PROJECT REPORT

ON

A STUDY OF CSR NORMS AND ITS ADOPTION BY

DIFFERENT COMPANIES

Submitted in partial fulfillment of requirement of Bachelor of

Business Administration (B.B.A) General

BBA VI TH SEMESTER (SHIFT)(SECTION)

BATCH 2015-2018

Name of guide-Arushee Grover Name of student – Nikita Kadiyala

Designation-Assistant Professor Enrollment no.-40624588815

JAGANNATH INTERNATIONAL MANAGEMENT SCHOOL

KALKAJI
 ACKNOWLEDGEMENTS
A lot of effort has gone into this training report. My thanks are due to many
people with whom I have been closely associated.

I would like all those who have contributed in completing this project. First of all, I
would like to send my sincere thanks to Ms Arushee Grover for her helpful hand
in the completion of my project.

I would like to thank my entire beloved family & friends for providing me monetary
as well as non – monetary support, as and when required, without which this
project would not have completed on time. Their trust and patience is now
coming out in form of this thesis
 CONTENTS

Description Page No.

Acknowledgement (i) (i)
Contents with page no. (ii)
List of figures (iii)
Executive Summary 4
Certificate of completion 5
Introduction to topic 6
Objectives 14
Literature review 15
Induction and Training Program 21
Research Methodology 35
Analysis & Interpretation 47
Findings & Inferences 48
Limitations 61
Recommendations and Conclusion 64
Appendices 67
Bibliography 67
 EXECUTIVE SUMMARY
Over the past twenty years, globalisation, deregulation, privatisation and a
redrawing of the roles between state and market have radically changed the
basis on which private enterprise is expected to operate. Meanwhile, discussions
around concepts such as Corporate Social Responsibility (CSR), Good
Corporate Citizenship or Corporate Accountability, indicate the growing vacuum
between strictly nation-bound governmental control and increasingly global
efforts in areas such as protection of the environment and social cohesion. It is
now recognised that socially and environmentally sustainable poverty reduction
depends on the emergence of a growing number of responsible entrepreneurs
and small and medium enterprises (SMEs), since it this that leads to increasing
productivity and economic opportunity in developing countries that is socially and
environmentally protective. By enhancing CSR-based business practices, the
IOCL has a unique role in advancing the sustainable competitiveness and
ultimately the sustainable industrial development of developing countries. .

1. Sustainable Industrial Development

In 1987, the World Commission on Environment and Development (better known
as the Brundtland Commission) defined sustainable development as
‘development that meets the needs of the present without compromising the
ability of future generations to meet their own needs’. This statement refers
explicitly there being not only an economic dimension but also an environmental
and a social dimension to the efforts for a successful advancement of nations.
Building on this, in 1998 IOCL defined Sustainable Industrial Development as an
advancement of the industrial sector of an economy in a sustainable and
equitable way, respecting equally the three components of economy,
environment and employment/social issues.

In this framework, the achievement of Sustainable Industrial Development

depends greatly on
 the provision of an enabling policy and an infrastructure framework and
  the strategic development of the private sector, with a special accent on
development efforts for small and medium enterprises, both embedding
 concepts of balance between economic, social, and environmental
factors, leading to sustainable quality growth of a country.
Corporate Social Responsibility
There is a wide consensus among public and private institutions that the concept
of Corporate Social Responsibility (CSR) is based on a company attaining a
balance between the interests of all its stakeholders within its strategic planning
and operations.

Over the past decade, numerous debates have emerged around the question of
whether such ‘responsibilities’ should be voluntary or not, especially regarding
growing environmental challenges in areas such as climate change, as well as
regarding the enforcement of labour standards and basic human rights. Other
critics have pointed out that the role of the private sector is defined purely
through production and profit-maximisation, generally assuming that only
government should take care of social and environmental issues through efficient
policy frameworks and mechanisms. Furthermore, concerns have been raised
that the almost total exclusion of SMEs (especially in developing countries) from
conceptual discussions on CSR could lead to a purely ‘northern agenda’ for
multinational companies. It should also be observed that CSR has frequently
been misleadingly equated simply with ‘corporate philanthropy’ and ‘charitable
giving’, which in turn are often separate from their core business and without an
underlying strategic plan behind it.

Today, CSR is widely seen a management strategy option. A growing number of

successful examples have demonstrated that respecting CSR in strategic
planning, and following these through plans in operations, either leads to
increased economic output, or at least is (in the short run) neutral in its effect on
company profits. Furthermore, a growing number of large companies (and an
increasing number of SMEs) has recognised the need to improve their social and
environmental risk management strategies, grasp opportunities in innovative
technology development and knowledge creation, and engage more proactively
with their stakeholders.

While there is growing conceptual clarity around CSR, technical assistance

activities in this field are still scarce. One of the problems is that SMEs, notably in
developing countries, often lack the capacities and opportunities to learn about a
possible CSR approach in their management planning and daily operations.
These companies are therefore either caught by surprise by sudden ‘CSR-
requirements’ from their (normally northern) customers and counterparts, often in
the form of complicated codes of conduct, or they face increasing difficulties in
accessing global supply chains.

This growing knowledge gap could have serious consequences on the

development of SMEs, especially in developing countries, but it seems to be
avoidable: the basic business concept of CSR, the inclusion of environmental
and social concerns into the company’s strategy, is also valid and feasible for
small, even micro-enterprises, and does not depend on their location.

Practically, this means that, through CSR, companies can detect and overcome
inefficiencies in their production process, continuously upgrade the quality of their
products, and gradually develop their expertise in marketing and sales in an
ever-wider market place. By doing so, they eventually improve their
environmental and social performance and, thereby, their overall
competitiveness.
 CERTIFICATE OF COMPLETION

This is to certify that the Project work entitled A STUDY ON CSR NORMS AND
ITS ADOPTION BY DIFFERENT COMPANIES submitted by NIKITA
KADIYALA in fulfillment for the requirements of the award of “BACHELOR OF
COMMERCE(HONORS)” from “Jagannath International Management
School”, Kalkaji New Delhi is an authentic work carried out by his/her under my
supervision and guidance. To the best of my knowledge, the matter embodied in
the project has not been submitted to any other University / Institute for the
award of any Degree.
 CHAPTER I
INTRODUCTION TO THE TOPIC
Business as it is said, is aproduct to be manufactured, the size, volume of
operation, etc 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

External
Internal Business Environment

Decision
Environment
Social Responsibility of business refers to what business 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 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 businessman’s decision and actions taken to
reason at least partially beyond the firm’s 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. 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.

Models of Corporate Social Responsibility

There are some models, which endeavor to describe the evolution and extent of
social orientation of companies.
Carroll’s Model:
He defines CSR as a range and obligations a business has towards the society.
There are four categories of the obligation.

Discretionary
Resp.

Ethical Resp.

Orgn Legal Resp.

Economic Resp.

 Economic Responsibility:
A firm being an economic unity, this is its prime responsibility, i.e. to satisfy
the economic needs of the society through generating surplus and investing in
development of the society.

 Legal Responsibility:
A company performs this because it is bound to obey the law and the legal
system.
 Ethical Responsibility:
Business organization is expected to undertake these though they are not
mandatory. These include not restoring to unfair trade practices, not cheating
the customer, etc.
  Discretionary Responsibility:
It refers to the voluntary activities undertaken by the organization for social
development programmes. These levels of responsibilities was named as
“Pyramid of Corporate Social Responsibility”

Ackerman’s Model:
Also described that CSR done by a company generally spreads over
three phases:
 FIRST where the top management recognizes the existence of
social problem, which deserves attention and acknowledges the
company’s policy towards it by making an oral or written statement.
 SECOND phase is where the Co. appoints staff specialists or
external consultants to study the problem and suggest ways of
dealing with it.
 THIRD phase involves the implementation of the social
responsibility programmes.

THE INTEREST GROUPS

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. The management owes responsibility
towards all these groups.
Therefore, management
should show a standardized
norm of behavior.
  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.

 Workers:
Workers have direct interest in an organization because by working there, they
satisfy their needs. Thus, it is the management’s 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:
 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.

 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.
 OBJECTIVE

 To study how organization will be dealing with Corporate Sustainability /

CSR Communication and Value Creation – A marketing approach of
Automobile and its overall merits and demerits.
 To study the concept of the CSR activity and there reposition towards the
individual customer.
 To study if the CSR has any impact over the brand image of the
organisation through the primary data analysis.
 To study the employees readiness about the CSR activity to take it further
because it is an total organisation participation.
 CHAPTER-II

LITRATURE REVIEW
CSR(corporate social responsibility) is a concept in which organizations consider
the interests of society by taking responsibility for the impact of their activities on
customers, suppliers, employees, shareholders, communities other stakeholders,
future generation and on environment. The organizations voluntarily taking
advance steps to improve the quality of life for employees and their families as
well as for the local community and society.
There are so much debate and criticism on CSR. Proponents argue that there is
a strong business case for CSR, in that corporations benefit in multiple ways in
long term run with high profits. Critics argue that CSR distracts from the
fundamental economic role of businesses; others argue that it is an eye wash by
big organizations; some other says by this governments watch as a watchdog
over powerful multinational corporations
Development
The term CSR came in to common use in the early 1970s firstly it was taken as
corporate stake holder responsibility. The term stakeholder, meaning those
impacted by an organization's activities, it was used to describe corporate
owners beyond shareholders from around 1989.
An approach for CSR that is becoming more widely accepted is community-
based development projects, such as the Shell Foundation's involvement in the
Flower Valley, South Africa. Here they have set up an Early Learning Centre to
help educate the community's children, as well as develop new skills for the
adults. Marks and Spencer is also active in this community through the building
of a trade network with the community - guaranteeing regular fair trade
purchases.
Some other approaches of CSR is the establishment of education facilities for
adults, as well as HIV/CORPORATE SOCIAL RESPONSIBILITY education
programmers. The majority of these CSR projects are established in Africa. A
general approach of CSR is giving aid to local organizations and impoverished
communities in developing countries. Some organizations do not like this
approach as it does not help build on the skills of the local people, whereas
community-based development generally leads to more sustainable
development.

