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CORPORATE SOCIAL
RESPONSIBILITY
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A CASE STUDY OF JAIPUR RUGS
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9/17/2013

Rita Kedawat & Prof. (Dr.) Trilok Kumar Jain

TABLE OF CONTENTS
Page no.
Chapter 1

Chapter2

Introduction of CSR

Background

Introduction

What is CSR

Meaning & Definition

Need for CSR

Characteristics

12

Approach

13

Importance

17

CSR & Small Business

19

Companies Bill passed on CSR

25

CSR is not charity

28

Measures

30

Relationship between CSR & Law

33

Reporting Framework

34

Recent News on CSR

37

Introduction of Jaipur Rugs

42

Background

42

Introduction

43

Jaipur Socio Economic Business Model

45

Chronicle of the founder

47

Awards

59

Certifications

68

Chapter3

Chapter4

Chapter5

Word says by Jeremy Higgs

72

Philosophy

73

Introduction of Jaipur Rugs Foundation

78

An overview

78

Objectives

80

Basic Approach

81

Integration with Business Strategy

82

Partnership & Collaboration

83

Founders Message

84

CSR activities in Jaipur Rugs

89

Social Mobilization in JRF

90

Education in JRF

93

Alternative Education Programme

96

Health Camps

97

Programmes conducted by JRF

98

Skill Training Programmes

110

Community Mobilization

120

What JRF achieved through CSR

122

Conclusion

124

Research Findings

127

Introduction of CSR

Although the subject Corporate Social Responsibility in its present form and
content has gained popular attention only in recent years, its origin can be traced
back to the evolution of the concept of a welfare state. As the pace of
industrialization quickened employers became more and more concerned with the
loss of productivity efficiency due to avoidable sickness or accidents or stoppage
of work due to bad personal relationships. This gave rise to the idea of a welfare
state, which was further strengthened by the growth of democracy and of respect to
human dignity during the last 150 years. The frame work of a welfare state and
with it the concept of social responsibility have thus come to stay in many
countries of the world. The changing image of business in the recent years has lent
further support to the idea of social responsibility. Some public opinion polls in the
1960s and 1970s in United States have left businessman disenchanted.

These polls have revealed that the businessman is viewed as an individual who
does not cares for others, who ignored social problems, who preys upon the
population, who exploits labor, and who is a selfish money grabber. On the other
hand, until these opinions were unveiled, the businessman in America believed that
others viewed him as he viewed himself, as a practical, down-to-earth,
hardworking, broadminded, progressive, interesting and a competitive free
enterpriser. He believed that the society looked up at him as a self sacrificing
community leader, pillar of society, generous to a fault, great supporter of
education, patron of the arts, in short, the salt of the earth. Indeed, the businessman
in the pre-poll days thought of himself as a happy mix of Plato, Gandhi, and
Churchill.

What Is Corporate Social Responsibility?

Corporate social responsibility (CSR) is a form of business self-regulation to


incorporate social and environmental concerns. It represents a business model that
adheres to laws, ethical standards, and international norms. As part of the business
model, businesses have to take into account the impact of their activities on the
environment, employees, communities, stakeholders, and other members of the
public. In short, CSR represents the deliberate inclusion of the publics interest in a
business decision making to ensure a triple bottom line that considers the planet,
people, and profits. In general, CSR involves some kind of standardized reporting
that allows the business to collect information on how it is making progress on
various fronts.

Businesses that engage in CSR typically focus on some or all of the following:
Environment: This requires a look at the environmental impacts of
products and services, as well as what the business does outside the
company to improve the environment. Employees: Its important to ensure
that all employees are cared for adequately. Businesses usually focus on
workplace conditions, benefits, living wages, and training.
Communities: Engaging the surrounding communities is an important part
of not just creating good human capital that can serve the business, but also
securing a reputation that can further establish the business. Regulations:
Respecting regulations to the fullest and often exceeding them is part of
being socially responsible. Crisis Preparedness: Being ready to address
business crises and ensure safety for employees and surrounding
communities is critical. Having plans ready and tried are important in
ensuring minimal losses during times of crises.

Meaning and Definition of CSR


CSR is about how companies manage the business processes to produce an overall
positive impact on society. Take the following illustration:
Companies need to answer to two aspects of their operations.
1. The quality of their management - both in terms of people and processes (the
inner circle).
2. The nature and quantity of their impact on society in the various areas.
Outside stakeholders are taking an increasing interest in the activity of the
company. Most look to the outer circle - what the company has actually
done, good or bad, in terms of its products and services, in terms of its
impact on the environment and on local communities, or in how it treats and
develops its workforce. Out of the various stakeholders, it is financial
analysts who are predominantly focused - as well as past

Financial performance- on quality of management as an indicator of likely future


performance.

Other definitions The World Business Council for Sustainable Development in its
publication "Making Good Business Sense" by Lord Holmes and Richard Watts
used the following definition. "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" The same report gave some
evidence of the different perceptions of what this should mean from a number of
different societies across the world.
Definitions as different as "CSR is about capacity building for sustainable
livelihoods. It respects cultural differences and finds the business opportunities in
building the skills of employees, the community and the government" from Ghana,
through to "CSR is about business giving back to society" from the Philippines.
7

On the other hand, the European Commission hedges its bets with two definitions
wrapped into one: "A concept whereby companies decide voluntarily to contribute
to a better society and a cleaner environment. A concept whereby companies
integrate social and environmental concerns in their business operations and in
their interaction with their stakeholders on a voluntary basis".

Need for Corporate Social Responsibility

The brands that will be big in the future will be those that tap into the social
changes that are taking place. - Sir Michael Perry, Chairman of Centrica PLC
There are many situations where social responsibility of a business becomes
necessary. Few of these situations which show the need for Corporate Social
Responsibility are discussed below:
1. A societal approach to business is the contemporary business philosophy,
which demands business organizations to be responsive to the social
problems.
9

2. As a result of globalization of business, global companies and MNCs


operate in a big way in their host countries. In order to establish a good
corporate image, they include social responsibility as a corporate objective.
Indigenous companies are forced to follow suit for maintaining their
corporate identity.
3. In the terms and conditions of collaborations agreements, very often, social
welfare terms are included which necessitates the collaborating company to
take up social responsibility of business.

4. On the basis of legal provisions, companies have to concentrate on social


problems. For example an industrial organization in India must obtain a
certification from Pollution Control Board.
5. Corporate donations of social welfare projects of approved NGOs are
exempted from income tax in India.

6. An organizations commitment to social responsibility creates a good


corporate image, and there by a better business environment.
10

7. Social responsibility of business enables the organization to improve its


product positioning and thereby improve its market share.
8. Very often situations demand due to natural calamities, accidents and so on.
For example, gas leak at the Union Carbide plant in Bhopal, wherein the
company had to monetarily compensate through medical treatment.

11

12

Approach to CSR
Triple Bottom Line Concept (TBL)
Triple Bottom Line Concept (TBL) was introduced by Ellington in 1999. Triple
bottom line is a unique approach to community development that integrates
environmental stewardship, sustainable development and social justice. The triple
bottom line is made up of "social, economic and environmental" the "people,
planet, profit" phrase was coined for shell by sustainability.

13

Triple Bottom Line efforts are as varied as the organizations and communities in
our state wide network. This approach is flexible and innovative, creating new
economies that protect, enhance and restore natural, cultural, historic and
community resources.
The Triple Bottom Line standards for:
Economic (Profit).
Social (People).
Environment (Planet).
Economic (Profit):
This is more about making a honest profit than raking a profit at any cost - it must
be made in harmony with the other two principles of People and Planet. While
many major corporations used to sneer at the idea of a Triple Bottom Line
reporting system. With a positive flow on effect to their suppliers. because supply
chains are also accountable to the overall impact of a company.
A narrow concept of economic sustainability focuses on the economic
performance of the corporation itself: the responsibility of management is develop,
produce and market those products that secure long-term economic performance
for the company. This includes a focus on strategies that lead to a long term rise in
share price, revenues and market share rather than short term explosions of profits
at the expense of long term viability.

Social (People) :
This is also known as Human Capital. It really just means treating your employees
right, but furthermore also the community where your business operates. In this
part of the Triple Bottom Line model, business not only ensures a fair day's work
for a fair day's pay; but also plods back some of its gains into the surrounding
community through sponsorships, donation or projects that go towards the
common good.
14

The key issue in the social perspective of sustainability is that of social justice
.Despite the impressive advances in standards of living that many of us have
enjoyed; there are growing disparities of income and wealth within many
countries. In a more just an equitable world, living standards will lead to more
economic prosperity.

15

Environment (Planet):
This is Natural Capital. A business will strive to minimize its ecological impact in
all areas - from sourcing raw materials, to production processes, to shipping and
administration. It's a "cradle to grave" approach and in some cases "cradle to
cradle" i.e. taking some responsibility for goods after they've been sold - for
example, offering a recycling or take back program.
The importance of Triple Bottom Line reports are:

Economic gains: Jobs created, Small businesses started or expanded,


environmentally responsible industries engaged, Poverty reduced or
alleviated.
Social improvements: people of collar or low-wealth engaged; educational
systems improved; racism dismantled; power shared.
Environmental stewardship: land/water resources protected; working lands
locally-owned; water quality improved; native plants and herbs propagated.

