-in, self-
regulating mechanism whereby business monitors and ensures its active compliance with the
spirit of the law, ethical standards, and international norms. The goal of CSR is to embrace
responsibility for the company's actions and encourage a positive impact through its
activities on the environment, consumers, employees, communities, stakeholders and all
other members of the public sphere. Furthermore, CSR-focused businesses would
proactively promote the public interest by encouraging community growth and development,
and voluntarily eliminating practices that harm the public sphere, regardless of legality. CSR
is the deliberate inclusion of public interest into corporate decision-making, that is the core
business of the company or firm, and the honouring of a triple bottom line: people, planet,
profit.

The term "corporate social responsibility" came in to common use in the early 1970s, after
many multinational corporations formed. The term stakeholder, meaning those on whom an
organization's activities have an impact, was used to describe corporate owners beyond
shareholders as a result of an influential book by R. Edward Freeman, Strategic management:
a stakeholder approach in 1984.[2] Proponents argue that corporations make more long term
profits by operating with a perspective, while critics argue that CSR distracts from the
economic role of businesses. Others argue CSR is merely window-dressing, or an attempt to
pre-empt the role of governments as a watchdog over powerful multinational corporations.

CSR is titled to aid an organization's mission as well as a guide to what the company stands
for and will uphold to its consumers. Development business ethics is one of the forms 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
(currently a Draft International Standard). Public sector organizations (the United Nations for
example) adhere to the triple bottom line (TBL).
Approaches

Some commentators have identified a difference between the Continental European and the
Anglo-Saxon approaches to CSR. And even within Europe the discussion about CSR is very
heterogeneous.

An approach for CSR that is becoming more widely accepted is community-based

development approach. In this approach, corporations work with local communities to better
themselves. For example, the Shell Foundation's involvement in the Flower Valley, South
Africa. In Flower Valley they set up an Early Learning Centre to help educate the
community's children as well as develop new skills for the adults. Marks and Spencer is also
active in this community through the building of a trade network with the community -
guaranteeing regular fair trade purchases. Often activities companies participate in are
establishing education facilities for adults and HIV/AIDS education programmes. The
majority of these CSR projects are established in Africa. JIDF For You, is an attempt to
promote these activities in India.

A more common approach of CSR is philanthropy. This includes monetary donations and aid
given to local organizations and impoverished communities in developing countries. Some
organizations do not like this approach as it does not help build on the skills of the local
people, whereas community-based development generally leads to more sustainable
development.

Another approach to CSR is to incorporate the CSR strategy directly into the business
strategy of an organization. For instance, procurement of Fair Trade tea and coffee has been
adopted by various businesses including KPMG. Its CSR manager commented, "Fairtrade
fits very strongly into our commitment to our communities.

Another approach is garnering increasing corporate responsibility interest. This is called

Creating Shared Value, or CSV. The shared value model is based on the idea that corporate
success and social welfare are interdependent. A business needs a healthy, educated
workforce, sustainable resources and adept government to compete effectively. For society to
thrive, profitable and competitive businesses must be developed and supported to create
income, wealth, tax revenues, and opportunities for philanthropy. CSV received global
attention in the Harvard Business Review article Strategy & Society: by Michael E. Porter, a
leading authority on competitive strategy and head of the Institute for Strategy and
Competitiveness at Harvard Business School; and Mark R. Kramer, Senior Fellow at the
Kennedy School at Harvard University and co-founder of FSG Social Impact Advisors. The
article provides insights and relevant examples of companies that have developed deep
linkages between their business strategies and corporate social responsibility. Many
approaches to CSR pit businesses against society, emphasizing the costs and limitations of
compliance with externally imposed social and environmental standards. CSV acknowledges
trade-offs between short-term profitability and social or environmental goals, but focuses
more on the opportunities for competitive advantage from building a social value proposition
into corporate strategy.
Many companies use the strategy of benchmarking to compete within their respective
industries in CSR policy, implementation, and effectiveness. Benchmarking involves
reviewing competitor CSR initiatives, as well as measuring and evaluating the impact that
those policies have on society and the environment, and how customers perceive competitor
CSR strategy. After a comprehensive study of competitor strategy and an internal policy
review performed, a comparison can be drawn and a strategy developed for competition with
CSR initiatives.

Potential business benefits

The scale and nature of the benefits of CSR for an organization can vary depending on the
nature of the enterprise, and are difficult to quantify, though there is a large body of literature
exhorting business to adopt measures beyond financial ones (e.g., Deming's Fourteen Points,
balanced scorecards). Orlitzky, Schmidt, and Rynes. found a correlation between
social/environmental performance and financial performance. However, businesses may not
be looking at short-run financial returns when developing their CSR strategy.