Areas on which organization are taking initiatives

An essential component of corporate social responsibility is to care for the
community. Organizations take initiative to make a positive contribution to the
underprivileged communities by supporting a wide range of socio-economic,
educational and health initiatives.
HEALTH: Health has identified as a primary objective in the community
development process. As a part of the healthcare initiatives weekly clinics,
counselling sessions, health camps are regularly held to promote general health
in the community. The health threats in the community are too many and in order
to treat some minor ailments and casualties, community members have identified
and are learning to treat minor ailments.
EDUCATION: Education too has been a primary focus area for the
organizations, and a number of initiatives have been designed to promote non-
formal education in the community. Akanksha, a non governmental organization
that focuses on developing strong educational foundations, deep sense of self-
esteem and facilitates fun activities for underprivileged children has been
identified to facilitate education and awareness. PMC schools have been given
computers to promote IT education in the neighbouring area of Chandan Nagar.
LIVELIHOOD ADVANCEMENT BUSINESS SCHOOL (LABS): A unique
program to create more opportunities for less privileged youth. Pune Corporate
Consortium for LABS was inaugurated on April 4, 2006. LABS, a flagship
program of Maruti’s Foundation (DRF), promotes customized programs for youth
and women in the age group of 18-30 years from economically weaker sections
of society, and empowers them to gain access to opportunities for sustainable
livelihoods and growth in the New Economy.
Potential business benefits
Corporate Social Responsibility (CSR) agenda of a corporation shows of its
social conscience and commitments to the community and society in which it
operates. It is not viewed as a liability on corporate resources. More and more
Companies have increasingly realized that it is an investment with multiple
benefits for the corporate sector. Various empirical research findings clearly
pointing to a strong positive correlation between CSR and corporate profitability
have further provided the impetus.
There are a lot of potential benefits of CSR for any organization. The scale and
nature of the benefits of CSR for an organization is different and depending on
the nature of the enterprise. It is difficult to quantify. However, businesses may
not be looking at short-run financial returns when developing their CSR strategy.
The definition of CSR used within an organization can change from the strict
"stakeholder impacts". CSR may be based within the human resources, business
development or public relations departments of an organization.
The business benefits by CSR for a company
In Human resources
Any organization can take CSR programme on recruitment and retention.mainly
in the competitive graduate student market. Potential recruits often ask about a
firm's CSR policy during an interview, and having a comprehensive policy can
give an advantage to organization. CSR can also help to improve the way of
thinking of a company among its staff.
In Risk management
Risk Management is a central part of many corporate strategies. The
Reputations that take decades to build up can be ruined in hours through
incidents such as corruption scandals or environmental accidents. These events
can also draw unwanted attention from regulators, courts, governments and
media. Building a genuine culture of 'doing the right thing' within a corporation
can decrease these risks.
Brand differentiation
In crowded marketplaces where competition is very high, companies looks for a
unique selling proposition which can separate them from the competition in the
minds of consumers. CSR can play a role in building customer loyalty based on
ethical values. Several major brands, such as The Co-operative Group and The
Body Shop are built on ethical values. Business service organizations can take
benefit from building a reputation for integrity and best practice.
License to operate
Corporations are keen to avoid interference in their business through taxation or
regulations. By taking right voluntary steps, they can persuade governments and
the wider public that they are taking issues such as health and safety, diversity or
the environment seriously, and in this way they can avoid intervention. And
organization can improve its profit.
Examples of CSR
There are a lot of organizations which are deeply involved in corporate social
responsibility.
At international level
The biggest example of this is Graminbank in Bangladesh. It is the world’s
great example of CSR.
 Automobile giant FORD-This organization is providing health care
programme for deprived children since 1957 and also concerned about
the women health programme.
 Microsoft group-this group is working at international level for education
programme for all society and basically in rural areas.
Steel maker Andrew Carnegie is contributing in education and charity.
In India
Tata group is most benevolent organization who is very focussed for welfare of
society from very initial. They are working at a great scale they are working on
these areas
 Child health care
 Women education
 Working groups of women
 Environment issues such as global warming

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

The Zensar Foundation has been working with various NGOs on multiple social
programs for Pune. It is associated with NGOs such as NFBM Jagruti School
for blind girls, SurajyaSarwangeenSewaSanstha,
SahityaRangabhoomiPratishthan, Saathi,
KagadKachPatraKashtakariPanchayat, Maher etc for development and social
benefit.
Adani group is operating a school for deprived children at Ahmedabad.
Other Initiatives: The Tsunami Relief operation at Zensar was an outstanding
success story of solidarity and support. The overwhelming response to the
appeal of employees donating a day’s salary went on to building a Tsunami
Relief fund which is being used for a sustained three-year Tsunami Rehabilitation
Program. Through the Centre for Youth Development Activities (CYDA) the fund
is being utilized to support the education of 120 students from Nagapattinam who
were worst affected by the calamity
ITC group has introduced e-choupal in remote areas to improve education
condition.
Hindustan leverlimited initiated Shakti group for women.
Four concepts of social responsibility
1. Stakeholder Responsibility
2. Profit Responsibility
3. Cause Marketing
4. Green Marketing

Stake Holder Responsibility

Stakeholders
A person, group, organisation, or system who affects or can be affected by an
organisation’s actions.
Types of stakeholders
Internal stakeholders:
 Shareholders: Shareholders are owners of a particular company's Stock
or of a Mutual Fund. The unit of ownership is called a share
 Employees: Any person providing paid or volunteer services for a
certifying agent.
 Management :Management comprises planning, organizing, resourcing,
leading or directing, and controlling an organization (a group of one or
more people or entities) or effort for the purpose of accomplishing a goal.
External stakeholders:
  Consumers:are individuals, households, organisations, institutions,
resellers and governments that purchase the products offered by other
organisations.
 Suppliers:Individuals or businesses that provide resources needed by a
company in order to produce goods and services.
 Creditors: Individuals or corporations that have supplied credit (lent
money) to a firm.
 Competitors: individuals or species that each requires the same limited
resource to survive.
 Community: Group of people sharing a common understanding who
reveal themselves by using the same language, manners, tradition and
law.
Responsibilities of Stakeholders
The stakeholder responsibilities often involve moral and citizenship duties
requiring collective action. In general the responsibilities of stakeholders separate
into four general categories:
1. With the firm
2. Among stakeholders themselves
3. Common pool resources (especially nature)
4. The commonwealth

A stakeholder must consider proper conduct.

The most obvious instances of stakeholder responsibility involves
 The global natural environment – environmental protection
 The global labour standards – minimum wages, working hours
 Basic human rights – right to live, follow religion, choose occupation etc.
Corporate stakeholder responsibility requires
Procedural justice integrating the values of them into the development and
implementation of a firm’s strategy.The stakeholders are integrated in the
strategic processes by either providing or receiving benefits or providing or
bearing risks.

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

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

Cause-related marketing (CRM) is defined as the public association of a for-

profit company with a nonprofit organization, intended to promote the
company's product or service and to raise money for the nonprofit. CRM is
generally considered to be distinct from corporate philanthropy because
the corporate dollars involved in CRM are not outright gifts to a nonprofit
organization, hence not tax-deductible.
Cause-related marketing was first used by American Express in 1983 to
describe its campaign to raise money for the restoration of the Statue of Liberty.
American Express made a one-cent donation to the Statue of Liberty every time
someone used its charge card; the number of new card holders soon grew by
45%, and card usage increased by 28%.
Cause marketing is about businesses supporting social causes they believe in to
connect with their customers. Companies, big and small, are using it as a tool to
win customers and their loyalties, to present themselves as a responsible
organizations, to boost employee morale and loyalty, and, of course, to generate
funds for social causes. Getting associated with a cause through popular non-
profit organizations gives them free publicity and increased sales-not to mention
a tax-deductible expense.
Cause marketing principles, cautions, and trends:
There are seven principles about cause marketing as following –
1. Unbalanced - Having a cause-marketing relationship that is too one
sided, self-serving, and/or commercial.
2. Dishonest - Having advertising that is not sincere, honest, or gives the
perception of non-profit endorsement and not handling criticism with open
and honest communication.
3. Evasive - No managing expectations on both sides. Be aware of and
clearly explain what you can and can’t deliver to your corporate partner.
Ensure your own internal team understands what is and isn’t being
achieved by a cause-marketing relationship.
4. Jeopardize - Not protecting the integrity of the organization’s brand and
visual identity. Non-profits must take care as to use of logo, wording, and
approach.
5. Disrespectful - Not recognizing those nonprofits have valuable assets to
contribute and must receive compensation to reflect this value.
6. Carelessness - Not doing due diligence, risk assessment, receiving
institution wide support and ensuring you fulfil best practices (Better
Business Bureau) and any legal requirements.
7. Insincere - Not working with a corporation that walks the talk. The
program must be part of larger corporate citizenship.

Types of cause marketing

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

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

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

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

Green marketing involves developing and promoting products and services

that satisfy customer's want and need for Quality, Performance, Affordable
Pricing and Convenience without having a detrimental input on the
environment.

Evolution of Green Marketing

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

Why Green Marketing?

As resources are limited and human wants are unlimited, it is important for the
marketers to utilize the resources efficiently without waste as well as to achieve
the organization's objective. So green marketing is inevitable.
There is growing interest among the consumers all over the world regarding
protection of environment. Worldwide evidence indicates people are concerned
about the environment and are changing their behaviour. As a result of this,
green marketing has emerged which speaks for growing market for sustainable
and socially responsible products and services.
Companies that develop new and improved products and services with
environment inputs in mind give themselves access to new markets, increase
their profit sustainability, and enjoy a competitive advantage over the companies
which are not concerned for the environment.
Adoption of Green Marketing
There are basically five reasons for which a marketer should go for the adoption
of green marketing. They are -
 Opportunities or competitive advantage
 Corporate social responsibilities (CSR)
 Government pressure
 Competitive pressure
 Cost or profit issues

4 P's of Green Marketing

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

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

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

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

Since the second half of the 20th century a long debate on corporate social
responsibility (CSR) has been taking place. In 1953, Bowen (1953) wrote the
seminal book Social Responsibilities of the Businessman. Since then there has
been a shift in terminology from the social responsibility of business to CSR.
Additionally, this field has grown significantly and today contains a great
proliferation of theories, approaches and terminologies. Society and business,
social issues management, public policy and business, stakeholder
management, corporate accountability are just some of the terms used to
describe the phenomena related to corporate responsibility in society. Recently,
re-need interest for corporate social responsibilities and new alternative concepts
have been proposed, including corporate citizenship and corporate sus-
trainability. Some scholars have compared these new concepts with the classic
notion of CSR (see van Marrewijk, 2003 for corporate sustainability; and Matten
et al., 2003 and Wood and Lodgson, 2002 for corporate citizenship).

Furthermore, some theories combine different approaches and use the same
terminology with dif-ferent meanings. This problem is an old one. It was 30 years
ago that Votaw wrote: ‘‘corporate social responsibility means something, but not
always the same thing to everybody. To some it conveys the idea of legal
responsibility or liability; to others, it means socially responsible behaviour in the
ethical sense; to still others, the meaning transmitted is that of ‘responsible for’ in
a causal mode; many simply equate it with a charitable contribution; some take it
to mean socially conscious; many of those who me-brace it most fervently see it
as a mere synonym for legitimacy in the context of belonging or being proper or
valid; a few see a sort of fiduciary duty imposing higher standards of behaviour
on business-men than on citizens at large’’ (Votaw, 1972, p. 25). Nowadays the
panorama is not much better. Carroll, one of the most prestigious scholars in this
discipline, characterized the situation as ‘‘an eclectic field with loose boundaries,
multiple memberships, and differ-ing training/perspectives; broadly rather than fo-
cused, multidisciplinary; wide breadth; brings in a wider range of literature; and
interdisciplinary’’ (Carroll, 1994, p. 14). Actually, as Carroll added (1994, p. 6),
the map of the overall field is quite poor.

