You are on page 1of 18

CORPORATE SOCIAL RESPONSIBILITY

Prepared for:

Mrs Sadaf Siraj

Prepared by:

Abhishek Sachan (IB-02)

Neeraj Sharma (IB-17)

Prashant Rampuria (IB-29)

Kawanlpreet Singh (IB-47)

Jimmy Aggarwal (IB-61)

29-September-2008

1
Acknowledgements

It is a great opportunity for all of us to work on the topic Corporate Social Responsibility.
We are extremely grateful to those who have shared their expertise and knowledge with us
and without whom the completion of this presentation report would have been virtually
impossible.

We would like to thank our subject teacher Mrs. Sadaf Siraj who has been a constant source
of inspiration for us during the completion of this presentation report. She gave us invaluable
inputs during our endeavor to complete this report.

We are also extremely grateful to Mr. Amit Gupta, Asst. Manager Adani Energy, to have
given us this opportunity to gain valuable insights into the CSR.

We are indebted to all those who have kept our spirits surging and helped us in delivering our
best.

Abhishek Sachan (IB-02)

Neeraj Sharma (IB-17)

Prashant Rampuria (IB-29)

Kawanlpreet Singh (IB-47)

Jimmy Aggarwal (IB-61)

Asia Pacific Institute of Management

PGDM (IB), 2008-10

2
CONTENTS

1. Summary 4
2. Introduction 5
3. Development 5
4. Areas on which organization are taking initiatives
• Health 6
• Education
• Livelihood advancement business school 6

4. Potential Business Benefits 6

5. The business benefits by CSR for a company 7

 In human resource 7
 In risk management 7
 Brand differentiation 7
 License to operate 8

6. Examples of CSR 8

 At international level
 In India

7. The four concepts of Social Responsibilities 9

 Stake holder responsibility 10


 Profit responsibility 11
 Cause marketing 12
 Green marketing 15

8. Bibliography 18

List of Illustrations

3
1. Illustration 1: Concept of CSR 4

Summary

Corporate social responsibility means whereby organisation consider the


interest of the society by taking responsibility for the impact of their activities
on the stakeholders, environment & future generation.

The following are the possible Benefits of CSR:

 Goodwill.
 Branding.
 Improved Perception about Company.

Concept of CSR

There are four concept of CSR. The concept of CSR can be explained through a diagram:

CSR

STAKEHOLDER PROFIT CAUSE GREEN


RESPONSIBILITY RESPONSIBILITY MARKETING MARKETING

ILLUSTRATION 1: Concept of CSR

4
Corporate social responsibility
Introduction

CSR(corporate social responsibility) is a concept in which organizations consider the


interests of society by taking responsibility for the impact of their activities on customers,
suppliers, employees, shareholders, communities other stakeholders, future generation and on
environment. The organizations voluntarily taking advance steps to improve the quality of
life for employees and their families as well as for the local community and society.

There are so much debate and criticism on CSR. Proponents argue that there is a strong
business case for CSR, in that corporations benefit in multiple ways in long term run with
high profits. Critics argue that CSR distracts from the fundamental economic role of
businesses; others argue that it is an eye wash by big organizations; some other says by this
governments watch as a watchdog over powerful multinational corporations

Development

The term CSR came in to common use in the early 1970s firstly it was taken as corporate
stake holder responsibility. The term stakeholder, meaning those impacted by an
organization's activities, it was used to describe corporate owners beyond shareholders from
around 1989.

An approach for CSR that is becoming more widely accepted is community-based


development projects, such as the Shell Foundation's involvement in the Flower Valley, South
Africa. Here they have set up an Early Learning Centre to help educate the community's
children, as well as develop new skills for the adults. Marks and Spencer is also active in this
community through the building of a trade network with the community - guaranteeing
regular fair trade purchases.

Some other approaches of CSR is the establishment of education facilities for adults, as well
as HIV/AIDS education programmers. The majority of these CSR projects are established in
Africa. A general approach of CSR is giving aid to local organizations and impoverished

5
communities in developing countries. Some organizations do not like this approach as it does
not help build on the skills of the local people, whereas community-based development
generally leads to more sustainable development.

