everybody has some responsibilities

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INTRODUCTION

Everybody has some responsibilities. And responsibilities are realized by a person whenhe get maturity. So like a persons personal responsibility business also has responsibilityand it is not a very new concept but it comes when business get maturity. So lets know

what is corporate social Responsibility? And when it comes.

CSR as the name suggests is a term which shows the responsibility taken by an

organization towards the society.

Business depends upon society directly or indirectly because the business needed inputs

like men, money and skills and the society is the market on which business depends tosale, product to their buyers. Thats why so much depends upon society business has

definite responsibility towards the society which is popular as corporate social

responsibility.

Corporate plays vital role in shaping the quality of life of the society as a whole in

todays globalized economy. According to Nobel Laureate Amartya Sen, Market forcesalone are not sufficient for equitable distribution, and some sort of intervention is

required, be it political or from business houses, towards society.

It covers various issues, like human rights, working conditions, equality and diversity ,consumer protection, environment and health impacts, economic development, ethical

business practices and lobbying and political influence.

It is not a new concept to our country. In olden days, the merchants committedthemselves to society for religious reasons sharing their wealth in building temples. The

business community ( vaishyas ) occupied a special place in ancient Indian society. Theyalso provided relief in times of famine and other calamities.

The pioneers of industrialization in those times were

families like Tata, Birla, Bajaj, Godrej, Mahindra etc all who were strongly in favor of

philanthropy. But their interests were not necessarily motivated by religious sentiments.The underlying pattern of charity included sporadic donations ( to schools and hospitals )

without any long-term engagements.

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DEFINITON OF CSR

There is no national or international governing body which control or regulates the CSRactivities carried but in different org. and as such there is also no globally accepted

definition of CSR.But different organization & people have framed different definitions:

The world Business Council for Sustainable Development in its publication Making

Good Business Sense by Lord Holme and Richard Watts used the following definition.

Corporate Social Responsibility is the continuing commitment by business to be have

ethically and contribute to economic development while improving the quality of life ofthe workforce and their families as well as of the local community and society at large.

According to World Bank Group Corporate Social Responsibility Practice, Corporatesocial responsibility is the commitment of business to contribute to sustainable economic

development by working with employees, their families, the local community and society

at large to improve their lives in ways that are good for business and for development.

According to Howard R. Bowen, Social responsibility of business refers to the

obligation of business to pursue those policies to make those decisions or to follow thoselines of action which are desirable in terms of the objectives and values of the society.

According to Koontz and ODonnel, social responsibility is the personel obligation of

every one as he acts for his own interests to assure that the rights and legitimate interestsof all others are not impinged.

According to K.R.Andrews, Conceptually social responsibility may be taken to mean

intelligent and objective concern for the welfare of the society.

According to International Finance Corporation, Corporate social responsibility is thecommitment of businesses to contribute to sustainable economic development by

working with employees, their families, the local community and society at large to

improve their lives in ways that are good for business and for development.

As per European Commission, CSR is a concept whereby companies integrate social

and environmental concerns in their business operations and in their interaction with their

stakeholders on a voluntary basis.

Simply put, CSR is corporates responsibility to the social context, which is outside

immediate stakeholders. While some stakeholders will be involved in implementing anysuch social cause,the benefits of such initiatives spread across the society at large. From

the PR perspective, CSR is a tool for building corporate reputation by taking initiatives

that helps in developing and sustaining the image of socially responsible corporation

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Reason behind CSR

If CSR does not brings any profit to an organization then the question arises why

companies are getting associated with it?

The reasons or drive behind social responsibility towards human and environmentalresponsibility is still questionable whether based on genuine interest or have underlining

ulterior motives could be:

1. Capital Reputation-Corporate social responsibility is basically a new businessstrategy to reduce investment risks and maximize profits by taking all the key

stake-holders into confidence. The proponents of this perspective often include

corporate social responsibility in their advertising and social marketing initiatives.

2. No one knows how many AIDS patients are there in India other countries but it is

possible that everyone has heard about Bill & Melinda Gates Foundations

supporting the cause of AIDS Because CSR stories are easier to be picked up in

the media if the social cause supported is the one needing immediate attention.

