Social Responsibility

Dr. Ruchi Srivastava

SRMS-IBS
Corporate Social Responsibility (CSR)
“ It takes 20 years to build a reputation and only 5
minutes to ruin it “

( Warren Buffet )
Business and society
Businesses are part of societies (locally, nationally,
globally) therefore have a duty to act within their
expectations and norms.
By doing so they are able to operate successfully
without harming the societies, communities and
environments in which they operate (Sethi, 2003).

Enterprise and its Business Environment ©

Goodfellow Publishers 2016 3
What is CSR
CSR requires companies to acknowledge
that they should be publically accountable
not only for their financial performance but
also for their social and environment record
DEF: UN
A management concept whereby companies
integrate social and environmental concerns
in their business operations and interactions
with their stakeholders.
Concept of Corporate Social Responsibility
Corporate Social Responsibility (CSR) is a concept
that suggests that it is the responsibility of the
corporations operating within society to
contribute towards economic, social and
environmental development that creates
positive impact on society at large. Although
there is no fixed definition, however the concept
revolves around that fact the corporations needs
to focus beyond earning just profits. The term
became popular in the 1960s
CSR is the ethical behavior of a company
towards society
 Basic Constituents of CSR

Contribute Make Improvement Towards

towards a desirable Business
of social
sustainable social
economic environment & Society
changes
development
Four Pillars of CSR
Transparency
Integration
Focus
Commitment
Levels of CSR
Carroll’s CSR Pyramid
Economic responsibilities: business organizations
to be able to sustain themselves and the only way this
is possible is by being profitable and able to incentivize
owners or shareholders to invest and have enough
resources to continue in operation
Legal Responsibilities :. Businesses are expected
and required to comply with these laws and
regulations as a condition of operating.
Ethical responsibilities :Taking on ethical
responsibilities implies that organizations will embrace
those activities, norms, standards and practices that even
though they are not codified into law, are expected
nonetheless. Part of the ethical expectation is that
businesses will be responsive to the “spirit” of the law,
not just the letter of the law.
Philanthropic responsibilities :Corporate philanthropy
embraces business’s voluntary or discretionary activities. To
fulfill its perceived philanthropic responsibilities,
companies engage in a variety of giving forms – gifts of
monetary resources, product and service donations,
volunteerism by employees and management, community
development and any other discretionary contribution to
the community
Some Environmental concepts

Green Building: A ‘green’ building is a building that, in its

design, construction or operation, reduces or eliminates negative
impacts, and can create positive impacts, on our climate and
natural environment. Green buildings preserve precious natural
resources and improve our quality of life
World Environment Day - 5 June
Go Green- go green means you opt for a sustainable and
renewable way of living. A green lifestyle focuses on reducing,
reusing and recycling  whenever possible. Going green is a
gradual process of changing your lifestyle by using products that
are considered to be green and ensuring that you reduce the
imprint you and your family leave on the environment.
Driving Forces Behind CSR
Globalization
Power & influence of Business Corporation
Growing access to education and information
Growing awareness of environmental issues
Spread of Corporate Scandals and Public Distrust
Nature of social responsibility
 CSR is normative in nature.
 CSR is a relative concept.
 CSR may be started as a proactive or reactive.
 All firms do not follow the same patterns of CSR.
.
Types of Social Responsibility
Responsibility towards Society
 Carrying on business with moral& ethical standards.
 Prevention of environmental pollution.
 Minimizing ecological imbalance.
 Contributing towards the development of social
health, education
 Making use of appropriate technology.
 Overall development of locality.
Responsibility towards
Government
 Obey rules & regulations.
 Regular payment of taxes.
 Cooperating with the
Govt to promote social
values.
 Not to take advantage of
loopholes in business laws.
 Cooperating with the Govt for
economic growth & development.
Responsibility towards Shareholders
 To ensure a reasonable rate of
return over time.
 To work for the survival & the
growth of the concern.
 To build reputation & goodwill
of the company.
 To remain transparent &
accountable.
 Responsibility towards Employee
 To provide a healthy working environment.
 To grant regular & fair wages.
 To provide welfare services.
 To provide training & promotion
facilities.
 To provide reasonable working standard &
norms.
 To provide efficient mechanism to redress
worker’s grievances.
 Proper recognition of efficiency & hard
work.
Responsibility towards consumers
 Supplying socially harmless
products.
 Supplying the quality, standards,
as promised.
 Adopt fair pricing.
 Provide after sales services.
 Resisting black-marketing &
profiteering.
 Maintaining consumer’s
grievances cell.
 Fair competition.
 CSR EXAMPLES
 IBM UK - Reinventing Education Partnership programme
Interactions and sharing of knowledge through a web-
based technology - the “Learning Village” software.
Culture of openness and sharing of good practice

