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Corporate Social Responsibility

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Corporate Social Responsibility

  1. 1. Corporate Social Responsibility
  2. 2. What is Corporate Social Responsibility?
  3. 3. What is CSR?
  4. 4. Also known as: Corporate Citizenship Corporate Responsibility Responsible Business Sustainable Responsible Business Corporate Social Performance
  5. 5. Definition <ul><li>The voluntary actions that business can take, over and above compliance with minimum legal requirements, to address both its own competitive interests and the interests of wider society </li></ul><ul><li>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 </li></ul>
  6. 6. Corporate Citizenship <ul><li>Corporate citizenship embraces all the facets of </li></ul><ul><li>Corporate social responsibility – emphasizes obligation and accountability to society </li></ul><ul><li>Corporate social responsiveness – emphasizes action, activity </li></ul><ul><li>Corporate social performance – emphasizes outcomes, results </li></ul>
  7. 7. Why CSR? <ul><li>Consumers & Investors: Growing expectation for organisations to behave responsibly </li></ul><ul><li>Consumer awareness: ‘Green’ and ‘Ethical’ consumerism </li></ul><ul><li>Legislation: Sustainability, Codes of Practice </li></ul><ul><li>Globalisation: Adoption of ‘Best Practice’, Consumer & Legal Acceptance </li></ul>
  8. 8. Corporate Social Responsibility… adds value
  9. 9. Business Advantages <ul><li>Human Resources </li></ul><ul><li>Recruitment, retention and morale of Staff </li></ul><ul><li>Risk Management </li></ul><ul><li>Investment in ‘ethical brand equity’ </li></ul><ul><li>‘ Greenwash’ effect? </li></ul><ul><li>Brand Differentiation </li></ul><ul><li>As USP </li></ul><ul><li>Build brand loyalty </li></ul><ul><li>Reputation and brand attractiveness </li></ul><ul><li>Addresses issues by being proactive </li></ul>
  10. 10. Business Advantages <ul><li>Business Development </li></ul><ul><li>New markets, products and services </li></ul><ul><li>Addresses social issues business caused and allows business to be part of the solution </li></ul><ul><li>Protects business self-interest </li></ul><ul><li>Resources Management </li></ul><ul><li>Better management and conservation of strategic assets </li></ul><ul><li>Addresses issues by using business resources and expertise </li></ul><ul><li>Stakeholder Management </li></ul><ul><li>Better internal and external relationships </li></ul><ul><li>Freedom of operation: reduce government, public, NGO intervention in organisation </li></ul>
  11. 11. Why not CSR? <ul><li>May take management focus away from core business activity </li></ul><ul><li>May appear cosmetic – without genuine social benefit </li></ul><ul><li>May make organisation more vulnerable to revelation of bad / unethical business practice </li></ul><ul><li>Restricts the free market goal of profit maximization </li></ul><ul><li>Business is not equipped to handle social activities </li></ul><ul><li>Limits the ability to compete in a global marketplace </li></ul>
  12. 12. Perspectives on Social Responsibility <ul><li>Economic Responsibility </li></ul><ul><ul><li>To make a profit within the “rules of the game” </li></ul></ul><ul><ul><ul><li>Organizations cannot be moral agents. </li></ul></ul></ul><ul><ul><ul><li>Only individuals can serve as moral agents. </li></ul></ul></ul><ul><li>Public Responsibility </li></ul><ul><ul><li>Businesses should act in a way that is consistent with society’s view of responsible behavior, as well as with established laws and policies </li></ul></ul><ul><li>Social Responsiveness </li></ul><ul><ul><li>Business should proactively seek to contribute to society in a positive way </li></ul></ul><ul><ul><li>Organizations should develop an internal environment that encourages and supports ethical behavior at an individual level. </li></ul></ul>
  13. 13. 4 Faces of Social Responsibility Legal/Responsible Illegal/Irresponsible
  14. 14. Caroll’s CSR definition
  15. 15. 4 Components of CSR <ul><li>CSR encompasses the </li></ul><ul><li>Economic </li></ul><ul><li>Legal </li></ul><ul><li>Ethical </li></ul><ul><li>Discretionary (philanthropic) </li></ul><ul><li>expectations that society has of organizations at a </li></ul><ul><li>given point in time </li></ul>
  16. 16. Carroll’s Four Part Definition Responsibility Societal Expectation Examples Economic Required Be profitable. Maximize sales, minimize costs, etc. Legal Required Obey laws and regulations. Ethical Expected Do what is right, fair and just. Discretionary (Philanthropic) Desired/ Expected Be a good corporate citizen.