3. While corporates are doing their level best talent, CSR is turning out to be an

opportunity to retain the talented staff as people look forward to make difference

in the lives of people around them and are willing to support the cause theiremployer backs up

4 CSR gets featured in corporate annual reports, marketing document and HR

presentation , as well as advertising, thus creating a higher overall impact.

5. Another important reason why CSR matters is that financial success is no longer

an indicator of long-term survival. Companies are subjected to increasing regulation

and forced transparency and scrutiny, which might make them out of the business,

should the business neglect social concerns. Thus, corporate reputation is at stake androle of CSR becomes all the more important and critical.

Why Be Socially Responsible?

Corporations and leaders must ask the Why questions here:

Why be concerned about being socially responsible?

Why care about being a corporation that is socially responsible- does it really

matter?The answer, simple, is yes- being socially responsible can make a difference and has

multiple benefits, including creating a positive corporate reputation, building a positive

corporate image, increasing profit margins, enhanced corporate efficiency while reducingoperating cost and creating a competitive edge.

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The first benefit is reputation building; from a practical perspective, being socially

responsible is good business as in when a corporation makes the stand to be a corporationthat is corporation that is corporately socially responsible they set themselves apart and

begin to build a reputation attracts good employees, as well as increases corporate

commitment, employee motivation , and overall productivity-all good side benefits.Further, a reputation for being socially responsible attracts attention from the

government, national leaders, and community leaders-and who may seek ways to help acorporation continue their service and reward them for such service.

A second benefit of being socially responsible is the increased involvement in the

community which also increases the positiveness with which ones corporation is seen

and breeds good relationships with others as well as the potential for broader impact.Connected with reputation, a positive corporate image builds customer trust and attracts

new customers trust and attracts new customers for the business all of which build the

bottom line for the corporation.

The third benefit is about profit. According to the CSR Network, being a socially

responsible corporation builds higher profit margins, in fact corporations which reporthaving a socially responsible agenda just do better financially, reporting higher sales and

revenues. In an era where profit margins are stretched thin throughout all industries, this

unique idea of serving others ends up serving the corporation at the same time.

A fourth, and interesting benefit, is reduced operating cost in conjunction with higher

operational efficiency. According to the csrnetwork, this benefit goes against the grain of

common thought as one might tend to think of being socially conscious might be anexpensive endeavor, when in actually it creates operational efficiency improving

operational effectiveness. For example, corporations are increasingly turning their

attention to their supply chains to ensure they are sourcing products and services

responsibly to make sure their supplier are providing fair conditions for workers,protecting the environment and generally aiming to achieve an appropriate level of

corporate behavior. This in turn, has led to innovative procedures and processes andalternative options which can lead to efficiency.

A fifth benefit is creating a competitive edge in the marketplace. There are multiple

benefits to operating from a socially responsible aware position, least of which ought tobe the very fact that corporations that are socially responsible are those corporations that

are concerned about the world in which they live and operate in, the bottom line-a good

agenda. In marketing, a corporations image is a highly competitive tool to gain newcustomers. Good publicity, connected with the social initiatives of the corporation ,

opens the channels of marketing to a broader audience.

In many cases, todays consumers are looking to do business with corporations who care

about their local, national, and global responsibility to do good business and give

back in a positive way. These lead to new competitive advantages that corporations can

use to leverage their own position.

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Measuring Corporate Social Responsibility

The csr network and accountability evaluates and ranks global corporations on six

issues : public disclosure, governance management, assurance and stakeholder

engagement. Together, they form a total social accountability rating on the top 50 largestcorporations in the world based on the Fortune Global 500. Here is how the measurement

breaks down according to the, Accountability Rating Report published on Oct 23,2006:

1. Stakeholder Engagement

Engaging in dialogues with people who have an interest in, may be affected

by, or may affect its business.

2. Governance

Executives and the advisory board properly consider stakeholder issues when

setting strategy and formulating.

3. Strategy

Core business strategy integrates social and environmental targets with financialones.

4. Performance Management

Management processes, business standards, incentives and targets seek to achieve

social and environmental goals.

5. Public Disclosure

Provide a detailed report of social and environmental performance.

6. Assurance

Secures appropriate independent assurance.

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Table : Measures of Corporate Social ResponsibilityLevel Measures Indicators Recognition/reward Example

Corporate Corporatecommitment

Visionstatement

ITC, Infosys,Godrej etc.

