Corporate Social Responsibility

Prof. Ritesh Lal

Social Responsibility- Some Definitions«
Corporate Social Responsibility (CSR), also known as Corporate Responsibility, Corporate citizenship, Responsible Business, Sustainable Responsible Business (SRB), or corporate social performance, is a form of corporate self-regulation integrated into a business model. ³«.operating in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business«.´Business for social responsibility. Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honoring of a triple bottom line: People, Planet,and Profit.

Legal. Ethical and Discretionary (Philanthropic) expectations that society has of organizations at a given point of time .Carroll¶s Four Part Definition CSR encompasses the Economic.

Maximize sales. fair and just. . Be a good corporate citizen.Understanding the Four Components Responsibility Societal Expectation Required Required Expected Expected Examples Economic Legal Ethical Discretionary (Philanthropic) Be profitable. etc. Obey laws and regulations. minimize costs. Do what is right.

Pyramid of CSR .

. . how resources for the production of goods and services are distributed within the social system Efficient operation to satisfy economic needs of the society and generation of surplus for rewarding the investors and further development.Economic Responsibilities..

Refers to obeying governmental laws and regulations civil law: Rights & Duties individuals and organizations of criminal law: prohibits specific actions and imposes fines and/or imprisonment as punishment for breaking the law .Legal Responsibilities...

behaviors and activities that are expected or prohibited by organizational members. or expectations that reflect the concern of major stakeholders For Example. unfair competitive practices etc. adulteration.. and society (not codified into law) standards. the community.a company should not resort to bribing.. norms. .Ethical Responsibilities.

Philanthropic Responsibilities. Voluntary contributions of business to the society like involvement in community development or other social programmes ...

CSR towards different sections Responsibility Responsibility Responsibility Responsibility Responsibility to to to to to Shareholders Employees Consumers Community Government .

Corporate Social Responsibility: Initiatives and Examples .

Facts of India in CSR India has consistently ranked among the top three along with Singapore and Hong Kong in a survey carried out by the Asian Governance Association In another study undertaken by automotive research company. India has been ranked second in global Corporate Social Responsibility. Bharat Petroleum and Maruti Udyog were ranked as the best companies in India Contd« . TNS Automotive.

000 crore on social expenditure during the last year Steel Authority of India Ltd (SAIL). the Indian corporate sector spent Rs30. this was 2% of its Profit After Tax (PAT) Contd« . and only 25% filed CSR reports at all According to Times.Contd« A recent KPMG study among 27 Indian companies showed that a mere 8% mentioned their social expenditures in their annual reports. the country's largest steel company. spent Rs100 crore on CSR last year.

Pharmaceuticals company Jubilant Organosys Ltd.Contd« Tata Steel Ltd spends an average of Rs150 crore as part of its annual revenue expenditure. already runs an Anti-tuberculosis programme with the government of Uttar Pradesh .

There are 6.ITC Limited ITC partnered the Indian farmer for close to a century Leveraging Information-Technology through its trailblazing 'e-Choupal' initiative Creating livelihoods by helping poor tribal make their wastelands productive investing in rainwater harvesting to bring muchneeded irrigation to parched dry lands empowering rural women by helping them evolve into entrepreneurs providing infrastructural support to make schools exciting for village children. ITC Limited plans to scale up to 20. servicing 15 million farmers .500 e-Choupals today.000 e-Choupals by 2012 covering 100.000 villages in 15 states.

K. It aims to increase the number of Nanhi Kalis (children) to 10. financial assistance and recognition to them. C. across age groups and across income strata The Trust has provided more than Rs.5 Crore in the form of grants. 7.000 in the next 2 years. The Nanhi Kali project has over 3.300 children under it. Mahindra with an objective to promote education Its vision is to transform the lives of people in India through education. Mahindra Education Trust was established in 1953 by late Mr.Mahindra & Mahindra The K. C. by reaching out to the underprivileged children especially in rural areas . scholarships and loans. It promotes education mainly by the way of scholarships.

