CHAPTER 1

INTRODUCTION
Corporate Social Responsibility is a management concept whereby companies integrate
social and environmental concerns in their business operations and interactions with their
stakeholders. CSR is generally understood as being the way through which a company achieves a
balance of economic, environmental and social imperatives (Triple-Bottom-Line- Approach),
while at the same time addressing the expectations of shareholders and stakeholders. In this
sense it is important to draw a distinction between CSR, which can be a strategic business
management concept, and charity, sponsorships or philanthropy. Even though the latter can also
make a valuable contribution to poverty reduction, will directly enhance the reputation of a
company and strengthen its brand, the concept of CSR clearly goes beyond that.
Promoting the uptake of CSR amongst SMEs requires approaches that fit the respective
needs and capacities of these businesses, and do not adversely affect their economic viability.
UNIDO based its CSR programmed on the Triple Bottom Line (TBL) Approach, which has
proven to be a successful tool for SMEs in the developing countries to assist them in meeting
social and environmental standards without compromising their competitiveness. The TBL
approach is used as a framework for measuring and reporting corporate performance against
economic, social and environmental performance. It is an attempt to align private enterprises to
the goal of sustainable global development by providing them with a more comprehensive set of
working objectives than just profit alone. The perspective taken is that for an organization to be
sustainable, it must be financially secure, minimize (or ideally eliminate) its negative
environmental impacts and act in conformity with societal expectations.
Key CSR issues: environmental management, eco-efficiency, responsible sourcing,
stakeholder engagement, labor standards and working conditions, employee and community
relations, social equity, gender balance, human rights, good governance, and anti-corruption
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measures. A properly implemented CSR concept can bring along a variety of competitive
advantages, such as enhanced access to capital and markets, increased sales and profits,
operational cost savings, improved productivity and quality, efficient human resource base,
improved brand image and reputation, enhanced customer loyalty, better decision making and
risk management processes.
We define corporate social responsibility strategically. Corporate social responsibility
encompasses not only what companies do with their profits, but also how they make them. It
goes beyond philanthropy and compliance and addresses how companies manage their
economic, social, and environmental impacts, as well as their relationships in all key spheres of
influence: the workplace, the marketplace, the supply chain, the community, and the public
policy realm.
The term "corporate social responsibility" is often used interchangeably with corporate
responsibility, corporate citizenship, social enterprise, sustainability, sustainable development,
triple-bottom line, corporate ethics, and in some cases corporate governance. Though these terms
are different, they all point in the same direction: throughout the industrialized world and in
many developing countries there has been a sharp escalation in the social roles corporations are
expected to play. Companies are facing new demands to engage in public-private partnerships
and are under growing pressure to be accountable not only to shareholders, but also to
stakeholders such as employees, consumers, suppliers, local communities, policymakers, and
society-at-large.
Laggard firms and governments can sometimes use the existence of corporate social
responsibility programs to shirk their roles. Government ultimately bears the responsibility for
leveling the playing field and ensuring public welfare. In order for corporate social responsibility
programs to work, government and the private sector must construct a new understanding of the
balance of public and private responsibility and develop new governance and business models
for creating social value.

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CORPORATE SOCIAL RESPONSIBILITY (CSR)

Definition:
The World Business Council for Sustainable Development has defined corporate social
responsibility (CSR) as:

'The commitment of business to contribute to sustainable economic development, working with

employees, their families, the local community and society at large to improve their quality of
life'. An equally valid but more concise definition of CSR in practice is 'companies managing
their business processes to produce an overall positive impact on society'.

Corporate initiative to assess and take responsibility for the company's effects on the
environment and impact on social welfare. The term generally applies to company efforts that go
beyond what may be required by regulators or environmental protection groups.
Corporate social responsibility may also be referred to as "corporate citizenship" and can involve

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incurring short-term costs that do not provide an immediate financial benefit to the company, but
instead promote positive social and environmental change.

CONCEPT:
Corporate social responsibility (CSR) can be defined as the economic, legal, ethical and
discretionary expectations that society has of organizations at a given point in time.
The World Business Council in its publication wrote that Corporate Social Responsibility is
the continuing commitment by business to behave ethically and contribute to economic
development while improving the quality of life of the workforce and their families as well as of
the local community and society at large
-CSR is a form of corporate self regulation integrated into a business model. It is when a
corporation realizes its responsibility towards its stakeholders and other members in the public
sphere.
-An ethical and moral component is underpinned in this rapidly developing concept.
-The concept of CSR means that organizations have moral, ethical, and philanthropic
responsibilities in addition to their responsibilities to earn a fair return for investors and comply
with the legal norms.
-It emphasizes on the realization of the ethical responsibility towards the stakeholders.
According to Post, Lawrence and Weber- stakeholders are individuals and groups that are
affected by an organizations policies, procedures and actions. The PRIMARY stakeholders,
such as employees and owners have specific legal rights and expectations in regard to the
organizations operations while the SECONDARY stakeholders not, but may perceive that they
have moral rights.
-CSR is synchronized with the concept of sustainability in Development. In 1987, the UN
appointed Brundtland commission which defined sustainable development as development
which meets the needs of the present without compromising the ability of future generations to
meet their own needs. Since then, the concept has caught up very fast. CSR introduces the
concept of sustainability into business operations meaning that business organizations do not
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just become wealth hoarding chambers but also fulfil their duty towards the larger community by
investing in socially benefiting concerns. Our planet has limited resources. Corporations and
industrial houses cannot go on exploiting this wealth without significant efforts for its
refurbishment.
CSR is holistic in its approach. It does not include only one aspect but embraces all aspects that a
corporate organization touches and affects.

HISTORY
In the late 18th century a Scottish philosopher and economist named Adam Smith wrote
numerous articles on these subjects, his magnum opus being The Wealth of Nations in which he
espoused the concepts of free trade and the free market on which the classic market economy
was based.

