Corporate Social Responsibility

Prof. Ritesh Lal

Social Responsibility- Some Definitions…
 Corporate Social Responsibility (CSR), also known as
Corporate Responsibility, Corporate citizenship,
Responsible Business, Sustainable Responsible Business
(SRB), or corporate social performance, is a form of
corporate self-regulation integrated into a business model.
 “….operating in a manner that meets or exceeds the ethical,
legal, commercial and public expectations that society has of
business….”Business for social responsibility.

 Essentially, CSR is the deliberate inclusion of public interest into

corporate decision-making, and the honoring of a triple bottom
line: People, Planet,and Profit.
Carroll’s Four Part Definition

 CSR encompasses the Economic, Legal,

Ethical and Discretionary (Philanthropic)
expectations that society has of
organizations at a given point of time
Understanding the Four Components
Responsibility Societal Examples
Expectation

Economic Required Be profitable. Maximize sales,

minimize costs, etc.
Legal Required Obey laws and regulations.

Ethical Expected Do what is right, fair and just.

Discretionary Expected Be a good corporate citizen.

(Philanthropic)
Pyramid of CSR

Philanthropic Responsibilities
Be a good corporate citizen.

Ethical Responsibilities
Be ethical.

Legal Responsibilities
Obey the law.

Economic Responsibilities
Be profitable.
Economic Responsibilities...

 how resources for the production of

goods and services are distributed
within the social system
 Efficient operation to satisfy
economic needs of the society and
generation of surplus for rewarding
the investors and further
development.
Legal Responsibilities...

 Refers to obeying governmental laws

and regulations
 civil law: Rights & Duties of
individuals and organizations
 criminal law: prohibits specific actions
and imposes fines and/or
imprisonment as punishment for
breaking the law
Ethical Responsibilities...
 behaviors and activities that are expected or
prohibited by organizational members, the
community, and society (not codified into
law)
 standards, norms, or expectations that
reflect the concern of major stakeholders
 For Example- a company should not resort
to bribing, adulteration, unfair competitive
practices etc.
Philanthropic Responsibilities...

 Voluntary contributions of business to

the society like involvement in
community development or other
social programmes
CSR towards different sections
 Responsibility to Shareholders
 Responsibility to Employees
 Responsibility to Consumers
 Responsibility to Community
 Responsibility to Government
 Corporate Social
Responsibility: Initiatives
and Examples
Facts of India in CSR
 India has consistently ranked among the top
three along with Singapore and Hong Kong in a
survey carried out by the Asian Governance
Association
 In another study undertaken by automotive
research company, TNS Automotive, India has
been ranked second in global Corporate Social
Responsibility. Bharat Petroleum and Maruti
Udyog were ranked as the best companies in
India
Contd…
Contd…
 A recent KPMG study among 27 Indian
companies showed that a mere 8% mentioned
their social expenditures in their annual reports,
and only 25% filed CSR reports at all
 According to Times, the Indian corporate
sector spent Rs30,000 crore on social
expenditure during the last year
 Steel Authority of India Ltd (SAIL), the
country's largest steel company, spent Rs100
crore on CSR last year; this was 2% of its Profit
After Tax (PAT)
Contd…
Contd…
 Tata Steel Ltd spends an average of Rs150
crore as part of its annual revenue
expenditure.
 Pharmaceuticals company Jubilant Organosys
Ltd, already runs an Anti-tuberculosis
programme with the government of Uttar
Pradesh
ITC Limited
 ITC partnered the Indian farmer for close to a century
 Leveraging Information-Technology through its
trailblazing 'e-Choupal' initiative
 Creating livelihoods by helping poor tribal make their
wastelands productive
 investing in rainwater harvesting to bring much-needed
irrigation to parched dry lands
 empowering rural women by helping them evolve into
entrepreneurs
 providing infrastructural support to make schools
exciting for village children.
 There are 6,500 e-Choupals today. ITC Limited plans to
scale up to 20,000 e-Choupals by 2012 covering
100,000 villages in 15 states, servicing 15 million
farmers
Mahindra & Mahindra
 The K. C. Mahindra Education Trust was
established in 1953 by late Mr. K. C. Mahindra with an
objective to promote education
 Its vision is to transform the lives of people in India
through education, financial assistance and
recognition to them, across age groups and across
income strata
 The Trust has provided more than Rs. 7.5 Crore in the
form of grants, scholarships and loans. It promotes
education mainly by the way of scholarships.
 The Nanhi Kali project has over 3,300 children under
it. It aims to increase the number of Nanhi Kalis
(children) to 10,000 in the next 2 years, by reaching
out to the underprivileged children especially in rural
areas
Aptech Limited
 Aptech Limited, a leading education player with a global
presence, has played an extensive and sustained role in
encouraging and fostering education throughout the country
since inception.
 It has, in association with leading NGOs, provided
computers at schools, education to the underprivileged and
conducted training and awareness-camps.
 Aptech students donate part of the proceeds from the sale
of their art work to NGOs
 Aptech fosters tie-ups with leading NGOs throughout the
country, including the Barrackpur-based NGO, Udayan, a
residential school for children of leprosy patients in
Barrackpur, established in 1970.
 The company strongly believes that education is an integral
part of the country’s social fabric and works towards
supporting basic education and basic computer literacy
amongst the underprivileged children in India
 Avon Cycle Limited
 The poor and ignorant of India’s rural population turn to
nearest towns and cities for healthcare. They face
indifference and exploitation.
 This gave inspiration to AVON for locating
MATAKAUSHALYA DEVI PAHWA CHARITABLE
HOSPITAL.
 Mr. Sohan Lal Pahwa, Avon's Chairman and Principal
Trustee of the hospital, spent a good part of his working
life devoted to philanthropy.
 Reaching out to the needy farther a field, the hospital
holds regular camps in surrounding villages to propagate
scientific approach to healthcare.
 Recently the hospital took the social responsibility concept
a step further and formulated a scheme titled 'Celebrating
Female Child' to enable and inspire positive and enduring
environment for society's all–consuming passion for 'sons
only' to end.
Satyam Computer Services Limited
 Alambana (support) is the corporate social
responsibility arm of Satyam Computer Services Limited,
formed to support and strengthen the vulnerable and
underprivileged sections in urban India.
 Registered as Satyam Alambana Trust in 2000,
Alambana aims at transforming the quality of life among
urban population.
 Alambana's services are directed primarily at the
disadvantaged sections in all the cities that Satyam has
offices in.
 Volunteers from Satyam associates and their family
members lead the services and perform the required
tasks.
Tata Consultancy Services
 The Adult Literacy Program (ALP) was conceived
and set up by Dr. F C Kohli along with Prof. P N Murthy
and Prof. Kesav Nori of Tata Consultancy Services in
May 2000 to address the problem of illiteracy.
 ALP believes illiteracy is a major social concern affecting
one-third of the Indian population comprising old and
young adults.
 To accelerate the rate of learning, it uses a TCS-
designed Computer–Based Functional Literacy Method
(CBFL), an innovative teaching strategy that uses
multimedia software to teach adults to read within 40
learning hours.
 Principles of CSR
Corporate Social Responsibility strives to conduct all business
dealings in an ethical manner, make a concerned effort to balance the
needs of all stake holders,while working to protect the environment.

