Corporate Social Responsibilities of Business

Introduction The term social responsibility came in to common use in the early 1970s, after many multinational corporations formed and with increased public consciousness about the role of business in helping to cultivate and maintain highly ethical practices in society and particularly in the natural environment. Social responsibility is a self-regulating mechanism whereby business would monitor and ensure its support to law, ethical standards, and international norms. Consequently, business would embrace responsibility for the impact of its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. The following categories are generally considered when measuring social responsiveness: contributions, fund-raising, volunteerism, recycling, diversity policies, direct corporate investment, quality of work life, attention to consumers and pollution control. Through mechanisms such as top management commitment and code of ethics managers can inculcate ethical behaviour in the employees. Why Social Responsibility? Business enterprises are creatures of society and should respond to the demands of society. If the management does not react to changes in social demands, the society will either force them to do so through laws or will not permit the enterprise to survive. The image of business organization is linked with the quality of its products and customer service. For long term success it matters a great deal if the firm has a favourable image in the public mind. Every business enterprise is an organ of society and its activities have impact on the social scene. Many of the problems like pollution and unemployment are caused due to these organisations. Therefore, it is important for management to consider whether their policies and actions are likely to promote the public good, advances the basic values of society, and constitute to its stability, strength and harmony. Besides taking care of the financial interest of owners, managers of business firms must also take into account the interest of various other groups such as employees, consumers, the government and the community as a whole. The reasons for companies becoming interested in social responsibility are divers i.e. risk protection, market positioning, recruitment, political-social relationships.

Companies that establish unethical reputations, practice poor business philosophies and are profit focused they end up hurting society in one or other form i.e. environmental damages, ruthless practices regarding employees or vendors, abusive outsourcing behaviour and they end up losing their customer confidence. Customers respond optimistically to companies that take an active interest in activities that promote public good. Consumers often react positively to corporations that have the image of caring about people and the world they reside in. In short the reasons for the social responsibility of a business can be summed up as: (i) To earn goodwill and reputation for the business (ii) For its long term survival, growth and continuous support from society (iii) To fulfill norms and regulations lay down by government (iv) To protect interest of consumers by providing quality product at competitive prices (v) To provide employee satisfaction as it is directly related to productivity
Responsibility towards different interested parties of business

A business doesnt work in isolation. Every business generally interacts with owners, employees, investors, consumers, suppliers, regulatory bodies, government and society. And all these groups are called as interested parties as their interest is affected directly or indirectly by the activities of the business.

Owners

Employees

Society Government

Busines s Suppliers Investors

Consumers

Competitors

Responsibility of business towards various interested parties (i) Responsibility towards owners Owners are the persons who own the business. They contribute capital and bear the business risks. The primary responsibilities of business towards its owners are to: a. Run the business efficiently. b. Proper utilisation of capital and other resources. c. Growth and appreciation of capital. d. Regular and fair return on capital invested. (ii) Responsibility towards investors Investors are those who provide finance by way of investment in debentures, bonds, deposits etc. Responsibilities of business towards its investors are a. Ensuring safety of their investment b. Regular payment of interest c. Timely repayment of principal amount. (iii) Responsibility towards employees Business needs employees or workers to work for it and if the employees are satisfied and efficient, then only the business can be successful. The responsibilities of business towards its employees include: a. Timely and regular payment of wages and salaries. b. Proper working conditions and welfare amenities. d. Opportunity for better career prospects. e. Job security as well as social security like facilities of provident fund, group insurance, pension, retirement benefits, etc. f. Better living conditions like housing, transport, canteen, crches etc. g. Timely training and development. (iv) Responsibility towards suppliers

