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Objectives of the study

1. The primary objective of the study was to know about corporate social responsibilities
and how it is helpful for any business organization.

2. Another important objective was to have a crystal clear picture of collusive oligopoly.

3. The secondary objective of the study was to identify the nature of volatility in price of
crude oil.

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Corporate Social Responsibility (CSR)
Introduction
I think many people assume, wrongly, that a company exists simply to make money. While this
is an important result of a company’s existence, we have to go deeper and find the real reasons
for our being. As we investigate this, we certainly come to the conclusion that a group of people
get together and exist as an institution that we call a company so that they are able to accomplish
something collectively that they could not accomplish separately – they make a contribution to
society, a phrase which sounds weird but is fundamental.

Corporate social responsibility (CSR) is also known by a number of other names. These include
corporate responsibility, corporate accountability, corporate ethics, corporate citizenship or
stewardship, responsible entrepreneurship, and “triple bottom line,” to name just a few. As CSR
issues become increasingly integrated into modern business practices, there is a trend towards
referring to it as “responsible competitiveness” or “corporate sustainability.”

A key point to note is that CSR is an evolving concept that currently does not have a universally
accepted definition. Generally, CSR is understood to be the way firms integrate social,
environmental and economic concerns into their values, culture, decision making, strategy and
operations in a transparent and accountable manner and thereby establish better practices within
the firm, create wealth and improve society. As issues of sustainable development become more
important, the question of how the business sector addresses them is also becoming an element
of CSR.

The World Business Council for Sustainable Development has described CSR as the business
contribution to sustainable economic development. Building on a base of compliance with
legislation and regulations, CSR typically includes “beyond law” commitments and activities
pertaining to:

• Corporate governance and ethics

• Health and safety

• Environmental stewardship

• Human rights

• Sustainable development

• Conditions of work

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• Industrial Relations

Definition(s)
Corporate social responsibility (CSR) is the responsibility of an organization for the impacts of
its decision and activities on society and environment through transparent and ethical behavior
that is consistent with sustainable development and welfare of the society; takes into the account
the expectations of stakeholders; is in compliance with applicable law and consistent with
international norms of behavior and is integrated throughout the organization.

Corporate social responsibility is a form of corporate self-regulation integrated into a business


model. CSR policy functions as a built-in, self-regulating mechanism whereby business monitors
and ensures its active compliance with the spirit of the law, ethical standards, and international
norms. The goal of CSR is to embrace responsibility for the company's actions and encourage a
positive impact through its activities on the environment, consumers, employees, communities,
stakeholders and all other members of the public sphere. Furthermore, CSR-focused businesses
would proactively promote the public interest by encouraging community growth and
development, and voluntarily eliminating practices that harm the public sphere, regardless of
legality. CSR is the deliberate inclusion of public interest into corporate decision-making, and
the honouring of a triple bottom line: people, planet, profit.

Corporate Social Responsibility (CSR) is the decision-making and implementation process that
guides all company activities in the protection and promotion of international human rights,
labour and environmental standards and compliance with legal requirements within its operations
and in its relations to the societies and communities where it operates. CSR involves a
commitment to contribute to the economic, environmental and social sustainability of
communities through the on-going engagement of stakeholders, the active participation of
communities impacted by company activities and the public reporting of company policies and
performance in the economic, environmental and social arenas.

Corporate Social Responsibility is a commitment to behave ethically and contribute to economic


development while improving the quality of life of our workforce and their families as well as
the local community at large.

Corporate social responsibility is a concept that all companies have obligations to the wider
community and that good corporate citizenship extends further than simply following the law.

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What are not corporate social responsibilities?

Corporate social responsibilities are not legal or regulatory obligations. It is a kind of voluntary
act performed by organization for the welfare of the society and for the welfare of its
stakeholders. However, all the activities under corporate social responsibility has to deal with the
image of the company.

Corporate social responsibility is not a cause-related marketing. Cause marketing or cause-


related marketing refers to a type of marketing involving the cooperative efforts of a "for profit"
business and a non-profit organization for mutual benefit. The term is sometimes used more
broadly and generally to refer to any type of marketing effort for social and other charitable
causes, including in-house marketing efforts by non-profit organizations. Cause marketing
differs from corporate giving (philanthropy) as the latter generally involves a specific donation
that is tax deductible, while cause marketing is a marketing relationship generally not based on a
donation.

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Reasons for CSR

In the flat world, with lengthy global supply chains, the balance of power between global
companies and the individual communities in which they operate is tilting more and more in
favor of the companies As such these companies are going to command more power, not only to
create value but also to transmit values, than any other institution on the planet.

Many factors and influences have led to increasing attention being devoted to the role of
companies and CSR. These include:

• Sustainable development: United Nations (UN) studies and many others have
underlined the fact that humankind is using natural resources at a faster rate than they are
being replaced. If this continues, future generations will not have the resources they need
for their development. In this sense, much of current development is unsustainable—it
can’t be continued for both practical and moral reasons. Related issues include the need
for greater attention to poverty alleviation and respect for human rights. CSR is an entry
point for understanding sustainable development issues and responding to them in a
firm’s business strategy.

