An obligation on the part of individual

or organization to act to benefit the

society at large based on ethical values
Two facets of Social Responsibility:
Human Responsibilities &
Environmental Responsibilities

Associated with various parties associated with

the business also known as STAKE HOLDERS,
such as:
Employees
Share Holders
Customers
Investors
Suppliers
Competitors &
Society at large

ENVIRONMENT

GOVT. AGENCIES

COMMUNITY/CITIZENS

COMPANY
SHAREHOLDERS

CONSUMERS

EMPLOYEES

SUPPLIERS

Continued: Human Responsibilities

1.EMPLOYEES

Provide competitive and challenging work environment to employees

Having ethical recruitment, remuneration, promotion & other policies

Provide opportunities to employees to voice their opinion and complaints

& have effective policy for resolution of grievances

Ensure safe working environment for the employees

2.Share Holders

Present fair picture of companys financial position and profit/loss a/c

to share holders

Payment of Fair & equitable dividends

Continued: Human Responsibilities

3.Government

Provide necessary information to the Govt. (like surveys)

as and when required

Payment of all taxes and duties at the appropriate time

Abide all the laws and regulations of the local area in

which the firm operates

Contribute to the national economy through exports

Continued: Human Responsibilities

4.Customers

Provide quality products to the customers at reasonable prices

Undertake constant research and development & coming up with

innovative & more useful products from time to time

5. Investors

Give investors a true and fair picture of financial position of business

Give them due returns on the investment made by them

Continued: Human Responsibilities

6.Towards suppliers

Make competitive payment to suppliers for products purchased from

them

Maintain good business relationship with suppliers

7. Towards competitors

Indulging in ethical and healthy competition

8. Towards society at large

Undertaking community development and area development

programmes (adopting villages, schools)

Undertaking charity work for underprivileged sections of society

Creating job opportunities (opening new factories)

9. Towards Environment

Ensure procurement of eco-friendly supplies

Pollution free process of production

Efficient supply of disposal of waste

Ensuring product & process of production as environmental friendly as

possible

Adopting eco-friendly packaging.

Business are not only associated with providing benefits only to the
stakeholders, but also at the same time, they need to consider
environment as a long term stakeholder whose effect may not be felt
immediately but have a slow impact on business, society and the whole
world.
Environmental Protection:
Sustainable development and Green Revolution

So, simply
SOCIAL RESPONSIBILITY
vested on the part of an organization is
referred to as
CORPORATE SOCIAL RESPONSIBILITY
(CSR)

Refers to

transparent business practices that are based on ethical values,

compliance with legal requirements, and

respect for people, communities, and the environment.

Thus, beyond making profits, companies are responsible for the totality of their
impact on people and the planet.

People - constitute the companys stakeholders: its employees, customers,

business partners, investors, suppliers and vendors, the government, and the
community

CSR is alternatively referred to as corporate citizenship, which essentially

means that a company should be a good neighbor within its host community.

Called by number of other names like corporate responsibility, corporate

accountability, corporate ethics, corporate citizenship or stewardship, responsible
entrepreneurship, and triple bottom line

As CSR issues become increasingly integrated into modern business practices,

there is a trend towards referring to it as responsible competitiveness or
corporate sustainability.

Social responsibility (is the) responsibility of an

organisation for the impacts of its decisions and activities on
society and the environment through transparent and
ethical behaviour that is consistent with sustainable
development and the welfare of society; takes into account
the expectations of stakeholders; is in compliance with
applicable law and consistent with international norms of
behaviour; and is integrated throughout the organisation.

A commitment to improve community

well
being
through
discretionary
business practices & contributions of
corporate resources
Philip Kotler & Nancy Lee(2005)

The World Business Council for Sustainable Development defines the

CSR as a business' commitment to contribute to sustainable economic
development, working with employees, their families, the local
community, and society at large to improve their quality of life. Under
this point of view, the CSR rests on the fundamental pillars of both the
economic growth and the quality of life as an engine for sustainable
development.

EU Definition of CSR: "A concept whereby companies integrate social

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

[Carroll, 1979; 2008,]: "The social responsibility of business

encompasses the economic, legal, ethical and discretionary
expectations that a society has of organizations at a given point in
time.

Mallen Baker Definition: "CSR is about how companies manage the

business processes to produce an overall positive impact on society

Building on a base of compliance with legislation and regulations, CSR typically

includes beyond law commitments and activities pertaining to:

corporate governance and ethics;

health and safety;
environmental stewardship;
human rights (including core labour rights);
sustainable development;
conditions of work (including safety and health, hours of work, wages);
industrial relations;
community involvement, development and investment;
involvement of and respect for diverse cultures and disadvantaged peoples;
corporate philanthropy(love of man) and employee volunteering;
customer satisfaction and adherence to principles of fair competition;
anti-bribery and anti-corruption measures;
accountability, transparency and performance reporting; and
supplier relations, for both domestic and international supply chains.

recognition and acceptance of the consequences of each action and decision one undertakes
caring attitude towards self and others
sense of control and competence
recognition and acceptance of individual and cultural diversity
recognition of basic human rights of self and others
the ability to be open to new ideas, experiences, and people
understanding of the importance of volunteering in social and community activities
ability to engage in experimentation with various adult roles
development of leadership, communication, and social skills

We generate wealth for the people. What

comes from the people must, to the extent
possible, therefore get back to the people.
- Bharat Ratna, J R D Tata

21

21

Corporate social responsibility must not be defined

by tax planning strategies alone. Rather, it should be
defined within the framework of a corporate
philosophy which factors the needs of the community
and the regions in which a corporate entity functions.
This is part of our cultural heritage. Mahatma Gandhi
called it trusteeship.I invite corporate India to be a
partner in making ours a more humane and just
society We need a new Partnership for Inclusive
Growth based on what I describe as a Ten Point
Social Charter...first, we need to have healthy respect
for your workers and invest in their welfare .
Indian Prime Minister,
Manmohan Singh in 2007

Corporate Social Responsibility is thus only

about two aspects:
1) Reducing the Negative Effects:
Steps taken by a
company to neutralise,
minimise or offset the harmful effects
caused by its processes and product-usage
2) Increasing the Positive Contributions:
Further
steps by a company using its
resources, core
competence,
skills,
location and funds for the
benefit of people
and the environment

Many factors and influences have led to increasing attention being devoted
to the role of companies and CSR.

These include:

Sustainable development: United Nations (UN) studies and many others

have underlined the fact that humankind is using natural resources at a
faster rate than they are being replaced.

If this continues, future generations will not have the resources they need
for their development. In this sense, much of current development is
unsustainableit cant be continued for both practical and moral reasons.

Related issues include the need for greater attention to poverty alleviation
and respect for human rights.

CSR is an entry point for understanding sustainable development issues

and responding to them in a firms business strategy

Globalization: With its attendant focus on cross-border trade,

multinational enterprises and global supply chainseconomic globalization
is increasingly raising CSR concerns related to human resource
management practices, environmental protection, and health and safety,
among other things.

CSR can play a vital role in detecting how business impacts labour
conditions, local communities and economies, and what steps can be taken
to ensure business helps to maintain and build the public good.

This can be especially important for export-oriented firms in emerging

economies.

Governance: Governments and intergovernmental bodies, such as the UN,

the Organisation for Economic Co-operation and Development (OECD) and
the International Labour Organization (ILO) have developed various
declarations, guidelines, principles and other instruments that outline
norms for what they consider to be acceptable business conduct.

CSR instruments often reflect internationally-agreed goals and laws

regarding human rights, the environment and anti-corruption.

Corporate sector impact: The sheer size and number of corporations, and
their potential to impact political, social and environmental systems relative
to governments and civil society, raise questions about influence and
accountability.

Even small and medium size enterprises (SMEs), which collectively represent
the largest single employer, have a significant impact.

Companies are global ambassadors of change and values.

How they behave is becoming a matter of increasing interest and importance

Communications: Advances in communications technology, such as the

Internet and mobile phones, are making it easier to track and discuss
corporate activities.

Externally, NGOs, the media and others can quickly assess and profile
business practices they view as either problematic or exemplary.

In the CSR context, modern communications technology offers opportunities

to improve dialogue and partnerships.

Finance: Consumers and investors are showing increasing interest in

supporting responsible business practices and are demanding more
information on how companies are addressing risks and opportunities
related to social and environmental issues.

