NAME: VINAYAK 1.

SHINDE
T.Y.B.M.S - B
ROLL NO. : 109

SUB: BUSINESS ETHICS

SUBMITTED TO:
PROF. VISHAL KADAM

TOPIC: CSR INITIATIVE IN INDIA

S. K. SOMAIYA COLLEGE OF ARTS,
SCIENCE & COMMERCE

Corporate Social Responsibility (CSR) - The societal responsibility of
companies

The voluntary compliance oI social and ecological responsibility oI companies is called
Corporate Social Responsibility (CSR).
Corporate social responsibility is basically a concept whereby companies decide voluntarily to
contribute to a better society and a cleaner environment. Corporate social responsibility is
represented by the contributions undertaken by companies to society through its business
activities and its social investment. This is also to connect the Concept oI sustainable
development to the company`s level.
Over the last years an increasing number oI companies worldwide started promoting their
Corporate Social Responsibility strategies because the customers, the public and the investors
expect them to act sustainable as well as responsible. In most cases CSR is a result oI a variety oI
social, environmental and economic pressures.

The Term Corporate Social Responsibility is imprecise and its application diIIers. CSR can not
only reIer to the compliance oI human right standards, labor and social security arrangements,
but also to the Iight against climate change, sustainable management oI natural resources and
consumer protection.
The concept oI Corporate Social Responsibility was Iirst mentioned 1953 in the publication
Social Responsibilities oI the Businessman` by William J. Bowen. However, the term CSR
became only popular in the 1990s, when the German Betapharm, a generic pharmaceutical
company decided to implement CSR. The generic market is characterized by an
interchangeability oI products. In 1997 a halt in sales growth led the company to the realization
that in the generic drugs market companies could not diIIerentiate on price or quality. This was
the prelude Ior the company to adopt CSR as an expression oI the company`s values and as a part
oI its corporate strategies. By using strategic and social commitment Ior Iamilies with
chronically ill children children, Betapharm took a strategic advantage.

In July 2001, the European Commission decided to launch a consultative paper on Corporate
Social Responsibility with the title ,Promoting a European Framework Ior Corporate Social
Responsibility'. This paper aimed to launch a debate on how the European Union could promote
Corporate Social Responsibility at both the European and international level.

The paper Iurther aimed to promote CSR practices, to ensure the credibility oI CSR claims as
well as to provide coherence in public policy on CSR.



Responsible Companies in the age of globalization
How a company perceives its societal responsibility depends on various Iactors such as the
markets in which it operates, its business line and its size.

In recent years CSR has become a Iundamental business practice and has gained much attention
Irom the management oI large international companies. They understand that a strong CSR
program is an essential element in achieving good business practices and eIIective leadership.
Companies have explored that their impact on the economic, social and environmental sector
directly aIIects their relationships with investors, employees and customers.

Whilst so Iar Corporate Social Responsibility was mainly promoted by a number oI large or
multinational companies, it is now also becoming important to small national companies.
TeIlon Companies. Shell was one oI Iirst companies which made the experience, that early
responsible acting is better than later crisis management. Shell was taken by complete surprise
when the Greenpeace campaign against sinking the Iormer drill platIorm Brent Spar achieved its
goals. There was a widespread boycott oI Shell service stations. The Brent Spar aIIair has
brought quite some change oI attitude to Shell.

As companies Iace themselves in the context oI globalization, they are increasingly aware that
Corporate Social Responsibility can be oI direct economic value. Although the prime goal oI a
company is to generate proIits, companies can at the same time contribute to social and
environmental objectives by integrating corporate social responsibility as a strategic investment
into their business strategy.

A number oI companies with good social and environmental records indicate that CSR activities
can result in a better perIormance and can generate more proIits and growth.
Research hast shown that company CSR programs inIluence to an extensive degree consumer
purchasing decisions, with many investors and employees also being swayed in their choice oI
companies.

A major challenge Ior companies today is attracting and retaining skilled workers. There is not
only an image gain Ior the companies using CSR, but it is also important Ior the employees.
Within the company, socially responsible practices primarily involve employees and relate to
issues such as investing in human capital, health and saIety and managing change.

In India there are an existent but small number oI companies which practice CSR. This
engagement oI the Indian economy concentrates mainly on a Iew old Iamily owned companies,
and corporate giants such as the Tata and Birla group companies which have led the way in
making corporate social responsibility an intrinsic part oI their business plans. These companies
have been deeply involved with social development initiatives in the communities surrounding
their Iacilities. Jamshedpur, one oI the prominent cities in the northeastern state oI Bihar in India,
is also known as Tata Nagar and stands out at a beacon Ior other companies to Iollow.
Jamshedpur was carved out Irom the jungle a century ago. TATA`s CSR activities in
Jamshedpur include the provision oI Iull health and education expenses Ior all employees and the
management oI schools and hospitals.
In spite oI having such liIe size successIul examples, CSR in India is in a very nascent stage.
In the inIormal sector oI the Indian economy, which contributes to almost the halI oI the GNP
and where approximately 93 oI the Indian workIorce is employed, the application oI CSR is
rare. On the contrary, the Iight against poverty, the development oI education, as well as the
conservation oI the environment are not existent in most oI the Indian enterprises.
India has an advantage as Iar as labor is concerned. To some extent, business and capital go to
those places where costs are less or standards are lower like the ones in India. But also in India,
the demand Ior responsible and ethical goods is constantly increasing.