Suppliers are businessmen who supply raw materials and other items required. The responsibilities of business towards these suppliers are: a. Giving regular orders for purchase of goods. b. Dealing on fair terms and conditions. c. Availing reasonable credit period. d. Timely payment of dues. (v) Responsibility towards customers As a part of the responsibility of business it should provide: a. Products and services must be able to take care of the needs of the customers. b. There must be regularity in supply of goods and services c. Price of the goods and services should be reasonable and affordable. d. All the advantages and disadvantages of the product as well as procedure to use the products must be informed do the customers. e. There must be proper after-sales service grievances must be settled f. Unfair means like under weighing the product, adulteration, etc. must be avoided. (vi) Responsibility towards competitors Competitors are the other organizations involved in a similar type of business. It also sometimes encourages the business to indulge in negative activities like resorting to unfair trade practices. The responsibilities of business towards its competitors are a. not to offer exceptionally high sales commission to distributers, agents etc. b. not to offer to customers heavy discounts and /or free products in every sale. c. not to defame competitors through false or ambiguous advertisements. (vii) Responsibility towards government Business activities are governed by the rules and regulations framed by the government. The various responsibilities of business towards government are: a. Setting up units as per guidelines of government b. Payment of fees, duties and taxes regularly as well as honestly. c. Not to indulge in monopolistic and restrictive trade practices. d. Conforming to pollution control norms set up by government. e. Not to indulge in corruption through bribing and other unlawful activities.

(viii) Responsibility towards society A society consists of individuals, groups, organizations, families etc. There exists a relationship among them, which may be direct or indirect. Thus, it has certain responsibilities towards society, which may be as follows: a. to help the weaker and backward sections of the society b. to preserve environment and promote social and cultural values c. to generate employment d. to conserve natural resources and wildlife f. to provide assistance in the field of developmental research on education, medical science, technology etc. Research Methodology and Data Collection Objectives (i) To study why there is a need for social responsibility. (ii) How a business is socially responsible towards various interested parties. (iii)What corporate world is contributing towards social responsibility? (iv) What other measures can be taken to make businesses socially responsible. The secondary method for data collection has been used. All the data is collected from following major sources
official Sites of companies Annual Reports of companies Internet Newspaper and articles Books & Journals

What corporate world is doing to become socially responsible? The role to be played by an organization has expanded and become more sophisticated. Social responsibility has been an integral part of many corporate sector companies. The following are the examples of socially responsible organisations:-

Wipro- it has developed a clear road to realize the vision of taking their success to other sections of society who struggle to care for their own basic needs. From community relief and rehabilitation in times of disasters to education opportunities, health and wellness programs for the needy, it makes sure that their work touches every level of society who needs help. Wipro Care program is executed with the help of employees who are free to volunteer their services and other recognized voluntary organizations who make sure the goal is never out of focus. Wipro Applying Thought in SchoolsEducation is recognized as a key investment in Wipro, not only within, but also marked and leveraged as a social initiative. Through the Applying Thought in Schools initiative, it takes tagline seriously enough to build a network of social organizations committed to education reform. Education quality, research and interventions are clearly defined. Eco Eye- The commitment to the ecology around is as strong as their every endeavor. It believes that the future lies in sustainable solutions that will never interfere with our environment. With the formation of Eco Eye, they are now a business that incorporates better ecological balance in every project we execute. Tata Steel- It has created a benchmark in corporate social responsibility. It believes that the loyalty and commitment of its employees depend upon the quality of life they are provided with at work and at home. Consistent with the group purpose, Tata Steel has declared in its vision statement that it will constantly strive to improve the quality of life of the communities it serves. The company has received a number of awards in recognition of its CSR efforts. The most recent testimony to Tata Steel's contribution is The Energy & Resources Institute (TERI) Award conferred on it in recognition of corporate leadership for good corporate citizenship and sustainable initiatives. Tata Steel is the only Indian company to have pledged to translate the Global Compact principles on human rights, labour and environment into practice. It was conferred the Global Business Coalition Award for Business Excellence in the Community for HIV/AIDS. It has moved away from charity and dependence, to empowerment and partnership. The many facets of Tata Steel's efforts are medical and health services in the rural and semi-urban areas,

