This document discusses the history and concepts of corporate social responsibility. It describes how views of CSR have evolved from a focus on profits alone to recognizing corporations' responsibilities to society. CSR involves companies voluntarily addressing ethical and social issues and stakeholders' needs. The document outlines the advantages of CSR and provides examples of CSR standards, awards, and initiatives in India.

1. Corporate Social Responsibility
session-4
Prof. S.K.Palhan
skpalhan@selfeffectiveness.com

2. Historical Background
• Adam Smith
– It is the profit driven market system, also called
price mechanism that drives business firms to
promote social welfare , though they work for
private gain
• Milton Friedman
– He argued that business has no other social
responsibility excepting making profits within the
legal & moral rules set by the society

3. Corporate Social Responsibility
• Now corporate social responsibility has come to
mean that the responsibility of a corporate to the
society is an inalienable part of operations &
strategy.
• The companies need to answer the following two
issues relating to their operations
1. The quality of their management -both in terms of
people & processes
2. The nature & quality of their impact on society in
various areas

4. Why social responsibility of
business ?
• The limited view of focus on profits alone
would be counter productive to its objective.

5. Why social responsibility of
business ?
• The ethical & social behaviour of a corporation
is essential for generation of profit, since
profits would come in the long run only due to
the reputation of the company & its social
behaviour
• In a democratic society any kind of enterprise
exist for the sake of society. Therefore the
enterprise is accountable to the society

6. CSR –Defined from different
perspectives
• The World Business Council For Sustainable
Development
– CSR is the continuing commitment by the business
to behave ethically& contribute to economic
development while improving the quality of life of
the workforce & their families as well as of the
local community & society at large
• In USA
– CSR has been traditionally defined in terms of
philanthropy model

7. Corporate Social Responsibility
• In Europe
–Focus is on operating the core business in a
socially responsible way, complimented by
investment in communities for solid case
reasons
–Social responsibility is an integral part of the
wealth creation process. If it is
philanthropic in nature then this would be
dropped first in hard times

8. Corporate Social Responsibility
• Mahatma Gandhi
– Wealth created from society has to be ploughed
back into society

9. Substance of CSR
1. It is an attempt made by companies to be
voluntarily responsible to ethical & social
considerations
2. It is not legal binding for the company, unlike
corporate accountability
3. Set of obligations which are desirable in
terms of the objectives & values of a society
4. Set of obligations to project, enhance
society in which it works

10. Substance of CSR
5. Overall relation ship of the organization with
the various stakeholders
6. It covers the following expectations/
responsibilities
– Economic
– Legal
– Ethical
– Philanthropic

11. Substance of CSR
7. The socially responsible company should strive
to
– Make profit
– Obey the law
– Be ethical
– Be a good corporate citizen
8. Social responsibility is temporal and society
based
– It differs from society to society
– It changes over time

12. CSR at present
• Importance of CSR realized due to
– Greater acceptance of business linkage with
external environment
– Greater professionalism in business
– Evolution of managers from all levels of general
society

13. Implementation of CSR
• Systematic implementation of CSR implies
– The adoption of strong organizational values &
norms depicting behaviour that are appropriate
towards a variety of stakeholders
– The continuous generation of intelligence about
stakeholder issues, along with positive response
to those issues

14. 4 Models for implementation
1. Ethical –Mahatma Gandhi
– Voluntary commitment by companies to public
welfare
2. Statist –Jawaharlal Nehru
– State ownership and legal requirements
determine corporate responsibilities

15. Models for implementation
3. Liberal –Milton Friedman
– Corporate responsibility limited to private
owners the needs of the stakeholders-
customers, creditors ,employees, communities
etc.
4. Stakeholder – R. Edward Freeman
– Corporate responsibility to the needs of the
stakeholders-customers, creditors ,employees,
communities etc.

16. CSR-Advantages
1. Improved financial performance
2. Enhanced brand image & reputation
3. Increased sales & customer loyalty
4. Increased ability to attract & retain
employees

17. CSR-Advantages
5. Reduced regulatory oversight
6. Innovation & learning
7. Better risk management
8. Easier access to capital
9. Environmental improvements

18. Scope of CSR
• Market forces
• Mandated actions
• Voluntary actions
• CSR addresses the following issues
– Community assistance in solving problems of the
community
– Health& welfare
– Education
– Human rights
– Natural environment
– Culture (music , art, sports etc)

19. Steps In CSR-
The International Chamber of
Commerce
1. Confirm CEO/Board commitment to prioritize
responsible business conduct
2. State company purpose & agree on company
values
3. Identify key stakeholders
4. Define business principles & policies
5. Establish implementation procedure &
management systems

20. Steps In CSR-The International
Chamber of Commerce
6. Benchmark against selected external code &
standards
7. Setup internal monitoring mechanisms
8. Use language that everyone can understand
9. Set up pragmatic & realistic objectives

21. Standards On CSR
• The Caux Round Table-founded in 1986
• OECD Guidelines—1976, updated in 2000
• United Nations Global Compact-2000,
– MD Tata steel among 18 others representing
business , labour, civil society leaders on the Board
of UNGC IN 2006
– More than 2,500 participating companies in over
90 countries

22. Standards On CSR
• Asia Pacific Economic Cooperation-code in
1999
• AA 1000 Accountability –in1999 for reporting
guidelines to improve accountability
• Social Accountability-8000 standard
• Principles for Global Corporate Responsibility-
with inputs from 275 religious institutions

23. Awards For CSR
• More than 24 prestigious international awards
constituted in various countries
– Most admired companies list
• Business fortune
• Management today
• Financial times
• Asian business

24. National Awards for CSR in India
• National award for excellence in corporate
governance
• Mother Teresa award for corporate citizen
• FICCI CSR award

25. National Awards for CSR in India
• The economic times award for corporate
excellence
• TERI CSR Award
• CNBC TV18 India business leader award
• Pegasus CSR award of Readers Digest
• Business for social responsibility award- by
BSE& NASSCOM Foundation

26. CSR- issues in India
• Corruption
• The license Raj
• Black money
• Non responsive systems for punishment &
reward

27. CSR-Indian examples
• AMM Foundation-education, health, rural
development
• Asian paints-community development
• BHEL, IPCL, NTPC- Health, education , rural
development
• Tata-community development, social welfare,
tribal development, education, health,
agriculture etc
• Wipro –quality , education

28. CSR-Indian examples
• GAIL-environment, drinking water, medical
• Godrej- environment & conservation
• Dr. Reddy’s lab-education , livelihood
• SAIL-agriculture, education, health, dairy,
poultry, fisheries & drinking water
• ITC- rural development
• TVS group-rural development, technical
education