16

Importance of CSR

17

CSR is an important business strategy because, wherever possible, consumers want


to buy products from companies they trust; suppliers want to form business
partnerships with companies they can rely on; employees want to work for
companies they respect; and NGOs, increasingly, want to work together with
companies seeking feasible solutions and innovations in areas of common concern.
Satisfying each of these stakeholder groups allows companies to maximize their
commitment to another important stakeholder group their investors, who benefit
most when the needs of these other stakeholder groups are being met: I honestly
believe that the winning companies of this century will be those who prove with
their actions that they can be profitable and increase social valuecompanies that
both do well and do good.Increasingly, shareowners, customers, partners and
employees are going to vote with their feetrewarding those companies that fuel
social change through business. This is simply the new reality of businessone
that we should and must embrace. Carly Fiorina Chairman and Chief Executive
Officer Hewlett Packard Company
The businesses most likely to succeed in the globalizing world will be those best
able to combine the often conflicting interests of its multiple stakeholders, and
incorporate a wider spectrum of opinions and values within the decision-making
process and objectives of the organization. Lifestyle brand firms, in particular,
need to live the ideals they convey to their consumers:
CSR is increasingly crucial to maintaining success in businessby providing a
corporate strategy around which the company can rally, but also by giving meaning
and direction to day to day operations.

18

CSR and Small Business

Practical CSR initiatives for Small Business


Drawing on experiences of small businesses implementing CSR, here is a list of 36
practical CSR activities a small business can do. These initiatives are likely to be
of interest to personnel in larger firms as well.

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Improving the environment


Reduce consumption of energy, water and other natural resources, and
emissions of hazardous substances.
Use or produce recycled and recyclable materials; increase the durability of
products and minimize packaging through effective design (reduce, reuse
and recycle).
Train staff so that they look for additional ways to reduce the firm's
environmental footprint.
Offset carbon emissions with equivalent carbon-fixing initiatives, such as
tree planting.
Join or start a local green business club that can help local firms access
conservation grants and expertise for reducing waste, water use and energy.
Consider using video-conferencing to meet a potential supplier or customer
rather than always physically travelling to meetings.
Establish an environmental management system with objectives and
procedures for evaluating progress, minimizing negative impacts and
transferring good practices.

20

Improving human resource management practices


Establish policies to ensure the health and safety of all employees and make
the policies known to employees. Involve employees in business decisions
that affect them and will improve the work environment.
Consult employees on how to handle a downturn in business (e.g. offer the
option of all staff taking pay cuts or reduced hours instead of layoffs).
When layoffs or closures are unavoidable, offer outplacement services,
retraining and severance benefits.
Provide training opportunities and mentoring to maximize promotion from
within the organization.
21

Extend training to life management, retirement planning and care of


dependents.
Be open to job splitting, flextime and other work-life balance policies.
Share training and human resources programs with other local small
businesses.
Consider supporting daycare for children or elderly dependants.
Encourage a healthy workplace (e.g. implement a smoking ban or drug and
alcohol abuse support program).
Provide exercise facilities or offer subsidized membership at a local gym.
Promoting diversity and human rights
Make sure that all staff know that there are explicit policies against
discrimination in hiring, salary, promotion, training or termination of any
employee on the basis of gender, race, age, ethnicity, disability, sexual
orientation or religion.
Do not tolerate jokes or behavior in the workplace that insult employees on
the basis of gender, race, age, ethnicity, disability, sexual orientation or
religion.
When hiring, think creatively about where to advertise the job and whether
there are any local employability schemes (e.g. run by a local council or
employer) to help find work for people who are homeless or disabled.
Pay comparable wages for comparable work.
Support organizations that promote fair trade and human rights compliance.
Check where products are manufactured and look into any associated human
rights concerns.

22

Helping the community


Encourage employee volunteering in the community and with financial
contributions and help in kind.
Make some of the business's product or services available free or at cost to
charities and community groups.
Look for opportunities to make surplus product and redundant equipment
available to local schools, charities and community groups.
Buy from local suppliers and strive to hire locally.
Offer quality work experience for students (job shadowing).
Collaborate with local teachers to make the business the subject of a school
project.
Use the business's experience to help a local school, charity or community
group become more efficient and entrepreneurial.
Use some of the marketing budget to associate the business or brand with a
social cause.
23

In general
Develop new environmental and social products and services; innovation
brings competitive advantage.
Share CSR lessons learned with business customers, business neighbors and
fellow members of a trade association or business organization.
Explain the environmental, social and economic performance of the business
to stakeholders and consider their ideas and views as the business develops.
Commit to an external code or standard or a set of business principles that
provides a framework to measure progress on environmental, and social and
community issues.

24

Companies Bill passed with mandate on CSR


spending
Fri Feb 22 2013,

Lok Sabha on Tuesday voted to replace India's 56-year-old omnibus Companies


Act with the Companies Bill, 2011, that brings the management of the corporate
sector in line with global norms. It introduces concepts like responsible selfregulation with adequate disclosure and accountability, ushers in enhanced
shareholders' participation and provides for a single forum to approve mergers and
acquisitions.
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The Bill, which will now travel to the Rajya Sabha, has said companies must
"ensure" they spend at least 2 per cent of their net profit towards corporate social
responsibility (CSR) activities, a move that has drawn both criticism and
appreciation from the stakeholders but one that promises to change the way CSR
has been perceived so far. Corporate affairs minister Sachin Pilot said
CSR would be mandatory for companies like their tax liabilities. "Severity of law
is not deterrent, it is surety which is deterrent," he said, adding the companies may
engage in promoting education, reducing child mortality and any other matter they
feel can contribute for social welfare.
The Bill has gone through several versions since 2008 when it was first introduced.
It includes learnings from the Satyam fiasco in its investor protection clauses. The
government has also introduced the concept of class action suit wherein depositors
or a unit of shareholders can collectively sue the company committing fraud. The
Bill will also provide the serious fraud investigation office (SFIO) with powers to
conduct searches and seizures on the premise of a fraudulent company. While
steering the Bill, Pilot said when Companies Act, 1956, was promulgated there
were only 30,000 companies in the country while in 2012, there are 8,50,000 firms
in India.
Apart from introducing concepts like one Person Company and making
independent directors and company auditors more accountable, the Bill also seeks
to keep a tab on remunerations for the board of directors and other executives of
the companies to protect the interest of shareholders and workmen. Disapproving
of "vulgar display of wealth", Pilot said the law provides that remuneration of a
director of a company should not be more than 5 per cent of the net profit.
The new legislation, which is a much shorter than the earlier one has also
harmonized the company law framework with sect oral regulations. It has 480
sections compared to over 600 sections in the 1956 Act.

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In line with global norms


The Bill, which will now travel to the Rajya Sabha, says companies must "ensure"
they spend at least 2 per cent of their net profit towards CSR activities
Corporate affairs minister Sachin Pilot said CSR would be mandatory for
companies like their tax liabilities
The government has introduced the concept of class action suit wherein depositors
or a unit of shareholders can sue the firm committing fraud.

27

Corporate social responsibility isn't charity


but survival issue: CEC

CEC S Y Qureshi came down heavily on corporate India regarding CSR, saying
that "CSR is not charity but a question of your very survival".
The author has posted comments on this article PTI | Jun 13, 2011, 09.25PM IST
28

MUMBAI: Chief Election Commissioner SY Qureshi came down heavily on


corporate India regarding corporate social responsibility (CSR), saying that "CSR
is not charity but a question of your very survival".
"We need a Warren Buffet and Bill and Melinda Gates to teach our corporate on
the need for CSR. What you do is not CSR but corporate social compulsion,"
Qureshi told a meet on CSR organized by BOMBAY CHAMBER OF
COMMERCE & INDUSTRY. "When it comes to charity, you corporate do not
follow its basic principle ('the left hand should not know what the right hand is
doing'). On the contrary, you want huge publicity even if you build a public toilet,"
the CEC said.

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Measure for applying Corporate Social


Responsibility
Sustainability reporting it is recommended that every company should publish a
separate Corporate Sustainability Report (as per the Global Reporting Initiative
(GRI) framework) along with their Annual Report. At the very least, every
company must include a Corporate Sustainability section in its Annual Report
(similar to the mandatory section on Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings and Outgo).
CSR philosophy to be defined and articulated Every company must clearly define
its own CSR philosophy and objectives, stating which issues it intends working on
or contributing to. It is recommended that a company first takes up areas that
directly concern its business processes, and thereafter any other related or
unrelated issues. These can also yield strategic benefits to the company.
Minimum annual CSR expenditure Every company must spend a minimum of
0.2% of its annual income on CSR activities. The CSR spending of a company
should not be linked to the profit made by the company because this would vary
from year to year and the CSR activities would thus not be consistently
maintained. The scale of operations of a company and its impact is connected with
its sales, and not with its profits. The larger the company, the greater is the damage
it is doing to the environment.
Conversely, the greater is the company's ability to do well. Protection and
restoration of the environment Every company must be engaged in CSR activities
that minimize its harm to the environment, and which help restore damage done to
the environment because of the company. For example, all companies should use
energy-efficient technologies for their factories and offices, and adopt rainwater
harvesting irrespective of the production process they are engaged in.

