An opening note :
The day an organization is born with an aim to serve some specific purpose or its time
bound, value base...
business. Itisonthis basisthatsocial activistshave stronglyarguedthatthe business communityought,
in return, to show conce...
have tended to take a coercive stance with governments imploring corporate organisations to show
social concern in their o...
The above chart clearlyexplainsthe relationshipof anentitywiththe societypure Social Responsibility.
Global level:Sustaina...
tooksome pioneeringinitiativeslike the establishmentof anew social-environmental
policywhenmakingdecisionsonloans,the crea...
Essilor International
Social innovationinthe Frenchcompanyisrealizedthroughvalue-ledinnovation
systemsandBase of the pyram...
behaviourandbusinessoperations.Anexample of these stakeholder-driveninitiativesis
the DAWN programme,the largest-ever,glob...
Procter & Gamble
Proctor & Gamble providesanexample of asocial innovative productthatfailedtobe
marketedforprofit.The case...
effectiveselectionmethodsof phone ownersandpaymentmethodsbyusingthe
experience of the GrameenBank.The businessmodel isbuil...
of tryingtoovercome local weaknessesisatthe core of businessactivities.Anexample
of the social innovationinitiativesatUnil...
towardsa betterunderstandingof the corporate social innovationprocess.One important
insightthathas emergedfromourdiscussio...
Csr report
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Csr report

  1. 1. An opening note : The day an organization is born with an aim to serve some specific purpose or its time bound, value based objectives "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large" "CSR is about capacity building for sustainable livelihoods. It respects cultural differences and finds the business opportunities in building the skills of employees, the community and the government" "CSR is about business giving back to society" Abstract Docketed literature on Corporate Social Responsibility(CSR)exhibitsheatedcontentionsonthe nature of business-society relations. This paper seeks to explore this contentious issue in the light of contemporary incorporation of CSR in business strategic plans. It notes that enforcing CSR on business might lead to itsmanipulation to advance corporate organisations’ purely self-interested ends rather than pursuing intrinsicphilanthropicactivitiesforthe goodof society.Aninsightintothe undesirable consequences of enforcing CSR is given. Using Kantian ethics, the paper notes that the instrumental use of CSR by corporate organizationsis immoral because it does not treat CSR as an end in itself in the same way as the profitmaximization is conceptualized in business circles. The paper, therefore, concludes that the integrationof CSRincorporate organizations’strategicplansisseenasinstrumental tothe realizationof their profit motives other than a genuine show of social concern. Introduction The relationship between business and society has, for long, been a source of intellectual interest to business ethicists. Thoughit appearsundeniable that corporate organisations function “…as part of an interactive system of relationships with individuals and groups in society” the Ideal business-society relationship remains intractable. Concern for business to contribute towards social prosperity hasalwayspersistedsince the daysof Aristotlewhoreckonedthe need for business to reflectthe interestsof the society inwhich their operations are based (Solomon, 1999:83). People live ina societyandeveryone ispartof the social organisation. Businessis wholly dependent on society. It can onlythrive inwell-organisedsocietieswhere individualscannot,themselves,produce all theirneeds and wants;for whenpeople are whollyselfsufficient,the conceptof businessservesnopurpose ontheir lives.Thus,astable andwell-organisedsocietyfundamentallymakesit possible for people to engage in