A sound CSR approach can help build share value, lower the cost of
capital, and ensure better responsiveness to markets.

Ethics: A number of serious and high-profile breaches of corporate ethics

resulting in damage to employees, shareholders, communities or the
environmentas well as share pricehave contributed to elevated public
mistrust of corporations.

A CSR approach can help improve corporate governance, transparency,

accountability and ethical standards

Consistency and Community: Citizens in many countries are making it

clear that corporations should meet the same high standards of social and
environmental care, no matter where they operate.

In the CSR context, firms can help build a sense of community and shared
approach to common problems.

Leadership: At the same time, there is increasing awareness of the limits

of government legislative and regulatory initiatives to effectively capture all
the issues that CSR address.

CSR can offer the flexibility and incentive for firms to act in advance of
regulations, or in areas where regulations seem unlikely.

Business Tool: Businesses are recognizing that adopting an effective

approach to CSR can reduce the risk of business disruptions, open up new
opportunities, drive innovation, enhance brand and company reputation
and even improve efficiency.

Current ideas of CSR are based on the notion that companies should
undertake tasks that are traditionally regarded as responsibilities of
governments.

Despite a general agreement on this core concept of CSR, controversies

arise when we attempt to use it to design or evaluate policies

There are many theories of CSR and many labels are used to identify it.

CSR has been theorised, for example, in terms of business ethics,

corporate philanthropy, environmental sustainability, or corporate
citizenship

One of the most popular concepts of CSR was developed by Archie

Carroll in the early 1990s.

It is known as the pyramid of CSR.

The pyramid suggests that CSR is composed by 4 different kinds of

social responsibility.

These responsibilities are economic, legal, ethical and philanthropic.

Four Dimension
Economical
Legal
Ethical
Voluntary Philanthropic

Philanthropic
Responsibilities

Ethical
Responsibilities

Legal Responsibilities

Economic Responsibilities

Continued: Four Dimension of CSR

1.Economic Responsibility
To provide goods and services what the society needs at
competitive prices

2. Legal Responsibility
Being compliant with local, national and international
law
Protecting the workers human rights (equity & safety
legislation)
Consumer Protection (regulations pertaining to
consumer protection legislation)

Obeying Environmental Protection laws

Legal aspects related with Natural Environment

Continued: Four Dimension of CSR

3. Ethical Responsibility
Behavior or activities by organization without any
harm and doing what is right and fair.
4. Voluntary Philanthropic Responsibility
Business contribution to society in terms of
quality of life and social welfare contribution to
charitable organizations & community Projects

 There

are three basic principles which

together comprises all the CSR activities
are as follows:
Sustainability,
Accountability,
Transparency

and

The shrinking role of government

Demands For greater disclosure/Openness

Growing investor pressure

Competitive markets

Political Reforms
Cultural Tradition
Socio economic priorities
Governance gap
Crisis response
Market access

CSR
Drivers

National Drivers

International
Drivers
International
Standardization
Investment Incentives
Stakeholder Activism
Supply Chain

National (or internal) drivers refer to pressures from within the country,
while international (or external) drivers tend to have a global origin.

National Drivers

Cultural tradition: CSR often draws strongly on deep-rooted

indigenous cultural traditions of philanthropy, business ethics and
community attachment.
Political reform: CSR cannot be divorced from the socio-political
policy reform process, which often drives business behavior
towards integrating social and ethical issues.
Socio-economic priorities: CSR is often most directly shaped by
the socio-economic environment in which firms operate and the
development priorities this creates.

National Drivers

Governance gaps: CSR is often seen as a way to plug the

governance gaps left by weak, corrupt or under-resourced
governments that fail to adequately provide various social
services.
Crisis response: CSR responses can be catalysed by economic,
social, environmental, health-related or industrial crises.
Market access: CSR may be seen as an enabler for companies in
developing countries trying to access markets in the developed
world.

International Drivers

International standardization: CSR codes, guidelines and

standards are a key driver for companies wishing to operate as
global players.
Investment incentives : CSR is given an incentive by the trend
of socially responsible investment (SRI), where funds are screened
on ethical, social and environmental criteria
Stakeholder activism: CSR is encouraged through the activism
of stakeholder or pressure groups, often acting to address the
perceived failure of the market and government policy.

Supply chain requirement: CSR activities among small and

medium-sized companies are boosted by requirements imposed
by multinationals on their supply chains.

Strengthened brand positioning.

Enhanced corporate image.
Increased ability to attract, motivate, and retain employees.
Increased sales and market share.
Increased appeal to investors and financial analysts

Smiths principles were borne out By the early 19th Century, new technology saw jobs being
created and living standards improved.

Unchecked by regulation, businesses flourished and industrialists in Europe and the USA
amassed huge fortunes.

However few of these wealthy new industrialists were concerned about the wellbeing of their
employees, society or the environment.

The appalling conditions under which people worked were documented in the novels of Charles
Dickens and inspired radical theorists such as Karl Marx and Friedrich Engels to write about new
concepts on labour, socialism and communism.

By the start of the 20th century, powerful corporations suffered a backlash against their
widespread exploitation.

Labour unions were formed, giving a voice to the workers, and governments began to assume
more responsibility for welfare and infrastructure, gradually introducing anti-trust legislation.

The 1980s and 1990s saw communism collapse, globalization emerge and the information
revolution change the way the world did business.

As globalization intensified, so did environmental awareness and the emergence of responsible

business practice.

Key developments include: the Brundtland Commission, the formation of the World Business
Council for Sustainable Development, and the United Nations Global Compact.

The history of CSR in India has its four phases which run parallel to
India's historical development and has resulted in different approaches
towards CSR.

However the phases are not static and the features of each phase may
overlap other phases.

In the first phase charity and philanthropy were the main drivers of CSR.

In the pre-industrialization period, which lasted till 1850, wealthy merchants shared
a part of their wealth with the wider society by way of setting up temples for a
religious cause.

Moreover, these merchants helped the society in getting over phases of famine and
epidemics by providing food from their warehouses and money and thus securing an
integral position in the society.

With the arrival of colonial rule in India from 1850s onwards, the approach towards
CSR changed.

The industrial families of the 19th century such as Tata, Godrej, Bajaj, Birla 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.

In the second phase, during the independence movement, there was increased stress on
Indian Industrialists to demonstrate their dedication towards the progress of the society.

This was when Mahatma Gandhi introduced the notion of "trusteeship", according to which
the industry leaders had to manage their wealth so as to benefit the common man.

"I desire 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.

The third phase of CSR (196080) had its relation to the element of "mixed economy", emergence
of Public Sector Undertakings (PSUs) and laws relating labour and environmental standards.

During this period the private sector was forced to take a backseat, the public sector was seen as the
prime mover of development.

Because of the stringent legal rules and regulations surrounding the activities of the private sector, the
period was described as an "era of command and control".

The policy of industrial licensing, high taxes and restrictions on the private sector led to corporate
malpractices.

This led to enactment of legislation regarding corporate governance, labour and environmental issues.

PSUs were set up by the state to ensure suitable distribution of resources (wealth, food etc.) to the
needy.

However the public sector was effective only to a certain limited extent.

This led to shift of expectation from the public to the private sector and their active involvement in the
socio-economic development of the country became absolutely necessary.

In 1965 Indian academicians, politicians and businessmen set up a national workshop on CSR aimed
at reconciliation.

They emphasized upon transparency, social accountability and regular stakeholder dialogues.

In spite of such attempts the CSR failed to catch steam.

In the fourth phase (1980 until the present) Indian companies started abandoning their
traditional engagement with CSR and integrated it into a sustainable business strategy.

In 1990s the first initiation towards globalization and economic liberalization were
undertaken.

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.

As discussed above, CSR is not a new concept in India.

Ever since their inception, corporates like the Tata Group, the Aditya Birla Group,
and Indian Oil Corporation, to name a few, have been involved in serving the community
through donations and charity events, many other organizations have been doing their
part for the society.

The basic objective of CSR in these days is to maximize the company's overall impact on
the society and stakeholders.

A growing number of corporate feel that CSR is not just another form of indirect expense
but is important for protecting the goodwill and reputation, defending attacks and
increasing business competitiveness

A more comprehensive method of development is adopted by some corporations such

as Bharat Petroleum Corporation Limited, Maruti Suzuki India Limited, and Hindustan
Unilever Limited.