  17. 17. Economic Responsibilities - Be profitable Legal Responsibilities - Obey the law Ethical Responsibilities - Be ethical Philanthropic Responsibilities – Be a good citizen Reporting Format Caroll’s CSR Pyramid
  18. 18. CSR & Business Organizations
  19. 19. Most common ways of demonstrating CSR <ul><li>Specialist ‘adopted’ projects </li></ul><ul><li>Corporate charitable donations </li></ul><ul><li>Voluntary schemes for staff </li></ul><ul><li>Staff fundraising activities </li></ul><ul><li>Changes to organisational operations </li></ul>
  20. 20. Social Responsibility Strategies <ul><li>A continuum of possible strategies based on the organization’s </li></ul><ul><li>tendency to be socially responsible or responsive. </li></ul>Do Nothing Do Much Reaction Defense Accommodation Proaction
  21. 21. <ul><li>Reaction </li></ul><ul><ul><li>An approach to CSR that includes an organization denying responsibility for its actions </li></ul></ul><ul><li>Defense </li></ul><ul><ul><li>Organizations that pursue a defense strategy respond to social challenges only when it is necessary to defend their current position </li></ul></ul>Social Responsibility Strategies
  22. 22. <ul><li>Accommodation </li></ul><ul><ul><li>An approach to CSR that adapts to public policy in doing more than the minimum required </li></ul></ul><ul><li>Proaction </li></ul><ul><ul><li>An approach to CSR that includes behaviors that improve society. </li></ul></ul><ul><ul><li>Organizations that assume a proaction strategy subscribe to the notion of social responsiveness. </li></ul></ul>Social Responsibility Strategies
  23. 23. Communicating CSR <ul><li>Organisations should develop a general values statement which reflects their stance towards CSR </li></ul><ul><li>This may form part of a more comprehensive Mission Statement </li></ul><ul><li>Should define ethical framework that guides the accomplishment of the overall mission of an organization within a society </li></ul>
  24. 24. Example: Organizational Focus
  25. 25. Example: Employee Focus
  26. 26. Reporting CSR <ul><li>CSR projects may be administered and communicate </li></ul><ul><li>achievements via: </li></ul><ul><li>A dedicated CSR section or department </li></ul><ul><li>The HR department </li></ul><ul><li>Business development section </li></ul><ul><li>Public Relations department </li></ul><ul><li>Directly via CEO and / or Board of Directors </li></ul>
  27. 27. Reporting Format <ul><li>The ‘Triple Bottom Line’: </li></ul><ul><li>Concept developed by John Elkington in 1994 </li></ul><ul><li>Expects organisations to be responsible to ‘stakeholders’ interests rather than ‘shareholders’ profit </li></ul><ul><li>This means expanding the traditional reporting framework to take into account performance in terms of: </li></ul><ul><ul><li>Social (People) </li></ul></ul><ul><ul><li>Environmental (Planet) </li></ul></ul><ul><ul><li>Financial (Profit) </li></ul></ul>
  28. 28. Business Criticism / Social Response Cycle Factors in the Societal Environment Criticism of Business Increased concern for the Social Environment A Changed Social Contract Business Assumption of Corporate Social Responsibility Social Responsiveness, Social Performance, Corporate Citizenship A More Satisfied Society Fewer Factors Leading to Business Criticism Increased Expectations Leading to More Criticism
  29. 29. Social—and Financial—Performance Good Corporate Social Performance Perspective 1: CSP Drives the Relationship Good Corporate Financial Performance Good Corporate Reputation Good Corporate Financial Performance Perspective 2: CFP Drives the Relationship Good Corporate Social Performance Good Corporate Reputation Good Corporate Social Performance Perspective 3: Interactive Relationship Among CSP, CFP, and CR Good Corporate Financial Performance Good Corporate Reputation
  30. 30. Ten Commandments <ul><li>Take corrective action before it is required. Compliance with self-imposed standards is almost always preferable to compliance with standards that are imposed by outside constituencies. </li></ul><ul><li>Work with affected constituents to resolve mutual problems. </li></ul><ul><li>Work to establish industry-wide standards and self-regulation. </li></ul><ul><li>Publicly admit your mistakes. Few things are worse for a company’s image than being caught trying to cover up socially irresponsible behavior. </li></ul><ul><li>Get involved in appropriate social programs. </li></ul>
  31. 31. Ten Commandments <ul><li>Help correct environmental problems. </li></ul><ul><li>Monitor the changing social environment. </li></ul><ul><li>Establish and enforce a corporate code of conduct. </li></ul><ul><li>Take needed public stands on social issues. </li></ul><ul><li>Strive to make profits on an ongoing basis. An organization cannot provide jobs and employ workers if it is not in a position to make consistent profits. </li></ul>
  32. 32. KLM’s CSR
  33. 33. Cadbury’s & Society <ul><li>Cadbury India has a tradition of caring for the environment and enriching the quality of lives of the communities we live and work in, through a variety of result-oriented programs: </li></ul><ul><li>Our commitment to the Environment </li></ul><ul><li>Growing Community Value </li></ul>
