The alternative perspective of CSR activities, how to make a CSR Activities becoming a financial system for SMEs

1. ENTERPRISE MANAGEMENT
•SOCIAL RESPONSIBILITY
5–1Mohammad Thoriq Bahri-Indonesia

2. What Is Social Responsibility?
• The Classical View
Management’s only social responsibility is to
maximize profits (create a financial return) by
operating the business in the best interests of the
stockholders (owners of the corporation).
Spending the firm’s resources on doing “social good”
unjustifiably increases costs that lower profits to the
owners and raises prices to consumers.
5–2Prof. Dibyendu Choudhury- NIMSME (SEM)

3. What Is Social Responsibility? (cont’d)
• The Socioeconomic View
Management’s social responsibility goes beyond
making profits to include protecting and improving
society’s welfare.
Corporations are not independent entities responsible
only to stockholders.
Firms have a moral responsibility to larger society to
become involved in social, legal, and political issues.
“To do the right thing”
5–3Prof. Dibyendu Choudhury- NIMSME (SEM)

4. Social Responsibility and Organizations
• Social Responsibility
The set of obligations (to behave responsibly) that an
organization has to protect and enhance the social
context in which it functions.
• Areas of Social Responsibility
Stakeholders: customers, employees, and investors.
The natural environment: environmentally sensitive
products, recycling, and public safety.
The general social welfare: charitable contributions,
and support for social issues such as child labor and
human rights.
5–4Prof. Dibyendu Choudhury- NIMSME (SEM)

5. Prof. Dibyendu Choudhury- NIMSME (SEM) 5–5
Stakeholder Model

6. Arguments For and Against
Social Responsibility
1. Business creates problems and
should therefore help solve them.
2. Corporations are citizens in our
society.
3. Business often has the resources
necessary to solve problems.
4. Business is a partner in our
society, along with the govern-
ment and the general population.
Social
Responsibility
4. The purpose of business in
society is to generate profit
for owners.
2. Involvement in social programs
gives business too much power.
3. There is potential for conflicts
of interest.
1. Business lacks the expertise to
manage social programs.
Arguments For Social Responsibility Arguments Against Social Responsibility
Figure 2.25–6Prof. Dibyendu Choudhury- NIMSME (SEM)

7. Approaches to
Social
Responsibility
Source: Barney, Jay B. and Ricky W. Griffin, The
Management of Organizations. Copyright © 1992 by
Houghton Mifflin Company. Used with permissions.
5–7Prof. Dibyendu Choudhury- NIMSME (SEM)

8. Managing Social Responsibility:
Formal Organizational Dimensions
• Legal Compliance
Extent to which the organization conforms to local,
state, federal, and international laws.
• Ethical Compliance
Extent to which members of the organization follow
basic ethical/legal standards of behavior.
• Philanthropic Giving
Awarding of funds or gifts to charities and other social
programs.
5–8Prof. Dibyendu Choudhury- NIMSME (SEM)

9. Managing Social Responsibility:
Informal Organizational Dimensions
• Organizational Leadership and Culture
Leadership practices and the culture of the
organization can help define the social responsibility
stance an organization and its members will adopt.
• Whistle Blowing
The organizational response to the disclosure by an
employee of illegal or unethical conduct on the part of
others within the organization is indicative of the
organization’s stance on social responsibility.
5–9Prof. Dibyendu Choudhury- NIMSME (SEM)

10. To Whom is Management Responsible?
5–10Prof. Dibyendu Choudhury- NIMSME (SEM)

11. Exhibit 5.2
Arguments For and Against Social Responsibility-
Summary
• For
 Public expectations
 Long-run profits
 Ethical obligation
 Public image
 Better environment
 Discouragement of further
governmental regulation
 Balance of responsibility
and power
 Stockholder interests
 Possession of resources
 Superiority of prevention
over cure
• Against
 Violation of profit
maximization
 Dilution of purpose
 Costs
 Too much power
 Lack of skills
 Lack of accountability
5–11Prof. Dibyendu Choudhury- NIMSME (SEM)

12. From Obligation to Responsiveness to
Responsibility
• Social Obligation
 The obligation of a business to meet its economic and legal
responsibilities and nothing more.
• Social Responsiveness
 The capacity of a firm to adapt to changing societal
conditions through the practical decisions of its managers
in responding to important social needs.
• Social Responsibility
 A firm’s obligations as a moral agent extends beyond its
legal and economic obligations, to the pursuit of long-term
goals that are good for society.
5–12Prof. Dibyendu Choudhury- NIMSME (SEM)