Areas on which organization are taking initiatives

An essential component of corporate social responsibility is to care for the community.


Organizations take initiative to make a positive contribution to the underprivileged
communities by supporting a wide range of socio-economic, educational and health
initiatives.

HEALTH: Health has identified as a primary objective in the community development


process. As a part of the healthcare initiatives weekly clinics, counselling sessions, health
camps are regularly held to promote general health in the community. The health threats in
the community are too many and in order to treat some minor ailments and casualties,
community members have identified and are learning to treat minor ailments.

EDUCATION: Education too has been a primary focus area for the organizations, and a
number of initiatives have been designed to promote non-formal education in the community.
Akanksha, a non governmental organization that focuses on developing strong educational
foundations, deep sense of self-esteem and facilitates fun activities for underprivileged
children has been identified to facilitate education and awareness. PMC schools have been
given computers to promote IT education in the neighbouring area of Chandan Nagar.

LIVELIHOOD ADVANCEMENT BUSINESS SCHOOL (LABS): A unique program to


create more opportunities for less privileged youth. Pune Corporate Consortium for LABS
was inaugurated on April 4, 2006. LABS, a flagship program of Dr. Reddy’s Foundation
(DRF), promotes customized programs for youth and women in the age group of 18-30 years
from economically weaker sections of society, and empowers them to gain access to
opportunities for sustainable livelihoods and growth in the New Economy.

Potential business benefits

6
Corporate Social Responsibility (CSR) agenda of a corporation shows of its social
conscience and commitments to the community and society in which it operates. It is not
viewed as a liability on corporate resources. More and more Companies have increasingly
realized that it is an investment with multiple benefits for the corporate sector. Various
empirical research findings clearly pointing to a strong positive correlation between CSR and
corporate profitability have further provided the impetus.

There are a lot of potential benefits of CSR for any organization. The scale and nature of the
benefits of CSR for an organization is different and depending on the nature of the enterprise.
It is difficult to quantify. However, businesses may not be looking at short-run financial
returns when developing their CSR strategy.

The definition of CSR used within an organization can change from the strict "stakeholder
impacts". CSR may be based within the human resources, business development or public
relations departments of an organization.

The business benefits by CSR for a company

In Human resources

Any organization can take CSR programme on recruitment and retention.mainly in the
competitive graduate student market. Potential recruits often ask about a firm's CSR policy
during an interview, and having a comprehensive policy can give an advantage to
organization. CSR can also help to improve the way of thinking of a company among its
staff.

In Risk management

Risk Management is a central part of many corporate strategies. The Reputations that take
decades to build up can be ruined in hours through incidents such as corruption scandals or
environmental accidents. These events can also draw unwanted attention from regulators,
courts, governments and media. Building a genuine culture of 'doing the right thing' within a
corporation can decrease these risks.

Brand differentiation

7
In crowded marketplaces where competition is very high, companies looks for a unique
selling proposition which can separate them from the competition in the minds of consumers.
CSR can play a role in building customer loyalty based on ethical values. Several major
brands, such as The Co-operative Group and The Body Shop are built on ethical values.
Business service organizations can take benefit from building a reputation for integrity and
best practice.

License to operate

Corporations are keen to avoid interference in their business through taxation or regulations.
By taking right voluntary steps, they can persuade governments and the wider public that
they are taking issues such as health and safety, diversity or the environment seriously, and in
this way they can avoid intervention. And organization can improve its profit.

Examples of CSR

There are a lot of organizations which are deeply involved in corporate social responsibility.

At international level

The biggest example of this is Gramin bank in Bangladesh. It is the world’s great example
of CSR.

Automobile giant FORD-This organization is providing health care programme for deprived
children since 1957 and also concerned about the women health programme.

Microsoft group-this group is working at international level for education programme for all
society and basically in rural areas.

Steel maker Andrew Carnegie is contributing in education and charity.

In India

Tata group is most benevolent organization who is very focussed for welfare of society from
very initial. They are working at a great scale they are working on these areas

• Child health care

8
• Women education
• Working groups of women
• Environment issues such as global warming

Mahindra’s - They provided hearing aid to nearly deaf child.