The definition of CSR used within an organization can vary from the strict "stakeholder
impacts" definition used by many CSR advocates and will often include charitable efforts
and volunteering. CSR may be based within the human resources, business development or
public relations departments of an organisation, or may be given a separate unit reporting to
the CEO or in some cases directly to the board. Some companies may implement CSR-type
values without a clearly defined team or programme.

Human resources

A CSR programme can be an aid to recruitment and retention,[12] particularly within the
competitive graduate student market. Potential recruits often ask about a firm's CSR policy
during an interview, and having a comprehensive policy can give an advantage. CSR can
also help improve the perception of a company among its staff, particularly when staff can
become involved through payroll giving, fundraising activities or community volunteering.
See also Corporate Social Entrepreneurship, whereby CSR can also be driven by employees'
personal values, in addition to the more obvious economic and governmental drivers.

Risk management

Managing risk is a central part of many corporate strategies. Reputations that take decades to
build up can be ruined in hours through incidents such as corruption scandals or
environmental accidents. These can also draw unwanted attention from regulators, courts,
governments and media. Building a genuine culture of 'doing the right thing' within a
corporation can offset these risks.[13]
Brand differentiation

In crowded marketplaces, companies strive for a unique selling proposition that can separate
them from the competition in the minds of consumers. CSR can play a role in building
customer loyalty based on distinctive ethical values.[14] Several major brands, such as The
Co-operative Group, The Body Shop and American Apparel[15] are built on ethical values.
Business service organizations can benefit too from building a reputation for integrity and
best practice.

License to operate

Corporations are keen to avoid interference in their business through taxation or regulations.
By taking substantive voluntary steps, they can persuade governments and the wider public
that they are taking issues such as health and safety, diversity, or the environment seriously
as good corporate citizens with respect to labour standards and impacts on the environment.

Tata Steel Ltd

CSR activities:

The wealth generated by Jamsetji Tata and his sons in half a century of industrial pioneering
formed but a minute fraction of the amount by which they enriched the nation. The whole of
that wealth is held in trust for the people and used exclusively for their benefit. The cycle is
thus complete: what came from the people has gone back to the people many times over.

Sharing Wealth to Diminish Disparities

For Jamsetji Tata, the progress of enterprise, welfare of people and the health of the
enterprise were inextricably linked. Wealth and the generation of wealth have never "been
ends in themselves, but a means to an end, for the increased prosperity of India," The Times
of India said in 1912 of the Tatas.

Successive generations of Tata Group leaders have always held the belief that no success in
material terms is worthwhile unless it serves the interest of the nation and is achieved by fair
and honest means.

Conscious that the task of social progress, especially in a country as diverse as India, cannot
be undertaken by the Government alone, J R D Tata the Chairman of the Tata Group from
1938 to 1991, believed that, "to create good working conditions, to pay the best wages to its
employees and provide decent housing to its employees are not enough for the industry, the
aim of an industry should be to discharge its overall social responsibilities to the community
and the society at large, where industry is located."

At the vanguard of social commitment

Guided by this mandate, Tata Steel has for decades used its skills and resources, to the extent
it can reasonably afford, to give back to the community a fair share of the product of its
efforts.

It was the first to establish labour welfare practices, even before these were made statutory
laws across the world. In 1912 it invited Sidney and Beatrice Webb, the Founders of the
London School of Economics, to prepare a Memorandum of Health for the Steel City. The
Company also instituted an eight-hour workday in 1912, free medical aid in 1915, a Welfare
Department in 1917, leave with pay, Workers Provident Fund and Workmen’s Compensation
in 1920 and Maternity Benefit for ladies in 1928.

With the understanding that the hunger for employment can never be satisfied despite its best
efforts, the Company took an enlightened decision to address the needs of those who
migrated to its vicinity in search for employment. It first stimulated entrepreneurship and
economic development in the Steel City and then reached out to the rural poor, empowering
them with the means to create better livelihoods within their own villages.

At the same time, Tata Steel also fulfilled their basic need for health care, food security,
education and income generation through the development of rural infrastructure,
empowerment and community outreach programmes.

By virtue of the extent of its demonstrated commitment for decades, through the beliefs and
values it has acted upon, the resources it has deployed, the wealth it has shared as well as the
many "firsts" it has achieved through socio-economic programmes, Tata Steel is India’s
acknowledged Corporate Social Responsibility leader and is recognised as a most humane
organisation. Every lesson learned, every piece of knowledge gathered, the Company offers
to all those who wish to work alongside it to "improve the quality of life of the communities
it serves."

Education

Tata Steel has influenced the integration of tribals in the economy in a less obvious and
immediate way by propping up the education of tribal children and youth of various ages and
at various stages of their academic career.

