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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 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. Business and society have been coeval since time immemorial and also have been interdependant. This relationship between business and society is appreciated in Rigveda also : “Corporates should work like a honeybee, which takes the nectar of a flower without the flower being losing its shape and fragrance and provides honey for the wellbeing of the society.” It means that both have to work on a symbiosis manner for each one’s survival and success. The business history is replete with evidences to believe that business flourishes only where society thrives. On the contrary, business dies when society condemns and rejects it. No business can survive without societal approval and sanction. The inter-dependant nature of relationship between the business and the society is best illustrated by the management guru Peter Drucker (1954) by the example of a ship and sea. He states that the relationship between business and society is “like the relationship between a ship and the sea which engirds it and carries it, which threatens it with storm and shipwreck, which has to be crossed but which is yet alien and distant.” No doubt, business has been conducted primarily to earn profit and / or create wealth. However, there are reasons and evidences to believe that the mindless obsession with profit maximization at any cost carried to any extreme has led to spurt in sordid activities in business causing harm to both the business and society and ultimately leading business to flounder and fizzle out. Enrons Parmalats, Union Carbide, and World.com are to name a few representing examples of such business collapses. Business history is also replete with examples that only the businesses that are conducted through good or right practices enjoy
3 societal sanction and survive and last for long. Johnson & Johnson, Maruti Limited, Reliance Industries Limited, and Tata Iron and Steel Company are such examples that indicate that being good in conducting business activities proves good for businesses also. Hence, there has been increasing concern for conducting business in a good or ethical manner. Though there has been a spurt in research activities on business ethics or ethics in business, not much research has so far been conducted on what actually makes business ethics and how being ethical or good is good for business also.
INTRODUCTION DR’REDDY LABORATORIES
Dr. Reddy’s Laboratories was founded by Dr Anji Reddy, an entrepreneur-scientist, in 1984. The DNA of the company is drawn from its founder and his vision to establish India’s first discovery led global pharmaceutical company. In fact, it is this spirit of entrepreneurship that has shaped the company to become what it is today. Dr Anji Reddy, having moved out of Standard Organics Limited, a company he had successfully co-founded, started Dr. Reddy’s Laboratories with $ 40,000 in cash and $120,000 in bank loan! Today, the company with revenues of Rs.2, 427 crore (US $546 million), as of fiscal year 2006, is India’s second largest pharmaceutical company and the youngest among its peer group. The company has several distinctions to its credit. Being the first pharmaceutical company from Asia Pacific (outside Japan) to be listed on the New York Stock Exchange (on April 11, 2001) is only one among them. And as always, Dr. Reddy’s chose to do it in the most difficult of circumstances against widespread skepticism. Dr. Reddy’s came up trumps not only having its stock oversubscribed but also becoming the best performing IPO that year. Dr. Anji Reddy is well known for his passion for research and drug discovery. Dr. Reddy’s started its drug discovery programme in 1993 and within three years it achieved its first breakthrough by out licensing an anti-diabetes molecule to Novo Nordisk in March 1997. With this very small but significant step, the Indian industry went through a paradigm shift in its image from being known as just ‘copycats’ to ‘innovators’! Through its success, Dr. Reddy’s pioneered drug discovery in India. There are several such inflection points in the company’s evolution from a bulk drug (API) manufacturer into a vertically integrated global pharmaceutical company today. Today, the company manufactures and markets API (Bulk Actives), Finished Dosages and Biologics in over 100 countries worldwide, in addition to having a very promising Drug Discovery Pipeline. When Dr. Reddy’s started its first big move in 1986 from manufacturing and marketing bulk actives to the domestic (Indian) market to manufacturing and exporting
5 difficult-to-manufacture bulk actives such as Methyldopa to highly regulated overseas markets, it had to not only overcome regulatory and legal hurdles but also battle deeply entrenched mind-set issues of Indian Pharma being seen as producers of 'cheap' and therefore ‘low quality’ pharmaceuticals. Today, the Indian pharma industry, in stark contrast, is known globally for its proven high quality-low cost advantage in delivering safe and effective pharmaceuticals. This transition, a tough and often-perilous one, was made possible thanks to the pioneering efforts of companies such as Dr. Reddy’s. Today, Dr. Reddy’s continues its journey. Leveraging on its ‘Low Cost, High Intellect’ advantage. Foraying into new markets and new businesses. Taking on new challenges and growing stronger and more capable. Each failure and each success renewing the sense of purpose and helping the company evolve. With over 950 scientists working across the globe, around the clock, the company continues its relentless march forward to discover and deliver a breakthrough medicine to address an unmet medical need and make a difference to people’s lives worldwide. And when it does that, it would only be the beginning and yet it would be the most important step. As Lao Tzu wrote a long time ago, ‘Even a 1000 mile journey starts with a single step.’ OUR CORE PURPOSE “ To help people lead healthier lives”
OUR VISION “To become a discovery led global pharmaceutical company”
OUR VALUES We strive for excellence in everything we think, say and do.
