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http://slidepdf.com/reader/full/csr5695cffd1a28ab9b0290707b 1/39

From Philanthropy to Corporatecitizenship

Corporate Social Responsibility– Paradigm Shift

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The Bill & Melinda GatesFondation !pening CaseBill Gates "as a slender# intense boy "ith a

messy room and a dazzling mind "ho oftenchallenged his teachers in class$

%e attended %arard 'niersity# bt left to

prse his fascination "ith compters$(t age )*# Gates fonded Microsoft Corporation

and t"ele years later he "as a billionaire$

%e "as energetic# independent# and

confrontational and deeloped the reptationof a fanatical competitor "illing to appropriateany technology and crsh mar+et rials$

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The Bill & Melinda GatesFondation !pening Case

,contined-Gates established the Bill & Melinda GatesFondation# "hich has an endo"ment of .//billion$

The fondation0s "or+ is based on a t"o

ales1(ll lies2no matter "here they are being led2hae

e3al ale4

To "hom mch is gien# mch is e5pected$

The fondation has gien ot more than .)/$6billion$Gates follows a long tradition of wealthy entrepreneurs who

have made fortunes, sometimes by compromising ethics,

then later in life used their wealth for works of extraordinary

benevolence..

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Introduction to Corporate Social Responsibility6

Business of business is to dobusiness – Milton Friedman

If so, why did Bill gates did

not think so ?

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7iscssion8hat is meant by CSR 98hy CSR ,in terms of Sta+eholder theory-

:oltion of CSR# "hy la"s

(dantages and disadantages of CSR

;a"s on CSR in <ndia

<sses regarding CSR implementation in<ndia – ho" to implement# =obs# reporting#areas of interention

Introduction to Corporate Social Responsibility>

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The :oling <dea of SocialResponsibilityCorporate social responsibility: The

dty of a corporation to create "ealth in"ays that aoid harm to# protect# orenhance societal assets

The fndamental idea is that corporationshae dties that go beyond la"fle5ection of their economic fnction

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Introduction to Corporate Social Responsibility?

Corporate Social Responsibility

( corporation does not only hae economicand legal responsibility to its shareholders#bt also responsibilities to the othersta+eholders that incldes consmers#

creditors# sppliers# employees# thegoernment# the commnity and one silentsta+eholder1 the natral enironment$

CSR is the contining commitment by bsinessto behae ethically and contribte to

economic de "hile improing the 3alityof life of "or+force and their families as"ell as of local commnity and society atlarge$

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Introduction to Corporate Social Responsibility@

CSR: Stakeholders’ Relationship

GOVERNMENTRegulation, Service,

Coordination

PRIVATE SECTORProfit, People,

Planet

CIVIL SOCIETSocial control,

Guiding

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/ Ps

Introduction to Corporate Social Responsibility*

Triple bottom line concept

People

PlanetProAt

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Managing > dimensions CSR

Introduction to Corporate Social Responsibility)

Cstomers:mployees

Bsiness partners

:nironmental protection and sstainabledimension

Commnities

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Introduction to Corporate Social Responsibility))

8hy CSR

)$ Datral Resorces hae become Anite#isse of sstainability

E$ Responsibility of :nironmentalGoernance falls s3arely on all

Sta+eholders/$ Pricing of resorces has become critical

6$ Globalization pts pressre oncompetitienes

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8hy CSR 9

Introduction to Corporate Social Responsibility)E

;ong term sstainability of bsinessre3ires bsiness society connection

Bsiness enterprises are created by societyand mst therefore sere it and not =st

proAt from itBsiness has responsibility to"ards societyProiding proper prodcts at proper prices

is a social responsibility

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(re Social and Financial PerformanceRelated9

( recent reie" of *> stdies oer / yearsfond that a ma=ority ,>/ percent- ofbsinesses sho"ed a positie relationshipbet"een proAts and responsibility# "hile only >

percent sho"ed a negatie one$Reslts inconsistent and ltimately

inconclsie de to methodological 3estions$

Safe to say corporations rated high in social

responsibility are no less proAtable than lo"errated Arms$

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Sorces of Pressre for SocialResponsibility