Infants and toddlers are prepared for formal schooling in the informally run balwadis
(crèches/nurseries). The drop out rate of tribal students in schools and colleges has been
checked with financial assistance and sponsorships.
The TCS bears the entire expense of two tribal students who secure admissions for
management education at the Tata Institute of Social Sciences. It also coaches students for
entrance into administrative, technical and the public services.

An unusual project called Sahyog, implemented in five schools, helps tribal students to
develop self-esteem and plan their future.

The Xavier Institute for Tribal Education near Jamshedpur has also been supported by Tata
Steel to produce professionally trained personnel.

"Thank you Tata Steel and Tribal Cultural Society..."

Had it not been for this fellowship from Tribal Cultural Society, I was bound to be like many
others, recycled into the family's earning process at an age when I needed to be at school”,
says Sunita Murmu.

And then came the announcement of Jyoti Fellowships. Sunita won the award not just for the
year, but, for the next seven consecutive years as well. The fellowship saw her through
matriculation and Intermediate. Relieved of the pressure, Sunita was able to concentrate and
secure first division all through. At an award ceremony, when asked what she had to say
about this assistance, “Thank you, Tata Steel and Tribal Cultural Society” were the words
she uttered with extreme gratitude

Tribals –culture :Efforts to support tribals may well leave them at the doorstep of
development without a sense of belongings and their cultural heritage.

With a view to helping the tribal population preserve its rich inheritance, Tata Steel has set
up the Tribal Culture Centre (TCC) at a cost of Rs 35,00,000. This Centre showcases the
tribal legacy of four major and five minor tribes of Jharkhand and Orissa and evokes a lot of
interest amidst scholars, researchers and even laypersons. TCC not only documents relevant
research but also enables the continuation of the tradition by sharing it with the youth and
non-tribals.

Additionally, a Santhali Language Laboratory has also been initiated in the Centre since
2002-03.

The centre was instrumental in reviving the now almost forgotten 'Kati' - a game played
between two teams that attempt to score points by hitting the opponent's Kati - a semicircular
piece of wood by a long wooden stick using their feet. Known to be a game that used to be
played by youths in non agricultural season, it tests the team spirit, physical strength and
concentration levels of the players.

"Hundreds of people joined..."

Adim Dastoor, a three day programme, was organized at Bari Maidan, Jamshedpur. This
cultural extravaganza showcased the heritage and lifestyle of the indigenous people in
Jharkhand. Lecture demonstration sessions on tribal heritage, exhibitions on historical advent
of tribal movements, various forms of tribal dance and music, their relevance and specifics
were dwelled upon at great length followed by actual performance by the experts.

The event also showcased a day-night Kati tournament between 25 teams from all over
Jharkhand and tribal Orissa.

Tribal belief has it that within the 'Akhara' (common meeting place for men within the
village), no one is an audience. Every step taken is dance, every word that is uttered is a
song. The climax of the three-day event resounded this belief as hundreds of people in the
ground joined in the performance accompanied by 25 drum beaters who lent a sparkling end
to the festival.

Income generation for tribals :In order to help tribals address their basic needs in a self-
reliant and sustainable way, Tata Steel has long been involved with increasing the
agricultural productivity for them in the rural areas through assured irrigation.

Tata Steel, holding the belief that the tribals know best for themselves, has assisted in the
formation of many Self Help Groups (SHGs).

These SHGs enable the tribals to arrange for credit and engage in micro-enterprises like
making Dokra items, carpet weaving, terracotta, paper bag making, mat making, food
processing, poultry, mushroom farming, piggery, pisciculture and floriculture. Tata Steel
provides these groups with training, networking and assistance in marketing.

For making a long term impact on the prospects of the tribals, the Company has given them
vocational training in areas like basic computer operation, software management, shorthand,
typing, motor driving and handling pregnancies as birth attendants.

"There was will and that was what saw us through..."Opportunity from TCS came like a ray
of hope. Not knowing what to expect from the workshop, I still dragged myself to participate
in it. Simple techniques on packaging the candles we made, helped improve the presentation
of the product... Deepawali, Christmas and Gram Shree Mela provided us with huge business
prospects, which we were able to encash upon. Next we received an order from Tata Steel to
supply 5000 candles in a week's time. But there was will and that was what saw us through.
My future plans are to improve our business extensively and also to enter the metropolitan
market. And with TCS behind us, we will make it. If I have found meaning in my life, it is
because of TCS. Without them, my desire to do something substantial would have remained
intangible forever.
Health care :Among the most active sponsors of the Lifeline Express – a hospital on
wheels- Tata Steel has endeavored to take medical care far beyond those connected with its
operations. This unique train travels at the behest of its sponsors to those parts of rural India,
left untouched by modern medicine.