sports, women's health and education, water harvesting and tribal development, relief and rehabilitation and income generation, among others. New Delhi, May 4, 2010 Tata Steel was awarded with the Business world-FICCI-SEDF Corporate Social Responsibility award 2009 by Shri Anand Sharma, Honble Union Minister for Commerce and Industry, Government of India. Larsen and Turbo- it is committed to environmental and societal well being. It has taken giant strides in promoting safety, health and hygiene, both within the corporation and externally. It has also set up several full-fledged schools and runs nurseries of talent. The initiatives against HIV/AIDS are part of L&T's wide spectrum of health and welfare programmes for the community. Painting Gallery - It has a great collection of 187 works of art created by a contemporary Indian artist (Late) D. G. Kulkarni. This reflects the Corporate Value and the emphasis attached by the organization to fostering art, culture and its commitment to society. Rehabilitation Efforts- Among the first in the Indian corporate sector to join rescue and rehabilitation efforts for the victims of natural calamity. When Orissa, Gujarat and Bhutan were ravaged by the cyclone, it provided shelter to those people who became homeless. Awards- The Bombay Chamber of Commerce and Industry complimented L&T for its outstanding contribution to society by awarding Good Corporate Citizen Award 1994-95. In July 2002, the Federation of Indian Chamber of Commerce and Industry's Socio-economic Development Foundations (FICCI - SEDF), Delhi presented appreciation certificate to L&T for programmes concerning women's empowerment, helping the elderly and AIDS prevention/control program of the company. Mahindra & Mahindra- In 2005, the Group celebrated its 60th anniversary by renewing its commitment to Corporate Social Responsibility. It pledged to dedicate 1% of its profit (after tax), on a continuous basis towards Corporate Social Responsibility. A unique kind of ESOPs Employee Social Options was launched to enable Mahindra employees to involve themselves in socially responsible activities of their choice. The Group also announced a special gift: to provide free cochlear implants to 60 profoundly hearing-impaired, under-privileged children.

K. C. Mahindra Education Trust- Established by the late Mr. K. C. Mahindra in 1953, it aims to 'Transform the lives of people in India through education, by providing financial assistance and recognition to them. It has provided more than Rs. 13.80 crores (approximately US $ 3.0 million) in the form of grants, scholarships and loans. Mahindra Academy- It has established schools near its factories for its employees but also the community around these schools. Disaster Relief- The foundation has helped patients suffering from cancer, heart ailments as well as burn victims. It has also been very active during national calamities and disasters. Environmental relief- Since 1984, the Mahindra Group has been lending a hand to the 'Green Bombay' movement by developing and maintaining municipal gardens. Infoyses- The main social activities of the Infosys are: Healthcare- It is conducting rehabilitation camps at tribal areas, drought hit areas, construction of hospitals, upgrading the hospitals with significant equipments Social Rehabilitation and Rural UpliftmentThe construction of orphanages, old age homes, rehabilitation of children on streets and slums, assisting the promotion of social awareness among the tribals or other backward communities where evil practices are followed. Learning & Education- Setting up libraries under educational project called 'Shalegondu Granthalaya', donating for the construction of additional classrooms, school building, science laboratories and assisting the promising students of economically weaker sections by means of scholarships.

Art- Promotion of deprived art or culture by organizing stage-shows and donating for such organization which promotes such a talent. Indian Oil CorporationAt Indian Oil, social responsibility (CSR) has been the cornerstone success right from inception in the year 1964. The Corporations objectives in this key performance area are enshrined in its Mission statement: "to help enrich the quality of life of the community and preserve ecological balance and heritage through a strong environment conscience." Sharing Profits- It sets aside a fixed portion of its profits for spreading smiles in millions of lives across the country through a comprehensive community welfare and development programme. It also helped victims of natural calamities and contributing to relief and rehabilitation measures in cash and kind. Environment Protection- It has invested close to Rs. 7,000 crore in state-of-the-art technologies at its refineries for production of green fuels meeting global standards. It is in the process of commercializing various options in alternative fuels such as ethanol-blended petrol, biodiesel, and Hydrogen and Hydrogen-CNG mixture. It is also committed to the Global Compact Programme of the United Nations and endeavors to abide by the 10 principles of the programme. Hero HondaHero Honda Motors takes considerable pride in its stakeholder relationships. The Company has managed an economically and socially backward region in Dharuhera, Haryana, into the national economic mainstream. An Integrated Rural Development Centre has been set up on 40 acres of land. Vocational Training Centre-In order to help local rural people, especially women, it has set up a Vocational Training Centre. So far 26 batches comprising of nearly 625 women have been trained in tailoring, embroidery and knitting. of