Provision of improved medical and sanitation facilities, building schools and houses, and
empowering the villagers and in process making them 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.

The UN Global Compact's ten principles enjoy universal

consensus in the areas of :

1.

human rights,

2.

labour,

3.

the environment and

4.

anti-corruption

The UN Global Compact asks companies to embrace, support

and enact, within their sphere of influence, a set of core values
in the areas of human rights, labour standards, the
environment and anti-corruption.

Human Rights

Principle 1: Businesses should support and respect the protection of

internationally proclaimed human rights; and

Principle 2: make sure that they are not complicit in human rights
abuses.

Labour

Principle 3: Businesses should uphold the freedom of association and the

effective recognition of the right to collective bargaining;

Principle 4: the elimination of all forms of forced and compulsory labour;

Principle 5: the effective abolition of child labour; and

Principle 6: the elimination of discrimination in respect of employment and

occupation.

Environment

Principle 7: Businesses should support a precautionary approach to

environmental challenges;

Principle 8: undertake initiatives to promote greater environmental

responsibility; and

Principle 9: encourage the development and diffusion of environmentally

friendly technologies.

Anti-Corruption

Principle 10: Businesses should work against corruption in all its forms,
including extortion and bribery.

To stay productive, competitive, and relevant in a rapidly changing

business world, they have to become socially responsible.

In the last decade, globalization has blurred national borders, and

technology has accelerated time and masked distance.

Because of globalization, there is also fierce competition for skilled

employees, investors, and consumer loyalty

Given this sea change in the corporate environment, companies want to

increase their ability to manage their profits and risks, and to protect the
reputation of their brands

How a company relates with its workers, its host communities, and the
marketplace can greatly contribute to the sustainability of its business
success.

In the United States, San Francisco-based Business for Social

Responsibility alone has 1,400 corporate members that globally employ
more than six million workers, and account for a total annual revenue
of US$1.5 trillion.

In Europe, the London-based International Business Leaders Forum

counts 60 major global companies as members

In developing countries such as India, Indonesia, Brazil, Egypt, and the

Philippines, business associations dedicated to CSR exist.

Responsible business is good business

Lok Sabha on 22 Feb2013 voted to replace India's 56-year-old Companies Act with
the Companies Bill, 2011, that brings the management of the corporate sector in
line with global norms.

It introduces concepts like responsible self-regulation with adequate disclosure and

accountability, ushers in enhanced shareholders' participation and provides for a
single forum to approve mergers and acquisitions.

The Bill, which will now travel to the Rajya Sabha, has said companies must
"ensure" they spend at least 2 per cent of their net profit towards corporate social
responsibility (CSR) activities, a move that has drawn both criticism and
appreciation from the stakeholders but one that promises to change the way CSR
has been perceived so far.

Corporate affairs minister Sachin Pilot said CSR would be mandatory for companies
like their tax liabilities.

"Severity of law is not deterrent, it is surety which is deterrent," he said, adding the
companies may engage in promoting education, reducing child mortality and any
other matter they feel can contribute for social welfare.

The Bill will also provide the serious fraud investigation office (SFIO) with powers to
conduct searches and seizures on the premise of a fraudulent company

3M India Ltd - Bangalore: Kar : Income -Rs 260 Cr : CSR -Pollution Drive : Karmayog CSR Rating - 2/5
Aarti Industries Ltd - Mumbai :Mah : Income -Rs 660 cr :Karmayog CSR Rating- 0/5
Aban Loyd Chiles Offshore Ltd - Chennai,TN:Income-Rs 300 cr :CSR-health,upliftment,disaster :CSR Rating- 2/5
ABB Ltd - Bangalore,ktk: Income -2300cr : CSR -environment , Disability : CSR Rating -2/5
Abbott India Ltd - Mumbai, Mah:Income-Rs 460 cr : CSR -environment , health : CSR Rating -3/5
Abhishek Industries Ltd - Surat ,Guj : Income-Rs 570 Cr :CSR -environment : CSR Rating-1/5
Adani Entreprises Ltd - Indore, MP : Income -Rs 13500 Cr :CSR -Health,sanitation : CSR Rating - 3/5
Aditya Birla Group - Mumbai,Mah : Income -4830 crore : CSR - education, infrastructure :CSR Rating -3/5
Agro Tech Foods Ltd - Secunderabad,A.P : Income-Rs 1060 Cr : CSR Rating-0/5
Air India Ltd - Mumbai,Mah : Income-Rs 7600 Cr : CSR - education scholarships : CSR Rating -1/5
Airports Authority of India - New Delhi : Income -Rs 3000 Cr : CSR Rating- 0/5
Alembic Ltd - Baroda,Guj:Income-Rs 530 Cr: CSR - healthcare ,education:CSR Rating-1/5
Alfa Laval (India) Ltd - Pune,Mah:Income-530 Cr:CSR- promoting entrepreneurship development:CSR Rating- 1/5
Allahabad Bank - Kolkata ,W.b:Income-Rs 3800 Cr: CSR Rating- 0/5
Alok Industries Ltd - Mumbai ,Mah:Income-Rs 1200 Cr:CSR -environment:CSR Rating-1/5
Alstom Projects India Ltd: - Mumbai, Mah:Income -Rs 850 Cr :CSR Rating-0/5
Amtek Auto Ltd - Gurgaon ,Har :Income-Rs 650 Cr : CSR Rating-0/5
Andhra Bank - Saifabad ,Hyd : Income- Rs 3000 Cr :CSR Rating-0/5
Apar Industries Ltd - Vadodara ,Guj : Income- Rs 850 Cr : CSR - general donations: CSR Rating -1/5
Apollo Hospitals Enterprise Ltd - Hyderabad, Ktk:Income- Rs 600 Cr: CSR Rating-1/5
Apollo Tyre - Kochi , Ker : Income-Rs 2250 Cr : CSR-community outreach , HIV AIDS : CSR Rating-1/5
Areva T&D Ltd - Kolkata ,W.b : Income-Rs 800 Cr : CSR Rating-0/5
Arvind Products Ltd - Ahmedabad ,Guj : Income-Rs 400 Cr : CSR Rating-0/5
Asahi India Glass Ltd - Delhi:Income- Rs 600 Cr: CSR- environment, health, education, sanitation: CSR Rating- 3/5
Ashapura Minechem Ltd - Mumbai, Mah : Income-Rs 500 Cr: CSR -social welfare schemes :CSR Rating-0/5
Ashok Leyland Ltd - Chennai,TN : Income: Rs 4300 Cr :CSR-environment ,health : CSR Rating-2/5
Asian Paints Ltd - Mumbai,Mah:Income-Rs 1950 Cr: CSR-water management,agecare, education,health, CSR Rating :2/5
Asian Star Company Ltd - Mumbai, Mah : Income- Rs1000 Cr : CSR Rating: 0/5
Atlas Copco (India) Ltd - Pune, Mah: Income-Rs 400 Cr: CSR Rating- 0/5
Atul Ltd - Valsad, Gujarat: Income: Rs 700 Cr: CSR : sustainable development, education ,health CSR Rating-2/5
Aurobindo Pharma Ltd - Hyderabad,AP: Income-Rs 1100 Cr:CSR Rating-0/5
Automotive Axles Ltd - Mysore, Ktk :Income-Rs 265 Cr: CSR Rating-0/5
Avaya GlobalConnect Ltd - Gurgaon , Har :Income: Rs 330 Cr : CSR Rating- 0/5
Aventis Pharma Ltd - Mumbai.Mah Income: Rs 750 Cr : CSR :disaster :CSR Rating: 1/5

Source: http://www.managementparadise.com/forums/company-profiles-news/19482-csr-companies-details.html

Better anticipation and management of an ever-expanding spectrum of

risk

Improved reputation management

Enhanced ability to recruit, develop and retain staff

Improved innovation, competitiveness and market positioning

Enhanced operational efficiencies and cost savings

Improved ability to attract and build effective and efficient supply

chain relationships

Enhanced ability to address change

More robust social licence to operate in the community

Access to capital

Improved relations with regulators

A catalyst for responsible consumption

August 2003, the UN Sub-Commission on the Promotion and Protection of Human

Rights launched the Norms on the responsibilities of trans-national corporations
and other business enterprises with regard to human rights

In this document, for the first time, the CSR is defined with regards to Human
Rights, proclaiming rules and monitoring policies.