At Jamshedpur, the Company runs a 850-bed general hospital with a specialised Burn
Centre, Dispensaries and Super Dispensaries to reach out to its employees as well as a large
number of citizens across the steel city. The network of specialised medical care units it has
created also fulfills the need for low cost, high quality medical care for the economically less
privileged. It established the Jamshedpur Blood Bank to provide safe blood to those in need
and has very successfully promoted a culture of voluntary blood donations. At its
outlocations the Company has set up hospitals, which cater to the healthcare needs of people
from the surrounding rural areas.

The doctors and para medical staff of its hospitals as well as the dedicated staff of its social
welfare arms have also taken health care awareness including eye care, tuberculosis
treatment, general health awareness, HIV/AIDS Awareness and Mother and Child survival
programmes to a large number of villages and communities.

Through the efforts of the Tata Steel Rural Development Society (TSRDS) and the Tata
Steel Family Initiatives Foundation (TSFIF), the Company covers the rural and peri-urban
population through basic health care amenities. Both these social welfare arms of the
Company have been building capacity through training programmes to create community
based health care partners as well as grass-root volunteers.

The Company has successfully changed notions of millions of villagers on water and
sanitation, created a demand for better health facilities, ensured immunisation for tens of
thousands and been instrumental in bringing down infant mortality rates.

Ongoing Programmes

Mother and Infant Survival Programme Population Stabilisation Operation Muskaan for
cleft lips and palates "YARS" - Youth and Adolescent Reproductive Services Specifically
targeted programmes on HIV and AIDS.

Project "WATSAN" for Water and Sanitation Free Health Checkups for Women at Surya
Clinics Pioneer in Family Initiatives and HIV/AIDS Awareness Ringing the first alarm bell
for Population Control The first corporation in the country to launch a family welfare
programme, Tata Steel has been promoting controlled family planning since the 1950s.
Through the innovative use of communication media, motivational programmes have
extremely successfully broken the barriers of prejudice and myths to bring about the
participation of communities, in even those which do not readily accept family planning.
Jamshedpur today is a leader in demographic indices in the country. For the past 16 years,
Tata Steel Family Initiatives Foundation (TSFIF) - formerly the Family Planning Department
- has been reaching out to the Community in Jamshedpur with Family Planning and
Reproductive Health Services. It covers a heterogenous population of over 10,00,000
including adolescents and youth, industrial workers, bustee dwellers and those from the
indigenous tribes of the area. Now it is in the process of reauthoring its role, so as to extend
both its capability and services into emerging sectors of need.

Health and AIDS AwarenessThe health and safety of the employees and the community is
critically interlocked with productivity and is enshrined in Tata Steel’s Vision. The Company
has thus taken proactive steps in AIDS prevention by spreading awareness not only amongst
its employees, but also the community at large so that the inhabitants of Jamshedpur and at
other locations, remain safe.

Tata Steel has evolved a corporate sector model to prevent the spread of STD/HIV/AIDS,
globally and nationally. This model is being shared through forums like ILO, Global
Business Coalition on HIV/AIDS, Global Compact Initiatives, WHO-SE Asia Regional
Office, NACO (National AIDS Control Organisation) and JAPC (Jharkhand AIDS
Prevention Consortium) and more recently through Global Reporting Initiatives. This
programme extends to the rural and urban populace residing in and around Jamshedpur.

The Global Business Coalition, which is an alliance of over a hundred major international
companies who are expected to lead by example, is dedicated to combating this disease. Tata
Steel is one of its founding members. The prestigious "Global Business Coalition Award
(GBC) for 2003 for Business Excellence" was conferred on Tata Steel for its response to the
epidemic and its outstanding HIV/AIDS Awareness work in Jamshedpur. The award is
conferred on companies who have evolved best practices on HIV/AIDS prevention,
especially to reduce the stigma and discrimination. This award places Tata Steel’s initiatives
at par with the best in the world, to be showcased globally.

Environment Tata Steel believes that environment management is integral to sustainable

business. The company's commitment in this area can be further gauged from the fact, that
Tata Steel is the first company in the country to be conferred ISO-14001 Certification for its
main steel works and utility services in Jamshedpur

All its mines and collieries are also ISO-14001 Certified for environmental management.Tata
Steel's collieries and mines which support the 'Save Forests' campaign are a benchmark in
environment management, Further augmenting its commitment in this field, Tata Steel, has
planted 1.5 million surviving trees as a part of the “Green Millennium” campaign. It may be
worth mentioning that Jamshedpur has the best tree cover in the country.
 ADITYA BIRLA GROUP

"To actively contribute to the social and economic development of the communities in which
we operate. In so doing, build a better, sustainable way of life for the weaker sections of
society and raise the country's human development index."

