CORPORATE SOCIAL RESPONSIBILTY

presented by: RIFAT HUMAYUN

CORPORATE SOCIAL RESPONSIBILITY INDEPENDENT VARIABLE

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.

Foreign Direct Investment Foreign direct investment (FDI) refers to long term

participation by  a country A into country B. It usually involves participation in management, joint-venture, transfer of technology and expertise. There are two types of FDI: inward foreign direct investment and outward foreign direct investment, resulting in a net FDI inflow (positive or negative).

Foreign direct investment (FDI) is a measure of foreign ownership of productive assets, such as factories, mines and land. Increasing foreign investment can be used as one measure of growing economic globalization.

FOREIGN DIRECT INVESTMENT PROMOTES

Capability to increase total production capacity.  Opportunities for co-production, joint ventures with local partners,

joint marketing arrangements, licensing, etc;    low corporate tax and income tax rates in Pakistan tax concessions/exemptions to particular businesses cheap labor in Pakistan Job training & employment subsidies Infrastructure subsidies Research and Development support Early Entry Advantage.

CSR IN ISLAM Allah glorifies a true businessman by saying that (Yusuf Ali., 2004):“Their doing business does not stop them from the remembrance of

Allah”.

“Who so desires the reward of the world, then with Allah is the reward both of the world and of the Hereafter. And Allah is Hearing, Seeing.”

(Al-Nisa:134).

Islam encourages work in general, and trade and commerce in particular, Prophet Mohammad was himself engaged in this

profession before he became a prophet (Bukhari M. I. & Yusuf T. D., 1997). He was a successful businessman Known for integrity, he bore

the honorific title, “the Trustworthy or al-amin”, The Quran states: "God has made business lawful for you“.

“(O Prophet!) Tell those of My servants who believe that they should establish prayer and spend out of what We have provided them with, both secretly and openly, before there arrives the Day when there will be no bargaining, nor any mutual befriending.” (Ibrahim: 31)

Narrated Hakim bin Hizam that the Prophet Muhammad (peace and blessings be upon him) said: “The upper hand is better than the lower hand (i.e. he who gives in charity is better than him who takes it). One should start giving first to his dependents. And the best object of charity is that which is given by a wealthy person (from the money which is left after his expenses).” [Bukhari].

CORPORATE SOCIAL RESPONSIBILITY

CSR is a form of corporate self-regulation integrated into a business model.

CSR is also called corporate conscience, corporate citizenship, social performance, or sustainable responsible business/ Responsible Business.

The term "corporate social responsibility" came into common use in the late 1960s and early 1970s.

ISO 26000 is the recognized international standard for CSR.

LITERATURE REVIEW European Commission (2010) defines CSR as:

“ A concept whereby companies integrate social and environmental

concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.“

Mc William and Siegel (2001) define CSR as:

“Actions that appear to further some social good, beyond the interests of the firm and that which is required by law.”

ACCORDING TO RESEARCHERS Frynas (2005) reported that the factors that drive specific firms to

engage in social investment include: obtaining competitive advantage; maintaining a stable working environment; managing external perceptions; and keeping employees happy.

“ In its broadest sense ,corporate social responsibility represents a concern with the needs and goals of society, which goes beyond the only economic. Insofar as the business system as it exists today can only survive in an effectively functioning free society ,the corporate social responsibility movement represents a broad concern with the business ‘s role in supporting and improving that social order.”(Eels and Watson,1974:247)

Howard Schultz, CEO OF STARBUCKS :Companies should not have a singular view of profitability. There needs to be a balance between commerce and social responsibility... The companies that are authentic about it will wind up as the companies that make more money.

TRIPLE BOTTOM LINE

PeoplePlanet Profit

TRIPLE BOTTOM LINE People planet and profit, also known as the triple

bottom line, are words that should be used and practiced in every move an organization makes.

People relates to a fair and beneficial business practices toward labour, the community and region where corporation conducts its business.

Planet refers to the sustainable environmental practices.

Profit is the economic value created by the organization after deducting the cost of all inputs, including the cost of the capital tied up.

RESPONSIBILITY PYRAMID IN BUSINESSCSR - STRATEGY

Ethical ResponsibilitiesSocial

Responsibilities

Legal Responsibilities

Economic Responsibilities

THE PRIME FACTORS OF CSR1. Climate Change

2. Transparency in business practice

3. Ecological diversity

4. Fair trade and fair procurement

5. Corruption prevention

6. Labour rights

7. Health and Safety

8. Education

9. Income equality and fair wages

10. Poverty

NEED FOR CSR1. Reputation management /

Goodwill Creation

2. Employee attraction

3. Competition (in general)

4. Investor relations

5. Corporate liabilities /Legal

claims

6. Cost efficiency

7. Quality

CREATION OF A CSR STRATEGY

Customer Relations

Product Responsibility

Community Engagement

Responsible Sourcing

Environment Responsibility

Employee Relations

CorporateGovernance Stakeholder Assessment

Internal & External Intelligence

Audit Methodologies

Strategic Actions

CSR Audit CSR Focus Areas

PROPOSED MODEL

CSRFOREIGN DIRECT

INVESTMENT

EDUCATION

Research Question“Is Corporate Social Responsibility

leading to improve foreign direct investment in Pakistan”

or “Education plays an mediating role

between CSR and foreign direct investment: Evidence from

Pakistan”.

LITERATURE GAP These studies have independently linked corporate social

responsibilities to foreign direct investment. No study, to the best of our knowledge has examined the relationship

of corporate social responsibilities and direct foreign investment. There is therefore a substantial gap in the literature which this paper

seeks to fill. In this research I want to re examine the relationship between

corporate social responsibility and foreign direct investment by investigating the role of education plays in this relationship.

This study will fill out the gap that has been identified.

OBJECTIVE OF STUDY The objective of the study is to provide the ways for increasing

foreign direct investment by promoting the corporate social responsibilities in Pakistan which plays an important role in our developing economy.

Developed countries like UK and USA focus Social Responsibility more as compare to the developing countries.

There is lot of research on this topic in the developed countries and they conclude different results of CSR on the financial performance and studied other factors which are enhancing the corporate social responsibilities of companies.

There is need to conduct this type of research in developing countries. So I decided to study this topic in the context of developing countries like Pakistan.

SIGNIFICANCE OF THE STUDY No doubt there are numerous studies on the relationship between CSR

and its components and the factors which are affecting the CSR in different factors.

Many results of CSR and its determinants have been shown by different scholars. The significance of this study is twofold. As the literature review is not to a large extent on this topic in the context of developing countries like Pakistan.

This study will add to the literature in the context of Developing countries.

This study will help to improve the knowledge and managerial practices. This study will also help to the investor for making investment in

because this study show the trend of where this sector is going on by promoting CSR.

THANK YOU…!!!

“WITHOUT A SENSE OF CARING,THERE CAN BE NO SENSE OF COMMUNITY.”