Adult Literacy Mission-This Scheme was launched on 21st September, 1999. It is now in the process of imparting Adult Literacy Capsules to adults by getting village heads and other prominent villagers to motivate illiterate adults. Marriages of underprivileged girls- Marriages are organized from time to time, particularly for girls from backward classes, by the Foundation by providing financial help and other support to the families. Rural Health Care- Besides setting up a modern hospital, the Foundation also regularly provides doorstep health care services to the local community. Free health care and medical camps are now a regular feature in the Hero Group's community outreach program. Reliance Industries Ltd. - RIL has a long and strong tradition of supporting the larger communities that it connects with - from education, health, drinking water, large-scale development of employable skills, to assistance during natural calamities such as earthquakes and cyclones. Education- A network of 10 schools caters to over 14,000 students spread across geographies in India. "Reliance Dhirubhai Ambani Protsaham" programme continues to support poor and brilliant students in pursuing higher studies. The Mumbai Indians' (the Indian Premier League's franchise for Mumbai) 'Education for All' initiative is a movement to support efforts to provide quality education to all children. Community Health Care- RIL has developed Community Medical Centres (CMCs) near most of its manufacturing divisions. These CMCs provide comprehensive health services to the communities from neighbouring villages. Annually, RIL employees organise and participate in blood donation camps across manufacturing divisions and offices. Communitys Safety-To provide emergency and trauma care to victims of highway accidents, it has tied up with an NGO and adopted a 110 kms stretch on the state highway in Gujarat. The

Hoshiarpur Manufacturing Division, Punjab, provides round-the-clock free ambulance services on the National Highway - 70 (a 20 kms stretch from Punjab to Himachal Pradesh). Rural infrastructure development- Reliance Rural Development Trust in FY 2009-10 undertook development of 1,390 village infrastructure facilities in 1,243 villages of 166 talukas across all 25 districts of the state of Gujarat. Livelihood Support Programme-RIL sponsored Self-Help Groups continue to empower women and youth from the underprivileged segment through various employment oriented training and skill development programmes. Relief Operations-RIL's time tested disaster management and calamity relief operations were put to use yet again in FY 2009-10. In addition to extending donations, the RIL team from Jamnagar and Andhra Pradesh worked zealously in flood affected areas of Krishna, Andhra Pradesh, in October 2009. Wildlife and Animal Care-Parapets were constructed on open wells in the Gir forest in Gujarat, through FY 2009-10, considerably reducing deaths amongst lion cubs. Heritage conservation-RIL continues to support and develop the heritage temple and
town of Dwarka and also continued the upkeep of the temple and the adjoining areas.

Measures to be taken to make business socially responsible- Every organization must be committed towards the society at large in which they are operating. This obligation is not only statutory but needs to be taken voluntarily to improve the quality of life for employees and society. All large and medium-sized companies should publicly report on their material environmental, social, and governance performance issues. Conclusion Employees are not only a resource for production but are human beings with emotions and desires who want care, praise and empathy from their employer and if an organization wants to develop high performance and result oriented culture then its employees must be comfortable with the working conditions. The focus is to proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. The ethical conduct of an organization depends on the ethical

standards of its managers. To conduct business in an ethical manner, managers should be aware of the factors that affect ethical behaviour. Bibliography 1. Orlitzky, M, Schmidt, F & Rynes, S 2003, 'Corporate social and financial performance: A meta analysis', Organization Studies, vol 24, no. 3, pp 403-11. 2. PJC, Parliamentary Joint Committee on Corporations and Financial Services 2006, Corporate responsibility: Managing risk and creating value, June, Canberra. 3. Schlesinger, L. and Heskett, J. (1991) "Breaking the cycle of failure in service", Sloan Management Review, spring, 1991, pp. 17-28. 4. Joshua Karliner, The Corporate Planet: Ecology and Politics in the Age of Globalization, (Sierra Club Books, 1997), now available in bookstores or from Corporate Watch. 5. James E .Post et.al,Business and society ,McGraw-Hill ,1999,P.85-86 6. S.K. Bhatia ,Business Ethics and corporate Governance, Deep & Deep Publications Pvt Ltd,2004,P.305 7. www.google.com 8. http://www.mahindra.com/index.asp 9. Ex sr\Hero Honda - Corporate Social Responsibility.htm 10. http://www.iocl.com/home.aspx 11. http://www.wipro.com/corporate/aboutus/index.htm 12. Sanjay K.Agarwal, Corporate Social Responsibilyt in India, Sage Publications Pvt. Ltd. New Delhi. 13. S.K. Bhatia ,Business Ethics and corporate Governance, Deep & Deep Publications Pvt Ltd,2004,P.305 14. James E .Post et.al,Business and society ,McGraw-Hill ,1999,P.85-86