Professional Documents
Culture Documents
Submitted to: Dr. Bushan D. Sudhakar Dept of International Business Pondicherry University
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Corporate
social
also
citizenship, social
or sustainable
Business) is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. CSR is a process with the aim to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders. The term "corporate social responsibility" came into common use in the late 1960s and early 1970s after many multinational corporations formed the term stakeholder, meaning those on whom an organization's activities have an impact. It was used to describe corporate owners beyond shareholders as a result of an influential book by R. Edward Freeman, Strategic management: a stakeholder approach in 1984. Proponents argue that corporations make more long term profits by operating with a perspective, while critics argue that CSR distracts from the economic role of businesses. Others argue CSR is merely window-dressing, or an attempt to pre-empt the role of governments as a watchdog over powerful multinational corporations. CSR is titled to aid an organization's mission as well as a guide to what the company stands for and will uphold to its consumers. Development business ethics is one of the forms of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. ISO 26000 is the recognized international standard for CSR.
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The model of corporate social responsibility can be subdivided into four criteria-economic, legal, ethical and discretionary responsibilities. These responsibilities are ordered from bottom to top in the following illustration. Lets discuss each one them briefly.
Economic responsibilities: The first criterion of social responsibility is economic responsibility. The business institution is, above all, the basic economic unit of society. Its responsibility is to produce goods and services that a society wants and to maximise profit for its owners and shareholders. An economic responsibility, carried to the extreme, is called profit-maximizing view; it was advocated by Nobel economist Milton Friedman. This view argued that a company should be operated on a profit-oriented basis, with its sole mission to increase its profits so long as is stays within the rule of the game.
The purely profit-maximizing view is no longer considered an adequate criterion of performance in the world in general. Treating economic gain in the social as the only social responsibility can lead companies into trouble.
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Legal responsibilities: All modern societies lay down ground rules, laws and regulations that businesses are expected to follow. Legal responsibility defines what society deems as important with respect to appropriate corporate behaviour. Businesses are expected to fulfil their economic goals within the legal framework. Legal requirements are imposed by local councils, state and federal governments and their regulating agencies. Organizations that knowingly break the law are poor performers in this category. Intentionally manufacturing defective goods or billing a client for work not done is illegal. Legal sanctions may include embarrassing public apologies or corporate confessions. Ethical responsibilities: Ethical responsibility includes behaviour that is not necessarily codified into law and may not serve the organizations direct economic interests. To be ethical, organizations decision makers should act with equity, fairness and impartiality, respect the rights of individuals, and provide different treatments of individual only when differences between them are relevant to the organizations goals and tasks. Unethical behaviour occurs when decisions enable an individual or organization to gain expense of society. Discretionary responsibilities: Discretionary responsibility is purely voluntary and guided by an organizations desire to make social contributions not mandated by economics, laws or ethics. Discretionary activities include generous philanthropic contributions that offer no payback to the organization and are not expected. Discretionary responsibility is the highest criterion of social responsibility, because it goes beyond societal expectations to contribute to the communitys welfare.
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Many companies use the strategy of benchmarking to compete within their respective industries in CSR policy, implementation, and effectiveness. Benchmarking involves reviewing competitor CSR initiatives, as well as measuring and evaluating the impact that those policies have on society and the environment, and how customers perceive competitor CSR strategy. After a comprehensive study of competitor strategy and an internal policy review performed, a comparison can be drawn and a strategy developed for competition with CSR initiatives.
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Advantages of CSR
Higher reputation of company, better company image Higher attraction for investors Good reputation and strong position in market Distinguish from rivals Increasing employees productivity and loyalty Attraction for quality and talented potential employees Decreasing expenses on risk management Direct financial saving ecological behaviour Better relationships with local society and public institutions
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Human resources
A CSR program can be an aid to recruitment and retention, particularly within the competitive graduate student market. Potential recruits often ask about a firm's CSR policy during an interview, and having a comprehensive policy can give an advantage. CSR can also help improve the perception of a company among its staff, particularly when staff can become involved through payroll giving, fundraising activities or community volunteering. CSR has been found to encourage customer orientation among frontline employees.
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Risk management
Managing risk is a central part of many corporate strategies. Reputations that take decades to build up can be ruined in hours through incidents such as corruption scandals or environmental accidents. These can also draw unwanted attention from regulators, courts, governments and media. Building a genuine culture of 'doing the right thing' within a corporation can offset these risks.