However, after all the previous definitions about the CSR, the following five topics
emerged as priority areas:

a. Enterprises ethics.
b. Social environment.
c. Loyalty.
d. Corporate citizenship.
e. Sustainable development.

All the definitions of the CSR are focused on the Triple Bottom Line
(TBL) approach.

This concept captures an expanded spectrum of values and criteria for

measuring organizational (and societal) success - economic,
environmental and social.

The TBL approach means expanding the traditional company reporting

framework to take into account not just financial outcomes but also
environmental and social performance starting from the base (bottom)
and following three objectives (triple-line) that are:

1.

Social justice.

2.

Environmental quality.

3.

Economic prosperity.

The definition of CSR varies from company to company and many use other terms
such as sustainable growth, corporate responsibility, social responsibility or
corporate citizenship.

No matter how it is described, CSR considers the human being as the centre of the
economic system.

The universal values of the individuals and their needs are seen as fundamental and
unrepeatable resources.

Hence, CSR is the business contribution to sustainable development, meaning the

way a company balances its economic, environmental and social objectives while
addressing stakeholder expectations and enhancing shareholder value.

CSR is not a rule, it is a way of life, a multidimensional philosophy of global

governance which one can voluntary subscribe to.

IBMUK - 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
TOIs - Lead India campaign, campaign for contribution towards
educating the poor

Dasani mineral water (part of Coca-Cola)

Cokes sale was banned as the result of tests, including those by the Indian government, which
found high concentrations of pesticides.
Communities in India, aroundCoca-Cola's bottling operations are facings evere shortages of
water as a result of the cola major sucking huge amounts of water from the common ground
water source.
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.

Few have work related skills when they arrive at the factory.
Issue-unhealthy work environmentdebates, 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

Book by Jean-Jacques Rousseau on social contract in 1762

Designed to explain relationship between and individual and society and its
government

Recently social contract gained importance as it has been used to explain the
relationship between a company and a society

Company/organization has obligations towards other parts of society in return for

its place in society

This in turn led to the development of Stakeholder Theory

Society

Govt.

Groups

The
organization

Other
organizations

Individuals

Definitions

Those groups without whose support the organization would cease to exist

Any group or individual who can affect or is affected by the achievement of the
organizations objectives

The most common groups consider to be stakeholders are:

Managers

Employees

Investors

Shareholders

Suppliers and some generic groups like,

Government

Society at large

The local community

Environment can be affected by organizational activity which takes many forms like:

Utilization of natural resources as a part of its production processes

Effects of competition between itself and other organizations in the same market

Transformation of the landscape due to raw material extraction or waste product

storage

Pollution caused by increased volumes of traffic and increased journey times

It is not often helpful to consider each stakeholder group in isolation and to separate
their objectives

Because.

Each person will belong to several stakeholder groups at the same time

For example, a single person might be a customer of an organization and also an

employee and a member of the local community and of society at large.

She/he may also be a shareholder and a member of a local environment association and
therefore concerned about the environment.

2 main ways to classify

1.

2.

Internal vs External

Those included in the organization such as employees or managers internal

Suppliers or customers who are not considered as part of the organization external

In modern organizations it is difficult to distinguish these 2 types when employees

might be sub-contractors and suppliers might be another organization within the same
group

Voluntary vs Involuntary

Voluntary stakeholders can choose whether or not to be stakeholder to an

organization whereas involuntary cannot

For example, an employee can choose to leave the employment voluntary

The local society or the environment are not able to make this choice - involuntary

This theory states that all stakeholders must be considered in the decision making
process of the organization

Theory states that there are 3 reasons why this should happen:

1.

It is the morally and ethically correct way to behave

2.

Doing so actually also benefits the shareholders

3.

It reflects what actually happens in an organization

Regulatory regimes which operates in any particular country means that certain
actions must be taken by firms which affect their influence upon the external
environment

These actions and prohibitions are controlled by means of regulation imposed by

the government of that country

For example, the types of discharges by an organization when they are considered
to cause pollution

Such regulations govern the way in which waste must be disposed of and the level
of pollutants allowed for discharges into rivers, as well as restricting the amount of
water which can be extracted from rivers

One thing of particular importance for all corporations, and is becoming more important
is the matter of risk and managing the risk

Risk is also related to sustainability

In order to fully recognize and incorporate environmental costs and benefits into the
investment analysis process the starting point needs to be the identification of the types
of costs and revenues which need to be incorporated in to the evaluation process

The completion of an environmental audit will enhance the understanding of the process
involved and will make this easier

Once all the data has been recognised, collected and quantified it then becomes possible
to incorporate this data, in financial terms, in to an evaluation which incorporates risk in
a more consistent manner

It is important to recognise benefits as well as costs, and it is perhaps worth reiterating

that many of these benefits are less subject to quantification and are of the less tangible
and image related kind.

Enhanced company or product image-increased sales

Health and safety benefits

Ease of attracting investments and lowered cost of such investment

Better community relationship this can lead to easier and quicker approval of
plans through the planning process\

Improved relationship with regulators, where relevant

Improved morale among workers, leading to higher productivity, lower staff

turnover and consequently lower recruitment and training costs

General improved image and relationship with stakeholders

Of the 3 principles of CSR the one which is most prominent at present is

sustainability

Sustainability is concerned with the effect which action taken in the present has
upon the options available in the future

The starting point for every definition of sustainability comes from the Brundtland
Report, which was produced by the World Commission on Environment and
Development

It is generally known however as the Brundtland Report

Strictly speaking the Brundtland Report was concerned with sustainable

development which they regarded as unquestioningly both possible and desirable

This report is considered to be extremely important in addressing the issue of

sustainability

The report described 7 strategic imperatives for sustainable development

1.

Reviving growth

2.

Changing the quality of growth

3.

Meeting essential needs for jobs, food, energy, water and sanitation

4.

Ensuring a sustainable level of population

5.

Conserving and enhancing the resource base

6.

Reorienting technology and managing risk

7.

Merging environment and economics in decision-making

This report makes institutional and legal recommendations for change in order to
confront common global problems

However, the Brundtland Report made an assumption-which has been accepted

ever since-that sustainable development was possible and the debate since has
centered on how to achieve this

Similarly, emphasis has been placed on such things as collaboration, partnerships

and stakeholder involvement

It has however been generally accepted that development is desirable and that
sustainable development is possible with a focus on how to achieve this

There is a considerable degree of confusion surrounding the concept of

sustainability: for the purist, sustainability implies nothing more than the ability
to continue in an unchanged manner- but often it is taken to imply development in
a sustainable manner

It is recognized in the financial world that the cost of capital which any company
incurs is related to the perceived risk associated with investing in that company
in other words there is a direct correlation between the risk involved in an
investment and the rewards which are expected to accrue from a successful
investment

Naturally a company which is sustainable will be less risky than one which is not

Consequently most large companies in their reporting mention sustainability and

frequently it features prominently

Indeed it is noticeable that extractive industries which by their very nature

cannot be sustainable in the long term make sustainability a very prominent issue

The prime example of this can be seen with oil companies BP being a very good
example which make much of sustainability and are busy redesignating
themselves from oil companies to energy companies with a feature being made of
renewable energy, even though this is a very small part of their actual operations

Component of Sustainability:

Social influence, which is defined as a measure of the impact that society makes
upon the corporation in terms of the social contract and stakeholder influence

Environmental Impact, which we define as the effect of the actions of the

corporation upon its geophysical environment

Organizational culture, which is defined as the relationship between the

corporation and its internal stakeholders, particularly employees, and all aspects of
that relationship and

Finance, which we define in terms of an adequate return for the level of risk
undertaken

 NIKE
GAP
Benetton
Arvind

Mills
Alok Industries
ITC-e-Chaupal

An initiative of ITC Limited, a large multi business conglomerate in India, to link

directly with rural farmers via the Internet for procurement of agricultural and
aquaculture products like soybeans, wheat, coffee, and prawns.

e-Choupal was conceived to tackle the challenges posed by the unique features
of Indian agriculture, characterized by fragmented farms, weak infrastructure and
the involvement of numerous intermediaries.

The programme involves the installation of computers with Internet access in rural
areas of India to offer farmers up-to-date marketing and agricultural information.

Problems addressed prior to the introduction of E-Choupal

Traditionally, commodities were procured in mandis (major agricultural marketing centres in rural
areas of India), where the middleman used to make most of the profit.