6 Quality: We are dedicated to achieving the highest levels of quality in everything we do to delight customers, internal & external, every time Respect for the Individual: We uphold the self esteem and dignity of each other by creating an open culture conducive for expression of views and ideas irrespective of hierarchy Innovation & Continuous Learning: We create an environment of innovation and learning that fosters, in each one of us, a desire to excel and willingness to experiment Collaboration & Teamwork: We seek opportunities to build relationships and leverage knowledge, expertise and resources to create greater value across functions, businesses and locations Harmony & Social Responsibility: We take utmost care to protect our natural environment and serve the communities in which we live and work Our business practices are guided by the highest ethical standards of truth, integrity and transparency.
Corporate social responsibility While 'Sustainability: The Triple Bottom Line' as a term may have a contemporary ring to it, the spirit underlying it has been relevant through the ages. In 1987, the World Commission on Environment and Development (established by a resolution of UN General Assembly) defined sustainability as "Development which meets the needs of the present without compromising the ability of future generations to meet their own needs". It also popularized the use of this term for resources renew ability, desired business plan and a progressive way of doing things. At Dr. Reddy's, we believe that any high performance sustainable organization rests on the three pillars of economic, social and environmental performance. To be a truly sustainable
7 organization, in the broadest definition of its terms, an organization must perform well across all three dimensions. As a company, we are fully committed to the principles of sustainability. We see our stakeholders as shareholders, to whom we promise sustained economic performance, the society - to whom we promise to create positive impact through our activities both business as well as voluntary - and finally the environment, which we promise will be well protected and enriched from our various activities. In recognition of the conviction that the prosperity of communities is integral to the success of companies, Social Initiatives is higher on the agenda of more companies now than ever before. At Dr Reddy’s, we take pride in the fact that our products and what they are intended to achieve represent the core of Social Initiatives – to help people lead healthier lives. The company achieves this objective through increased access and affordability of its generics, API and branded generics products and addressing unmet and undeserved medical needs by innovation through its Specialty and NCE businesses. At Dr Reddy’s, Social Initiatives represents an integral component of Corporate Social Responsibility. Our investments in the communities have extended beyond the adhoc disbursement of charity to a planned program in capability building, helping extend the sporadic to the sustainable. The various organizations that we support are: Dr. Reddy’s Foundation NAANDI Foundation Centre for Social Initiative & Management (CSIM) At the company, Social Initiatives does not just cover the community, but also employees. This re-interpretation has happened for an important reason: society represents a mix of employees and non-employees. By including employees in our definition of Social Initiatives, the company has demonstrated that no initiative can succeed unless if the initiators of the improvement do not figure among the beneficiaries themselves. It is this
8 comprehensive address – employees to communities – that enhances the impact of the company’s social initiatives, strengthening its case for true sustainability. Dr. Reddy foundation At Dr. Reddy’s we believe that for any development to be sustainable, people need to be empowered to support themselves in the first place. The company also believes that in every human being and organization there is a latent need to ‘give back to society’. It is with this perspective that Dr. Reddy's Foundation was incepted by Dr K Anji Reddy, Chairman of Dr. Reddy’s Laboratories, in 1996. In Dr. K. Anji Reddy’s own words,
The Foundation acts as a social change catalyst that fosters, develops and promotes initiatives at individual / group / organization levels to promote sustainable human and social development. Believing in the inherent motivation and capacity of the human being for progress – given the appropriate and adequate environment - the Foundation innovates and tries out novel concepts in pilot models that are continuously refined and scaled up to cover larger groups of deprived populations. Life . Research . Hope - Driven by this spirit, the company, led by the Chairman, Dr K Anji Reddy, called upon similar-minded corporates and created a new social platform, a
9 not-for-profit development organization that could showcase not only to India but the international community as well, the depth of corporate will in shouldering the responsibility of finding solutions to long-pending social development problems of the country.
