Csr

TABLE OF CONTENTS CHAPTER NO. Section A

TITLE

Objectives and Research Methodology Research Objectives Research Methodology

Section B

Theoretical Background and Literature Review

1.

Concept of Corporate Social Responsibility

1.1

CSR as a concept

1.2

Definitions of CSR

1.3

Nature of CSR

1.4

Meaning of Philanthropy

1.5

Difference between CSR and Philanthropy

2.

Case for and against CSR

2.1

The Case for social responsibility

2.2

The Case against social responsibility

2.3

Benefits of CSR

3.

Responsibilities towards various interest groups

3.1

Responsibilities towards Owners and Investors

3.2

Responsibilities towards Employee

3.3

Responsibilities towards Customer

3.4

Responsibilities towards the Community

3.5

Responsibilities towards Supplier and Competitor

3.6

Responsibilities towards Government

3.7

Responsibilities towards Environment

Section C

Research and Observations

4.

Primary Research

4.1

Research Design

4.2

Survey Design

4.3

Questionnaire and Sample Design

4.4

Summary of the findings

4.5

The need to address employee issues

4.6

The need to be responsible for the community (local or disadvantaged

4.7

The emerging recognition of the role of the environment and the potential as a tipping point

4.8

The stakeholder perspective

4.9

Benchmarking

4.10

Observation

5.

Recommendations and Limitations

5.1

Recommendations

5.2

Limitations

Appendices Appendix 1 Questionnaire Appendix 2 Bibliography Appendix 3 Curriculumvitae

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SECTION A OBJECTIVES AND RESEARCH METHODOLOGY

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RESEARCH OBJECTIVES 

To understand the concept of corporate social responsibility.



To know about the social responsibilities of the companies towards various groups



To understand what corporate responsibility mean for modern Indian business



To know how Indian businesses are practicing the CSR policies



To know the benefits of CSR or to know whether CSR relates to the success of businesses



To observe whether these benefits match up with what is being looked for by potential employees (graduate and post graduate students) and how CSR influences their choice of companies

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RESEARCH METHODOLOGY The research has been divided into two phases as follows:  Desk- and web-based research  Questionnaires with students (structured quantitative research) 1. Desk and web based research: A detailed search was conducted in Business journals, market research sites, business newspapers, and publications to study their CSR activities, CSR strategy and identify metrics used by them (if any). 2. Questionnaires with students:  A structured questionnaire was prepared and distributed to graduates and post graduates of India looking for jobs.  The data from completed questionnaires was entered into a spreadsheet for analysis as to what leading potential employees were looking for from companies in their job and career selection and if CSR would influence their choice.

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SECTION B THEORETICAL BACKGROUND AND LITERATURE REVIEW

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CHAPTER 1 CONCEPT OF CORPORATE SOCIAL RESPONSIBILITY 1.1. CSR as a concept Corporate social responsibility (CSR) describes an approach by which an organisation: •

Recognises that its activities have a wider impact on the society in which it operates and that developments in society in turn impact on its ability to pursue its business successfully;

•

Actively manages the economic, social, environmental and human rights impact of its activities across the world.

•

Seeks to achieve these benefits by working closely with other groups and organisations – local communities, civil society, other businesses and home and host governments.

1.2. Definitions of CSR “Social responsibility refers to the obligations (of businessmen) 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.” Howard R. Bowen

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“In the real sense, the assumption of social responsibilities implies recognition and understanding of the aspirations of the society and determination to contribute to its achievement.” George A. Steiner “Social responsibility requires managers to consider whether their action is likely to promote the public good, to advance the basic beliefs of our society, to contribute to its stability, strength and harmony.” Peter F. Drucker “Social responsibility of business implies that the businessmen’s decisions and actions are taken for reasons at least partially beyond the firm’s direct economic or technical interest.” Keith Davis “Corporate Social responsibility is about how companies manage the business processes to produce an overall positive impact on society.” Mallen Baker Mallen Baker has explained his definition with the help of the following figure:

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Figure 1.1 The above figure says that Companies need to answer to two aspects of their operations. 1. The quality of their management – both in terms of people and processes (the inner circle). 2. The nature of and quantity of their impact on society in the various areas. Outside stakeholders are taking an increasing interest in the activity of the company. Most look to the outer circle – what the company has actually done, good or bad, in terms of its products and services, in terms of its impact on the environment and on local communities, or in how it treats and develops its workforce. Out of the various stakeholders, it is financial analysts who are predominantly focused – as well as past financial performance – on quality of management as an indicator of likely future performance.

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1.3. Nature of CSR The following points explain the nature of social responsibilities of business: •

The concept of social responsibility is based on the premise that a business firm is more than an economic institution. It is an organ of society and its activities exercise significant influence on the public. Therefore, business should work beyond the narrow goal of profit making.

•

Social responsibility does not mean mere philanthropy where the consumer is robbed to pay the owner. A business can be socially responsible without charity.

•

In the long run, social responsibility is consistent with profit motive. By fulfilling its social obligations, business creates an environment which is conducive to its success.

•

Social responsibility is a personal obligation. A business firm can discharge its social responsibility only through the persons who manage and control it.

•

Social responsibility is a reciprocal relationship. Just as business owes responsibility to society, society also is responsible to business.

•

Social responsibility is a continuing obligation. A business firm remains responsible to the society throughout his life.

•

The concept of social responsibility implies that business has responsibility towards society which extends beyond economic and legal obligations.

1.4.

Meaning of Philanthropy

Philanthropy is the act of donating money, goods, time or effort to support a charitable cause, usually over an extended period of time and with a defined objective. In a more general sense, philanthropy may encompass any altruistic activity intended to promote good or improve human quality of life. Someone who is known for practicing philanthropy may be called a philanthropist.

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The purpose of philanthropy is also debated. Some equate philanthropy with benevolence and charity for the poor. Others hold that philanthropy can be any altruistic act that fulfills a social need that is not served, is under-served, or is perceived as unserved or under-served by the market. 1.5.

Difference between CSR and Philanthropy

Social responsibility does not mean mere philanthropy where Peter (the customer) is robbed to pay Paul(the owner).Philanthropy covers the charitable activities done by a business for the society whereas CSR covers the responsible activities taken up by a business towards the various interest groups such as consumers, employees, shareholders, creditors, suppliers, competitors, environment, government and the community. A business does not need to do philanthropy for practicing CSR. A business can be socially responsible without charity.

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CHAPTER 2 CASE FOR AND AGAINST CSR Different businessmen have different views about CSR. Some find it a very important and indispensable part of business activities whereas some call it a wasteful practice. Let us here know what the experts say in favour of and against it.

2.1. THE CASE FOR SOCIAL RESPONSIBILITY Experts say that business is expected to be responsible to society due to the following reasons: 2.1.1 Self interest In the long run, it is the interest of the business to assume social obligations. Enlightened businessmen recognize that they can succeed better by fulfilling the demands and aspirations of the society. People who have had a higher standard of living and have been exposed to the environment conducive to healthy growth make better employees and customers for business than those who are poor, ignorant and oppressed. For example, provision of higher wages and good working conditions motivates workers to work hard and produce more. 2.1.2 Creation of society Business is a creation of society and uses the resources of society. Hence, it should fulfill its obligations to society. Businessmen should meet the demands of the society and should utilize the social resources at their command for the benefit of the people. In the long run a successful business can be built on the foundations of a happy community and a satisfied work force.

