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Name AASHISH DILIP MALOO................................................................. MBA FT MIB Undergraduate

................................................................................................................................... MBA PT MSc Diploma Certificate

................................................................................................................................... Specialization......................................................................................................

....................................................................................... Intake °0904

Student ID Number (s) ................................................................................... Grenoble main Campus Off site (state which one)

Subject Ethics ..................................................................................................................... Singapore ...............................

Assignment Oral Presentation Exam Project Proposal Management Project/Dissertation

Title Sustainability thru Corporate social Responsibility in Developing Countries.......................................................................................................................

I hereby declare that the attached assignment is my own work and understand that if I am suspected of plagiarism or other form of cheating; my
work will be referred to the Disciplinary Committee, which may result in my exclusion from the program.

Signature AASHISH DILIP MALOO

.................................................................................................... Date 9th June 2010

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Sustainability  Thru  
Corporate  Social  
Responsibility  in  
Developing  
Countries  
 
 
Aashish  Dilip  Maloo  (G0887943K)  
Masters  in  International  Business  (MIBD0904)  
9th  June  2010  
 

 
 

 
  
 

Table  of  Contents                                                                                                                                                                                                                      Pg  No.  

-­‐ Abstract                                                                                                                                                                                                                                      1                                                  

-­‐ Introduction                                                                                                                                                                                                                      2    

-­‐ Literature  Review                                                                                                                                                                                                    3  

-­‐ Methodology                                                                                                                                                                                                                13  

-­‐ Conclusion                                                                                                                                                                                                                          14  

-­‐ Bibliography                                                                                                                                                                                                                    15  

 
  
 

“..For  any  business  to  be  sustainable,  the  community  the  business  served  should  
be  sustainable”  –  Neville  Isdell  –  Chairman  and  CEO,  Coca-­‐Cola  (March  2008)  

Abstract  

In  the  globalizing  world,  all  the  MULTINATIONALS  are  focusing  on  the  developing  
economies,  countries  such  as  India,  African  countries  like  South  Africa,  Zimbabwe,  
Nigeria,  China,  Russia  are  the  hot  property  for  the  companies.  Every  company,  big  or  
small  wants  to  enter  the  developing  countries.  It  is  also  a  cheaper  option  for  the  
companies  to  shift  their  production  units  to  these  countries  due  the  availability  of  
resources  in  abundance  and  at  a  much  cheaper  cost.  Countries  such  Africa  and  India  
with  high  population  and  literacy  rates  these  companies  can  get  cheap  labour  and  
use  the  resources  how  very  they  want  with  very  little  to  give  in  return.  This  paper  
discusses  what  and  how  do  the  companies  deliver  the  value  back  to  the  country.  

 
  
 

Introduction  

There  have  been  a  lot  of  Socially  responsible  practices  in  the  developed  countries  
but  this  paper  is  about  how  do  companies  practice  CSR  in  the  developing  countries.  
All  the  multi  nationals  are  now  exploring  the  markets  of  developing  countries  and  
even  using  these  countries  production  capacity  to  meet  their  global  needs,  this  
paper  deals  with  how  do  these  companies  conduct  the  CSR  in  these  countries,  by  
what  means  and  what  measures  do  they  use  to  conduct  CSR  and  how  effective  is  it.  

This  paper  also  answers  the  questions  of  the  importance  of  CSR.  In  today’s  world  
customers  and  investors  are  looking  for  companies  which  are  socially  responsible,  
for  example  if  we  go  to  buy  a  Aircon,  we  would  look  for  which  company  is  energy  
efficient,  because  that  will  preserve  our  environment  and  is  beneficial  for  us  as  well.  

So  companies  today  in  order  to  be  sustainable  have  to  look  after  many  things  just  
apart  from  profit,  like  if  a  Industry  helps  the  people  it  is  serving  to  in  other  ways  it  
creates  a  brand  image  for  the  company  and  people  tend  to  like  the  company.  For  
e.g.  Tata  in  India,  it  is  one  the  most  socially  responsible  companies  in  India  it  is  
known  for  its  best  customer  care  and  employer  care  and  also  works  for  the  society,  
that  is  the  reason  it  is  the  most  successful  company  in  India.  

