Corporate Social Responsibility

Presentation by:

Dr. G. Sashikumar

Corporate Social responsibility(CSR)

A businesss intention, beyond its legal obligations, to do the right things and act in

ways that are good for the society as a

whole.

Arguments for social responsibilities of business

Change in public expectations Long run profits

Ethical obligation
Better environment Balance of responsibility & power

Arguments for social responsibilities of business

New avenue to create profits Favourable public image

Protecting shareholder interests

Possession of resources Prevention is better than cure

Arguments against social responsibility

Opposes the principle of profit maximisation Excessive costs Increase in the firms power & influence

Lack of necessary skills among business people

Lack of consensus on social involvement

Lack of accountability

Social stakeholders
Shareholders Employees Customers Creditors & suppliers Dealers Society Government

Responsibilities Of Business To Different Sections Of The Society

Responsibility to shareholders
To safeguard the capital of the shareholders To provide a reasonable dividend By:

Strengthening & consolidating its position thru

innovation & growth

Responsibility to employees
The payment of fair wages

The provision of the best possible working conditions

The establishment of fair work standards & norms

Provision of labor welfare facilities to the extent

possible & desirable

Arrangements for proper training & education of the

workers

Responsibility to employees- cont

Reasonable chances & proper system for accomplishment & promotion. Proper recognition, appreciation & encouragement of special skill & capabilities of the workers

The installation of an efficient grievance handling system

Opportunity to participate in managerial decision to the extent possible

Responsibility to consumers
To improve the efficiency of the functioning of the business so as to
Increase productivity & reduce prices Improve quality Smoothen the distribution system to make goods easily available.

To do research & development, to improve quality & introduce better & new products To take appropriate steps to remove the imperfections in the distribution system, including black marketing or profiteering by middle men or anti social elements To supply goods at reasonable prices

Responsibility to consumers- cont

To provide the required after sales service. To ensure that the product supplied has no adverse effect on the consumer To provide sufficient information about the products, including their adverse effects, risks, & care to be taken while using the products To avoid misleading the customers by improper advertisements or otherwise To provide an opportunity for being heard & to redress genuine grievances To understand customer needs & to take necessary measures to satisfy these needs.

Responsibility to the society

Taking appropriate steps to prevent environmental pollution & to preserve the ecological balance

Rehabilitating the population displaced by the operation of the

business, if any

Assisting the overall development of the locality

Taking steps to conserve the scarce resources & developing

alternatives , wherever possible

Responsibility to the society- cont

Improving the efficiency of the business operation Contributing to R&D Development of backward areas Promotion of small scale industries Making possible contribution to furthering social causes like the promotion of education & population control Contributing to the national effort to build up a better society.

Responsibility to creditors & suppliers

Provide accurate information regarding the financial health of the organisation Ensure a reasonable price for the articles supplied, and make prompt repayments; there should be fairness in transactions. Promotes a healthy atmosphere where creditors, suppliers and other interest groups are treated as partners in a cooperative endeavour.

Responsibility to the dealers

Fairness & truthness of all the activities including pricing, licensing to sell & rights to sell. Ensure business activities are free from litigation Develop long term stability in dealer relationship Ensure that there is equity in relationship with all dealers.

Responsibility to the government

To behave like a law abiding citizen To pay its dues & taxes to the state fully & honestly Impartiality towards political affairs, i.e., to abstain from direct political involvement, & not to support political parties To follow honest trade practices & avoid activities leading to restraint of trade

Responsibility to the government- cont

Not to corrupt public servants for selfish ends To sell commodities & services without adulteration Use scarce national resources properly Environmental protection & reduce pollution Respect to the community & citizens of the country Contribute to social development.

Social responsiveness
The ability of an organisation to relate its operations and policies to the social

environment in ways that are mutually

beneficial to the company and to the society

How to measure Social Responsiveness?

Through social audits:
Concept proposed by Howard R Bowen The efforts made within the firm to evaluate its own social responsiveness Two types:
Those required by the government Voluntary social programs

Green Management
A form of management in which managers consider the impact of their organisation on the natural environment

Managerial Ethics
Presentation by:

Dr. G. Sashikumar

Ethics
The rules & principles that define right & wrong conduct standards of conduct and moral judgment that differentiate right from wrong.

Managerial Ethics
When the term ethics is applied is applied to managers of organisations, it is called managerial ethics. Refers to a set of moral principles which guide the behavior of managers in carrying out their organizational responsibilities.

Eg : truthful ad, fair trade agreements, objective hiring and promotional policies etc

Types of managerial ethics (Archie B Carroll)

Moral management
Managers follow ethical principles & practices

Amoral management
Manager intentionally/ unintentionally ignores ethical considerations

Immoral management
Manager ignores & also opposes ethical behaviour

Factors that influence ethical behaviour

Stages of moral development

Level I: Preconventional Stage 1: Decide an act is right or wrong depending on personal consequences like rewards/ punishments Stage 2: follow rules only when doing so is in your immediate interest

Factors that influence ethical behaviour

Stages of moral development

Level II: Conventional Stage 3: Perceive moral values to be important to live up to the expectation of others Stage 4: maintain conventional order by fulfilling obligations to which you have agreed

Factors that influence ethical behaviour

Stages of moral development

Level III: Principled Stage 5: value rights of others and uphold absolute values and rights regardless of the majoritys opinion Stage 6: follow self chosen ethical principles even of they violate the law.

Factors that influence ethical behaviour

Individual characteristics
Personal values Ego strength:
Strength of a persons convictions Higher ego strength: tend to do what they think is right

Locus of control
Internal: likely to take responsibility of the consequences of their behaviour

Factors that influence ethical behaviour

Structural variables:
Ambiguous structural design encourage unethical behaviour Focus on results/ outputs- tendency of unethical behaviour Greater pressure on managers- tendency of unethical behaviour

Factors that influence ethical behaviour

Strong & ethical organizational culture Intensity of ethical issue:
Extent of harm Consensus of wrong Probability of harm Immediacy of consequences Proximity to victims Concentration of effect

Ethical guidelines for managers

Obey the law Tell the truth Uphold human dignity Adhere to the golden rule Primum non- nocere( above all, do no harm) Allow room for participation Always act when you have responsibility

Mechanisms for ethical management

Top management commitment Code of ethics:
a statement of policies, principles & rules that guide ethical behavior

Ethics audit:
Systematic assessment of the adherence of employees to the ethical policies

Ethics training Ethics hotline: Ethics committee