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Meeting the challenge Making the change

CORPORATE SOCIAL RESPONSIBILITY

Agenda
1. Overview of Corporate Social Responsibility
2. Research findings / Trends

3. Discussion

What is Corporate Social Responsibility?

Responsibility as a Fig Leaf


CSR is the obligation of decision makers to take actions which protect and improve the welfare of society as a whole along with their own interests. The social responsibility of business encompasses the economic, legal, ethical and discretionary expectations that a society has of organizations at a given point in time.

Corporate Social Responsibility


CSR may be used by businesses as another way of promoting their image, products and services. Within this concept businesses make profits, unhindered except by fulfilling their duty to pay taxes. Then they donate a certain share of the profits to charitable causes.

Corporate Social Responsibility


However CSR can also be extended to how business takes account of its economic, social and environmental impacts in the way it operates

Need for Social Responsibility


(1) The Iron Law of Responsibility: The institute of business exists only because it performs invaluable services for society.

(2) (2) To Fulfill Long-run Self-interest: A business organization is most sensitive to community needs, in its own self-interest, like to have a better community in which to conduct its business.

Three Pillars of Corporate Social Responsibility


ENVIRONMENT -Recycling efforts -Produce less waste -Energy efficiency -Reduce emissions SOCIAL - Employment practices - Diverse workforce - Health and safety - Support work/life balance - Corporate giving - Employee volunteerism - Community involvement, development and investment - Customer satisfaction ECONOMY - Local employment - Local suppliers -Support local training and scholarship programs -Corporate governance and ethics -Accountability, transparency and reporting

Corporate Social Responsibility


Trade Unions through their connections with employers and employers organisations can be agents of social change and can help NGOs in their promotion of social inclusion through employment Donations are helpful but measures for social integration are more helpful and long-lasting.

So..
How do we prioritize stakeholders in a global economy?
What are the relationships between business and society? Musts? Obligatory ought? Discretionary?

And IF the world is flat (the globalization thesis),


How should we think or rethink about ideas of CSR in a global economy?

A STAKEHOLDER MAP
Mass media Pressure groups Shareholders Employees Governments

Corporate management Local communities NGOs

Political parties

Private sector

Company
Professionals

Customers

Special interest Groups

Suppliers

International Organizations

Special interest Groups

Broad Engagement of Stakeholders


Workplace
Employees Unions Retirees Families

Environment Immediate community Society as a whole Financial Investors Shareholders Regulators Lenders Insurers

Marketplace
Customers / consumers Suppliers Partners Competitors

Community
Neighbors Charities Social service agencies Local government Media

Stakeholder Networks of Responsibilities in a Globalized Setting


Local employees Customer
Local Governments & Political Systems

Corporation

NGOs

Global employee s

Social Norms & Customs

Suppliers

Religious influences

Partners & Competitors

Shareholders

Communities

What We are going to discuss..


Corporate Citizenship

Business Ethics Community Investment


Environmental Responsibility Sustainability

Emerging Trends and Key Benefits

CSR - An Emerging Business Trend


Future of CSR- Experts Views Over the next 5 years (Globe Scan 2008)

Key Benefits of CSR


Enhance employee recruitment and retention
91% of employees would prefer to work for a company with a strong commitment to community. 92% of employees want to be involved in their companys social responsibility in some way. 90% of employees of large Canadian companies agreed that CSR increases my motivation and loyalty

(2008 Globe scan)

Best Way for Company to Make Positive Contribution to Society (Globe Scan Survey)

Strategic Partnership Trends


Best Indication That Company Is Socially Responsible

Works with NGO or Charity, Trends: 20022006

Examples

Donating computers to a school Building a playground Developing a website for a charity Enabling your employees to volunteer for a charity

Providing skills training for unemployed youths


Planting trees in a local community park

What the media say Companies that dont keep a firm grip on staff working conditions, the activities of their suppliers, or the amount of pollution they cause, are more likely to be shut down by the authorities or boycotted by the public.

How do some companies do CSR?

Procter & Gamble


Go, Give and Grow Better Start Golden Households

How do some companies do CSR?

Nokia
Make a Connection

Social Responsibility Models


Economics Legal Ethical Discretionary

Economic
Efficient operation to satisfy economic needs of the society and generation of surplus for rewarding the investors and further development.