— Mrs. Rajashree Birla, Chairperson,

The Aditya Birla Centre for Community Initiatives and Rural Development

Making a difference
Before Corporate Social Responsibility found a place in corporate lexicon, it was already
textured into our Group's value systems. As early as the 1940s, our founding father Shri G.D
Birla espoused the trusteeship concept of management. Simply stated, this entails that the
wealth that one generates and holds is to be held as in a trust for our multiple stakeholders.
With regard to CSR, this means investing part of our profits beyond business, for the larger
good of society.

While carrying forward this philosophy, our legendary

leader, Mr. Aditya Birla, weaved in the concept of
'sustainable livelihood', which transcended cheque book
philanthropy. In his view, it was unwise to keep on giving
endlessly. Instead, he felt that channelising resources to
ensure that people have the wherewithal to make both ends
meet would be more productive. He would say, "Give a
hungry man fish for a day, he will eat it and the next day,
he would be hungry again. Instead if you taught him how
to fish, he would be able to feed himself and his family for a lifetime."

Taking these practices forward, our chairman

Mr. Kumar Mangalam Birla institutionalised the concept of triple bottom line accountability
represented by economic success, environmental responsibility and social commitment. In a
holistic way thus, the interests of all the stakeholders have been textured into our Group's
fabric.

The footprint of our social work today spans 2,500 villages in India, reaching out to seven
million people annually. Our community work is a way of telling the people among whom
we operate that We Care.

Our strategy
Our projects are carried out under the aegis of the "Aditya Birla Centre for Community
Initiatives and Rural Development", led by Mrs. Rajashree Birla. The Centre provides the
strategic direction, and the thrust areas for our work ensuring performance management as
well.

Our focus is on the all-round development of the communities around our plants located
mostly in distant rural areas and tribal belts. All our Group companies —- Grasim, Hindalco,
Aditya Birla Nuvo and UltraTech have Rural Development Cells which are the
implementation bodies.

Projects are planned after a participatory need assessment of the communities around the
plants. Each project has a one-year and a three-year rolling plan, with milestones and
measurable targets. The objective is to phase out our presence over a period of time and hand
over the reins of further development to the people. This also enables us to widen our reach.
Along with internal performance assessment mechanisms, our projects are audited by
reputed external agencies, who measure it on qualitative and quantitative parameters, helping
us gauge the effectiveness and providing excellent inputs.

Our partners in development are government bodies, district authorities, village panchayats
and the end beneficiaries — the villagers. The Government has, in their 5-year plans, special
funds earmarked for human development and we recourse to many of these. At the same
time, we network and collaborate with like-minded bilateral and unilateral agencies to share
ideas, draw from each other's experiences, and ensure that efforts are not duplicated. At
another level, this provides a platform for advocacy. Some of the agencies we have
collaborated with are UNFPA, SIFSA, CARE India, Habitat for Humanity International,
Unicef and the World Bank.

Our focus areas

Our rural development activities span five key areas and our single-minded goal here is to
help build model villages that can stand on their own feet. Our focus areas are healthcare,
education, sustainable livelihood, infrastructure and espousing social causes.

Education
Balwadis (pre-school)
Adult education
Non-formal education
Continuing education
Scholarships for girls, merit and
technical education

Mobile clinics - doctors visit once a

week
Medical camps - general and issue-
based
Health training and awareness
Sanitation - toilets, training,
smokeless chullahs, biogas
Safe drinking water
Mother and child health
Reproductive health
Awareness building
Sustainable development and
livelihood and agriculture and
watershed development
Self-help groups
SGSY - dairy, readymade
garments, jute project, basket
making, aggarbati making, bee
keeping, durrie making.
Check dam
Irrigation
Land development
Soil and water conservation
Pasture development
Social forestry/ plantation
activities/ nursery
Horticulture
Farmer training

Roads
Dams
Community centres
Houses
Culverts
Electricity
Health centres
Water channels
Schools
Social causes
Widow / dowry-less mass
marriages
Women empowerment
Awareness drives on knowledge,
attitude and practices

Criticisms and concerns

Critics of CSR as well as proponents debate a number of concerns related to it. These include
CSR's relationship to the fundamental purpose and nature of business and questionable
motives for engaging in CSR, including concerns about insincerity and hypocrisy.

Nature of business

Milton Friedman and others have argued that a corporation's purpose is to maximize returns
to its shareholders, and that since only people can have social responsibilities, corporations
are only responsible to their shareholders and not to society as a whole. Although they accept
that corporations should obey the laws of the countries within which they work, they assert
that corporations have no other obligation to society. Some people perceive CSR as in-
congruent with the very nature and purpose of business, and indeed a hindrance to free trade.
Those who assert that CSR is contrasting with capitalism and are in favor of neoliberalism
argue that improvements in health, longevity and/or infant mortality have been created by
economic growth attributed to free enterprise.