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Smiths principles were borne out. By the early 19th Century, new technology saw jobs being
created and living standards improved. Unchecked by regulation businesses flourished and
industrialists in Europe and the USA amassed huge fortunes. However few of these wealthy new
industrialists were concerned about the wellbeing of their employees, society or the environment.
The appalling conditions under which people worked were documented in the novels of Charles
Dickens and inspired radical theorists such as Karl Marx and Friedrich Engels to write
By the start of the 20th century, powerful corporations suffered a backlash against their
widespread exploitation. Labor unions were formed, giving a voice to the workers, and
governments began to assume more responsibility for welfare and infrastructure, gradually
introducing anti-trust legislation.
In the 1950s, emerging consumer power saw companies start taking a new interest in the social
and human aspects of their markets it was at about this time scientists and environmentalists
started noticing some worrying changes to the environment.
The 1960s saw a shift in attitudes towards government and business. In 1962 Professor Milton
Friedman, Nobel Prize-winning economist, published his controversial Capitalism and Freedom.
In it he makes the case for economic freedom as a precondition for political freedom.
The 1980s and 1990s saw communism collapse, globalization emerge and the information
revolution change the way the world did business. As globalization intensified, so did
environmental awareness and the emergence of responsible business practice. Key developments
include: the Brundtland Commission, the formation of the World Business Council for
Sustainable Development, and the United Nations Global Compact.

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CHAPTER 2
Evolution in India

The Four Phases of CSR Development in India

The history of CSR in India has its four phases which run parallel to India's historical
development and has resulted in different approaches towards CSR. However the phases are not
static and the features of each phase may overlap other phases.
The First Phase: In the first phase charity and philanthropy were the main drivers of CSR.
Culture, religion, family values and tradition and industrialization had an influential effect on
CSR. In the pre-industrialization period, which lasted till 1850, wealthy merchants shared a part
of their wealth with the wider society by way of setting up temples for a religious cause.
Moreover, these merchants helped the society in getting over phases of famine and epidemics by
providing food from their godowns and money and thus securing an integral position in the
society. The industrial families of the 19th century such as Tata, Godrej, Bajaj, Modi, Birla, and
Singhania were strongly inclined towards economic as well as social considerations.

The Second Phase: In the second phase, during the independence movement, there was
increased stress on Indian Industrialists to demonstrate their dedication towards the progress of
the society. This was when Mahatma Gandhi introduced the notion of "trusteeship", according to
which the industry leaders had to manage their wealth so as to benefit the common man. "I desire
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to end capitalism almost, if not quite, as much as the most advanced socialist. Gandhi's influence
put pressure on various Industrialists to act towards building the nation and its socio-economic
development. According to Gandhi, Indian companies were supposed to be the "temples of
modern India". Under his influence businesses established trusts for schools and colleges and
also helped in setting up training and scientific institutions.
The Third Phase: The third phase of CSR (196080) had its relation to the element of "mixed
economy", emergence of Public Sector Undertakings (PSUs) and laws relating labour and
environmental standards. During this period the private sector was forced to take a backseat. The
public sector was seen as the prime mover of development. Because of the stringent legal rules
and regulations surrounding the activities of the private sector, the period was described as an
"era of command and control". The policy of industrial licensing, high taxes and restrictions on
the private sector led to corporate malpractices. However the public sector was effective only to
a certain limited extent. This led to shift of expectation from the public to the private sector and
their active involvement in the socio-economic development of the country became absolutely
necessary. In 1965 Indian academicians, politicians and businessmen set up a national workshop
on CSR aimed at reconciliation. They emphasized upon transparency, social accountability and
regular stakeholder dialogues. In spite of such attempts the CSR failed to catch steam.
The Fourth Phase: In the fourth phase (1980 until the present) Indian companies started
abandoning their traditional engagement with CSR and integrated it into a sustainable business
strategy. In 1990s the first initiation towards globalization and economic liberalization were
undertaken. Controls and licensing system were partly done away with which gave a boost to the
economy the signs of which are very evident today. Increased growth momentum of the
economy helped Indian companies grow rapidly and this made them more willing able to
contribute towards social cause. Globalization has transformed India into an important
destination in terms of production and manufacturing bases of TNCs are concerned. As Western
markets are becoming more and more concerned about and labor and environmental standards in
the developing countries, Indian companies who export and produce goods for the developed
world need to pay a close attention to compliance with the international standards.

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 IMPORTANCE OF CORPORATE SOCIAL RESPONSIBILITY

Many companies are starting the New Year by examining exactly how effective their branding is
and how they are perceived by their customers and the general public. With all else being equal,
companies that take an active role in promoting their corporate social responsibility programs are
generally viewed more favorably than those that do not have highly visible programs. Having
goals and a vision for your company that go beyond products and profits definitely provides a
warmer image of your business that consumers will be more eager to engage with.
Showing a True Commitment
The most successful corporate social responsibility programs integrate these two types of CSR
together to show a true commitment to a cause. For example, a company that uses sustainable
materials in their products, donates financial resources to environmental causes, and allows
employees to take paid time off for volunteering at environmental charities would be showing a
true commitment to the environment that goes beyond any single CSR initiative.
Social Media Visibility
One of the reasons that corporations should have visible CSR campaigns is due to the importance
and prevalence of social media. Corporations that want to protect their brand understand that
social media is an integral part of public perception. When a corporation exercises social
responsibility in the form of fundraising or setting up employee giving programs, using social
media to promote these actions helps to create a positive branding environment and it is a great
way to engage with your audience on a deeper level that goes beyond your products or services.
Public Relations Benefits
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Public relations is a potent tool for shaping consumer perception and building a companys
image. Corporations that actively promote their social responsibility activities often take steps to
publicize these efforts through the media. Getting the word out about corporate donations,
employee volunteer programs, or other CSR initiatives is a powerful branding tool that can build
publicity for you in both online and print media.

