CSR means the duties and obligations of business

towards different social groups (stakeholders)

Prof. Neeraja
ARGUMENTS FOR SOCIAL RESPONSIBILITY

 Changed Public expectations of Business

 Business has the Resources
 Moral responsibility
 Better employees
 Globalisation
 Balance of Responsibility with Power
 Prevention is better than Cure.
 Better Environment for Business
Prof. Neeraja
ARGUMENTS AGAINSTSOCIAL RESPONSIBILITY

Profit maximisation
Lack of social skills
Social overhead cost
Business already has enough power

Prof. Neeraja
RESPONSIBILITY TOWARDS STAKEHOLDERS

CONSUMERS
CONSUMERS

SOCIETY
SOCIETY//
EMPLOYEES
EMPLOYEES
COMMUNITY
COMMUNITY
RESPON-
-SIBILITY
TOWARDS

GOVERNMENT
GOVERNMENT SHAREHOLDERS
SHAREHOLDERS

Prof. Neeraja
CONSUMERS EMPLOYEES SHAREHOLDERS GOVERNMENT SOCIETY

 Customer Satisfaction: ‘Customer First’

Approach
 Avoid unfair trade practices, allow free trade
 Avoid artificial scarcity (hoarding) of goods
 Install Consumer grievance mechanism in
companies
 Reveal correct and complete information in
advertisements and packaging

Prof. Neeraja
CONSUMERS EMPLOYEES SHAREHOLDERS GOVERNMENT SOCIETY

Maintain the dignity of every employee as a human being

 Timely and fair payment of wages.

 Conducive working conditions
 Good career prospects
Fair transfer and promotion policies
 Proper human resource development facilities
 Suitable and sufficient grievance handling
mechanism
 Recognition and rewarding
Prof. Neeraja
employees’ efforts
CONSUMERS EMPLOYEES SHAREHOLDERS GOVERNMENT SOCIETY

 Earn sufficient profit and maintain financial

soundness in the business
 Keep enterprise stable and dynamic
 Disclose sufficient and necessary information
 Undertake activities towards improving the
prestige and growth prospects of business
 Provide fair return on investment

Prof. Neeraja
CONSUMERS EMPLOYEES SHAREHOLDERS GOVERNMENT SOCIETY

 Proper and timely payment of taxes/duties

 Conduct the business in the right spirit
 Enter in socially relevant or capital intensive
projects/industries.
 Participate in social welfare projects and
activities
 Abide to all laws and regulations laid down by the
government
 Not to abuse their financial power in asking for
political favours Prof. Neeraja
CONSUMERS EMPLOYEES SHAREHOLDERS GOVERNMENT SOCIETY

 SUPPLIERS: Not to exploit suppliers by delaying

payment and expecting low quotes
 DEALERS: Maintain good relations, give them a
adequate margin
 Generate sufficient employment opportunities
 Amenities of the local community not to be
damaged.
 Protection of environment and ecological balance
 Provide financial support to social and cultural
activities. Prof. Neeraja
Prof. Neeraja
 ETHICS refers to the code of
conduct that guides an individual in
dealing with a situation.

BUSINESS ETHICS refers to the

system of moral principles applied to
business activities.
Prof. Neeraja
BENEFITS OF BUSINESS ETHICS

Cultivates teamwork and productivity

Promotes a strong public image
Legitimises managerial actions
Strengthens the coherence and balance of
organisation’s culture
There exists a clear vision and picture of
integrity throughout the organisation.
Supports employee growth and meaning
Prof. Neeraja
 ETHICAL IMPERFECTORS

CRIMES INVOLVING CRIMES CRIMES

EMPLOYEES BETWEEN FIRMS AGAINST SOCIETY

CONFLICT OF INTEREST ECOLOGICAL DISASTERS

DUMPING

EMBEZZLEMENT MONEY LAUNDERING

PRICE FIXING
KICKBACKS JOB DISCRIMINATION

BID RIGGING
EXP. A/C PADDING UNSAFE PRODUCTS

INVASION OF PRIVACY

JOB SAFETY VIOLATIONS

Prof. Neeraja
Prof. Neeraja
Corporate Governance is the system by which
companies are directed and controlled.