 AVON - a partnership with Breakthrough Breast Cancer, and

its Breast Cancer Crusade has raised over 10 million pounds
since its launch 12 years ago

 TOI’s Lead India campaign, campaign for contribution

towards educating the poor
Companies incorporated the CSR
Tata chemical
Ambuja cement
Infosys
Mahindra& Mahindra
ITC
Tata Motors
Coca-cola
Bharat petroleum
Ultra tech
Many others
 Companies in
trouble
 Dasani mineral water (part of Coca-Cola).

 Coke’s sale was banned as the result of tests, including

those by the Indian government, which found high
concentrations of pesticides.

 Communities in India , around Coca-Cola's bottling

operations are facing severe shortages of water as a result
of the cola major sucking huge amounts of water from the
common groundwater source.
 Issues at NIKE
 Nike Inc producer of footwear, clothing, equipment and accessory
products for the sports and athletic market.
 Selling to approximately 19,000 retail accounts in the US, and
approximately 140 countries around the world.
 Manufactures in China, Taiwan, Korea, Indonesia , Mexico as well as
in the US and in Italy.
 People working - 58% young adults between 20 and 24 years
old, 83% - women.
 Few have work-related skills when they arrive at the factory.
 Issue- unhealthy work environment – debates heated arguments,
verbal abuse , 7.8% of workers reported receiving unwelcome
sexual comments, and 3.3% reported being physically abused. In
addition, sexual trade practices in recruitment and promotion were
reported
Arguments for CSR
 Protect the interests of stakeholders:
 Long-run survival:
Self-enlightenment
Avoids government regulation: Non-conformance to social
norms may attract legislative restrictions. Government directly
influences the organisations through regulations that dictate
what they should do and what not. Various agencies monitor
business activities.
For example, Central Pollution Control Board takes care of issues
related to environmental pollution, Securities and Exchange
Board of India considers issues related to investor protection,
Employees Organisations that violate these regulations are
levied fines and penalties. To avoid such interventions,
organisations have risen to the cause of social concerns.
Resources: Business organisations have enormous
resources which can be partly used for solving social
problems

 Professionalisation:The ethics of profession bind

managers to social values and growing concern for
society. Thus, there is increasing awareness of social
responsibility
Arguments against Corporate Social
Responsibility
Business is an economic activity:The prime
responsibility of assuming social responsibility should,
therefore, be of the Government and not of the
business enterprises.

. Quantification of social benefits:

. Cost-benefit analysis:
. Lack of skill and competence
Transfer of social costs
Triple Bottom Line concepts of CSR
Economic Responsibility (PROFIT)

Social Responsibility (PEOPLE)

Environmental Responsibility (PLANET)

Benefits of CSR
Increased employee loyalty and retention
Increased quality of products and services
Increased customer loyalty
Increased reputation and brand image
Greater productivity & quality
Reduced regulatory oversight
Less Volatile market
 Specific Features of Companies Act – 2013
 These rules came in to force from 1st April, 2014.
 The government of India made it mandatory for companies to
undertake CSR activities under the Companies Act, 2013.
 The CSR activities will have to be within India, and the new rules
will also apply to foreign companies registered here.
 Funds given to political parties and the money spent for the
benefit of the company’s own employees (and their families) will
not count as CSR.
 The concept of CSR is defined in clause 135 of the Act, and it is
applicable to companies which have:
 An annual turnover of Rs 1,000 crore or more, or a
 Net worth of Rs 500 crore or more, or a
 Net profit of Rs 5 crore or more.
 An average of the previous three financial years PAT will
be considered for calculating the 2% for CSR.
 CSR policy of a company should ensure that surplus arising out
of a CSR activity will not become part of business profits.
Thank You