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2.1.3 Social Power Businessmen have considerable social power. Their decisions and actions affect the lives of all of us. Businessmen should assume social obligations commensurate with their social power. Otherwise, their social power will be taken away by the society through government controls and other regulations. It is therefore the moral and right thing for business enterprises to assume social obligations. 2.1.4 Public Image A business can improve its image in public by assuming social obligations. Good relations with workers, consumers and suppliers help in the success of business. Social obligations improve the confidence and faith of people in a business enterprise. 2.1.5 Social Awareness Consumers and workers are well informed about their rights nowadays. Consumers expect better quality products at reasonable prices. Similarly, workers desire fair wages and benefits. They pressurize employers through trade unions. If the business does not fulfill its obligations, there will be industrial unrest and conflict in society. 2.1.6 Free Enterprise If businessmen do not accept and discharge their social obligations they will loose their freedom. For instance, the government has passed the Consumer Protection Act to prevent businessmen from indulging in adulteration, black marketing and other anti social practices. Thus, social responsibilities are essential for avoiding governmental action against business. Such action will reduce the freedom of decision making in business. 2.1.7 Law and Order Business can survive and grow only when there is law and order in society. If business exploits the weaker sections of society for too long, these sections will take the law in their own hands. The resulting chaos will threaten the very survival of business.

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2.1.8 Socio-cultural Norms India has a rich cultural heritage. Businessmen who help in preserving and promoting this heritage will naturally enjoy the patronage of the society and the government. Business should, therefore, promote equality of opportunity, healthy relations with employees and customers. 2.1.9 Moral Justification In a large country like India, government alone cannot solve all the problems. Business has money and talent with which it can assist the government in solving the problems. For example, business can play a vital role in solving regional disparities, unemployment, illiteracy, scarcity of foreign exchange and other such problems in the country. Moreover, business has created some social problems such as pollution. Therefore, business should help society in solving its problems. 2.1.10 Professionalisation Management of business enterprises is being professionalized. An owner-manager nurses a greater greed for profiteering because all the gains go to him. But a salaried and qualified manager is less likely to be lured because he does not benefit from the profits earned through questionable practices. 2.1.11 Trusteeship Mahatma Gandhi suggested that “those who own money or property should hold and use it in trust for the society”. Businessmen should run business firms not for their selfenrichment but for the good of the society.

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2.2 THE CASE AGAINST SOCIAL RESPONSIBILITY Some experts criticise the concept of social responsibility. They put forward the following arguments against assumption of social responsibility business firms: 2.2.1 Vague Concept The concept of social responsibility is very vague and amenable to different interpretations. There is no consensus on its meaning and scope. In such a situation it would be futile as well as risky to accept social responsibility. 2.2.2 Dilution of Business Goals Involvement of business in social activities may dilute focus on economic productivity and weaken its position in the market place. Businessmen may get confused abut their role in society. As a result business may perform poorly in both economic and social roles. Managers are the agents of owners and their sole mission should be to maximize profits consistent with law and social customs. 2.2.3 Lack of Social Skill Business firms and their managers may lack the perception and skills to handle social issues. Their outlook is primarily economic and their skills are best suited for business activities. They may mishandle social matters. 2.2.4 Costs of Social Involvement Business cannot afford to invest considerable economic resources in social issues. If it does so costs of doing business will increase. Business is likely to pass on the additional costs to consumers by increasing prices. This would imply additional burden on consumers.

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2.2.5 Undermines free enterprise According to Milton Friedman the concept of social responsibility is a subversive doctrine because it undermines the principles of free enterprise. Businessmen can be held accountable

for

social

problems

only

when

consumers,

minorities,

women,

environmentalists and other social groups are represented on the board of directors. Such a diversity of interests would make the decision making process political thereby undermining the free enterprise system. 2.2.6 Businessmen are not moral agents Social responsibility is basically a moral concept. Business organizations are not moral agents and cannot be expected to act on moral grounds.

2.2.7 Reduction on Competitive Position Indian business firms are often not fully competitive in international markets. In case they are asked to incur expenditure on social problems, their international competitiveness will deteriorate.

2.2.8 Improper Role The proper role of business is to use resources and energies efficiently so as to earn the best possible return on investment within the confines of law and ethics. Business should concentrate on economic performance leaving social service to other organizations.

2.2.9 Already Responsible Business organizations are already serving society by providing goods and services, generating employment, developing technology and contributing to public exchequer through tax payments. It would be unjust to overburden them with further responsibilities.

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The arguments against social responsibility suffer from two weaknesses. First they require business firms to ignore social demands which they cannot do. Secondly, the critics are over stressing the influence and power of practicing social responsibility in business. Today the question is not whether or not to accept social responsibility but how much responsibilities to assume. After discussing the above points favouring social responsibility and the points against it, we can come to a conclusion that social responsibility is a very important activity to be practiced by businessmen as they are responsible towards the society in return of what they take from the society. I also conclude that practicing CSR also brings many benefits for the businesses practicing it.

2.3 BENEFITS OF CSR By practicing CSR a business can reap many benefits for itself. Let us throw light on the benefits attached with the practice of social responsibility by a business. •

Building good reputation: A business earns a good reputation in the society if it practices social responsibility. Many consumers prefer to buy from ethical businesses.

•

Customer satisfaction: If a business practices CSR then it creates more satisfaction amongst its customers as they find the business more responsible towards the society. Some customers don’t just prefer to deal with responsible companies, but insist on it.

•

Reducing waste and emissions: Reducing waste and emissions doesn’t just help the environment – it saves the money of the businesses too. By following CSR, businesses can save the natural resources by using them judiciously and reducing their wastage.

•

Increases employee motivation: Employees are better motivated and thus can be more productive by following CSR. Employees stay longer hence reducing the costs and disruption of recruitment and retraining.

•

Activities such as involvement with the local community are ideal opportunities to generate positive press coverage for the business.

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•

CSR can make the business more competitive and reduces the risk of sudden damage to its reputation (and sales). Investors recognize this and are more willing to finance the business.

•

Understanding the wider impact of a business can help it think up profitable new products and services.

•

CSR helps ensure a business comply with regulatory requirements.

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CHAPTER 3 RESPONSIBILITIES TOWARDS VARIOUS INTEREST GROUPS Business operates in the society and during its operations it comes in contact various groups such as employees, shareholders, customers, suppliers and competitors etc. Business takes help from these various groups hence it becomes the duty of a business to take care of the well being of these groups. Every business should realize that its actions affect the various above mentioned groups also and thus there exists a responsibility of the business to take care of them too. Business is responsible to all these interest groups in the following ways:

3.1 RESPONSIBILITY TOWARDS OWNERS AND INVESTORS Shareholders are the true owners of a business as they provide capital to a business and bear risks. Therefore, their concern with the activities and the responsibilities of a business is very obvious. Hence, they have a direct stake in business and a business thus has the following responsibilities towards them: •

to invest the capital of the shareholders judiciously.

•

to ensure safety of investment made by shareholders.

•

to provide regular interest and dividend.

•

to provide accurate and adequate information on the financial position of the business.

•

to give opportunities to the shareholders for participation in policy decisions.

•

to give equal treatment to all shareholders.

3.2

RESPONSIBILITIES TOWARDS EMPLOYEES

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Employees are the work force of a business. They help achieve the goals of a business by their service. Hence, employees are the greatest asset of a business and their well being is an important responsibility of a business. Employees should be given respect by the employers and a proper reward for their services should also be given to them. They should be provided both economic and psychological satisfaction. A business has the following responsibilities towards its employees: •

to pay a regular and proper wage or salary.