Government Relations
Corporations that place an emphasis on corporate social responsibility typically have an easier
experience when dealing with politicians and government regulators. In contrast, businesses that
present a reckless disregard for social responsibility tend to find themselves fending off various
inquiries and probes, often brought on at the insistence of public service organizations. The more
positive the public perception is that a corporation takes social responsibility seriously, the less
likely it is that activist groups will launch public campaigns and demand government inquiries
against it.
Building a Positive Workplace Environment
Finally, one of the greatest benefits of promoting social responsibility in the workplace is the
positive environment you build for your employees. When employees and management feel they
are working for a company that has a true conscience, they will likely be more enthusiastic and
engaged in their jobs. This can build a sense of community and teamwork which brings everyone
together and leads to happier, more productive employees.

Five Dimensions of Corporate Social Responsibility

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Traditionally, companies have had one responsibility: to make a profit. But the concept of
corporate social responsibility holds that companies should be responsible to more than just their
owners. Corporate social responsibility holds that there are multiple dimensions that should
affect a company's actions. Understand these dimensions when planning your own company's
corporate social responsibility efforts.
Environmental:
The environmental dimension of corporate social responsibility refers to your business's impact
on the environment. The goal, as a socially responsible company, is to engage in business
practices that benefit the environment. For example, you might choose to use recycled materials
in your packaging or ad renewable energy sources like solar power to your factory.
Social:
The social dimension of corporate responsibility involves the relationship between your business
and society as a whole. When addressing the social dimension, you should aim to use your
business to benefit society as a whole. This could involve sourcing fair trade products, for
example, or agreeing to pay your employees a livable wage. It could also involve taking on
endeavors that benefit society, for instance using your resources to organize charitable
fundraisers.
Economic:
The economic dimension refers to the effect that corporate social responsibility has on the
finances of your company. In an ideal world, where corporate social responsibility had no costs,
there would be no reason to limit it. But in the real world it is important to recognize the
financial impact that these actions have and to balance being a good corporate citizen with
making a profit.

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Stakeholder:
The stakeholders are all of the people affected by your company's actions. These include
employees, suppliers and members of the public. When considering the stakeholder dimension of
corporate social responsibility, consider how your business decisions affect these groups. For
example, you might be able to increase your output by having employees work more, but you
should consider the impact it will have on them, not just your bottom line.
Voluntariness:
Actions that fall into the voluntariness dimension are those that you are not required to do. These
actions are based in what your company believes is the correct thing to do. They may be based in
specific ethical values that your company holds. For example, you may believe that using
organic products is the right thing to do even if you are not required to do so.

The Principles of CSR

Because of the uncertainty surrounding the nature of CSR activity it is difficult to define
CSR and to be certain about any such activity. It is therefore imperative to be able to identify
such activity and we take the view that there are three basic principles which together comprise
all CSR activity. These are:

Sustainability

Accountability

Transparency
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Sustainability:
Sustainable development has been defined in many ways, but the most frequently quoted
definition is from Our Common Future, also known as the Brundtland Report:
"Sustainable development is development that meets the needs of the present without
compromising the ability of future generations to meet their own needs. It contains within it two
key concepts:

the concept of needs, in particular the essential needs of the world's poor, to which
overriding priority should be given; and

the idea of limitations imposed by the state of technology and social organization on the
environment's ability to meet present and future needs."

This is concerned with the effect which action taken in the present has upon the options available
in the future. If resources are utilized in the present then they are no longer available for use in
the future, and this is of particular concern if the resources are finite in quantity.
Thus raw materials of an extractive nature, such as coal, iron or oil, are finite in quantity and
once used are not available for future use. At some point in the future therefore alternatives will
be needed to fulfil the functions currently provided by these resources. This may be at some
point in the relatively distant future but of more immediate concern is the fact that as resources
become depleted then the cost of acquiring the remaining resources tends to increase, and hence
the operational costs of organizations tend to increase.
Sustainability therefore implies that society must use no more of a resource than can be
regenerated. This can be defined in terms of the carrying capacity of the ecosystem (Hawken
1993) and described with input output models of resource consumption. Thus the paper
industry for example has a policy of replanting trees to replace those harvested and this has the
effect of retaining costs in the present rather than temporally externalizing them.
Viewing an organization as part of a wider social and economic system implies that these
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effects must be taken into account, not just for the measurement of costs and value created in the
present but also for the future of the business itself. Measures of sustainability would consider
the rate at which resources are consumed by the organization in relation to the rate at which
resources can be regenerated. Unsustainable operations can be accommodated for either by
developing sustainable operations or by planning for a future lacking in resources currently
required. In practice organizations mostly tend to aim towards less unsustainability by increasing
efficiency in the way in which resources are utilized. An example would be an energy efficiency
programmed.
Every organization mentions sustainability and most claim to have developed sustainable
practices. A lot of this is just rhetoric from people who, we would claim, do not want to face the
difficult issues involved in addressing sustainability. There is a danger therefore that
sustainability has taken over from CSR itself as a target for green washing. Nevertheless
although the relationship between organizations and society has been subject to much debate,
often of a critical nature, evidence continues to mount that the best companies make a positive
impact upon their environment.
Furthermore the evidence continues to mount that such socially responsible behavior is
good for business, not just in ethical terms but also in financial terms in other words that
corporate social responsibility is good for business as well as all its stakeholders. Thus ethical
behavior and a concern for people and for the environment have been shown to have a positive
correlation with corporate performance. Indeed evidence continues to mount concerning the
benefit to business from socially responsible behavior and, in the main, this benefit is no longer
questioned by business managers. The nature of corporate social responsibility is therefore a
topical one for business and academics.

