LINKAGES AND LINKAGES AND POSSIBILITIESPOSSIBILITIES

Definitions and Relationships

Corporate social responsibility (CSR) is the process by which businesses negotiate their role in society

In the business world, ethics is the study of morally appropriate behaviors and decisions, examining what "should be done”

Although the two are linked in most firms, CSR activities are no guarantee of ethical behavior

Recent Evidence of CSR Interest

An Internet search turns up 15,000 plus response to “corporate citizenship”Journals increasingly “rate” businesses (and NGOs) on socially responsive criteria:

Best place to workMost admiredBest (and worst) corporate reputation

Reasons for CSR Activities

CSR activities are important to and even expected by the public

And they are easily monitored worldwide

CSR activities help organizations hire and retain the people they want

CSR activities contribute to business performance

Maximize firm’s profits to the exclusion of all else

Balance profits and social objectives

Do what it takes to make a profit; skirt the law; fly below social radar

Fight social responsibility initiatives

Comply; do what is legally required

Integrate social objectives and business goals

Lead the industry and other businesses with best practices

Do more than required; e.g. engage in philanthropic giving

Articulate social value objectives

Corporate Social Responsibility

CSR are Grounded by Opposing Objectives :-

Do what it takes to make a profit; skirt the law; fly below social radar

Fight CSR initiatives

Comply with legal requirements

Do more than legally required, e.g., philanthropy

Articulate social (CSR) objectives

Integrate social objectives and business goals

Lead the industry on social objectives

Businesses CSR ActivitiesPhilanthropy

give money or time or in kind to charity

Integrative philanthropy—select beneficiaries aligned with company interests

Philanthropy will not enhance corporate reputation if a company

fails to live up to its philanthropic image or

if consumers perceive philanthropy to be manipulative

Integrate CSR GloballyIncorporate values to make it part of an articulated belief systemAct worldwide on those values

Cause-related marketingCause-based cross sector partnerships

Engage with stakeholdersPrimary stakeholdersSecondary stakeholders

Business Ethics Development The cultural context influences organizational ethics

Top managers also influence ethics

The combined influence of culture and top management influence organizational ethics and ethical behaviors

Emergence of a Global Business Ethic Growing sense that responsibility for righting social wrongs belongs to all organizations Growing business need for integrative mechanisms such as ethics

Ethics reduce operating uncertaintiesVoluntary guidelines avoid government impositions

Ethical conduct is needed in an increasingly interdependent world—everyone in the same gameCompanies wish to avoid problems and/or be good public citizens

Four Challenges to a Global Ethic

Global rules emerge from negotiations and will reflect values of the strong

Global rules may be viewed as an end rather than a beginning

Rules can depress innovation and creativity

Rules are static but globalization is dynamic

SPECTRUM OF CSRSPECTRUM OF CSR

Good CSRPoor CSR•No employment

•No concern for indirect effect (land, water, air)

•Destruction of agricultural land

•Not willing to listen to other stakeholders

•Appropriate of land not being compensated

•Non compliance of rule of land

•Taking care of workers

•Low dependence on non renewable resources

•High awareness about CSR initiatives

•Land compensation

•Increased monitoring system

•Environment responsibility

Main Concepts of CSR

Social Contract (Donaldson, 1982; Donaldson and Dunfee, 1999) – There is a tacit social contract between the firm and society; the contract bestows certain rights in exchange for certain responsibilities.

Stakeholder Theory (Freeman, 1984) – A stakeholder is “any group or individual who can affect or is affected by the achievement of an organisation’s purpose.” Argues that it is in the company’s strategic interest to respect the interests of all its stakeholders.

CSR (Carrol, 1979)

Firms have responsibilities to societies including economic, legal, ethical and discretionary (or philanthropic).

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Key Issues in CSRLabour rights:

child labour forced labour right to organise safety and health

Environmental conditionswater & air emissionsclimate change

Human rightscooperation with paramilitary forcescomplicity in extra-judicial killings

Poverty Alleviationjob creationpublic revenuesskills and technology

Key drivers of CSR

Around the world

• NGO Activism

• Responsible investment

• Litigation

• Gov & IGO initiatives

Developing Countries

• Foreign customers

• Domestic consumers

• FDI

• Government & IGO

Key Drivers: NGO Activism

Facilitators: IT (esp Internet), media, low cost travel

Boycotts, brand damage, influence legislation, domino effect

e.g. Shell in Nigeria, Exxon in Cameroon, Sinopec in Sudan, Apparel Industry (Nike, Gap), GMO, Wood Products, etc.

United Nations Initiatives

UN Global Compact

UN Principles for Responsible Investment

UNEP Equator Principles

ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration)

UNHCHR Business and Human Rights

UNODC Anti-corruption

UNCTAD Corporate Responsibility Reporting, World Investment Report

Implications for Enterprises

The Extended FirmRegional Plants / JV Partners

Suppliers / Distributors

New social and product liability patterns

Development of Codes of Conduct and CSR reporting

Expanding sphere of influenceApplication of Code of Conduct to value chain

CSR management: value chain management = compliance management

CSR Drivers

Transnational Corporations

Implications for Enterprises: CSR Management

How do companies address socio-environmental & legal compliance issues?

• Policies - Code of Conduct

• Systems - Compliance Management

• Reporting - Accounting and Reporting

CSR Management:Plan, Do, Check, Act methodPlan, Do, Check, Act method

Plan

• Consult stakeholders

• Establish code of conduct

• Set targets

Do

• Establish management systems and personnel

• Promote code compliance

Check

• Measure progress

• Audit

• Report

Act

• Corrective action

• Reform of systems

Implications for Development: CSR management

CSR performance among 100 emerging market enterprises

Source: UNCTAD, 2008

Environment overall

0%

20%

40%

60%

80%

100%

Policy Systems Reporting

Advanced Good Intermediate Limited No evidence

Implications for Development: CSR management

CSR performance among 100 emerging market enterprises

Source: UNCTAD, 2008

Human Rights overall

0%

20%

40%

60%

80%

100%

Policy Systems Reporting

intermediate limited no evidence

What is Social Entrepreneurship?

Social Entrepreneurship is the use of business practices such as business planning, project management, marketing and sales, for advancing social causes

To be Successful A To be Successful A Community Community VentureVenture Needs: Needs:

A clearly stated purposeA governing structure, knowledgeable advisorsA solid Business PlanGood Project PlanningA target audienceA source of money &/ resources to run and expand the organizationGood Communications, marketing and sales planSolid LeadershipA good working relationship with other community organizations

Implications for Development

CSR ‘cascade effect’ on members of the global value chain

labour conditions (e.g. OSH, right to organise, wages)environmental controlstransfer of new management techniques

Compensation for weak legal environment in LDCs

Impact on economic development & national competitiveness???

REFERENCES:-

SAINATH views upon CSR

Views from C.K. PRAHLAD

Views from TIM INKPEN

Views from-DR. ANTHONY MILLERUnited nations conference on trade and development

THANK YOU…THANK YOU…PRESENTED BY:-PRESENTED BY:-

SUMIT MUKHERJEEROLL NO. - 2011126