Corporate Social Responsibility

1. Corporate Social
Responsibility

2. Lecture Outline:
 Corporate Social responsibility.
 Types and nature of social responsibilities.
 CSR principles and strategies.
 Models of CSR.
 Best practices of CSR.
 Need of CSR.
 Arguments for and against CSR.

4.  Person going from one side of the canyon to the other… a
lot of clouds like fog. The point is going from one way of
doing business to another is very tough. There’s a lot
uncertainty.
It takes a lot of skill, but we have to lift ourselves beyond that,
above the fog, and that’s not going to be a simple
exercise. CSR is about seeing the forest, the fog, and
seeing how we can get on the other side, and how we can be
well- equipped for doing that. So probably we need to
develop
additional skills, knowledge, and understanding.”

5. The message is that whatever
we do today will have an impact
on future generations. We
should not hope that the walls
we build to protect ourselves
will be tall enough to protect
our children. Only with very
conscious effort we can make
the world for them a better
place to live…even if we
address our most selfish needs
we have to address the needs of
the next generation. That’s
what CSR is about.”

6. Meaning:
 Corporate social responsibility is a gesture of showing the
company’s concern & commitment towards society’s
sustainability & development.

CSR is the ethical behaviour of a company towards society.

7. WBCSD (World Business Council for
Sustainable Development)
“The continuing commitment by business to behave
ethically and contribute to sustainable economic
development while improving the quality of life of
the workforce and their families as well as of the
local
community and society.”

8. Basic Constituents of CSR
Contribute
towards a
sustainable
economic
development
Make
desirable
social
changes
Improvement
of social
environment
Towards
Business
& Society

9. Types of Social Responsibility

10. Responsibility towards Society
 Carrying on business with moral& ethical standards.
 Prevention of environmental pollution.
 Minimizing ecological imbalance.
 Contributing towards the development of social
health, education
 Making use of appropriate technology.
 Overall development of locality.

11. Responsibility towards
Government Obey rules & regulations.
 Regular payment of taxes.
 Cooperating with the Govt
to promote social values.
 Not to take advantage of
loopholes in business laws.
 Cooperating with the Govt for
economic growth & development.

12. Responsibility towards
Shareholders
 To ensure a reasonable rate of
return over time.
 To work for the survival & the
growth of the concern.
 To build reputation & goodwill
of the company.
 To remain transparent &
accountable.

13. Responsibility towards
Employee
 To provide a healthy working environment.
 To grant regular & fair wages.
 To provide welfare services.
 To providetraining & promotion facilities.
 To provide reasonable working standard &
norms.
 To provide efficient mechanism to redress
worker’s grievances.
 Proper recognition of efficiency & hard
work.

14. Responsibility towards
consumers
 Supplying socially harmless
products.
 Supplying the quality,
standards, as promised.
 Adopt fair pricing.
 Provide after sales services.
 Resisting black-marketing &
profiteering.
 Maintaining consumer’s
grievances cell.
 Fair competition.

15. Nature of social
responsibility CSR is normative in nature.
 CSR is a relative concept.
 CSR may be started as a proactive or reactive.
 All firms do not follow the same patterns of CSR.
 Legal & socially responsible.
 Legal but socially irresponsible.
 Illegal & socially irresponsible.

17. CSR Principles & Strategies.
 Respect for human rights.
 Respect for the differences of views.
 Diversity & non-discrimination should be the
guiding principle.
 Make some social contribution.
 Enter into e dialogue
 Self-realization & creativity.
 Fair dealings & collaboration.
 Feedback from the community.
 Positive value- added
 Long term economic & social development.

18. Models of corporate social
responsibility
 Friedman model
 Ackerman Model
 Carroll Model
 Environmental Integrity & Community Model.
 Corporate Citizenship Model.
 Stockholders & Stakeholders Model.
 New Model of CSR.

19. Friedman Model(1962-73)
 A businessmen should perform his duty well, he is
performing a social as well as a moral duty.
 A businessmen has no other social responsibility to
perform except to serve his shareholders & stockholders.