Accountability:
This is concerned with an organization recognizing that its actions affect the external
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environment, and therefore assuming responsibility for the effects of its actions. This concept
therefore implies a quantification of the effects of actions taken, both internal to the organization
and externally. More specifically the concept implies a reporting of those quantifications to all
parties affected by those actions. This implies a reporting to external stakeholders of the effects
of actions taken by the organization and how they are affecting those stakeholders.
This concept therefore implies a recognition that the organization is part of a wider
societal network and has responsibilities to all of that network rather than just to the owners of
the organization. Alongside this acceptance of responsibility therefore must be a recognition that
those external stakeholders have the power to affect the way in which those actions of the
organization are taken and a role in deciding whether or not such actions can be justified, and if
so at what cost to the organization and to other stakeholders.
Accountability therefore necessitates the development of appropriate measures of
environmental performance and the reporting of the actions of the firm. This necessitates costs
on the part of the organization in developing, recording and reporting such performance and to
be of value the benefits must exceed the costs. Benefits must be determined by the usefulness of
the measures selected to the decision-making process and by the way in which they facilitate
resource allocation, both within the organization and between it and other stakeholders. Such
reporting needs to be based upon the following characteristics:

-Understand ability to all parties concerned

-Relevance to the users of the information provided;
-Reliability in terms of accuracy of measurement, representation of impact and freedom
from bias;
-Comparability, which implies consistency, both over time and between different organizations.
Inevitably however such reporting will involve qualitative facts and judgments as well as
quantifications. This qualitativeness will inhibit comparability over time and will tend to mean
that such impacts are assessed differently by different users of the information, reflecting their
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individual values and priorities.

A lack of precise understanding of effects, coupled with the necessarily judgmental nature
of relative impacts, means that few standard measures exist. This in itself restricts the interorganization comparison of such information. Although this limitation is problematic for the
development of environmental accounting it is in fact useful to the managers of organizations as
this limitation of comparability alleviates the need to demonstrate good performance as anything
other than a semiotic.

Transparency:
Transparency, as a principle, means that the external impact of the actions of the organization can
be ascertained from that organizations reporting and pertinent facts are not disguised within that
reporting. Thus all the effects of the actions of the organization, including external impacts,
should be apparent to all from using the information provided by the organizations reporting
mechanisms. Transparency is of particular importance to external users of such information as
these users lack the background details and knowledge available to internal users of such
information. Transparency therefore can be seen to follow from the other two principles and
equally can be seen to be a part of the process of recognition of responsibility on the part of the
organization for the external effects of its actions and equally part of the process of transferring
power to external stakeholders.

THE PROMINENCE OF CSR

It is quite noticeable how much more prominent corporate social responsibility (CSR) has
become not just in the academic world and in the business world but also is everyday life. We
can highlight a lot of factors which have led to this interest such things as:
Poor business behavior towards customers
Treating employees unfairly
Ignoring the environment and the consequences of organizational action.
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Since then other things have also featured prominently in popular consciousness. One of these
which has become more pronounced is the issue of climate change and this has affected concern
about CSR through a concern with the emission of greenhouse gases and particularly carbon
dioxide. Nowadays it is quite common for people to know and discuss the size of their carbon
footprint whereas even three years ago people in general did not even know what a carbon
footprint was.

Another thing which has become prominent is a concern with the supply chain of a business; in
other words with what is happening in other companies which that company does business with
their suppliers and the suppliers of their suppliers. In particular people are concerned with the
exploitation of people in developing countries, especially the question of child labour but also
such things as sweat shops.
So no longer is it acceptable for a company to say that the conditions under which their suppliers
operate is outside of their control and so they are not responsible. Customers have said that this is
not acceptable and have called companies to account
Interestingly the popularity of companies increases after they have admitted problems and taken
steps to correct these problems. In doing this they are thereby showing both that honesty is the
best practice and also that customers are reasonable. The evidence suggests that individual
customers are understanding and that they do not expect perfection but do expect honesty and
transparency. Moreover they also expect companies to make efforts to change their behavior and
to try to solve their CSR problems.

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CHAPTER 3
CHANGING EMPHASIS IN COMPANIES
Companies themselves have also changed. No longer are they concerned with green washing
the presence of socially responsible behavior through artful reporting. Now companies are taking
CSR much more seriously not just because they understand that it is a key to business success
and can give them a strategic advantage, but also because people in those organizations care
about social responsibility.
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So it would be reasonable to claim that the growing importance of CSR is being driven by
individuals who care but those individual are not just customers, they are also employees,
managers, owners and investors of a company. So companies are partly reacting to external
pressures and partly leading the development of responsible behavior and reporting. So
accountability one of the central principles of CSR is much more recognized and is being
responded to by increasing transparency another of the principles of CSR.

GLOBALIZATION AND CSR

Globalization is a leading concept which has become the main factor in business life during the
last few decades. This phenomenon affects the economy, business life, society and environment
in different ways, and almost all corporations have been affected by these changes. We can see
these changes mostly related with increasing competition and the rapid changing of technology
and information transfer. This issue makes corporations more profit oriented than a long term and
sustainable company. However, corporations are a vital part of society which needs to be
organized properly. Therefore we need some social norms, rules and principles in society and
business life for socially responsible behavior.
Globalization can be defined as the free movement of goods, services and capital. This definition
does not cover all the aspects of globalization or global changing. Globalization also should be a
process which integrates world economies, culture, technology and governance. This is because
globalization also involves the transfer of information, skilled employee mobility, the exchange
of technology, financial funds flow and geographic arbitrage between developed countries and
developing countries. Moreover globalization has religious, environmental and social
dimensions. In order to encompass this broad impact area globalization covers all dimensions of
the world economy, environment and society. Moreover it is apparent all over the world and the
world is changing dramatically. Every government has a responsibility to protect all of their
economy and domestic market from this rapid changing.
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 HOW GLOBALIZATION AFFECTS CSR

The question might be how globalization affects CSR. But the answer to this question is not only
related to the last quarter of the 20th century but also related to previous centuries. John Maynard
Keynes calculated that the standard of living had increased 100 percent over four thousand years.
Adam Smith had an important (seminal) idea about the wealth of communities and in 1776 he
described conditions which would lead to increasing income and prosperity. Similarly there is
much evidence from economic history to demonstrate the benefit of moral behavior; for
example, Robert Owen in New Lanark, and Jedediah Strutt in Derbyshire both in the UK
showed the economic benefits of caring for stakeholders. More recently Friedman has paid
attention to the moral impact of the economic growth and development of society.