•

to provide good and safe working conditions.

•

to provide opportunities for training and self development.

•

to develop a sense of belonging and dignity.

•

to give facilities like housing, medical, insurance, social security etc

•

to give freedom of religion and political views. 3.2.1 TATA In this field, the Tata group has taken many relevant steps. The Tata Group’s commitment to enhancing the knowledge and leadership quotient of its people has resulted in the establishment of institutions such as the Tata Management Training Centre and the running of programmes such as Tata Administrative Service (TAS). TAS: This managerial development programme was conceived by JRD Tata, the late chairman of the Tata Group, in the 1950s. The idea was to select and groom young managers, provide them opportunities for professional growth, and make them part of a talent pool that could be tapped by companies across the Tata organisation. TMTC: The Tata Management Training Centre, set in a lush campus in Pune, helps Group professionals add to their knowledge bank. Primarily an in-house learning centre for the Group, its goal is to provide training to high performers, act as a cradle of change and develop leadership qualities.

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Tata Business Leadership Award: Initiated in 2004, this an annual business school event organized by the Tata Group. It offers students from select management institutions a unique opportunity to compete with the brightest and display their business acumen.

3.3

RESPONSIBILITIES TOWARDS CUSTOMERS

A business has several responsibilities towards its customers also as customers are the ones who are the ultimate users of the products and services provided by a business. Hence, it becomes the duty of a business to take the responsibility of its actions. The responsibilities of a business towards its customers are: •

to provide good quality products.

•

to provide the products at fair prices.

•

to supply socially useful products that meets the needs of customers.

•

to ensure a fair distribution of products at the time of shortage.

•

to ensure an adequate supply of products.

•

to provide a fair distribution of products all over the country.

•

to offer a good service to the customers.

•

to handle consumer complaints and grievances quickly.

•

to avoid unfair trade practices like adulteration, hoarding, black marketing, false advertising etc

•

to supply useful information about new products and their uses.

•

to give warnings about some products like expiry date of eatables etc

3.4

RESPONSIBILITIES TOWARDS THE COMMUNITY

Every business uses the resources of the community thus it’s the responsibility of a business to think and work about the well being of the community as well. A business should work for the social and economic well being of the community. It should try to work

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for the society in solving its problems and in improving the quality of life of the people of our society. The main responsibilities of a business towards the community and the public are: •

To protect the environment from all kinds of pollution.

•

To make the optimum utilization of natural resources.

•

To generate more and more employment opportunities

•

To help the government and the local bodies in providing and improving the amenities like sanitation, drinking water etc.

•

To preserve social and cultural values.

•

To promote national integration.

•

To provide assistance to hospitals, educational institutions etc

•

To work for the weaker sections of the society like orphans, widows, disabled persons etc

•

Not to do any activity which is against the well being of the society and which affects public welfare. Let us see how some of the leading companies of India have perceived the issue of corporate social responsibility and what they have done in this direction. 3.4.1 ITC In 2000, harnessing the empowering force of information technology and its scalability, ITC launched e-Choupal – a knowledge portal providing farmers with a range of information and services. Designed to enable them to bargain collectively and enhance their transactive power, e-Choupal became the much needed and easily adoptable tool farmers had been waiting for. Today e-Choupal is a vibrant and rapidly growing zone of business and interaction for over 4 million farmers. ITC’s other activities in the field of CSR are:

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•

ITC’s businesses generate livelihoods for over 5 million people.

•

ITC’s globally recognized e-Choupal initiative is the world’s largest rural digital infrastructure benefiting over 4 million farming families. ITC’s Social and Farm Forestry initiative has greened over 80,000 hectares creating

•

an estimated 35 million person days of employment among the disadvantaged. ITC’s Watershed Development Initiative brings precious water to nearly 35,000

•

hectares of dry lands and moisture-stressed areas. ITC’s

•

Sustainable

Community

Development

initiatives

include

women

empowerment, supplementary education, integrated animal husbandry programmes. 3.4.2

RELIANCE

Dahanu power station is a power generating wing set up by the Reliance group of companies. It is a significant contributor to the betterment of the community at Dahanu. It promotes and supports many programs that help the community in terms of education, employment and other aspects. As a responsible corporate citizen DTPS has undertaken various Community initiatives and social activities in and around Dahanu Taluka which is a predominant Tribal area. There are focused activities in the field of Education, Health and other community needs. Regular, Permanent and Service projects are carried out for supporting the mass community there. Community Initiatives •

The company has constructed an Anti Sea Erosion Bund with a length of 700 meters at Diwa Dandi. The bund has effectively stopped erosion of soil and has saved the livelihood of the villagers. The total expenditure on the construction of the bund amounted to Rs. 75 lacs.

•

Construction of Water Storage check dams under ground water conservation programme at Saravali / Savata / Ashagad village around Dahanu. With these check dams more than 12,000 nearby villagers are benefited.

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Employment Initiatives The Fly Ash Brick making project was instituted in 1995 and provides employment to many tribal youth. Educational Initiatives In keeping with the corporate belief that education and training are primary enablers for the society, the Dahanu TPS of Reliance Group has actively contributed towards making quality education available in the vicinity of the company’s operations. Specific Educational initiatives undertaken by the company include: Establishing DTPS Junior College of Science in the year 1998 and DTPS junior

•

college of Arts in 2004. The building and handing over of 8 Municipality schools to the Zilla Parishad at

•

Dahanu. The construction of an Audiometric Room & Computer lab for Dumb and Deaf

•

school children. An annual program that has been in place since 1995, under school children is given

•

Stationary & Educational material free of cost. Institution of the Merit Scholarship for Eng. and Medical Students since 1998 in

•

association with Rotary Club. Eight students have been awarded this scholarship to date. A Scholarship for tribal students from the Industrial Training Institute, Vanagaon,

•

was instituted in 1990, for promoting enrollment in vocational courses. An ongoing program to distribute note books at subsidized rates. This initiative is

•

undertaken by the company in association with the Rotary club and has been in place since 1995. Health Initiatives

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Community health is one of the prime areas of the company’s social concerns and the company is an active contributor to community health programs. •

An annual Health Check up Camp has been instituted by the company and a local NGO for the benefit of the rural community in the vicinity of the plant.

•

The company sponsors an annual Eye Check Up and Cataract Operation Camp, in association with the Lions Club.

•

Since 1996, the company has been an active participant in the Annual Pulse Polio Program.

•

To ensure supply of clean and fresh drinking water, the company has undertaken construction & maintenance of 70 Tube Wells in 30 villages. This has brought welcome relief to the villagers who previously had to walk long distances to get fresh drinking water.

•

Mobile dispensary van for local tribals for serving community in far lung areas under Vanvasi 23ustom Kendra, Talasari.

Reliance Energy’s Dahanu Thermal Power Station has won the Golden Peacock award for corporate social responsibility for the year 2007. 3.4.3 TATA Tata group of companies has always been very active in the field of social responsibility. To serve the society the company has made the following efforts: Tata Council for Community Services: Tata group of companies has set up a separate council known as the Tata Council for Community Initiatives which is the umbrella agency that guides and supports Tata Group companies with their community development initiatives. TCCI has a charter that embraces social development, environmental management, biodiversity restoration and employee volunteering.