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( Global System of CSR(ctiity

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Corporate Po"er andResponsibility

Iron law of responsibility says that in the longrn# those "ho do not se po"er in "ays that

society considers responsible "ill tend to lose it

Gien the irtally immeasrable po"er in thehands of the leaders of large# globalcorporations# sta+eholders throghot the social

system e5pect bsiness to ta+e great care in"ielding its po"er responsibly for thebetterment of society

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Corporate Social Responsibility

Principles

The charity principle is the idea that the"ealthiest members of society shold be

charitable to"ard those less fortnate

The stewardship principle is the idea thatbsiness leaders hae an obligation to see

that eeryone# particlarly those in need or atris+# beneAts from their Arms0 actions(ccording to this ie"# corporate managers hae

been placed in a position of pblic trst

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Phases of Corporate Social Responsibility rederick provides expanded framework for

understanding the evolution of CSR concept

!ivided into " phases# Corporate social stewardship, $%&'s ( $%)'s

Corporate social responsiveness, $%)'s ( $%*'s

Corporate+business ethics, $%'s ( $%%'s

Corporate+global citi-enship, $%%'s ( '''s

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From CSR to CorporateCitizenshipCorporate citizenship is ptting CSR into

practice

Social responsibility

Responsieness incldes bsiness actions insociety

Corporate Citizenship Performance is resltand otcome of bsiness responsieness

Introduction to Corporate Social Responsibility)*

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Introduction to Corporate Social ResponsibilityE

CSR1 Business EvolutionToward Sustainability

From profit

focus, a companyexist only forshort-termshareholder

profit

For

philanthropy, passivedonations tocharities whenrequested

To community

affairs, strategic giving linked tobusiness interests(includes cause-related marketing)

To corporate

communityinvestment,strategic

partnershipsinitiated bycompany

To ustainable !usiness,

integrated into business functions, goals, strategy"

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(rgments for and againstCSR

For !ainst

Introduction to Corporate Social ResponsibilityE)

Balances corporatepo"er "ithresponsibility

7iscoragesgoernment reglation

Promotes long termproAt for bsiness

<mproes bsinessale and reptation

Corrects socialproblems cased bybsiness

;o"ers economiceciency and proAt

<mposes ne3al costamong competitors<mposes hidden costs

passed on tosta+eholders

Re3ires s+illsbsiness may lac+

Places responsibilityon bsiness ratherthan indiidals

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CSR as a StrategyReptationBrand Management

(ttract and retain employees

Sta+eholder management

Financial management and ta5

Seeral indices are rating corporateperformance on enironmental and socialcriteria – 7o" ones grop sstainability inde5or FTS: for good inde5

Introduction to Corporate Social ResponsibilityEE

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The CSR Spectrm

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:nlightened Self<nterest :conomic and social goals come together in companies

that practice enli!htened self"interest Means Arm leadership can see it is in the company0s self

interest in the long term to proide tre ale to itscstomers# to help its employees gro" and behaeresponsibility

Scholars hae debated the related 3estion1 7o sociallyresponsible companies sacriAce proAts by promoting thesocial good9 Stdies comparing CSR "ith Arm performance sho"s there

is a moderately positie association bet"een the t"ofactors

Corporate social and enironmental responsibility is li+elyto pay oH

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(pproaches to CSR

<nactieReactie

(ctie

Pro interactie

Introduction to Corporate Social ResponsibilityE>

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Fnctional areas

Mar+etingIality Control

Financial Management

Spply managementR & 7

%man Resorce management

Introduction to Corporate Social ResponsibilityEJ

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;eels of CSR

;egal – Focs on ma5imizing proAts "hileobeying the la"

:thical – Focs on proAtability and goingbeyond the la" to do "hat is right# =st andfair

Beneolent – Focs on proAtability andhelping society throgh philantrophy

Introduction to Corporate Social ResponsibilityE?