It is clear that there is nothing new about economic growth, development and globalization.
Economic growth generally brings out some consequences for the community. This is becoming
a world phenomenon. One of the most important reasons is that we are not taking into account
the moral, ethical and social aspects of this process. Some theorists indicated the effect of this
rapid changing more than a hundred year ago. Economic growth and economic development
might not be without social and moral consequences and implications.

Another question is who is responsible of this ongoing process and for ensuring the wellbeing of
people and safeguarding their prosperity. Is this the responsibility of governments, the business
world (businessman), consumers, shareholders, or of all people Government is part of the system
and the regulator of markets and lawmakers. Managers, businessmen and the business world take
action concerning the market structure, consumer behavior or commercial conditions. Moreover,
they are responsible to the shareholders for making more profit to keep their interest long term in
the company. Therefore they are taking risk for their benefit/profit. This risk is not opposed to the
social or moral/ethical principles which they have to apply in the company. There are many
reasons for ethical and socially responsible behavior of the company. However, there are many
cases of misbehavior and some illegal operations of some companies. Increasing competition
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makes business more difficult than before in the globalized world.

The good news and our expectations are that competition will not have any longer bad influence
on company behavior. According to international norms (practice) and expectations, companies
have to take into account social, ethical and environmental issues more than during the last two
decades. One of the reasons is more competition not always more profit; another reason is
consumer expectation is not only related to the cost of products but also related to quality, proper
production process and environmental sensitivity.

Moreover shareholders are more interested in long term benefit and profit from the company.
The key word of this concept is long termism which represents also a sustainable company.
Shareholders want to get long term benefit with a sustainable company instead of only short term
profit. This is not only related to the company profit but also related to the social and
environmental performance of the company. Thus, managers have to make strategic plans for the
company concerning all stakeholder expectations which are sustainable and provide long term
benefit for the companies with their investments. However, Sustainability can be seen as
including the requirement that whatever justice is about fair distribution of goods, fair
procedures respect for rights is capable of being sustained into the future indefinitely. Thus
sustainability requires that the values of justice are capable of being continued into the future: if
current practices for instance were just from the present point of view but would prevent the
same practices from occurring in the future, that would be rejected from the point of view of
sustainability (Dower, 2004). So investor or shareholder expectations and all other
stakeholders approaches are supporting a socially responsible and ethical company more than
other companies. Globalization has had a very sharp effect on company behavior and still we can
see many problems particularly in developing countries. This is one of the realities of the
globalization process. However we are hoping to see some different approaches and
improvements to this process with some of them naturally related to some international
principles, rules and norms. But most of them are related to the end of this flawed system and the
problem of capitalization.

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The challenge of CSR in a globalizing world is to engage in a process of political deliberation

which aims at setting and resetting the standards of global business behavior. While stakeholder
management deals with the idea of internalizing the demands, values and interests of those actors
that affect or are affected by corporate decision-making, we argue that political CSR can be
understood as a movement of the corporation into environmental and social challenges such as
human rights, global warming, or deforestation (Scherer & Palazzo, 2008), .

THE EFFECTS ON BUSINESS PERFORMANCE

If corporate social responsibility has grown as a business objective, has this in any way impinged
upon business performance? Studies, empirical and otherwise, suggest that rather than detracting
from business performance and harming shareholder value, in fact the opposite appears to be the
case. Corporate social responsibility appears to offer a positive contribution to business
performance, especially over the longer term.
The following factors have been identified as some of the positive economic benefits that
businesses have gained from adopting a more socially responsible position.

Improved economic performance

A large number of studies have attempted to identify and evaluate the economic returns from
social responsibility. Factors that have been considered include business growth rates, stock
prices and sales and revenue.
A 1999 survey by Roman, Hayibor and Agle evaluated the findings of 52 studies that considered
the link between business ethics and enhanced profits. They concluded that 33 studies showed a
positive link, 14 suggested neutral effects or were inconclusive, and the remaining 5 suggested
that there was in fact a negative relationship.
Although this evidence would on balance favor an argument that corporate social responsibility
is good business practice, the whole area of linking ethics and responsibility to profit is a
contentious one. When considering ethics and social responsibility, what are we including within
this definition? Is the business merely complying with a business code, either developed within
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the business or by a third party. Such codes essentially state. What is not acceptable business
behavior, such as taking bribes or pursuing anti-competitive behavior. Or does the understanding
of an ethical business go further and entail positive social actions, ranging from giving money
to good causes, to contributing to particular programmers in which the business has competency.
For example, a pharmaceutical company might develop a drug that might benefit the populations
of the worlds poorest countries, with no possibility of profit. So at what level do we identify an
ethical business, and to what degree might this level of responsibility influence profitability?

Enhancing the brand

Related to profitability is the issue as to how far corporate social responsibility enhances brand
image and the firms reputation. Not only would this strengthen consumer loyalty but also aid the
firm in raising finance and attracting trading partners. An increasing number of studies have
identified that value-based criteria are becoming increasingly important in consumer buying
decisions. A 1997 study by Walker Research found that, given two products with similar quality
and price criteria, 76 per cent of those surveyed stated they would purchase the product produced
by the company most associated with good causes. Factors such as environmental responsibility
and active participation in the community were most often cited as those factors most likely to
affect consumer purchasing behavior.
Business may be further encouraged to develop the social image of their brand with the
increasing number of awards given to recognize and promote corporate social responsibility.
Most Admired Companies Lists, such as that presented by Management Today in the UK and
Fortune in America, are based around an assessment of corporate social responsibility criteria,
such as reputation for ethics and honesty, use of corporate assets and community and
environmental responsibility. The public relations and marketing potential that might be gained
from such awards would go a long way in helping the business to further strengthen its socially
responsible brand image.