NaandiFoundation Naandi Foundation was created through this effort. It is an autonomous, public trust that works together with governments, corporates and civil society to improve the lives of the underprivileged. To underline the company's commitment in supporting Naandi's objectives, Dr K Anji Reddy became one of its principal founders, and took on the responsibility of its Chairmanship as well. The employees of Dr Reddy's too have been staunch supporters of Naandi's vision of improving lives. The company has defined 'corporate giving' by coming forward to donate unconditionally to Naandi's social initiative programs through the Power of 10™.
The Power of 10™
The Power of 10™ is a mechanism created by Naandi that allows everyone to do their bit for the society, even if it is donating Rs 10 every month towards a cause. And leading the way, we are proud to say, have been the company's factory workers. They give generously to the Power of 10™ , which is channelised by Naandi into its education project, popularly known as the 'Support Our Schools' program, aimed at improving the quality of education in over 2000 government schools. To encourage this culture of giving showcased by its employees, Dr. Reddy's too makes a contribution to the Power of 10™ that matches the contributions made by the employees. Dr. Reddy's has become a model that is being emulated by more and more corporates, institutions, and individuals thereby enabling Naandi to become the platform that allows for an interface between civil society and the underprivileged.
For employees who want to do more, Naandi offers several windows of opportunities to give back to the society. These range from adopting government schools, and volunteering in them to improve quality education, to participating in tribal development projects. Dr. Reddy's new recruits inevitably get their first taste of rural India, every year, through an Outbound Rural Sensitivity Training, that is organised by Naandi. Ability to garner civil society support has propelled Naandi's growth and reach. It is the only NGO in the country to run automated central Midday meal kitchens in urban centres - the ones at Hyderabad and Visakhapatnam presently cater to around 1200 government schools. So far the kitchens have supplied 45 million meals, without any complaints, to the underprivileged that come to these schools. This task gets bigger as Naandi targets to implement this model for the children of 5 other cities in the country by 2005. Among its other innovations, Naandi has enabled the revival of dead irrigation assets by converting the small farmer into a micro-entrepreneur and bringing water back to more
11 than 40,000 drought -hit families. By creating sustainable and cost-effective social entrepreneurship models Naandi is enabling technology transfers from The Lawrence Berkeley National Laboratory, California , to bring safe drinking water to Indian villages. And in keeping with its vision, Naandi continues to create new development breakthroughs in the areas of health, education and livelihood that are being replicated by governments across the country to impact millions of men, women and children in the country. Centre for Social Initiative and Management (CSIM) Centre for Social Initiative and Management Manava Samvardhani registered (CSIM), Seva (MSDS), Public an Initiative under the aegis of Dharma is a Charitable Several social divides confront the Indian society today: their growing intensity and emerging newer ones make the situation increasingly difficult. Social Work education in the country does not prepare and students for talent. such a challenge - therefore, the need for entrepreneurial professional Compassionate
Trust with Mr. P.N.Devarajan as its founder and Managing Trustee. The Hyderabad Chapter of CSIM, started in 2002, is supported by Dr.Reddy's Dr.Reddy's enhancing as CSIM concept community fits of value
individuals, who pitch in with noble intentions, have limitations in finding breakthrough solutions and thus add to the list of non-performing and under-performing NGOs.
social sustainability through through their programmes.