  34. 34. <ul><li>To increase water conservation, Bangalore factory constructed a check dam to store the rainwater </li></ul><ul><li>It acts as a major ground water replenishing source for the bore wells in the factories and surrounding community and also as a stopover location for some of the migratory birds </li></ul>Commitment to the Environment <ul><li>Worked with the Kerala Agriculture University to undertake cocoa research which increased cocoa productivity and touched the lives of thousands of farmers </li></ul>
  35. 35. <ul><li>Installed 28 solar powered streetlights to reduce annual carbon dioxide emissions by 10 tonnes, playing a part in the effort to reduce global warming </li></ul><ul><li>Karnataka State Pollution Control Board has honoured the Bangalore factory with the Parisara Premi (Preserver of the Environment) Award for the second year in a row </li></ul>Commitment to the Environment
  36. 36. <ul><li>Non-formal school set up by Cadbury for children of migrant workers in Baddi </li></ul><ul><li>Sarvam Program </li></ul><ul><ul><li>established a Tsunami Regeneration Programme </li></ul></ul><ul><ul><li>contributing to the redevelopment of two Tsunami affected villages in the costal region of Pondicherry </li></ul></ul><ul><ul><li>addresses education, health, economic development, vocational training, organic farming, water harvesting and attitude changes including the empowerment of women </li></ul></ul>Growing Community Value
  37. 37. <ul><li>Cadbury in tie-up with Bharti-Walmart to support education needs of underprivileged children </li></ul><ul><li>Cadbury spreads smiles at Vatsalya </li></ul><ul><ul><li>partnered with Vatsalya Foundation, an NGO working with underprivileged street children in Mumbai to give the child a supportive environment to live and study in and gain skills so that they become contributing members of society </li></ul></ul>Commitment to the Environment
  38. 38. <ul><li>Cadbury India supports the building of a Neo-natal ward to provide a health start to the newborn infants of the local community in the Thane district </li></ul><ul><li>Gurikha Project </li></ul><ul><ul><li>launched the Community Initiative Programme </li></ul></ul><ul><ul><li>focused on healthcare and education in the nearby village of Gurikha </li></ul></ul><ul><ul><li>Started a nursery school </li></ul></ul><ul><ul><li>social improvements: fresh drinking water from a new village pump, a doctor's clinic, vet services for milk producing animals and fruit trees for each household to plant during the monsoons </li></ul></ul><ul><ul><li>Special focus was given to the rights and contribution of girls </li></ul></ul>Commitment to the Environment
  39. 39. McDonald’s CSR
  40. 40. “ We do everything we can to operate in a manner that is sustainable: economically, socially, and environmentally - in the best interest of long-term success for our enterprise.” Novartis’s CSR
  41. 41. <ul><li>JEET – Joint efforts to eradicate Tuberculosis </li></ul><ul><li>Distribution of free Drugs to 5,00,000 TB patients </li></ul><ul><li>Working with “Global TB Alliance for TB drug development </li></ul><ul><li>Novartis institute for tropical diseases </li></ul><ul><li>Distribution of Anti Malarial drug Coartem </li></ul>Tuberculosis And Malaria
  42. 42. <ul><li>A Rural Health Initiative originated in 2006 </li></ul><ul><li>Disease area(s) - Multiple diseases </li></ul><ul><li>Partner(s) - Rural Connect, NGO, Volunteers. </li></ul><ul><li>Program type(s): Access - Pricing, Education </li></ul><ul><li>Current Status: Serving 25 million villagers across seven states </li></ul><ul><li>Objective: To be fully operational in the country </li></ul><ul><li>Award won: “ Best long-term rural marketing initiative ” from RMAI </li></ul>Arogya Parivar Program
  43. 43. <ul><li>Worldwide initiative </li></ul><ul><li>Novartis India- a step further by “celebrating” a week. </li></ul><ul><li>Hundreds of associates contribute </li></ul><ul><li>Employee is given the chance to spend one day a year volunteering for a local community project </li></ul><ul><li>Decorating buildings to organizing children’s art and craft workshops, providing health checks, cleaning streets, delivering food to shelters, visiting hospitals and working with older people and people with physical and mental disabilities </li></ul>Community Partnership Day
  44. 44. <ul><li>Education:  The Indian School of Business scholarship </li></ul><ul><li>Akanksha – p articipated in the Standard Chartered marathon held in 2004 and 2005 with a commitment that the amount donated goes to Akanksha for the education and health of underprivileged children </li></ul><ul><li>Novartis Oration Award for Research in Cancer </li></ul><ul><li>Spastics Society of India – sponsored an anganwadi in Mumbai for these special children and keeps in contact with them on its progress </li></ul><ul><li>Comprehensive leprosy care project - Providing physical aids </li></ul>Other Events
  45. 45. CSR in the 21 st Century <ul><li>Demonstrate a commitment to society’s values and contribute to society’s social, environmental, and economic goals through action </li></ul><ul><li>Insulate society from the negative impacts of company operations, products and services </li></ul><ul><li>Share benefits of company activities with key stakeholders as well as with shareholders </li></ul><ul><li>Demonstrate that the company can make more money by doing the right thing </li></ul>