SOCIAL RESPONSIBILITY OF BUSINESS

Introduction
• Social responsibility of business implies the obligations of
the management of a business enterprise to protect the
interests of the society.
• According to the concept of social responsibility the objective
of managers for taking business decisions is not merely to
maximize profits or sharehold­ers’ value but also
• to serve and protect the interests of other members of a
society such as workers, consumers and the community as a
whole.
 Introduction
• Social responsibility in business, also known as corporate
social responsibility (CSR), pertains to people and
organizations behaving and conducting business ethically
and with sensitivity towards social, cultural, economic, and
environmental issues.
• Striving for social responsibility helps individuals,
organizations, and governments have a positive impact on
development, business, and society.
 Introduction
• According to the concept of social responsibility the
objective of managers for taking business decisions is not
merely to maximize profits or shareholders’ value but also to
serve and protect the interests of other members of a society
such as :
consumers and
the community as a whole.
 Introduction
• The social responsibility of business implies that a corporate
enterprise has to serve interests other than that of common
shareholders who, of course, expect that their rate of return,
value or wealth should be maximised.
 Introduction
• In today’s world the interest of other stakeholders,
community and environment must be protected and
promoted.
• Social responsibility of business enterprises to the various
stakeholders and society in general is considered to be the
result of a social. Responsibility of Business Enterprises
towards Stakeholders and Society in General contract.
 Shareholders

Consumers

Business
Enterprise Environment

Employees

Society
 Introduction
• Social responsibility is a means of achieving sustainability.
• Adopting key social responsibility principles, such as
accountability and transparency, can help & ensure the long-
term viability and success of any organization or system.
 Introduction

• In 2010, the 
International Organization for Standardization (ISO) published
an international standard, ISO 26000, to help organizations
assess and address their social responsibilities. 
• ISO 26000-2010: Guidance on Social Responsibility defines
social responsibility as:
 Introduction
• The responsibility of an organization for the impacts of its
decisions and activities on society and the environment, through
transparent and ethical behavior that:
Contributes to sustainable development, including health and
the welfare of society.
Takes into account the expectations of stakeholders
Is in compliance with applicable laws and consistent with
international norms of behavior.
Is integrated throughout the organization and practiced in its
relationships
 Introduction

• Organizations can achieve sustainability by paying careful

attention to their impact on society and the environment.
• Behaving in a transparent, ethical manner ensures an approach
that helps protect the long-term success of society and the
environment.
 Introduction

• Another tenet of social responsibility is the triple bottom line,

also known as "people, planet, and profit."
• This is the belief that achieving profit does not require harm to
the planet or the exploitation of people. Organizations can
profit while also taking care of the planet and people.
 Guidance on Social Responsibility 

• ISO 26000-2010: Guidance on Social Responsibility identifies seven core

social responsibility subjects:
1. Organisational Governance
2. Human rights
3. Labor practices
4. Environment
5. Fair operating practices
6. Consumer issues
7. Community involvement and development
 Social Responsibility Principles
• In addition to the core areas, ISO 26000 also defines seven key principles
of socially responsible behavior of organisations:
• Accountability
• Transparency
• Ethical behavior
• Respect for stakeholders interest.
• Respect for the rule of law
• Respect for international norms of behavior
• Respect for human rights
 Social Responsibilities
• Business enterprises have a lot of responsibility to the society at large.
Some of them are
1. To take appropriate measures to reduce level of pollution and adopt
eco-friendly technologies.
2. To generate sufficient employment opportunities so as to make good
contribution to the reduction of poverty in the country.
3. Respect the rights of workers and other employees and take
appropriate measures to ensure their safety and to improve their working
conditions.
Social Responsibilities
4. To provide quality healthcare to their employees.
5. To invest adequately in the research and development so as
to make innovations to improve their productivity.
6. Do not pay excessive remuneration to promoters and senior
executives as it creates social resentment.
7. To end cartels that keep prices highly
 Social Responsibilities
8. To implement affirmative action and to provide jobs to SCs, STs and
OBCs.
 Dr. Manmohan Singh directed the private corporate sector to give
preference to minorities, especially Muslims in providing employment.
9. To resist to pay bribes to officials and therefore do not promote
corruption.
 Conclusion:

• Social responsibility is related to the concept of ethics.