 CG aims towards aligning the interests of

individuals, corporations and society.

 It is a system by the companies are run and the

means by which they are responsive to
stakeholders.

 It is also concerned with ethics, values, morals of

a company and its directors.

 Ensures that directors are subject to their

duties and obligations and are accountable for
their actions. Prof. Neeraja
 DIMENSIONS OF CORPORATE
GOVERNANCE

 BOARD OF DIRECTORS

 DISCLOSURE AND TRANSPERANCY

 CORPORATE GOVERNANCE REPORT

Prof. Neeraja
RESTRUCTURING
 RESTRUC TURING
 RESTRUCTURING means changing the original structure of an
enterprise
 It means providing a new structure in place of an existing one.
 It covers all aspects of business:
 Financial  Personnel
 Manufacturing  Marketing
 Objectives of restructuring is to:
 To reduce cost
 To raise efficiency and profitability of business
 To gear up for future business opportunities
 REASONS FOR RESTRUC TURING

 Globalisation of business

 Changed fiscal and govt. policies

 Revolution in IT

 Wrong divisionalisation strategy

 Improved focus on productivity and cost reduction


FINANCIAL
Capital structure changes,
Adjustment in repayment scdle,
Mgt. of working capital,
Conversion of debt into equity
PERSONNEL
Weeding out surplus staff, Training TYPES OF
of staff towards efficiency, RESTRUCTURING
Modification in payscales, Rules
relating to promotions, trsf etc.
MANAGERIAL
Changes in mgrl responsibilities
to bring in more efficiency,
Training; efficient internal
communication system.
TECHNOLOGICAL
Introduction of new products
and processes. Objectives
being cost reduction, quality
improvement, and optimum
utilisation of resources
MARKETING
Changes in target mkt, mrktng
mix, Introducing new sales
promotion measures, provision
of after sales service,
ORGANISATIONAL
Modification in org structure,
Bringing uniformity in individual
and Org goals, making org
slim and strong
 TECHNIQUES OF
RESTRUCTURING

EXPANSION DIVESTMENT OTHER

TECHNIQUES TECHNIQUES TECHNIQUES
EXPANSION TECHNIQUES

MERGERS & AMALGAMATIONS

TAKEVOVERS

JOINT VENTURES

BUSINESS ALLIANCE

FOREIGN FRANCHISES

INTELLECTUAL PROPERTY RIGHTS

DIVESTMENT TECHNIQUES

SELL-OFF

DEMERGER(SPIN OFF)

MANAGEMENT BUYOUT

LIQUIDATION

LEVERAGED BUYOUT
OTHER TECHNIQUES

GOING PRIVATE

SHARE REPURCHASE

BUY IN

REVERSE MERGER
TURNAROUND
 TURNAROUND

Turnaround is a process/strategy in which a loss-making

company is converted into a profitable one.

A technique of bringing failing companies back into life.

Turnaround management techniques employed.

WHEN IS TURNAROUND NEEDED?
 Persistent negative cash flow, lowering/declining profits

 Declining market price of the shares

 Increase in stock of inventories

 Unutilised production capacity

 High labour turnover

 Overall mismanagement of the enterprise

CLOSURE
 C LOSURE

 “CLOSURE/WINDING UP” means closing of a business

enterprise permanently

 The activities of the business entity comes to an end.

 A sick/uneconomic unit needs closure if its turnaround is

not possible.

 The property of the entity after closure is administered

for the benefit of creditors and members.
 REASONS FOR C LOSURE

 Faulty location of business unit

 High production cost, high labour cost
 Limited market demand
 Use of obsolete technology
 Financial difficulties
 Inefficient management
 Changes in government policies