The Zensar Foundation has been working with various NGOs on multiple social programs
for Pune. It is associated with NGOs such as NFBM Jagruti School for blind girls, Surajya
Sarwangeen Sewa Sanstha, Sahitya Rangabhoomi Pratishthan, Saathi, Kagad Kach
Patra Kashtakari Panchayat, Maher etc for development and social benefit.

Adani group is operating a school for deprived children at Ahmedabad.

Other Initiatives: The Tsunami Relief operation at Zensar was an outstanding success story
of solidarity and support. The overwhelming response to the appeal of employees donating a
day’s salary went on to building a Tsunami Relief fund which is being used for a sustained
three-year Tsunami Rehabilitation Program. Through the Centre for Youth Development
Activities (CYDA) the fund is being utilized to support the education of 120 students from
Nagapattinam who were worst affected by the calamity

ITC group has introduced e-choupal in remote areas to improve education condition.

Hindustan lever limited initiated Shakti group for women.

Four concepts of social responsibility

1. Stakeholder Responsibility
2. Profit Responsibility
3. Cause Marketing
4. Green Marketing

9
Stake Holder Responsibility

Stakeholders

A person, group, organisation, or system who affects or can be affected by an organisation’s


actions.

Types of stakeholders

Internal stakeholders:

Shareholders: Shareholders are owners of a particular company's Stock or of a Mutual Fund.


The unit of ownership is called a share
Employees: Any person providing paid or volunteer services for a certifying agent.
Management : Management comprises planning, organizing, resourcing, leading or
directing, and controlling an organization (a group of one or more people or entities) or effort
for the purpose of accomplishing a goal.

External stakeholders:

Consumers: are individuals, households, organisations, institutions, resellers and


governments that purchase the products offered by other organisations.
Suppliers: Individuals or businesses that provide resources needed by a company in order to
produce goods and services.
Creditors: Individuals or corporations that have supplied credit (lent money) to a firm.
Competitors: individuals or species that each requires the same limited resource to survive.
Community: Group of people sharing a common understanding who reveal themselves by
using the same language, manners, tradition and law.

Responsibilities of Stakeholders

The stakeholder responsibilities often involve moral and citizenship duties requiring
collective action.

In general the responsibilities of stakeholders separate into four general categories:

1. With the firm


2. Among stakeholders themselves

10
3. Common pool resources (especially nature)
4. The commonwealth

A stakeholder must consider proper conduct.

The most obvious instances of stakeholder responsibility involves

The global natural environment – environmental protection

The global labour standards – minimum wages, working hours

Basic human rights – right to live, follow religion, choose occupation etc.

Corporate stakeholder responsibility requires

Procedural justice integrating the values of them into the development and implementation of
a firm’s strategy.The stakeholders are integrated in the strategic processes by either providing
or receiving benefits or providing or bearing risks.

Distributive justice

Acknowledges that all stakeholders who make (voluntarily or not) firm-specific investments
either by providing benefit or bearing risks should have the right to the residual claim
analogous to the shareholders’ firm-specific investment and their right of residual claim based
on their risk bearing function.

Profit Responsibility
An organisation work with profit motive. An organisation works within a society & needs to
check the impacts of its activities on the society. It cannot work in isolation & hence also
need to work for the welfare of the society. But this does not mean that it invest all its profit
for the benefit of the society. It is not a Philanthropy organisation which can give away its
profits for Charity. Hence an organisation undertaking CSR activities need not to work
philanthropy.

11
Cause Marketing
Cause-related marketing (CRM) is defined as the public association of a for-profit
company with a nonprofit organization, intended to promote the company's product or
service and to raise money for the nonprofit. CRM is generally considered to be distinct
from corporate philanthropy because the corporate dollars involved in CRM are not
outright gifts to a nonprofit organization, hence not tax-deductible.
Cause-related marketing was first used by American Express in 1983 to describe its
campaign to raise money for the restoration of the Statue of Liberty. American Express made
a one-cent donation to the Statue of Liberty every time someone used its charge card; the
number of new card holders soon grew by 45%, and card usage increased by 28%.
Cause marketing is about businesses supporting social causes they believe in to connect with
their customers. Companies, big and small, are using it as a tool to win customers and their
loyalties, to present themselves as a responsible organizations, to boost employee morale and
loyalty, and, of course, to generate funds for social causes. Getting associated with a cause
through popular non-profit organizations gives them free publicity and increased sales-not to
mention a tax-deductible expense.