Ethics is the discipline that deals with moral duties and
obligations.
• Social responsibility implies corporate enterprises should
follow business ethics and work for not only to maximise
their profits or shareholders’ value but also to promote the
interests of other stakeholders and the society as a whole.
 Conclusion:

• Two instances of lack of social responsibility of business

witnessed in India are worth mentioning.
• One refers to Bhopal Gas Leak Tragedy. On Dec. 2,1984 in
a pesticide factory located in Bhopal and owned by a
multinational corporation ‘Union Carbide Limited (UCL),
there was a leakage of poisonous gas from factory which
resulted in the death of more than 2000 poor people and
about 2 lakh persons were badly injured and crippled.
 Conclusion:

• This was due to the non-installation of safety measures by

the company. Union Carbide tried to show that it was not
responsible.
• A long legal battle was fought and ultimately Union
Carbide was held responsible by the court and was asked
to pay $ 650 millions to the victims as damages.
 Conclusion:

• Another case of lack of corporate social responsibility in India and

failure of good corpo­rate governance in India is provided by
Satyam Saga. Ramalinga Raju, chairman of Satyam Computers
Committed fraud running into several thousand crores inflicting
heavy losses to the shareholders and lenders of the company. For
this criminal act Raju is in Jail and his company has been taken
over by Mahindra.
 Conclusion:

• This Satyam fraud raises the question of failure of corporate

governance in India, especially the role of independent directors in
ensuring good governance of the corporates.
• The above two examples serves as a wake-up call for Indian
corporate businesses that they should discharge their
responsibility to their customers, employees, other stakeholders
and society at large.
• The UNGC is an international initiative proposed in 2000 by former UN
Secretary General Kofi Annan to call for stronger corporate social
responsibility in the four areas of human rights, labour, environment and
anti-corruption, and ten principles in respective areas:
• Principle 1: Businesses should support and respect the protection of
internationally proclaimed human rights
• Principle 2: Businesses should make sure they are not complicit in human
rights abuses
• Principle 3: Businesses should uphold the freedom of association and the
effective recognition of the right to collective bargaining
. 
• Principle 4: Businesses should uphold the elimination of all forms
of forced and compulsory labour.
• Principle 5: Businesses should uphold the effective abolition of
child labour
• Principle 6: Businesses should uphold the elimination of
discrimination in respect of employment and occupation
• Principle 7: Businesses should support a precautionary approach
to environmental challenges.
. 
• Principle 8:  Businesses should undertake initiatives to promote
greater environmental responsibility
• Principle 9: Businesses should encourage the development and
diffusion of environmentally friendly technologies.
• Principle 10: Businesses should work against corruption in all its
forms, including extortion and bribery.
 Indian Companies topped CSR in 2020

. 
• Infosys has beaten Tata Chemicals for the Number 1 position in 2020 India
sustainability and CSR chart.
• Tata Chemicals held the top spot for three consecutive years, until now.
Infosys was the second ranker in 2019, and has risen to number one for CSR
in 2020.
• This ranking is based on the companies’ spending patterns on CSR,
performance and spending with respect to the responsibility matrix, ESG
performance and how companies are incorporating Sustainable
Development Goals (SDGs) into their responsible business actions.
 Indian Companies topped CSR in 2020
https://thecsrjournal.in/top-indian-companies-for-csr-in-2020/

1. Infosys Limited
2. Mahindra & Mahindra Ltd.
3. Tata Chemicals Ltd.
4. ITC Ltd.
5. Vedanta Ltd.
6. Wipro Ltd.
7. Hindustan Unilever Ltd.
8. Godrej Consumer Products Ltd.
9. Grasim Industries Ltd.
10. Bharat Petroleum Corporation Ltd.
 The Top 10 Companies With The Best Reputation Are:

1.Lego
2.The Walt Disney Company
3.Rolex
4.Ferrari
5.Microsoft
6.Levi’s
7.Netflix
8.Adidas
9.Bosch
10.Intel