This  paper  clearly  justifies  that  in  order  to  survive  and  to  sustainable  in  the  market  
today  CSR  is  very  important.  

 
  
 

Literature  Review  

Wayne,  considers  drivers  as  one  of  the  most  powerful  way  to  determine  CSR  in  
developing  countries  and  he  distinguishes  these  drivers  as:  

• Political  Reform:    

CSR  cannot  be  separated  from  the  political  reforms  in  a  country,  because  political  
reform  is  the  key  driver  for  a  business  in  country  towards  ethical  and  social  behavior.  

• Socio-­‐Economic  Priorities:  

It  is  the  socio-­‐economic  condition  in  which  the  business  works  that  persuades  the  
business  to  set  up  its  priorities.  

• Governance  gaps  

It  depends  on  the  governments  will  to  share  the  responsibility  with  the  corporate  to  
develop  the  society.  

 
• Crisis  Response  

It  is  a  company’s  response  to  the  natural  calamities  or  disaster  prevailing  in  the  
country.  
  
 
• Market  Access  

In  central  Europe  and  Asia  CSR  works  as  a  competitive  advantage.  

• International  Standardization  

CSR  also  works  on  the  standards  imposed  by  multinationals  on  its  subsidiaries  in  
developing  countries.  

• Investment  Incentives  

CSR  in  developing  countries  acts  a  way  to  attract  investment  from  unknown  foreign  
firms.  

• Stake  Holder  Activism  

People  hold  companies  responsible  for  the  societies  down  fall  or  up  liftment  so  it  is  
way  to  attract  stakeholders.  

• Supply  Chain  

Its  is  the  Wal-­‐Mart  effect,  i.e.  CSR  adds  value  to  all  its  suppliers.  

-­‐  Corporate  Social  Responsibility  In  Developing  Countries  –  Wayne  Visser  

 

 
  
 

Pedersen  here  explains  us  that  the  key  organizations  of  the  society  need  to  partner  
with  the  smaller  organizations  and  work  in  congruence  for  the  betterment  of  the  
society,  and  this  is  only  possible  when  both  come  in  to  complete  agreement  over  
their  tasks.  He  also  recognizes  the  key  and  small  organization  as  follows:  

Pedersen  sees  corporate  citizenship  as  development  done  by  the  private  sector  and  
PSD  programs  can  be  used  as  an  effective  tool  to  develop  corporate  citizenship.  PSD  
programs  are  the  most  effective  way  used  to  support  private  initiatives  such  as  
better  working  condition  and  fighting  HIV/AIDS.  

PSD  programs  affect  the  whole  partnership  process;  by  providing  advice  and  
financial  support  PSD  programs  has  influence  on  everything  right  from  initial  
meetings  to  the  development  of  partnership.  The  PSD  program  process  consist  of  
three  stages:  

 
 
  
 
The  preparatory  phase  consist  of  the  research  part,  i.e.  recognizing  the  right  
opportunity.  The  implementation  phase  consist  of  the  legal  formalities  and  to  fulfill  
other  requirement  to  start  the  partnership  and  the  maintenance  and  improvement  
looks  over  the  working  and  contribution  of  the  partners.
 
-­‐The  Role  of  Development  Agencies  in  Driving  Corporate  Citizenship  -­‐  Esben  Rahbek  Pedersen  
 

 
  
 

To  be  a  leader,  you  have  to  lead  human  beings  with  affection  -­‐  J.R.D.  Tata.  

CSR  is  a  young  movement  in  the  developing  nation  and  too  much  contribution  in  too  
little  time  is  expected  from  the  small  firms  in  the  developing  countries,  which  does  
not  look  possible  at  every  layman’s  scale.  It  is  the  subsidiaries  and  counter  parts  of  
multinationals  from  the  developed  countries  that  set  the  standards  of  CSR  in  
developing  countries  and  they  are  also  expected  to  lead  the  movement.  But  even  in  
the  short  time  and  low  scale  it  has  been  proved  that  small  companies  in  are  
embracing  the  CSR  into  their  business  practices  and  also  publish  their  environmental  
practices  (Jeremy  Baskin).  