Attracting and retaining employees

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It increasingly appears to be the case that companies with clear ethical and social positions find it
easier, to not only recruit but to hold on to their employees. In a number of surveys of graduate
employment intentions, students have claimed that they would be prepared to take a lower salary
in order to work for a business with high ethical standards and a commitment to socially
responsible business practices.
A survey conducted in June 2000 by Burson Marsteller and the Prince of Wales Business Leaders
Forum found that when employees were asked to rank the reason for admiring certain
companies, 24 per cent identified respect for their employees, and a further 21 per cent identified
environmental responsibility. The survey concluded that the reputation of the employer was
crucial in the recruitment and retention of staff. As John Browne the chairman of BP Amoco has
remarked,

Access to capital

The growth in ethically screened investment funds has grown by over 238 per cent since 1995.
This phenomenal growth is driven not only by the demands from shareholders for ethical funds,
but also by a realization from investors generally, that socially responsible business has the
potential to be hugely profitable. A recent survey by the Ethical Investment Research Service has
revealed that 77 per cent of members of pension schemes wanted their pension funds to adhere to
some form of socially responsible investment, so long as it did not impinge upon their returns.
The likelihood of returns being lower in ethically screened funds has been questioned by the
findings of two recent reports. Innovest Strategic Value Advisors and the Alliance for
Environmental Innovations, both concluded that, in respect to environmental responsibility in
particular, those companies that exhibit superior environmental performance over their peers
achieve better financial performance in the stock market. It is suggested that the reason for this is
that environmental performance is a good indicator of general management quality, which is the
main determinant of stock price.
The benefits from being socially responsible appear not only to be diverse, but from an
economic point of view, worth having. Not only is business performance likely to be
enhanced, but brand image will be strengthened, employee turnover minimized and access
to stock market funds readily available. The next step for research is to attempt to quantify
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the benefits, and try to relate the economic advantages directly to the level of social
responsibility a business adopts.
OTHER POTENTIAL BUSINESS BENEFITS

Triple bottom line : People planet profit, also known as the triple bottom line, are words

that should be used and practiced in every move an organization makes.

People relates to fair and beneficial business practices toward labour, the community and

II

region where corporation conducts its business.

Planet refers to sustainable environmental practices. A triple bottom line company does
not produce harmful or destructive products such as weapons, toxic chemicals or batteries
containing dangerous heavy metals for example.
Profit is the economic value created by the organization after deducting the cost of all

III

inputs, including the cost of the capital tied up. It therefore differs from traditional
accounting definitions of profit. Despite the fact that adopting this triple measure has
helped some companies be more conscious of their social and moral responsibilities

Human resources : A CSR program can be an aid to recruitment and retention,

particularly
within 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. CSR can also help improve the perception of a company among its staff,
particularly when staff can become involved through payroll giving, fundraising activities
or community volunteering. CSR has been found to encourage customer orientation
among frontline employees.

Risk management: Managing risk is a central part of many corporate strategies.

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

Brand differentiation: In crowded marketplaces, companies strive for a unique selling

proposition that can separate them from the competition in the minds of consumers. CSR
can play a role in building customer loyalty based on distinctive ethical values several
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major brands, such as The Co-operative Group, The Body Shop and American Apparel
are built on ethical values. Business service organizations can benefit too 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 substantive 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 as good corporate citizens with respect to labour
standards and impacts on the environment.

Satisfied Employees: Employees want to feel proud of the organization they work for.
An employee with a positive attitude towards the company is less likely to look for a job
elsewhere. It is also likely that you will receive more job applications because people
want to work for you.
More choice means a better workforce. Because of the high positive impact of CSR on
employee wellbeing and motivation, the role of HR in managing CSR projects is
significant.

Positive PR: CSR provides the opportunity to share positive stories online and through
traditional media. Companies no longer have to waste money on expensive advertising
campaigns. Instead they generate free publicity and benefit from worth of mouth
marketing.

More Business Opportunities: A CSR program requires an open, outside oriented

approach. The business must be in a constant dialogue with customers, suppliers and
other parties that affect the organization. Because of continuous interaction with other
parties, your business will be the first to know about new business opportunities.

Long term future for your Business : CSR is not something for the short term. Its all
about achieving long term results and business continuity. Large businesses refer to:
shaping a more sustainable society

CORPORATE SOCIAL RESPONSIBILITY IN DEVELOPING MARKETS

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Developing markets can be an attractive alternative for businesses facing stagnating home
markets. When you enter such new markets, you have to be aware of ethical, legal and social
considerations that come under the term corporate social responsibility. Addressing the CSR
issues in a comprehensive way allows you to avoid conflict with local culture and helps your
company prosper in its new market.