These middlemen used unscientific and sometimes outright unfair means to judge the quality of the
product to set the price.

The difference in price between good quality and inferior quality was little, and therefore there was
no incentive for the farmers to invest and produce good quality output.

With e-Choupal, the farmers have a choice and the exploitative power of the middleman is
neutralised.

Statement of a farmer who is a member of E-choupal:

"Before ITC introduced us to e-Choupal, we were restricted to selling our produce in the local mandi.
We had to go through middlemen and prices were low. ITC trained me to manage the Internet kiosk
and I became the e-Choupal Sanchalak in my village. Today we are a community of e-farmers with
access to daily prices of a variety of crops in India and abroad this helps us to get the best price. We
can also find out about many other important things weather forecasts, the latest farming
techniques, crop insurance, etc. e-Choupal has not only changed the quality of our lives, but our
entire outlook

Effects of e-Choupal

ITC Limited has now provided computers and Internet access in rural areas across several agricultural
regions of the country, where the farmers can directly negotiate the sale of their produce with ITC Limited.

This online access enables farmers to obtain information on mandi prices, and good farming practices, and
to place orders for agricultural inputs like seeds and fertilizers.

This helps farmers improve the quality of their products, and helps in obtaining a better price.

Each ITC Limited kiosk having Internet access is run by a sanchalak a trained farmer.

The computer is housed in the sanchalak's house and is linked to the Internet via phone lines or by
a VSAT connection.

Each installation serves an average of 600 farmers in the surrounding ten villages within about a 5 km
radius.

The sanchalak bears some operating cost but in return earns a service fee for the e-transactions done
through his e-Choupal.

The warehouse hub is managed by the same traditional middle-men, now called samyojaks, but with no
exploitative power due to the reorganisation.

Indeed these middlemen make up for the lack of infrastructure and fulfil critical jobs like cash
disbursement, quantity aggregation and transportation.

Since the introduction of e-Choupal services, farmers have seen a rise in their income levels
because of a rise in yields, improvement in quality of output, and a fall in transaction costs.

Even small farmers have gained from the initiative.

Customized and relevant knowledge is offered to the farmers despite heterogeneous cultures,
climates and scales of production.

Farmers can get real-time information despite their physical distance from the mandis.

The system saves procurement costs for ITC Limited.

The farmers do not pay for the information and knowledge they get from e-Choupals; the
principle is to inform, empower and compete.

At the same time ITC Limited has obtained benefits from the programme:
1.
2.
3.
4.

elimination of non value added activities

differentiated product through identity preserved supply chains
value added products traceable to farm practices
e-market place for spot transactions and support services to futures exchange

There are presently 6,500 e-Choupals in operation. ITC Limited plans to scale up to 20,000 eChoupals by 2012 covering 100,000 villages in 15 states, servicing 15 million farmers.

Success that followed

Today this initiative of ITC has empowered the lives of people

living in 10 states where 40000 villages have 6500 e choupals and
around 4 million farmers have been empowered.

The initiative taken up by ITC to help the degrading reputation of

a farmer has surely made a huge difference to not only large but
also medium and small scale farmers.

NIKE, Inc. (NYSE:NKE) on 18.03.2013 announced a strategic partnership

with Swiss company bluesign technologies to accelerate the supply of
more sustainable materials and chemistries for use in NIKE, Inc. products.

NIKE, Inc.s VP of Sustainable Business & Innovation, Hannah Jones, calls

the partnership a significant step in the companys sustainable materials
strategy: Nike is committed to catalyzing a major change in the world of
materials, driving for the elimination of hazardous substances and
innovating new, sustainable materials. To shift to a palette of entirely
sustainable materials multiple stakeholders must work together to
innovate new chemistry, encourage the use and scale of better chemistry,
and eliminate harmful chemistry.

NIKE, Inc. Chemistry Innovation Backgrounder:

NIKE, Inc. has been innovating in greener chemistry for more than 15 years. A
commitment to design sustainability into products from the outset has been a
hallmark of Nikes approach.

1995 Nike began phasing out petroleum-derived solvents in its footwear.

1997 Nike began phase-out of the global warming SF6 gas, previously used in
Air-Sole cushioning.

2002 Nike developed a formula for environmentally preferred rubber then shared
the formula with the industry.

2006 Nike pioneered a materials sustainability index to enable designers to make

better materials choices. In 2011 it shared this tool with the industry through the
Sustainable Apparel Coalition (SAC).

2011 Nike committed to a goal of eliminating the discharge of hazardous

chemicals in its supply chain by 2020.

2012 Nike invested in DyeCoo Textile Systems B.V., a Dutch company that
invented a revolutionary process to dye materials without water and subsequently
reducing chemical discharge.

Nike works with the contract factories that produce its products to develop water
quality and energy efficiency programs and voluntarily reports against its targets to
reduce environmental impact across four key areas: water, chemistry, waste and
energy.

Nike has just released its most recent sustainability report, and it is quite possibly one
of the most compelling and engaging one have ever come across.

Nike has launched an interactive sustainability report that educates, innovates and brings
sustainability alive.

Not all of the news coming from Nikes Beaverton headquarters is sunny.

Excessive overtime is still a nagging problem in the companys contract factories, and
Nike admits many of the factors are within the companys control.

The complete elimination of hazardous chemicals from its supply chain will take time.

And the companys water footprint is still huge.

But Nike is charging ahead with a sustainability agenda that just a few years ago would
have seemed unthinkable.

And rather than taking a self-congratulatory tone, Nike draws stakeholders in on its
journey to share the companys successes and shortcomings.

One example of how Nike engages stakeholders is by demonstrating the impact

that the 16,000 various materials used to manufacture its sporting apparel have on
the environment.

A tour of the Nike Material Index (NMI) allows users to compare organic versus
conventionally grown cotton, learn about recycled polyester and how it
outperforms nylon, and explains the various components that comprise a pair of
athletic shoes.

While users design their version of green athletic wear, they learn how Nike
assesses the overall sustainability performance of the materials based on energy,
chemistry, water and waste

Gap Inc. is an American apparel company headquartered in San Francisco,

founded in 1969 by Don and Doris Fischer. Gap Inc. is the umbrella company that
market the brands: Gap, Banana Republic, Old Navy, Athleta, and Piper Lime.

Today the companys market cap is valued at 15 billion dollars.

Having an over 35-year history with over 130,000 employees, they currently
operate in 8 countries and have franchises in 24 countries.

In 2003 Gap Inc. was the first retailer to release a social responsibility report,
offering a comprehensive overview of their approach to social responsibility.

The report was broadly lauded for its willingness to be open and honest about both
the successes and failures in this arena.

In fact, this report won Business Ethics magazine's Social Reporting Award for
"unprecedented honesty in reporting on factory conditions."

Corporate social responsibility across Gap Inc., are in four strategic ways

The first one is this whole idea of sustainable solutions in supply chain.

This consists of working on a four-part strategy to improve working conditions,

monitor factories, integrate labour standards into our business practices, and the
whole idea

The second is with employees and making Gap Inc., a place where people can
really flourish and Corporate Social Responsibility at Gap build their careers in a
positive work environment.

The third is community involvement, including everything from foundation to

volunteerism.

And the fourth key area in corporate social responsibility is environment, health
and safety.

Firstly, Founders Award which recognizes employees who do work in

their communities around the world.

The winner of the yearly award receives paid time off to volunteer and a
grant to give to their community partner.

The second area is leadership, to ensure to train their leaders to

understand what it means to live their values as a socially responsible
company, and their role in creating a positive work environment ;

Creating ways for their leaders to listen and respond to the voices of their
employees, whether its the employee survey, the code of business
conduct, or informal feedback channels.

Any employee anywhere in the world can open a door and raise an issue
and will be responded appropriately.

In 1992 the company developed global factory compliance guidelines and a vendor
code of conduct.

This practice has now become the mainstay and more or less standard within the
apparel manufacturing industry.

This includes such regulations as the use of independent monitoring, child labour
restrictions, safe working conditions, transparent record keeping, and right of
association.

The Gap has taken a key step with using independent factory auditing as well a
their own internal factory monitors.

They have partnered with the International Labour Organization, and The Ethical
Trading Initiative.

In addition, in order to support the daily living needs of labourers in the most rural
and underdeveloped communities they have collaborated with the International
Finance Corporation which is a sub branch of the World Bank.