However, some attempts have been made to ad-dress this deficiency. Frederick
(1987, 1998) out-lined a classification based on a conceptual transition from the
ethical–philosophical concept of CSR (what he calls CSR1), to the action-
oriented man-agerial concept of social responsiveness (CSR2). He then included
a normative element based on ethics and values (CSR3) and finally he
introduced the cosmos as the basic normative reference for social issues in
management and considered the role of science and religion in these issues
(CSR4). In a more systematic way, Heald (1988) and Carroll (1999) have offered
a historical sequence of the main developments in how the responsibilities of
business in society have been understood.

questioned as CSR seems to be a consequence of how this relationship is

understood (Jones, 1983; McMa-hon, 1986; Preston, 1975; Wood, 1991b).

In order to contribute to a clarification of the field of business and society, our aim
here is to map the territory in which most relevant CSR theories and related
approaches are situated. We will do so by considering each theory from the
perspective of how the interaction phenomena between business and society are
focused.

As the starting point for a proper classification, we assume as hypothesis that the
most relevant CSR theories and related approaches are focused on one of the
following aspects of social reality: economics, politics, social integration and
ethics. The inspiration for this hypothesis is rooted in four aspects that, according
to Parsons (1961), can be observed in any social system: adaptation to the
environment (related to resources and economics), goal attainment (re-lated to
politics), social integration and pattern maintenance or latency (related to culture
and val-ues).1This hypothesis permits us to classify these theories in four groups:

1. A first group in which it is assumed that the corporation is an instrument

for wealth crea-tion and that this is its sole social responsibil-ity. Only the
economic aspect of the interactions between business and society is
considered. So any supposed social activity is accepted if, and only if, it is
consistent with wealth creation. This group of theories could be call
instrumental theories because they understand CSR as a mere means to
the end of profits.

2. A second group in which the social power of corporation is emphasized,

specifically in its relationship with society and its responsibility in the
political arena associated with this power. This leads the corporation to
 accept social duties and rights or participate in certain social cooperation.
We will call this group political theories.

3. A third group includes theories which consider that business ought to

integrate social de-mands. They usually argue that business de-pends on
society for its continuity and growth and even for the existence of business
itself. We can term this group integrative theories.
4. A fourth group of theories understands that the relationship between
business and society is embedded with ethical values. This leads to a
vision of CSR from an ethical perspective and as a consequence, firms
ought to accept social responsibilities as an ethical obligation above any
other consideration. We can term this group ethical theories.

Throughout this paper we will present the most relevant theories on CSR and
related matters, trying to prove that they are all focused on one of the
forementioned aspects. We will not explain each theory in detail, only what is
necessary to verify our hypothesis and, if necessary, some complementary
information to clarify what each is about. At the same time, we will attempt to
situate these theories and approaches within a general map describing the cur-
rent panorama regarding the role of business in society.

Instrumental theories

In this group of theories CSR is seen only as a strategic tool to achieve economic
objectives and, ultimately, wealth creation. Representative of this approach is the
well-known Friedman view that ‘‘the only one responsibility of business towards
society is the maximization of profits to the share-holders within the legal
framework and the ethical custom of the country’’ (1970).2

Instrumental theories have a long tradition and have enjoyed a wide acceptance
in business so far. As Windsor (2001) has pointed out recently, ‘‘a leit-motiv of
wealth creation progressively dominates the managerial conception of
responsibility’’ (Windsor, 2001, p. 226).

Concern for profits does not exclude taking into account the interests of all who
have a stake in the firm (stakeholders). It has been argued that in certain
conditions the satisfaction of these interests can contribute to maximizing the
shareholder value (Mitchell et al., 1997; Odgen and Watson, 1999). An adequate
level of investment in philanthropy and social activities is also acceptable for the
sake of profits (McWilliams and Siegel, 2001). We will re-turn to these points
afterwards.

In practice, a number of studies have been carried out to determine the

correlation between CSR and
corporate financial performance. Of these, an increasing number show a positive
correlation be-tween the social responsibility and financial perfor-mance of
corporations in most cases (Frooman, 1997; Griffin and Mahon, 1997; Key and
Popkin, 1998; Roman et al., 1999; Waddock and Graves, 1997) However, these
findings have to be read with caution since such correlation is difficult to measure
(Griffin, 2000; Rowley and Berman, 2000).

Three main groups of instrumental theories can be identified, depending on the

economic objective proposed. In the first group the objective is the maximization
of shareholder value, measured by the share price. Frequently, this leads to a
short-term profits orientation. The second group of theories focuses on the
strategic goal of achieving competi-tive advantages, which would produce long-
term profits. In both cases, CSR is only a question of enlightened self-interest
(Keim, 1978) since CSRs are a mere instrument for profits. The third is related to
cause-related marketing and is very close to the second. Let us examine briefly
the philosophy and some variants of these groups.

Maximizing the shareholder value

A well-known approach is that which takes the straightforward contribution to
maximizing the shareholder value as the supreme criterion to evaluate specific
corporate social activity. Any investment in social demands that would produce
an increase of the shareholder value should be made, acting without deception
and fraud. In contrast, if the social demands only impose a cost on the company
they should be rejected. Friedman (1970) is clear, giving an example about
investment in the local community: ‘‘It will be in the long run interest of a
corporation that is a major employer in a small community to devote resources to
providing amenities to that community or to improving its government. That
makes it easier to attract desirable employees, it may reduce the wage bill or
lessen losses from pilferage and sabotage or have other worthwhile effects.’’ So,
the socio-economic objectives are completely separate from the economic
objectives.

Currently, this approach usually takes the share-holder value maximization as

the supreme reference for corporate decision-making. The Agency Theory
(Jensen and Meckling, 1976; Ross, 1973) is the most popular way to articulate
this reference. However, today it is quite readily accepted that shareholder value
maximization is not incompatible with satis-fying certain interests of people with a
stake in the firm (stakeholders). In this respect, Jensen (2000) has proposed
what he calls ‘enlightened value maximi-zation’. This concept specifies long-term
value maximization or value-seeking as the firm’s objec-tive. At the same time,
this objective is employed as the criterion for making the requisite tradeoffs
among its stakeholders.

Strategies for achieving competitive advantages

A second group of theories are focused on how to allocate resources in order to

achieve long-term social objectives and create a competitive advantage (Husted
and Allen, 2000). In this group three ap-proaches can be included: (a) social
investments in competitive context, (b) natural resource-based view of the firm
and its dynamic capabilities and (c) strategies for the bottom of the economic
pyramid.

a) Social investments in a competitive context. Porter and Kramer (2002) have

recently applied the well-known Porter model on competitive advantage (Porter,
1980) to consider investment in areas of what they call competitive context. 3 The
authors argue that investing in philanthropic activities may be the only way to
improve the context of competitive advantage of a firm and usually creates
greater social value than individual donors or government can. The reason
presented ) the opposite of Freidman’s position ) is that the firm has the
knowledge and resources for a better understanding of how to solve some
problems related to its mission. As Burke and Lodgson (1996) pointed out, when
philanthropic activities are closer to the company’s mission, they create greater
wealth than others kinds of donations. That is what happens, e.g., when a
telecommunications company is teach-ing computer network administration to
students of the local community.

b) Porter and Kramer conclude, ‘‘philanthropic investments by members of

cluster, either individ-ually or collectively, can have a powerful effect on
the cluster competitiveness and the performance of all its constituents
companies’’ (2002, pp. 60–61). Natural resource-based view of the firm
and dynamic capabilities. The resource-based view of the firm (Barney,
1991; Wernerfelt, 1984) maintains that the ability of a firm to perform
better than its compet-itors depends on the unique interplay of human,
organizational, and physical resources over time. Traditionally, resources
that are most likely to lead to competitive advantage are those that meet
four criteria: they should be valuable, rare, and inimita-ble, and the
organization must be organized to de-ploy these resources effectively.

The ‘‘dynamic capabilities’’ approach presents the dynamic aspect of the

resources; it is focused on the drivers behind the creation, evolution and recom-
bination of the resources into new sources of com-petitive advantage (Teece et
al., 1997). So dynamic capabilities are organizational and strategic routines, by
which managers acquire resources, modify them, integrate them, and recombine
them to generate new value-creating strategies. Based on this per-spective,
some authors have identified social and ethical resources and capabilities which
can be a source of competitive advantage, such as the process of moral
decision-making (Petrick and Quinn, 2001), the process of perception,
deliberation and responsiveness or capacity of adaptation (Litz, 1996) and the
development of proper relationships with the primary stakeholders: employees,
customers, suppliers, and communities (Harrison and St. John, 1996; Hillman
and Keim, 2001).

A more complete model of the ‘Resource-Based View of the Firm’ has been
presented by Hart (1995). It includes aspects of dynamic capabilities and a link
with the external environment. Hart ar-gues that the most important drivers for
new re-source and capabilities development will be constraints and challenges
posed by the natural biophysical environment. Hart has developed his conceptual
framework with three main inter-connected strategic capabilities: pollution
preven-tion, product stewardship and sustainable development. He considers as
critical resources continuous inprovement, stakeholder integration and shared
vision.

c) Strategies for the bottom of the economic pyramid.

Traditionally most business strategies are focused on targeting products at upper

and middle-class people, but most of the world’s population is poor or lower-
middle class. At the bottom of the economic pyra-mid there may be some 4000
million people. On reflection, certain strategies can serve the poor and
simultaneously make profits. Prahalad (2002), ana-lyzing the India experience,
has suggested some mind-set changes for converting the poor into active
consumers. The first of these is seeing the poor as an opportunity to innovate
rather than as a problem.

A specific means for attending to the bottom of the economic pyramid is

disruptive innovation. Disruptive innovations (Christensen and Overdorf, 2000;
Christensen et al., 2001) are products or ser-vices that do not have the same
capabilities and conditions as those being used by customers in the mainstream
markets; as a result they can be intro-duced only for new or less demanding
applications among non-traditional customers, with a low-cost production and
adapted to the necessities of the population. For example a telecommunications
company inventing a small cellular telephone system with lower costs but also
with less service adapted to the base of the economic pyramid.

Disruptive innovations can improve the social and economic conditions at the
‘‘base of the pyramid’’ and at the same time they create a competitive advantage
for the firms in telecommunications, consumer electronics and energy production
and many other industries, especially in developing countries (Hart and
Christensen, 2002; Prahalad and Hammond, 2002).