  2. 2. business. Itisonthis basisthatsocial activistshave stronglyarguedthatthe business communityought, in return, to show concern to the society that sustains an ideal environment for profit making. Acknowledges the inseparability of business andethics : The slim wedge between business and ethics can be bridged by a concept of Corporate Social Responsibility (CSR). Definition of CSR as the performance or non-performance of certain activities by a private enterprise orcorporate organisation without the expectation of direct economic gain or loss, for the purpose of improving the social well being of the community or one of its constituent groups.It isthe dutyof businesscommunitytopromote the welfare of society.Forinstance,acorporate organisation is said to be socially responsible or a good citizen if,amongotherthings,itmakessafe productsdevoidof seriousstructural defects, carefully disposes of its industrial wastes without causing ecological disasters, provides equal employment opportunities irrespectiveof gender,race orclass and contributes towards solving society’s problems in a number of ways such as building Old Peoples’ Homes and donating food to the poor. Proponents of the narrow viewof CSRdo not denythe importance of CSR as part of corporate strategy to ensure that an enabling social environmentforprofitgenerationand maximisation is created through, among others, prosocial business practices and helping out society solve its problems. The core of their argument is that CSR is not important in itself but in so far as it helps them achieve their self-interested profit motive. The need for individuals and corporate organisations to be socially responsible is also documented in the Old Testament. In the contemporaryworld,business constitutesaveryindispensable social institutionin thatit supplies society with goods and services and positively and negatively impact on the social and natural environment. This dominant nature of business in society has led people to be verywary of itsactivities.Pertinentquestionshave, therefore, been raised with regard to whether the welfare of society takesprecedence overthe organizational objectivestogenerate and maximizeprofits or vice- versa. Manipulation of CSR With calls for business to show concern to society and the environment gaining momentum in the contemporary era, frenzy compliance to this concerted demand to consider the impact of their operationstosocietyislikelyto have disturbing results on the business-society relations. Calls for CSR
  3. 3. have tended to take a coercive stance with governments imploring corporate organisations to show social concern in their operations and interactions with society and the environment. Thispronouncedcall for business to show social concern is primarily a reaction to widespread cases of corporate misdeedsinthe formof pollutiontothe environment, disregard of consumer rights through, amongothers,sellingsubstandardcommoditiesand profiteering and general disregard for the welfare and well being of stakeholders. However, a trend is looming whereby the mandatory call for corporate organisations to contribute towards solving social issues are manipulated to further their economic gains through morally scandalous interactions with society and the environment. Corporate organisations’ morally questionable responsetothiscall ispartlybecause theyare anunwillinglotinthisquasi-coercive call for themto embarkon CSRactivities.This,therefore,explainsthe mainthesisof this paper that call for CSR has now been corrupted and manipulated to further enhance the economic advantage of those in business to the detriment of the rights of consumers and the environment. When Carroll (1991) revisited his 1979 four-part characterisation of CSR, he replaced the discretionary with the philanthropic component emphasising that this component also includes the notion of Corporate Citizenship(CC).Inlightof this, he (1999:289) posits that “the CSR firm should strive to make a profit, obeythe law,andbe a goodcorporate citizen.”Forhim(ibid),Corporate Citizenship is part and parcel of a crusade to establish the place of business in society that is by and large dominated by CSR. The call for corporate organisations to act as responsible citizens has been widespread in the contemporary management literature. This involves corporate organisations taking an interest in the whole social world. The lack of a widelyaccepteddefinitionof CCinthe managementliterature,however,does not weaken our contention that good CC for its own sake is important for the success of both corporate organisations and the social world.