According to a their annual report highlights, the Gap has 99% of all its factories
monitored.

Gaps focus on the environment includes energy conservation, sustainable design, and
reduction of waste.

At the companys San Francisco headquarters, employees sort their meal waste by
use of composting and recycling bins in the cafeteria.

The company has also taken steps to decrease their environmental impact and reduce
dependence of fossil fuels.

In 2008 they completed the installation of a solar power system grid in their west
coast distribution center.

In their other DCs across the US, they have installed energy efficient fluorescent
lights their distribution centers saving 2 million dollars annually in energy cost.

They are currently rolling out a program that includes changing the lighting, paint and
fixtures in Old Navy stores to more energy efficient design.

Some of the recycling programs they are implementing include the reduction of
corrugated cardboard use, and aggressive reduction of solid waste in their retail stores.

The design office has started to explore working with sustainable fabric and
trims that are commercially viable and cost effective for the business.

The design teams have been challenged to using hemp, paper and soy in
their product collections while keeping the garments an accessible price
point for the consumers.

Part of the focus on environment movement also consists of the innovation

and use of recycled packaging and recycled denim.

One of the most successful environment program they have had as to

date, was the Recycle Your Blues denim drive launched in April 2010.

In collaboration with Cotton Inc., and their From Blue to Green

campaign, the company help market their environmental efforts and
awareness to consumers.

Customers were encouraged to bring in their used and unwanted denim to

Gap stores across the US to be recycled, and in return received 30% off
their next purchase of denim.

Gap Inc. collected over 270,000 denim jeans that year for conversion into
the Ultra Touch Denim Insulation by Bonded Logic for
insulating homes and donating to those communities in need.

Gap Inc. has been one the apparel industrys front-runners in improving the use of water
in the manufacture of denim products.

Their goal is the reduction of the total amount of water volume used in denim
processing as well and the use re use of the wastewater.

Becoming a Clean Water Program member of the BSR group along with other denim
apparel companies, Gap Inc. is taking proactive steps to reduce the use and the lowering
the limit of heavy metals and chemical in water for a positive sustainable impact on the
environment.

Going a step further Gap is working with independent environmental consultants to

develop a new denim laundry compliance guideline for their denim mills.

The compliance guidelines include the use of less harmful dyes and the use of
environmental friendly practices to mitigate the detrimental impact of that the textile
and mill processes has on the environmental.

Using their business leverage, the Gap has been successfully able to influence 100% of
the mills and denim laundries for participation in the Clean Water program within their
supply chain.

For many years Gap Inc. has been big donor to many charities and community projects but has not
publicly discussed their philanthropy in the press.

Instead of building an elaborate internal business function within the organization to seek out just a
few community and chartable investment opportunities, the Gap has decided to instead to follow and
support its employees interests and motivation for volunteerism to help identify charitably causes.

In turn, the company has supported those charitable interests by providing leadership, selfdevelopment and management workshop for its employees.

The company encourages and facilitates community volunteerism in numerous ways.

Grants of $150 dollars are given to not profits for every 15 hours of employees volunteer.

Each year they sponsor 50 employees to work on building homes across the world for Habitat for
Humanity.

The company matches employees donations to charitable organizations dollar for dollar.

Every year over 2 million dollars of company donations are given away matched by employee
donations.

During semi annual sales, employees send out company coupons to the public.

To encourage the use of the coupon and drive company sales, each employee chooses a charity to
which a percentage of the sale proceeds are donated when the coupon is used.

Gap Inc. is a key supporter of CAREs Factory Health Education Project in

Cambodia, which improves access to clinical services for garment factory
workers and promotes education, awareness and prevention of HIV/AIDS and
other sexually transmitted diseases.

In 2004, Gap Inc. doubled its contribution to the Cambodia program and
newly funded CAREs Private Sector Coalition Against HIV/AIDS in Lesotho.

Source:
http://www2.gapinc.com/GapIncSubSites/csr/index.shtml
http://www2.gapinc.com/GapIncSubSites/csr/documents/COVC_070909.pdf
http://www2.gapinc.com/GapIncSubSites/csr/Utility/resources.shtml
http://www.bsr.org/en/our-work/working-groups/apparel-mills-sundries
http://www.care.org/
http://www.care.org/newsroom/articles/2009/07/gap-give-and-get-couponpromotion-20090727.asp
http://www.care.org/newsroom/articles/2009/07/gap-give-and-get-couponpromotion-20090727.asp
http://popsop.com/39258

Ethics shows a corporation how to behave properly in their all business and
operations

However, business ethics is characterized by conflicts of interests

Businesses attempt to maximize profits as a primary goal on one hand while they
face issues of social responsibility and social service on the other

Ethics is the set of rules prescribing what is good or evil, or what is right or wrong
for people

In other words, ethics is the values that form the basis of human relations and the
quality and essence, respect and fair acting in all circumstances

However, such values as honesty, respect and confidence are rather general
concepts without definite boundaries

Ethics can also be defined as overall fundamental principles and practices for
improving the level of wellbeing of humanity

A business which does not respect ethical criteria and fails to improve them will
disrupt its integrity and unity

Business ethics is the honest, respectful and fair conduct by a business and its
representatives in all of its relations

Milton Friedman argued that there is only one social responsibility of business
use its resources and engage in activities designed to increase its profits as long as
it.engages in open and free competition without deception and fraud

However, ethical behavior and ethical business has effects not only on
stakeholders, and shareholders but also on the entire economy

There is no absolute agreement as to what constitutes ethical (or unethical)

behavior

For each of us there is a need to consider our own ethical position as a starting
point because that will affect our own view of ethical behavior

The opposition provided by deontological* ethics and teleological** ethics

(regarding the link between actions and outcomes), and by ethical relativism
(regarding the universality of a given set of ethical principles) represent key areas
of debate and contention in the philosophy of ethics

*is the normative ethical position that judges the morality of an action based on the action's
adherence to a rule or rules. It is sometimes described as "duty" or "obligation" or "rule" -based
ethics, because rules "bind you to your duty

**any philosophical account that holds that final causes exist in nature, meaning that design and
purpose analogous to that found in human actions are inherent also in the rest of nature

1. Deontological Ethics (from Greek deon, "obligation, duty)

According to deontologists certain actions are right or wrong in themselves and so

there are absolute ethical standards which need to be upheld

Problem in this is, how we know which acts are wrong and how we distinguish
between a wrong act and an omission

Philosophers such as Nagel argue that there is an underlying notion of right which
constrains our actions, although this might be overridden in certain circumstances

Thus, there may be an absolute moral constraint against killing someone, which in
time of war can be overridden

2. Teleological Ethics

Teleological theory distinguishes between the right and the good, with the
right encompassing those actions which maximize the good

Thus it is outcomes which determine what is right, rather than the inputs (our
actions), in terms of ethical standards

This is the view point by Rawls in his A Theory of Justice

Under this perspective, ones duty is to promote certain ends, and the principles of
right and wrong organize and direct our efforts towards these ends

3. Utilitarianism

It is based upon the premise that outcomes are all that matter in determining what is good
and that way in which a society achieves its ultimate good is through each person pursuing
his/her own self interest

The philosophy states that the aggregation of all these self interests will automatically lead
to the maximum good for society at large

4. Ethical relativism

Relativism is the denial that there are certain universal truths

Thus, ethical relativism posits** (To assume the existence of; postulate. Synonyms
is presume) that there are no universally valid moral principles
***Verb

Assume as a fact; put forward as a basis of argument.

Noun

A statement made on the assumption that it will prove to be true.