13. Social Responsibility versus Social
Responsiveness
Source: Adapted from S.L. Wartick and P.L. Cochran, “The Evolution of the Corporate
Social Performance Model,” Academy of Management Review, October 1985, p. 766.
Social Responsibility Social Responsiveness
Major consideration Ethical Pragmatic
Focus Ends Means
Emphasis Obligation Responses
Decision framework Long term Medium and short term
5–13Prof. Dibyendu Choudhury- NIMSME (SEM)

14. Does Social Responsibility Pay?
• Studies appear to show a positive relationship
between social involvement and the economic
performance of firms.
Difficulties in defining and measuring “social
responsibility” and “economic performance raise
issues of validity and causation in the studies.
Mutual funds using social screening in investment
decisions slightly outperformed other mutual funds.
• A general conclusion is that a firm’s social
actions do not harm its long-term performance.
5–14Prof. Dibyendu Choudhury- NIMSME (SEM)

15. CORPORATE SOCIAL RESPONSIBILITY –
CASE STUDY OF
TATA GROUP
5–15Prof. Dibyendu Choudhury- NIMSME (SEM)

16. Prof. Dibyendu Choudhury- NIMSME (SEM) 5–16
Connecting Employees

17. Prof. Dibyendu Choudhury- NIMSME (SEM) 5–17
Connecting with Customers

18. Prof. Dibyendu Choudhury- NIMSME (SEM) 5–18
Connecting with Investors

19. Prof. Dibyendu Choudhury- NIMSME (SEM) 5–19

20. Prof. Dibyendu Choudhury- NIMSME (SEM) 5–20
Connecting with Government

21. Prof. Dibyendu Choudhury- NIMSME (SEM) 5–21
Connecting with Society

22. Prof. Dibyendu Choudhury- NIMSME (SEM) 5–22
Connecting with Suppliers

23. Corporate Social Responsibility Policy
“Tata Steel believes that the primary
purpose of a business is to improve the
quality of life of people.
Tata Steel will volunteer its resources,
to the extent that it can reasonably
afford, to sustain and improve a healthy
and prosperous environment and to
improve the quality of life of the people
of the areas in which it operates.”
8
5–23Prof. Dibyendu Choudhury- NIMSME (SEM)

24. From Tradition To Process
Areas of Impact
Environment
Employee Relations
Stimulating Economic Growth
Civic Amenities & Community Service
Population Management
Sports and Adventure
Health for All
Relief During Natural Calamities
Education / Arts and Culture
9
5–24Prof. Dibyendu Choudhury- NIMSME (SEM)

25. Environment
Conserving Nature for Future
Generations
All production units certified to ISO
14001
Town Services certified to ISO 14001
Planted -”thousand trees for thousand
days” - as a millennium gift for future
generations. The eventual count was
1.6 million
20% reduction in consumption of raw
materials in the past five years
100% treatment of waste water,
discharged upstream from point of
collection
Greening of Supply Chain
10
5–25Prof. Dibyendu Choudhury- NIMSME (SEM)

26. Employee Relations
Many landmarks in Labour Welfare
1915 Free Medical Aid to all employees and
dependent family members
1917 Welfare Department set up
1956 Joint Consultation instituted with Union
Management Agreement
1990 Incentive for Higher Technical Education
2001 Family Benefit Scheme
2003 R D Tata Technical Education Centre
2003 Initiated process for SA 8000
certification
2004 Completed 75 years of Industrial
Harmony
2004 Inserted clause against Sexual
Harassment in the Works Standing
Order
11
5–26Prof. Dibyendu Choudhury- NIMSME (SEM)

27. Stimulating Economic Growth
Continuously augmenting Town infrastructure to
promote business growth
Tata Steel and its subsidiaries provide business
opportunities to ancillary units
Institutions such as National Institute of
Technology, R.D.Tata Technical Education Center,
and Savak Nanavati Technical Institute provides
technical and job oriented training
Promoting rural economy through natural
resource management, micro financing and credit,
and training for gainful employment
Tate Steel caters to over 600 villages and several
company towns, in the provinces of Orissa and
Jharkhand
Creating a ripple effect across towns and villages
12
5–27Prof. Dibyendu Choudhury- NIMSME (SEM)

28. Civic Amenities and Community Service
“Be sure to lay wide streets planted with shady
trees, every other of a quick growing variety. Be
sure that there is plenty of space for lawns and
gardens. Reserve large areas for football hockey
and parks. Earmarks areas for Hindu temples,
Mohammaden mosques and Christian
churches.”
J N Tata,1902
Created Town Services, Community Development &
Social Welfare Department, and Energy and
Environment Cell
Today, also responsible for environment
management, family initiatives, medical services,
emergency fire services, airport, mobile medical
services, sports facilities, libraries, education
centers...
Services have grown to cover 700,000 beneficiaries
13
5–28Prof. Dibyendu Choudhury- NIMSME (SEM)