Critics of this argument perceive neoliberalism as opposed to the well-being of society and a
hindrance to human freedom. They claim that the type of capitalism practiced in many
developing countries is a form of economic and cultural imperialism, noting that these
countries usually have fewer labour protections, and thus their citizens are at a higher risk of
exploitation by multinational corporations.

A wide variety of individuals and organizations operate in between these poles. For example,
the REALeadership Alliance asserts that the business of leadership (be it corporate or
otherwise) is to change the world for the better.[18] Many religious and cultural traditions hold
that the economy exists to serve human beings, so all economic entities have an obligation to
society (see for example Economic Justice for All). Moreover, as discussed above, many
CSR proponents point out that CSR can significantly improve long-term corporate
profitability because it reduces risks and inefficiencies while offering a host of potential
benefits such as enhanced brand reputation and employee engagement.

Motives

Some critics believe that CSR programs are undertaken by companies such as British
American Tobacco (BAT),[19] the petroleum giant BP (well-known for its high-profile
advertising campaigns on environmental aspects of its operations), and McDonald's (see
below) to distract the public from ethical questions posed by their core operations. They
argue that some corporations start CSR programs for the commercial benefit they enjoy
through raising their reputation with the public or with government. They suggest that
corporations which exist solely to maximize profits are unable to advance the interests of
society as a whole.[20]

Another concern is that sometimes companies claim to promote CSR and be committed to
sustainable development but simultaneously engaging in harmful business practices. For
example, since the 1970s, the McDonald's Corporation's association with Ronald McDonald
House has been viewed as CSR and relationship marketing. More recently, as CSR has
become mainstream, the company has beefed up its CSR programs related to its labor,
environmental and other practices[21] All the same, in McDonald's Restaurants v Morris &
Steel, Lord Justices Pill, May and Keane ruled that it was fair comment to say that
McDonald's employees worldwide 'do badly in terms of pay and conditions'[22] and true that
'if one eats enough McDonald's food, one's diet may well become high in fat etc., with the
very real risk of heart disease.'[23]

Royal Dutch Shell has a much-publicized CSR policy and was a pioneer in triple bottom line
reporting, but this did not prevent the 2004 scandal concerning its misreporting of oil
reserves, which seriously damaged its reputation and led to charges of hypocrisy. Since then,
the Shell Foundation has become involved in many projects across the world, including a
partnership with Marks and Spencer (UK) in three flower and fruit growing communities
across Africa.

Critics concerned with corporate hypocrisy and insincerity generally suggest that better
governmental and international regulation and enforcement, rather than voluntary measures,
are necessary to ensure that companies behave in a socially responsible manner. Others, such
as Patricia Werhane, argue that CSR should be considered more as a corporate moral
responsibility, and limit the reach of CSR by focusing more on direct impacts of the
organization as viewed through a systems perspective to identify stakeholders.

Ethical consumerism

The rise in popularity of ethical consumerism over the last two decades can be linked to the
rise of CSR. As global population increases, so does the pressure on limited natural resources
required to meet rising consumer demand (Grace and Cohen 2005, 147). Industrialization, in
many developing countries, is booming as a result of both technology and globalization.
Consumers are becoming more aware of the environmental and social implications of their
day-to-day consumer decisions and are therefore beginning to make purchasing decisions
related to their environmental and ethical concerns. However, this practice is far from
consistent or universal.

Globalization and market forces

As corporations pursue growth through globalization, they have encountered new challenges
that impose limits to their growth and potential profits. Government regulations, tariffs,
environmental restrictions and varying standards of what constitutes "labor exploitation" are
problems that can cost organizations millions of dollars. Some view ethical issues as simply
a costly hindrance, while some companies use CSR methodologies as a strategic tactic to
gain public support for their presence in global markets, helping them sustain a competitive
advantage by using their social contributions to provide a subconscious level of advertising.

Social awareness and education

The role among corporate stakeholders is to work collectively to pressure corporations that
are changing. Shareholders and investors themselves, through socially responsible investing
are exerting pressure on corporations to behave responsibly. Non-governmental
organizations are also taking an increasing role, leveraging the power of the media and the
Internet to increase their scrutiny and collective activism around corporate behavior.
Through education and dialogue, the development of community in holding businesses
responsible for their actions is growing [24].

Ethics training

The rise of ethics training inside corporations, some of it required by government regulation,
is another driver credited with changing the behavior and culture of corporations. The aim of
such training is to help employees make ethical decisions when the answers are unclear.
Tullberg believes that humans are built with the capacity to cheat and manipulate, a view
taken from (Trivers 1971, 1985), hence the need for learning normative values and rules in
human behavior [25]. The most direct benefit is reducing the likelihood of "dirty hands"
(Grace and Cohen 2005), fines and damaged reputations for breaching laws or moral norms.
Organizations also see secondary benefit in increasing employee loyalty and pride in the
organization. Caterpillar and Best Buy are examples of organizations that have taken such
steps[26].

