Corporate Social Responsibility

INTRODUCTION
Business as it is said, is a product of environment. The
nature

of

business,

manufactured,

the

location,

size,

the

product

of

operation,

volume

to
etc

be
is

determined by the environment in which it operates.

Similarly it has an impact on the environment in which it
exists. The business decisions in an organization completely
depend upon the environment and their impact.
The environment can be divided into:
Internal Environment
External Environment

Busine
Internal
Environme
nt

ss
Decisio

External
Environm
ent

Social Responsibility of business

refers to what business
n
does over and above the statutory requirement for the
benefit of the society. The word responsibility emphasizes
that the business has some moral obligations towards the
society.
The term corporate citizenship is also commonly used to
refer to the moral obligations of the business towards the

Corporate Social Responsibility

society. It implies that like individuals, corporates are also
the part of the society and their behavior shall be guided by
the social norms.
Social Responsibility has been defined by Davis as
follows:
Social responsibilities refer to businessmans decision and
actions taken to reason at least partially beyond the firms
direct economic or technical interest.
Still broader view has been suggested by Andrews
when he says that:
By social responsibility, we mean the intelligent and
objective concern for the welfare of the society that
restrains individual and corporate behavior from ultimately
destructive activities, no mater how immediately profitable,
and leads in the direction of positive contributions to human
betterment, variously as the latter may be defined.
There has been a growing acceptance of the plea that
business should be socially responsible i.e. it should
discharge its duties and responsibilities in enhancing the
welfare of the society of which it is an integral part.

Corporate Social Responsibility

H. S. Singhania classifies CSR into two categories:
The manner in which a business carries out its own business
activity.
The welfare activity that it takes upon itself as an additional
function.

THE INTEREST GROUPS

Corporate Social Responsibility

Social Responsibility requires the identification of various
interest groups, which may affect the functioning of a
business organization and may also be affected by its
functioning. Normally various groups associated with a
business

organization

are

shareholders,

workers,

customers, creditors, suppliers, government and society in

general.

responsibility

towards

The

all

these

management

groups.

owes

Therefore,

management should show a standardized norm of behavior.

Corporate Social Responsibility

Shareholders:
The first responsibility of the management is to protect the
interest of shareholders. The interests of majority of
shareholders

and

large

minority

of

shareholders

are

generally well protected through either direct participation

in the management actions or they have real power to
intervene, if necessary. They should be informed about the
functioning of the organization adequately and timely.
Therefore, management has a responsibility to provide
proper safeguard to the money invested by shareholders.

Corporate Social Responsibility

Workers:
Workers have direct interest in an organization because by
working there, they satisfy their needs. Thus, it is the
managements responsibility to protect the interest of
workers in the organization. This can be done by the
management in the following ways:

Management should treat workers as another wheel of

the cart

Management should develop administrative process in

such a way that promotes cooperative endeavor
between employers and employees.

The management should adopt a progressive labor

policy based on recognition of genuine trade union
rights participation of workers in management,
creating a sense of belongingness, improving their
living and working conditions.

Management should pay fair and reasonable wages

and other financial benefits to workers.

Customers:
Management owes a primary obligation to give a fair deal to
the customers. This can be done in the following ways:

Corporate Social Responsibility

Customers should be charged a fair and reasonable

price.

The supply of goods and services should be of uniform

standard and of reasonable quality.

Management

should

not

indulge

in

profiteering,

hoarding, or creating artificial scarcity.

Management should not mislead the customers by

false, misleading and exaggerated advertisements.

Creditors, Suppliers and Others:

They affect the organization in various ways. Therefore , the
management is responsible to fulfill its obligations towards
them. This can be done in the following ways.

Management should create healthy and cooperative

inter

business

relationship

between

different

businesses.

Management should provide accurate and relevant

information to creditors and suppliers.

Payments of price of materials, interest on borrowings,

other charges should be prompt.

Corporate Social Responsibility

Government:
It is very closely related with the business system of the
country. It provides various facilities for the development of
business. Government, no doubt, exercises control over
business,

but

these

controls

are

meant

for

overall

development of business. Management can discharge its

obligation to government by:

Management should be a law-abiding citizen

Management should pay taxes and other dues fully,

timely & honestly.