30

Employment for marginalized groups every company should provide inclusive


employment opportunities and include the physically-challenged and marginalized
groups in their workforce. The number of employment opportunities offered to
such groups should be stated in the Annual Reports as is done by Public Sector
Undertakings.
Local community development It is recommended that a company first undertakes
projects in the places where it functions, and helps those local communities and
environments that are affected by its work. Use of core competence every company
should use its core competence to benefit its stakeholders and society.
For instance, banks can use their expertise to identify and counsel debtors who are
likely to run into financial trouble Extending profile and area of businesses A
company should attempt to stretch its business beyond its existing profile and into
areas where it does not normally work so as to reach out to under-served groups
and populations. While this may sometimes mean smaller profit margins or
marginal losses for the company, it will invariably result in valuable business
learning's as well as effective CSR for the company.
Developing internal CSR implementation systems A company may choose to
develop an in-house CSR team or division that undertakes the CSR activities for
the company. This is desirable as it leads to greater sensitization and awareness
within the company about it's processes, responsibilities, role, etc. and leads to the
internalization of the company's CSR philosophy. Instead of contributing to the
trust of the CEO or the promoter family, a company should set up its own
trust/foundation as a matter of proper business ethics.
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It is recommended that a company set up a committee that includes an external


Director, an NGO and local stakeholders for selecting, monitoring and evaluating
its CSR activities.
Focused CSR activities for greater impact it is recommended that a company
identifies a few issues for its CSR activities and works on these areas for a
sustained period of time so that measurable results and improvements can be
achieved, rather than undertaking or supporting several small initiatives across
several areas thereby reducing effective impact.

32

What is the relationship between CSR and


the law?
There is a close relationship between CSR and the law. The main instrument
governments use to address a firm's social, environmental and economic impacts is
the law. For example, in Canada there is a wide range of laws at the federal,
provincial, territorial and local levels of government pertaining to consumers,
workers, health and safety, human rights and environmental protection, bribery and
corruption, corporate governance and taxation. A firm's corporate social
responsibility approach should ensure compliance with the social, environmental
and economic laws already in place. The CSR activities of firms can be seen as a
proactive method of addressing potentially problematic conduct before it attracts
legal attention.

33

CSR Reporting Frameworks


Some of the reporting guidelines or standard for social accounting, auditing and
reporting are:

ISO 26000
Purpose- ISO 26000 provides guidance on how businesses and organizations
can operate in a socially responsible way. This means acting in an ethical and
transparent way that contributes to the health and welfare of society.

34

The AA1000 Standards


Developed by- The Institute of Social and Ethical Accountability.
Purpose- Accountabilitys AA1000 series are principles-based standards to
help organizations become more accountable, responsible and sustainable. They
address issues affecting governance, business models and organizational strategy,
as well as providing operational guidance on sustainability assurance and
stakeholder engagement. The AA1000 standards are designed for the integrated
thinking required by the low carbon and green economy, and support integrated
reporting and assurance. This is based on John Ellingtons Triple Bottom Line
(3BL) reporting.

35

Social Accountability SA 8000


Initiated by- Council on Economic priority Accreditation Agency (CEPAA)
Purpose- It measures the performance of companies in eight areas important
to social accountability in the workplace: child labor, forced labor, health and
safety, free association and collective bargaining, discrimination, disciplinary
practices, working hours and compensation.

The Good Corporation


Developed by- The Institute of Business ethics.
Purpose- this covers fairness to employees, suppliers, customers and
providers of finance contribution to the community; and protection to the
environment.

The United Nations Global Compact


Purpose- This requires companies to communicate on their progress and to
describe the companys implementation of the compacts ten Universal principles.

Global Reporting initiative


Formed by- United States based non-profits organization and TELUS
Institute, with the support of the United Nations Environment Programme (UNEP)
Purpose- this report is an organizational report that gives information about
economic, environmental, social and governance performance.

36

Recent news on CSR


March 27, 2013:
After the passing of the Companies Bill 2012, it has become mandatory for
corporate to adopt Corporate Social Responsibility (CSR). What was once
voluntary has become law.
A company with a net worth of Rs 500 crore or more, a turnover of Rs 1,000 crore
or more or a net profit of Rs 5 crore or more in a financial year shall constitute a
corporate social responsibility (CSR) committee of the board, consisting of three or
more directors, of which at least one shall be an independent director.
Before the Companies Bill was passed, CSR was in the nature of voluntary actions
that businesses could take. It was like going the extra mile. But the provisions of
the Bill, particularly Section 135, read with Schedule VII, show that the
Government has adopted an inclusive growth strategy to implement CSR through
corporate.

37

While mandating CSR spends for the corporate, the Government has also ensured
that such spending is monitored in the form of reporting and disclosure.
Business Responsibility
The Minister of State for Corporate Affairs, Sachin Pilot, who pushed the issue in
Parliament after the Bill was finalized by the Cabinet and approved way back in
2009, has said that the provisions of corporate governance and CSR in the
Companies Bill are based on UN principles and cover human rights, labor
standards, environment and even corruption.
The intention of the Bill is to eradicate extreme hunger and poverty, promote
education, enhance vocational skills and empower women.

Improved bottom-line

38

The new Bill says larger corporate should contribute to society, especially the
communities in which they operate, by setting aside 2 per cent of their net profit
towards CSR. Since CSR spending will be tax-free, there is an opportunity for
Indian corporate to embrace a few large consensual projects that could make social
commitments visible to all.
The need for CSR has its roots in the fundamental moral thought what and
how much has been given back over and above what you have taken from society.
CSR is often referred to as business responsibility in other words, an
organizations action on environmental, ethical, social and economic issues. It was
soon realized that promoting a responsible way of doing business actually
improved the bottom-line. Now, demonstrating a wider sense of responsibility has
come to be expected when bidding for major contracts.
Section 135 of the Companies Bill provides that the functions of the CSR
committee shall be to formulate and recommend a CSR Policy which shall indicate
the activities to be undertaken by the company as specified in Schedule VII of the
Bill.
The CSR committee shall also deliberate on the amount to be incurred on activities
mentioned in the CSR Policy. It shall also monitor the CSR Policy from time to
time.
The companys board, after receiving the panels recommendations, will adopt a
CSR Policy and ensure that the activities it mandates are undertaken.
The board must ensure that the company should spend for CSR, every financial
year, at least 2 per cent of the firms average net profits recorded in the three
immediately preceding financial years. The company is expected to give
preference to the areas around which it operates in spending the amount earmarked
for CSR activities.

39

If the company fails to spend such an amount, the Board shall, in its report specify
the reasons for not doing so.
The company shall not select a project that earns profit for the company, but rather
take on work that benefits society.
The new company law has made it mandatory for all companies, listed or unlisted,
to have independent directors forming one-third of the board.
INDEPENDENT DIRECTORS
These independent, or non-executive, directors are those who have no material or
pecuniary relationship with the company or related persons, except for sitting fees.
In the US, independent directors make up 66 per cent of all boards. In India .the
expression independent directors means directors who, apart from receiving
director's remuneration, have no other material pecuniary relationship or
transactions with the company, its promoters, its management or its subsidiaries,
which in the judgment of the board, may affect the independent judgment of the
directors.
A large number of people working in NGOs or running an NGO will be benefited
when these companies appoint them as independent directors to run their CSR
initiatives.
Socially responsible business houses, such as the Tatas and Birlas have, for
decades, contributed immensely through their various charitable and welfare
Trusts.
Such Trusts have been the guiding lights for smaller entrepreneurs who fund
various small social causes in their areas of operation or in their home towns and
villages.

40

For some, the interface between CSR and the law might seem like a contradiction.
Compliance could seem forced, as if the expenditure is an additional cost of being
in business. Yet, there is an opportunity for responsible and concerned boards to
improve relationship, enhance a reputation and build a corporate brand. A synergy
between CSR and the law will eventually help.

Business social responsibility should not be coerced; it is a voluntary decision


that the entrepreneurial leadership of every company must make on its own.
John Mackey

41

42

JAIPUR RUGS PROFILE

JAIPUR RUGS is India's largest manufacturer and exporter of hand knotted rugs,
known globally as a leader in hand-woven rugs category. The artistic designs,
tantalizing color combinations and the comfort feel of our products make
JAIPUR's rugs the first choice around the world.

