Corporate Social Responsibitiy-mba 1st Sem

8/3/2019 Corporate Social Responsibitiy-mba 1st Sem

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Corporate Social ResponsibilityCorporate Social Responsibility

y By World Business Council for Sustained Development CSR is

the continuing commitment by business to behave ethically and

contribute to the economic development while improving the

quality of life of the workforce as well as of the local community

and society at large.

y Peter Drucker addressed CSR as one of the key areas for business

objectives. Drucker believed that managements first responsibility

to society involved making profit, he felt it was also most important

that management considers the impact of every business policy and

action upon society.


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y CSR is a term used to express an organization taking responsibility

for the impact of its activities upon its employees, customers,

community and the environment.

y The online encyclopedia, Wikipedia (2007) has one of the best

definitions of CSR. It states that it is a concept that organizations,

especially corporations, have an obligation to consider the interests

of customers, employees, shareholders, communities, and

ecological considerations in all aspects of their operations.


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CSRCSRy Ethically doing business manner in which a business carries outits business policies.

y Organizations commitment and contribution to improve the lives

of stakeholders, consumers , workforce , government , society as awhole.

y Organizations continued effort to monitor its business policy and

its impact on society.

y Organizations ecological considerations while framing its policies.


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Social Responsibility ModelSocial Responsibility Model

y Archie. B. Carroll who defines CSR as the entire range of

obligations business has to society, he has proposed a model.

According to Carroll a firm has the following four categories of

obligations

ECONOMIC

LEGAL

ETHICAL

DISCRETIONARY


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Social Responsibility ModelSocial Responsibility Model

y Economic: Efficient operations to satisfy economic needs of the

society and generation of surplus for rewarding the investors and

further development.

y

Legal: Organizations are expected to obey the law of the land iewhere they are operating.

y Ethical:Norms that society expects business to follow though not

mandated by law.

y Discretionary: Voluntary contributions of the business to the

social cause.


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Further StudiesFurther Studies

Adam Smith and Milton Friedman, the economic functionsefficiently and provide goods and services for the society and earnmaximum profits.

However this view was criticized. Rather it was opined that economic

goals and social responsibility objectives should be achievedsimultaneously.

NK Balasubramaniam of IIM Bangalore summarizes the findings ofseveral recent surveys on CSR in India. Some of the major findings

are1. Rather than seeing it as mere philanthropy or legal compliance it is

now seen as fundamental to the core business of the organization.

2. Major areas of social concern in India are pollution, health,education, social welfare, and rural development.


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Further StudiesFurther Studies

3. There are 2 sets of motivational concerns, one is social concerns

like ethics, values , social improvement , while other is business

concerns such as corporate reputation , customer relationship.

4. There are several obstacles also like adhoc approach, ineffective

evaluation of CSR implementation, unprofessional management.

Overall findings indicate that while CSR is perceived as strategically

important, yet it has to be extensively integrated into the practices.


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Importance of CSRImportance of CSR

y Keith Davis says some socially responsible business decisions can

be justified by having a good chance of bringing long run economic

gain to the firm, thus paying it back for its socially responsible

outlook.

y One hand CSR exhibits ethical behavior that an organization

exhibits towards its internal and external stakeholders. On the

other hand it denotes the responsibility of an organization towards

the environment and society in which it operates.

y Social responsibility encompasses the sectors like health, education,

employment,income and quality of life.


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y CSR is considered to be an important aspect of business success

through efficient resource management, environment protection,

employment,eco-friendly atmosphere.

y CSR initiatives reaps long term benefits in terms of Brand Image

enhancement and SocialAcceptance of an organization.


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Perception and practices of CSR in India A survey was conducted

by ORG-MARG for TERI-Europe in several cities of India in 2001.

The basic purpose of the survey was to capture perceptions and

expectations (related to corporate responsibility) of three sets of

stakeholders such as general public, workers and corporate

executives. The poll gathered that people believe that companiesshould be actively engaged in social matter.

More than 60% of the general public felt that the companies should

also be held responsible for bridging the gap between the rich and

the poor, reducing human rights abuses, solving social problems andincreasing economic stability.


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Importance of CSRImportance of CSRProponents of corporate social responsibility (CSR) are convinced that it paysoff for the firm as well as for the organization's stakeholders and society.