Legal
Legal responsibilities are also fundamental in nature because a company is bound to obey the law of the land.

Ethical
Ethics is principles, value and beliefs that define what is right and wrong behavior. For example, a company shall not resort to bribing or unethical practices, unfair competition.

Establishing Of Ethics
Company policy Formal rules and regulation Performance appraisal system Reward allocation

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Appointment ethics committee Create a strong culture Motivation Teaching ethics Values self-confidence

Discretionary
Discretionary responsibilities refer to the voluntary contribution of the business to the social cause, like involvement in community development or other social programmer for example adult or poor children education etc.

Social Responsibility to Government


Setting up units as per guidelines of government. Payment of fees, duties and taxes regularly as well as honestly. Not to involve in monopolistic and restrictive trade practices. Conforming to pollution control norms set up by government.

Social Responsibility To Public


To help the weaker and backward sections of the society.

To preserve and promote social and cultural values. To generate employment.


To protect the environment.

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To provide assistance in the field of developmental research on education, medical science, technology etc. To conserve natural resources and wildlife. To promote sports and culture Regular supply of goods and services. Goods and services at reasonable and affordable price.

Current Scenario Of Two Company


ADITYA BIRLA GROUP TATA GROUP

As early as the 1940s, they founding father Shri G.D Birla espoused the trusteeship concept of management.

TATA group are giving contribution since mid 19th century.

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ADITYA BIRLA GROUP Employment generate, give training in village3700 village and 7 million people touching annually. Balwadis (pre-school) Adult education on-formal education Continuing education Scholarships for girls, merit and technical education TATA GROUP To provide education+traning in rural area. DHAN Academy & Shri Ratan Tata Trust, give education pre-school to college. and give JRD TATA Scholarship for higher education.

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ADITYA BIRLA GROUP They provide medical facility to employee and they establish a hospital in rural area. Infrastructure development Roads, Dams Community centers, Houses Culverts Electricity, Water channels Schools TATA GROUP TATA group arrange medical camp in rural as well as urban area. they provide special medical facility to their employee. They build many house and give lower price to poor people.

Companies Which are involve in Social Welfare activities


TCS

Adult literacy programme through computer based functional literacy method.

Infosys
Focuses on the underprivileged in rural areas, healthcare for the poor education rehabilitation and promotion of Indian art and culture. Infosys Hyderabad development centre has launched a computer literacy programme for Cyderabad police personnel

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Canon Home Eye care project Humanitarian aid and disaster relief Art, culture and sports Education and science Local communist Social welfare Conservation of environment

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Axa

Employees Clients and distributors Shareholders Suppliers Environment

STAKEHOLDERS
The stakeholders of an organization are all those who participate in the activities of the organization. It may be

1.

Any group of people who have stake in the business. 2. Those who are vital to the survival and success of the organization. 3. Any group that is affected by the activities of the organization. Stakeholder may be internal or external.

Shareholder
Share holder are considered to be the owners of the corporation. Shareholders are considered `members` of the company who help to achieve the companys goals by investing in the business. So that it is a first responsibility of the company to protect the interest of the shareholder.

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Shareholders responsibilities. Responsibilities of the organization towards the shareholders.

Consumers
The customer is the foundation of a business of a business and keeps it in a existence. Consumers provides lifeblood of the firm in the form of revenue.

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The responsibilities of business corporations towards their consumers are summed up by the five Rs- the right quality, right quantity right time, right place and right price. A few of these responsibilities are :

Social Responsibility Of Managers In Business


Social responsibilities refer to the businessmans decisions and actions taken to reasons at least partially beyond the firms direct economic or technical interest.

The first break came in the 1930s.


Social responsibility contends that management is responsible to the organization itself and to all the interest groups with which it interacts.

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Features of social responsibility Three types of behavior. Social obligation to fulfill. Obligations according to social norms and expectations.

SOCIAL AUDIT

Definition Of Social Audit


According to Ahmed Belkoui, Social audit is much like the financial audit-is and identification and examination of the activities of the firm in order to assess, evaluate, measure and report their impact on the immediate social environment.

Major Involvement in Social Audit


Social impact. Costs and Benefit. Format

Objectives and benefits of Social Audits


The basic objective of social audit is to evaluate the social dimensions of the performance of the company. Social performance

Public image.