Cause-related marketing

Cause-related marketing has been defined as ‘‘the process of formulating and

implementing marketing activities that are characterized by an offer from the firm
to contribute a specified amount to a designated cause when customers engage
in a revenue-providing exchanges that satisfy organizational and individual
objectives’’ (Varadarajan and Menon, 1988, p. 60). Its goal then is to enhance
company revenues and sales or customer relationship by building the brand
through the acquisition of, and association with the ethical dimension or social
responsibility dimension (Murray and Montanari, 1986; Varadarajan and Menon,
1988). In a way, it seeks product differen-tiation by creating socially responsible
attributes that affect company reputation (Smith and Higgins,
2000). As McWilliams and Siegel (2001, p. 120) have pointed out: ‘‘support of
cause related marketing creates a reputation that a firm is reliable and honest.
Consumers typically assume that the products of a reliable and honest firm will
be of high quality’’. For example, a pesticide-free or non-animal-tested ingredient
can be perceived by some buyers as pref-erable to other attributes of
competitors’ products.
Other activities, which typically exploit cause-related marketing, are classical
musical concerts, art exhibitions, golf tournaments or literacy campaigns. All of
these are a form of enlightened self-interest and a win–win situation as both the
company and the charitable cause receive benefits: ‘‘the brand manager uses
consumer concern for business responsibility as a means for securing
competitive advantage. At the same time a charitable cause re-ceives substantial
financial benefits’’ (Smith and Higgins, 2000, p. 309).

Political theories

A group of CSR theories and approaches focus on interactions and connections

between business and society and on the power and position of business and its
inherent responsibility. They include both politi-cal considerations and political
analysis in the CSR debate. Although there are a variety of approaches, two
major theories can be distinguished: Corporate Constitutionalism and Corporate
Citizenship.

Corporate constitutionalism

Davis (1960) was one of the first to explore the role of power that business has in
society and the social impact of this power4. In doing so, he introduces business
power as a new element in the debate of CSR. He held that business is a social
institution and it must use power responsibly. Additionally, Davis noted that the
causes that generate the social power of the firm are not solely internal of the
firm but also external. Their locus is unstable and constantly shifting, from the
economic to the social forum and from there to the political forum and vice versa.

Davis attacked the assumption of the classical economic theory of perfect

competition that pre-cludes the involvement of the firm in society besides the
creation of wealth. The firm has power to influence the equilibrium of the market
and there-fore the price is not a Pareto optimum reflecting the free will of
participants with perfect knowledge of the market.

Davis formulated two principles that express how social power has to be
managed: ‘‘the social power equation’’ and ‘‘the iron law of responsibility’’. The
social power equation principle states that ‘‘social responsibilities of businessmen
arise from the amount of social power that they have’’ (Davis, 1967, p. 48). The
iron law of responsibility refers to the negative consequences of the absence of
use of power. In his own words: ‘‘Whoever does not use his social power
responsibly will lose it. In the long run those who do not use power in a manner
which society considers responsible will tend to lose it because other groups
eventually will step in to as-sume those responsibilities’’ (1960, p. 63). So if a firm
does not use its social power, it will lose its position in society because other
groups will occupy it, especially when society demands responsibility from
business (Davis, 1960).

According to Davis, the equation of social power-responsibility has to be

understood through the functional role of business and managers. In this respect,
Davis rejects the idea of total responsibility of business as he rejected the radical
free-market ideology of no responsibility of business. The limits of functional
power come from the pressures of different constituency groups. This ‘‘restricts
orga-nizational power in the same way that a govern-mental constitution does.’’
The constituency groups do not destroy power. Rather they define conditions for
its responsible use. They channel organizational power in a supportive way and
to protect other interests against unreasonable organizational power (Davis,
1967, p. 68). As a consequence, his theory is called ‘‘Corporate
Constitutionalism’’.

Integrative social contract theory

Donaldson (1982) considered the business and society relationship from the
social contract tradi-tion, mainly from the philosophical thought of Locke. He
assumed that a sort of implicit social contract between business and society
exists. This social contract implies some indirect obligations of business towards
society. This approach would overcome some limitations of deontological and
teleological theories applied to business.

Afterwards, Donaldson and Dunfee (1994, 1999) extended this approach and
proposed an ‘‘Integrative Social Contract Theory’’ (ISCT) in order to take into
account the socio-cultural context and also to integrate empirical and normative
aspects of management. Social responsibilities come from consent. These
scholars assumed two levels of con-sent. Firstly a theoretical macrosocial
contract appealing to all rational contractors, and secondly, a real microsocial
contract by members of numerous localized communities. According to these
authors, this theory offers a process in which the contracts among industries,
departments and economic sys-tems can be legitimate. In this process the
partici-pants will agree upon the ground rules defining the foundation of
economics that will be acceptable to

the ‘‘hyper-norms’’; they ought to take prece-dence over other contracts. These
hyper-norms are so fundamental and basic that they ‘‘are discernible in a
convergence of religious, political and philo-sophical thought’’ (Donaldson and
Dunfee, 2000, p. 441). The microsocial contracts show explicit or implicit
agreements that are binding within an identified community, whatever this may
be: industry, companies or economic systems. These microsocial contracts,
which generate ‘authentic norms’, are based on the attitudes and behaviors of
the members of the norm-generating community and, in order to be legitimate,
have to accord with the hyper-norms.
Corporate citizenship

Although the idea of the firm as citizen is not new (Davis, 1973) a renewed
interest in this concept among practitioners has appeared recently due to certain
factors that have had an impact on the business and society relationship. Among
these fac-tors, especially worthy of note are the crisis of the Welfare State and
the globalization phenomenon. These, together with the deregulation process
and decreasing costs with technological improvements, have meant that some
large multinational companies have greater economical and social power than
some governments. The corporate citizenship framework looks to give an
account of this new reality, as we will try to explain here.

In the 80s the term ‘‘corporate citizenship’’ was introduced into the business and
society relationship mainly through practitioners (Altman and Vidaver-Cohen,
2000). Since the late 1990s and early 21st century this term has become more
and more pop-ular in business and increasing academic work has been carried
out (Andriof and McIntosh, 2001; Matten and Crane, in press).

Although the academic reflection on the concept of ‘‘corporate citizenship’’, and

on a similar one called ‘the business citizen’, is quite recent (Matten et al., 2003;
Wood and Logsdon, 2002; among others), this notion has always connoted a
sense of belonging to a community. Perhaps for this reason it has been so
popular among managers and business people, be-cause it is increasingly clear
that business needs to take into account the community where it is operating.

The term ‘‘corporate citizenship’’ cannot have the same meaning for everybody.
Matten et al. (2003) have distinguished three views of ‘‘corporate citi-zenship’’:
(1) a limited view, (2) a view equivalent to CSR and (3) an extended view of
corporate citi-zenship, which is held by them. In the limited view ‘‘corporate
citizenship’’ is used in a sense quite close to corporate philanthropy, social
investment or certain responsibilities assumed towards the local community. The
equivalent to CSR view is quite common. Carroll (1999) believes that ‘‘Corporate
citizenship’’ seems a new conceptualization of the role of business in society and
depending on which way it is defined, this notion largely overlaps with other
theories on the responsibility of business in society. Finally, in the extended view
of corporate citizenship (Matten et al., 2003, Matten and Crane, in press),
corporations enter the arena of citizenship at the point of government failure in
the protection of citizenship. This view arises from the fact that some
corporations have gradually come to replace the most powerful institution in the
traditional concept of citizenship, namely government.

The term ‘‘citizenship’’, taken from political sci-ence, is at the core of the
‘‘corporate citizenship’’ notion. For Wood and Logsdon ‘‘business citizen- ship
cannot be deemed equivalent to individual citizenship-instead it derives from and
is secondary to individual citizenship’’ (2002, p. 86). Whether or not this view is
accepted, theories and approaches on ‘‘corporate citizenship’’ are focused on
rights, responsibilities and possible partnerships of business in society.

Some theories on corporate citizenship are based on a social contract theory

(Dion, 2001) as devel-oped by Donaldson and Dunfee (1994, 1999), al-though
other approaches are also possible (Wood and Logsdon, 2002).

In spite of some noteworthy differences in cor-porate citizenship theories, most

authors generally converge on some points, such as a strong sense of business
responsibility towards the local community, partnerships, which are the specific
ways of formal-izing the willingness to improve the local commu-nity,5 and for
consideration for the environment.

The concern for local community has extended progressively to a global concern
in great part due to the very intense protests against globalization, mainly since
the end of the 90s. This sense of global corporate citizenship led to the joint
statement ‘‘Global Cor-porate Citizenship – the Leadership Challenge for CEOs
and Boards’’, signed by 34 of the world largest multinational corporations during
the World Eco-nomic Forum in New York in January 2002. Subse-quently,
business with local responsibility and, at the same time, being a global actor that
places emphasis on business responsibilities in a global context, have been
considered as a key issue by some scholars (Tichy et al., 1997; Wood and
Lodgson, 2002).

Integrative theories

This group of theories looks at how business inte-grates social demands, arguing
that business depends on society for its existence, continuity and growth. Social
demands are generally considered to be the way in which society interacts with
business and gives it a certain legitimacy and prestige. As a con-sequence,
corporate management should take into account social demands, and integrate
them in such a way that the business operates in accordance with social values.

So, the content of business responsibility is limited to the space and time of each
situation depending on the values of society at that moment, and comes through
the company’s functional roles (Preston and Post, 1975). In other words, there is
no specific action that management is responsible for perform-ing throughout
time and in each industry. Basically, the theories of this group are focused on the
detection and scanning of, and response to, the social demands that achieve
social legitimacy, greater social acceptance and prestige.

Issues management

Social responsiveness, or responsiveness in the face of social issues, and

processes to manage them within the organization (Sethi, 1975) was an
approach which arose in the 70s. In this approach it is crucial to con-sider the
gap between what the organization’s relevant publics expect its performance to
be and the organi-zation’s actual performance. These gaps are usually located in
the zone that Ackerman (1973, p. 92) calls the ‘‘zone of discretion’’ (neither
regulated nor illegal nor sanctioned) where the company receives some unclear
signals from the environment. The firm should perceive the gap and choose a
response in order to close it (Ackerman and Bauer, 1976).

Ackerman (1973), among other scholars, analyzed the relevant factors regarding
the internal structures of organizations and integration mechanisms to manage
social issues within the organization. The way a social objective is spread and
integrated across the organization, he termed ‘‘process of institution-alization’’.
According to Jones (1980, p. 65), ‘‘cor-poratebehavior should not in most cases
be judged by the decisions actually reached but by the process by which they are
reached’’. Consequently, he emphasized the idea of process rather than
principles as the appropriate approach to CSR issues.