20. Ackerman Model (1976)
 The model has emphasized on the internal policy goals & their
relation to the CSR.
 Four stages involved in CSR.
 Managers of the company get to know the most
common social problem & then express a
willingness to take a particular project which will
solve some social problems.
 Intensive study of the problem by hiring experts
& getting their suggestions to make it
operational.
 Managers take up the project actively & work
hard.
 Evaluating of the project by addressing the issues.

21. Contd….
 Six Strategies in the adoption of
CSR.
 Rejection strategy
 Adversary strategy
 Resistance strategy
 Compliance strategy
 Accommodation strategy
 Proactive strategy

23. Carroll Model(1991)

24. 


Philanthropic requirements: Donation, gifts, helping the
poor. It ensure goodwill & social welfare.
Ethical responsibility: Follow moral & ethical values
to deal with all the stakeholders.
Economic responsibility: Maximize the shareholders value
by paying good return.
Legal responsibility: Abiding the laws of the land.
Carroll Model(1991)

25. Environmental Integrity & Community
Health Model.
 This model developed by Redman.
 Many corporate in US adopted this model.
 Corporate contribution towards environmental integrity &
human health, there will be greater expansion
opportunities.
 Healthy people can work more & earn more.
 CSR is beneficial for the corporate sector.
 CSR in a particular form is welcome.

26. Corporate Citizenship
Model To be a corporate citizen, a corporate firm has to satisfy
four conditions:
 Consistently satisfactory
 Sustainable economic performance
 Ethical actions
 Behaviour.
 A particular firm’s commitment to corporate citizenship
requires the fulfillment of certain social responsibilty.

27. Stockholders & Stakeholders Model
1
Productivism
2
Progressivism
3
Philanthropy
4
Ethical Idealism
Self
Duty
Interest
Stakeholder
Model
Stockholders
Model
Moral
ORIENTATIO
N

28. Contd………….
 Productvists believe that the only mission of a firm is to
maximize the profit.
 Philanthropists who entertain the stockholders. CSR is
dominated by moral obligations & not self-interest.
 Progressivists believes the corporate behaviour basically
motivated by self interest & should have ability to transform
the society for good.
 Ethical Idealism concern with sharing of corporate profits
for humanitarian activities.

29. New Model of CSR
CSR (+) CSR(-)
CSR(-) CSR(-)
Strong
Ethical Rooting
Poor

30. Best Practices of CSR
 To set a feasible, Viable & measureable goal.
 Build a long lasting relationship with the
community.
 Retain the community core values.
 The impact of the CSR needs to be assessed.
 Reporting the impact.
 Create community awareness.

31. Need for Corporate Social
Responsibility
 To reduce the social cost.
 To enhance the performance of employees.
 It a type of investment.
 It leads to industrial peace.
 It improves the public image.
 Can generate more profit.
 To provide moral justification.
 It satisfies the stakeholders.
 Helps to avoid government regulations &
control.
 Enhance the health by non polluting measures.

32.  Fundamental principles of business gets violated.
 It vey expensive for business houses.
 CSR projects will not be successful.
 There are not the special areas of any business.
 CSR is to induce them to steal away the shareholders
money.
Arguments against the CSR

33. Arguments for the CSR
 Corporate should have some moral & social obligations
to undertake for the welfare of the society.
 Proper use of resources, capability & competence.
 The expenditure on CSR is a sort of investment.
 Company can avoid many legal complications.
 It create a better impression.
 Corporate should return a part of wealth.

34. Indian Perspective.
 The Sachar committee was appointed in 1978 to look into
corporate social responsibility issues concerning Indian
companies .
 The company must behave & function as a responsible
member of society.
 Committee suggests openness in corporate affairs &
behaviour.
 Some business houses have established social institutions
like Schools, colleges, charitable hospitals etc.
 Corporate sectors have not made significant contributions.
(Polluting Environment).

