Corporate social responsibility

CORPORATE SOCIAL RESPONSIBILITY

TO REFLECT FOR FEW MOMENTS…

I have failed over and over again in my life. And that is why I succeed…… Michael Jordan

The mind is not a vessel that needs filling but wood that needs lighting…….. Plutarch

WHAT IS CSR

Commitment of a business to contribute to sustainable economic development, working with employees and their families, the local community and society at large to improve their quality of life in ways that are good for business and good for development

INFLUENCES ON CSR

Two major concepts – Stakeholder’s model and triple bottom line

Bottom line : Financial, Social, Environmental Thus, CSR can also be defined as operating a

business in a manner that meets or exceeds the ethical, legal, commercial and public expectations that society has of business

Evolution of the concept of Corporate Citizen

FRIEDMAN DILEMMA Suggested that corporate executives could

either strive for profits or go hearing about chasing social causes

The two were inimical to each other as social responsibility was nothing less than unadulterated socialism

Corporate philanthropy was allowed for but only after profits were properly secured

For Friedman corporate philanthropy is all right, but anything resembling CSR is letting the shareholders down

EVOLUTION OF LATE…

Shift from viewing CSR as synonymous with philanthropy to socially responsible investing

Shift from spending a portion of profits for charitable purposes to create an impression of caring for others to taking up responsibilities in societal development activities

CSR must have a business perspective without being obsessed by profits

INFOSYS’S CAMPUS CONNECT Started in 2004, it is a unique industry-academia

initiative that aims to overcome this by creating a vibrant pool of future engineering graduates

“It is our way of walking the talk on building the much-needed link between industry and academia. The focus is on enhancing the industry readiness of the students coming out of our educational institutions” – Krish Gopalakrishnan, CEO and MD

It has been normal practice for most IIT graduates to leave Indian shores for greener pastures in developed nations like the US or Europe facing a severe talent crunch in India. With Campus Connect, Infosys aims to solve the problem

BOSCH The world’s largest private industrial giant

and a billion dollar corporate has done more than its share for the country since 1951

It started an apprenticeship program in 1960 Infusing professionalism into India’s industrial

sector, 500 trained apprentices from Bosch have been bridging the skill gap for companies across the globe every year for almost 50 years

The students have gone on to become industrialists, or managing directors, such as R Ramakrishnan, CMD of GMR Agro-Business

ELEMENTS OF CSR

Desired of business by society

Expected of business by society

Required of business by society

ACTION PLAN FOR CSR – ENVIRONMENT AND ECOLOGY Reduce consumption of energy, water, and

other natural resources and emission of hazardous substances

Establish environment management system Use recycled and recyclable products Increase durability of products and minimize

packaging Train staff in environmental issues

HEALTH AND WELL BEING Establish policies to ensure the health and

safety of all employees – which are known to employees

Involve employees in business decisions that affect them

Operate open book policies Consult employees on how to handle a

downturn in business if layoffs are unavoidable, offer outplacement services, retraining and severance benefits, provide training opportunities

Extend training to life management, retirement planning and dependants’ care

DIVERSITY AND HUMAN RIGHTS Work with charities, job centers to redesign

jobs to make them accessible to the disadvantaged

Set the tone in not tolerating sexists, racists, and homophobic jokes

Support organizations that promote fair trade and human rights compliance

Make sure that staff members are aware that there are explicit policies against discrimination in hiring, salary, promotion, training or termination of any employee on the basis of gender, race, age, ethnicity and disability

COMMUNITY Encourage employee volunteering in the community

payroll giving and back up with financial contributions and help in kind

Make some of business products or services available free or at a cost to charitable products

Look for opportunities to make surplus products and redundant equipment available to local schools charities and community organizations

Offer quality work experience for school children and students

Collaborate with local teachers to make the activity of business the subject of school projects. Use business experience to help local school charity

Use marketing budget to associate business with social cause

SOME BENEFITS OF CSR

Enhanced brand image Employee retention Reduced operational costs Increased community support…

BUSINESS IMPORTANCE OF CSR

Improved financial performance Reduced operating costs Enhanced brand image and reputation Increased sales and customer loyalty Increased productivity and quality Increased ability to attract and retain

employees Reduced regulatory oversight

ARGUMENTS FOR CSR

Balancing corporate power with corporate responsibilities

Discouraging the creation and imposition of government regulations

Focusing on social problems

ARGUMENTS AGAINST CSR Stakeholders bear the costs of corporate

social action (shareholders, employees and consumers) which affect a “corporation’s operating efficiency and weaken competitive position and advantage”

Mismatch of the roles and expectations between the organization and society

Prospects of corporation becoming even more powerful, as they may already exercise considerable power over society

Management is trained in functional areas of management and does not have generic expertise in handling social issues

UN GLOBAL COMPACT

Certain principles provided by Mr. Kofi Annan, UN Secretary General in 1999

Focus is on labor standards, human rights and environment protection

SOCIAL ASPECTS OF CSR

Human rights Labor Consumer protection Respect for national sovereignty and local

communities

DRIVERS OF CSR

Values

Strategy

Public pressure

THREE MODELS OF CSR

1. Competency Driven2. Community Driven3. Consumer Drive

COMPETENCY DRIVEN

Company reaches out to the society by depending on its core competencies

In doing so, it helps create potential stakeholders, and also adds to evolving higher efficiency standards

COMMUNITY DRIVEN CSR

Organizations invest in social welfare but again with a business interest

Idea is to subscribe to a sustainable form of CSR

CONSUMER DRIVEN

Consumer pressure has made a great difference in sensitizing companies to the needs of stakeholders

CSR can also help in raising consumer standards and expectations

In this process not only is the consumer benefited, but the company too can hike up the competition in its own market sector