• Globalization: With its attendant focus on cross-border trade, multinational enterprises


and global supply chains—economic globalization is increasingly raising CSR concerns
related to human resource management practices, environmental protection, and health
and safety, among other things. CSR can play a vital role in detecting how business
impacts labour conditions, local communities and economies, and what steps can be
taken to ensure business helps to maintain and build the public good. This can be
especially important for export-oriented firms in emerging economies.

• Governance: Governments and intergovernmental bodies, such as the UN, the


Organization for Economic Co-operation and Development (OECD) and the International
Labour Organization (ILO) have developed various compacts, declarations, guidelines,
principles and other instruments that outline norms for what they consider to be
acceptable business conduct. CSR instruments often reflect internationally agreed goals
and laws regarding human rights, the environment and anti-corruption.

• Corporate sector impact: The sheer size and number of corporations, and their potential
to impact political, social and environmental systems relative to governments and civil
society, raise questions about influence and accountability. Even small and medium size
enterprises (SMEs), which collectively represent the largest single employer, have a
significant impact. Companies are global ambassadors of change and values. How they
behave is becoming a matter of increasing interest and importance.

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• Communications: Advances in communications technology, such as the Internet and
mobile phones, are making it easier to track and discuss corporate activities. Internally,
this can facilitate management, reporting and change. Externally, NGOs, the media and
others can quickly assess and profile business practices they view as either problematic or
exemplary. In the CSR context, modern communications technology offers opportunities
to improve dialogue and partnerships.

• Finance: Consumers and investors are showing increasing interest in supporting


responsible business practices and are demanding more information on how companies
are addressing risks and opportunities related to social and environmental issues. A sound
CSR approach can help build share value, lower the cost of capital, and ensure better
responsiveness to markets.

• Ethics: A number of serious and high-profile breaches of corporate ethics resulting in


damage to employees, shareholders, communities or the environment—as well as share
price—have contributed to elevated public mistrust of corporations. A CSR approach can
help improve corporate governance, transparency, accountability and ethical standards.

• Consistency and Community: Citizens in many countries are making it clear that
corporations should meet the same high standards of social and environmental care, no
matter where they operate. In the CSR context, firms can help build a sense of
community and shared approach to common problems.

• Leadership: At the same time, there is increasing awareness of the limits of government
legislative and regulatory initiatives to effectively capture all the issues that CSR address.
CSR can offer the flexibility and incentive for firms to act in advance of regulations, or in
areas where regulations seem unlikely.

• Business Tool: Businesses are recognizing that adopting an effective approach to CSR
can reduce the risk of business disruptions, open up new opportunities, drive innovation,
enhance brand and company reputation and even improve efficiency.

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Key motivators for CSR

National drivers Description


Cultural tradition CSR often draws strongly on deep-rooted indigenous cultural
traditions of charity, business ethics.

Political reform CSR cannot be divorced from the socio-political policy reform
process, which often drives business behaviour towards
integrating social and ethical issues.

Governance gaps CSR helps to provide all the social services which are not done
due to government laziness.

Crisis response CSR responses can be catalysed by economic, social,


environmental, health-related or industrial crises.

Market access CSR may be seen as a bridge for companies in developing


countries trying to access markets in the developed world.

International Drivers Description

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International Standardization CSR codes, guidelines and standards are a key driver for
companies wishing to operate as global players.

Investment Incentives CSR is given an incentive by trend of Socially


Responsible Investment, where funds are screen on
ethical and environmental criteria

Stakeholders Activism CSR is often encouraged by the activism of stakeholder,


to address the perceived failure of market and
government policy.

Business responsibilities towards stakeholders


• Responsibility towards owners
a. Run the business efficiently
b. Proper utilisation of capital and other resources.
• Responsibility towards investors
a. Ensuring safety of their investment,
b. Regular payment of interest.
• Responsibility towards employees
a. Timely and regular payment of wages and salaries.
b. Proper working conditions and welfare amenities.
• Responsibility towards suppliers
a. Giving regular orders for purchase of goods.
b. Dealing on fair terms and conditions.
• Responsibility towards customers
a. Products and services must be able to take care of the needs of the customers.
b. Products and services must be qualitative
c. There must be regularity in supply of goods and services
• Responsibility towards competitors
a. Not to offer exceptionally high sales commission to distributers, agents etc.
b. Not to offer to customers heavy discounts and /or free products in every sale.
• Responsibility towards government
a. Setting up units as per guidelines of government
b. Payment of fees, duties and taxes regularly as well as honestly.

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• Responsibility towards society
a. To help the weaker and backward sections of the society
b. To preserve and promote social and cultural values
c. To generate employment
d. To protect the environment
e. To conserve natural resources and wildlife

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Bibliography
Books

1. P.L. Mehta, (11th ed) “Managerial Economics”, Sultan Chand & Sons.
2. Dominick Salvatore, (6thed, adapted version) “Managerial Economics”, Oxford
University Press.

3. Dominick Salvatore, (4th ed) “Managerial Economics in a global economy”, Oxford


University Press

WebPages

1. http://www.ioga.com/Special/crudeoil_Hist.htm

2. http://www.wtrg.com/prices.thm

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