It should not corrupt government workers and public

servants and the democratic process

It should not buy political favors by any means

Society:
Organizations exist within a social system and get facilities
from the system. Therefore, they owe obligations to the
society as a whole. This can be done by:

Management should maintain fair business policies

and practices.

It should play a proper role in civic affairs.

It should provide and promote general amenities and

help in creating better living conditions in general.

Corporate Social Responsibility

WHY SOCIAL RESPONSIBILITIES OF BUSINESS?

Why

business

should

be

concerned

about

social

responsibilities? is a question that has attracted the

attention of many thinkers, both from academics as well as
from

practitioners.

counterarguments

There
in

have

favour

of

been
and

arguments
against

and
social

responsibility of business.

Arguments against Social Responsibility:

1. Profit Maximization:
The first and the most important argument against CSR is
that a business organizations primary objective is profit
maximization. Since business operates in a world of poverty
and hunger, the economic efficiency of the business is a
matter of top priority and should be the sole mission of
business. Its function is economic and not social and
economic values should be the only criteria used to measure
success.

Corporate Social Responsibility

2. Society has to pay the cost:
Another argument is that the costs of social responsibility
will be passed on to the society and it is the society, which
has to bear its cost. The question is whether the society can
afford these costs?
3. Lack of Social Skills:
Business managers are best in managing matters related to
business. They are not equally good at solving social
problems. If society is going to depend on someone to work
with social problems, why choose a group, which is not
qualified to do it.

4. Lack of Accountability:
Another point of view is that business has not direct
accountability towards the people, so it is unwise to give the
businessman

the

responsibility

for

areas

he

is

not

accountable. Until the society can develop mechanisms,

which establish direct lines of social accountability from
business to the public, it should pursue its goal of profit
where it is directly accountable through the market system.
5. Friedmans Views:
The most convincing criticism has been voiced by the
economist Milton Friedman. Friedman based his arguments

10

Corporate Social Responsibility

on two principal contentions, one economic and one legal.
From

the

economic

perspective,

he

asserted

that

if

managers spend corporate funds on projects not intended to

maximize profits, the efficiency of the market mechanism
will be undermined and resources will be misallocated
within the economy.
On the legal side, Friedman contended that because
managers are legal agents of the stockholders, their sole
duty is to maximize the financial return to the stockholders.
Hence if they spend corporate funds for social purposes
they are essentially stealing from the stockholders.

Arguments for Social Responsibility:

1. Changed Public Expectations of Business:
One of the most potent arguments for social responsibilities
is that public expectations from business have changed. It is
reasoned that the institution of business exists only because
it satisfies the valuable need of the society. Society gave
business its charter to exist, and the charter can be
amended or revoked at any time that business fails to live
up to societys expectations. Therefore, if business wishes to
remain viable in the long run, it must respond to societys

11

Corporate Social Responsibility

needs and give societys needs and give society what it
wants.
2. Public Image:
Another argument in favor of social responsibility is that it
improves public image. Each individual firm seeks an
enhanced public image so that it may gain more customers,
better employees more responsive money market and other
benefits. Affirm which seeks better public image should
support social goal.
3. Avoidance of Government Regulation:
It seeks to regulate business in the public interest.
Government regulation is costly and denies the much
needed freedom in decision-making. Before government
stretches its long arms, business should discharge its
obligation to society.
4. Business has the Resources:
Another argument for social responsibility is that business
has a vast pool of resources in terms of men, talents,
fictional expertise and money. Probably, business is without
peers in respect of the resources it possesses. With these
resources at its command, business is in a better position to
work for social goals

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Corporate Social Responsibility

5. Prevention is Better then Cure:
If business delays dealing with social problems now, it may
find itself constantly occupied with social problems now, it
may find itself constantly occupied with putting out social
fires so that it has no time to accomplish its goal of
producing goods and services. Since these social problems
have to be dealt some time, it is actually more economical to
deal with them before they develop into serious social
breakdowns that consume management time.
6. Citizenship argument:
If individual members of society have an obligation to
improve society, corporations also have this responsibility.
After all, corporations unlike citizens are created by the
society. Corporations are citizens and citizens have civic
duties and responsibilities.
The proponents of social responsibility say that the old
concept of profit maximization has vanished and even
economists have accepted it. The have substituted profit
maximization

with

satisfactory

profit.

