1. Corporate Social Responsibility

2. Theme : Theoretical Base of CSR

3. Session Sub-themes Theories of CSR Generation of CSR Drivers of CSR
Models of CSR
Discussion article : Why can companies
no longer afford to ignore their
social responsibilities

4. Five Stages of CSR

5. Compelling Factors for Integrating CSR ethos and principles into corporate activities
Greater stakeholder awareness of corporate ethical, social and environmental behaviour
Direct stakeholder pressure
Peer pressure
Investor pressure
An increased sense of social responsibility
(Ernst and Young, 2002)

6. Compelling Factors for Integrating CSR ethos and principles into corporate activities (contd.)
Moral obligation
Sustainability
License to operate
Reputation
(Porter and Kramer, 2006)

7. Compelling Factors for Integrating CSR ethos and principles into corporate activities (contd.)
Improved financial performance and profitability
Reduced operating costs
Long term sustainability for companies and their employees
Increased staff commitment and involvement
Enhanced capacity to innovate
Good relations with government and communities
Better risk and crisis management
Enhanced reputation and brand value
Development of closer links with customers and greater awareness of their needs.
Jones et al., 2009

8. Parameter of responsibility of a company
Where should lines be drawn between corporate , public and civil society in terms of their responsibility to deliver “public good “?

9. Parameter of responsibility of a company
Profits
Political performance
Social demands
Ethical values

10. Theoretical bases of CSR
Instrumental Theories
Political Theories
Integrative Theories
Ethical Theories

11. Instrumental Theories
focus on economic objective
Maximization of shareholder value
Strategies for achieving competitive advantages
Social investments in competitive context
Natural resource-based view of the firm and dynamic capabilities
Strategies for the bottom of the pyramid
Cause –related marketing
CSR as a mere means to the end of profits

12. Political Theories
Based on the interaction and connections between business and society
Social power of a corporation is emphasized, specifically in its relationship with society and its responsibility in the political arena associated with this power
Social Contract Theory
Corporate Citizenship

13. Political Theories
Social Contract Theory
Corporation as organization enter into social contracts with other members of society, & receive resources, goods and societal approval to operate in exchange for good behaviour.
Davis explored the power that business has on society and the impact of this power.
Enunciated
Social power equation &
Iron law of responsibility
Corporate Citizenship
The term is introduced by practitioners to enunciate the business and society relationship.
The term “citizenship” taken from political science is at the ore of corporate citizenship
Approaches on corporate citizenship are focused on rights, responsibilities and possible partnerships of business in society,

14. Integrative Theories Based on how business integrates social demands
Business depends on society for its continuity and growth
Issues management
The principle of public responsibility : social justice
Stakeholder management
Corporate social performance

15. Integrative Theories Issues management
The principle of public responsibility
Following the laws and regulations but also the broad pattern of social directions reflected in public opinion, emerging issues, formal legal requirements and enforcement or implementation practices
Scope of managerial responsibility in the firms social environment : Primary and secondary
Primary responsibilities : essential includes the economic task of the firm such as locating and establishing facilities, procuring suppliers, engaging employees, carrying out its production function and marketing products/services
Secondary involvements are a consequence of primary responsibilities and include career and earning opportunities for some individuals, which come from the primary activity of selection and advancement of employees.
Issues management
An approach which arose in the 70’s to focuses on corporate responses to social issues.
It is the process by which the corporation can identify , evaluate and respond to those social and political issues which may impact significantly upon it.
Other factors which have been considered include the corporate responses to media exposure, interest group pressures and business crises,

16. Stakeholder’s Theory
Managing for stakeholders is about creating as much value as possible for stakeholders, without resorting to tradeoffs.
The basic idea is that businesses, and the executives who manage them, actually do and should create value for customers, suppliers, employees, communities, and financiers (or shareholders).
They need to pay careful attention to how these relationships are managed and how value gets created for these stakeholders.

18. Ethical Theories
The relationship between business and society is embedded in ethical values and as a consequence, firms ought to accept social responsibilities as an ethical obligation above any other consideration
Universal Rights
Sustainable development
The common good approach
Trusteeship theory ( Indian Scenario)

19. Ethical Theories Sustainable development
Universal Rights
Human rights have been taken as the basis of CSR
Human-rights based approaches for corporate responsibility have bee proposed.
UN Global Compact is one such approach which includes nine principles in the areas of human rights, labour and environment
Sustainable development
Although this approach was developed at the macro level, it demands a relevant corporate contribution

20. Ethical Theories The common good approach
The approach maintains that business as with any other social group or individual in society , has to contribute to the common good , because it is a part of society
Business should be neither harmful to nor a parasite on society, but purely contribute to the well- being of the society
Business contributes to common good in different ways, such as creating wealth, providing goods and services in an efficient and fair way, at the same time respecting the dignity and the inalienable and fundamental rights of the individuals

21. Trusteeship Theory: Indian Perspective Based on Gandhian Philosophy ( 1939)
Perceived business as a form of service to the community.
Trusteeship principle
No recognition to the right of individual property
Resources must be held and utilized for the benefit of society
Management is the trustees of the stakeholders and must work towards optimizing stakeholder value , not merely maximizing shareholder value

22. Statist Model ( State Intervention)
Models of CSR: India
Philanthropic Model
Statist Model ( State Intervention)
( Friedman Model)
Liberal Model
( Freeman Model)
Stakeholder Model

23. International Framework for CSR : ISO 26000
Principles of SR
1. Ethical behaviour 2. Respect for rule of law
3. Respect for international norms of behaviour
4. Respect for and considering of stakeholder interests
5. Accountability 6. Transparency
7. Precautionary approach 8. Respect for human rights
Organizational Governance
Implementing SR
Core Subjects
7.3 Working With Stakeholders
7.2 Defining scope
7.4 Integrating into organization
7.5 Implementing in daily practise
Labour Practises
Environment
Human Rights
Consumer issues
Community & society development
Fair operating practises
7.7 Evaluating performance
7.8
Enhancing credibility
7.3 Communicating 23