Corporate Actualimplementation

Allocation offund

Birlas, Bajajetc.

Corporate Executionability

Specific,need-based

plans

Teri

Operational Commitment toexecutive

corporate

Vision

Fixing ofsuitable NGO

or in house

system

Operational Accountability Feedback

systems

Quarterly review of

progress andawarding certificates

of merit etc.,

Infosys, ABB

NGO Expertise-level Objectives,

previous

projects etc.,

Christle

House

Learning

Centre

Employee

Involvement

Initiative Participation

in specificvoluntary

activities

Limited time off,

Certificate of Meritetc.,

Philips,

Bosch,McDonalds,

Pizza Hut,etc.,

Community

Perception

Program

efficacy

Satisfaction

survey ( pre

and post

program )

Companys Senior

Management team is

publicly felicitated.

Employees are givenconcessions where

possible.

GIVE-TEJ

Hotels

partnership

Community

Perception

Overall impact

on social life of

people in thecommunity

Annual or Bi

annual Social

Audit

NGOs and other

agencies involved

are felicitated andpublicly honored

Citi Group

International

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Co

Components of Corporate Social Responsibility

Even after independence, companies such as TISCO and other public sector enterprises

voluntarily contribution to community development. However, mere contribution tocommunity building doesnt make a company socially responsible. A company should

take a balanced view of the components of CSR and implement the strategies in line with

the vision, mission and values of the company. While companies in North America andEurope are pressured by stakeholders to adopt CSR practices, the Indian companies so

far have not faced any such pressures. Also, while companies in developed countries

report their activities adhering to the Global Reporting Initiatives ( fig-2); in India,companies are still not legally bound to formally report CSR activities.

According to a study,

Only 12.4% of Indian companies pursue strategic philanthropy as compared

to 48% of the Multinational Corporations (MNCs).

Charity is pursued by 35%of Indian companies as against 62% of MNCs.

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Both Indian and multinational corporations give money primarily to supporteducation services, environment, health services, and uplifting living

conditions. Support for art and culture, employee volunteering, event

sponsorship, and matching grants (8.0%) are some of the important activities

of the MNCs but not Indian companies.

Other forms of corporate philanthropy include diversity management,

generating alternatives resources and support for agriculture.

It found that the group companies, transport companies and banks practiced philanthropy

in all forms. Entertainment and R&D companies were not involved in any philanthropic

activities. Healthcare, consultancy, software and pharmaceutical companies followed a

more strategic approach to their social activities.

CSR in a Global Context

Although the debate about CSR is often framed in a global context, there is very littleempirical research on the nature and extent of CSR in the developing countries. One

notable exception is a survey by Jeremy Baskin which analyzed reported CSR behavior

of 127 leading companies from 21 emerging markets across Asia, Africa, Latin Americaand central and Eastern Europe. This compares with over 1700 leading companies in high

income Organization for Economic Co-operation and development countries.

Asia is the most covered region in the writing on CSR in developing countries. A2005

survey of CSR reporting in Asia find nearly three quarters of large companies in India

present themselves as having CSR policies and practices verses only a quarter in

Indonesia.The evolution of CSR in Asia tends to occur in 3 waves, with community involvement

being the most established form of CSR, followed by successive second and third waves

of socially responsible production process and employee relations.

A CSR Pyramid for Developing Countries

The most popular model Archie Carrolls CSR Pyramid, comprising economic, legal ,ethical and philanthropic responsibilities almost entirely based on research in anAmerican context. But the order of the CSR layers in developing countries, if they are

taken as an indicator of relative emphasis assigned to various responsibilities, differ from

Carrolls classic pyramid. The CSR Pyramid for Developing Countries is explainedbelow :-

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Economic Responsibilities

Many developing countries suffer from a shortage of FDI, as well as from high

unemployment and widespread poverty. Thats why the economic contribution of

companies in developing countries is highly prized, by governments and communitiesalike. This should not be seen in a negative light, but rather as a more development-

oriented approach to CSR that focuses on the enabling environment for responsiblebusiness in developing countries and that brings economic and equity aspects ofsustainable development to the forefront of the agenda.

