Corporate Social Responsibility

Symbiosis Centre for Information Technology Report entitled A Study on the Corporate Social Responsibility

Submitted by Name : Smritha.L

PRN: 9030241034

Name : Soniya Susan Abraham

PRN: 9030241035

Name : Anu Garg

PRN: 9030241005

Name : Pooja Dutta

PRN: 9030241021

Name : Shubham Puranik 9030241033

PRN:

Name: Vikram Kumar

Stream

: ITBM

Batch

: 2009 – 11

PRN: 9030241041

Subject/Code : Semester

: 1st Semester

Date

: 10/08/2009

For Office Use only Marks out of

:

Name of the Faculty

: Mrs. Sharmili Ganguly

Corporate social responsibility Definition of corporate social responsibility Corporate social responsibility is not a new concept in India. However, what is new is the shift in focus from making profits to meeting societal challenges. Giving a universal definition of corporate social responsibility is bit difficult as there is no common definition as such. However, there are few common threads that connect all the perspectives of CSR with each other; the dedication to serve the society being most important of them. Most ideal definition of corporate social responsibility (CSR) has been given by world business council for Sustained Development which says, “Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large”. Thus, the meaning of CSR is twofold. On one hand, it exhibits the ethical behavior that an organization exhibits towards its internal and external stakeholders (customers as well as employees). On the other hand, it denotes the responsibility of an organization towards the environment and society in which it operates. (Naukrihub [online], august 2009). CSR is also referred to as: • ‘corporate’ or ‘business responsibility’ • ‘corporate’ or ‘business citizenship’ • ‘community relations’ • ‘social responsibility’.

History of CSR “The phrase Corporate Social Responsibility was coined in 1953 with the publication of Bowen's Social Responsibility of Businessmen” (Corporate watch report, 2006). The evolution of CSR is as old as trade and business for any of corporation. Industrialization and impact of business on the society led to completely new vision. By 80’s and 90’s academic CSR was taken into discussion. The first company to implement CSR was Shell in 1998. (Corporate watch report, 2006) With well informed and educated general people it has become threat to the corporate and CSR is the solution to it.

1990 was CSR as a standard industry with companies like Price Warterhouse Copper and KPMG. CSR evolved beyond code of conduct and reporting it started taking initiative in NGO’s, multistakeholder, ethical trading. (Corporate watch report, 2006).

Benefits of corporate social responsibility Corporate social responsibility offers manifold benefits both internally and externally to the companies involved in various projects. Externally, it creates a positive image amongst the people for its company and earns a special respect amongst its peers. It creates short term employment opportunities by taking various projects like construction of parks, schools, etc. Working with keeping in view the interests of local community bring a wide range of business benefits. For example, for many businesses, local customers are an important source of sales. By improving the reputation, one may find it easier to recruit employees and retain them. Businesses have a wider impact on the environment also. Plantation and cultivation activities taken up by Intel India are a step towards the same. Recycling used products also acts as a step towards minimizing wastes. Internally, it cultivates a sense of loyalty and trust amongst the employees in the organizational ethics. It improves operational efficiency of the company and is often accompanied by increases in quality and productivity. More importantly, it serves as a soothing diversion from the routine workplace practices and gives a feeling of satisfaction and a meaning to their lives. Employees feel more motivated and thus, are more productive. Apart from this, CSR helps ensure that the organization comply with regulatory requirements. . (Naukrihub [online], august 2009)

CSR importance and its relevance today The amount of information available to customer about the company, product, brand globally through easy accessible and available mode of information; internet, communication, customer wants to buy product from trusted brand, employee want to work for the company who respect them, NGO’s want to work with company who work with the same vision for the benefit of the people. As said by Peter Duker “The 21st century will be the century of the social sector organization. The more economy, money, and information become global, the more community will matter.” (Corporate watch report, 2006). According to strategic corporate social responsibility by William B. Werther, David Chandler there is three trends which are going to have importance in future are Increasing Affluence: Customer from elite level can afford to buy and pay more for premium brand but the poor customer might not be willing to pay so much for brand, instead they would prefer to spend their money on business which can take their business to much better level. Changing social expectation: Its natural that customer expect more from the company whose product they buy but with recent controversy and scandal of company has reduced the trust and confidence in the regulatory body and organization which manage the corporate.

Globalization and free flow of Information: With growing trend of media and easy access to information through mobile, TV even the minor mistake of the company is brought in public in no time, this sometime fuels the activist group and likeminded people to spread message which can lead to situation like boycott of the product. There can be few key steps to implement CSR successfully (Corporate Social Responsibility, 2003) 1) 2) 3) 4) 5)

Better communication between top management and organization Appoint for CSR position. Good relationship with customer, supplier, stakeholder. Annual CSR audit. Feedback process