Ethical relativism may be further subdivided into: conventionalism, which argues that a
given set of ethics or moral principles are only valid within a given culture at a particular
time and subjectivism, that sees individual choice as the key determinant of the validity of
moral principles

According to the conventional ethical relativism it is the mores (norms) and

standards of a society which define what is moral behavior and ethical standards
are set, not absolutely, but according to the dictates of a given society at a given
time

Thus if we conform to the standards of our society then we are behaving ethically

However ethical standards change over time within one society and vary from one
society to another; thus the attitudes and practices of the 19th century are different
to our own as are the standards of other countries

Ethical objectivism

This philosophical position is in direct opposition to ethical relativism; it asserts

that although moral principles may differ between cultures, some moral principles
have universal validity whether or not they are universally recognized

There are 2 key variants of ethical objectivism: strong and weak

Strong ethical objectivism or absolutism argues that there is one true moral
system

Weak ethical objectivism holds that there is a core morality of universally valid
moral principles, but also accepts an indeterminate area where relativism is
accepted

Developed by Lovelock in 1979, in which he proposed a different model of the planet

Earth, in his model the whole of the ecosphere, and all living matter therein, was
dependant upon its various facets and formed a complete system

According to this hypothesis, this complete system, and all components of the system,
were interdependent and equally necessary for maintaining the Earth as a planet capable
of sustaining life

This Gaia Hypothesis was a radical departure from classical liberal theory which
maintained that each entity was independent and could therefore concentrate upon
seeking satisfaction for its own wants, without regard to other entities

Gaia hypothesis stated that organisms were interdependent and that it was necessary to
recognize that the actions of one organism affected other organisms and hence inevitably
affected itself in ways which were not necessarily directly related

Thus the actions of an organism upon its environment and upon externalities was a
matter of consequence for every organism

This is true for humans as much as for any other living matter upon the planet

Important for company success and concerning the relationship between corporate
and business interests (stakeholders)

We cannot define CB without a ethical and CSR base in order to refer to that
behavioral aspect

CB involves legal rules, ethical codes of conduct and social responsibility

principles

CB has effects not only on stakeholders and shareholders but also on the entire
economy

When a corporation acts ethically and socially responsible in its business decisions
and strategic planning then that corporation will be more sustainable

Often the most important factor in gaining a competitive advantage as well as

building financial and social success

Possessing a well-known name can help them secure a good position in the market
place

There are many benefits of having a good CR

Improves shareholder value

Inspires confidence in investors, which in turn leads to a higher stock price for a company

Increased customer loyalty

Influential factor in forming partnerships and strategic alliances

Employee morale and commitment are higher

At a time of crisis a good CR can shield the company from criticism and blame and can
help to put its own point of view to the audiences like Pepsi Cola tampering case,
according to which products on sale were found to contain hypodermic syringes.

Pepsi dealt effectively by defusing public alarm with a public relations campaign that
highlighted the integrity of its manufacturing process and its corporate credibility

Evaluation of performance for a business depends upon the determination of what good
performance actually consists of.

Measurement of stakeholder performance is more problematic than the measurement of

financial performance.

Measures considered for performance are into 9 categories:

1.

Quality of Management

2.

Quality of goods & services

3.

Capacity to innovate

4.

Quality of marketing

5.

Ability to retain top talent

6.

Community & environmental responsibility

7.

Financial soundness

8.

Value as long term investment

9.

Use of corporate assets

An approach to reporting a firms activities which stresses the need for

identification of socially relevant behavior, the determination of those to whom the
company is accountable for its social performance and the development of
appropriate measures and reporting techniques

Wide range of aspects of corporate performance are:

1.

Concerns of investors

2.

Focus upon community relations

3.

Concern with ecology

To evaluate performance it is necessary to measure performance and that

measurement needs the following components:

Language to express results

Specification of objects to which the results will apply

Standardization for transferability between organizations

Accuracy and control to permit evaluation

Different perspective upon performance evaluation has been proposed by Kaplan

and Norton with the development of their balance scorecard approach

They argue that traditional measurement systems in organizations are based upon
the finance function and so have a control bias but that balanced scorecard puts
strategy and vision at the centre

They identify four components of the balanced scorecard, each of equal

importance, and each having associated goals and measures

The 4 components are:

1.

Financial perspective how does the firm look to shareholders

2.

Customer perspective how do customers perceive the firm

3.

Internal business perspective what must the firm excel at

4.

Innovation and learning perspective can the firm continue to improve and create value

Before the development of any appropriate measures can be considered it is first necessary for
the organizations to develop an understanding of the effects of its activities upon the external
environment

The starting point for the development of such an understanding is the undertaking of an
environmental audit

It is merely an investigation and recording of the activities of the organization in order to

develop this understanding

ISO14000 is concerned with such audits

Such audit will address, inter alia, the following issues:

Extent of compliance with regulations and possible future relations

Extent and effectiveness of pollution control procedures
Extent of energy usage and possibilities increasing for energy efficiency
Extent of waste produced in the production processes and the possibilities for reducing such waste or finding uses
for the waste
Extent of usage of sustainable resources and possibilities for the development of renewable resources
Extent of usage of recycled materials and possibilities for increasing recycling
Life cycle analysis of products and processes
Possibilities of increasing capital investment to affect these issues
Existence of or potential for environmental management procedures to be implemented

Such an audit will require a detailed understanding of the processes of an organization

and so will be detailed and cannot be undertaken just by the accountants of the
organization

It also involves other specialists and managers within the organization who will need to
pool their knowledge and expertise to arrive at a full understanding

The objective of such an audit is firstly to arrive at an understanding of the effects of

organizational activity and then to be able to assign costs to such activity

It should also enable the managers of the organization to consider alternative ways of
undertaking the various activities which comprise the operational processes of the
organization and to consider and evaluate the cost implications, as well as the benefits,
of understanding such processes differently

Such an audit will probably necessiate the collection of information which has not
previously been collected by the organization, although it may well be in existence
somewhere within the organizations data files

Once this audit has been completed then it is possible to consider the development of
appropriate measures and reporting mechanisms to provide the necessary information
for both internal and external consumption

It is central to any consideration of performance evaluation and this resolves into 2 areas for
consideration, namely
1.
2.

Why measure
what to measure

It is essentially a comparative process and enables the comparison of the constituents of

performance in the following areas:

Temporally by enabling the comparison of one time period with another

Geographically by enabling the comparison of one business, sector or nation with another

Strategically by enabling alternative courses of action and their projected consequences to be

compared

Evaluation of performance takes place for many reasons:

1.
2.
3.

For control
For strategy formation
For accountability

Measurement derive their meaning however from the use to which they are applied and
mismeasurement by using measures incorrectly causes conflict and misunderstanding

Once a framework has been developed which identifies and addresses needs and purposes
of evaluation it is then possible to consider the efficiency and effectiveness of existing
measures and identify deficiencies in the measurement system

Differing needs of different parties in the evaluation process cause tensions within the
organization as it seeks to meet its internal control, strategy formulation and
accountability functions and produce a reporting structure to meet these needs

While the basic information required to satisfy these needs is the same information, or at
least derives from the same source data, the way in which it is analyzed and used is
different, which can lead to conflict within the organization

One factor of importance in PE is the concept of the sustainability of performance

It is therefore important for all stakeholders to be able to ascertain, or atleast project, not
just current performance but its implications for the future

PE must therefore necessarily have a future orientation for all evaluations

Can be defined as the free movement of goods, services and capital

Doesnt cover all the aspects of globalization or global changing

It also should be a process which integrates world economies, culture, technology and governance

Because it also involves the transfer of information, skilled employee mobility, the exchange of
technology, financial funds flow and geographic arbitrage between developed countries and
developing countries

Moreover globalization has religious, environmental and social dimensions

To encompass this broad impact area globalization covers all dimensions of the world economy,
environment and society

The question is how a company will adapt to this changing

First, companies have to know different effects of globalization

It has some opportunities and threats

A company might have learn how to protect itself from some negative effects and how to get
opportunities from this situation

Globalization affects the economy, business life, society and environment in

different ways:

Increasing competition

Technological development

Knowledge/information transfer

Portfolio investment (fund transfer btw developed and emerging markets/countries)

Regulation/deregulation, international standards

Market integration

Intellectual capital mobility

Financial crisis-contagion effect global crisis

John Maynard Keynes calculated that the standard of living had increased 100% over four thousand
years

Adam Smith in 1776 described conditions which would lead to increasing income and prosperity

Economic growth generally brings out some consequences for the community

Economic growth and economic development might not be without social and moral consequences
and implications

Another question is who is responsible of this ongoing process and for ensuring the well-being of
people and safeguarding their prosperity?

Is this the responsibility of governments, the business world, consumers, shareholders, or of all
people?