Today,

business

decision making is a mixture of altruism, self interest and

good citizenship. Managers do take actions, which are in
the social interest even though there is a cost involved and
the connection with the long-range profit is quite remote.

13

Corporate Social Responsibility

Therefore,

the

responsibilities

of

business

can

be

represented as follows:

Economic
Concern

Mutual
Concern

Social
Concern

The figure shows that though there may be some

cleary distinct economic and social goals of an organisation,
there is always a common area. This is the area that
provides a realistic view of the social responsibility of a
business.

STANDARD CHARTERED BANK

HISTORY
The Standard Chartered Group was formed in 1969 through
a merger of two banks: The Standard Bank of British South
Africa founded in 1863 and the Chartered Bank of India,
Australia and China, founded in 1853.
Both companies were keen to capitalize on the huge
expansion of trade and to earn the handsome profits to be
made from financing the movement of goods from Europe to
the East and to Africa.

14

Corporate Social Responsibility

SERVICES
Personal Banking
Through our global network of over 1,750 branches and
outlets, we offer personal financial solutions to meet the
needs of more than 14 million customers across Asia, Africa
and the Middle East.
SME Banking
Our SME Banking division offers a wide range of products
and services to help small and medium-sized enterprises
manage the demands of a growing business.
Wholesale Banking
Headquartered in Singapore and London, with on-theground expertise that spans our global network, our
Wholesale

Banking

division

provides

corporate

and

institutional clients with innovative solutions in trade

finance, cash management, securities services, foreign
exchange

and

risk

management,

capital

raising,

and

corporate finance.

Islamic Banking
Standard Chartered Saadiq's dedicated Islamic Banking
team

provides

comprehensive

international

banking

15

Corporate Social Responsibility

services and a wide range of Shariah compliant financial
products that are based on Islamic values.
Private Banking
Our Private Bank advisors and investment specialists
provide customised solutions to meet the unique needs and
aspirations of high net worth clients.

PRINCIPLES & VALUES

At Standard Chartered success is built on teamwork,
partnership and the diversity of their people. At the heart of
their

values

lie

diversity

and

inclusion.

They

are

fundamental part of culture, and constitute a long-term

priority

in

their

aim

to

become

the

world's

best

international bank.
WHAT SCB STAND FOR:
Strategic Intent
The world's best international bank
Leading the way in Asia, Africa and the Middle East
BRAND PROMISE
Leading by Example to be The Right Partner
VALUES

16

Corporate Social Responsibility

Responsive
Trustworthy
International
Creative
Courageous
APPROACH
Participation
Focusing on attractive, growing markets where we can
leverage our relationships and expertise
Competitive positioning
Combining global capability, deep local knowledge and
creativity to outperform our competitors
Management Discipline
Continuously improving the way we work, balancing the
pursuit of growth with firm control of costs and risks
COMMITMENT TO STAKEHOLDERS
Customers
Passionate about the customers' success, delighting them
with the quality of our service

17

Corporate Social Responsibility

Our People
Helping our people to grow, enabling individuals to make a
difference and teams to win
Communities
Trusted and caring, dedicated to making a difference
Investors
A

distinctive

investment

delivering

outstanding

performance and superior returns

Regulators
Exemplary governance and ethics wherever we are

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Corporate Social Responsibility

CORPORATE SOCIAL RESPONSIBILITIES

Standard Chartered employs 38,000 people in 950 locations
in more than 50 countries in the Asia Pacific Region, South
Asia, the Middle East, Africa, the United Kingdom and the
United States of America. Standard Chartered is one of the
world's

most

international

banks,

with

employees

representing 80 nationalities. Since SCB operates all

around the globe and in such a diverse culture they face a
variety of corporate responsibility issues.
In June 2004 SCB carried out an audit of Corporate
Responsibility activities through a cross section of the
Banks operations. The audit provided a snapshot of the
organizations

strength

and

weakness

in the

area

of

Corporate Responsibility and covered its approach and

management of Corporate Responsibility related issues and
the

effectiveness

of

both

its

internal

and

external

communication.
SCB like most of the leading organizers sees Corporate
Responsibility as an opportunity to make its brand stand