Cause marketing principles, cautions, and trends:


There are seven principles about cause marketing as following –
1. Unbalanced - Having a cause-marketing relationship that is too one sided, self-
serving, and/or commercial.
2. Dishonest - Having advertising that is not sincere, honest, or gives the perception of
non-profit endorsement and not handling criticism with open and honest
communication.
3. Evasive - No managing expectations on both sides. Be aware of and clearly explain
what you can and can’t deliver to your corporate partner. Ensure your own internal
team understands what is and isn’t being achieved by a cause-marketing relationship.
4. Jeopardize - Not protecting the integrity of the organization’s brand and visual
identity. Non-profits must take care as to use of logo, wording, and approach.
5. Disrespectful - Not recognizing those nonprofits have valuable assets to contribute
and must receive compensation to reflect this value.

12
6. Carelessness - Not doing due diligence, risk assessment, receiving institution wide
support and ensuring you fulfil best practices (Better Business Bureau) and any legal
requirements.
7. Insincere - Not working with a corporation that walks the talk. The program must be
part of larger corporate citizenship.

Types of cause marketing

 Product, service, or transaction specific


 Promotion of a common message
 Product licensing, endorsements, and certifications
 Local partnerships
 Employee service programs

In their efforts to diversify and enhance their funding base nonprofits have embraced CRM.
The practice has evolved to include a wide range of activities from simple agreements to
donate a percentage of the purchase price for a particular item or items to a charity for a
specific project, to longer, more complex arrangements. Corporations too have been drawn to
CRM due to the competition of the expanding global marketplace and the need to develop
brand loyalty.
CRM has become a controversial topic among grant seekers, as nonprofits entering into CRM
activities debate the ethics of lending their name and reputation to corporations. Some of the
common criticisms of CRM are that it undermines traditional philanthropy, that nonprofits
are changing their programs in order to attract CRM dollars and that only well-established,
noncontroversial causes can attract CRM dollars.

Benefits:
 The possible benefits of cause marketing for nonprofit organizations include an
increased ability to promote the nonprofit organization's cause via the greater
financial resources of a business, and an increased ability to reach possible supporters
through a company's customer base.

13
 The possible benefits of cause marketing for business include positive public
relations, improved customer relations and additional marketing opportunities.

Examples:

• Mercedes-Benz is selling Sedan model to raise funds for Sakes Fifth Avenues key to
the cure, a women’s cancer initiative developed in partnership with the Entertainment
Industry Foundations Women Cancer Research Fund. Mercedes-Benz expects to
contribute $1million through the sale of these vehicles. The campaign urges
consumers to by a car, yet pollutants found in car exhaust have been linked to breast
cancer.
• One example of cause-marketing would be the partnership of Yoplait's "Save Lids to
Save Lives" campaign in support of the Susan G. Komen Breast Cancer Foundation.
The company packages specific products with a pink lid that consumers turn in, and
in turn Yoplait donates 10 cents for each lid.
• An example of a nonprofit certification of a product (business) includes the American
Heart Association's stamp of approval on Cheerios, the popular breakfast cereal.
• Launched in early 2006, Product Red is an example of one the largest cause-related
marketing campaigns to date given the number of companies and organizations
involved as participants as well as its reach worldwide. It is also an example of a
cause marketing campaign that is also a brand on its own. Product Red was created to
support The Global Fund to Fight AIDS, Tuberculosis & Malaria (The Global Fund)
and includes companies such as Apple Computer, Motorola, Giorgio Armani, and The
Gap as participants

14
Green Marketing

Green marketing involves developing and promoting products and services that satisfy
customer's want and need for Quality, Performance, Affordable Pricing and
Convenience without having a detrimental input on the environment.