Jones draws an analogy with the political process assessing that the appropriate
process of CSR should be a fair process where all interests have had the
opportunity to be heard. So Jones has shifted the criterion to the inputs in the
decision-making pro-cess rather than outcomes, and has focused more on the
process of implementation of CSR activities than on the process of
conceptualization.

The concept of ‘‘social responsiveness’’ was soon widened with the concept
‘‘Issues Management’’. The latter includes the former but emphasizes the
process for making a corporate response to social issues. Issues management
has been defined by Wartick and Rude (1986, p. 124) as ‘‘the processes by
which the corporation can identify, evaluate and respond to those social and
political issues which may impact significantly upon it’’. They add that issues
management attempts to minimize ‘‘surprises’’ which accompany social and
political change by serving as an early warning system for potential
environmental threats and opportunities. Further, it prompts more systematic and
effective responses to particular issues by serving as a coordinating and
integrating force within the corporation. Issues management research has been
influenced by the strategy field, since it has been seen as a special group of
strategic issues (Greening and Gray, 1994), or a part of international studies
(Brewer, 1992). That led to the study of topics related with issues (identifi-cation,
evaluation and categorization), formalization of stages of social issues and
management issue re-sponse. Other factors, which have been considered,
include the corporate responses to media exposure, interest group pressures
and business crises, as well as organization size, top management commitment
and other organizational factors.

The principle of public responsibility

Some authors have tried to give an appropriate content and substance to help
and guide the firm’s responsibility by limiting the scope of the corporate
responsibility. Preston and Post (1975, 1981) criti-cized a responsiveness
approach and the purely process approach (Jones, 1980) as insufficient. In-
stead, they proposed ‘‘the principle of public responsibility’’. They choose the
term ‘‘public’’ ra-ther than ‘‘social’’, to stress the importance of the public process,
rather than personal-morality views or narrow interest groups defining the scope
of responsibilities.

According to Preston and Post an appropriate guideline for a legitimate

managerial behavior is found within the framework of relevant public policy. They
added that ‘‘public policy includes not only the literal text of law and regulation
but also the broad pattern of social direction reflected in public opinion, emerging
issues, formal legal requirements and enforcement or implementation
practices’’(Preston and Post, 1981, p. 57). This is the essence of the principle of
public responsibility.

Preston and Post analyzed the scope of managerial responsibility in terms of the
‘‘primary’’ and ‘‘sec-ondary’’ involvement of the firm in its social envi-ronment.
Primary involvement includes the essential economic task of the firm, such as
locating and establishing its facilities, procuring suppliers, engag-ing employees,
carrying out its production functions and marketing products. It also includes
legal requirements. Secondary involvements come as consequence of the
primary. They are, e.g., career and earning opportunities for some individuals,
which come from the primary activity of selection and advancement of
employees.

At the same time, these authors are in favor of business intervention in the public
policy process especially with respect to areas in which specific public policy is
not yet clearly established or it is in transition: ‘‘It is legitimate – and may be
essential – that affected firms participate openly in the policy formation’’ (Preston
and Post, 1981, p. 61).

In practice, discovering the content of the prin-ciple of public responsibility is a

complex and difficult task and requires substantial management attention. As
Preston and Post recognized, ‘‘the content of public policy is not necessarily
obvious or easy to discover, nor is it invariable over time’’ (1981, p. 57).
According to this view, if business adhered to the standards of performance in
law and the existing public policy process, then it would be judged acceptably
responsive in terms of social expectations.

The development of this approach was parallel to the study of the scope
regarding business–govern-ment relationship (Vogel, 1986). These studies fo-
cused on government regulations – their formulation and implementation – as
well as corporate strategies to influence these regulations, including campaign
contributions, lobbying, coalition building, grass-roots organization, corporate
public affairs and the role of public interest and other advocacy groups.

Stakeholder management

Instead of focusing on generic responsiveness, spe-cific issues or on the public

responsibility principle, the approach called ‘‘stakeholder management’’ is
oriented towards ‘‘stakeholders’’ or people who af- fect or are affected by
corporate policies and prac-tices. Although the practice of stakeholder
management is long-established, its academic development started only at the
end of 70s (see, e.g., Sturdivant, 1979). In a seminal paper, Emshoff and
Freeman (1978) presented two basic principles, which underpin stakeholder
management. The first is that the central goal is to achieve maximum overall
cooperation between the entire system of stake-holder groups and the objectives
of the corporation. The second states that the most efficient strategies for
managing stakeholder relations involve efforts, which simultaneously deal with
issues affecting multiple stakeholders.

Stakeholder management tries to integrate groups with a stake in the firm into
managerial decision-making. A great deal of empirical research has been done,
guided by a sense of pragmatism. It includes topics such as how to determine
the best practice in corporate stakeholder relations (Bendheim et al., 1998),
stakeholder salience to managers (Agle and Mitchell, 1999; Mitchell et al., 1997),
the impact of stakeholder management on financial performance (Berman et al.,
1999), the influence of stakeholder network structural relations (Rowley, 1997)
and how managers can successfully balance the com-peting demands of various
stakeholder groups (Og-den and Watson, 1999).

In recent times, corporations have been pressured by non-governmental

organizations (NGOs), activ-ists, communities, governments, media and other
institutional forces. These groups demand what they consider to be responsible
corporate practices. Now some corporations are seeking corporate responses to
social demands by establishing dialogue with a wide spectrum of stakeholders.

Stakeholder dialogue helps to address the question of responsiveness to the

generally unclear signals re-ceived from the environment. In addition, this dia-
logue ‘‘not only enhances a company’s sensitivity to its environment but also
increases the environments understanding of the dilemmas facing the organiza-
tion’’ (Kaptein and Van Tulder, 2003 p. 208).
Corporate social performance

A set of theories attempts to integrate some of the previous theories. The

corporate social performance (CSP) includes a search for social legitimacy, with
processes for giving appropriate responses.

Carroll (1979), generally considered to have introduced this model, suggested a

model of ‘‘cor-porate performance’’ with three elements: a basic definition of
social responsibility, a listing of issues in which social responsibility exists and a
specification of the philosophy of response to social issues. Carroll considered
that a definition of social responsibility, which fully addresses the entire range of
obligations business has to society, must embody the economic, legal, ethical,
and discretionary categories of business performance. He later incorporated his
four-part categorization into a ‘‘Pyramid of Corporate Social Responsibilities’’
(Carroll, 1991). Recently, Sch-wartz and Carroll (2003) have proposed an
alterna-tive approach based on three core domains (economic, legal and ethical
responsibilities) and a Venn model framework. The Venn framework yields seven
CSR categories resulting from the overlap of the three core domains.

Wartich and Cochran (1985) extended the Carroll approach suggesting that
corporate social involve-ment rests on the principles of social responsibility, the
process of social responsiveness and the policy of issues management. A new
development came with Wood (1991b) who presented a model of corporate
social performance composed of principles of CSR, processes of corporate
social responsiveness and outcomes of corporate behavior. The principles of
CSR are understood to be analytical forms to be filled with value content that is
operationalized. They include: principles of CSR, expressed on institu-tional,
organizational and individual levels, processes of corporate social
responsiveness, such as environ-mental assessment, stakeholder management
and is-sues management, and outcomes of corporate behavior including social
impacts, social programs and social policies.
Ethical theories

There is a fourth group of theories or approaches focus on the ethical

requirements that cement the relationship between business and society. They
are based on principles that express the right thing to do or the necessity to
achieve a good society. As main approaches we can distinguish the following.
Normative stakeholder theory

Stakeholder management has been included within the integrative theories group
because some authors consider that this form of management is a way to
integrate social demands. However, stakeholder management has become an
ethically based theory mainly since 1984 when Freeman wrote Strategic
Management: a Stakeholder Approach. In this book, he took as starting point that
‘‘managers bear a fiduciary relationship to stakeholders’’ (Freeman, 1984, p. xx),
instead of having exclusively fiduciary duties towards stockholders, as was held
by the conventional view of the firm. He understood as stakeholders those
groups who have a stake in or claim on the firm (suppliers, customers,
employees, stockholders, and the local community). In a more precise way,
Donaldson and Preston (1995, p. 67) held that the stakeholder theory has a
normative core based on two major ideas (1) stakeholders are persons or groups
with legitimate interests in procedural and/or substantive aspects of corporate
activity (stakeholders are identified by their interests in the corporation, whether
or not the corporation has any corre-sponding functional interest in them) and (2)
the interests of all stakeholders are of intrinsic value (that is, each group of
stakeholders merits consideration for its own sake and not merely because of its
ability to further the interests of some other group, such as the shareowners).

Following this theory, a socially responsible firm requires simultaneous attention

to the legiti-mate interests of all appropriate stakeholders and has to balance
such a multiplicity of interests and not only the interests of the firm’s stockhold-
ers. Supporters of normative stakeholder theory have attempted to justify it
through arguments taken from Kantian capitalism (Bowie, 1991; Evan and
Freeman, 1988), modern theories of property and distributive justice (Donaldson
and Preston, 1995), and also Libertarian theories with its notions of freedom,
rights and consent (Freeman and Philips, 2002).

A generic formulation of stakeholder theory is not sufficient. In order to point out

how corporations have to be governed and how managers ought to act, a
normative core of ethical principles is required (Freeman, 1994). To this end,
different scholars have proposed differing normative ethical theories. Free- man
and Evan (1990) introduced Rawlsianprinci-ples. Bowie (1998) proposed a
combination of Kantian and Rawlsian grounds. Freeman (1994) proposed the
doctrine of fair contracts and Phillips (1997, 2003) suggested introducing the
fairness principle based on six of Rawls’ characteristics of the principle of fair
play: mutual benefit, justice, coop-eration, sacrifice, free-rider possibility and
voluntary acceptance of the benefits of cooperative schemes. Lately, Freeman
and Philips (2002) have presented six principles for the guidance of stakeholder
theory by combining Libertarian concepts and the Fairness principle. Some
scholars (Burton and Dunn, 1996; Wicks et al., 1994) proposed instead using a
‘‘fem-inist ethics’’ approach. Donaldson and Dunfee (1999) hold their ‘Integrative
Social Contract The-ory’. Argandon˜a (1998) suggested the common good notion
and Wijnberg (2000) an Aristotelian ap-proach. From a practical perspective, the
normative core of which is risk management, The Clarkson Center for Business
Ethics (1999) has published a set of Principles of Stakeholder Management.

Stakeholder normative theory has suffered critical distortions and friendly

misinterpretations, which Freeman and co-workers are trying to clarify (Phil-lips
et al., 2003). In practice, this theory has been applied to a variety of business
fields, including stakeholder management for the business and society
relationship, in a number of textbooks Some of these have been republished
several times (Carroll and Buchholtz, 2002; Post et al., 2002; Weiss, 2003;
among others).

