1. Corporate social Responsibility

2. Session Theme Social Responsibilities of Business
Session 4 and 5

3. Sessions’ sub-themes
Origins and Growth of Social Responsibilities of Business
Stakeholders of Business
Conceptual clarity of csr
Paradigm shift in CSR at the Global level: New approaches to CSR
Triple Bottom-line approach
Section 135

4. What is the link between business and society?

5. Business and Society : The Link
General Systems Theory( 1940) :
When applied to management theory, the systems concepts implies that business firms ( social organisms) are embedded in a broader social structure ( external environment) with which they constantly interact.
Business and society taken together form an interactive social system.

6. What is the role of business in society?

7. Role of business in society
Operate profitably
Efficient and sustainable use of resources
Innovation
Provide and deliver products /services

8. Forces that shape Business and Society Responsibility
Economic competition
Strategic and social challenges
Ethical perceptions and public values
Changing role of government and public policy
Ecology and natural resources concern
Technology and new technology
Business and its Stakeholders

9. Survey Results of 10 countries

10. How can companies take care of this responsibility towards society?

11. Managing stakeholders

12. Who is a stakeholder or what is a stakeholder?

13. Stakeholders
Any group or individual who can affect or be affected by the achievement of your purpose”
Sometimes it’s useful to think broadly, NGOs, governments, media, etc.
Sometimes it’s useful to think more narrowly, just think about customers, suppliers, employees, financiers and communities (or society).

14. Typology of Stakeholders
Secondary or Non-Market stakeholders
Primary or Market stakeholders
those who engage in economic transaction with the company as it carries out its primary purpose of providing society with goods and services.
those who do not engage in direct economic exchange with the firm but are affected by or can affect the firm through its actions.

15. Relations between a business firm and its primary stakeholders
Stockholders
Employees
(Unions)
Wholesalers
(Retailers)
Distribute
products
Sell
labor
Invest
capital
Creditors
Business firm
(Managers)
Buy
products
Lend
money
Customers
Suppliers
Sell
materials

16. Relations between a business firm and some of its other (secondary) stakeholders
General
Public
Local
Communities
Positive,
negative
opinion
Governments
Central/State
and Local
Jobs,
environment
Regulation,
Taxes
Business
Support
Groups
Advice,
research
Business Firm
(Managers)
Friendly,
hostile
Image,
publicity
Social
Activist
Groups
Media
Social
demands

17. Why should a company engage with its stakeholders?

18. Stakeholder Engagement/Management
Is important because
There is a change initiative, a programme or a project . All of which have an impact on people internal and external to the company.

19. How to Manage /Engage : based on the attributes of a stakeholder
Legitimacy refers to the perceived validity of the stakeholder’s claim to a stake
Power refers to the ability or capacity of a stakeholder to produce an effect
Urgency refers to the degree to which the stakeholder’s claim demands immediate attention

20. Stakeholder Mapping : Typology based on Attributes

21. What strategies do companies adopt to manage stakeholders of a project?

22. Corporate Philanthropy
Models adopted by Business to take care of responsibility towards stakeholders
Corporate Philanthropy
CSR
Shared Value Creation

23. Corporate Philanthropy
Corporate philanthropy may be defined as the direct contribution by a corporation to a charity or cause, most often in the form of cash grants, donations and /or in-kind services ( Kotler and Lee, 2005)

24. Corporate Philanthropy : Current Scenario
Corporate contribution : $ 19.9 billion in cash and product giving according to Corporate Giving Standard Survey.
Top 5 foundations by Total Giving
Bill & Melinda Gates Foundation : every person deserves the chance to live a healthy and productive life.
AbbVie Patient assistance Foundation : helping uninsured access medicines.
Pfizer Patient Assistance Foundation, Inc.: prescription assistance
Glaxo SmithKline Patient Access Programs Foundation : prescription assistance
Genentech Access to Care Foundation : prescription assistance
Source : http;//foundationcentre.org/findfunders/fundingsources/fdo.html

25. Corporate Philanthropy : Current Indian Scenario
Gates Foundation: National polio eradication programme
Azim Premji Foundation : enabling elementary education in India.
HCL Foundation : education & art
GMRV Foundation : education , livelihood, health care & community development.
Swades Foundation ( Ronnie Screwwala) : community mobilization, water and sanitation, agriculture and livelihood, health and nutrition in rural India.