(How Corporate responsibility pays off

Lee Burke and Jeanne M. Logsdon)

Pursuing Corporate Social Responsibility helps in creating positive brand imageand identity.(Corporate reputation image and identity-Pruzan P, CorporateReputation Review,Volume 4,Number 1, 1April 2001 , pp. 50-64(15)

CSR initiatives gives CompetitiveA

dvantage to a firm ( Strategy and Society Thelink between Competitive advantage and Corporate Social Responsibility-Michael E Porter and Mark R.Krammer, Harvard Business Review 2006 Dec)


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CSR in IndiaCSR in India

y The pressure on Indian industrialists to demonstrate theircommitment to social development increased during theindependence movement, when Mahatma Gandhi developed thenotion of trusteeship, whereby the owners of property wouldvoluntarily manage their wealth on behalf of the people.

y TATA was one of the first corporate houses to initiate.

y A review of contemporary CSR trends in India concluded thatalthough the corporate sector in India benefited immensely from

liberalization and privatization processes, its transition fromphilanthropic mindsets to CSR has been lagging behind itsimpressive financial growth

(Source:A review of Corporate Social Responsibility in India Bimal Arora , Ravi Puarnik)


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ExamplesExamples

y Hindustan Unilevers, Lifebuoy SWASTHYA CHETNA health and

hygiene education program. Educate people about health related

precautions to 200million in rural and urban areas.

y

Tata Teas communication and positioning itself as a catalyst forsocial awakening through JAAGO RE campaign.

y Colgate Palmolive SPREADING SMILES AT PRATHAM(NGO) , In

association with IDA organize free dental checkup camps ,

Supported free surgery of children and young adults suffering fromcleft lips.


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ExamplesExamples

y Marico Industries brand Saffola positioned itself as an edible oil

brand that cares for heart. On World Heart Day they ORGANISE

FREE HEART CARE CAMPS.

y

ITC every notebook that is bought, rs 1 goes forEDUC

ATIO

N

OF UNDERPRIVILEDGED CHILDREN Concept of E- Choupal .

y Idea Cellular Ltd. Had done a campaign on the eve of one year of

26/11 terror attacks in Mumbai , talk between 20:26 21:26hrs

and monies earned , a part of it will go to the INF

RA

STRUCTURE

DEVELOPMENT OF MUMBAI POLICE. Similarly had done

undertaken education of underprivileged children. Initially it had

also addressed the issue of social discrimination.


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ExamplesExamples

y The Times of India has a dedicated Times Foundation which takes

care of CSR activities.TEACH INDIA , LEAD INDIA

y PepsiCo Indias WATER CONSERVATION PROJECT to benefit

35000 people across multistate.

y Coca Cola India has partnered with Rotary International and

launched ELIXIR OF LIFE to provide potable water to more than

30000 underprivileged children in and around Chennai.


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ExamplesExamples

y Canon India launched I-CARE in 2008 with Venu Eye Institute and

Research centre to provide eye care and rehabilitation of visually

challenged.

y Proctor & Gamble initiated SHIKSHA for underprivileged children

with the motto- Padega India Badega India , Mile sabko Shiksha ka Haq

A campaign had run in April-June09 that r.s 1 from every product

that is being bought will go for education of downtrodden.


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ExamplesExamples

y GSK India undertakes Rural Development initiations through

GRAMINAROGYA SANSTHAN for tribal health.

y Parle-G , gave a call to come up with ideas to KEEP THE CITY

GREEN

y Star Plus had done a 360 degree campaign around its serial Sabki

Ladli Bebo EDUCATEA GIRL CHILD.


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IMPACT OF CSR ON CONSUMERSIMPACT OF CSR ON CONSUMERS

y Motivation

y Perception

y Attitudes

y Most importantly Association

The CSR activities are publicized by editorial support, which serves as a PR TOOL to reach out toall sections of society

(Source:Economictimes, 14/12/2007)


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NUT SHELLNUT SHELL

y CSR initiatives are viewed by people in positive light as it is viewed

as a non profitable initiative and hence it Enhances the Brand Image-

DO GOODTO LOOK GOOD.

y

TheC

onnect With people is established, and gradually furnished. It isimperative in todays competitive scenario.

y People feel that the organization values him/her as CSR brings in

participation.

y PublicizingCSR is a PR TOOL , it creates a positive impact on the

mind of the consumer.


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Nut Shell.Nut Shell.

y Positions an Organization that CARES , this belief is built in the mind.

y Customers believe monies garnered by selling of product going for a

human cause

y CSR gives a competitive advantage to an organization.

Corporate Social Responsibitiy-mba 1st Sem

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