  4. 4. The above chart clearlyexplainsthe relationshipof anentitywiththe societypure Social Responsibility. Global level:Sustainability Innovation At the global level muchattentionhasbeenpaidtothe role venture capital (VC) playsin Promotingsustainabilityinnovation.The termcleantechnologyventurecapital hasbeen introducedinorderto delimitthisnewtype of innovationfromearlierenvironmentalA Literature ReviewonCorporate Social Responsibilityinthe InnovationProcess 20 technologyor"greentech"investmentspopularized inthe 1970's and 80's. The latter were mainlyend-of-pipe solutionsthatstronglyreliedonparticularlegislationsupport. Cleantechonthe otherhandis meantto denote new technologyandrelatedbusiness modelsofferingcompetitive returnsforinvestorsandcustomerswhile providing solutionstoglobal challengesthroughbreakthroughproductinnovation.Cleantech venturingisthusdrivenbytwomainforces:technologyandcompetitivenesswhichboth are superimposedoncertainenvironmental orsocial problemsinordertogenerate new ideas.Whereas,stakeholder-driveninnovationisveryoutwardsoriented,cleantechor sustainabilityinnovationusestechnologyandtraditional innovationmechanisms. PART V:INTERNATIONALSOCIALINNOVATION BRANDS Social innovationtakesmanyformsespeciallyinaglobal context.Inordertograsp the differentlevelsandformsof social innovationthe followingexampleswill serve as inspiration. ABN AMRO ABN AMRO is a Dutch corporationworkinginthe financial service industry.Itwas acquiredin2007 by a consortiumof three European banks,Royal Bankof Scotland Group, Fortis,andBanco Santander.Before thistake over,ABN AMROhadinitiateda large scale acquisitionschemeinBrazil in1998. The take overof several majorBrazilian banksresultedinthe establishmentof BancoABN AMRO Real.Thisnew consortium
  5. 5. tooksome pioneeringinitiativeslike the establishmentof anew social-environmental policywhenmakingdecisionsonloans,the creationof the Real MicroCrédito,which providedfinancingforsmall businessandentrepreneurs,andthe implementationof the Ethical Fund,whichwasthe firstSocial ResponsibleInvestmentfundinBrazil.These initiativeswere primarilyledasafirstmoverwithinthe Brazilianmarket,andintroduced ina marketcontextwithlittle previousexperience insocial bankingpractices. Electricité de France The French electricitycompanyfocusesonelectricityaccessindevelopingpartsof the world.The initiative,EnergyAccessProgramme throughRural ElectricityandServices Companies,hashelpedbringingelectricitytorural areas of Mali,Morocco and South Africa,whichwouldhave beenotherwise ‘off the grid.’EDFhasbroughtelectricityto 800,000 people andthe 2010 goal is one millionpeople.EDFconsidersthis‘adropinthe ocean’but emphasizesthe difference theymake inthesespecificcountries.Around8-10 percent of electricityisprovidedthroughthisinitiative,affectingalotof people and businesseswithinthe region.One of the projectsinMoroccoiscalledTemasol andhas A Literature ReviewonCorporate Social Responsibilityinthe InnovationProcess 22 providedsolarenergyformore than20,000 householdsinrural areas. Temasol hasundertakenapilotprojectof deliveringdrinkingwatertothe same households,whileat the same time extendingoperationstootherpartsof the country.The initiativesare innovatingbothintermsof social capacitybuilding,whileatthe same time havinga low environmental impact.Itisanimportantfirststep,anda basisforotherpeople tofurther developinfrastructure inthesecommunities.The presence inthese marketshasallowed the companyto innovate social schemesfurtherinareasof housing,employmentand education.(http://knowledge.insead.edu/bottompyramid.cfm)
  6. 6. Essilor International Social innovationinthe Frenchcompanyisrealizedthroughvalue-ledinnovation systemsandBase of the pyramidactivities.EssilorInternational hasdevelopedboth manufacturinganddistributionsystemsinrural Indiaforoptical lenses.The initiative was undertakeninthe absence of adequate eyecare facilities,whichresultedinverylow usage of spectacles.Uncorrectedrefractive errorisone of the majorcauses of blindness, whichif detectedandcorrected,wouldgive afreshlease of lifetoindividuals.In2004, EssilorIndiaestablishedaRural MarketingDivision.Accesswasevenmore important than costsso innovationwithinbothmanufacturinganddistributionwasurgent.Afteran initial studyof the situation,Essilorrealizedthatthe lackof consumptionof spectacles was connectedtoa lack of product access.Essilorhasnow developedasystemof mobile lowcost testinginrural areas as a meansto reachthe remote,rural populationof India and manufacture cheap,affordableproductsthroughasteeplearningcurve andimmense scale inproduction. Novo Nordisk Stakeholder-driveninnovationisatthe core of social