Aptech students donate part of the proceeds from the sale of their art work to NGOs Aptech fosters tie-ups with leading NGOs throughout the country. in association with leading NGOs. has played an extensive and sustained role in encouraging and fostering education throughout the country since inception. Udayan. established in 1970. The company strongly believes that education is an integral part of the country¶s social fabric and works towards supporting basic education and basic computer literacy amongst the underprivileged children in India . including the Barrackpur-based NGO. a residential school for children of leprosy patients in Barrackpur. It has. provided computers at schools.Aptech Limited Aptech Limited. education to the underprivileged and conducted training and awareness-camps. a leading education player with a global presence.

Avon's Chairman and Principal Trustee of the hospital. Mr. spent a good part of his working life devoted to philanthropy. the hospital holds regular camps in surrounding villages to propagate scientific approach to healthcare. This gave inspiration to AVON for locating MATAKAUSHALYA DEVI PAHWA CHARITABLE HOSPITAL. They face indifference and exploitation. Recently the hospital took the social responsibility concept a step further and formulated a scheme titled 'Celebrating Female Child' to enable and inspire positive and enduring environment for society's all±consuming passion for 'sons only' to end. Sohan Lal Pahwa. Reaching out to the needy farther a field.Avon Cycle Limited The poor and ignorant of India¶s rural population turn to nearest towns and cities for healthcare. .

formed to support and strengthen the vulnerable and underprivileged sections in urban India. Alambana aims at transforming the quality of life among urban population. Registered as Satyam Alambana Trust in 2000.Satyam Computer Services Limited Alambana (support) is the corporate social responsibility arm of Satyam Computer Services Limited. . Alambana's services are directed primarily at the disadvantaged sections in all the cities that Satyam has offices in. Volunteers from Satyam associates and their family members lead the services and perform the required tasks.

Tata Consultancy Services The Adult Literacy Program (ALP) was conceived and set up by Dr. To accelerate the rate of learning. ALP believes illiteracy is a major social concern affecting one-third of the Indian population comprising old and young adults. an innovative teaching strategy that uses multimedia software to teach adults to read within 40 learning hours. it uses a TCSdesigned Computer±Based Functional Literacy Method (CBFL). F C Kohli along with Prof. . Kesav Nori of Tata Consultancy Services in May 2000 to address the problem of illiteracy. P N Murthy and Prof.

9) Respects the rights of consumers.while working to protect the environment. 2) Sets high standards of behavior for all employees.Principles of CSR Corporate Social Responsibility strives to conduct all business dealings in an ethical manner. 8) Invests in the communities in which corporation operates. 4) Strives to manage the company for the benefit of all stakeholders. make a concerned effort to balance the needs of all stake holders. 7) Fosters a reciprocal relationship between the corporation and community. 3) Exercises ethical oversight of the executive and board levels. . 5) Initiates and engages in genuine dialogue with stakeholders. 1) Engages in fair and honest business practices in its relationship with stakeholders. 6) Values and implements dialogue.

15) Engages in open and flexible communication with employees.Principles of CSR 10) Offers quality products and services. 19) Demonstrates a commitment to the environment. 17) Strives for a competitive return on investment. . 12) Provides a family-friendly work environment. 11) Provides information that is truthful and useful. 14) Provides an equitable reward and wage system for employees. 18) Engages in fair trading practices with suppliers. 13) Engages in responsible human-resource management. 16) Invests in employee development. 20) Demonstrates a commitment to sustainable development.

Responds to changing stakeholders¶ demands. Discourages government regulation.Arguments for corporate Social responsibility Balances corporate power with responsibility. Corrects social problems caused by business. Promotes long-term profits for business. .

. Sometimes imposes costs of the social responsibility on consumers and stakeholders.Arguments against Corporate Social Responsibility It is the duty of Government and Social organisation to carry out social activities Lowers economic efficiency and profit. Many companies getting involved because of the Tax exemption It could lead to an increase in the dominance or influence of business over the society. Imposes unequal costs among competitors. Places responsibility on business rather than individuals. A business may lack required social skills.

´ Social Audit is the process of communicating the social and environmental effects of organisations' economic actions to particular interest groups within society and to society at large. . evaluate measure and report their impact on the immediate social environment.Social Audit A social Audit enables the public as well as the company to evaluate the social performance of the company. The ³ social audit ± much like the financial audit ± is an identification and examination of the activities of the firm in order to assess.

Key Principles of Social Auditing Multi Perspective/Polyvocal Comprehensive Participatory Multidirectional Regular Comparative Verification Disclosure .

Methods 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 .

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