To guarantee the supply oI responsible and ethical goods, it is especially important to implement
a nationwide system oI CSR standards.

How "social responsible" are Companies in reality?
Due to the lack oI international CSR guidelines, the practical application oI CSR diIIers and CSR
Strategies within most companies still show major deIiciencies. There are still complaints about
multinational companies wasting the environment and NGOs still denouncing human rights
abuses in companies. Some critics believe that CSR programs are undertaken by especially
multinational companies to distract the public Irom ethical questions posed by their core
operations. That meanwhile even multinational companies such as MicrosoIt or Pepsi conIess to
their social responsibility, is discussed quite controversial.
While companies increasingly recognize their social responsibility, many oI them have yet to
adopt management practices that reIlect it: company employees and managers need training in
order to acquire the necessary skills and competence. Pioneering companies can help to
implement socially responsible practices by guiding the processes.
The Copenhagen Centre and CSR Europe have recently launched a program to bring the business
and academic community together with the aim to identiIy and address the training needs oI the
business sector on Corporate Social Responsibility.
While corporate social responsibility can only be taken on by the companies themselves,
employees, consumers and investors can also play a decisive role in areas such as working
conditions, environment or human rights, in the purchasing oI products Irom companies which
already adopted CSR or in prompting companies to adopt socially responsible practices.
Critics suggest that better governmental and international regulation and enIorcement, rather than
voluntary measures are necessary to ensure that companies behave in a socially responsible
manner.
Corporate social responsibility should thereIore not be seen as a substitute to regulation
concerning social rights or environmental standards. In countries where such regulations do not
exist, eIIorts should Iocus on putting the proper regulatory Iramework in place on the basis oI
which socially responsible practices can be developed.
Corporate Social Responsibility in India - Putting Social-Economic
Development on a Fast Track
Four years ago, Reliance Industries Ltd. launched a countrywide initiative known as 'Project
Drishti, to restore the eye-sights oI visually challenged Indians Irom the economically weaker
sections oI the society. This project, started by one oI India`s corporate giants has brightened up
the lives oI over 5000 people so Iar.
Corporate Social Responsibility (CSR) deIined as 'the ethical behavior oI a company towards
the society, maniIests itselI in the Iorm oI such noble programs initiated by Ior-proIit
organizations. CSR has become increasingly prominent in the Indian corporate scenario because
organizations have realized that besides growing their businesses it is also vital to build
trustworthy and sustainable relationships with the community at large. This is one oI the key
drivers oI CSR programs.
Another reason Iuelling this rapid adoption oI CSR is the state oI the Indian society. Though
India is one oI the Iastest growing economies, socio-economic problems like poverty, illiteracy,
lack oI healthcare etc. are still ubiquitous and the government has limited resources to tackle
these challenges. This scenario has opened up several areas Ior businesses to contribute towards
social development.
CSR is not a new concept in India. Corporates like the Tata Group, the Aditya Birla Group, and
Indian Oil Corporation, to name a Iew, have been involved in serving the community ever since
their inception. Many other organizations have been doing their part Ior the society through
donations and charity events.
Today, CSR in India has gone beyond merely charity and donations, and is approached in a more
organized Iashion. It has become an integral part oI the corporate strategy. Companies have CSR
teams that devise speciIic policies, strategies and goals Ior their CSR programs and set aside
budgets to support them.
These programs, in many cases, are based on a clearly deIined social philosophy or are closely
aligned with the companies` business expertise. Employees become the backbone oI these
initiatives and volunteer their time and contribute their skills, to implement them. CSR Programs
could range Irom overall development oI a community to supporting speciIic causes like
education, environment, healthcare etc.
For example, organizations like Bharath Petroleum Corporation Limited, Maruti Suzuki India
Limited, and Hindustan Unilever Limited, adopt villages where they Iocus on holistic
development. They provide better medical and sanitation Iacilities, build schools and houses, and
help the villagers become selI-reliant by teaching them vocational and business skills.
On the other hand GlaxoSmithKline Pharmaceuticals` CSR programs primarily Iocus on health
and healthy living. They work in tribal villages where they provide medical check-up and
treatment, health camps and health awareness programs. They also provide money, medicines
and equipment to non-proIit organizations that work towards improving health and education in
under-served communities.
Many CSR initiatives are executed by corporates in partnership with Non-governmental
organizations (NGOs) who are well versed in working with the local communities and are
experts in tackling speciIic social problems.
For example, SAP India in partnership with Hope Foundation, an NGO that works Ior the
betterment oI the poor and the needy throughout India, has been working on short and long-term
rebuilding initiatives Ior the tsunami victims. Together, they also started The SAP Labs Center of
HOPE in Bangalore, a home Ior street children, where they provide Iood, clothing, shelter,
medical care and education.
CSR has come a long way in India. From responsive activities to sustainable initiatives,
corporates have clearly exhibited their ability to make a signiIicant diIIerence in the society and
improve the overall quality oI liIe. In the current social situation in India, it is diIIicult Ior one
single entity to bring about change, as the scale is enormous. Corporates have the expertise,
strategic thinking, manpower and money to Iacilitate extensive social change. EIIective
partnerships between corporates, NGOs and the government will place India`s social
development on a Iaster track.