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Tata Index for Sustainability: The Tata index for sustainable human development is a pioneering effort aimed at directing, measuring and improving the social uplift programmes that Group enterprises undertake. The index provides guidelines for Tata companies looking to fulfill their social responsibilities, and is built around the Tata Business Excellence Model. Tata group of companies has set up various trusts also to take care of its actions in the area of CSR. It has the following trusts: Sir Dorabji Tata and allied trusts: The Sir Dorabji Tata Trust was established in 1932 by Sir Dorab Tata, the elder son of Tata Group founder Jamshedji Tata, and is one of the oldest social organisations in India. The grant-making pattern of the Trust involves three broad areas: endowment grants (grants to institutions), grants to non-governmental organisations (NGOs) and grants to individual (medical and educational grants). Endowment grants The Trust has promoted, and continued to support, several institutions of learning, research and culture in India. These include the Tata Institute of Social Sciences, Mumbai, the Tata Memorial Centre for Cancer Research and Treatment, Mumbai, the Tata Institute of Fundamental Research, Mumbai, the Tata Agricultural and Rural Training Centre for the Blind, Phansa, and the National Centre for the Performing Arts, Mumbai. The Trust has also helped in establishing the Sir Dorabji Tata Trust Centre for Research in Tropical Diseases at the Indian Institute of Science, Bangalore, the JRD Tata Eco technology Centre, Chennai, and the National Institute of Advanced Studies, Bangalore. NGO grants The Trust makes grants to NGOs in five social development sectors:

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•

Management of natural resources: The Trust supports projects related to water and water resources, land degradation and better methods of cultivating and harvesting crops.

•

Livelihoods: The Trust has backed several projects in this sector, covering unorganized labourers, capacity building of grassroots groups, and business development of a variety of people-based organisations.

•

Education: The Trust has supported initiatives in the field of education, focusing on children, adolescents and adults (within and outside the formal education system).

•

Health: The Trust has made contributions in creating and upgrading medical infrastructure and healthcare facilities across India, while focusing on training community health workers. The Trust also supports research studies in alternative systems of medicine such as ayurveda.

•

Social development initiatives: These cover many areas, including community development, human rights, family welfare, civil society, art and culture, and relief work.

Individual grants The Trust gives merit and need-based educational and medical grants to individuals. •

Medical: Financial help is extended to individuals for the treatment of diseases and to solve other health problems.

•

Education: The Trust offers scholarships for higher education and travel grants for studying abroad and for attending conferences, as well as for sports activities.

The Allied Trusts The Allied Trusts are, primarily, smaller trusts; while some have a specific mandate, the rest are broad-based in their approach to grant-making. The Sir Dorabji Tata Trust administers the Allied Trusts.

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Sir Ratan Tata Trust: The Sir Ratan Tata Trust was established in 1918 following the death of Sir Ratan Tata, the younger son of Group founder Jamshedji Tata and it operates in accordance with his will. The trust makes, broadly speaking, two types of grants: institutional grants, under which come programme grants, endowment grants and small grants; and individual grants, which are medical and educational grants. Institutional grants •

Programme grants: These cover rural livelihoods and communities, education, health, art and culture, and civil society and governance.

•

Endowment grants: The trust supports institutions that work within the thematic areas that it focuses on.

•

Small grants: This caters to the needs of small, welfare-oriented organisations, and those needing support to implement innovative ideas.

Individual grants •

Medical grants: Grants are disbursed to patients requiring help to meet treatment expenses.

•

Educational grants: The trust supports individuals pursuing higher education through its ‘studies in India’ programme and through travel grants.

Educational Initiatives Lady Meherbai Tata Education Trust: Set up in 1932, the Trust grants scholarships to young Indian women graduates of recognized Indian universities to pursue higher studies abroad in the fields of social work and public health. JN Tata Endowment: The first of the Tata trusts, it was established by Group founder Jamshedji Tata, in 1892 to provide scholarship loans to individuals for the pursuit of higher

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studies abroad. Over 120 students are selected every year from across India as JN Tata scholars. Lady Tata Memorial Trust: Established by Sir Dorabji Tata in 1932 in memory of his wife, Lady Meherbai, who died of leukemia in 1930, the Trust spends four-fifths of its income on international research in leukemia. The Trust also supports institutional research carried out by recognized Indian institutions, with the emphasis on leukemia research. Indian Institute of Science: IISc has produced Nobel laureates, trained many of India’s greatest scientists and helped nurture some of the country’s finest scientific institutions. Housed in a 375-acre campus in Bangalore, this trailblazing institution has 40 departments and centres pursuing R&D and teaching in all departments of science, engineering and technology Tata Institute of Fundamental Research: The need to improve India’s scientific temper and strengthen the nation’s science infrastructure were the objectives that drove scientist Homi J Bhabha and JRD Tata, the late chairman of the Tata Group, to pursue their vision of establishing TIFR in Bombay back in 1945. Tata Institute of Social Sciences: Set up in 1936, TISS is a pioneer in the field of socialwork education in the Asia-Pacific region. The Institute, which offers postgraduate and doctoral programmes, has made significant contributions in the domains of social policy and planning, intervention strategies and human resource development. Health Initiatives Tata Memorial Centre: TMC is India’s best-known cancer hospital and research centre. This global centre of excellence, where 70 per cent of patients get free primary care, was established in Bombay in 1941, a time when there were only a handful of such institutions in the world. It has added significantly to its capacity and capabilities since then JRD Tata Eco technology Centre: The flag bearer of the eco technology movement in India, JRDTEC is part of the MS Swaminathan Research Foundation, Chennai. Established

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in 1996, it is devoted to seeding and encouraging sustainable development, one that protects the environment while also benefiting the people who depend on it. Tata Medical Centre: To be commissioned in 2009, Tata Medical Centre in Kolkata, in eastern India, is being equipped with the most contemporary and state-of-the-art medical equipments and will be one of the leading cancer care and research institutions in the country.

3.5

RESPONSIBILITIES TOWARDS SUPPLIERS AND COMPETITORS

Suppliers help in completing the process of production of a business by supplying the required raw materials on time whereas competitors provide the impetus to a business to work harder and to be ahead in their line of business. Thus a business should discharge the following responsibilities towards its supplier, dealers and competitors: • to make regular and fair payments to the suppliers. • to adopt fair trade practices regarding pricing, quality, service etc • to protect and promote small scale and cottage industries. • to patronize trade associations and chambers of commerce.

3.6

RESPONSIBILITIES TOWARDS GOVERNMENT

A business has the following responsibilities towards the government: •

to pay the taxes regularly and promptly.

•

to abide by the laws.

•

to adopt fair dealings in foreign trade

•

to assist or help government in solving national problems like poverty, illiteracy, over population, etc

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•

to avoid monopolistic and restrictive trade practices

•

not to involve in corrupting public servants by giving them bribes for their own interest.

3.7

RESPONSIBILITIES TOWARDS ENVIRONMENT

As citizens of a country, we have certain obligation towards our society, and the environment we are living in and are leaving behind for the next generation. Similarly companies also are committed to ensure a clean and healthy environment. Rapid industrialization is causing a great damage to the environment which has to be taken care of by the companies. In India, the government has enacted laws to prevent pollution of all kinds. But companies also have to be active in this direction. Companies should take up the following steps for this purpose: •

Set aside a significant part of revenue to ensure that all effluents and emissions are pollution free.

•

Foliage and gardens should occupy 1/3 rd of the total factory area contributing to a green environment.

•

Industrial houses should plant trees and maintain parks thereby providing for greenery. But they should also make.