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Over the years, JAIPUR has continued to carry forward the rich heritage of designs
into homes in more than 40 countries around the world.
They produce an exclusive product range of rugs, pillows and poufs in numerous
fabrics with atheist colors and sophisticated textures. With diversity in its
collection and categories JAIPUR facilitates its customers with explicit selection of
traditional to transitional tranquil surfaces expressed in leveled piles and flat
weaves.
An expression to the visions of its founder, Mr. NK Chaudhary, JAIPUR Rugs is a
product of love and humble being, which is produced by its extended family of
thousands of artisans spread in different states of India. Empowering the grass
roots, by providing them with sustainable livelihoods by introducing them to the
carpet value chain, has not just given value to the business of Jaipur Rugs but has
also extended its horizon of developing the society all together.
It has a network of around 40,000 skilled artisans in rural India. They have linked
the grassroots to the most elite and luxurious icons of the world. The business
model of JAIPUR RUGS has woven happiness and smile into the life of rural
artisans by providing them sustainable livelihood. With its base of operations in
Jaipur city, also known as Pink City of India, the brand takes the artistic
craftsmanship of hand-woven rugs to North America through its unit in Atlanta,
Georgia (USA) and representatives across USA and Canada.

44

Jaipur Socio-Economic Business Model

Fast Facts
40,000 home-based artisans spread across 700 villages in 7 states of India
80% of its artisans are women.

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7,000 looms create more than 100,000 rugs per year.


3,000 wool spinners before working for JAIPUR, most of them lived below
the poverty line. JAIPUR is committed to bettering the lives of artisans and
their families.
80% of JAIPUR artisans are women and live in disadvantaged communities
of rural India
Customers in 40 countries across the world.

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Chronicle from the founder


I arrived late to the journey and was thrown right into our field visit to Jaipur Rugs,
the largest exporter in India of hand-knotted rugs. On the 2-hour journey to one of
the villages that Jaipur Rugs works in, we were given an introduction to the work
of Jaipur Rugs, and then had the unique opportunity to hear from the founder, NK
Chaudhary, about his 30-year journey of building the organization. It all started
with his realization that carpet weavers were being exploited by the traditional
system.

47

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Year-1978

In 1978 Mr. Nand Kishore Chaudhary stated his carpet business with just 2 looms
and 9 weavers in Rajasthan. It was a very small set up. With constituted efforts,
determined hard work and dedication led to expansion of his business from 2 to 10
looms within three years.

49

1986 Direct export began

Mr. N K Chaudhary started exporting carpets on his own. Now he did not had to
depend on other exporters in getting work orders and supplying finished carpets to
them.

50

1989 Production base set up in Gujarat State

In the joint business with his brother, Chaudhary expanded production from
Rajasthan to Gujarat. In this new place he faced many challenges while working
with Tribal, SC/ ST and other backward classes. People abused him and made fun
of him for working with the untouchables, yet he continued working amidst all
challenges. Chaudhary stayed and ate with the tribal people, understood them and
their lifestyle and brought their traditional designs on the carpet.

51

1999 Independent firm- Jaipur Carpets

An independent firm- Jaipur Carpets was established in Rajasthan, India.


Alongside, another firm with the name of Jaipur Rugs Incorporated (JRI) was
setup in USA, for global distribution of rugs. The core purpose of JRI was only
sales, targeting the US market, selling out the production done in India by Jaipur
Carpets. Though the initial years, didnt come easy as Chaudhary was rooted at the
grassroots with the weavers and had minimum knowledge of the business
practices.

52

Year-2000
Artisans network crosses 10000- Jaipur Carpets expanded its business and along
with it grew the chain of its weavers working in small villages of Rajasthan and the
tribal area of Gujarat.
2001- Asha Chaudhary joined as CEO
Mr. Chaudharys eldest daughter Asha Chaudhary joined the business after
completing her graduation from Emory University, Atlanta, USA. She leant and
understood the business, and brought about the necessary changes in its
functioning according to the market. Her in-depth knowledge about marketing and
sales and leadership gave a new boost to the business of Jaipur Rugs. Few years
later, she moved to USA to head JRI, as its CEO, and started taking care of all US
Sales and other operations.

53

2004 Jaipur Rugs Foundation (JRF) established


Jaipur Rugs Foundation (JRF) is a non-profit-organization established under the
Rajasthan Public Trust Act. JRF was setup to value artisans involved with carpet
value chain, to ensure their functional skill up-gradation as well as to train new
people in carpet weaving skill , thus providing them with a sustainable livelihood
option. This same year, Archana Chaudhary, (Mr. Chaudharys second daughter)
joined the business as COO and today works along with Ms. Asha Chaudhary,
taking care of the business operations at Jaipur Rugs Incorporated.

54

Year-2006 Yogesh Chaudhary & Kavita Chaudhary joined the business

Major Additions took place- Jaipur Carpets was renamed as Jaipur Rugs Company
Private Limited (JRCPL). And Chaudharys eldest son, Yogesh Chaudhary and
youngest daughter, Kavita Chaudhary joined the business. Yogesh Chaudhary
today is the director of JRCPL. He takes care of the direct sales and marketing of
JRCPL. He has added a whole new IT infrastructure to meet the international
standards. The cutting edge technology introduced by him has elevated the work
culture of the company altogether.
Kavita Chaudhary heads the Design Department of JRCPL. With her entry, she has
added a whole new catalog of designs and colors to the palate of JAIPUR. Her
innovative ideas and design sense has instilled a new spirit into the design of the
carpets. Her research and experiments with the needs of customers has colored the
carpets of Jaipur to stand as pioneer in the carpet industry.

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2007 1 million square feet production of hand knotted carpets


With time, the business grew and so did the network and production, hitting over 1
million square feet! It was a moment of big achievement and celebration for the
company, having grown to many states of India, majorly covering Rajasthan,
Gujarat and Uttar Pradesh, yielding quality products in varied qualities, textures
and expressive colors.

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2008- Boom in JAIPUR family as network growth hits to over 40 thousand


artisans
Continuous learning resulted in steady growth, extending the Jaipur Rugs family to
a number of over 40000 artisans, majority of which are women. We are reaching
out to the remote areas with focus on the needy and helping those who are
struggling within the vicious cycle of poverty.

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2009 JAIPUR case study appears in C. K. Prahalads (Padma Bhushan


Award winner) 5th edition of The Fortune at the Bottom of the Pyramid

Excellence
Award
by
the
Institute
of
Economic
Studies
'Best SME for CSR ' by Business Today & Yes Bank Year 2009,
added valuable recognition to the company, moreover because of the case-study
done by Mr. Chaudhary on Jaipur Rugs, which was published in his book The
Fortune at the Bottom of the Pyramid. His study brought great appreciation to the
company, to Mr. Chaudhary and his business Model. Mr. C.K. Prahalad recognizes
Jaipur Rugs as one which is able to develop the grassroots and further connect the
rural poor to the markets of the rich, like the USA. Other than this, there were other
added recognitions and awards majorly the Excellence Award by the Institute of
Economic Studies for the business functioning and growth as well as the 'Best
SME for CSR ' by Business Today & Yes Bank, for the benefit gained by the poor
through this business.

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Awards

1994 - Carpet Export Promotion Council of India gave the Gold Trophy
Award to Mr. N K Chaudhary

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2003 - State Award for Export Excellence by the Government of Rajasthan

60

2009 - American Graphic Design Award by the Graphic design USA

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2010 - Ernst & Young Entrepreneur of the Year Award 2010-Start Up' by
Ernst & Young, India
Indian Achievers Award For Business Excellence by Indian Achievers forum.
With growing recognition came a series of awards. Mr. NKChaudhary was
acknowledged with the global business award of Ernst & Young Entrepreneur of
the Year-Start Up 2010. This award commemorates and encourages the most
resilient of Indian entrepreneurs. NKCs innovative thinking and entrepreneurial
success became synonymous of his victory. Jaipur Rugs attained the Indian
Achievers Award for Business Excellence, bestowed by Indian Achievers Forum
for corporate social responsibilities.

62

2011- Villgro Social Enterprise Award 2011' by Villgro Innovations


Foundation India
As recognition of path breaking work in the rural sector in India, JAIPUR received
the Villgro Social Enterprise Award 2011, during the social entrepreneurship Unconvention conference, for creating a global supply chain that integrates more than
40,000 carpet artisans from 600 remote villages in India. This was to recognize and
felicitate outstanding individuals, enterprises and institutions in the Innovation &
Social Entrepreneurship eco-system, for their contribution in facilitating a
sustainable change in society.

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2011 - India Pride Award

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2012 - Karmaveer Puraskaar 2012 by the The CtrlS - iCONGO


Bestowed upon Mr. N.K Chaudhary as Real Wealth Creator for the communities,
he was awarded with the prestigious Karmaveer Puraskaar 2012. As a fruit of all
efforts, he has been named as Gandhi of carpet industry since many artisans in
the villages are weaving carpet with their hands on looms while sitting in their own
homes. This is what Gandhi had dreamt and Chaudhary made it come true.