In short, stakeholder approach grounded in ethi-cal theories presents a different

perspective on CSR, in which ethics is central.
Universal rights

Human rights have been taken as a basis for CSR, especially in the global
market place (Cassel, 2001). In recent years, some human-rights-based
approaches for corporate responsibility have been proposed. One of them is the
UN Global Compact, which includes nine principles in the areas of human rights,
labor and the environment. It was first presented by the United Nations
Secretary- General Kofi Annan in an address to The World Economic Forum in
1999. In 2000 the Global Compact’s operational phase was launched at
 RESEARCH METHODOLOGY

HYPOTHESIS

Many individuals find investments to be fascinating because they can participate in the
decision making process and see the results of their choices. Not all investments will be
profitable, as investor wills not always make the correct investment decisions over the
period of years; however, you should earn a positive return on a diversified portfolio. In
addition, there is a thrill from the major success, along with the agony associated with the
stock that dramatically rose after you sold or did not buy. Both the big fish you catch and
the fish that get away can make wonderful stories.

RESEARCH METHODOLOGY
Secondary Data:
It will consist of information that already exists somewhere in documents. The secondary
data will be collected from the newspapers, expert reports, internet and HK Technology
website, etc.
 Internet :-www.google.com , etc
 Past records and analysis
 Books, Magazines & Journals.
Both primary and secondary data will be collected to analyze:
 Existing market scenario of Indian market with respect to Industry.
 Customers views regarding Indian financial industry
 Experts’ opinion regarding Indian Industry and contribution of Investment
decision into it.

TARGET AUDIENCE:
 Financial manager of the firm, and customers.

SCOPE OF THE WORK

This project is about hoe the Investor's Behavior is changing and they are now leaving
behind the sacred investment options like the fixed deposits, company deposits, gold etc.
Investors are now looking towards equity linked investment options.

JUSTIFICATION OF THE CHOOSING TOPIC

The unique investment strategy of letting the maturity of the debt investment run down
with time and targeting equity investments to capture dividends is targeted to deliver
positive returns over medium time frame. The investment strategy of the fixed income
portfolio is designed to remove the impact of interest rate movements over the medium
term. The strategy of targeting dividends in equities over a period is expected to improve
the yield of the fund. The above investment strategy expects to minimize capital loss in
adverse market condition and deliver moderate returns in stable/positive market
conditions.
 CHAPTER-IV

ANALYSIS AND FINDINGS

 CASE STUDY ANALYSIS OF DR. REDDY’S CSR
ACTIVITY IN INDIA
Dr. Reddy’s Laboratories was founded by Dr Anji Reddy, an entrepreneur-
scientist, in 1984. The DNA of the company is drawn from its founder and his
vision to establish India’s first discovery led global pharmaceutical company. In
fact, it is this spirit of entrepreneurship that has shaped the company to become
what it is today.

Dr Anji Reddy, having moved out of Standard Organics Limited, a company he

had successfully co-founded, started Dr. Reddy’s Laboratories with $ 40,000 in
cash and $120,000 in bank loan! Today, the company with revenues of Rs.2, 427
crore (US $546 million), as of fiscal year 2006, is India’s second largest
pharmaceutical company and the youngest among its peer group.

The company has several distinctions to its credit. Being the first pharmaceutical
company from Asia Pacific (outside Japan) to be listed on the New York Stock
Exchange (on April 11, 2001) is only one among them. And as always, Dr.
Reddy’s chose to do it in the most difficult of circumstances against widespread
skepticism. Dr. Reddy’s came up trumps not only having its stock oversubscribed
but also becoming the best performing IPO that year.

Dr. Anji Reddy is well known for his passion for research and drug discovery. Dr.
Reddy’s started its drug discovery programme in 1993 and within three years it
achieved its first breakthrough by out licensing an
anti-diabetes molecule to Novo Nordisk in March 1997. With this very small but
significant step, the Indian industry went through a paradigm shift in its image
from being known as just ‘copycats’ to ‘innovators’! Through its success, Dr.
Reddy’s pioneered drug discovery in India. There are several
such inflection points in the company’s evolution from a bulk drug (API)
manufacturer into a vertically integrated global pharmaceutical company today.

Today, the company manufactures and markets API (Bulk Actives), Finished
Dosages and Biologics in over 100 countries worldwide, in addition to having a
very promising Drug Discovery Pipeline. When Dr. Reddy’s started its first big
move in 1986 from manufacturing and marketing bulk actives to the domestic
(Indian) market to manufacturing and exporting difficult-to-manufacture bulk
actives such as Methyldopa to highly regulated overseas markets, it had to not
only overcome regulatory and legal hurdles but also battle deeply entrenched
mind-set issues of Indian Pharma being seen as producers of 'cheap' and
therefore ‘low quality’ pharmaceuticals. Today, the Indian pharma industry, in
stark contrast, is known globally for its proven high quality-low cost advantage in
delivering safe and effective pharmaceuticals. This transition, a tough and often-
perilous one, was made possible thanks to the pioneering efforts of
companies such as Dr. Reddy’s.

Today, Dr. Reddy’s continues its journey. Leveraging on its ‘Low Cost, High
Intellect’ advantage. Foraying into new markets and new businesses. Taking on
new challenges and growing stronger and more capable. Each failure and each
success renewing the sense of purpose and helping the company evolve.

With over 950 scientists working across the globe, around the clock, the
company continues its relentless march forward to discover and deliver a
breakthrough medicine to address an unmet medical need and make a difference
to people’s lives worldwide. And when it does that, it would only be the beginning
and yet it would be the most important step. As Lao Tzu wrote a long time ago,
‘Even a 1000 mile journey starts with a single step.’

OUR CORE PURPOSE

“ To help people lead healthier lives”

OUR VISION

“To become a discovery led global pharmaceutical company”

OUR VALUES

We strive for excellence in everything we think, say and do.

Quality: We are dedicated to achieving the highest levels of quality in everything

we do to delight customers, internal & external, every time

Respect for the Individual: We uphold the self esteem and dignity of each other
by creating an open culture conducive for expression of views and ideas
irrespective of hierarchy

Innovation & Continuous Learning: We create an environment of innovation and

learning that fosters, in each one of us, a desire to excel and willingness to
experiment

Collaboration & Teamwork: We seek opportunities to build relationships and leverage

knowledge, expertise and resources to create greater value across functions,
businesses and locations

Harmony & Social Responsibility: We take utmost care to protect our natural
environment and serve the communities in which we live and work

Our business practices are guided by the highest ethical standards of truth,
integrity and transparency.
Corporate social responsibility

While 'Sustainability: The Triple Bottom Line' as a term may have a

contemporary ring to it, the spirit underlying it has been relevant through the
ages.

In 1987, the World Commission on Environment and Development (established

by a resolution of UN General Assembly) defined sustainability as "Development
which meets the needs of the present without compromising the ability of future
generations to meet their own needs". It also popularized the use of this term for
resources renew ability, desired business plan and a progressive way of doing
things.

At Dr. Reddy's, we believe that any high performance sustainable organization

rests on the three pillars of economic, social and environmental performance. To
be a truly sustainable organization, in the broadest definition of its terms, an
organization must perform well across all three dimensions.

As a company, we are fully committed to the principles of sustainability. We see

our stakeholders as shareholders, to whom we promise sustained economic
performance, the society - to whom we promise to create positive impact
through our activities both business as well as voluntary - and finally the
environment, which we promise will be well protected and enriched from our
various activities.

In recognition of the conviction that the prosperity of communities is integral to

the success of companies, Social Initiatives is higher on the agenda of more
companies now than ever before.

At Dr Reddy’s, we take pride in the fact that our products and what they are
intended to achieve represent the core of Social Initiatives – to help people lead
healthier lives. The company achieves this objective through increased access
and affordability of its generics, API and branded generics products and
addressing unmet and undeserved medical needs by innovation through its
Specialty and NCE businesses.
At Dr Reddy’s, Social Initiatives represents an integral component of Corporate
Social Responsibility. Our investments in the communities have extended
beyond the adhoc disbursement of charity to a planned program in capability
building, helping extend the sporadic to the sustainable. The various
organizations that we support are:

Dr. Reddy’s Foundation

NAANDI Foundation

Centre for Social Initiative & Management (CSIM)

At the company, Social Initiatives does not just cover the community, but also
employees. This re-interpretation has happened for an important reason: society
represents a mix of employees and non-employees. By including employees in
our definition of Social Initiatives, the company has demonstrated that no
initiative can succeed unless if the initiators of the improvement do not figure
among the beneficiaries themselves. It is this comprehensive address –
employees to communities – that enhances the impact of the company’s social
initiatives, strengthening its case for true sustainability.

Dr. Reddy foundation

At Dr. Reddy’s we believe that for any development to be sustainable, people

need to be empowered to support themselves in the first place. The company
also believes that in every human being and organization there is a latent need to
‘give back to society’.

It is with this perspective that Dr. Reddy's Foundation was incepted by Dr K Anji
Reddy, Chairman of Dr. Reddy’s Laboratories, in 1996.

In Dr. K. Anji Reddy’s own words,

The Foundation acts as a social change catalyst that fosters, develops and
promotes initiatives at individual / group / organization levels to promote
sustainable human and social development. Believing in the inherent motivation
and capacity of the human being for progress – given the appropriate and
adequate environment - the Foundation innovates and tries out novel concepts in
pilot models that are continuously refined and scaled up to cover larger groups of
deprived populations.

Life . Research . Hope - Driven by this spirit, the company, led by the Chairman,
Dr K Anji Reddy, called upon similar-minded corporates and created a new social
platform, a not-for-profit development organization that could showcase not only
to India but the international community as well, the depth of corporate will in
shouldering the responsibility of finding solutions to long-pending social
development problems of the country.
NaandiFoundation
Naandi Foundation was created through this effort. It is an autonomous, public
trust that works together with governments, corporates and civil society to
improve the lives of the underprivileged.

To underline the company's commitment in supporting Naandi's objectives, Dr K

Anji Reddy became one of its principal founders, and took on the responsibility of
its Chairmanship as well.

The employees of Dr Reddy's too have been staunch supporters of Naandi's

vision of improving lives. The company has defined 'corporate giving' by coming
forward to donate unconditionally to Naandi's social initiative programs through
the Power of 10™.

The Power of 10™

The Power of 10™ is a mechanism created by Naandi that allows everyone to do

their bit for the society, even if it is donating Rs 10 every month towards a cause.
And leading the way, we are proud to say, have been the company's factory
workers. They give generously to the Power of 10™ , which is channelised by
Naandi into its education project, popularly known as the ' Support Our Schools'

program, aimed at improving the quality of education in over 2000 government

schools.