35. CSR EXAMPLES
 IBM UK - Reinventing Education Partnership programme
Interactions and sharing of knowledge through a web-based
technology - the “Learning Village” software. Culture of
openness and sharing of good practice
 AVON - a partnership with Breakthrough Breast Cancer, and
its Breast Cancer Crusade has raised over 10 million pounds
since its launch 12 years ago
 TOI’s Lead India campaign, campaign for contribution
towards educating the poor

36. Companies in trouble
 Dasani mineral water (part of Coca-Cola).
 Coke’s sale was banned as the result of tests, including those
by the Indian government, which found high concentrations
of pesticides.
 Communities in India , around Coca-Cola's bottling
operations are facing severe shortages of water as a result of
the cola major sucking huge amounts of water from the
common groundwater source.

37. Issues at NIKE
• Nike Inc producer of footwear, clothing, equipment and
accessory products for the sports and athletic market. selling
to approximately 19,000 retail accounts in the US, and
approximately 140 countries around the world. Manufactures
in China, Taiwan, Korea, Indonesia , Mexico as well as in
the US and in Italy.
• People working - 58% young adults between 20 and 24 years
old, 83% -women.
• Issue- unhealthy work environment – debates heated
arguments, verbal abuse , 7.8% of workers reported receiving
unwelcome sexual comments, and 3.3% reported being
physically abused. In addition, sexual trade practices in
recruitment and promotion were reported

38. Case Study
Jack Cohen founded Tesco in 1919
when he began to sell surplus
groceries from a stall in the East
End of London. The Tesco brand
first appeared in 1924. The name
came about after Jack Cohen
bought a shipment of tea from T.E.
Stockwell. He made new labels
using the first three letters of the
supplier's name (TES), and the first
two letters of his surname (CO),
forming the word TESCO. The
first Tesco store was opened in
1929 in Burnt Oak, Edgware,
Middlesex.
Tesco was floated on the London
Stock Exchange in 1947 as Tesco
Stores (Holdings) Limited.

39. Corporate Social Responsibility of Tesco
 Tesco has made a commitment to corporate social responsibility, in the form of
contributions of 1.87% in 2006 of its pre-tax profits to charities/local community
organisations.
 In 1992 Tesco started a "computers for schools scheme", offering computers in
return for schools and hospitals getting vouchers from people who shopped at Tesco.
Until 2004, £92 million of equipment went to these organizations. The scheme has
been also implemented in Poland.
 Starting during the 2005/2006 football season the company now sponsors the Tesco
Cup, a football competition for young players throughout the UK. The cup now runs a
boy's competition at Under 13 level and two girl's cups at Under 14 level and Under
16 level. Over 40,000 boys alone took part in the 2007/08 competitions.
 In 2009 Tesco used “Change for Good” as advertising, which is trade marked by
Unicef for charity usage but is not trademarked for commercial or retail use which
prompted the agency to say "it is the first time in Unicef’s history that a commercial
entity has purposely set out to capitalise on one of our campaigns and subsequently
damage an income stream which several of our programmes for children are
dependent on”.

40. Vodafone promised to cut down their carbon
dioxide emissions in half by 2020 through
improving the energy efficiency of its global
mobile -phone networks. Additional points for
Vodafone on CSR because they are constantly
updating us with the results of the campaign; no
matter whether it’s going well or not.
.
Future promises includes pledging to recycle
95% of network equipment waste and plans
to reduce work-related accidents that cause
lost time by 10%. On top of that, Vodafone is a
leading business in socially responsible
products such as the text-to-speech software for
blind people and easy-to-use handsets for the
elderly.

41. The bank’s head of corporate
sustainability, Teresa Au, has said that
despite the economic situation, HSBC
would continue to support its
sustainability campaign. Initiatives
include providing small businesses with
sustainability insurance options and
developing an index for climate change.
The business has also boosted its
management of ethical and socially
responsible investing funds by 60%
over the last two years. HSBC has an
American unit that is dedicated to
assisting local communities by
promoting affordable
homeownership, among other goals.