1) Engages in fair and honest business practices in its relationship with

stakeholders.
2) Sets high standards of behavior for all employees.
3) Exercises ethical oversight of the executive and board levels.
4) Strives to manage the company for the benefit of all stakeholders.
5) Initiates and engages in genuine dialogue with stakeholders.
6) Values and implements dialogue.
7) Fosters a reciprocal relationship between the corporation and community.
8) Invests in the communities in which corporation operates.
9) Respects the rights of consumers.
 Principles of CSR
10) Offers quality products and services.
11) Provides information that is truthful and useful.
12) Provides a family-friendly work environment.
13) Engages in responsible human-resource management.
14) Provides an equitable reward and wage system for employees.
15) Engages in open and flexible communication with employees.
16) Invests in employee development.
17) Strives for a competitive return on investment.
18) Engages in fair trading practices with suppliers.
19) Demonstrates a commitment to the environment.
20) Demonstrates a commitment to sustainable development.
Arguments for corporate Social responsibility

 Balances corporate power with responsibility.

 Discourages government regulation.
 Promotes long-term profits for business.
 Responds to changing stakeholders’ demands.
 Corrects social problems caused by business.
Arguments against Corporate Social Responsibility

 It is the duty of Government and Social

organisation to carry out social activities
 Lowers economic efficiency and profit.
 Imposes unequal costs among competitors.
 Sometimes imposes costs of the social
responsibility on consumers and stakeholders.
 Many companies getting involved because of the
Tax exemption
 It could lead to an increase in the dominance or
influence of business over the society.
 A business may lack required social skills.
 Places responsibility on business rather than
individuals.
Social Audit

 A social Audit enables the public as well as the

company to evaluate the social performance of the
company.
 The “ social audit – much like the financial audit – is
an identification and examination of the activities of
the firm in order to assess, evaluate measure and
report their impact on the immediate social
environment.”
 Social Audit is the process of communicating the
social and environmental effects of organisations'
economic actions to particular interest groups
within society and to society at large.
Key Principles of Social Auditing

 Multi Perspective/Polyvocal
 Comprehensive
 Participatory
 Multidirectional
 Regular
 Comparative
 Verification
 Disclosure
Methods of Social Audit
 Social Process Audit
 Financial Statement Format Audit
 Macro-Micro Social Indicator Audit
 Constituency Group Audit
 Partial Social Audit
 Comprehensive Audit
 Corporate Rating Approach
Thank You