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Corporate Social Responsibility

out. Working on this, SCB has set some goals for itself for
the year 2005 which were as follows: By the end of 2009 it aimed to have:
An

established

governance

structure

for

Corporate

Responsibility
Raised

awareness,

internally

and

externally,

of

its

priorities and intentions

Corporate Responsibility aspirations that are aligned with
its business goals
Established clear goals for all areas overseen by the
Corporate Responsibility Committee
Actively engaged all its employees in its Corporate
Responsibility programme to spread understanding and
best practice.

Community Partnership around the Globe

Seeing is Believing
Seeing is believing is one of the major global community
programmes conducted by SCB. It was launched in 2003 to
help alleviate the issue of blindness across the globe. In first
year of its functioning SCB raised enough money to restore
the sight of 56,000 people. This achievement exceeded their

20

Corporate Social Responsibility

goal of raising enough to restore sight to 28,000 people by
World Sight Day on the 9th October 2003.
Due to this overwhelming success, SCB has continued with
its programme, in partnership with VISION 2020 the
international body for the elimination of avoidable blindness
- and together aim to raise US$ 6 million over the next three
years which will help to restore sight of about one million
people.
The bank believed in discharging its social responsibility
and so as part of the bank's 150th anniversary in 2003, a
global fund raising campaign - 'Seeing is Believing' -- was
launched that aimed to restore eyesight for nearly 30,000
persons globally (one for each Standard Chartered Bank
employee). The Bank raised over US$ 1.44 million globally
(enough to restore eyesight for 56,000 persons). In India,
the Bank raised about US$ 200,000 from its staff and
customers and is in the process of partnering with several
organizations and NGOs across the country to restore
eyesight to over 7,500 persons.

Living with HIV

21

Corporate Social Responsibility

SCBs Living with HIV programme focuses on training all
of its 30,000 plus employees in more than 50 countries on
the facts about HIV/AIDS, how it spreads, how it can be
prevented and how to care for those who are infected or
affected by HIV.
SCB in through their unique programme hopes to take away
the stigma attached to HIV/AIDS in the hope that more
people will come forward for testing and treatment, which
they also offer to their staff members.
In Botswana for example SCBs work with the youth
organizations

has

helped

to

educate

people

about

prevention and treatment. Similarly, in Malaysia, SCB is

working with the student organization, AIESEC, and have
trained 30 young people who will in turn train a further
3,000 counselors, thus spreading awareness in the country.

Community Partnership Programmes in India

International Marathon
Standard

Chartered

had

organized

an

International

Marathon in Mumbai on 15th February 2004, as an

innovative platform to bring together the corporates and the
NGOs. What emerged from this initiative was a fun-filled
way to channel funds to those in the country who needed it
the most. Like, Give India, the charity partner for the event,

22

Corporate Social Responsibility

raised an impressive figure close to Rs. 52,00,000/- for
various causes. The funds are now been allotted to various
causes as per the choices of the participants. They range
from child welfare and education to aid for the blind and
programmes for the elderly.
SCB, through this marathon was able to bring closer donors
like ICICI, McKinsey, celebrities and international sports
personality to various NGOs like the Give India and National
association for the Blind (NAB).
The participants of the Marathon began at the start and
ended at the finish line. But the funds generated began at
the Marathon and ended in spurring social action for the
under privileged. Following the choice of the donors and the
variety of donation options, funds have found their way to a
variety of causes. It took Rs 600 to sponsor a mid-day meal
for 120 children, Rs700 to sponsor an artificial limb for a
disabled child, Rs2000 to sponsor a blind childs education
for a year, Rs5000 to sponsor a set of books and journals for
a rural library and Rs11,250 to sponsor teacher training
workshops for 25 women.
The Nation Association for the Blind (NAB) has spread the
Marathon generated funds for cataract operations, Braille
presses and rehabilitation activities, while the Children Toy

23

Corporate Social Responsibility

Foundation is busy formulating nutrition programmes,
teaching aides, uniforms and libraries with it. 125 children
are now assured of an education while 30 disabled people
will have access to rehabilitation facilities. Dream a Dream
will initiate the Dream Outdoor Programme, aimed at giving
disadvantaged

children

exposure

and

empowerment

through the means of outdoor activities.