44. The Concept:
• Triple bottom line means expanding the traditional framework to take into
account ecological and social performance in addition to financial
performance.
• In 1981 Freer Spreckley first articulated the term in a publication called 'Social
Audit - A Management Tool for Co-operative Working'.
• The phrase was coined by John Elkington in his book ’Cannibals with Forks: the
Triple Bottom Line of 21st Century Business’ in the year 1998.
• The concept of TBL demands that a company‘s responsibility lies with
stakeholders rather than shareholders.
In this case, "stakeholders" refers to anyone who is influenced, either directly or
indirectly, by the actions of the firm.

45. Three pillars of TBL
PEOPLE PLANET PROFIT

46. PEOPLE
"People" (human capital) pertains to fair and beneficial
business practices toward labour and the community and
region in which a corporation conducts its business.
A TBL company conceives a reciprocal social structure in
which the well-being of corporate, labour and other
stakeholder interests are interdependent.

47. PLANET
•"Planet" (natural capital) refers to sustainable environmental practices.
A TBL company endeavors to benefit the natural order as much as possible or
at the least do no harm and curtail environmental impact.
•A TBL endeavor reduces its ecological footprint by, among other things,
carefully managing its consumption of energy and non- renewable and
reducing manufacturing waste as well as rendering waste less toxic before
disposing of it in a safe and legal manner.
•TBL manufacturing businesses which typically conduct a life cycle
assessment of products to determine what the true environmental cost is from
the growth and harvesting of raw materials to manufacture to distribution to
eventual disposal by the end user.
•A triple bottom line company does not produce harmful or destructive
products such as weapons, toxic chemicals or batteries containing dangerous
heavy metals for example.

48. PROFIT
"Profit" is the economic value created by the organization after deducting
the cost of all inputs, including the cost of the capital tied up.
It therefore differs from traditional accounting definitions of profit. In the
original concept, within a sustainability framework, the "profit" aspect
needs to be seen as the real economic benefit enjoyed by the host society.
It is the real economic impact the organization has on its economic
environment.
This is often confused to be limited to the internal profit made by a
company or organization (which nevertheless remains an essential
starting point for the computation).
Therefore, an original TBL approach cannot be interpreted as simply
traditional corporate accounting profit plus social and environmental
impacts unless the "profits" of other entities are included as a social
benefits.

49. Interdependence

50. Currently, the cost of disposing of non-degradable or
toxic products is borne financially by governments
and environmentally by the residents near the disposal
site and elsewhere.
In TBL thinking, an enterprise which produces and
markets a product which will create a waste problem
should not be given a free ride by society.
It would be more equitable for the business which
manufactures and sells a problematic product to bear
part of the cost of its ultimate disposal.

51. •Ecologically destructive practices, such as
overfishing or other endangering depletions of
resources are avoided by TBL companies.
•Often environmental sustainability is the more
profitable course for a business in the long run.
•Arguments that it costs more to be environmentally
sound are often specious when the course of the
business is analyzed over a period of time.
•Generally, sustainability reporting metrics are better
quantified and standardized for environmental issues
than for social ones.

52. Some well knows sustainability issues
• ExxonMobil
• KFC
• Nike
• Body Shop
• Coca Cola

53. Top 10 Companies for Sustainability & CSR in 2018
1. Tata Chemicals
2. Ambuja Cement
3. Infosys Ltd.
4. Mahindra & Mahindra Ltd.
5. Tata Motors Ltd.
6. Tata Power Company Ltd.
7. Bharat Petroleum Corporation
8. ITC Ltd.
9. Hindustan Zinc Ltd.
10. Indian Oil Corporation
Source: The CSR Journal 2018

54. Few useful actions for all management teams
to improve sustainability practices.
1. Align strategy and sustainability
2. Compliance first, then competitive advantage
3. Reactive to proactive
4. Quantify, including the business case
5. Transparency
6. Engage the Board
7. Engage your ecosystem
8. Finally – and most importantly – engage the
organization broadly

55. Thank you..