•

proper arrangement for disposal of industrial waste should be made.

•

well ventilated working place for the employees should be provided.

•

companies should see to it that the rubbish is disposed off without polluting the surroundings.

•

The vehicles engaged for transportation of the products should regularly be sent for Auto Emission Test and have the Pollution under control certificate.

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Let us see what different companies have done to protect environment. 3.7.1 ITC •

ITC has been ‘Carbon Positive’ three years in a row (sequestering/storing twice the amount of CO2 than the Company emits).

•

‘Water Positive’ six years in a row (creating three times more Rainwater Harvesting potential than ITC’s net consumption).

•

Close to 100% solid waste recycling.

•

All Environment, Health and Safety Management Systems in ITC conform to the best international standards.

3.7.2 Reliance Reliance, Jamnagar is the largest grass root refinery set up with annual capacity of 27 million tons and the 3rd largest refinery in the world at any single location. At reliance Jamnagar, a clean environment for sustainable development is of prime concern, and is an important business objective achieved by every employee’s contribution and responsibility towards environmental performance. Following are the major improvements achieved during 2000-2008: •

Reduction in Emission of CO2.

•

Planting of 4.0 million trees in and around the complex has already been done till March 2005 which includes planting of 51,000 additional trees during 2004-05.

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•

Plantation of 35,000 trees in the direction of further enhancement of benefits of greening like CO2 absorption & improved microclimate etc during last year.

•

Reduction of plastic cup consumption from 5.1 Lakhs cup (In 2000) per month to 3.2 Lakhs (2003) per month.

•

Construction of landfill facility for the disposal of hazardous waste.

•

Incinerator plant is installed of 200Kg/Hr capacity to incinerate the Hazardous Waste like Oily Rags, Oily sludge & other oily contaminated material

Energy Awards

•

Reliance, Jamnagar has bagged ICMA (Indian Chemical Manufacturers Association) Award 2002 and 2005 for Excellence in Energy Conservation and Energy Management.

•

Reliance, Jamnagar has bagged award from BEE (Ministry of Power) for Excellence in Energy Conservation and Energy Management in 2004, 05 & 06.

•

It has received award for Excellence in Energy Management – 2002, 2003, 2004, 2005 and 2006 by CII (Confederation of Indian Industries).

•

Reliance, Jamnagar has bagged award in the Large projects for Exemplary work in Energy Conservation by PCRA (Petroleum Conservation Research Association) in 2005.

•

Reliance, Jamnagar received Oil & Gas Conservation Fortnight-2005 Award from Ministry of Petroleum & Natural gas for First prize in minimum Steam leaks.

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•

Reliance, Jamnagar received Oil & Gas Conservation Fortnight-2006 Award from Ministry of Petroleum & Natural gas for First prize for excellence in Boiler / Furnace performance.

3.7.3 Tata The Tatas have a separate wing known as the ‘Group environment network’ to guide its companies and organisations on environmental issues. The Tata approach to environmental management makes it mandatory for Group companies to do the following: •

Have a vision and mission statement that explicitly states its policy on environmental management.

•

define a corporate environment policy and communicate that to all employees.

•

set up environmental management systems and programmes at the organizational level and annual budget for environmental improvement.

•

train its workforce on environmental issues and assign management representatives and facilitators for the task of monitoring environmental systems.

•

regularly scrutinize resource consumption and the quality of air, water and land in and around the areas where it operates.

•

review environmental performance at different levels in the management hierarchy.

•

establish a convention for conducting impact-assessment surveys and periodic audits.

•

publish annual environmental performance in annual reports.

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SECTION C RESEARCH AND OBSERVATIONS

33

CHAPTER 4 RESEARCH METHODOLOGY 4.1. RESEARCH DESIGN I have conducted exploratory research to achieve my objectives in this research. Exploratory research will help me form relationships between various variables taken into account and give recommendations on the basis of the finding of the research.

4.2 SURVEY DESIGN There were two phases of the research: •

Desk- and web-based research

•

Questionnaire with students (structured quantitative research)

4.2.1 Desk and web based research: 1

An initial search was conducted within the public domain to review the CSR reported practice of large Indian corporations, which are acknowledged to be at the forefront of the engine of economic growth in India. This was established through selecting leading growth sectors and reviewing the leading company in each sector.

2.

To augment this, a detailed search was conducted in business journals, market research sites, business newspapers, and publications to study their CSR activities and CSR strategy. This was followed by comparing these leading companies across sectors with the selected benchmark of the Tata group of companies.

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The companies reviewed were: Benchmark: Tata Information Technology: Wipro, Infosys Two-wheelers: Hero Honda, Bajaj FMCG: Dabur, Godrej Rural Marketing: Hindustan Unilever, ITC Telecom: Airtel, BSNL Real Estate: DLF Oil and Gas: ONGC, IOC 4.2.2 Questionnaire with students: A structured questionnaire was prepared and distributed to four leading graduate and post graduate institutions in India. The data from completed questionnaires was entered into a spreadsheet for analysis as to what leading potential employees were looking for from companies in their job and career selection and if CSR would influence their choice.

4.3 QUESTIONAIRE AND SAMPLE DESIGN The questionnaire was designed such that it helps in achieving the objective of the research which is to know about the preferences of India’s potential employees and what they think about practicing Corporate Social Responsibility. The questions are mostly objective so as to make it simpler for the respondents to answer them and also make it easier to analyze the results quantitatively so as to reach accurate results. The sample chosen was 80 students of the four leading graduate and post graduate colleges of Delhi.

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4.4 SUMMARY OF THE FINDINGS 4.4.1 Corporate reporting – desk and web based review The review of the findings shows programmes in the community, education, environment and health areas but there are within those programmes four emerging themes as to how the companies reviewed are responding with CSR to the issues in India. We have conducted our study on some of the top corporate houses operating in various sectors of Indian economy. In summary the review highlighted the following: Community

Environmen

Education

Health

ITC HUL Airtel BSNL Infosys Wipro IOC ONGC Godrej Dabur Bajaj Hero Honda DLF Ta ta

High

Med

Low

The companies have been ranked high, medium or low based on their focus as reflected by the financials and organizational resources devoted to CSR causes, along with Figure 4.1

36

•

Tatas have a high focus and level of involvement in community development, education and environment space and has initiatives in all four themes, with special focus on community and health and education initiatives.

•

After Tatas, the other companies that score high on CSR initiatives in India are ITC and Godrej. ITC lays great stress on community and environmental initiatives, but is low on the initiatives taken in education and health. Godrej focuses on environment and health initiatives, while it has low involvement in community development and education. Also, ITC is the only company in India which works on CSR programs related to climate change.

•

BSNL and DLF have the least number of CSR initiatives, with both focusing on community initiatives. DLF is involved in the field of education but BSNL doesn’t have presence in any other category.

•

Companies in the automobile and oil & gas space have undertaken very few initiatives in addressing the environmental concerns.

•

Indian companies seem to be spending most of their time and effort on community initiatives followed by education and environment. Health sector has the least number of initiatives with four companies having no involvement in that category.