In developing countries, CSR tends to stress the importance of economic multipliers,

including the capacity to generate investment and income, produce safe products andservices, create jobs, invest in human capital, establish local business linkages, spread

international business standards, support technology transfer and build physical and

institutional infrastructure. For this reason, companies that operate in developingcountries increasingly report on their economic responsibilities by constructing

economic value added statements.

Philanthropic Responsibilities

Philanthropic responsibility in Europe tends to be rather more compulsory via the legalframework than discretionary acts of successful companies or rich capitalists like in the

US. In this respect, developing countries have more in common with the American

model, although philanthropy generally gets an even higher priority as a manifestation ofCSR.

Partly, this is a result of strong indigenous traditions of philanthropy in developing

countries, as previously discussed. However, there are several other reasons as well. Inthe first instance, the socioeconomic needs of the developing countries in which

companies operate are so great that philanthropy is an expected norm-it is considered theright thing to do by business.

Second, companies realizes that they cannot succeed in societies that fail, and

philanthropy is seen as the most direct way to improve the prospects of the communitiesin which their businesses operate.

Third, over the past 50 years, many developing countries have become reliant on foreignaid or donor assistance. Hence, there is often an ingrained culture of philanthropy.

And a final reason for developing countries prioritization of philanthropy is that they aregenerally still at an early stage of maturity in CSR, sometimes even equating CSR and

philanthropy, rather than embracing the more embedded approaches now common in

developed countries.

Legal Responsibilities

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In developing countries, legal responsibilities generally have a lower priority than indeveloped countries. This does not necessarily mean that companies flaunt the law, but it

is far less of a pressure for good conduct. This is because in many developing countries,

the legal infrastructure is poorly developed, and often lacks independence, resource andadministrative efficiency.

Many developing countries are also behind the developed world in terms of incorporatinghuman rights and other issues relevant to CSR into their legislation. Admittedly, there are

exceptions and some developing countries have seen significant progress in strengthening

the social and environmental aspects of their legislation. However, government capacity

for enforcement remains a serious limitation, and reduces the effectiveness of legislationas a driver for CSR. Hence, tax avoidance by companies is one of the most significant

examples of irresponsible business behavior in developing countries, often contradicting

their CSR claims of good conduct.

Ethical Responsibilities

The 1992 King report was the first global corporate governance code to talk about

stakeholders and to stress the importance of business accountability beyond the

interests of shareholders. Similarly, the 2002 revised King Report was the first to include

a section on integrated sustainability reporting, covering social, health andenvironmental management policies and practices.

This progress is certainly encouraging, but in general, it is still the exception rather thanthe rule. For instance, in Transparency Inter nationals annual Corruption Barometer,

developing countries usually make up the bulk of the most poorly ranked countries.

Further more, survey respondents from these countries generally agree that corruption

still affects business to a large extent. The World Banks Investment Climate Surveypaints a similar picture.

CSR in India

In the new millennium, there is an increased interest in CSR among corporate andmanagement institutes in India. The TATA group is planning to prepare a Human

Development Index Report, which will be the first of its kind in collaboration with theHuman Development Resource Centre (HDRC) of the UNDP and is trying to create anew standard for accountability along the lines of the Human Development Index (HDI).

This will make it simpler for the group companies to report in their balance sheets about

the work being done on other fronts besides business.

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The management schools are committed to train a breed of new age managers, who willbe socially responsible. Even as corporates are embraking upon defining good corporate

citizenship in terms of management practices, the management schools are developing

modules and full-fledged programs to build up a deep sense of corporate responsibility.

Infosys TecnologiesInfosys, formed in 1981 by NR Narayana Murthy, follows a socially responsible and

sustainable path in conducting business. Even during the boom time of the 1990s when

the stock prices of IT companies were skyrocketing, the company believed in sharing the

wealth with the society and its employees. This practice of the company stems from thepersonal belief of Murthy to give back to the society more than what it gave him. It also

substantiates the role and motivation of the CEO and the top management in making the

company a responsible corporate citizen.

Infosys has won many awards such as Best Employers to Work for in India, Golden

Peacock Award for Excellence in Corporate Governance in the Global Category by theWorld Council for Corporate Governance, London, and Corporate Citizenship Award by

The economic Times.