Method of Social Audit


Social Process Audit Financial Statement Format Audit Macro-Micro Social Indicator Audit Constituency Group Audit Partial Social Audit Comprehensive Audit Corporate Rating Approach

Obstacles to Social Audit


New concept Methodology. Agreement. Cost factor. Resistance.

Performa of Social Audit


Particular 1.Social Benefits & cost of staff A. social benefits to staff 1 medical & hospital facilities
2 educational facilities 3 canteen facilities 4 recreation, entertainment 5 hosing & township facilities Amt. Amt.

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6 water supply, concessional electricity & transport

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Particular
7.Training & career development

Amt.

Amt.

8.P.f, gratuity, bonus & insurance 9.Holiday,leave encashment & leave travel benefit 10.Other benefits. Total benefit to staff

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Particular B.Social costs to staff
1.Lay off & involuntary termination 2.Extra hours put in by officers voluntarily

Total cost to staff Social income to staff (A-B)

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Particular II. Social benefit & costs to community A. Social benefit to community
1.Local taxes paid to panchayat/ municipality 2.Environmental improvements 3.Generation of job potential 4. Generation of business

Total social Benefits to Community

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Particular B.Social Costs to Community
1.Increase in cost of living in the vicinity on account of the cement plants

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Particular III. Social Benefit & Costs to General Public A.Social benefits to general public
1.Tax, duties, etc, paid to State government 2.Tax, duties etc. paid to central government Total benefit to general public

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Particular B. Social costs to general public
1. State services consumed -electricity 2.Central services consumed telephone, telegraph,postal services & banking. Net social benefit to general public III(A-B)

Net social Income to Staff, Community & General Public (I+II+III)

SOCIAL RESPONSIBILITY TOWARDS EMPLOYEES

Employees are our greatest asset

Definition of Employee
An employee is anyone who has agreed to be employed, under a contract of service, to work for some form of payment. This can include wages,salary,commision and piece rates

Employees In Organization
Employees have direct interest in an organisation.

Depends of Employees moral.

Managements responsibility to protect interest of employees in the organisation.

Responsibility of the organisation to employees


The payment of fair wages. The installation of an efficient grievance handling system.

Arrangement for proper training and education of the employees.

Management should develop administrative process in such way that promotes cooperative endeavour between employees & employers.

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The establishment of fair work Standard & Norms. Reasonable chances and proper system for Accomplishment & Promotion. Proper recognition, appreciation & encouragement of special skill & capabilities of the Employees.

Various Companys Social Responsibility Towards Employees


Reliance

Infosys TATA ONGC Ltd.

Arguments for social involvement


1. Since business utilizes the resources of the

society hence they tend to be accountable to the society. 2. A resourceful business holds responsibility towards the society. a special

3. By involving in social activities businesses can develop harmonious relationships between the society and business and this will be mutually

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4. Businesses being social responsible will be able to avoid additional government regulation and intervention. 5. It helps to create better public image for the company, which may help it in attracting customers, efficient personnel and investors.

Arguments Against Undertaking Of Social Responsibility By Business


1. Business should be concerned about commercial activities only; there are government Agencies and NGOs, which can carry out social activities that too in a very good manner.
2. The economic health of any business may be adversely affected by social involvement.

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3. The cost of social involvement is mostly passed on to the consumer in the form of increased prices, hence there seems to be no point in pursuing something which will eventually put the burden on the society itself. 4. The business managers are usually adept at handling business activities but may be poorly skilled in managing social activities.

Conclusion
Business is part of society and business is also known as person in language of the law. Initially, it is difficult to express social incurred by a corporate enterprise and social benefits generated in money terms, until suitable methodologies are available for conversional of social costs benefits transaction in money terms, It need to further research in this area. but business should give contribution to develop of society, using some techniques.

Bibliography

Business Environment by Dr. Francis Cherunilam Management Concept & Contemporary Practice The Mercantile law. by N.K. Kapoor. Annul Report of RELIANCE LTD.(07-08) Annul Report of INFOSYS LTD.(07-08) Annual Report of ADITYA BIRALA GROUPS.(07-08) Annual Report of TATA MOTORS LTD.(07-08) Annual Report of ONGC LTD.(07-08) web site: http://www.adityabirla.com http://www.bing.com http://csr-news.net/main http://google.com