Specifically reviewing how the other companies have picked up on these issues the following highlights emerge:

4.5. THE NEED TO ADDRESS EMPLOYEE ISSUES: The Tata Group has huge employee base in India and across the globe. Tata were the pioneers in employee benefits that were later mandated through legislation in India and elsewhere in the world. The eight-hour working day, free medical aid, welfare departments, grievance cells, leave with pay, provident fund, accident compensation, training institutes,

37

maternity benefits, bonus and gratuity were introduced by the group before any legal rules were framed on them. Tata has created cities and towns – Jamshedpur, Mithapur, Babrala and Mathigiri – around industrial facilities. Tata Steel maintains Jamshedpur’s public utilities such as the local municipality and takes care of road maintenance, water and electricity supply, streetlights, healthcare and sanitation. Bajaj Auto provides interesting and explicit commitments to employees through its company’s policies: • The Company believes that equal opportunity in employment for all sections of the society is a component of its growth and competitiveness. • It recognises that diversity to reflect socially disadvantages sections of the society in the workplace has a positive impact on business. t• The Company is not biased against employing people from disadvantaged sections of the society, if the applicant possesses competitive skills and job credentials. • Its selection of business partners is not based on any considerations other than normal business parameters. In case of equal business offers, the Company will select a business partner belonging to a socially disadvantaged section of society. • The Company makes all efforts for upgrading the skills and continual training of all its employees to enhance their capabilities and competitive skills. It has a partnership program with various educational institutions to support and aid employees and family members of employees. Infosys implemented health clubs and health programmes, such as health week, nutrition programmes and ergonomics training. It also implemented safety programs to improve awareness about precautions and measures to improve road and personal safety.

4.6.

THE NEED TO BE RESPONSIBLE FOR COMMUNITY (LOCAL OR DISADVANTAGED):

THE

Tata Chemicals set up the Tata Chemicals Society for Rural Development (TCSRD) to promote its social objectives for the communities in and around Mithapur and Babrala,

38

where its facilities are located. Some of the initiatives of TCSRD are: agricultural development, education, women’s programmes, animal husbandry, rural energy, training, watershed development, relief work and infrastructure. TCCI, in collaboration with the United Nations Development Program (India), created the Tata Index for Sustainable Human Development. This was aimed at directing, measuring and enhancing the community work that group enterprises undertake. BSNL is the only telecommunication service provider offering rural telephony as part of its social responsibility. BSNL with support from government is in process of providing broadband to all gram panchayats, secondary and higher secondary schools and public health care centres. BSNL is offering special tariffs for rural subscribers by providing lower rental and higher free calls as compared to urban area subscribers. Bharti Airtel founded the Bharti Foundation in 2000, with the vision: “To help underprivileged children and young people of our country realize their potential.” Through the foundation, several initiatives were started such as the Bharti Computer Centers, which have provided computer learning to more than 130,000 children in five states; the Bharti Library Programme, aimed to encourage reading habits of children; and the Mid-day Meal Programme, in which Bharti Foundation has supported Akshaya Para in providing meals to 43,000 children per day in 292 government schools. For the coming years, the Foundation has plans to start a large number of primary schools in rural areas across the country. It will also provide teachers’ training facilities. Bajaj Auto’s CSR activities among the rural poor are carried out by a Trust, the Jankidevi Bajaj Gram Vikas Sanstha (JBGVS). Established in 1987 by Ramkrishna Bajaj in memory of his mother, Jankidevi Bajaj, this Trust acts as a catalyst to development at the grass root level in 32 villages around its plants in Pune and Aurangabad. The trust initiates sustainable, integrated development through long term projects in rural health, hygiene and sanitation, education and adult literacy, improving agricultural and livestock yield, watershed development and women’s empowerment. Through its poverty alleviation

39

schemes, the Trust provides micro-credit and income generation opportunities for the poor. These projects have a positive impact on the quality of rural living standards. Hero Honda is committed to community as “We must do something for the community from whose land we generate our wealth”. (Quote from Chairperson Brijmohan Lall Munjal) Godrej funds the NAZ foundation which has evolved and implemented a holistic approach to fight HIV, focusing on prevention as well as treatment. In 2004, Parmeshwar Godrej, wife of Chairman Adi Godrej, launched a three-year Heroes Project which seeks to develop coordinated campaigns to address the spread of HIV/AIDS and reduce stigma and discrimination by educating the public. To fight AIDS, Godrej & Boyce has opened a clinic at its Godrej Memorial Hospital in Mumbai.

Dabur has a vision of being company dedicated to the health and well being of every household, drawing inspiration from its founder Dr. S. K. Burman, who said, “What is that life worth which cannot bring comfort to others”. In 1993, Dabur India Ltd established Sustainable Development Society (SUNDESH), a registered voluntary organisation, integrating various aspects such as health, literacy, employment, and empowerment. Through this, the company addresses the most deprived and weaker sections of the society including women, children, illiterates, and the unemployed. Healthcare: The company organizes camps, which include general OPDs, antenatal checkup, vaccination for children aged 0-5 years, family welfare, health awareness through meetings, eye screening and eye operation camps.

HUL launched Project Shakti in 2001 to create income-generating capabilities for underprivileged rural women by providing a small-scale enterprise opportunity, and to improve rural living standards through health and hygiene awareness. The project has been extended to 15 states covering 80,000 villages. The company has launched ‘i-Shakti’ kiosks

40

– an IT-based rural information service developed to provide information and services to meet rural needs in agriculture, education, vocational training, health, and hygiene. To improve business skills of the rural population, especially women, extensive training programmes are held. The total strength of Shakti Entrepreneurs has reached over 30,800. Quoting ITC Chairman, Mr. Y.C.Deveshwar, “Envisioning a larger societal purpose (‘a commitment beyond the market’) has always been a hallmark of ITC. The Company sees no conflict between the twin goals of shareholder value enhancement and societal value creation. The challenge lies in fashioning a corporate strategy that enables customized of these goals in a mutually reinforcing and synergistic manner”. The groups focus is on rural development. ITC’s e-Choupal empowers 3.5 million farmers by enabling them to access customized crop-specific information in their native village, habitat and language. Vernacular websites relating to each agricultural crop that the company deals in provide ready and real time information to even marginal farmers on the prevailing Indian and international prices and price trends for their crop, expert knowledge on best farming practices, and micro level weather forecast. Women Empowerment: ITC aims at micro-credit and skills training to generate alternate employment opportunities for women to facilitate better nutrition, healthcare and education for their children. DLF’s major CSR focus is on the welfare of masses but does not report much on how and where. Wipro believes in two fundaments that have guided its engagement: “One, Wipro is a socioeconomic citizen. Two, if you can do well, you must.” Its major thrust for CSR is education. Wipro Applying Thought in Schools: This initiative is aimed to rekindle the spirit of curiosity in children, in order to develop critical, creative and caring citizens. The project ranges from training programmes for teachers and principals to concerted efforts for transforming entire schools. It started in 2001 and it has reached over 4,500 teachers and

41

principals from 241 schools in 4 states. Its Chairman Azim Premji has launched his own Foundation – Azim Premji Foundation – with a focus on universalisation of education.

Infosys Foundation: It came into existence on 4 December 1996. Its main objective was to fulfill the social responsibility of the company by supporting and encouraging the underprivileged sections of society. The Foundation has been working on initiatives such as: training destitute woman in tailoring and donation of sewing machines and material to them to improve their livelihood; counseling centers to rehabilitate marginalized devadasis in North Karnataka; relief work conducted after natural disasters; donation of aid equipment to the physically challenged in rural areas of Karnataka; and construction of orphanages in rural areas.