The Infosys Foundation was formed to focus on healthcare, primary education, social

rehabilitation and rural uplift, art and culture. The Foundation began its activities in

Karnataka in 1996. according to recent report, Infosys spends about Rs.50 mn on social

activities.

IBM

The Reinventing Education program sponsored by International Business Machines

(IBM) maximized the benefits to the society and created new business opportunities.IBM has developed a teaching model in Philadelphia school system that uses voice

recognition technology to instruct non-English-speaking children in their native

languages. Computers act as personal instructor for these children.

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CSR Initiative Undertaken by Few Indian Companies

Corporate CSR Focus and Initiatives

Infosys Technologies Infosys Foundation: Through creating opportunities and working towardsa more equitable society, the Infosys Foundation has made small, but

effective strides in the areas of healthcare, education, social rehabilitation

and the arts. Promoted by Infosys technologies Limited, the Foundationoffer the promise of a better tomorrow, through its projects across India.

Focus Area: Healthcare, Social Rehabilitation, Learning and Education,

Art and Culture.

Hero Honda Hero Honda Motors takes considerable pride in its stakeholder

relationships, especially in ones developed at the grassroots. The company

believes it has managed to bring an economically and socially backwardregion in Dharuhera, Haryana, into the national economic mainstream.

Some initiatives taken includes:

Setting up of integrated Rural Development Center on Delhi Jaipur

Highway

Raman Munjal Memorial Hospital

Vocational Training Centre

Adult Literacy Programs

Marriages of underprivileged girls

ONGC ONGC takes a proactive approach towards socioeconomic development

by identifying projects at the plant level by involving the districtadministration, local representatives and recognized voluntaryorganization. Priority is given to areas around the projects with the

following themes: Education, Healthcare and Family Welfare, Community

Development.

Hindustan Lever

Limited

HLL is very committed to social and inclusive development of the

community. Some of the major projects taken by HLL includes: Project

Shakti: The project, which aims to empower underprivildged rural

women, targets small villages with population of less than 2000 people or

less. It provides income-generating opportunities, health and hygiene

education through the Shakti Vani program and creating access to relevant

information through the iShakti community portalYashodham: Rebuilding Lives- HLL has reconstructed a village in the

Bhachau Taluka of Gujarats Kachch district

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CONCLUSION

John D Rockefeller says, Think of giving not as a duty but as a privilege. It seemscompanies have accepted that business is not just making money. This is evident from

their involvement in various community development activities. In the Indian context, thephilanthropic outlook of CSR appears to have vanished and the companies are seeing it asan opportunity to serve the society in whereby contributing their shares for the well-being

of their society in which they exist. Some companies have integrated the term CSR into

their business and are using it as a strategy which is directed to the mutual development

of society and company itself, simultaneously.

CSR is a dynamic concept and it will keep on changing as per the new requirements of

society, to push it to achieve higher standards. It is a choice a choice to commit tobetter the world around you by changing business practices and procedures and giving

resources to those initiatives where we can voluntarily serve local, national, and global

communities.

CSR is a long term endeavor where corporate values, traditions, and visions must change

to reflect a responsibility to the world in which we all live and work. Thiss everyonesresponsibility. It is not enough for a business firm to be conscious of the need for

discharging of its responsibility towards different segments of the community. The

public relations function of management is concerned with the establishment of sound

and mutually fruitful relations with the different public which contribute towards thegrowth and prosperity of the business firm.

Some organizations are successfully implementing CSR initiatives through tie-ups with

NGOs. Hence, It can be observed that the fundamental Ethical model of CSR has nowtaken different forms. It has now moved from just being philanthropy to a self-sustainable

holistic approach.

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Contents

1. Introduction 1

2. Definition 2

3. Reason behind Corporate Social Responsibility 3

4. Why be socially responsible? 3

5. Measuring Corporate Social Responsibility 5

6. Components of Corporate Social Responsibility 7

7. Corporate Social Responsibility in a Global Context 8

8. A Pyramid of Corporate Social Responsibility in 8

Developing Countries

9. Corporate Social Responsibility in India 10

10. Infosys Technologies 11

11. IBM 11

12. CSR Initiative Undertaken by Few Indian Companies 12

13. Conclusion 13

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everybody has some responsibilities

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