A presentation on Corporate Social Responsibility

School of Management StudiesPresented By:

Amit Kumar [2012MB72]Durgesh Kumar [2012MB88]Anil Kumar [2012MB06]Ujjwal Mishra [2012MB01]

Carroll’s Four Part Definition

Ethical Responsibilities

Social Responsibilities

Legal Responsibilities

Economic Responsibilities

Carroll’s Four Part DefinitionUnderstanding the Four Components

Responsibility

Societal Expectati

on

Examples

Economic Required Be profitable. Maximize sales, minimize costs, etc.

Legal Required Obey laws and regulations.

Ethical Expected Do what is right, fair and just.

Discretionary(Philanthropic)

Desired/Expected

Be a good corporate citizen.

Draft Rules under the Companies Act; CSR

The Companies Bill, 2009 (the Bill), as passed by the Rajya Sabha on 8 August 2013 will introduce the concept of ‘Corporate Social Responsibility’ (CSR) into Indian company law.

Applicable to companies with: A net worth of Rs. 500 crore or more; a turnover of Rs 1,000 crore or more; and a  net profit of Rs 5 crore or more during any financial year.

Companies qualifying are required to form a CSR Committee with at least one independent director. The CSR spend of a company which meets the aforementioned threshold is required to be 2% of the average net profits for the preceding three financial years.

Chapter XXIX of the Bill (Sections 450 and 451) provide for general penalties for contravention and repeat offences.

CSR activities recognised under the Bill include: Eradicating extreme hunger and poverty; Promotion of education; Promoting gender equality and empowering women;   Combating HIV, AIDS, Malaria and other diseases etc.

Myths surrounding CSR

CSR is not for small businesses

It is too complicated and technical

It is too expensive

It is a market gimmick

It is a separate corporate initiative

Myths

The Benefits of Corporate Social Responsibility

“88% of consumers said they were more likely to buy from a company that supports and engages in activities to improve society.”

` - Better Business Journey, UK Small Business Consortium

Benefits

of CSR to Firm

Winning new

businesses

Enhanced

Relationship with

stakeholders

Attracting,

Retaining and

Maintaining a happy

workforce

Media interest

and good

reputationAccess to funding

opportunities

Enhancing your

influence in the industry

Differentiatin-g

yourself from the

competitor

Increase in

customer retention

Motivation Perception

Attitudes Most importantly

Association

IMPACT OF CSR ON

CONSUMERS

CSR in India

• The pressure on Indian industrialists to demonstrate their commitment to social development increased during the independence movement, when Mahatma Gandhi developed the notion of ‘trusteeship’, whereby the owners of property would voluntarily manage their wealth on behalf of the people.

• TATA was one of the first corporate houses to initiate.

• A review of contemporary CSR trends in India concluded that

although the corporate sector in India benefited immensely from liberalization and privatization processes, its transition from philanthropic mindsets to CSR has been lagging behind its impressive financial growth

Examples

• Hindustan Unilever’s, Lifebuoy SWASTHYA CHETNA – health and hygiene education program. Educate people about health related precautions to 200 million in rural and urban areas.

• Tata Tea’s communication and positioning itself as a catalyst for social awakening through JAAGO RE campaign.

• Colgate Palmolive – SPREADING SMILES AT PRATHAM(NGO) , In association with IDA organize free dental checkup camps , Supported free surgery of children and young adults suffering from cleft lips.

Cont...• Marico Industries brand Saffola positioned itself as an edible oil brand that cares for heart. On

World Heart Day they ORGANISE FREE HEART CARE CAMPS.

• ITC – every 4 notebook that is bought, rs 1 goes for EDUCATION OF UNDER PRIVILEDGED CHILDREN Concept of E- Choupal .

• Idea Cellular Ltd. – Had done a campaign on the eve of one year of 26/11 terror attacks in Mumbai , talk between 20:26 – 21:26hrs and monies earned , a part of it will go to the INFRASTRUCTURE DEVELOPMENT OF MUMBAI POLICE. Similarly had done undertaken education of underprivileged children

• Canon India launched I-CARE in 2008 with Venu Eye Institute and Research centre to provide eye care and rehabilitation of visually challenged.

• Proctor & Gamble initiated SHIKSHA for underprivileged children with the motto- “Padhega India Badhega India , Mile sabko Shiksha ka Haq” A campaign had run in April-June09 that r.s 1 from every product that is being bought will go for education of downtrodden.

Environmental Benefits

• Greater material recyclability

• Better product durability and functionality

• Greater use of renewable resources

• Integration of environmental management tools into business plans, including life-cycle assessment and costing, environmental management standards, and eco-labeling.

Benefits to the Community and the General Public

• Charitable contributions

• Employee volunteer programs

• Corporate involvement in community education, employment and homelessness programs

• Product safety and quality

Challenges

• Non-availability of Clear CSR Guidelines

• Lack of Consensus on Implementing CSR Issues

• Visibility Factor

• Narrow Perception towards CSR Initiatives

References

• (Source: A review of Corporate Social Responsibility in India Bimal Arora , Ravi Puarnik.1999)

• (Source:Economic times, 14/12/2007)• www.csr-asia.com/upload/hkpresentation• vi.unctad.org/russiast09/docs/millercsr• www.trikal.org/ictbm11/pdf/csr/d1142-done.pdf