4.7. THE EMERGING RECOGNITION OF THE ROLE OF THE ENVIRONMENT AND THE POTENTIAL AS A TIPPING POINT: Tata Steel has laid great emphasis, over the years, on creating a green environment in and around its plants and on utilizing the waste generated in the process of manufacturing steel. The company generates roughly 700 kg of various wastes (excluding fly ash) in the process of producing one tone of rude steel. Of this, 83.16% is utilized either through recycling and reuse in the company’s own processes or is sold as raw material to other industries. The rest is sent for land filling. For Airtel, 5,000 sites are using a green-shelter system that provides cooling for four hours in the Base Transceiver Station. This system saves cost and reduces pollution.

Bajaj Auto’s has an Environmental management system, which is an integral part of the overall management system at Bajaj Auto’s Aurangabad plant, was awarded ISO 14001 certification in 1997.

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Hero Honda is certified for its Environmental Management Systems according to ISO 14001. The Green Rating conducted by the Centre for Science & Environment, New Delhi, for all automobile companies in India, ranked Hero Honda as No.1 for its environmental performance. 1999: Environment Management System of Dharuhera Plant was certified with ISO-14001 by DNV Holland and in 2000: Environment Management System of Gurgaon Plant was certified with ISO-14001 by DNV Holland. Godrej which “covers many aspects and areas, the greenery and mangroves are just one of them,” according to the company. Godrej has been a key player in aiding education, environment and the health verticals besides looking after its own employees. The company strongly believes that the green environment enhances productivity and quality which has been appreciated by all employees and visitors. The company has a mission of “Enriching quality of life everyday everywhere”. The Soonabai Pirojsha Godrej Foundation has been maintaining the western bank of the Thane Creek, the single largest mangrove belt in Mumbai. The Sohrabji Godrej Green Business Centre launched the Green Business Initiative in December 2005, which was aimed at facilitating the development of corporate greenhouse gas inventories and subsequent investments in greenhouse gas mitigation projects. Dabur works towards developing sustainable cultivated source for herbal ingredients, which would help in reducing the strain on natural habitat of these herbs. The company is also involved in reforestation in the Himalayan range. HUL is also committed to extending its efforts on water management to the larger community, and engages in community projects in water adjacent to manufacturing sites. The company has a management system conforming to ISO 14001. ITC focuses on the use of renewable energy such as biomass and solar energy. A number of units have installed solar thermal systems mainly for use in canteens and kitchens. It claims it endeavours to be a carbon positive corporation. Its efforts in the field of energy conservation, use of carbon neutral fuels and large scale tree plantations through social and

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farm forestry have resulted in sequestering 85.6% of the Carbon Dioxide (CO2) emitted by its operations. The Watershed Project, Government of Rajasthan and the ITC Rural Development Trust, have signed a memorandum of understanding (MoU) for the project in Kalyanpura village, over 250 km from the state capital, Jaipur. ITC’s watershed development seeks to achieve two critical objectives: water conservation and soil enrichment. All ITC Units and the four hotel properties owned by ITC (Maurya Sheraton, Mughal Sheraton, Chola Sheraton and Grand Maratha Sheraton) have obtained ISO 14001 certification for their Environment Management Systems. Indian Oil Corporation has been an active founder-member of the United Nations Global Compact (UNGC), an international initiative that brings companies together with UN agencies, labour and civil society to support universal environmental and social principles. Indian Oil has included CSR in its vision and mission statement and has built its corporate strategies around it. Environmental initiatives include: development of cleaner fuels such as diesel with low sulphur content and biodegradable lube formulations; pollution control programme, in which all refineries are provided with facilities to control pollution from different sources; and ecological parks, which are scientifically designed green belts that have been developed at Gujarat Panipat refineries, to serve as a pollution sink and to enhance the aesthetic look of the refinery area. Indian Oil won the TERI Corporate Environmental Award 2002-03 in category III (companies with an annual turnover exceeding Rs.500 crore p.a.). This award has been presented to Indian Oil for installation of Fuel Gas scrubbing (BELCO) system to treat flue gas from RFCC unit of Barauni Refinery to remove particulate matter and sulphur dioxide. Seven refineries and the Indian Oil Research & Development Centre at Faridabad have achieved the ISO 14001:1996 accreditation for Environment Management System. In 1998-99, the Salaya-Mathura Pipeline and the Koyali-Ahmedabad Pipeline became the first oil pipelines in the world to be accredited with ISO-14001 for Environment Management System. Indian Oil’s Mathura Refinery has been certified for “Occupational

44

Health and Safety Management System (OHSMS)” by DNV – the first refinery worldwide to receive this certification and Mathura Refinery was the first Refinery in Asia, and the third in the world in the Petroleum Sector, to be certified ISO-14001 for its efficient Environmental Management System. ONGC has all its operational facilities certified for Quality, Occupational Health& Safety and Environment Management (QHSE) based on ISO 9001, OHSAS 18001, ISRS and ISO 14001. Infosys programmes on environment are being evaluated through the Ozone initiative, in which Infosys Environmental Management System (EMS) is subject to third party surveillance audits.

4.8. THE STAKEHOLDER PERSPECTIVE

Airtel: According to the company, “Corporate Social Responsibility is a way of life at Bharti.” Airtel has been looking after the needs and interest of its stakeholders, including employees, consumers, and communities, along with the environment. Its mission recognises stakeholders: “Airtel is strongly committed to being a responsible corporate citizen. Providing a platform to leverage the potential of the citizens of tomorrow and concern for the environment are our top priorities.” (Sunil Bharti Mittal – Chairman and Managing Director, quoted from the 2005-06 annual report) Hero Honda: Motors takes considerable pride in its stakeholder relationships, especially ones developed at the grassroots. The company believes it has managed to bring an economically- and socially-backward region in Dharuhera, Haryana, into the national economic mainstream. HUL’s CSR philosophy is embedded in its commitment to all stakeholders, including consumers and employees, the environment, and the society the company operates in.

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ONGC is playing an important role in strengthening India’s corporate world with a tuned sense of moral responsibility towards the community of people where it operates and the country at large. In its vision/mission and the philosophy regarding CSR it claims that the company feels responsible not only for wealth creation but also for social and environmental good. It also aspires to abiding commitment to safety, health and environment to enrich quality of community life and to imbibe high standards of business ethics and organizational values. Its approach to CSR is summarized as “an approach to business that exemplifies transparency and ethical behaviour, respect for stakeholder groups and a commitment to add economic, social and environmental value”. Dr. Ashok Kumar Balyan, joined the Board of ONGC as Director (Human Resources) on August 23, 2003 and is currently responsible for formulation and implementation of policies in tune with the strategies of ONGC. He is actively leading the continuous change journey of ONGC called ‘Corporate Rejuvenation Campaign’.

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4.9. BENCHMARKING In order to compare the CSR performance of the companies with the leader (Tata) in CSR, parameters such as the number of initiatives, spectrum of stakeholders addressed and the financial outlay on CSR was studied. Number of initiatives

Company

Stakeholders it addresses through CSR Community Environment Education Health Customer Employees Business Partners

Outlay (in Rs.)