CSR  in  developing  countries  in  majorly  for  those  firms  that  are  involved  
internationally  in  their  business  practices.  CSR  gives  these  firms  a  competitive  
advantage  over  the  others  in  the  global  market.  

CSR  in  different  countries  is  looked  upon  differently,  like  it  is  not  much  practiced  in  
Malaysia  and  Pakistan  as  they  do  not  follow  the  what  Islam  says  about  the  business  
ethics,  similarly  Ghana  believes  that  CSR  in  the  help  of  the  private  sector  where  the  
government  falls  short.  

Industries  in  developing  countries  practice  irresponsible  reporting  to  show  that  they  
are  socially  responsible,  this  it  self  is  no  CSR.  Thus  the  developing  countries  need  
more  time  to  adapt  and  conduct  CSR  successfully.  

-­‐ Corporate  Social  Responsibility  in  Emerging  Economies  –  Jedrzej  George  Frynas  (  Greenleaf  
Publishing,  Winter  2006)  
 

 
  
 

Jenkins  considers  the  development  agencies  as  the  key-­‐driving  factor  of  CSR  for  
transnational  companies  in  the  developing  countries,  like  United  Nations  Millennium  
Development  Goal  (MDG),  which  gave  strategy  and  rules  for  the  companies  to  help  
the  developing  countries  with  issues  such  as  health,  education  and  mostly  poverty.  
Jenkins  consider  the  main  responsibility  of  Corporate  in  developing  countries  is  to  
eradicate  poverty.  The  NGO’s  play  a  vital  role  in  utilizing  the  CSR  of  multinationals  to  
help  the  people  of  the  state.  They  are  the  link  between  the  common  people  and  the  
companies.  

Alan  Winters  recognizes  a  framework  for  the  eradication  of  poverty  thru  FDI:    

• Enterprise  Channel:  

FDI  directly  creates  employment  and  when  the  employment  increases  and  shortage  
of  unskilled  labor  creates  more  employment  for  the  poor.  

• Distribution  Channel:  

This  channel  treats  the  poor  as  the  consumer  and  providing  them  with  the  products  
that  are  affordable  by  them.  

• The  Government  and  revenue  channel:  

Jenkins  in  this  channel  argues  that  FDI  provides  revenue  for  the  govt.  in  terms  of  
taxes  that  should  be  utilized  by  the  govt.  to  eradicate  poverty.  

-­‐  Globalization,  Corporate  Social  Responsibility  and  poverty  -­‐  Rhys  Jenkins  (International  Affairs  81,  
2005)  
 

 
  
 

The  argument  given  by  Payne  in  the  journal  is  what  I  find  to  be  the  most  reasonable  
argument  for  a  company  to  be  socially  responsible,  he  says  that  ‘if  a  country  and  its  
people  help  to  meet  your  development  need  then  it  is  also  your  duty  to  help  them  
meet  their  development  need’.  When  a  multinational  is  working  in  new  country  and  
with  new  environment  it  does  not  know  what  are  the  need  of  the  people  and  the  
society,  so  similar  to  Pedersen  Payne  also  suggests  that  like  business  partnerships  
where  you  partner  with  a  respective  firm  who  is  good  at  their  field,  similarly  in  CSR  
partner  with  an  organization  which  understand  the  society’s  needs  and  is  able  to  
deliver  it  to  them.  And  Payne  argues  his  suggestion  with  a  series  of  examples  of  
different  companies  in  different  countries  like  the  American  tobacco  partnered  with  
4  NGO’s  to  protect  Bio  Diversity.  Do  not  look  at  the  bad  ethics  cases  where  the  
companies  have  got  into  trouble  but  instead  look  at  those,  which  have,  given  
companies  profit  because  of  excellent  CSR.  

-­‐  Corporate  social  responsibility  and  sustainable  development  –  A.  Payne  (Journal  of  Public  Affairs  
Aug-­‐Nov  2006)  

.  