To encourage this culture of giving showcased by its employees, Dr. Reddy's too
makes a contribution to the Power of 10™ that matches the contributions made
by the employees.

Dr. Reddy's has become a model that is being emulated by more and more
corporates, institutions, and individuals thereby enabling Naandi to become the
platform that allows for an interface between civil society and the
underprivileged.
For employees who want to do more, Naandi offers several windows of
opportunities to give back to the society. These range from adopting government
schools, and volunteering in them to improve quality education, to participating in
tribal development projects. Dr. Reddy's new recruits inevitably get their first
taste of rural India, every year, through an Outbound Rural Sensitivity Training,
that is organised by Naandi.

Ability to garner civil society support has propelled Naandi's growth and reach. It
is the only NGO in the country to run automated central Midday meal kitchens in
urban centres - the ones at Hyderabad and Visakhapatnam presently cater to
around 1200 government schools. So far the kitchens have supplied 45 million
meals, without any complaints, to the underprivileged that come to these schools.
This task gets bigger as Naandi targets to implement this model for the children
of 5 other cities in the country by 2005.

Among its other innovations, Naandi has enabled the revival of dead irrigation
assets by converting the small farmer into a micro-entrepreneur and bringing
water back to more than 40,000 drought -hit families. By creating sustainable and
cost-effective social entrepreneurship models Naandi is enabling technology
transfers from The Lawrence Berkeley National Laboratory, California , to bring
safe drinking water to Indian villages. And in keeping with its vision, Naandi
continues to create new development breakthroughs in the areas of health,
education and livelihood that are being replicated by governments across the
country to impact millions of men, women and children in the country.

Centre for Social Initiative and Management (CSIM)

Centre for Social Initiative and

Several social divides confront the Indian
Management (CSIM), an
society today: their growing intensity and
Initiative under the aegis of
emerging newer ones make the situation
Manava Seva Dharma
increasingly difficult.
Samvardhani (MSDS), is a
registered Public Charitable
Social Work education in the country does not
 prepare students for such a challenge -
Trust with Mr. P.N.Devarajan
therefore, the need for professional and
as its founder and Managing
entrepreneurial talent. Compassionate
Trustee. The Hyderabad
individuals, who pitch in with noble intentions,
Chapter of CSIM, started in
have limitations in finding breakthrough
2002, is supported by
solutions and thus add to the list of non-
Dr.Reddy's as CSIM fits
performing and under-performing NGOs.
Dr.Reddy's concept of
social sustainability through
enhancing community value
through their programmes.

The environment thus presents an opportunity for individuals with initiative and
who can think of bold and creative solutions to make a significant difference
through concrete actions. The challenge is to discover and mould Social
Entrepreneurs, who can generate radical, path-breaking solutions to social
divides, who can take reasonable risks and persistently work towards creating a
lasting social impact. Similarly, small and medium tier non-governmental
organizations (NGOs), with compassionate individuals as leaders, also need
organizational skills to recharge themselves, refocus priorities and become
impact-driven. They need a long-term approach to sustenance, creatively plan a
revenue model and leverage hidden resources including volunteer talent.

Centre for Social Initiative and Management (CSIM) is a learning center that

 Enrolls, discovers and shapes Social Entrepreneurs

 Supports the process of social entrepreneurship in small and medium
NGOs
 Provides a volunteer constituency to Social Entrepreneurs and NGOs

At CSIM, you will have access to:

Social Entrepreneurship Initiative that is knowledge and involvement based

and offers learning in Social Entrepreneurship. The programs are:
  One year PG diploma in Social Initiative and Management,
 Four month part-time program in Social Entrepreneurship Outlook,
 Training for volunteers who wish to partner with Social Entrepreneurs,
 Entrepreneurship Learning club as an interactive networking platform,
 Incubation service to design and deploy impact based social change
initiatives
 Internship program for the socially conscious
 Customized management skill development programs for NGOs

Volunteering Initiative, which offers short term and action oriented programs for
socially conscious individuals, youth and working professionals. Several
platforms such as the Social Action Group, Student Volunteer Consulting
program and Student-Non Profit Exchange programs are operational with
individual volunteers and also in partnership with colleges, schools and
corporates.

Education - Program Overview

A conviction that poor are not poor but rich by a state and conscientious civil
society and it is by accessing those who had failed in getting democratic
institutions work for them, with the institutions and standing by them in realizing
their constitutional rights has been the motive force behind all what DRF has
been doing since 1997.

Education is more than attending schools, it decides how life would be and it
relieves one from the circularity in life and it is the deciding line that separates
participants in the development from those who are left behind. The very
essentiality of education makes it a fundamental right. DRF choose to stand by
the children, who are denied of that right and make every effort possible to
support them realize their rights.
Besides undertaking the programme of
mobilising children to school we thought
it would be half hearted effort unless we
address the issue of quality education
which is no less a right than accessing
school, which led us to take up a
programme of partnering with schools in
Secunderabad and Hyderabad districts in
improving school processes, curriculum
delivery mechanisms to ensure every
pupil get trained in curricular objectives
proclaimed by the government.

Organization had taken up several programs to support young persons reclaim

their education, ABC centers mobilize adolescent boys and girls who are past
their school age Give them education, prepare them to complete 7th and 10th
exams and let them acquire relevant Certification to pursue their careers .DRF
also facilitates youngsters to get trained in the modern skills like communication
and computers and expose them to various opportunities.

As we are not duplicating the functions of the government, we are not playing
the role of the state by presenting alternative institutions; conversely we are not
working on behalf of the communities who are deprived of life's opportunities to
secure them services, what we are consciously attempting is to prepare
communities realize and articulate their rights And invest in the processes that
facilitate them access institutions.

Since education is the field of activity we chose and mobilizing communities

through awareness campaigns, facilitating youth, parents and leaders of the
community to form Comities that look after children's schooling particularly
engaged in campaigns against the system of child labour that deprives children
of their right to education.
We have been working in close collaboration with the government so as to
sensitize them of the needs and attending difficulties of the communities in
schooling their children and Preparing government schools to grow into quality
oriented institutions that deliver their mandate effectively.

No of
Number of
S. no Programme Schools/ Places
Children
Centers

Balanagar mandal,
Interventions in
57 Schools Rangareddy dt
1 Government 32,792
15 Schools Hyderabad &
Schools
Secunderabad

Intervention in V.R.Puram mandal,

2 32 schools 3,633
Tribal Schools Khammam

Kallam Anji
Madinaguda,
3 Reddy 1 School 1,400
Hyderabad
Vidyalaya

Vocational Madinaguda,
4 1 School
College Hyderabad

Adolescent
5 7 Centers Hyderabad 851
Bridge Course

Short term
Kawadiguda,
6 Vocational 1 Center 350
Hyderabad
Course

Residential Sevalalnagar Tanda,

7 Bridge Course 2 Centers Moosapet, Balanagar 75
Center mandal
 Balanagar mandal,
Early Childhood
8 19 Centers Rangareddy Dt 1463
Centers
Andhra Pradesh

Livelihoods - LABS

FINDINGS AND INFERENCES

While 'Sustainability: The Triple Bottom Line' as a term may have a
contemporary ring to it, the spirit underlying it has been relevant through the
ages.
In 1987, the World Commission on Environment and Development (established
by a resolution of UN General Assembly) defined sustainability as "Development
which meets the needs of the present without compromising the ability of future
generations to meet their own needs". It also popularized the use of this term for
resources renew ability, desired business plan and a progressive way of doing
things.
At Maruti's, we believe that any high performance sustainable organization rests
on the three pillars of economic, social and environmental performance. To be a
truly sustainable organization, in the broadest definition of its terms, an
organization must perform well across all three dimensions.
As a company, we are fully committed to the principles of sustainability. We see
our stakeholders as shareholders, to whom we promise sustained economic
performance, the society - to whom we promise to create positive impact through
our activities both business as well as voluntary - and finally the environment,
which we promise will be well protected and enriched from our various activities.
In recognition of the conviction that the prosperity of communities is integral to
the success of companies, Social Initiatives is higher on the agenda of more
companies now than ever before.
At Dr Reddy’s, we take pride in the fact that our products and what they are
intended to achieve represent the core of Social Initiatives – to help people lead
healthier lives. The company achieves this objective through increased access
and affordability of its generics, API and branded generics products and
addressing unmet and undeserved medical needs by innovation through its
Specialty and NCE businesses.
At Dr Reddy’s, Social Initiatives represents an integral component of Corporate
Social Responsibility. Our investments in the communities have extended
beyond the adhoc disbursement of charity to a planned program in capability
building, helping extend the sporadic to the sustainable. The various
organizations that we support are:
 Maruti’s Foundation

NAANDI Foundation

Centre for Social Initiative & Management (CSIM)

At the company, Social Initiatives does not just cover the community, but also
employees. This re-interpretation has happened for an important reason: society
represents a mix of employees and non-employees. By including employees in
our definition of Social Initiatives, the company has demonstrated that no
initiative can succeed unless if the initiators of the improvement do not figure
among the beneficiaries themselves. It is this comprehensive address –
employees to communities – that enhances the impact of the company’s social
initiatives, strengthening its case for true sustainability.

LIMITATIONS

Many constraints were involved in doing this study. Some of them are as follows.
 The most significant limitation has been the individuals involved in this
study were very busy and did not spare much time in discussion.
 The size selected for the Project was too small as compared to large one.
 The project was carried out on secondary data , so findings on data
gathered can be best true for Delhi only and not applicable to other parts
of state and country.

RECOMMENDATION

 Each and every company should undertake the element of corporate

social responsibility into consideration.
 It is for the benefit of the companies long life and consistent growth.
  As we have seen in this project, IOCL has conducted a number of social
responsibility activities, it has gained a good reputation in the globally
competitive market.
 In these days more social responsibility u undertake. More you will get
consumers satisfaction and earn our customers loyally
 Thus, for having a consistent survival for the business and to stay ahead
of our rivals one has to mandatorily conduct the csr activities.
 As the business is operated within the society, it becomes compulsory to
conduct csr activities to win consumers confidence.

Some of the benefits derived from CSR

1) CORPORATE REPUTATION AND ENHANCED BRAND IMAGE
Good organizational performance in relation to CSR can build reputation while
poor performance can damage brand value. Among other things, a good
reputation affords resource companies their social license to operate and
improves relations with regulators, which help them obtain the required permits
for their operations with fewer hold-ups. It also helps attract good employees in
what is often a tight labor market. It also allows companies to tap into a growing
demand for values-based products or services.
2) EARN AND MAINTAIN SOCIAL LICENSE TO OPERATE
For resource companies, reputation as a good corporate citizen determines its
social license to operate and expand. Failing to obtain community support or
attracting the ire of the non-governmental community can increase costs by
holding up approvals in lengthy public hearings. An example of this accounts a
nearby mine that failed to invest in developing relations with its local communities
and non-governmental organizations saw its project challenged in court, even
after permits had been issued by the relevant regulatory authorities. The
company in question invested seven years and $30 million in a mine that never
opened. Thus, CSR links business vision and mission with proper ethics and
community enhancement. Moreover, corporations are keen to avoid interference
in their business through taxation or regulations. By taking substantive voluntary
steps, they can persuade governments and the wider public that they are taking
issues such as health and safety, diversity or the environment seriously, and so
avoid intervention. This also applies to firms seeking to justify eye-catching
profits and high levels of boardroom pay. Those operating away from their home
country can make sure they stay welcome by being good corporate citizens with
respect to labour standards and impacts on the environment.

