Bgs chapter 7

Module 7
CORPORATE SOCIAL
RESPONSIBILITY
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com
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CSR
• It stands for “corporate social responsibility”. In
general CSR or business responsibility can be
described as an approach by which a company:
1. Recognizes that its activities have a wider
impact on the society in which it operates; and
that developments in society in turn impact on
its ability to pursue its business successfully
2. Actively manages the economic,
social,environmental and human rights impact
of its activities across the world.
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3.Seeks to achieve these benefits by working
closely with other groups and organizations
4. There are four main parts to CSR
• Economic
• Legal
• Ethical
• Voluntary and philanthropic
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Strategies companies adopted
1. Workplace
2. Environment
3. Responsible marketing
4. Community involvement
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Types of Social responsibility
1. Responsibility towards the customers
2. Social responsibility to prospects
3. Social responsibility to community
4. Responsibility towards human resources
5. Responsibility to society and ecological
environment
6. Responsibility towards government
7. Social responsibility to global business
environment
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The company and its social
responsibilities
• CSR is a form of corporate self regulation
integrated into a business model.
• The term “CSR” came into common use in the
late 1960’s and early 1970’s after many
multinational corporations formed the term
stakeholder, meaning those on whom an
organization’s activities have an impact
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Sustainability
• CSR is closely linked with the prinicples of
sustainability, which argues that enterprises
should make decisions based not only on
financial factors such as profits or dividends ,
but also based on the immediate and long term
social and environmental consequences of their
activities
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How companies benefit from CSR
activities
• CSR benefits
• Reduced costs
• Increased business leads
• Increased reputation
• Improved relationship with stakeholders
• Managing the risks a co faces
• Innovation in processes, products and services
• Social responsibilities for economic growth
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CSR principles and strategies
• The UN global compact’s ten principles in the
areas of human rights, labour, the environment
and anti corruption enjoy the universal
consensus and are derived from:
1. The Universal declaration of human rights
2. The international labour organization’s
Declaration on fundamental principles and
rights at work
3. The Rio declaration on environment and
Development
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4.The united nations convention against
corruption
5.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.
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A. Human Rights
• Principle 1: Businesses should support and respect
the protection of internationally proclaimed human
rights
• Promoting the rule of law : societies where human
rights are respected are more stable and provide a
better environment for business.
• Addressing consumer concerns: Access to global
information means that consumers are increasingly
aware of where their goods come from and the
conditions under which they are made.
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Value chain management:
Global sourcing and distribution means that
companies need to be aware of potential human
rights issues both upstream and downstream
Increasing worker productivity and
retention:
Workers who are treated with dignity and given
fair and just remuneration for their work are
more likely to be productive and remain loyal to
an employer. New recruits increasingly consider
the social, environmental and governance record
of companies when making their choice of
employer.
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• Principle 2:make sure that they are not complicit
in human right abuses.
• Complicity
Respecting human rights includes avoiding
complicity, which is another way, beyond their
own direct business activities, that businesses
risk interfering with the enjoyment of human
rights.
Complicity is made up of 2 elements:
• An act or omission (failure to act) by a co, or
individual representing a company, that helps
“(facilities, assists)” another, in some way, to
carry out a human right abuse and
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• 2.the knowledge by the company that its act or
omission could provide such help.
Contemporary issues:
• Globalization
• Growth of civil society
• Transparency and accountability
• Crime
• State owned enterprise
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B.Labour
• Principle 3: Businesses should uphold the
freedom of association and the effective
recognition of the right to collective bargaining.
• collective bargaining refers to a voluntary
process or activity through which employees and
workers discuss and negotiate their relations, in
particular terms and conditions of work and the
regulation of relations between
employers,workers and their organizations
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Principle 4:
The elimination of all forms of forced and
compulsory labour
Principle 5: the effective abolition of child labour
Principle 6: the elimination of discrimination in
respect of employment and occupation
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C.ENVIRONMENT
• Principle 7: businesses should support a
precautionary approach to environmental
challenges.
• Principle 8: undertake initiatives to promote
greater environmental responsibility
• Principle 9: encourage the development and
diffusion of environment friendly technologies
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D.Anti corruption
• Principle 10: businesses should work against
corruption in all its forms, including extortion
and bribery
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Models of CSR
• There are 3 models :
1. Conflict model:
In the traditional conflict model for corporate
social responsibility, social values and benefits
are seen as in conflict with shareholder profits.
Under this model, corporations opting to
practice forms of social responsibility are likely
to see added costs for doing so.
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2.Added value model
• A second model for conceptualizing corporate social
responsibility is to see social and environmental
commitments as a means to increase profit. While
proponents of this model tend to acknowledge that
conflicts persist in business decisions, they also
believe that CSR investments are also capable of
generating new revenues. This model tends to focus
on issues like the value of CSR in attracting socially
conscious consumers, finding socially conscious
employees and managing the risks of negative press.
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3. Multiple Goals model
• Finally a third model for corporate social
responsibility posits a role for social values in
corporate decisions that are untethered to
economic values. Under this model,
corporations have goals beyond shareholder
value, including the enhancement of their
community without respect to monetary gain.
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Best practices of CSR
• Corporate responsibility is an issue where by most of
the companies are dominating with respect to gain
the market share in the economy.
• Key components of CR:
1. Corporate governance
2. True governance should provide all stakeholders
with
3. Clarity, openness and democracy in all the
organization’s policies, procedures or strategies
and
4. CR report
5. Sustainable communities
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Need of CSR
• Social approach is very important to corporate
organizations, which demand that they should be
responsive to the social problems of society
• To establish a good corporate image,business
organizations include social responsibility as to
corporate objectives
• Legal provisions like pollution and environmental
laws also direct a co to take up social problem
• Donations to approved NGOS are exempted from
the income tax
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• Indian companies practising CSR activities
1. Icici bank
2. Itc
3. P&g
4. CISCO system inc
5. Infosys technologies ltd
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