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2013- TOI Social Impact Awards under the Livelihood- Corporate Category
Jaipur Rugs was awarded with the TOI Social Impact Awards under the
Livelihood- Corporate Category, for providing livelihood opportunities for people
living in remote distant areas mostly under the poverty belt. The Times of IndiaSocial Impact Awards are an attempt to honor and publish the activities of those
who are making constant efforts to bring about a change in the society on large
scale, by providing the essential aids like education, healthcare and decent
livelihoods.

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Certifications
STAR EXPORT HOUSE

Jaipur Rugs Company Private Limited was conferred with STAR EXPORT
HOUSE. This is recognition by the Director General Foreign Trade, Ministry of
Commerce, Government of India for stupendous export performance over the
years, its continual growth in turnover and earnings from export of goods. The star
export house recognition is given to organizations for continual growth and
stability in the export performance over the years in efficient management system.

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ISO 14001: 2004

ISO 14001 is an internationally accepted standard that sets out how you can go
about putting in place an effective Environmental Management System (EMS).
The standard is designed to address the delicate balance between maintaining
profitability and reducing the negative environmental impact. This award is to
ensure compliance with environmental legislation and reduces the risk of penalties
and possible litigation.

D&B

Jaipur Rugs Company private limited received the DUN & BRADSTREET
certification.

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ISO 9001:2008

ISO 9001:2008 certifies quality and Jaipur rugs is a certified company for its
quality production standards. The reason of our progressive growth is our range of
quality products which are accepted globally. A quality management team to
supervise the quality checkups by the time of production and before shipment of
the products. We always strive to provide our clients quality products and get the
maximum customer satisfaction by providing world class customer service.

SA 8000: 2008

SA 8000: 2008 Jaipur Rugs is the first company in India with Design,
Development, Manufacturing and Export of Handmade Carpets and Floor
Coverings scope and 11th carpet company to receive SA 8000 certification in
India. This certification is given as recognition of its functioning with 40000
people from the remote distant areas, who are working well within governmental
norms and in an efficient management system.

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SA 8000 is an internationally recognized standard based on International Labor


Organization (ILO) conventions and the United Nations' Universal Declaration of
Human Rights and the Convention on Rights of the child.

RUGMARK

Jaipur Rugs Company, as a socially responsible company, strictly ensures that no


child labor is involved in any process of our carpet manufacturing. As a ChildLabor-Free Rug Mark Licensee, Jaipur Rugs binds itself to the contract with Rug
Mark Foundation to produce rugs without involvement of child labor, to register all
looms with the Rug Mark Foundation, and to allow access to looms for
unannounced inspectors.

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Achieving Scale While Retaining Your Value


SystemJeremy Higgs on Jaipur Rugs
December 05th 2012 13:12
One of the leading manufacturers of handmade carpets, Jaipur Rugs is changing
the carpeting industry from one thats exploitative to one that improves the lives of
its weavers. All this while providing the highest quality products.
Jeremy Higgs is Executive Officer at the Network of Organizations Working for
People with Disabilities, Pakistan (NOWPDP). Her experience spans from
renewable energy to serving as President of the Pakistan chapter of AIESEC.
We take leaders on transformational journeys to meet the pioneers who are
changing our world.

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Philosophy
Coming together is a beginning. Keeping together is progress. Working
together is success.
JAIPUR is a creation of love, dreams, aspirations, courage and one vision.
Growing with the society in ways that we could give back, it has evolved over the
years with compassion running into its essence. A foundation was established to
promote overall well fare of the artisans and their families. As a responsible
company, we work in a way that the community at large is at benefit.

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Largely, living the thoughts of its Founder, Mr. NK Chaudhary finding yourself,
through loosing yourself, a way to look at life where your acts represent you.
JAIPUR believes in giving in your soul to all that you do, you shall find out a new
being in you with your giving in to your work a complete true involvement
resulting into smiles of many - many artisans. Chosen the way to function its
business around the talents of the rural India- adding value to one such minute
handcraft- carpet weaving- JAIPUR is a continuous effort to build the skills of
such artisans and give recognition for them.
Embracing purity in its essence, from its roots to body, its a family of pure people,
filled with passion and empathy. With transparency running in its system, it values
commitment which is set to come from a disciplined momentum of life gained
from freedom of mind. JAIPUR strongly believes in giving love to its people,
society and its esteemed customers.

Vision : We look upon business not merely as a source of income or profit, but as
a way of life, as a medium for putting our talents to good use, while at the same
time exploring an opportunity to promote holistic community development.

Mission: "Service to the community" is our motto. Our company strives towards
this to make the society grow hand in hand with our own growth and prosperity.
We ensure that the skills of our weavers are matched by the needs of our
customers.

Organization: India (Jaipur Rugs Company Pvt. Ltd.), USA (Jaipur Rugs Inc.)
China (Jaipur Rugs Company)

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Infrastructure: Jaipur Rugs has the best of the infrastructures to match the
requirements to operate at the global level, to compete with the products and
support systems that are one of the best in the industry. Jaipur Rugs has been
regular in updating the infrastructure needs of its business at the most efficient
levels.

Jaipur Rugs Company Private Limited (JRCPL) encompasses a staff of 300


personnel's servicing 14 different departments. The head-office incorporates
professionals, both technical and non-technical for various field and office based
operations, like the IT executives, ERP supervisors, Operations and Human
Resource officials, the store managers and basic employees for finishing processes
of carpet. The company is equipped with latest software and hardware used in
various processes.

From 1978 to now they have grown from just 2 looms and 9 artisans to 40,000
artisans servicing over 7,000 looms. Majority of these artisans are illiterate women
from the most backward classes like the SC/ST/OBC/minority communities who
are residing in the remote villages in India. This network of weavers is maintained
closely by their branch offices in different states.

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Jaipur Rugs has its roots grounded in 5 different states being- Rajasthan, Gujarat,
Uttar Pradesh, Bihar and Madhya Pradesh. The weavers collectively give an annual
production of approximately 5 thousand million square feet, constituting of all
kinds of rugs namely, hand knotted, hand-tufted, hand-loom, punja weaves and flat
weaves. Ranging in various collections and categories, with a variety of textures
primarily silk, wool, polyester, nylon, cotton etc. the products undergo numerous
processes and manual labor. Alongside, two recent additional states being
Maharashtra and Jharkhand, where training processes have begun and will soon
start contributing to the actual production.

Jaipur Rugs have its carpets in the elite homes of over 40 different countries across
the worldwide. The USA is the major market of rugs where about 65% of its sales
are done. This is followed by Turkey, Canada, Mexico, Germany, Australia,
Russia, Spain, Italy, Romania etc, where its products are sold.

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Jaipur Rugs has an in-house team of Designers and developers working on creating
new designs as well as further facilitating the existing designs. Restructuring the
created designs in new sizes, or different colors at times even with different
materials, this kind of processing is done by experienced and talented professionals
with assistance of latest technologies of software and hardware. Printing of maps,
their instruction base as well as laminations along with many more functioning is
done at its design and development department.

JRCPL has a functioning team of IT executives, ERP supervisors and Internet


Marketing officials. These professionals carry out various operations. The ERP
Navigation software is functioning to enable a systematic functioning throughout
the manufacturing process. With this system, individuals can know about the exact
state and condition of one particular carpet, under process by which weaver of a
particular village. IT and internet marketing professionals take care of smooth
running of processes with an in-house team of developers servicing the website
and clients, at different stages with the catalog and other issues.

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Jaipur Rugs Foudation

Jaipur Rugs Foundation works on the principle of constantly improving the


lives of marginalized people.

An Overview
Jaipur Rugs Foundation (JRF) was established under the Rajasthan Public Trust
Act in the year 2004 by Mr. Nand Kishore Chaudhary, Founder of the JAIPUR
group. JRF is a non-profit organization that catalyzes sustainable livelihoods for
people engaged in the entire carpet value chain by empowering them to establish
collective enterprises through enhancing their artisanal and business skills. The
overall work mandate of JRF is to reach out to remote rural areas and establish
bonds with the undeserved communities, especially women, enabling them to start
weaving not just rugs but also their own lives.
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Its core focus of JRF is to provide skill building and skill up-gradation training to
those artisans who are associated with carpet weaving and thereby substantially
increase their income. Since most of the artisans involved are women, increased
income will make meaningful contributions in alleviating poverty. It facilitate
income generating opportunities at the door steps of artisans residing in the
remotest of the locations and forward & backward linkages with the aid of its
strategic partners.

Vision
The vision of JRF is to create a society where equality, justice and peace prevail
through socio-economic development opportunities for all.

Mission
The mission of JRF is to serve as a social innovator promoting the cause of artisans
by providing them with decent work opportunities and lead them towards their
socio-economic well-being.
Geographic Presence
With its head office in Jaipur, Rajasthan, India, Jaipur Rugs Foundation has its
operational presence in rural locations of five states of India: Gujarat, Rajasthan,
Uttar Pradesh, Bihar and Jharkhand. And functional planning involves spreading
its wings to Madhya Pradesh as well.

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Objectives
To enhance economic returns for artisans through global market linkages.
To connect artisans with the end customers, thus building relationships and
infusing human touch to the carpet value chain.