SCB will be arranging similar such marathons this year in
Nairobi and Singapore and in Hong Kong the next year.

Ashray Centre:
In continuing the Bank's pledge for providing support to
HIV affected people Standard Chartered India has recently
supported the children of Ashray Centre.
Ashray centre is a local NGO which provides residential
shelter for children of 0-12 years affected and infected by
HIV /AIDS. A total of 60 children are currently housed at the
centre. The Standard Chartered Branch staff donated
generously for the mission along with money that was
available out of selling old newspapers. School bags,
notebooks and pencil were donated to each child.

24

Corporate Social Responsibility

And as a token of their gratitude towards the Bank, the
children, all trained by Shiamak Davar, entertained the
Banks staff when the staff had visited the NGO to distribute
the gift items.
Mobile Medical Unit
The Mobile Medicine Unit sponsored by Standard Chartered
Bank to Helpage India has continued to render primary
healthcare at the doorsteps of the poor and needy old
persons living in slums and peripheral villages of Kanpur
and Patna in India. During the period of April to June 2002,
a total number of beneficiaries for treatments reached
12,521.
Health

education

and

awareness activities

were also

undertaken by the Mobile Medical Unit to address eyes

related problems and organizes preventive health-checking
camps. Arrangements have also been made under which the
patients can be referred for a secondary level and tertiary
level health care.
The Mobile Medicine Unit is believed to have fulfilled a long
felt need of the disadvantaged older persons in the society
who were otherwise neglected by the society.
Central School for the Education of the Deaf

25

Corporate Social Responsibility

The Bank is a strong supporter of the Central School for
the Education of the Deaf - a registered society and public
charitable trust founded in 1966. Its prime concern is to
rehabilitate profoundly and severely deaf children by
providing model teaching and training facilities, both in
English and Marathi. In doing so, the School also endeavors
to bring vocational and other employment opportunities,
which would otherwise be denied to them, within the reach
of deaf children.
The Central School for the Deaf has 62 children divided into
6 classes. Education is imparted to the children free of
charge and a school bus service is provided for bringing and
taking the children to and from school. A balanced mid-day
meal is also provided to the children free of cost. Regular
medical and dental camps are conducted every year for the
children and follow-up treatment is ensured. The school also
offers assistance for the purchase of the individual hearing
aids wherever necessary.
The Bank provides ongoing assistance to the School,
through cash donation, as well as the Standard Chartered
Income Fund, in which the Bank's donations and the
School's own funds are invested, and which interest returns
fund the School.

26

Corporate Social Responsibility

Prem Dan
Prem Dan, a charity run by Sister Felicity Morris in
Mumbai, has three learning centers for children forced into
living on the streets.
Standard

Chartered

Bank

has

committed

an

annual

donation for a period of five years towards the Education

and Nutrition Programme for the under privileged children
in Mumbai.
The children covered under programme are provided with a
wholesome mid-day meal and are given free tuition classes
to help them cope with their studies. This programme has
helped the children because they leave their homes early
morning and return home only in the night for their supper.
The programme supports around 572 children in four local
schools in Mumbai.
Victoria Memorial School for the Blind
In 1995, during the visit to India of Chairman Sir Patrick
Gillam, the Bank undertook to sponsor
the refurbishment of the central hall of
the Victoria Memorial School for the
Blind in Mumbai.

27

Corporate Social Responsibility

The school required nearly five years to complete the
renovation project, due to the meticulous care with which
the renovation to an 86-year old Heritage building needed
to be carried out. The hall, now complete and known as the
Standard Chartered Hall, was inaugurated by Dr. P. C.
Alexander, Governor of the state of Maharashtra, in January
2001.