Government is part of the system and the regulator of markets and lawmakers

Managers, businessmen and the business world take action concerning the market structure, consumer
behavior or commercial conditions

They are taking risk for their benefit/profit, which is not opposed to the social or moral/ethical
principles which they have to apply in the company

However, there are many cases of misbehavior and some illegal operations of some companies

Increasing competition makes business more difficult than before in the globalized
world

The good news and our expectations are that competition will not have any longer
bad influence on company behavior

According to international norms and expectations, companies have to take into

account social, ethical and environmental issues more than during the last two
decades

One of the reasons is more competition not always more profit, another reason is
consumer expectation is not only related to the cost of the products but also related
to quality, proper production process and environmental sensitivity

Moreover shareholders are more interested in long term benefit and profit from the
company instead of only short term profit

Managers have to make strategic plans for the company concerning all stakeholder
expectations which are sustainable and provide long term benefit for the companies
with their investments

The challenge of CSR in a globalizing world is to engage in a process of political

deliberation which aims at setting and resetting the standards of global business
behavior

Enron, Satyam, Union Carbide and various other corporate failures bring out some
governance and CSR issues and have increased attention to the role of business
ethics

Managers and CEOs of these companies must be considered responsible for all of
these failures and these are cases of corporate irresponsibility

Big scandals affects market and the economy

Managers tend to become much more ambitious than before in their behavior and
status in the globalized world

However, to be socially responsible one must be more than simply law abiding who
has to be capable of acting and being held accountable for decisions and actions

CSR protects firms against some long term loss

No certain answer which depends on from where you are looking

Globalization has different effects on the social responsibility of the company and the
behavior of managers

Some of these are supporting companies/managers for motivating towards socially

responsible behavior, while others of them are destroying fair business and all principles,
norms and regulations which are the result of increasing competition

Globalization has created bigger companies in terms of turnover, market capitalization and
amount of assets

This causes imperfect competition with other small and medium size companies which is a
major threat for them

But it might also provide to companies great opportunities for reaching people and customers
and for collaboration with other companies from all over the world

Globalization is an inevitable phenomenon for which we have no alternative yet

Well regulated and controlled markets are not a big problem and threat, but lack of regulation
and norms is the main problem in developing country which globalization has a big influence
in these economies

The not for profit(NFP) sector is one which is growing in importance all over the world

In EU it is estimated that the sector comprises around 40% of GDP

In India it is estimated that between around 2 mn such organizations exist

Some are very large such as governmental institutions and the large charities (WWF) but
many are very small

There is a growing movement within the non profit and non government sector to
define itself in a more constructive, accurate way

Instead of being defined by non words, organizations are suggesting new terminology
to describe the sector

The term civil society organization (CSO) has been used by a growing number of
organizations, such as the Center for the Study of Global Governance

The term citizen sector organization has also been advocated as one of citizens, for
citizens

A not for profit organization is one whose objective is to support or engage in

activities of public or private interest without any commercial or monetary profit

In many countries some will be charities but there will also be many which are not

A non-governmental organization (NGO) is a legally constituted organization

operates without any participation or representation of any government

In the cases in which NGOs are funded totally or partially by governments, the
NGO maintains its non-government status insofar as it excludes government
representatives from membership in the organization

Public bodies: related to govt. in some way and include such things as a local
authority and a health authority

These all have function of providing services to members of society and receive
their funding and powers directly from the national government

Quasi public body: often known as Quangos (quasi autonomous nongovernmental organizations) and serve a public or civic purpose without having
any direct relationship with the government (ex. housing associations).

These too often get some funding directly from the government

Educational institutions: schools, colleges, and universities

May be publicly owned or privately owned and the norms differs between
countries

Charity: a charity exists to fulfill a particular function which involves providing a

service

Development and implementation of strategy is important for every organization

Role of a business manager

Crucial part is meeting the objectives of the organization

Nature of a mangers job may vary from one organization to another but there is
considerable similarity in terms of the fundamental tasks to be performed

The tasks can be categorized as:

External information

Planning

Organization

Feedback

Results

Direction

Control

Profit maximization

Maximizing cash flow

Maximizing return on capital invested

Maximizing service provision (for NFP sectors)

Maximizing shareholder value

Growth

Long term stability

Satisficing way of reducing risk and taking multiple objectives into account
by making decisions which are acceptable from several viewpoints

Concept of Leadership
List of qualities which a good leader should have:

Integrity

Judgement

Energy

Humor

Fairness

Initiative

Foresight

Dedication

Objectivity

Decisiveness

Ambition

Set of attributes that a good leader should not have:

Stubbornness

Vainness

Self centeredness

Ruthlessness

Unfairness

Prejudice

Leadership is concerned with how a person influences another to carry

out various tasks and so it is more concerned with communication and
motivation

Concerned not just with tasks but also with relationship between the
leader and others involved in the tasks

Based on this notion of relationship, Hersey & Blanchard developed

leadership models as below
Leadership styles

Relationships

Involving

Selling

Delegating

Telling

Task

Good leadership depends upon the interaction between the leader and the led, but it depends upon more than this.

It also depends upon the situation

Based on this, leadership can be classified into 3 distinct types namely:

1.

Authoritarian

2.

Laissez-faire

3.

Democratic

We can relate these back to the styles identified by Hersey & Blanchard by comparing the authoritarian style to
the telling style, the laissez-faire to the delegating and the democratic to the selling and involving styles

But we cannot state that any style is necessarily better than any other

This depends upon both the people involved and the situation in which the organization finds itself

Thus we can state that there are 3 variables involved in the determination of good leadership.

1.

The personality of the leader

2.

The personality of the follower

3.

The situation at the time

Different styles of leadership will work better in different cultures

Organizational cultures can be classified into 3 types:

Coercive: where the structure is hierarchical and conformity depends upon the
imposition of sanctions for failure to conform. The ultimate example of this kind is the
military

Utilitarian: where the structure is focused around the completion of the tasks which
need to be undertaken. An organization structured into departments such as accounting,
production and marketing is an example

Normative: where the culture of the organization is focused upon a shared vision which
all members of the organization buy into. For this type of culture the structure is largely
irrelevant as it is the vision which prevails. Many of the new dot com companies have
this type of culture

A different type of classification was provided by Handy, who classified

organizations into 4 types:

Hierarchical where the organization and the people within it are organized into
lines of responsibility reaching upwards and downwards in the organization

Functional where the organization is organized according to the functions to be

performed (similar to utilitarian structure identified by Etzioni)

Matrix where the organization has a mix of hierarchy and functionality to meet
the needs of particular tasks. Thus a person may have two sets of responsibilities
a functional one depending upon his/her area of specialism (accounting or IT) and
a task one the implementation of a new project which requires a multidisciplinary team

Individual where people work largely on their own and only joint together into
an organization for administrative convenience. Example, doctors in a health
centre of barristers in a practice

1.
2.
3.
4.

Another type of classification was provided by Miles & Snow

based upon their approach to change and development.

Defender
Prospector
Analyzer
Reactor

Theories of Motivation

The Expectancy Theory of motivation, developed by Vroom and Lawler, suggests that people
are motivated by an internal calculation which they do

In this calculation a person works out how difficult a task is to do and how much the rewards
for successful completion of the task are worth

The interaction determines the level of motivation

A different motivation theory was developed by Herzberg and is known as Two Factor theory

For Herzberg there are two types of factor (hence the name) which have different effects upon
a person as far as motivation is concerned

The 2 factors and their effects are:

1.

Hygiene factors these do not motivate people if they are present but do demotivate people if they are
absent.Money, above a certain minimal level is a hygiene factor and does not motivate people

2.

Motivators these motivate people if they are present but do not demotivate if they are absent. Motivators are
concerned with job enrichment, recognition and praise etc

Power is the capacity to affect organizational outcomes Mintzberg

Power is that which enables A to modify the attitudes or behavior of B Handy

Sources of Power

Legitimate power: a leader has legitimate power if people believe that this leader has the right to give
orders which they have an obligation to obey. In most organizations this legitimate power derived from
a persons status and position in the organization

Reward power: if a person is able to give or withhold rewards from another

Coercive power: this power exists if the subordinates believe that the leader has the ability to impose
penalties which are undesirable. The ability to bestow rewards and coercive power are opposite sides of
the same coin

Referent power: this exists depending upon the personality and charisma of the leader, if people
believe that the leader has characteristics which are desirable and which command respect

Expert power: if a leader has superior knowledge or expertise which is relevant to the task in hand

Information power: similar to expert power but arises not because of particular skills but rather
because of access to a particular knowledge base

Contingent power: this exists because of the demands of a particular situation. It is very often visible
in an emergency where someone will assume a leadership role because of the needs of the situation