29. Population Management
Jamshedpur leads in demographic indices and
maternal and child health in the country
Shares planned family norms with employees and
non-employees through Family Initiatives
Foundation
Extension programs have empowered the
community to sustain initiatives
Provides free Reproductive Health Services to over
2,000,00 women from urban & rural areas each year
Ensures 98% immunisation coverage in the city of
Jamshedpur
14
5–29Prof. Dibyendu Choudhury- NIMSME (SEM)

30. Sports & Adventure
Promotes Sports as a way of Life
Sports Department
Tata Steel Adventure Foundation
Tata Football Academy
Tata Archery Academy
30-acre J R D Tata Sports Complex
Organizes sporting events for employees and
community year round
Promotes sports in schools
Employees include 20 Olympians, over 100
international sports persons
India’s first woman to scale Mount
Everest
15
5–30Prof. Dibyendu Choudhury- NIMSME (SEM)

31. Health for All
Health care facilities open to employees and non-
employees
850-bed hospital, two super dispensaries and
nine dispensaries in Jamshedpur
Mobile medical units reach out to rural and semi
urban areas
Health Centers based in villages and
communities. Supports alternative remedies such
as ayurveda, naturopathy, homeopathy, etc
Supports Blood Bank, specialty hospitals for
tuberculosis, eye care services, cancer, etc
Taken “Lifeline Express” seven times to remote
parts of rural India
Partner for Child Survival, Smile Train, Polio and
Water and Sanitation projects
16
5–31Prof. Dibyendu Choudhury- NIMSME (SEM)

32. Relief during natural calamities
Immediate relief with materials and
help during natural calamities
Relief followed by long-term
rehabilitation programmes
Employees have contributed their
wages towards relief and
participated in relief work
Constructed schools and shelters
after recent super cyclone in Orissa
and earthquake in Gujarat
17
5–32Prof. Dibyendu Choudhury- NIMSME (SEM)

33. Education
Jamshedpur is a centre for excellence
in education
Three primary schools, six high schools and
one college run by the company
312 private schools and 171 “balwadi”
schools assisted by Tata Steel
Jamshedpur has among the highest literacy
rates in the country
Instituted Dr J J Irani Education Excellence
Award
18
5–33Prof. Dibyendu Choudhury- NIMSME (SEM)

34. Arts and Culture
Patron of Art and Culture
Contributed to setting up of National
Centre for Performing Arts, Mumbai
Tribal Culture Centre set up for
preservation and promotion of
indigenous art and culture
Supports cultural institutions in
Jamshedpur and outlocations
Promotes rural arts and crafts
“Art in Industry” camps
One of the oldest and finest collection of
India’s masters and contemporary Indian
art
19
5–34Prof. Dibyendu Choudhury- NIMSME (SEM)

35. Vision 2007
Global Goals and Social Commitments
Tata Steel plans to augment capacity from 4 million to 10 million
tones per annum
Grow from a domestic player to a global enterprises
All in line with ethos of creating value for the nation, without
compromising on the ability of future generations to meet their
needs.
Sets aside 12-14% of PAT for welfare
20
5–35Prof. Dibyendu Choudhury- NIMSME (SEM)

36. “We generate wealth for the people. What
comes from the people must, to the extent
possible, therefore get back to the people.”
- Bharat Ratna, J R D Tata
21
5–36Prof. Dibyendu Choudhury- NIMSME (SEM)

37. Corporate Responsibility
An Approach to Business that Embodies
Transparency and Ethical Behaviour, Respect for
Stakeholder groups and a Commitment to add
Economic, Social and Environmental value
Prof. Dibyendu Choudhury- NIMSME (SEM)

38. ONGC’s
CORPORATE CITIZENSHIP POLICY
Statement
ONGC Group of companies, as responsible Corporate
Citizens, shall promote Education, Healthcare and
Entrepreneurship in the community and support Water
Management and Disaster Relief in the country.
5–38Prof. Dibyendu Choudhury- NIMSME (SEM)

39. • To operationalise the Corporate Citizenship
statement, ONGC Group companies shall.
Promote community projects selected on the
following parameters in the focus areas:
 Shared contribution by the Corporation and the community;
 Sustainable impact of the project on the well-being of the
community; and
 Process credibility to enhance the corporate image.
• Support National causes in the focus areas,
and Create enduring Values, Satisfactions and
Recognitions
Corporate Citizenship Practice
5–39Prof. Dibyendu Choudhury- NIMSME (SEM)

