Corporate Social Responsibility(CSR)

It refers to the obligation of business or corporate to pursue those policies, to

make those decisions, or to follow those lines of action which are

desirable in terms of the objectives and values of our society.

CSR is based on the premise that a business firm is more than an economic institution. It is an organ of SOCIETY & its activities exercise a decisive influence on social welfare.

so, business must work beyond the narrow goal of profit making and should operate in the overall social interest.

Why CSR ?

To recognise and respect social values. To follow business ethics To follow cultural heritage To cooperate with the Government in

solving problems. To make the country economically strong

through export promotion and import substitution.

Concept behind CSR:

To make best use of natural resources.

To raise the level of national income and standard of living of the people.

To create more employment opportunities.

Objectives:

To protect environment and ecological balance from all types of pollutions.

To contribute to the economic development of backward regions.

To develop weaker section of society.

Objectives:

Causes of Growing Awareness of CSR:

Public Opinion

Trade Union Movement

Social Pressure

Consumerism

Education

Public Relations

Corporate

Owners

Customers

Suppliers

Employees

Competitors

Government

Labor Unions

Financial Institutions

Society

Media

Fair return on investment.

Safety of capital invested.

Steady appreciation of investment.

Regular & complete information about the

working and progress of firm.

Regular payment of dividend.

To use their resources effectively.

To treat them fairly and equitably.

Owners

To charge reasonable price for product.

To charge reasonable cost of service.

Regular supply of right quality of goods at right

time & place.

Adequate & continuous service.

Redressal of customers grievances.

Avoid unfair practices.

After sales services.

Customers

To provide accurate & correct information.

To make fair, adequate & prompt payments in

respect of price or interest.

To create healthy co-operative inter-business

relationship.

To avoid dishonest trade practices.

To support ancillaries in area.

To promote growth of professional

management.

Suppliers/Creditors

Fair wages & salaries.

Good & safe working conditions &

environment.

Working participation in decision making.

Chances for training & development.

Adequate service benefits.

Medical facilities & insurance cover.

Retirement benefits.

Collective bargaining & strike.

Employees

To promote healthy competition.

Not to offer exceptionally high sales commission to distributors ,

agents etc.

Not to influence employees to leave job.

Not to offer heavy discounts &/or free products to customers.

Not to defame competitors through false or ambiguous

advertisements.

Not to steal information.

It is better to lead competitors rather than to kill competition.

Not to purchase majority stake in business of competitors.

Competitors

To avoid corrupting public servants.

To encourage fair trade practices.

To avoid monopoly.

To avoid concentration of economic power.

To improve national income.

To improve of nation’s production.

To promote foreign trade.

Government

Labor Union

• Recognition of worker’s right to form trade unions.

Fair return on investment.

Safety of capital invested.

Steady appreciation of investment.

Regular & complete information about the

substantial interest area.

Regular payment of interest.

To use their resources effectively.

Prior permission if the interest is affected.

Financial Institutions

Fair & bearable product pricing.

Help to the weaker section of the society.

Job opportunities.

Improvement in living standards.

Health development.

Optimum utilisation of society’s resources.

To improve educational community.

To promote regional development.

To develop infrastructure

Society

To disclose information which is of social

interest.

To use proper source to publish information.

To provide correct & complete information.

To disclose harmful effect if any.

To disclose intentions clearly regarding

disclosures.

To give fair remuneration for promotion.

Media

To safe guard long term interest.

To respond to social demand.

To avoid government intervention.

To improve public image.

To recognise socio-cultural norms.

To respect social awareness.

Merits

Dilution of profit maximization.

Lack of yardstick.

Business lacks social skills.

Loss of incentives.

Power without accountibility.

Limitations

Subordinate Responsibility