To link artisans with the initiatives undertaken by government, business and


civil society to promote socio-economic well-being of artisans.

To serve as a forum for artisans and enable them to put forward their cause
and fulfill their aspirations.
To innovate and develop equipments and process for easing out the working
of artisans.

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The basic approach taken by the foundation is


Identifying the rural areas by conducting several meetings by the mobilizes
to understand the area.
After identifying, then research is done to understand the livelihood
activities undertaken by the people of the area and identifying the
households that are willing to take the carpet weaving as their livelihood.
Identifying the talent and the potential of members by forming various selfhelp groups by conducting meetings and surveys.

Selection of the people who are capable


Training of the members is done to improve their carpet weaving skills, and induce
more sets by providing technological inputs by the company. Also, various welfare
activities in health, education, sanitation, and leadership and entrepreneurship
training are also provided.
At last, it provides global market linkages through Jaipur Rugs Inc. by providing
them competitive price.
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Integration with Business Strategy

82

Partnerships and Collaboration with NGOs


and Government and International
Organization
JRF has had a number of collaboration in the past for various interventions. Some
of the valued collaborations with JRF are:

The World Bank


Jaipur Rugs Company Private Ltd (JRCPL)
Punjab National Bank (PNB)
Rajasthan Other Backward Classes Finance & Development Corporation
Development Commissioner- Handicrafts Ministry of Textiles, Government of India
Tribal Development Department, Government of Gujarat
District Poverty Initiatives Program (DPIP), Government of Rajasthan
NABARD (National Bank for Agriculture and Rural Corporation)
NRDC (National Research Development Corporation)
Confederation of Indian Industry (CII)
Ministry of Panchayati Raj, Government of India
Small Industries Bank of India (SIDBI)
Department of Industries, (DIC) Government of Rajasthan
National and regional level handloom organizations
Weavers service centers
Regional level handloom weavers cooperative societies
Primary handloom weavers cooperative societies
National level training institutes for imparting managerial skills
Cooperative training institutes
Self-help groups in the Handlooms and related sector

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Founders Message

During more than 30 years of experience in an industry generally perceived as


exploitative, I have always worked to inspire and form a team that shares the same
passion: to make the life of poor in underprivileged communities in rural India
worth living.
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When we started laying the groundwork of Jaipur Rugs Foundation in 2004, we all
had the same dream: to take each rug crafting artisan by hand and prove them that
they can sustain a dignifying life. The team is now putting at work each day an
ancient principle that says Give a man a fish; feed him for a day. Teach a man to
fish; feed him for a lifetime. With one exception: we teach the women, mostly.

I believe that happiness comes from simplicity and dignity in life and that all
human beings have potential and desire to grow and develop themselves.
I learned that efforts to develop skills create poverty reducing synergies, provide
the artisans with the sense of dignity and increase their confidence in their own
potential.
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Still, the challenge of the world is to find sustainable ways to better the lives of
people living in extreme poverty. Our key is empowerment not charity: we offer
opportunities for artisans themselves to find a way out of poverty and bring
prosperity to their homes.
At Jaipur Rugs Foundation, we are a team of people that works to support rug
crafting artisans to gain a greater sense of ownership and become small
entrepreneurs.

My vision is to link our grassroots with the global buyers and create shared value
for both sides. JRF is the outcome of my long cherished goal of fostering socio
economic development of rural poor through collective action by multiple
stakeholders. It is our consistent endeavor to transform the core values like love,
empathy, commitment and conscience into our systems, processes and people so
that we always remain close to the weavers and the customers.
NK Chaudhry
(Founder)

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CSR Activities in Jaipur Rugs

Jaipur Rugs Foundation works on the principle of constantly


improving the lives of marginalized people.
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SOCIAL MOBILISATION IN JAIPUR


RUGS FOUNDATION

Jaipur Rugs Foundation, a corporate social responsibility of Jaipur Rugs Company


Private Limited aims to uplift the underprivileged and deprived communities
through carpet weaving was founded in 1999, with a mission to encourage
grassroots mobilization of weavers and to improve the welfare of the companys
weavers and their families. They connect them by making a global supply chain,
focusing on development of human skill sets and providing stable source of
incomes for rural men and women, and connecting them to international markets.
The company not only uses traditional weavers, but also teaches the people, who
do not have this skill. Raw materials are sourced from around the world, and
processed into rugs with traditional and new designs. Jaipur Rugs Foundation
establishes a profitable commercial connection between poor and rich. Jaipur Rugs
Foundation is driven by social values, by its commitment to provide competitive
wages to its workers, investment in their skill development training, access to
healthcare and education, giving loans to the contractors who are aspiring
entrepreneurs.

The foundation is based on the concept of 3Es- employment for the unemployed,
employability for the artisans and developing them as entrepreneurs. Jaipur Rugs
Foundation collaborates with the Panchayati Raj and local government bodies to
motivate the artisans to develop their capacity building, technical knowledge,
quality control and provide them with credit facilities.

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How social mobilization is designed and practiced:


There is a special post for mobilizer that conducts meetings with the villagers, to
mobilize and motivate them and is specially positioned for community
mobilization and formation of SHG. SHG is the main empowering tool at rural
level, to encourage, empower and sustaining them. To form a SHG, motivational
seminars and follow-up seminars are required. Motivational seminars help people
to interact with each other and also allow them to live in peace during training
period. It also inculcates enthusiasm and introduces and orients people towards the
art. It helps the weavers to jell with each other well and creation of awareness
about their specific roles. In motivational seminars, following points of discussion
are there:

Source of incomes
Per day earning
Existing issues
Introduction to SHG
Benefits of SHG
Benefits of carpet weaving
Awareness about health and education of its members

In mobilization phase, the artisans are mobilized in carpet enterprise groups. Each
group will collect savings and do inter- loaning also. They also meet once a month
to discuss their progress and also what they plan for the future. These activities
create a sense of belonging between them and also create a spirit of togetherness.
After some time, these groups can be registered as a producer company also.
After mobilized phase, the capacity building is carried out to enhance the skill set
of people, by focusing on carpet- weaving skills and technological up gradation.
The groups are trained through a series of skill training programs in design
development and improve production and productivity to increase earnings.

91

After capacity building, the focus is on providing adequate infrastructure as there is


no regular place for giving trainings to the artisans; management and control of
various processes, and storage, collection and distribution of produce in the area.
Hence not all the material can be stored and checked at the place itself. the
transportation expenses are borne by the artisans and the products arrive at the
companies without quality check. Thus there is a requirement to establish a
common facility center (CFC) in the cluster area comprising of production
collection & distribution center, cluster office, training center, library and primary
quality checking office from where various types of services can be delivered as
per requirements.
Artisans are not alert about the quality desired in the market; there is no
appropriate system of quality checking and quality control. Artisans are also not
interested in self checking, the advantages of quality management and fatalities of
quality unawareness. The Middlemen are not accountable for monitoring; they just
gather the product and deliver it to the next link in chain. If there are any losses
due to the lack of quality the amount will be deducted from the artisans wage. To
remove the concept of Thekedaar (contractor/middleman), first, there is cluster
activity in which every artisan is the owner of the Cluster work. Then, a team of
supervisors is formed through enterprise management training. This team will
guarantee the quality control and supervision in a systematic way. After the
products are guaranteed to be of higher quality, they are then exported by
providing market linkages with the export company, Jaipur Rugs Company.
Once the income will start through continued job work then the artist start to
understand the idea of supply cluster and producers company structure creation.
The base of the company will be an enterprise group governed by elected members
and all members of the cluster will put in a share in the company. Capacity
Building of the governing body will be JRFs duty. Registration of the company
will be done during the course. The cluster will be managed by JRF at first, but the
management will be transferred gradually to professionals chosen by artisans or the
artisans themselves.

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Education in JRF
Jaipur Rugs Foundation also organizes campaigns to create
education among rural weavers. Various motivational seminars
Jaipur Rugs Foundation to motivate the rural weavers and
participate in Pravesh Utsav, a programme conducted by
department during July in all government schools to enroll all
eligible in school.

awareness about
are conducted by
their children to
the government
children who are

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JRF is a firm believer of educating the mass on the whole. Literacy is necessity,
and JRF functions towards spreading awareness and providing knowledge. Other
than teaching the weavers about numerical and literal alphabetic knowledge, the
foundation draws attention upon other fundamental aspects of day to day life.
Concentrating mainly towards educating the females, continued sessions are taken
to teach the women how to read and write; at par letting them perform signatures
rather than thumb prints. Mobilizing them to be able to be able to use cell phones/
mobiles!

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Along with this, bringing consciousness about health issues, aspects of hygiene and
family living, about cleanliness and environment shaping. Talking upon issues like
family planning, monetary keepings, and life skills are another agenda upon the
JRF teachings.
Other than these necessities, JRF also touches upon building communication skills
and managerial aspects of the weavers, as the motto of Jaipur Rugs Foundation is
each artisan an entrepreneur.