40. Financial Commitment
ONGC allocates fund equivalent to 0.75%
of net profits of the previous year towards
SEDP every year. Out of the total, the following
allocation are made:
 60% towards Corporate programmes, all
in the focus areas.
 40% towards programmes in and around
the Work Centres and operational areas
5–40Prof. Dibyendu Choudhury- NIMSME (SEM)

41. The Focus Areas
Corporate Level:
 Disaster relief management
 Water Management Projects.
Work Centre Level:
 Education especially InfoTech
 Healthcare including drinking water
 Entrepreneurship schemes
 Others
5–41Prof. Dibyendu Choudhury- NIMSME (SEM)

42. ONGC’s Cyclone Relief Activities in Nimpada,
situated in Puri district of Orissa in 1999:
• Rs.8.0 crores contributed towards the Prime
Minister’s Relief Fund.
• ONGC’s employees donated one day’s salary
• Immediate Relief:
 Temporary shelters i.e. polythene sheets,
tarpaulins, food, medicines, clothing, 10,500
blankets, drinking water.
 Round the clock medical treatment by ONGC
doctors.
Disaster Relief Management
5–42Prof. Dibyendu Choudhury- NIMSME (SEM)

43. Disaster Relief Management Contd…
• Reconstruction, rehabilitation,
restoration work:
Restoration work under taken
Reconstruction of public utilities viz.primary
health centers, dispensaries.
500 BPL (below poverty line) houses constructed
and handed over to beneficiaries
30 schools constructed
74 tube wells drilled
5–43Prof. Dibyendu Choudhury- NIMSME (SEM)

44. Disaster Relief Management Contd…
• Relief and Rehabilitation of Gujarat earthquake victims:
Immediate Relief:
 Rs. 7.5 crores donated to Prime Minister’s Relief Fund.
 Employees donated one day’s salary
 Relief provided in terms of food, medicines, medical
help
 Provided heavy machinery like cranes, trailors and fire
tenders
Restoration/Reconstruction:
 Associated with Oil PSUs for construction of 800
temporary shelters
 Reconstruction of Meghani Nagar, Kanoria school
 Construction/Extension of Physiotherapy building at
Vadilal Sarabhai Hospital, Ahmedabad 5–44Prof. Dibyendu Choudhury- NIMSME (SEM)

45. • Kargil War Relief:
 Rs. 15 crores contributed towards Prime Minister’s Relief
Fund
 ONGC Employees donated one day’s salary
 50 posts sanctioned for Kargil War victims
5–45Prof. Dibyendu Choudhury- NIMSME (SEM)

46. Water Management
Project Saraswati
• To provide sustainable solution to Ground Water
Resource Management in North West Rajasthan.
Collaborators:
• Central Ground Water Board
• Rajasthan State Ground Water Deptt.
• Space Application Centre
• Deptt of Space & Regional Remote Sensing
Service Centre
• Indira Gandhi Nahar Pariyojna
5–46Prof. Dibyendu Choudhury- NIMSME (SEM)

47. Scope:
Supplying water from Indira Gandhi Nahar Pariyojna for
hinterland through lift canals
Recharging available ground water aquifers through
rainwater harvesting and canals
Conjunctive use of ground / surface water
Mixing of Saline ground water with canal water to
augment supply
Desalination and deflouridation of contaminated ground
water
5–47Prof. Dibyendu Choudhury- NIMSME (SEM)

48. Healthcare
 Support to Centres of excellence in medical research in
the country example: Sankara Nethralaya, Chennai
 Contribution for setting up of a 600 bed hospital in
Behala, West Bengal.
 Contribution towards Latika Roy Memorial Foundation
for running a school for mentally handicapped.
 Contributed to Conclave on Accelerating the Business
Response to AIDS – Partnership and Action organised
by CII.
5–48Prof. Dibyendu Choudhury- NIMSME (SEM)

49. • Healthcare:
 Medical camps organised by ONGC serve about
10,000 patients residing around operational area
annually and around 300-400 patients obtain IOL
implants done free of cost.
 AIDS Awareness activities are conducted through
lectures, display boards, exhibition, plays, rallies,
dances etc.
 Active participation in pulse polio immunisation
programme of the Government. More than one lakh
children immunized for polio virus through various
clinics in the country.
5–49Prof. Dibyendu Choudhury- NIMSME (SEM)

50. • Promotion of Sports:
 Supported National Football League and Durand
Football Tournament.
 Supported National Games held in Punjab
 Supported construction of an International
Tennis Centre by Bengal Tennis Association,
Kolkata
5–50Prof. Dibyendu Choudhury- NIMSME (SEM)