Brand differentiation
In crowded marketplaces, companies strive for a unique selling proposition that can separate them from the competition in the minds of consumers. CSR can play a role in building customer loyalty based on distinctive ethical values. Several major brands, such as The Co-operative Group, The Body Shop and American Apparel are built on ethical values. Business service organizations can benefit too from building a reputation for integrity and best practice.
License to operate
Corporations are keen to avoid interference in their business through taxation or regulations. By taking substantive voluntary steps, they can persuade governments and the wider public that they are taking issues such as health and safety, diversity, or the environment seriously as good corporate citizens with respect to labour standards and impacts on the environment.
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Among other countries India has one of the richest traditions of CSR. Much has been done in recent years to make Indian Entrepreneurs aware of social responsibility as an important segment of their business activity but CSR in India has yet to receive widespread recognition. If this goal has to be realised then the CSR approach of corporate has to be in line with their attitudes towards mainstream business- companies setting clear objectives, undertaking potential investments, measuring and reporting performance publicly.
as Tata, Godrej, Bajaj, Modi, Birla, Singhania were strongly inclined towards economic as well as social considerations. However it has been observed that their efforts towards social as well as industrial development were not only driven by selfless and religious motives but also influenced by caste groups and political objectives.
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to end capitalism almost, if not quite, as much as the most advanced socialist. But our methods differ. My theory of trusteeship is no make-shift, certainly no camouflage. I am confident that it will survive all other theories." This was Gandhi's words which highlights his argument towards his concept of "trusteeship". Gandhi's influence put pressure on various Industrialists to act towards building the nation and its socio-economic development. According to Gandhi, Indian companies were supposed to be the "temples of modern India". Under his influence businesses established trusts for schools and colleges and also helped in setting up training and scientific institutions. The operations of the trusts were largely in line with Gandhi's reforms which sought to abolish untouchability, encourage empowerment of women and rural development.
Controls and licensing system were partly done away with which gave a boost to the economy the signs of which are very evident today. Increased growth momentum of the economy helped Indian companies grow rapidly and this made them more willing and able to contribute towards social cause. Globalization has transformed India into an important destination in terms of production and manufacturing bases of TNCs are concerned. As Western markets are becoming more and more concerned about and labour and environmental standards in the developing countries, Indian companies who export and produce goods for the developed world need to pay a close attention to compliance with the international standards.
more self-reliant by providing vocational training and a knowledge of business operations are the facilities that these corporations focus on. Many of the companies are helping other peoples by providing them good standard of living. On the other hand, the CSR programs of corporations like GlaxoSmithKline
Pharmaceuticals focus on the health aspect of the community. They set up health camps in tribal villages which offer medical check-ups and treatment and undertake health awareness programs. Some of the non-profit organizations which carry out health and education programs in backward areas are to a certain extent funded by such corporations. Also Corporates increasingly join hands with Non-governmental organizations (NGOs) and use their expertise in devising programs which address wider social problems. For example, a lot of work is being undertaken to rebuild the lives of the tsunami affected victims. This is exclusively undertaken by SAP India in partnership with Hope Foundation, an NGO that focuses mainly on bringing about improvement in the lives of the poor and needy. The SAP Labs Centre of HOPE in Bangalore was started by this venture which looks after the food, clothing, shelter and medical care of street children. CSR has gone through many phases in India. The ability to make a significant difference in the society and improve the overall quality of life has clearly been proven by the corporates. Not one but all corporates should try and bring about a change in the current social situation in India in order to have an effective and lasting solution to the social woes. Partnerships between companies, NGOs and the government should be facilitated so that a combination of their skills such as expertise, strategic thinking, manpower and money to initiate extensive social change will put the socio-economic development of India on a fast track.
CSR of TATA
As its operations have expanded to new geographies, the Tata Steel Group has retained a collective focus on the various areas of corporate sustainability that impact people, environment and the society at large. Founded on the philosophy that society is not just another stakeholder in its business, but the prime purpose of it, the Company, across its various operations is committed to making a positive contribution in a number of ways.
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As a policy, Tata Steel promotes and encourages economic, social and educational development within its communities while also giving active support to local initiatives. Its mammoth social outreach programme covers the company-managed city of Jamshedpur and over 800 villages around it through upliftment initiatives in the areas of income generation, health and medical care, education, sports, and relief.