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Introduction to Corporate Social ResponsibilityE@

CSR and <ndian :thos

)$ Bsiness :thos encorages Philanthropy andCharity

E$ %o"eer# highly sb=ectie in character

/$ Promoters and Corporates seen one and the

same

6$ ;ong Tradition of charity and philanthropy by<ndian Bsiness

>$%ose of Tatas# Birlas# Bangrs# Thapars etc

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CSR in <ndia

Companies (ct E)/8hat changes "ill itbring 9

Introduction to Corporate Social ResponsibilityE*

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<mpact of Companies Bill

<mpact )J ,)K- companies in <ndia# Rs )>E ,- cr

7eelopment of Society ,) Sectors-

De" employment generation – )J to

E professionalRole of independent director – J

Reporting re3irements for CSR

Change in attitde of companies

!penings for DG! sector >K can be donated

;esser role for adocacy DG!

Introduction to Corporate Social Responsibility/

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Csr la" in <ndia Criticism

the po"er to deAne the societal responsibility ofbsinesses lies "ith the bsinesses themseles$ Fore5ample# a pollting Arm can bild a hospital or arecreation centre in the commnity in "hich it operates

and deAne that as flAlling its social responsibilitythe goernment ,i- shold broaden the set ofsta+eholders of the bsinesses to e5plicitly inclde othersocietal actors beyond the shareholders and ,ii- sholddeAne the processes that companies shold se to flAl

their responsibility to"ards societal sta+eholders ratherthan specifying the leel of e5penditres and theactiities on "hich sch e5penditres shold be incrred

Introduction to Corporate Social Responsibility/)

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LLL$

First# the commnities that are most aHectedby bsiness operations are typically themarginalised grops# "hich sally "ield lesspo"er to inence the process$ Second#

another line of argment sggests that thebsinesses hae become more po"erfl thangoernments throgh a shift in po"er fromthe goernments to the bsinesses or in other

"ords# state po"er has been redistribted#aligning it more closely to the bsinessinterests and less so to the pblic interest

Introduction to Corporate Social Responsibility/E

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Critical Nie"s The (ct is perceied as a Social Ta5 The (ct is restrictie

The (ct is prescriptie

Companies lac+ organizational capacity# specialized

%RCSR rles contradictory to principles of eoling

global CSR

CSR rles s DNG principles

CSR fnd has ris+s of getting missed

Compliance s Nolntary

%ype s hope

CSR committee to go beyond the art of giing

Introduction to Corporate Social Responsibility//

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Introduction to Corporate Social Responsibility/6

CSR1 <ncreasing Role of Sta+eholders

Coca Cola :5perience in Plachimada# Oerala

:nironmental (ctiism forced Co+e to shtits plant in Oerala

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( Model Process of CSR<mplementation

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<mplementation Gidance

Introduction to Corporate Social Responsibility/J

<mplementation strategyBdget for CSR

:ngage "ith "ell established andrecognized programmes platforms

7isseminate information on CSR policies#actiities and progress

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Global CSR1 Reporting andNeriAcation Standards

Sstainability reporting – the practice of acorporation pblishing information abot itseconomic# social# and enironmental performance

T"o problems of sstainability reporting1

7eAning and measring social performance isdi#cultReports are not co$parable from company to

company

Reporting done on parameters – :conomic# Socialand :nironmental

GR< , Global Reporting <nitiatie-

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Case Stdies

%ro&ect Shakti E Choupal

Introduction to Corporate Social Responsibility/@

Concept

Target – Rral

8omen

Social (ngle

Commercial (ngle

'sage of <T for

farmers

<nformation

Ono"ledge

Prchase

Sales

7eelopmental 8or+

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%o" :Chopal saes Cost

Soya BeanTradin!

'andi E " Choupal

Cost for farmers Trolley Freight )E )E

,Rs$tonne- ;abor > Dil

Middlemen )> Dil

%andling ;oss > Dil

Total /? )E

Cost incrred by Commission ) >

Processor Gnny Bags ?> ?>

,Rs$tonne- Freight to factory )E Dil

Storage#handling

6 6

7isbrsementcost

Dil >

/*

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