 
  
 

Jason  Lunday,  thru  many  examples  tries  to  explain  us  that  sustainability  and  profit  
come  to  you  when  you  deliver  good  deeds  to  society.  If  the  society  and  the  
environment  in  which  the  company  is  working  is  happy  and  prospering  the  company  
will  also  definitely  prosper,  like  the  example  of  Levis  Strauss.  Co.,  due  to  its  
employment  relations  it  came  across  its  most  radical  product  of  DOCKERS  and  in  tuff  
times  for  the  company,  the  workers  and  the  employees  readily  accepted  pay  cuts  
rather  than  protesting  like  in  the  other  companies.  Another  such  example  is  that  of  
3M,  investing  in  saving  the  environment  and  preventing  pollution  ultimately  led  3M  
into  profits  of  more  that  500million  $.  With  such  examples  Lunday  conveys  the  
message  that  deliver  what  the  society  want  and  the  society  will  give  what  the  
company  wants  (Profits).  

-­‐ Profitable  Ethical  Programs  -­‐  Jason  Lunday  

 
  
 

Milton  here  explains  us  the  relation  between  a  the  social  responsibility  of  a  business  
and  of  an  individual,  like  an  individual  serves  his  responsibility  of  meeting  his  social  
obligations  like  taking  care  of  its  family,  doing  charity,  for  some  may  be  serving  the  
nation  similarly  Business  is  not  only  about  making  profit  thru  the  business  activities  
but  it  also  has  a  social  responsibility  towards  society  of  delivering  what  the  society  
wants,  after  all  it  is  the  society  that  serves  the  business.    

A  person  operating  a  business  must  some  times  keep  aside  his  business  motives  and  
full  fill  the  social  obligation  the  business  owes,  like  not  increasing  the  price  in  times  
of  inflation  even  if  it  is  not  it  the  companies  best  interests,  like  incurring  more  
expenditure  to  prevent  pollution  even  if  its  is  not  profitable  for  the  company.  It  also  
a  company’s  duty  that  not  to  get  into  undue  government  practices  such  as  bribing  
for  its  own  benefit,  or  not  to  use  its  CSR  a  mere  way  to  prevent  taxes,  A  company  
should  fulfill  its  social  obligation  in  full  faith  like  an  Individual  fulfill  his.  

 -­‐  The  Social  Responsibility  Of  Business  is  to  Increase  its  Profits  –  Milton  Friedman  

 
  
 

Deck  after  examining  over  70  corporations  has  come  to  some  conclusions  such  as  
the  STAKEHOLDERS  Theory,  in  which  he  explains  that  most  of  the  successful  
companies  now  no  longer  considers  share  holder  as  the  most  important  stake  
holders  in  the  company,  now  the  customers,  employees  and  suppliers  are  also  
equally  important.  As  far  as  ethics  in  workplace  is  considered,  Deck,  after  a  research  
in  more  than  200  corporate  understood  that  it  is  the  explicit  and  the  implicit  factors  
that  determine  the  work  ethics  or  a  company.  Explicit  elements  consist  of  the  things,  
which  an  organization  believes  in  and  it  revolves  around  the  corporate  code.  This  
corporate  code  serves  a  variety  of  purpose  such  as  image  enhancing,  doing  the  right  
thing.  

Analysis  of  these  corporate  codes  made  it  clear  that  there  are  three  types  of  codes,  
‘Code  of  ethics’,  ‘Code  of  conduct’,  and  ‘Code  of  practice’.  

Code  of  ethics  defines  the  purpose  of  the  company,  its  statements  of  values  and  
purpose.  

Code  of  Practice  is  the  illustration  that  affects  the  decision  maker  and  the  working  of  
a  company.    

And  Code  of  Conduct  states  that  what  an  individual  must  or  must  not  do  in  the  
company.  

-­‐  Corporate  Code  and  Ethics  Programs  –  Michael  C.  Deck  

 
  
 

Methodology    

Taking  in  consideration  how  Coca-­‐cola  India,  after  being  criticized  so  much  for  its  
unethical  practices  in  2006  and  the  product  being  condemned  by  the  people,  how  it  
came  up  again  to  be  one  of  the  most  ethical  companies  in  India  and  receiving  the  
golden  peacock  award  for  Corporate  Social  responsibility  in  2008.  It  did  so  many  
things  around  India  to  help  the  people  and  preserve  its  natural  resource  of  water.  

This  shows  that  a  company  can  become  profitable  and  sustain  in  a  market  thru  CSR,  
it  is  not  only  the  product  which  matter  to  the  public  but  the  over  all  impact  of  the  
product.    