Increasingly, companies are becoming interested in processes that can add visibility to their
CSR policies and activities. One method that is gaining increasing popularity is the use of
well-grounded training programs, where CSR is a major issue, and business simulations can
play a part in this.[citation needed]

One relevant documentary is The Corporation, the history of organizations and their growth
in power is discussed. Corporate social responsibility, what a company does to in trying to
benefit society, versus corporate moral responsibility (CMR), what a company should
morally do, are both important topics to consider when looking at ethics in CSR. For
example, Ray Anderson, in The Corporation, takes a CMR perspective in order to do what is
moral and he begins to shift his company's focus towards the biosphere by utilizing carpets
in sections so that they will sustain for longer periods. This is Anderson thinking in terms of
Garret Hardin's "The Tragedy of the Commons," where if people do not pay attention to the
private ways in which we use public resources, people will eventually lose those public
resources.

Laws and regulation

Another driver of CSR is the role of independent mediators, particularly the government, in
ensuring that corporations are prevented from harming the broader social good, including
people and the environment. CSR critics such as Robert Reich argue that governments
should set the agenda for social responsibility by the way of laws and regulation that will
allow a business to conduct themselves responsibly.

The issues surrounding government regulation pose several problems. Regulation in itself is
unable to cover every aspect in detail of a corporation's operations. This leads to burdensome
legal processes bogged down in interpretations of the law and debatable grey areas (Sacconi
2004). For example, General Electric failed to clean up the Hudson River after contaminating
it with organic pollutants. The company continues to argue via the legal process on
assignment of liability, while the cleanup remains stagnant. (Sullivan & Schiafo 2005).

The second issue is the financial burden that regulation can place on a nation's economy.
This view shared by Bulkeley, who cites the Australian federal government's actions to avoid
compliance with the Kyoto Protocol in 1997, on the concerns of economic loss and national
interest. The Australian government took the position that signing the Kyoto Pact would
have caused more significant economic losses for Australia than for any other OECD nation
(Bulkeley 2001, pg 436). On the change of government following the election in November
2007, Prime Minister Kevin Rudd signed the ratification immediately after assuming office
on 3 December 2007, just before the meeting of the UN Framework Convention on Climate
Change. Critics of CSR also point out that organisations pay taxes to government to ensure
that society and the environment are not adversely affected by business activities.

Denmark has a law on CSR. On 16 December 2008, the Danish parliament adopted a bill
making it mandatory for the 1100 largest Danish companies, investors and state-owned
companies to include information on corporate social responsibility (CSR) in their annual
financial reports. The reporting requirements became effective on 1 January 2009.[27] The
required information includes:
 • information on the companies’ policies for CSR or socially responsible investments
(SRI)
• information on how such policies are implemented in practice, and
• information on what results have been obtained so far and managements expectations
for the future with regard to CSR/SRI.

CSR/SRI is still voluntary in Denmark, but if a company has no policy on this it must state
its positioning on CSR in their annual financial report. More on the Danish law can be found
at CSRgov.dk

Crises and their consequences

Often it takes a crisis to precipitate attention to CSR. One of the most active stands against
environmental management is the CERES Principles that resulted after the Exxon Valdez
incident in Alaska in 1989 (Grace and Cohen 2006). Other examples include the lead
poisoning paint used by toy giant Mattel, which required a recall of millions of toys globally
and caused the company to initiate new risk management and quality control processes. In
another example, Magellan Metals in the West Australian town of Esperance was responsible
for lead contamination killing thousands of birds in the area. The company had to cease
business immediately and work with independent regulatory bodies to execute a cleanup.
Odwalla also experienced a crisis with sales dropping 90%, and the company's stock price
dropping 34% due to several cases of E. Coli spread through Odwalla apple juice. The
company ordered a recall of all apple or carrot juice products and introduced a new process
called "flash pasteurization" as well as maintaining lines of communication constantly open
with customers.

Stakeholder priorities

Increasingly, corporations are motivated to become more socially responsible because their
most important stakeholders expect them to understand and address the social and
community issues that are relevant to them. Understanding what causes are important to
employees is usually the first priority because of the many interrelated business benefits that
can be derived from increased employee engagement (i.e. more loyalty, improved
recruitment, increased retention, higher productivity, and so on). Key external stakeholders
include customers, consumers, investors (particularly institutional investors), communities in
the areas where the corporation operates its facilities, regulators, academics, and the media.