Pratham Mumbai Initiative

The Bank has made a three-year commitment to Pratham to
contribute necessary funds towards the running of 50
balwadis (pre-primary schools) per year.
Pratham is a registered public charitable trust, founded in
1994, and their successful model of tripartite collaboration
between corporates, government and the voluntary sector is
being replicated in Delhi, Bangalore, Pune, Vadodara, Surat,
Ahmedabad and Patna. The model has three basic elements:
supplementing and strengthening the government school
system, working on a city or large regional scale and cost
effectiveness expected of a catalyst. The uniqueness of
Pratham is that the organization allows and encourages
young executives to volunteer time to work in their balwadis
which are pre-primary classes set up in slum colonies in

28

Corporate Social Responsibility

Mumbai,

with

bridge

courses

and

computer-assisted

learning centre.
Standard Chartered is the largest donor and supporter of
the Balwadi programme and the bank is now exploring the
possibility

of

taking

on

the

role

of

the

'Leading

Organization' in this ward. Standard Chartered India has

increased its involvement with this organization, to embrace
not only donations of funds, but also the inclusion of needspecific

contributions,

with

the

Bank

donating

old

computers and furniture for the Mahila Mandals during the

Pratham Mumbai Initiative in 2001.

SCB to fund Sankara Nethralaya Project

Under

its

Seeing

is

Believing

campaign,

Standard

Chartered Bank has partnered with Sankara Nethralaya. In

this project, with the help of SCB, the fund could conduct
1,000 free cataract surgeries for the poor and needy people
in Tamil Nadu in 2004.
Chris Low, then the CEO of Standard Chartered Bank, India
Region, had presented a cheque of Rs. 12.50 lakh to Dr. S.
S. Badrinath, President and Chairman, Sankara Nethralaya

29

Corporate Social Responsibility

and also committed that the Bank would continue to fund
the Nethralaya projects to perform surgeries for the poor.
Scope International, a wholly-owned subsidiary of Standard
Chartered Bank, UK, has also partnered with Sankara
Nethralaya to support the cause of Pediatric Ophthalmology
in the area of restorative surgeries for children. These
surgeries

vary

from

simple

corrective

surgeries

to

complicated cases such as retinal detachment, oculoplasty

and vitreoretinal surgeries.

CONCLUSION
The concept of corporate social responsibility is not new in
India. Right from the pre-independence times, the Gandhian
model has been in practice. Many family owned businesses
continue to engage in philanthropic activities. However with

30

Corporate Social Responsibility

the passage of time and increased privatization and
globalization,

the

stakeholder model

is

gaining

more

importance. Hence, corporate responsibility is becoming an

integral part of the business strategy. A poll reveals a
number of areas where further progress is needed for the
business sector to keep pace with greater expectations for
responsible, transparent and accountable corporate conduct
from various stakeholders.
High expectations from companies are not yet matched
by judgments about CSRs.
More trust is placed in media and NGOs than the
industry.
Finding creative ways to work in collaboration with the
NGOs would help to enhance the corporate image.
The emerging message to corporations seems quite clear.
Take care of your customers; do not ignore your suppliers.
Your employees are your most important partners in the
wealth creation process: share your potential prosperity
with your people. Meet your debt service obligations
promptly and on schedule.
All these are imperative in ensuring shareholder wealth
maximization, which is indeed the primary goal of the
corporation.

Companies

must

focus

on

their

prime

31

Corporate Social Responsibility

responsibility to the shareholders, the owners of the
company. But in order to sustain such achievements,
working within and as part of society is all-important, failing
which society will reject the socially unconscientiously
corporation, often sooner rather than later. Such are the
challenges and opportunities for corporations in quest of
world-class standards of excellence in the twenty first
century.

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Corporate Social Responsibility

BIBLIOGRAPHY
BOOKS:
Principles and Practice of Management
Business environment - Francis Cherunilam
Essentials of Business Environment - K. Aswathappa

WEBLIOGRAPHY:
www.infochangeindia.org
http://www.standardchartered.com/corporateresponsibility/i
ndex.html

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