Keeping  in  mind  how  CSR  can  help  to  sustain  and  make  profits  and  gathering  
information  and  literature  by  different  authors  with  the  help  of  Ebsco  and  
Perspective  in  Business  Ethics  by  Laura  P  Hartman  and  their  view  on  the  similar  
topic.  The  various  literatures  show  various  ways  to  be  socially  responsible  in  
countries  and  still  being  profitable  and  able  to  sustain  the  business  

There  are  different  frame  works  such  as  the  Internal  and  External  drivers  by  WAYNE,  
then  the  Pedersen’s  Congruence  pyramid  shows  how  big  organizations  should  work  
with  the  small  one.  Pedersen  also  tell  about  the  different  stages  of  a  PSD  program.  
The  paper  also  includes  the  framework  to  eradicate  poverty  thru  FDI  by  Winters.    

 
  
 

Conclusion  

Coke  was  severely  criticized  by  NGO’s  and  people  in  India  for  its  Wastage  of  water,  
and  destroying  the  land  thru  discharging  of  chemicals,  and  using  pesticides  in  its  
drinks.  But  coke  came  clear  of  most  of  the  allegations  and  today  it  working  with  the  
society  and  running  a  successful  business  in  the  country.  Coke  also  promised  India  
that  it  would  maintain  a  zero  water  balance  that  is  it  will  give  the  country  all  the  
water  it  uses,  and  it  is  doing  it  through  restoring  many  wells,  recharging  rain  water,  
rain  water  harvesting,  it  is  also  educating  the  poor  children’s  thru  opening  schools  in  
the  rural  are  and  also  educating  people  about  the  use  of  water  and  its  importance.  
Today  coke  has  won  many  awards  for  its  contribution  to  the  society  and  the  
company  in  terms  of  profit  is  doing  tremendously  well.  

This  shows  that  how  criticized  you  are  how  bad  name  people  can  get  you  but  you  
work  towards  the  society  can  make  up  all  for  it.    

There  are  many  ways  to  be  socially  responsible  in  developing  countries,  like  Wayne  
with  the  help  of  drivers  that  are  the  internal  and  external  drivers  explains  how  we  
have  to  use  this  drivers  and  work  with  them  to  help  the  society.    Pedersen  show  how  
the  big  companies  and  organization  should  partner  and  work  in  congruence  with  the  
small  ones  to  help  the  society  and  a  similar  argument  in  given  by  Payne,  With  the  
help  of  Jenkins  literature  we  understand  how  FDI  can  we  used  as  a  tool  to  promote  
social  activities.  

All  the  frame  works  explained  are  way  to  sustain  the  business  with  being  Socially  
Responsible.  

 
  
 

Bibliography  

-­‐ Corporate  Social  Responsibility  In  Developing  Countries  –  Wayne  Visser  

-­‐ The  Role  of  Development  Agencies  in  Driving  Corporate  Citizenship  -­‐  Esben  Rahbek  
Pedersen  
-­‐ Corporate  Social  Responsibility  in  Emerging  Economies  –  Jedrzej  George  Frynas  (Greenleaf  
Publishing,  Winter  2006)  
-­‐ Globalization,  Corporate  Social  Responsibility  and  poverty  -­‐  Rhys  Jenkins  (International  
Affairs  81,  2005)  

-­‐ Corporate  social  responsibility  and  sustainable  development  –  A.  Payne  (Journal  of  Public  
Affairs  Aug-­‐Nov  2006)  
-­‐  Perspectives  In  Business  Ethics-­‐  pg.  246,  Third  Edition,  Laura  P.  Hartman,  McGraw  Hill,  
Singapore  
-­‐ Perspectives  In  Business  Ethics-­‐  pg.  280,  Third  Edition,  Laura  P.  Hartman,  McGraw  Hill,  
Singapore  
-­‐ Perspectives  In  Business  Ethics-­‐  pg.  248,  Third  Edition,  Laura  P.  Hartman,  McGraw  Hill,  
Singapore  
-­‐ Coca  Cola  India’s  Corporate  Social  Responsibility  Strategy  –  Hadiya  Faheem