03/28/2023 18BHM447: Corporate Social Responsibility-Introduction 1

CO RP ORATE S OC I A L
RES PO NS I BI L I T Y
Dr Seema Kataria
Feb 2023

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 INTRODUCTION

18BHM447: Corporate Social Responsibility-Introduction

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Governments and companies have
important roles to embark in the
concept of modern societies. There
exists a dynamic interaction between
corporations and society which can be
reviewed and embraced with the help
of Corporate Social Responsibility
(CSR).

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 What is CSR ?

The CSR definition used by Business

for Social Responsibility is:

Operating a business in a manner that

meets or exceeds the ethical, legal,
commercial and public expectations
that society has of business.

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18BHM447: Corporate Social Responsibility-Introduction
 What is CSR ?

The European Commission hedges its bets

with two definitions wrapped into one:

A concept whereby companies decide

voluntarily to contribute to a better society
and a cleaner environment. A concept
whereby companies integrate social and
environmental concerns in their business
operations and in their interaction with
their stakeholders on a voluntary basis.
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18BHM447: Corporate Social Responsibility-Introduction
Corporate Social Responsibility

The ‘ethical behaviour of a company (or say business) towards society

It means engaging directly with local communities, identifying their basic needs, and integrating their needs
with business goals and strategic intent

The government perceives CSR as the business contribution to the nation’s sustainable development
goals.

CSR is a concept which suggests that commercial corporations must fulfil their duty of providing care to the
society

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 DISCUSSION

• ARE FIRMS READY TO ASSUME THE RESPONSIBILITY OF CSR??

• ARE SOCIETY AND CONSUMERS WILLING TO PAY FOR CSR EXPENSES?

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 Why Is There So Much Talk About CSR Today?

"why are terms like ‘CSR’ and ‘sustainable development’ being talked of now only for the last
decade? .“

• The people are now more educated and informed than their predecessors, their expectations from
corporate houses too have increased manifold.
• The growing sizes of businesses and the corresponding shrinking roles of governments
• The reason why CSR has assumed so much importance today is ‘because corporate houses intervene
in so many areas of social life, they must be responsible towards society and environment

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DO WE HAVE SKILLED PEOPLE WHO UNDERSTAND AND
CAN UNDERTAKE CSR?

• Businesses with their professional experience can contribute significantly to the nation’s
development
• Trained manpower that can infuse order into the system is the need of the hour
• Certainly, we do not have enough people who understand CSR in its right perspective.

Concept of CSR is embedded in a broader relationship

between business and its various stakeholders

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CSR -The Scenario

• characterized by various developments including the shift of power from capital to

knowledge,
• increased levels of literacy and the shrinking of geographical boundaries
• People are, by and large, becoming conscious of their rights
• Led to a rise in the expectations of society from business.
• No amount of coercion can compel corporate houses to realize their sense of
responsibility
• the nature of the involvement of business houses with social causes has undergone
a change.
• Moved away from charity and dependence to empowerment and partnership

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Social Responsibility

• Social Responsibility: the manager’s duty to nurture,

protect and enhance the welfare of stakeholders.
Also defined as
• Social responsibility: is the obligation of organization’s
management to make decisions and take actions that
will enhance the welfare and interests of society as well
as the organization.
Social Responsibility

 Social responsibility is therefore quite important to the society,

organization and human

 It can be said that social responsibility is not fixed and has to be

related to pressures at a particular point of time
Social Responsibility

• Organization’s obligation to make choices and take actions that will contribute to
the welfare and interests of society and organization.
• Distinguishing right from wrong.
• Being a good corporate citizen.
Many social responsibilities issues are ambiguous with respect to right and wrong.
Social Responsibility

It is related to the ethical responsibility and differentiates into different

levels of social responsibilities, which is :
1) economic
2) legal
3) ethical and
4) discretionary responsibilities.
Social Responsibility

There are many ways managers respond to this duty:

• Obstructionist response: managers choose not to be socially
responsible.
• Defensive response: managers stay within the law but make no
attempt to exercise additional social responsibility.
• Accommodative response: managers realize the need for social
responsibility.
• Proactive response: managers actively embrace social
responsibility.
Managing Social Responsibility

• Formal Organizational Approaches

• Legal compliance
• Ethical compliance
• Philanthropic giving

• Informal Approaches
• Organizational Culture
• Whistle blowers
How much Social Responsibility
Business has a social responsibility and issue falls under four categories

Social opposition

Social obligation

Social response

Social contribution
Responsibility can be divided into 4 groups of beneficiaries

Owners/shareholders

Employees

Customers/consumers

Community
Obligations of managers towards different segment of societies

• Social obligation lies towards two groups

• Internal Stakeholders-stakeholders and employees

• External Stakeholders-customers, suppliers , government and the

society as a whole
 Obligations of managers towards different
segment of societies-Contd..

• Internal Social Responsibility- concern with assuring due process, justice,

equity and morality in employee selection and training. They may also relate to
other things like increasing employee productivity and improving employee
environment

• External Social Responsibility- refer to actions such as improving balance of

payments or training and hiring hard core unemployed
 Areas of Social Responsibility

Mangers should pay attention to their social responsibility under following -

Ecology and environmental quality

Consumerism

Community needs

Governmental relations

Minorities and disadvantaged person

Labor relations

Shareholder relations

Corporate Philanthropy
• Business Benefits

o The KPMG International

Survey of Corporate
Responsibility Reporting,

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 The KPMG International Survey of Corporate Responsibility Reporting,
identified the following drivers of corporate responsibility in the order
of their importance
• Economic considerations
• Ethical considerations
• Innovation and learning
• Employee motivation
• Risk management or risk reduction
• Access to capital or increased shareholder value
• Reputation or brand
• Improvement in market position (market share)
• Strengthened supplier relationship
• Cost saving
• Improved relationships with governmental authorities (Other factors

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