Efforts to implement CSR

A very large number of social and voluntary organizations are contributing to the field of
Corporate social responsibility by making it an important agenda where they clearly harp for
all the corporate bodies to adhere to the norns of CSR at all costs. In fact, these voluntary
organizations always go on devising newer and more pragmatic/stringent norms of
application of the requirements of Corporate social responsibility. A few of them are
Examples (lead partner Equal) Community Action Dacorum (lead partner IiC Hertfordshire)
Council for Voluntary Service St Albans District BITC - Business In the Community CSR
(India)- a subsidiary of IRDS, a Lucknow based Voluntary organization.

Key principles in designing and implementing CSR policies

Listed below, in no particular order, are seven key principles relating to the effective
management of Corporate Social Responsibility:

• Apply similar principles to managing CSR as with other aspects of the business.

In order to implement CSR in an effective manner, it must be managed like any other aspect
of business. Amongst over things, this involves the setting of key objectives, priorities and
performance indicators, the creation of action plans and subsequent performance evaluation.

The principles of effective management apply to all aspects of a company’s operations,

including CSR.

• Keep it simple.

The entire approach of organizations towards CSR should be kept as straightforward as

possible.

A more straightforward approach offers several benefits. First, under a simpler approach, it
becomes easier for management and staff to maintain focus on the bigger picture of what the
firm is trying to achieve. In addition, a simpler approach also increases the likelihood of staff
understanding CSR policy and becoming engaged in CSR effort. Finally, under a simpler
approach, CSR is likely to be managed more effectively – fewer complications, fewer
opportunities for mistakes.

Simply put, simple is better.

• Focus on core principles, not policies and procedures.

Whilst specific policies may be necessary to provide clarity to employees in some

circumstances, the focus should be upon core principles rather than detailed policies or
procedures.

An organizational focus based primarily around core principles allows employees the
flexibility to apply a common sense approach when dealing with situations which may arise,
whilst still ensuring actions and practices which are consistent with the key values of the
organization as well as the principal objectives of CSR policy.

• Set measurable outcomes, goals and objectives.

As with any other area of business, the process of setting goals, objectives and measurable
outcomes is essential for the effective management of Corporate Social Responsibility.

These provide focus and direction for CSR effort as well as a mechanism to measure and
evaluate organizational performance.

• Focus upon specific industry concerns.

All firms should aspire to good corporate citizenship in common areas such as the
environment, labor relations and corporate governance.

In addition, all firms should aspire to conduct their business in a manner of honesty and
integrity.

Beyond this, however, organizational effort relating to CSR should focus predominately
upon areas of specific concern to the industry in which the organization operates.

Manufacturers of alcoholic beverages for example, should focus CSR efforts upon programs
to prevent under-age drinking, drink-driving or other forms of alcohol abuse. Timber firms
could focus upon forest regeneration. Fast food companies could focus upon health related
programs, as well as the minimization of harmful ingredients in their food. And finally,
financial institutions could refrain from lending to certain clientele. (such as weapons
manufacturers)

By focusing CSR efforts upon areas of specific relevance to their industry, organizations
maximize the impact of their CSR effort both from a public relations viewpoint and from the
viewpoint of the broader community benefit.

• Communicate, involve and engage.

No man is an island in himself, nor does any business operate in isolation.

Companies should seek input from key stakeholder groups throughout the CSR process,
particularly during the process of setting goals, objectives and key priorities.

Not only will stakeholder input help the organization to identify and focus upon areas of
greatest importance, the process of engagement will also help to strengthen key stakeholder
relationships.

In addition, companies should also seek the engagement of employees. As the group which
puts company policy into action, employees have considerable influence over the outcome of
CSR effort. Where possible, staff should be given to opportunity to provide input into
decisions relating to CSR policies and programs. In addition, companies should clearly
communicate the reasons behind CSR effort, including the anticipated benefits from the
perspective of the community, the organization and, where applicable, employees
themselves.

In cases where staff have a clear understanding of the reasons behind CSR policies and
programs, and are provided the opportunity to provide input into decision making, they are
more likely to apply CSR policy in a diligent manner. They are also more likely to
participate actively in specific CSR programs.

• Don’t leave it to the PR or legal department.

Many organizations view CSR as primarily a form of public relations, or risk mitigation.
Accordingly, organizations may view CSR management primarily as a function for the
public relations or legal departments.

Whilst these departments may be well positioned to provide valuable input into CSR
management, there are drawbacks in viewing CSR in this manner.

Where CSR is left predominately to the public relations department, the resultant
communication may come across as ‘spin doctoring,’ As a result key stakeholders, as well as
the general public, may distrust the sincerity of the organization’s efforts, thereby limiting
any positive impact upon corporate reputation.

Moreover, delegating CSR to one department misses the point. CSR is more than simply a
public relations exercise. It is not simply a task to be delegated to one department and
ignored by the rest of the organization.

CSR is fundamentally a way of doing business, and should be a factor in guiding

organizational behavior across the entire spectrum of operations.

It should not be left to one department.