Workplace
Social responsibility issues related to work include salary, workplace safety, sexual harassment,
work hours and employee benefits. While it is unrealistic to expect employers to pay U.S. level
wages in a developing country, pay should be enough for a living wage. Companies are
responsible for employee safety and personal security. Work hours must allow a reasonable lifework balance and your company should pay for benefits that reduce employee stress due to
medical or other concerns.
Market
Introduction of your products to the new market has to avoid disruptions and take place in a way
that respects local traditions. Reviewing how other American companies entered the market and
how local companies operate gives you an overview of approaches that work and actions you
must avoid. Test marketing with small local groups can yield additional insights. While you may
want to differentiate yourself from local suppliers and call attention to your products, you have to
do so in positive ways.
Governance
It may seem customary in some developing countries to make payments to decision-makers in
order to obtain contracts or other benefits. In addition to many of these payments being
unethical, the U.S. Foreign Corrupt Practices Act makes it illegal to pay to obtain work that
companies would not otherwise receive. When you participate in such payment schemes, you
support a local corrupt system that hurts the general population of the country. If you find that
you can't do business in a country without making illegal payments, you may want to reevaluate
your involvement in the market.
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Environment
Some developing countries have weak or non-existing environmental protection legislation.
Even so, it is unethical for corporations to allow their activities to pollute as a result. CSR
requires companies to act in an environmentally friendly manner when operating in developing
countries. You have to go beyond legal compliance and minimize your company's production of
waste and pollution.
Social
A key component of CSR in developing markets is social investment. If you are profiting from
your operations in the country, it is ethical to return some of the profit to the community. Typical
initiatives are helping to fund education, medical care and infrastructure such as water and
sewers. Companies publish their involvement in such projects and benefit from a positive
influence on their image, both in the developing country and in their home market.

SOCIAL RESPONSIBILITY STRATEGIES

Social responsibility is a form of self-regulation that businesses adopt as a part of their corporate
conscience and citizenship. Often referred to as corporate social responsibility or CSR, this
policy spurs businesses to develop means to monitor the publics social perception of them as a
responsible business. The business goal of social responsibility is to encourage the companys
actions toward the positive impact of consumer, community and employee responsibility.
Voluntary Hazard Elimination
Companies involved with social responsibility often take action to voluntarily eliminate
production practices that could cause harm for the public, regardless of whether they are required
by law. For example, a business could institute a hazard control program that includes steps to
protect the public from exposure to hazardous substances through education and awareness. A
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plant that uses chemicals could implement a safety inspection checklist to guide staff in best
practices when handling potentially dangerous substances and materials. A business that makes
excessive noise and vibration could analyze the effects its work has on the environment by
surveying local residents. The information received could be used to adjust activities and develop
soundproofing to lessen public exposure to noise pollution.
Community Development
Companies, businesses and corporations concerned with social responsibility align with
appropriate institutions to create a better environment to live and work. For example, a
corporation or business may set up a foundation to assist in learning or education for the public.
This action will be viewed as an asset to all of the communities that it serves, while developing a
positive public profile
Philanthropy
Businesses involved in philanthropy make monetary contributions that provide aid to local
charitable, educational and health-related organizations to assist under-served or impoverished
communities. This action can assist people in acquiring marketable skills to reduce poverty,
provide education and help the environment. For example, the Bill and Melinda Gates
Foundation focuses on global initiatives for education, agriculture and health issues, donating
computers to schools and funding work on vaccines to prevent polio and HIV/AIDS.
Creating Shared Value
Corporate responsibility interests are often referred to as creating shared value or CSV, which is
based upon the connection between corporate success and social well-being. Since a business
needs a productive workforce to function, health and education are key components to that
equation. Profitable and successful businesses must thrive so that society may develop and
survive. An example of how CSV works could be a company-sponsored contest involving a
project to improve the management and access of water used by a farming community, to foster
public health.
Social Education and Awareness

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Companies that engage in socially responsible investing use positioning to exert pressure on
businesses to adopt socially responsible behavior themselves. To do this, they use media and
Internet distribution to expose the potentially harmful activities of organizations. This creates an
educational dialogue for the public by developing social community awareness. This kind of
collective activism can be affective in reaching social education and awareness goals. Integrating
a social awareness strategy into the business model can also aid companies in monitoring active
compliance with ethical business standards and applicable laws.

Microsoft Corporation is an American multinational software corporation headquartered in

Redmond, Washington that develops, manufactures, licenses, and supports a wide range of
products and services related to computing. The company was founded by Bill Gates and Paul
Allen on April 4, 1975. Microsoft is the world's largest software maker measured by revenues.It
is also one of the world's most valuable companies.
Microsoft was established to develop and sell BASIC interpreters for the Altair 8800. It rose to
dominate the personal computer operating system market with MS-DOS in the mid-1980s,
followed by the Microsoft Windows line of operating systems. The company's 1986 initial public
offering, and subsequent rise in its share price, created an estimated three billionaires and 12,000
millionaires from Microsoft employees. Since the 1990s, it has increasingly diversified from the
operating system market and has made a number of corporate acquisitions. In May 2011,
Microsoft acquired Skype Technologies for $8.5 billion in its largest acquisition to date.

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CHAPTER 4

CORPORATE SOCIAL RESPONSIBILITY OF

MICROSOFT

Citizenship at Microsoft
Working responsibly
Serving communities
Citizenship governance
Setting priorities and
stakeholder engagement
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External frameworks

Serving Communities
Microsoft YouthSpark
Empowering youth through technology and education
Inspiring future innovators
Helping youth realize their potential
Technology for Good
Donating software and services to nonprofits worldwide
Improving access to hardware
Sharing knowledge to deepen impact
Solutions in action
Employee giving
Making a difference
Humanitarian response
Accessibility
Expanding opportunity for people with disabilities
Improving wellness for seniors

Working Responsibly
Environmental sustainability
Making our operations carbon neutral
Developing technologies to reduce environmental impact
Human rights
The power of technology to promote human rights
A global approach
Engagement
Good governance and the rule of law
Privacy and data security
Responsible sourcing
Hardware and packaging production
Conflict minerals
Governance
Corporate governance
Maintaining strong practices and performance
Public policy engagement
Compliance

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Water Filter Provides Safe Drinking Water for 100 Girls