Human
Development of Employees Healthy People Educated Population Active Volunteering Overseas Initiatives
Environment
Conservation Initiatives Eco-Citizen
Economic
Employment Generation Infrastructure Development
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Safety
At Tata Steel In Mines & Collieries Safety Committees
The Allied Trusts, administered by the Sir Dorabji Tata Trust are the Jamsetji Tata Trust, the R.D.Tata Trust, the J.R.D. Tata Trust, the Tata Education Trust, the Tata Social Welfare Trust, the J.R.D. and Thelma J. Tata Trust, the J.N. Tata Endowment for the Higher Education of Indians, the Lady Tata Memorial Trust and the Lady Meherbai D. Tata Education Trust. The grant-making pattern of the Trusts is based on three broad segments of philanthropy: 1. Grants to institutions set up or signicantly facilitated by the Trusts. 2. Grants to Non-Government Organisations (NGOs). 3. Grants to individuals (educational and medical).
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INSTITUTIONAL GRANTS The Sir Dorabji Tata Trust and the Allied Trusts have pioneered several leading institutions, the rst of their kind in India, and in doing so; have created centres of excellence in several eldsparticularly medicine, science and education. Institutions supported by the Trusts are: Indian Institute of Science, Bengaluru Tata Institute of Social Sciences, Mumbai Tata Memorial Centre, Mumbai Tata Medical Center, Kolkata Tata Institute of Fundamental Research, Mumbai National Centre for the Performing Arts, Mumbai National Institute of Advanced Studies, Bengaluru
NON-GOVERNMENT ORGANISATIONS (NGO) GRANTS The pattern of grant making support extended to NGOs is in accordance with the chosen strategy. The grants are made in six social development areas: Natural Resource Management and Rural Livelihoods Urban Poverty and Livelihoods Education Health Civil Society, Governance and Human Rights Media, Art and Culture Natural Resource Management and Rural Livelihoods This portfolio addresses food security at the household level and promotes ecological security. It accounts for the largest number and value of grants. The portfolios grants are dominated by two programmes, namely the System of Rice Intensi cation and Diversion Based Irrigation, as well as some emerging programmes such as Goat Based Livelihoods. Urban Poverty and Livelihoods This portfolio deals with the issues of mitigating the travails of internal migration suffered by over 120 million persons migrating for work seasonally. It also addresses issues of the informal sector livelihoods, urban planning and governance, and employability.
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Education This portfolio is focused on supporting projects, related to elementary education, child protection, adolescent education and skills development, and womens literacy in the underprivileged sections. Health Even though India is making increasing public investment in healthcare, access to health services still remains highly inequitable. The overarching approach of this portfolio is rooted in community-based health interventions and spans the sub-thematic areas of noncommunicable diseases with a focus on cancer, disability, public health and services, and domestic violence. Civil Society, Governance and Human Rights This portfolio works towards strengthening the civil society, improving governance and supporting the protection of human rights with a focus towards the vulnerable sections of society. Media, Art and Culture The portfolio aims to build and promote the arts scholarships and archival facilities, protect and conserve cultural heritage and dying art forms, support research and development activities of the Arts, provide support to media projects engaged in the development discourse and develop proactive areas in folklore. Relief Grants In the event of natural or man-made disasters, the Trusts provide nancial succour towards relief and rehabilitation efforts. In case of major calamities, they work collaboratively with the Tata Relief Committee (TRC). INDIVIDUAL GRANTS The Trusts provide merit and need based educational assistance as well as medical grants to deserving individuals. Education Grants The Sir Dorabji Tata Trust gives nancial assistance for education by way of: General education grants for studies in India, after taking into account factors such as academic record, fees and the economic background of the family. Scholarships for undergraduate and postgraduate studies in India. Study in Urban and Rural Community Development.
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Scholarships by the J.R.D. Tata Trust are given with a view to nancially assist promising young students pursuing their graduation and post graduation courses, subject to the eligibility criteria set out on merit basis.
The J.N. Tata Endowment for the Higher Education of Indians (established in 1892 by the founder, Jamsetji Tata) selects candidates of exceptional merit and assists them by awarding loan scholarships to pursue higher education at some of the best institutions in the world. The Jamsetji Tata Trust supports the J.N. Tata Scholars by way of gift awards.
The Lady Tata Memorial Trust was established in 1932 by Sir Dorabji Tata in memory of his wife, Lady Meherbai, who died of leukaemia at an early age. This trust supports international research on leukaemia and scholarships in India for scienti c investigations having a bearing, directly or indirectly, on the alleviation of human suffering from disease. Recently, an annual Young Researcher Award has also been instituted which entitles the recipient to a ve-year postdoctoral research grant.