3) ESTABLISH OR IMPROVE REPUTATION WITH INVESTORS, BOND

AGENCIES AND BANKS
There is a small but growing trend in the investment community to use
environmental and social performance factors to evaluate a company’s suitability
for investment. This is because “a company’s environmental and social
performance is an increasingly potent proxy and leading indicator” for three
typically under-weighted drivers critical to future profitability potential: (1)
corporate agility or adaptability; (2) durability of a firm’s competitive advantage;
(3) and the quality of its strategic management. In addition to institutional
investors, individual investors are using environmental and social criteria to guide
their investment decisions. Banks and insurers are also beginning to look at a
company’s environmental and social performance and activities to determine
risks and liabilities. Companies that can demonstrate they are acting to reduce
environmental and social risks and future liabilities can benefit from enhanced
credit worthiness and lower premiums.

4) REDUCE AND MANAGE BUSINESS RISKS

Managing risk in an increasingly complex market with greater stakeholder
scrutiny of corporate activities is becoming essential to business success.
Companies are starting to realize that failing to invest the time and resources in
understanding stakeholder expectations and address their concerns upfront can
increase risks to business such as project delays or cancellations, public
relations disasters, and damaged reputations.

5) EMPLOYEE MORALE AND PRODUCTIVITY

CSR programs contribute to increased employee morale and motivation and
these, in turn, translate into greater productivity. It’s observed in many companies
that its good employment practices and safety record demonstrate to employees
that the company cares, and this improves labor productivity. It can also help in
reinforcing the teamwork culture and gives individuals the opportunity to
demonstrate skills such as leadership that they might not otherwise have a
chance to in their day-to-day duties. These have advantages in attracting and
maintaining good people, keeping them loyal and motivated, all of which translate
into better service to their clientele.

6) ATTRACT AND MAINTAIN EMPLOYEES

There is growing evidence that companies with strong CSR or sustainability
reputations often find it easier to recruit and retain high quality employees in tight
labor markets. A 1999 study by the World Resources Institute (WRI) and the
Initiative for Social Innovation Through Business (ISIB) entitled Beyond
Pinstripes Preparing MBAs for Social and Environmental Stewardship found that
graduates of MBA programs look at corporate values in addition to other criteria
(such as salaries, job responsibilities, etc) in determining where to work. A
reputation as a good place to work is also making it easier to attract people to
move to a relatively remote region of the country and work in what is perceived to
be a relatively dangerous industry.

7) COMPETITION FOR ACCESS TO RESOURCES

A good track record for managing social and environmental performance and a
demonstrated willingness to work with stakeholders to address their concerns
can enhance the success of bids when competing with others for access to
resources such as energy, minerals and forests. A company’s good reputation for
negotiating and honoring agreements with indigenous groups and communities
where they are ensured a share of the benefits (in terms of jobs, royalties, etc)
can help in accessing rights in new areas.

8) ACCESS TO MARKETS/CUSTOMERS
Investment in CSR pays off in improved access to markets, including customer
loyalty, security in existing markets and attractiveness in new markets. Quoting a
CEO who is a CSR advocate, “someone who is willing to forego some return on
his or her investments to support programs that improve the environment or the
lives of others—is probably only a small percent of the total market, I feel that
CSR work nevertheless attracts new depositors as there is evidence that people
look at what a company is doing as a proxy for how they will be treated as
customers.

9) CORPORATE VALUES: “THE RIGHT THING TO DO”

Majority of companies identified CSR as being the “right thing to do since it was
very much a part of the corporate identity. Husky Injection Molding sees itself as
a leader in its industry and wants to maintain this position. CSR is strongly
rooted in its origins as a cooperative committed to working for the sustainable
development of communities and as a means of giving back.
10) MEET CHANGING STAKEHOLDER EXPECTATIONS
An important driver for many companies is the expanding definition of who
constitutes a stakeholder and the changing nature of their expectations. Over the
last decade, the definition of “stakeholder” has expanded beyond the traditional
stakeholder group of governments, shareholders and employees to include
environmental organizations, social activists, communities, suppliers, and other
special interest groups. This expanded group of stakeholders has become more
global in its reach and has a better understanding of business than ever before.
More and more, stakeholders want not only to be informed of business’s
activities and performance, but also to be involved in setting social and
environmental performance objectives. Changing expectations are a key driver in
encouraging companies to rethink on how they do businesses
11) COST SAVINGS/IMPROVE THE BOTTOM LINE
While few studies have been able to conclusively draw a positive correlation
between an integrated approach to CSR and bottom-line performance, there are
many examples of the business benefits that results from individual program
areas that constitute CSR. While most companies interviewed reported that their
CSR programs had resulted in cost savings, the majority of these were attributed
to environmental programs. Examples include, DuPont Canada, which has
realized financial benefits through waste and energy intensity reductions. A
partnership between the company and Collins and Aikman, an important
customer, resulted in the establishment of recycle “loops” for “fluff” type waste.
The project team conducted a comprehensive environmental assessment that
alerted the team to an opportunity to divert 9 tonnes of “fluff” waste through
recycling, annually. Cost reductions total approximately $15,000 annually. The
contribution of investment in social programs to bottom line performance is less
well understood.
12) IMPROVED RELATIONS WITH STAKEHOLDERS / DISPUTE
RESOLUTION / ISSUES MANAGEMENT
Most companies cite improved relations with stakeholders as an outcome of their
CSR activities. When stakeholders see that companies are open to hearing their
concerns and working with them to address them, trust is built which is invaluable
to resolving disputes and issues. CPR’s work to re-establish channels of
communication with municipalities and communities is helping build the trust that
will allow them to move from a situation where disputes are resolved through the
courts at a cost to all involved, to a more collaborative approach where these can
be addressed and resolved outside the courts. Often this approach leads to
innovative solutions that might not have been thought of otherwise.

13) PROVIDE VALUABLE INPUT TO STRATEGIC PLANNING, AS WELL AS

A BETTER UNDERSTANDING OF SUSTAINABILITY ISSUES FACING THE
COMPANY
A number of companies noted that stakeholder engagement was important to
understanding sustainability issues. Vanity uses the Accountability 1000
standard, an international process for accountability, auditing and reporting which
emphasizes stakeholder engagement as a means for aligning corporate values
and activities with stakeholder expectations.

14) ESTIMULATE INNOVATION AND GENERATE IDEAS

By examining core businesses through the lens of corporate social responsibility,
some companies saw an avenue for innovation and developed new business
prospects.
CONCLUSION
Corporate governance also known as the corporate social responsibility for the
firm which operating in the various geography in the world Corporate social
responsibility (CSR) till very recently was viewed as a philanthropic activity
indulged into only when the firms were in jeopardy (Adenekan, 2007). Though
the earlier decades are referred to as “false dawns” wherein CSR had a regional,
person cantered philanthropic focus, it is now viewed to be inclusive, broad and
diverse (Silberhorn and Warren, 2007). It is not only used for fulfilling legal
expectations but also for investing more into human capital, the environment and
the relations with stakeholders. Companies facing the challenges of globalization
are aware that CSR can be of direct economic value. They view these activities
not as a cost but an investment, as a ‘long term strategy minimizing risks linked
to uncertainty’. (European Commission, 2001). According to Sacconi, (2007)
when firms fulfill their “fiduciary duties” to their stakeholders, they benefit from
reputation and the “positioning of the firm with respect to social issues is clearly a
way to differentiate the firm and its products and services in ways that creates
value” (Husted and Allen, (2007). Developed countries like USA and UK have
long seen CSR as a practice that benefits both organizations and society (Etang,
1994). Marketing communications of companies are also focusing on the
communication of their CSR initiatives (eg. Sunfeast). It has also been studied
that the composition of the board of directors also influences the CSR as outside
directors appear more concerned about CSRs and hence the firm are more likely
to engage in socially responsible activities (Ibrahim et al., 2003) Increased
globalization along with increasing the opportunities for business has also
brought the businesses under the scrutiny of different audiences, NGOs and
media.
It is predicted that in the times to come companies will be ‘judged more by their
social policies than on their delivery of products and services’ (Juholin, 2004).
Debacles like Enron and Worldcom did cause a slew of critiques against the CSR
initiatives but these critiques were largely ill founded (Stoll, 2007) Many theorists
have also argued about the economic impact of CSR, some relating it positively
with the profit (Adenekan, 2007; Joyner and Payne, 2002) and some feeling that
no such relationship exists (Aupperle et al., 1985). Bird et al., 2007 studied that
the market is influenced by the independent CSR activities and also by the
totality of these activities and the gains can be in terms of economic performance
or social performance (Cottrill, 1990). Since CSR and corporate reputation are
the two sides of the same coin (Hillenbrand and Money, 2007) the current paper
examines how corporate enterprises are currently using CSR initiatives as a part
of their corporate strategy and public relations pertaining to the same.CSR is a
multidimensional concept (Stanwick and Stanwick, 1998) and is comprised of a
number of variables. These variables include: firm’s profitability, charitable giving,
environmental emissions, women and minority members on the board of
directors, women and minority members within the firm, and annual salary and
monetary bonus of the Chief Executive Officer. In the Indian context it has been
observed that out of the 27 firms surveyed, 3 firms did not indicate any CSR
initiative being taken, and two firms expressed the need to take CSR initiatives.
This works out to 11% of the firms surveyed, which are apparently not taking
CSR initiatives. The bar graph below shows the number of firms taking different
CSR initiatives.
 APPENDICES

 Books:
 Principles and Practice of Management
 Business environment
- Francis Cherunilam
 Essentials of Business Environment
- K. Aswathappa
 Corporate Social Responsibilities concepts & Cases – Vol. I
- ICFAI University

 Magazines:
 Business Today (May 8th 2005)

 Newspaper:
 Midday (September 17th 2005)

Webliography:

 www.ril.com/aboutus
 www.prdomain.com
 www.rel.co.in
 www.infochangeindia.org
 http://www.bombaychamber.com/csr.htm
 http://www.standardchartered.com/corporateresponsibility/index.html
 www.indianngos.com/corporate/mahindra
 www.mahindrabt.com
 www.mahindra.com