India - For the 100 girls who live together at an Udaan school in Mewat,
Haryana province, India, getting an education is a dream come true. This
residential school provides for nearly all of their needs: education, food,
shelter, and recreation. But the girls needed a consistent source of clean
drinking water. The lack of clean drinking water affected the health of the
girls at the Udaan school throughout the academic year. Most of the students
suffered from skin problems, infections, and typhoid. With funding from
YouthSpark on GlobalGiving, the CARE.org project was able to provide a
reverse-osmosis water filter cooler for the school. This filter can serve safe
drinking water for the 100 girls at the residential campus, helping them stay
healthy and focused on their studies so that they can prepare for the next
level of education.
Entrepreneur Opens Mobile Repair Shop for Villagers
India - Ranjeet Kumar is the oldest of seven children and lives with his family
in a remote flood- and famine-prone village in the Muzaffarpur District of
Northern Bihar in India. Like others in Bihar, where half of people in the state
live below the poverty line, Ranjeets family has struggled to eke out a living.
Despite the challenges, people in this area look to Ranjeet as a testament of
perseverance, entrepreneurial spirit, and family ties. Ranjeets family worked
hard to support his studies, but even with their combined effort, their
monthly income wasnt enough. Most technical college courses were too
expensive to pay for without neglecting food and other necessities for the
family. Yet Ranjeet remained determined to gain access to higher education.
He learned about the Aga Khan Foundation (AKF), an organization dedicated
to developing and promoting creative solutions to problems that hinder
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social development. AKF partners with YouthSpark, a Microsoft initiative to

create opportunities for 300 million young people around the world, to
provide curriculum, computers, and teacher training for technology centers,
including one in Ranjeets district. Ranjeet signed up for a computer
technology course and a mobile repairing class. After completing his training,
he opened a mobile repair shop in his home, and he now provides mobile
services for the people of his village. Because there is no electricity, the
generators he uses provide the power for villagers to charge their mobile
phones and complete other tasks. In a place where farming is the
expectation for most young people, Ranjeet serves as a role model, proof
that viable alternatives exist and can be reached with the right opportunity
Environmental sustainability
Technology can help create a more sustainable future. This year, Microsoft
modeled a way forward by making their operations leaner and more energy
efficient helping us meet their goal of carbon neutrality and reducing the
environmental impact of our services and devices.

Be green: More renewable energy, less waste

Using resources efficiently requires both commitment and investment. Weve
increased our purchase of green energy while making responsible choices
with our energy, waste, and water.

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 More than doubled our investment in renewable energy in FY13 by

purchasing 2.3 billion kWh of green power globally.
Recognized by the U.S. Environmental Protection Agency (EPA) as the
second largest purchaser of green energy in the United States. Our totals
increased nearly 70 percent from last year, and were equivalent to the
energy consumed by 204,000 average American homes.
Offset more than 300,000 metric tons of CO2 emissions through a growing
portfolio of innovative carbon-offset projects.
Invested $5.5 million in a demonstration project to power a data center in
Cheyenne, Wyoming, using biogas from a wastewater treatment facility,
providing ultra-clean, carbon-neutral electricity. Known as the Data Plant, it
will be completely independent of the grid and will sustainably power cloud
services.
Be accountable: Holding ourselves to a new standard
A critical aspect of addressing climate change is holding ourselves
accountable. For the first time ever, weve integrated carbon use into the
financial decision making of the company. Our internal carbon fee builds a
more responsible corporate culture while giving us a new perspective on the
external costs of our emissions.

Held every business group at Microsoft responsible for their emissions

with our internal carbon fee the cornerstone of our commitment to
carbon neutrality. Using technologies to measure the impact of our
operations, we charge our business groups according to their actual
carbon impact, from electricity use to air travel. This adds discipline to
our business decisions and helps guide the resource choices made
both at our corporate headquarters and through our local subsidiaries.

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Created an internal investment fund for our carbon fee payments. The
fund will be used to support a variety of energy-efficiency and carbonoffset projects, helping us reduce net emissions and meet our carbon
neutrality goal.

Improved transparency by measuring emissions with advanced

tracking software. We rolled out the cloud-based Carbon Systems
Enterprise Sustainability Platform based on Microsoft technology to
more than 600 facilities in 100 countries, providing visibility into our
energy use and emissions.

CHAPTER 5
CONCLUSION:-

Thus Corporate Social Responsibility (CSR) is about how companies manage the business
processes to produce an overall positive impact on society. Thus companies consider the interests
of society by taking responsibility for the impact of their activities on customers, suppliers,
employees shareholders, communities and other stakeholders, as well as the environment. This is
seen to extend beyond the statutory obligation to comply with legislation as organizations are
voluntarily taking further steps to improve the quality of life for employees and their families as
well as for the local community and society at large. If a company chooses to follow the way of
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CSR, it will integrate ethical concerns in its activities and in its interaction with all the Stake
holders. This implies that the corporate units function in such a way that their CSR activities in
all likelihood actually reach out to the beneficiaries the society in general. The ethical
considerations are aimed at preparing the groundwork for expecting the correct reaction or
response of their CSR generated activities

It would be useless to even try to initiate action where the response generated would be negative.
This is why prior to corporate social responsibility lies the work of preparing the society for the
same, which should be the joint efforts of corporates, non-governmental organizations and
definitely the monitoring authority, that is the government. Such concerted efforts can expectedly
produce the desired results. The groundwork is essential since an unresponsive, obstructive
unwilling, suspicious recipient in this case the society, will actually deter all efforts directed
towards development and cause unnecessary delay and confusion. Providing employment and
spreading literacy will actually see the commencement of CSR. Yes, the question will definitely
arise that if transport and communication is grossly undeveloped how is it possible to spread
literacy? The obvious solution would be the involvement of the residents in the construction of
roads and other communication networks, which would therefore guarantee them employment.

BIBLIOGRAPHY

www.csr.com
www.wikipedia.in
www.microsoft.com
www.typesofcrs.com
www.timesofindia.com
www.five-dimensions-corporate-social-responsibility
Strategic management Michael. Vaz

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