innovationinNovoNordisk. Several programmeshave beeninitiatedduringthe pastdecade,all withglobal perspectivesandgrowthpotential.NovoNordiskhasundertakenashiftfromaninternal focusto a reflective viewthroughacorporate historyandculture thatlaysthe foundationA Literature ReviewonCorporate Social Responsibilityinthe InnovationProcess 23 for itsvalues-basedandholisticapproachtodoingbusiness.Byestablishingthe link betweenhealthasa driverof wealth,ithasbeenpossibletopursue Triple BottomLine strategiesinaway that increasinglygetsatthe heartof core businessprocesses –inthe markets,as well asinthe corporate functionsandgovernance mechanisms.The approach isshapedthroughextensive stakeholderengagement embeddedin organisational
  7. 7. behaviourandbusinessoperations.Anexample of these stakeholder-driveninitiativesis the DAWN programme,the largest-ever,global surveytouncoverdiabetesattitudes, wishesandneeds.The studyfocusesonthe personbehindthe diseaseandisaimedto uncoverthe psychosocial aspectsof diabetes.The DAWN programme taughtall parties involved,thatthe patientsalsoneedmentalencouragementandpositiveguidance empoweringthemtotake charge of theirownhealth.Suchinnovationinpublichealth promotionactivitieshelpeffectivelyreduce the burdenof diseasessuchasdiabetes. Furthermore,NovoNordiskisdrivingNational DiabetesProgrammestoeducate stakeholdersaswell asactivelysupportingthe growinginternational advocacyplatform to put chronicdisease preventiononthe political agenda.One suchinitiative isthe OxfordHealthAlliance. Philips The GreenFlagshipsprojectatPhilipsisagatheringandquantitative measuringof the bestlightingproducts.Tobe consideredaGreenFlagship,aproductmustfirstundergoa divisionalEcoDesignprocedure.Next,the productorproductfamilyisinvestigatedinat leastthree of the six GreenFocal Areas.These GreenFocal Areasconsistof Energy Efficiency,Recyclability,Lifetime Reliability,Packaging,HazardousSubstancesand Weight.Basedonthisanalysis,the productor productfamilymustbe proventoofferat least10% improvedenvironmental performance inat leastone GreenFocal Area comparedto a predecessororcompetitive product,andthe overall lifecycle score mustbe equal or better.Sowhile manyproductsmaybe “green”,onlythe topEco-designed products achieve GreenFlagshipstatus.A PhilipsGreenFlagshipproductisabestenvironmental choice and a product thateitherhasthe bestenvironmentalperformance inthe market,isthe mostinnovative environmental friendlyproductinitsportfolio,oristhe bestenvironmental solutioninitsapplication area.The developmentof GreenEnergyhasexperiencedamajorboomwithinthe lastdecade.The labellingof greenenergy“cleantech”isincreasinglyattractingfinance frombothventure capital and MNCs. The GreenFlagshiplabel isanexample of thisenvironmental progress.
  8. 8. Procter & Gamble Proctor & Gamble providesanexample of asocial innovative productthatfailedtobe marketedforprofit.The case is a waterpurificationsystemcalledPUR,whichP&G developedincollaborationwiththe USCentre forDisease Control forcommercial markets,targetinglowincome consumers.The producthadclearsocial benefits, providingcleandrinkingwaterforhouseholdsinplaceswherethe healthrisksof untreated drinkingwaterare high,especiallyforchildren.Afterthree yearsof market teststhough,PUR waslookinglike acommercial failure.Manyotherfirmswouldhave closeddownthe project,butP&G insteadmovedPUR to itscorporate sustainability department,where focusnolongerreliedsolelyonmakingaprofit.Since 2003, P&G has soldthe product at cost andworkedinpartnership withnon-profitorganisations,who distribute the productthroughtheirdevelopmentandhumanitarianrelief networks. However,byusingthe marketplace P&Gfelttheycouldrelievepeople ataglobal level whereasphilanthropicactivitywouldnotbe aseffective.Usingsocial marketingmodels by collaboratingwithNGOscreatedgreaterimpactthancommercial marketing. Telenor In 1997 Telenorinitiatedajointventure betweenTelenorandGrameenBank.The partnershipledtothe formationof twoseparate organizations,GrameenPhoneand GrameenTelecom.ItwasoperatedbyexperiencedTelenormanagerswithastrategic objective tomaximize financial returns;Grameen- Telecomwassetupasthe administrativeinterface tothe existingGrameenBank.Thisdevelopmentbank,founded by MuhammadYunusin 1976, providesmicrofinance formillionsof poorpeopleinthe more than 60,000 rural villagesthroughoutBangladesh.Assuch,Telenorcouldbenefit frommarketaccess and distributionsystemsandGrameencouldintroduce new typesof productutilizationintotheirbusinessmodel.Furthermore,itprovidedTelenorwith