The Lady Meherbai Tata Education Trust, also established in 1932, gives scholarships to young Indian women graduates of Indian universities to pursue higher studies abroad in the elds of social work and public health.
Additionally, education-related travel grants are given to meet the costs of pursuing studies overseas, as well as for presenting papers at conferences, undergoing advanced training, research and exchange programmes.
Medical Grants The increasing costs of medical treatment places a huge burden, especially on those from the economically weaker sections of society. The Sir Dorabji Tata Trust and the J.R.D. Tata Trust provide nancial assistance to meet the cost of medical treatment. The J.R.D. Tata Trust focuses mainly on the relatively younger age group, who, with such medical assistance can go on to lead a better quality of life.
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The Sir Ratan Tata Trust and Navajbai Ratan Tata Trust, established in 1919 and 1974 respectively, are grant-bestowing public foundations. Both trusts seek to be catalysts in development through giving grants to institutions in the areas of Rural Livelihoods and Communities, Education, Enhancing Civil Society and Governance, Health and Arts, Crafts and Culture. They focus their grants to organisations which they can partner to undertake innovative and sustained initiatives with the potential to make a visible difference. They also provide grants for endowments, have a separate programme for small grants and give grants to individuals for education and medical relief.
INSTITUTIONAL GRANTS The bulk of these are in the areas of Rural Livelihoods and Communities and Education. Within Rural Livelihoods and Communities, the Trusts focus on key initiatives within three broad areas: Livelihoods Drinking Water and Sanitation Micro nance
The Trusts grants in the eld of Education follow a focused approach in the following areas: Reforming elementary education Nurturing education as a discipline Higher Education
Within Health, the Trusts focus efforts on: Rural Health Programmes Mental Health Children With Special Needs Health Resources and Health Systems Development Clinical establishment
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Within Enhancing Civil Society & Governance, the Trusts grants are based on the following two key initiatives: Encouraging youth action for development through the Youth & Civil Society Initiative. Professionalising the non-prot sector through the Roopantaran initiative, focusing on Human Resource and Organisation Development.
Within Arts, Crafts and Culture, the Trusts grants are focused on the following: Crafts Based Livelihood Initiatives Sustaining Livelihoods in Performing Arts Conservation and Digitisation Community Media and Livelihoods
In most of the thematic areas, the Trusts focus their grants on well-dened initiatives. Some of its key initiatives are mentioned below: Central India Initiative: This involves a series of livelihood projects across the central India region, addressing core issues aimed at alleviating poverty amongst tribals in a sustainable manner.
Himmothan Pariyojana: The initiative addresses some of the key rural development issues confronting the inhabitants of the Himalayas, on a systematic basis.
Kharash Vistarotthan Yojana (KVY): This tackles issues related to sea water ingress on the Gujarat coastline through eld projects and coordination with the state government.
Drought Proo ng in West Rajasthan: The objective is to develop replicable models for drought proong in the desert regions of Rajasthan.
Reviving the Green Revolution: The initiative involves a series of interventions encouraging crop diversication in Punjab and Tamil Nadu to tackle the negative impact of the ricewheat cropping system, whilst also focusing on Integrated Pest Management in various crops to enhance productivity.
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North East Initiative (NEI): The initiative addresses livelihood issues of the North-eastern states. Currently, the NEI focuses on the three hill states of Arunachal Pradesh, Mizoram and Nagaland and opportunities for partnerships with state governments and local organisations are being explored in these States. Sukhi Baliraja Initiative (SBI): The initiative aims to promote a holistic livelihood promotion strategy for the Vidharbha region of Maharashtra, with the key objective of reducing distress among the farming community by enhancing livelihoods of 25,000 households across 300 villages.
Drinking Water Initiative (Mission Swach Jal): The initiative aims to provide potable water and promote sanitation in order to enhance the health of rural communities. Notably, community and individual based drinking water interventions are dovetailed with sanitation and hygiene education. Currently, the Trusts support drinking water and sanitation projects in around 450 villages across the country, including salinity affected villages in coastal areas of Gujarat, uoride affected villages in Andhra Pradesh, Himalayan regions of Uttarakhand, etc.
Sakh Se Vikas: This initiative consolidates and expands community-based micronance in Rajasthan by strengthening livelihoods and reducing vulnerabilities. Whilst strengthening linkages between micronance and development, the Trusts are also supporting a large community-based micronance programme in South India.
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REFERENCES
www.google.com www.wikipedia.com www.tata.com
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