The environment thus presents an opportunity for individuals with initiative and who can think of bold and creative solutions to make a significant difference through concrete actions. The challenge is to discover and mould Social Entrepreneurs, who can generate radical, path-breaking solutions to social divides, who can take reasonable risks and
12 persistently work towards creating a lasting social impact. Similarly, small and medium tier non-governmental organizations (NGOs), with compassionate individuals as leaders, also need organizational skills to recharge themselves, refocus priorities and become impact-driven. They need a long-term approach to sustenance, creatively plan a revenue model and leverage hidden resources including volunteer talent.
Centre for Social Initiative and Management (CSIM) is a learning center that
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Enrolls, discovers and shapes Social Entrepreneurs Supports the process of social entrepreneurship in small and medium NGOs Provides a volunteer constituency to Social Entrepreneurs and NGOs
At CSIM, you will have access to: Social Entrepreneurship Initiative that is knowledge and involvement based and offers learning in Social Entrepreneurship. The programs are:
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One year PG diploma in Social Initiative and Management, Four month part-time program in Social Entrepreneurship Outlook, Training for volunteers who wish to partner with Social Entrepreneurs, Entrepreneurship Learning club as an interactive networking platform, Incubation service to design and deploy impact based social change initiatives Internship program for the socially conscious Customized management skill development programs for NGOs
Volunteering Initiative, which offers short term and action oriented programs for socially conscious individuals, youth and working professionals. Several platforms such as the Social Action Group, Student Volunteer Consulting program and Student-Non Profit Exchange programs are operational with individual volunteers and also in partnership with colleges, schools and corporates.
13 Education - Program Overview
14 A conviction that poor are not poor but rich by a state and conscientious civil society and it is by accessing those who had failed in getting democratic institutions work for them, with the institutions and standing by them in realizing their constitutional rights has been the motive force behind all what DRF has been doing since 1997. Education is more than attending schools, it decides how life would be and it relieves one from the circularity in life and it is the deciding line that separates participants in the development from those who are left behind. The very essentiality of education makes it a fundamental right. DRF choose to stand by the children, who are denied of that right and make every effort possible to support them realize their rights.
Besides undertaking the programme of mobilising children to school we thought it would be half hearted effort unless we address the issue of quality education which is no less a right than accessing school, which led us to take up a programme of partnering with schools in Secunderabad and Hyderabad districts in improving school processes, curriculum delivery mechanisms to ensure every pupil get trained in curricular objectives proclaimed by the government.
Organization had taken up several programs to support young persons reclaim their education, ABC centers mobilize adolescent boys and girls who are past their school age Give them education, prepare them to complete 7th and 10th exams and let them acquire relevant Certification to pursue their careers .DRF also facilitates youngsters to get trained in the modern skills like communication and computers and expose them to various opportunities.
15 Livelihoods - LABS
16 Dr. Reddy’s Foundation has been engaged in promoting pioneering public-private partnership models linking life, learning and livelihoods. The foundation addresses the cause of poverty alleviation, with specific emphasis on livelihoods for marginalized youth. Livelihood Advancement Business School (LABS)
The Livelihood Advancement Business School (LABS), a flagship program of Dr. Reddy's Foundation (DRF), since its inception in 1999, promotes tailor made programs targeted at youth in the age group of 18 -35 years from economically weakest sections and enables them to gain access to opportunities for sustainable livelihoods and growth in the New Economy. LABS had so far created over 70,000 new economy livelihoods in
LABS assumes the role of a catalyst, facilitating ongoing, concurrent participation of citizens, corporate and government in finding lasting solutions for sustainable livelihoods. LABS is now operational in 86 centers across India. 11 states of the country have been already covered by the program including all the major metropolitan towns, cities as well as small and medium towns. There are 26 new sector curriculums within the LABS framework, for e.g., BPO, retail academy, Customer Relations and Sales, Micro Irrigation, Automobile, Hospitality, Bed side Patient Assistants, etc. Each curriculum is incorporated into the LABS framework after a thorough market survey is undertaken in the sector. The survey analyses the possible livelihoods in the respective sector and the potential for upward mobility for the LABS aspirant. The training is imparted for duration of 90 days, which in itself is unique. The classroom modules are unique with lot of emphasis on life
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