Evolution of Green Marketing


The green marketing has evolved over a period of time. According to Peattie (2001), the
evolution of green marketing has three phases. They are:
 "Ecological" green marketing - During this period all marketing activities were
concerned to help environment problems and provide remedies for environmental
problems.
 "Environmental" green marketing - The focus shifted on clean technology that
involved designing of innovative new products, which take care of pollution and
waste issues.
 "Sustainable" green marketing - It came into prominence in the late 1990s and early
2000.

Why Green Marketing?


As resources are limited and human wants are unlimited, it is important for the marketers to
utilize the resources efficiently without waste as well as to achieve the organization's
objective. So green marketing is inevitable.
There is growing interest among the consumers all over the world regarding protection of
environment. Worldwide evidence indicates people are concerned about the environment and
are changing their behaviour. As a result of this, green marketing has emerged which speaks
for growing market for sustainable and socially responsible products and services.
Companies that develop new and improved products and services with environment inputs in
mind give themselves access to new markets, increase their profit sustainability, and enjoy a
competitive advantage over the companies which are not concerned for the environment.

15
Adoption of Green Marketing
There are basically five reasons for which a marketer should go for the adoption of green
marketing. They are -
 Opportunities or competitive advantage
 Corporate social responsibilities (CSR)
 Government pressure
 Competitive pressure
 Cost or profit issues

4 P's of Green Marketing


Every company has its own favourite marketing mix. Some have 4 P's and some have 7 P's of
marketing mix. The 4 P's of green marketing are that of a conventional marketing but the
challenge before marketers is to use 4 P's in an innovative manner.
Product
The ecological objectives in planning products are to reduce resource consumption and
pollution and to increase conservation of scarce resources (Keller man, 1978).
Price
Price is a critical and important factor of green marketing mix. Most consumers will only be
prepared to pay additional value if there is a perception of extra product value. This value
may be improved performance, function, design, visual appeal, or taste. Green marketing
should take all these facts into consideration while charging a premium price.
Promotion
There are three types of green advertising: -
Ads that address a relationship between a product/service and the biophysical environment
(National Geographic, Discovery Channel, etc.)
Ads that promote a green lifestyle by highlighting a product or service (Khadi Gram
Udhyog)
Ads that present a corporate image of environmental responsibility (ITC)

Place
The choice of where and when to make a product available will have significant impact on
the customers. Very few customers will go out of their way to buy green products.

16
Strategies
The marketing strategies for green marketing include: -
 Marketing Audit (including internal and external situation analysis)
 Develop a marketing plan outlining strategies with regard to 4 P's
 Implement marketing strategies
 Plan results evaluation

Challenges Ahead
• Green products require renewable and recyclable material, which is costly.
• Requires a technology, which requires huge investment in R & D.
• Water treatment technology, which is too costly.
• Majority of the people are not aware of green products and their uses.
• Majority of the consumers are not willing to pay a premium for green products.

Some Cases
 McDonald's restaurant's napkins, bags are made of recycled paper.
 Coca-Cola pumped syrup directly from tank instead of plastic which saved 68 million
pound/year.
 Badarpur Thermal Power station of NTPC in Delhi is devising ways to utilize coal-
ash that has been a major source of air and water pollution.
 Barauni refinery of IOC is taken steps for restricting air and water pollutants.

Conclusion
Green marketing should not neglect the economic aspect of marketing. Marketers need to
understand the implications of green marketing.
If a marketer think customers are not concerned about environmental issues or will not pay a
premium for products that are more eco-responsible, then he must think again. He must find
an opportunity to enhance his product's performance and strengthen his customer's loyalty
and command a higher price.
Green marketing is still in its infancy and a lot of research is to be done on green marketing
to fully explore its potential.

17
Bibliography
Web link
http://www.wikipedia.org/
http://www.coolavenues.com/know/mktg/sanjit-green-marketing-1.php
Both sites accessed during September, 2008
Print media
India today, March 2008.
Economics times, 17-April-2007.
Energy beats by Adani group, May 2008.
The Times of India, 17 August, 2008.

18