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Alternative Education Program


The 'Alternative Education Program' (AEP) is meant to provide functional literacy
to illiterate artisans and the village community members. The initiative is a live
example of how buyers and customers can get connected to the artisans beyond
rugs. The ambit of this 'alternative education' is basic literacy and numeracy skills,
and developing an understanding of health, hygiene, family life education and the
environment. The program aims towards confidence building of women so that
they become more self-reliant and are able to contribute effectively towards their
family and community.

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Health Camps
The Health Camps are organized in villages so as to enable the poorest of the poor
to avail expert check-up and treatment along with free of cost medicines. These
camps are useful in treating the general ailments and the severe health issues are
referred to hospitals for complete treatment. These camps help in not only treating
the patients but also in identifying potential health disorders which if otherwise
unattended may eventually develop into a serious ailment. These are taken up in
partnerships with local healthcare providers.
These camps are useful in treating the general ailments whereas the severe health
issues are diagnosed and are referred to hospitals for proper care. These camps
help in not only treating the patients but also in identifying potential health
disorders which if otherwise unattended may eventually raise their healthcare
burden. These generally include ENT, Eye checkup, Orthopedic services, Dental
services, Gynecological services, Pediatric cases, Pathology facilities and Medicine
support. As per the need, transportation facility is also provided to those who have
limited mobility.

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PROGRAMMES CONDUCTED BY JRF TO


MOBILIZE PEOPLE
In this the leadership also has a very important role to play. Right from mobilizing
people to formation of SHGs to training and marketing their products, the leaders
should ensure that they infuse confidence in the people, and also foster cooperative
behaviour. Also developing leaders is a crucial aspect of this organisation, as they
try to develop entrepreneurship skill amongst the rural weavers, to bridge the gap
between customers and weavers, and providing opportunity to establish them and
contribute to the industry. This allows the weavers to understand the customers
better and also customers can see the emotions and feelings attached with the
weavers work. Rural weavers are basically structured and made as self- employed
and self- sufficient so that they can enjoy their work and also contribute to the
society.
PROGRAMME TO ERADICATE CHILD LABOUR
Jaipur Rugs Foundation also tries to make efforts to make carpet industry free of
child labor. They encourage the weavers to provide proper care, nourishment and
education to their children. For achieving this, they take the initiatives like:
Creating awareness among the consumers to buy the products that are not
made by children
Creating educational opportunities for child workers.
Motivating the children to continue their education
Providing sustainable livelihood to weavers so that they are not forced to
send their children to work.
While taking motivation seminars and mobilizing people, contagion theory
is widely applicable, as it states the temporary transformation of people
under group influence. Convergence theory, which is based on convergence
of people who share the same predisposition, is also applicable in some
cases, where people were self- motivated to learn the art and craft, and earn
their living.
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WOMEN EMPOWERMENT :( political, social, economic)


As carpet weaving is primarily a home based occupation, many women are
also likely to adopt it. Since there are many restrictions on women, in the
area, and women are not allowed even to move out of their homes, so
through carpet weaving women can generate income without moving out of
their homes and also without neglecting their domestic work. JRF works on
reflected movement for women empowerment. It reduces the economic
dependency of women and also increases their economic value in the society
through self-employment. It also results in increased social and political
decision making. While implementing various projects across several
villages in India, JRF worked with women artisans and that they were more
enthusiastic and practical about learning carpet weaving to uplift their social
status and earning. Males on the other hand, were cynical and less concerned
to understand their family needs. Through various efforts and collaboration,
JRF was able to control injustices existing against women. Carpet weaving
has helped many rural women artisans to continue an enhanced livelihood.

In the direction of encouraging women artisans to live a better life through


stable employment, Jaipur Rugs Foundation discovered that women in many
villages were willfully adopting carpet weaving as an occupation. Many of
them have been abused, harassed at some point of time, starved and
exploited due to numerous reasons. By encouragement and regular
counseling, these women have seen a ray of hope now.
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SGSY Special Project

The 'Swarnjayanti Gram Swarozgar Yojana' (SGSY) Special Project is under the
overall ambit of National Rural Livelihoods Mission by the Ministry of Rural
Development, Government of India. JRF has been chosen as an agency to train
4000 rural youth living below poverty line (BPL) and transform them into skilled
artisans in carpet weaving. The project is being implemented in Uttar Pradesh and
Gujarat state of India.

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Thanagazi Carpet Cluster Development Project (2007-2010)


The Thanagazi Carpet Cluster Development Project is a joint development
initiative between JRF and the Department of Industries of the Government of
Rajasthan. The project was initiated with the purpose to provide support to the
underprivileged members of the society, providing them livelihood opportunities,
improving their artisanal skills through skill and design trainings, skill upgradation trainings, group formations, and market linkages. The project initiated in
2007 and aimed on- building entrepreneurial skills in weavers empowering them
and making them self-reliant, up gradation of technology, and creation of exquisite
designs that suit the needs of the customers in recent times. The project was
accomplished in the financial year 2010-11, benefitting around 3000 rural artisans,
enhancing their earning capacities and entrepreneurial skills.

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AMBEDKAR HAATSHIP VIKAS YOJANA


This programme was started to promote carpet weaving as a sustainable livelihood
option and also to increase the earnings of artisans from Rs.40-50 per day to Rs.80120 per day, so as to relieve them form the exploitation of middlemen and
agricultural landholders. Other objective was to provide consistent employment
and training programmes and to bring the BPL/SC/ST women and other
underprivileged families above the poverty line. Also, it provides a self- sufficient,
reliant production and marketing structure.

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Poverty alleviation and skill development programme


Rug weaving carries a lot of significance in poverty alleviation and skill
development landscape as it provides livelihood opportunities to illiterate and poor
people (especially women) inhabiting remote rural locations. It does not require
massive infrastructure establishment. It enables the poor to acquire traditional
skills at their doorstep while also getting avenues for sustainable livelihood at their
doorstep, thus doing away with the compulsion of migrating out in search for life
bread. Furthermore, flexible working hours and output based wages enhance
livelihood options of rural poor as per their needs.

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Encourage Artisans to be creative


Artisans dont just weave but also fabricate their own designer pieces!!!

Jaipur Rugs Foundation also encourage artisans to be creative not only with what
they are doing but also with their imaginations. Few of artisans have weaved their
own designs and those pieces have turned out to be magnificent! These rugs are
not only exclusive designer pieces today but also carry the complete route planning
of it in their minds. Yes! I mean weaved out completely through imagination and
no maps!
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Artisan Cards
The Artisan Cards are issued to the artisans by Development Commissioner
Handicrafts and the local nodal entities are district industries center. But due to
lack of awareness and low levels of accessibility, the artisans are unable to get their
cards made. JRF acts as a link and bridges this gap by assisting the illiterate
artisans in getting their card by doing all the paper work involved in the process.
These artisan cards let the artisan take up a credit facility worth thousands of
rupees from the government.

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Artisans ID Card & Credit Card Camp

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Jaipur Rugs Foundation also designs some


skill training programmes
Skill Development Training
Once location mapping has been conducted, localities are selected to conduct the
field level functionaries of the organization. Once the community members get
convinced about the work, they are divided into different batches and their skill
development trainings are organized in their own villages. JRF conducts skill
development trainings in such areas, where the artisans are taught the basics of
weaving, the techniques, usage of tool, efficient manners of working, reading the
design maps etc. this whole process goes on from 2-3 months. JRF installs weaving
looms in the villages and lets the trainers teach the art of weaving to the unskilled
community members and transform them into skilled artisans.

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On successful completion of the training, the skilled artisans are given job work in
their own localities, either at the same loom that was utilized for training or on a
nearby loom located at a walking distance from their households. Thus, both the
trainings as well as livelihoods are provided to the village community in their local
settings and they are not required to out migrate from their rural habitations in
search for sustainable livelihoods.
It focuses on providing carpet-weaving skills and technological upgradation to the
weavers. It also trains them in design development and loom operations and also
enhance the skill set of weavers.
Skill and design development training: under this programme, training is provided
to individuals, not skilled at carpet weaving.

Skill upgradation training

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India is filled with talent and rug weaving is not a new technique for many. Hence,
JRF conducts Skill Upgradation Trainings for those weavers who are already
acquainted with the art of weaving. This kind of training involves teaching them to
meet the new standards as per the demand, to be set to work upon the Jaipur Rugs
standards, teach them the latest technique or using of some new tool.
These upgradation training are essential both in terms of meeting the market
standards and for continual motivation of the workers. They uplift the psyche of
the artisans and help put forward better and efficient results.

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Entrepreneur skill training


Under this programme, specific tools and techniques are used to enhance the
managerial skills of weavers.
These training programmes help in increasing output and increase in income based
on quality.

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Blood Donation Camp : July 2010


Jaipur Rugs Foundation (JRF) organized a blood donation camp on July 17, 2010
in the JRF campus. It took place in collaboration with Santkoba Durlabhji
Memorial Hospital. It drew an enthusiastic participation from the employees of
both JRF and Jaipur Rugs Company, a leading carpet manufacturing and exporting
firm. A total of 50 employees registered for the camp and each person donated
around 450 ml of blood. The camp was matched with an awareness program for
the employees regarding better food and health habits. All the blood donors were
provided with refreshment and souvenirs.

