corporate social responsibility

What is CSR?

Definition

The World Business Council for Sustainable Development defines Corporate Social Responsibility (CSR) as the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce, their families and the local community and society at large.

Also known as Corporate Citizenship Corporate Responsibility Responsible Business corporate sustainability sustainable business social responsibility

What is Corporate Philanthropy?Corporate philanthropy or corporate giving is the

act of corporations donating some of their profits,

or their resources, to charitable causes to address

a variety of social, economic and other issues as

part of their overall corporate citizenship strategy.

Difference between CSR and CP? When business decides to donate a portion of their profits to a charity, this action qualifies as philanthropy.

Social responsibility involves adopting responsible behaviors for your business. So in fact, Corporate Philanthropy is one component of CSR.

Evolution of CSR

Evolution of CSR CSR in i950’s commonly known as social responsibility

“Howard Bowen”, published his book in 1953, “ Social Responsibilities of the Businessman”

“Howard said“ CSR refers to the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society.”

Evolution of CSR (cont…)There were a few other landmark books during the 1950s. Morrell Heald’s publication, “Management’s Responsibility to Society”

Eell’s 1956 work, “Corporate Giving in a Free Society”

In 1963, Joseph W McGuire published their book“Business and Society”

The Three-Tiered Model of CSR

In 1971, The Committee for Economic Development (CED) published social responsibilities of business corporations. The CED outlined a three-tiered model of CSR:

1. The inner circle 2. The intermediate circle 3. The outer circle

The debate on social responsibility

Not all business organizations behave in a socially responsible manner Some argue that it is not the job of businesses to be concerned about social issues and problems•Two schools of thought: –

1. Free market view: the job of business is to create wealth for shareholders

2. Corporate social responsibility view: business should be concerned with social issues

Arguments for CSR It is the ethical thing to do It improves a business’ image and reputation Socially responsible actions can be profitable An improved social environment will be beneficial to a business It will be attractive to some investors It can increase employee motivation

Arguments against CSR

Financial Mismanagement Too much power Lack of skills to cope with social issues Lack of accountability Costs

Corporate Fundraising for CSR Projects

Cash donations to charities remain one of the main forms of CSR.

This most commonly takes the form of a Charity of the Year program, where the corporation forms a partnership with one or more chosen charities for the year, and their fundraising is channeled into this charity.

Corporate Fundraising for CSR Projects cont…

There are several way in which corporations raise money to support charities and their own CSR goals: Fundraising from Customers e.g. British Airways and UNICEF

Payroll Giving

Volunteering

Why should a business Embrace CSR

Public image Government requirements

Investor's education tax benefits

Better relations with Stake holders Employee satisfaction & sense of pride

Business advantages of CSR

Business advantages of CSR Business Development New markets, products and services Brand Differentiation As USP, Build brand loyalty , Reputation and brand attractiveness Stakeholder Management Better internal and external relationships Freedom of operation: reduce government, public, NGO intervention in organization

How to fulfill responsibility towards customers?

Give proper and authentic information and give them quality goods,

innovate and develop superior products, give customers education support and

guidance.

How to fulfill responsibility towards suppliers?

Give them timely payments information about changing trends in the market so that they may develop

themselves, establish long term relations with the

suppliers

How to fulfill responsibility towards employees?

Give them a great place to work, enable them to undertake what they want to do and let them to be creative, autonomous,

and a leader in one's own sector,fulfill their expectations in terms salary,

growth, learning, development, promotions etc.

Corporate examples

Asian Paints funded a large scale community development project to enable farmers to use local resources effectively. ONGC allocates 0.75% of its net profit each year for various socio-economic developmental programs. It has also prepared a corporate citizen charter.

Any question???