  9. 9. effectiveselectionmethodsof phone ownersandpaymentmethodsbyusingthe experience of the GrameenBank.The businessmodel isbuildaroundahighdegree of social interactivityinrural villages,where people use the new systemsbothtoenrich theirprivate communicationfacilityandenhance businesscapabilities.(The Academyof ManagementPerspectives,vol.21,number4 (2007) pp 49-63) TrygVesta TrygVestastrivestocreate innovationsthatmake adifference forindividualsandsociety ingeneral usingpeople withbackgroundsinhumanisticdisciplinessuchasphilosophy, theatre science,musicanddesigninadditiontothe classical economical and technological disciplines.Withthe creationof theirBusinessLabfocusingonCorporate Social Innovation,TrygVestaislaunchingincubatorprogrammes;amongthese the Corporate Venturingproject,whichhelpsthe creationof new venturesthatbuildon sociallyinnovativeideas.The natural interestin Social InnovationbyTrygVestais createdthroughthe risksharingbetweenthe companyandcustomersinthe insurance industry.Itisa social contract thatconnectsthe actors,where sociallyinnovative schemesare generatingvalue forbothTrygVestaandcustomers.Thisprocessis fundamental tosuccesssince itrequiresacceptance andsupportfromall partiesinvolved. Unilever Unileverdefinestheirsocial innovationasutilizingconsumerconcernsaboutsocial and environmental issues.These provide opportunitiesforbrandstoconnectwiththeir consumersat a deeperlevel and,indoingso,gain competitive andsalesadvantage throughcross-sectorpartnerships.ThisallowsUnilevertodobusinessandtackle social problemsatthe same time.Unileverfocusesonthe emergingmarkets.Toachieve optimal resultsforboththe companyandlocal societal development,local marketsmust teachand change Unilever,notthe otherwayaround.Exploitinglocal strengthsinstead
  10. 10. of tryingtoovercome local weaknessesisatthe core of businessactivities.Anexample of the social innovationinitiativesatUnileveristhe Lifebuoysoaptohelpreduce child mortalityof diarrhoea.ObstaclesfacedespeciallyinIndiaare illiteracy,rural massesnot reachedbymass-media,andperceptionsthatif hands lookcleanthey are clean.To overcome these obstacles,Unileverhasinitiatedthe largestrural healthandhygiene educationprogramme everundertakeninIndia.Educationteamsare visiting communities andschoolstoreachthe broad masses. Inorderto helplow income householdsthe soapissoldin18-gram bars,enoughforone personto washtheirhands once a dayfor 10 weeks.Anotherprojectisthe “Shakri”,whichdealswithreaching small Indian villageswithlessthan2,000 people.Lackof retail distributionnetworksto reach the 500,000 smallervillagesbroughtinnovativethinkingatthe core of strategy. The solutionwasrecruitingwomenfromthese small villagestoact as freelance direct salesoperators.CooperationbetweenUnileverandmanywomen’sself-helpgroups (IndianNGOs) providedtrainingandeducationtothese womenandmade themlocal entrepreneurs.The womentypicallydoubledthe householdincome tendingtouse the moneyon educationfortheirchildren.Since 2000,UnileverhasextendedShakri tocover 80,000 villages.There are manymore productexamplesforinstance inIndia,Indonesia and Brazil. CONCLUSIONS So far verylittle isknownabouthowsocial innovationhappensandhow we can encourage more of it.This literature review hasaimedatprovidingmore thanjustan enumerationof extantpublications.Bysuggestingalogical framework(derivedfrom Wood,1991) to structure the differentconceptsusedinliterature we hope toadvance
  11. 11. towardsa betterunderstandingof the corporate social innovationprocess.One important insightthathas emergedfromourdiscussionisthe factthatsocial innovationcanemerge fromfour differentlevelsof analysis. In our analysesof corporate social innovationwe willthusneedtoaskthe following questions:  Whichemerginginstitutionsare drivingandenablingsocial innovation?Andhow do innovatorsdeal withrigiditiescreatedfromextantinstitutionsthathamperchange?  2. What makespeople perceive social innovationasbothdesirableandfeasible?And whatturns themintosocial entrepreneurs?  3. What role can andshouldstakeholdersplayinthe innovationprocessandwhatare the pitfallsof suchan inclusive approach?  4. What role doesthe source of financingplayforsocial innovationandhow doessocial innovationventuringattractinvestors?

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