Van Mahotsav Celebration : July 2010


Jaipur Rugs Foundation celebrated Van Mohatsav in Thanagazi block of Alwar
District, Rajasthan during the first week of July 2010. The main objectives of this
initiative were to:
Create awareness among the community about the importance of plantation,
nuances of deforestation in the present context of reduced rainfall in the area,
depleting ground water, problem of soil erosion increasing, agricultural land
getting converted into deserts, etc.
Sensitize people towards environment protection through collective action.
Native plants viz. Shisham, Bel Patra and Gulmohar were selected for distribution
and plantation. A total of 500 saplings were planted in 9 villages covering 43
SHGs on the occasion.

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Direct Linkage Increased Income

The carpet value chain at the grassroots is normally considered to be of an


exploitative nature. The rug sellers, instead of directly engaging with the artisans,
operate through contractors and subcontractors. In such process, a significant
amount of money that could have been earned by the artisans gets absorbed by
these intermediaries.
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Jaipur Rugs, by setting up its own offices in the production areas, has innovated in
establishing direct linkages with the artisans and it has ensured that the artisans
enjoy enhanced earnings through such supply chain linkage. The transport is also
taken care of for sending the raw material to the artisans and bringing back weaved
products, thus relieving the artisans of the burden of spending their own time and
resources for doing so.
Inspiring artisans
In our visit we gained exposure to the amazing work of the organization. This
included meeting artisans and quality supervisors that have been able to refine their
craft and increase and stabilize their income.

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Two key takeaways


What struck me about the organization were two things.
Firstly, despite being primarily a for-profit organization (with an India-based forprofit, US-based for-profit and an India-based non-profit), Jaipur Rugs has focused
on providing better opportunities, income, and work for carpet weavers, using a
business approach. Coming from a development sector perspective, it's inspiring to
see businesses that so effectively merge social impact with their work, and do so at
massive scale.

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Secondly, the organization, as it has grown, has faced challenges in instilling the
founder's values into employees, as well as finding new, passionate staff to meet its
growing needs. It was clear that in a small organization, where each employee is
able to interact with the founder and visionary, this is relatively easy. When an
organization reaches the size of Jaipur Rugs (350 people), and is looking at
succession planning, this becomes more difficult.

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Community Mobilization
JRF reaches out to the rural communities and spreads awareness about carpet
weaving as a vocation and their potential gateway for sustainable livelihoods. The
thrust is on locating and training the target populace to transform them into skilled
artisans and alongside, exploring how their collective strengths may be developed
further so as to enable them become life entrepreneurs.
Such awareness generation also takes the form of exposure visits of the unskilled
populace to those sites where skilled artisans are engaged in carpet weaving with
the support of JRF.
The main objectives of such exposure visits are: to enable the unskilled persons to
take a firsthand look at how skilled carpet artisans work in the looms; to facilitate
interactions between the potential skill development trainees and the previously
trained artisans; and to acquaint the unskilled persons with the different steps
involved in carpet manufacturing, especially weaving processes.

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This enables the people who are interested in enrolling for skill development
training to take informed and well thought decision over taking up carpet weaving
as a vocation and star considering it as a sustainable source of livelihood.
The recent JRF efforts towards community mobilization have been in the rural
locations of Bihar and Jharkhand. In Bihar, such work was carried out in the
villages of Madhubani and Darbanga. In Jharkhand, the district under focus had
been Deoghar. The field operations were started in the previous years and so far
the focus of the interventions is primarily on enterprise development, especially
skill development and upgradation in carpet weaving.

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What Jaipur Rugs Achieved Through CSR

Bringing people together for a common cause


We were able to bring people together for a common cause, the cause being
wellbeing of all. We were blessed with committed staff who also took the initiative
to work for their own good. Employees also sustained their enthusiasm and
motivation throughout which added to our strength.
Trust
Employees do have the trust in whatever the department does. The
department has helped them help themselves in such a way that it has left a long
lasting effect on their minds. This trust made it obvious for them to keep
participating actively in all the activities.
Transparency
The department has been totally transparent regarding all its activities. Employees
were made equal partners in conducting any activity. Because of this there was no
point where employees felt left out.
Need based activities
We at BPCL have never arranged activities for the sake of doing it. We have
conducted activities as and when people demanded, may it be our own
employees or people from the communities. Thus we have indirectly
given onus to the people to decide when, why and which activity they
need.

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Non-biased attitude
May it be a worker or an engineer or a driver or any administration staff, we give
equal treatment to all. Never do employees feel that some are favored and others
are not.
Involvement of all
We have been successful involving people of all cadres at the refinery level, right
from the managers to the workers, and from the various departments to the
different unions. This helped us to get the opinions and contributions of all.
At the community level, all the people are involved right from the planning level.
People take decisions along with us.
Human stories of revival helped
We had many success stories of our employees which constantly motivated us to
work consistently. The recovered addicts are our strength. They help us to help the
others who are in similar problem.

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Conclusion
CSR does not come free. It involves a real commitment of resources, management
time and energy. Single money invested in the health of female employees can
yield more than lot of money in business benefits. In addition, the improvements in
human well-being are incomparable.
Its clear that India is an emerging country with immense opportunities and that it
can take in all the CSR activities that are there for the grab. But from the evidences
provided above, it's clear that CSR failed when companies tried to put an act of
their own for their own good.
JAIPUR RUGS immensely helped the Indian society with their CSR initiatives,
can afford to do it as they are Indian companies with a great common man
bonding.
JAIPUR RUGS is making progress in taking on wider responsibilities and devising
relevant projects that work on the ground. It has done this with help from NGOs
and organizations. Its approach with is not purely about business benefits, but
focused on making a difference to the lives of its supplier workers.
JAIPUR RUGSs ongoing involvement with the women workers in rural area and
other supplier will help to provide it with a sustainable and ethical business model.

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Acting ethically involves making the right choices doing the right thing.
JAIPUR RUGSs seeks to adhere to its values by taking care of its employees,
maintaining ethical relationships and respecting human rights. By engaging with its
many stakeholders, including factory owners and workers in countries rural area in
the production of Rugs, Pillows, Poufs it ensures that everybody gains from the
business process and everyone is treated fairly.
So, we can conclude that Jaipur Rugs Foundation is also involved in mobilizing
people, so as to increase the villagers participation in carpet weaving programme,
through their motivational seminars and follow up seminars, through PRA and
rapport building exercises with the villagers.
They do so, by meeting with the villagers, and also follow up meetings with them
to ensure that those willing and passionate enough and also are motivated are not
left out. They have specially created a post of mobilizers to carry out this job.
Panchayat representative, village headmen or the gram pradhan were always
informed about how the project is going on, and they regularly visited the centre to
infuse enthusiasm in the employees, to motivate them and also increase their
participation in the activities.
After mobilization phase, only other stages like capacity building, training, quality
checking and providing market linkages are followed. Through their various
programmes, they are also providing sustainable and continuous incomes to the
women; by mobilizing them through meetings and follow-up meetings they are
also helping in their skill development and employment generation activities.
Also, as in mobilization phase in ideology the emphasis is on mass appeal, centers
on issues of deprivation and collective participation; the ideology of the
organization is to increase the participation of more and more employees by
emphasizing on mass appeal and stress on issues of deprivation and collective
participation.

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In institutionalization phase in ideology, the movement ideology is translated into


specific programmes, and the major stress is on implementation of programmes;
same in case of this organization in which in institutionalization phase, the
mobilized people are then trained, and are further educated for producing effective
output.
Also, collective entrepreneurship is promoted, to provide opportunity and
incentives to individuals to share various technical and market information So,
finally, it is the mobilization that is helping the organization to bring more people
to the craft of learning carpet weaving, and also, trying to increase their
participation in achieving organizations objectives.

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Research Findings
1. It was found that Jaipur Rugs have adopted CSR mechanism. Jaipur Rugs
have stated in their vision & mission in such a way which would help to
fulfill the CSR also.
2. Jaipur Rugs is doing innovation to find out some creative ways which may
use lesser amount of resources to produce the same quantity of the products.
3. It was also found that Jaipur Rugs dont want to earn profit at the stake of
society. Jaipur Rugs is fully aware about their responsibility towards society
at large.
4. Study has also shown that when company is performing its social obligation
in well manner, it creates good image in the mind of general people. It
becomes trustworthy organization. So, without even advertisement and
promotions Jaipur Rugs become popular.
5. Now customers are also smart enough, they know who is doing what and
they also understand the importance of Corporate Social Responsibility.
Hence, they dont mind to spend extra penny to make a contribution towards
safety of the environment on their own part. So, they become loyal to
particular organization if the organization is doing good for the society.
6. Employees are also engaged with this kind of organization which reduces
the employee turnover.
7. With the help of above study we can say that CSR plays a vital role in
overall development.!

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