CSR and BRANDS Brands are the way to success for a business. The sales and revenue of the company are widely dependent on the brand they give to customer. Few of the traits which affect the brand are Positive Marketing/ Brand Building - Times of India (kalingatimes.com) “Lead India Campaign” by Time of India is perfect example for brand building through CSR. This was the brought by times of India to bring about change in society. It was more of business/brand building strategy than CSR. Such activities knowingly or unknowingly prepare an image in mind of viewers and hence building image. Brand insurance - NIKE (Corporate Social Responsibility, 2003) NIKE has emerged as one of the most progressive global corporations in terms of CSR because it has learned from its past mistakes and attacks by NGOs. As one of the first corporations to have a Vice-President for Corporate Responsibility and to publish an annual CSR Report, the company has done a lot to mitigate public opinion, establish its brand as representative of a much more committed corporate citizen, and ‘insure’ itself against any repeat of the consumer boycotts it faced in the mid-1990s. Crisis management- Pepsi (wikipedia.org) Crisis stated during the scandal about syringe being found in the diet Pepsi. Pepsi, confident that tampering was not their fault and urged store not to remove any cans from shelves. In the mean time Pepsi released its first video about how Pepsi is processed making it clear that such fault cannot occur in the factory. Second video showed about the arrest of the man who had committed the scam. Basically corporation was completely transparent and open to public which made them effective throughout the crisis.

CSR in India Long referred to as a company’s soul food, corporate social responsibility is finally being taken seriously by Indian tech companies as they embark on a gamut of philanthropic activities. Through Infosys foundation and other initiatives, Narayan murthy chairman and chief mentor of Infosys has always been on the forefront of philanthropic activities as a part of CSR. Mr. Narayan murthy firmly underlines the significance of CSR: “for benefit of globalization and technology to reach the poor, the private sector, philanthropic institutes and individuals should cooperate and establish partnership with government institutions. This would lift millions of our people out of the poverty, provide them with opportunities and make them participate in the process and progress of globalization”. While murthy and Infosys are proactive on the CSR front, how do other tech companies stuck up? The sad part is that CSR still has not taken off in India according to a recent survey by Mumbai based online organization karmayog. The second edition of the research revealed that nearly half of the top companies do nothing in way of CSR. For the Indian company whatever the CSR activities are happening are centered around education, rural upliftment and helping the physically challenged. Some of the CSR initiatives the major IT companies have undertaken are 1) Education for all 2) Community development 3) Children of a lesser GOD No more 4) Volunteering anyone? (Shruti das, 2009)

[Excel sheets of the above points are added here, data retrieved from article “chicken soup” of magazine data quest, July 2009]

CSR and Globalization Globalization has changed corporate social responsibility, the boundaries between domestic and foreign industry and between in-house and out-houses activities which had led corporate to view from both political and economic view. On one side multinational company have taken the role of state and thus they should behave responsibly and on the other hand they need to have corporate social behavior in order to protect their image. Example: Wal-mart which sells it product at remarkable low price and at the same time its brand image is also protected.

Example of CSR (www.iocl.com) As per Indian oil CSR is “A Cornerstone of our Enduring Success”. Their mission is “to help enrich the quality of life of the community and preserve ecological balance and heritage through a strong environment conscience”. Indian Oil has been taking concrete action to realize its social responsibility objectives, thereby building value for its shareholders and customers. Besides this it is also aim at developing techno- viable and environment –friendly product and service for the benefit of customer at the same time maintaining high standard of safety and environment protection. Every year a fixed amount from the profit its profit goes for social and environment welfare across the country. Indian Oil has concentrated their programs for women, education, health, family, welfare etc. Along with this Indian Oil is also been forefront in case of national emergencies. Few of the initiative is providing petrol/diesel station dealerships and LPG distributorships to beneficiaries from among Scheduled Castes, Scheduled Tribes, physically handicapped, ex-servicemen, war widows, etc. and also kisan seva Kendra. In case of environment it has favored for green fuel. It is the firm resolve of Indian Oil people to move beyond business, touch every heart and fuel a billion dreams.

Conclusion It can be concluded that in today’s informative world where information are readily available to general public CSR has been an important part of any organization to be successful. Organization in present world cannot be successful without taking into account the social responsibility. CSR has been a vital component for any organization to have perpetual success and to create brand.

References:

1. Asmus. P. (2003),”Corporate Social Responsibility [PDF document]”, Retrieved from Lecture Notes Online Web site: http://www6.miami.edu/ethics/pdf_files/csr_guide.pdf

2. “Corporate Social Responsibility” (March 3, 2009),Retrieved August, 9, 2009, from http://www.iocl.com/Aboutus/corporatesocialresponsibility.aspx

3. “Corporative social responsibility”, Naukrihub, retrieved on 9th august 2009,http://www.naukrihub.com/hr-today/corporate-social-responsibility.html

4. “Crisis management”, Retrieved August 8, 2009, from wikipedia: http://en.wikipedia.org/wiki/Crisis_management

5. “CSR: A brand building exercise for media houses?” Kalinga Time, Retrieved from http://kalingatimes.com/business_news/news2/20090729_CSR_A_brand_building_exercise_for_ media_houses.html

6. Fauset. P. (2006). “What’s wrong with Corporate Social Responsibility [PDF document]”. Retrieved from Lecture Notes Online Web site: http://www.corporatewatch.org.uk/download.php?id=55

7. Shruti das (2009),” chicken soup”, Data Quest, July 15, 2009, pp-12-14, 16-17.