27. Origins of CSR

28. Defining Corporate Social Responsibility (CSR)
CSR considers the impact of the company’s actions on society ( Bauer)
CSR requires decision makers to take actions that protect and improve the welfare of society as a whole along with their own interests ( Davis and Blomstrom)
CSR mandates that corporation has not only economic and legal obligation , but also certain responsibilities to society that extend beyond these obligations (McGuire)
CSR relates primarily to achieving outcomes from organizational decisions concerning specific issues or problems, which by some normative standard have beneficial rather than adverse effects upon pertinent corporate stakeholders. The normative correctness of the problems of corporate action have been the main focus of CSR ( Epstein)

29. CSR : as defined today
Kotler and Lee (2005) “ a commitment to improve community well being through discretionary business practices and contributions of corporate resources”.
Mallen Baker refer to CSR as “a way companies manage the business processes to produce an overall positive impact on society”.

30. Responsibilities of Business
Ethical Responsibilities
Legal Responsibilities
Economic Responsibilities
Be a good
corporate citizen
Contribute resources to the
Community; improve quality of life
Philanthropic
Responsibilities
Obligation of doing what is
right, just and fair. Avoid harm
Operate ethically
Law is society’s codification
of right or wrong. Play
by the rules of the game
Obey the law
Without sustainable
viability all other
actions are not possible
Be Profitable
The Pyramid of Corporate Social responsibility
Source : Caroll, 1991

31. What is CSR?
While there may be no single universally accepted definition of CSR, each definition that currently exists underpins the impact that businesses have on society at large and the societal expectations of them

32. Paradigm Shifts: Stages in Evolution of CSR
The only social responsibility of businesses is to make money for owners and stockholders and obey the law.
Businesses must also be “ethical” in the ways they make money and not engage in bribery, fraud or corruption.
Businesses must also protect the environment and biodiversity.
Businesses must also protect and promote human rights, labour rights, and sustainable development. (“triple bottom line”)
Businesses must adhere to a global standard for CSR enforced by law.

33. The Debate

34. Arguments For & Against CSR
Corporations are citizens in our society
Business creates problems and should therefore help solve them
Business often has the resources necessary to solve problems
Business is a partner in our society, along with the government and the general population
Social issues are in the realm of public policy ie. Government action
Restricts the free market goal of profit maximization and dilutes the primary aim of business
Limits the firm’s ability to compete in a global marketplace
Managers are not trained to make public policy decisions

35. During the 1960s and 1970s, people especially in the US began to take this idea very seriously.
Large companies began to make what is known as “the business case for social responsibility”.
By being good citizens and paying attention to the social effects of their businesses, business leaders could gain important support from customers and communities, and avoid regulation which sought to constrain them. CSR was just good business.
By focusing on the business case, companies could counter Friedman’s argument that CSR was a waste of shareholder’s resources, and a usurping of their prerogative.

36. Strategic CSR Approach
Strategy goes beyond best practices.
It is about choosing a unique position: doing things differently from competitors in a way that lowers costs or better serves a particular set of customer needs.
Strategic CSR moves beyond good corporate citizenship.
Strategic CSR involves both inside-out and outside-in dimensions working in tandem: opportunities of shared value

38. Difference Between Corporate Philanthropy & Strategic CSR
Companies integrate CSR with their long term business strategy for sustainability.
Creating a social dimension to the value proposition
In maintaining TBL approach
Philanthropy
It may or may not bring direct returns
Often given because of some pressure/motives
Used as a PR for business
Partnership with civil society organizations ( Ad-hoc)
Only strategic philanthropy brings direct returns

39. Can Philanthropy and Corporate Philanthropy address all issues?

40. What are the other stakeholder issues which businesses have to address?

43. Triple Bottom Line

44. What benefits does CSR create for business?

45. Benefits of CSR Tangible Intangible Enhanced reputation & brand value
Reduced operating costs
Increased staff commitment & involvement
Development of better customer relations
Improved financial performance & profitability
Long term sustainability for companies & their employees
Enhanced reputation & brand value
Less Media Harassment
Good relations with communities & government
Better Environment