TATA’ S ITC HUL

8

3

4 4

4 1

3 3

1

3

1 14 Rural Marketing 1 6 2 1 8 Telecom

1

1

1

420cr

3

54.25cr N.A

AIRTE L BSNL

2

6 2

1 1

246cr N.A

1

5 3

1 1

13.96cr 4cr

IT INFOS YS WIPRO

3 1

1 1

1 2

IOC ONGC

2 5

1 2

1 1

1

5

1

2

1

2

BAJAJ HERO HONDA

2

1

1

3

1

3

DLF

4

GODR EJ DABU R

Oil and Gas 2 1 FMCG 3 1 Automobiles 2 2 Real Estate

1 Table 4.1

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6 9 9

27.52cr 96cr 1

70cr (every year)

6

N.A

6

10cr (every year)

9

N.A

5

N.A

Tata Group Tata Group investment on CSR in 2006-07 was estimated to be Rs. 420 crore, spread across education, health, environment, rural development, sports, arts and employee relations. Tata Group contributes to environmental initiatives by the direct involvement of Tata companies to preserve the environment and formation of Tata Trusts, which support non-governmental organizations. Community initiatives include formation of: •

educational institutions

•

s ports facilities

•

art and culture centers

Tata’s other initiatives encompass setting up of rural development societies and organizations like Rallilove ACTS and Voltas for Women. It has created towns and cities around industrial facilities for employee benefits. Tata group’s work has been lauded over the years and has received numerous awards including the ‘Award for Corporate Social Responsibility in Public Health – 2007 by USIBC’, ‘Golden Peacock Global Award for Corporate Social Responsibility (Asia) – 2007’, ‘Civil Society Award2006 by UNAIDS.’ The Tata Council for Community Initiatives in collaboration with the United Nations Development Program, created the Tata Index for Sustainable Human Development aimed at directing, measuring and enhancing the community work that group enterprises undertake. It is a set of guidelines for Tata companies looking to fulfill their social responsibilities. Airtel – With primary CSR focus on education and environment, Bharti Airtel has committed Rs 200 crore to support CSR initiatives over the 2006-08 period. Bharti Airtel founded the Bharti Foundation to provide facilities like computer education, library, midday meals etc. to help underprivileged children. Airtel launched the CII-Bharti Woman Exemplar Award in 2005 to promote women’s empowerment at the grassroots. The company has won several awards including India’s Most Customer Responsive Telecom Company Award and the Golden Peacock Award for Corporate Social Responsibility.

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Bharat Sanchar Nigam Limited – BSNL focuses its CSR activities primarily in the field of employee’s welfare activities, assistance during natural calamities and offering rural broadband plans. BSNL implements welfare programs and awards such as Bharat Sanchar Sarathy and Sanchar Seva Padak. It also offers its employees corporate group Life Insurance Policy. BSNL, with government support, plans to provide broadband to all gram panchayats, secondary and higher secondary schools and public health care centers by the end of 2007. BSNL is the only service provider offering rural telephony as part of its social responsibility. It received the ‘Golden Peacock National Award 2005’ for its contribution to the field of CSR, in connecting India’s remote areas and adhering to best labor practices. The company has an ISO 9000 certified Telecom Training Institute. Bajaj – Bajaj’s CSR policy focuses on women empowerment, income generation, health programs, agricultural extension, animal husbandry, watershed development, drinking water schemes, sanitation and education. The company set up the Jankidevi Bajaj Gram Vikas Sanstha (JBGVS) to provide employment opportunities at grass-root level, Samaj Seva Kendra to undertake social activities in the semi-urban areas and Kamalnayan Bajaj Hospital in Aurangabad. Bajaj was awarded the Meritorious Performance in Industrial Safety Award, consequently for three years (1998-2001) by the National Safety Council. The Environmental management system at Bajaj Auto’s Aurangabad plant, was awarded ISO 14001 certification in 1997. Hero Honda – Hero Honda’s CSR focus is in the fields of education, rural healthcare, vocational training, adult literacy and social support to girls of backward classes. Hero Honda has set up an Integrated Rural Development Centre on the outskirts of Delhi. The company’s other initiatives include construction of educational institutes, rural hospitals, sports complex and vocational training centres. In 2006, Hero Honda was ranked No. 1 in the automobile industry by TNS Corporate Social Responsibility Award.

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Godrej – Godrej’s major CSR initiatives include education, environment and health donations and it spends more than Rs 70 crore annually. It has set up establishments like Godrej Technical Institute at Bordi, Pirojsha Godrej Research Laboratory, and the Centre for Excellence at Pirojshanagar under its education initiatives. The Soonabai Pirojsha Godrej Foundation has been maintaining the western bank of the Thane Creek, the single largest mangrove belt in Mumbai. Godrej supports the Foundation for Medical Research, Mumbai for the cure of leprosy and funds the NAZ foundation which works for HIV. Jamshed Godrej, Chairman and MD, Godrej and Boyce Manufacturing Company Limited look after all the CSR. The Awareness program for Godrej and Boyce, Vikroli, Mumbai was given the ISO 14001 certification. Dabur – Dabur’s CSR policy is focused on healthcare, education, skill development and income generation training, empowerment and environment issues. Dabur established the Sustainable Development Society (SUNDESH), a voluntary organization, integrating various aspects such as health, literacy, employment, and empowerment. Dabur was among the ‘Top 10 Great Places to Work’ in 2004. Indian Oil Corporation – Most of the Indian Oil Corporation’s CSR initiatives focus on provision of drinking water and sanitation, health and family welfare, education, and empowerment of women and other marginalized groups in rural and backward areas. It has set up the Indian Oil Foundation to preserve and promote national heritage. It is working with the Bill and Melinda Gates Foundation to spread awareness about HIV/AIDS. Indian Oil’s Mathura Refinery won the 2006 National Energy Conservation Award. In February 2007, the Forum of Women in Public Sector (WIPS) conferred the Best Enterprise Award on Indian Oil for the Corporation’s pioneering efforts towards Women development and related issues. Oil and Natural Gas Corporation Limited – ONGC promotes education, healthcare and entrepreneurship in the community and supports water management and disaster relief in the country. From 2003, ONGC decided to allocate 0.75% of its net profits towards Social

50

and Economic Development programs. Under its project PURA, it undertakes initiatives for system for management of schools, healthcare units, vocational training centers and regional industrial units. An Institute of Petroleum Safety, Health and Environment management (IPSHEM) was set up in 1989. ONGC was awarded the Golden Jubilee Award for Corporate Social Responsibility in emerging Economies in 2006.

DLF – DLF’s CSR policy focuses on welfare of masses. The company organized fire safety drill and women self defense programs for welfare of the masses. The company along with DLF City residents, Gurgaon, organized an exhibition to create awareness among the residents and highlight various measures that need to be undertaken to ensure utmost safety. HUL – HUL CSR initiatives primarily encompass areas like health and hygiene, education, women empowerment, rehabilitation of special or underprivileged children, care for the destitute, HIV-positive, and rural development. The company’s donations include Rs 80 million for tsunami-hit areas in 2005 and Rs 10 million for Mumbai flood relief in 2005. HUL launched project Shakti in 2001 to encourage rural entrepreneurship and set up ‘ishakti’ kiosks to provide information and services to meet rural needs. Other initiatives include inception of rural education programs, education centers for the handicapped, health and hygiene programs in villages and women empowerment programs. Approximately 9% of the company’s resources for community involvement come in the form of employee time. HUL has won awards including Bombay Chamber of Commerce and Industry Civic Award for Community Development 2005, Exemplary Safety Performance from National Safety Council and the Government of Tamil Nadu for Tatapuram and am Tindiindivanam factories in 2005 and 2003 TERI-CSR Special Award for initiatives in sustainable development.

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ITC – ITC is involved in CSR initiatives like environmental performance, primary education, agriculture, women empowerment. But the group’s focus is on rural development initiatives which include echaupal – aiming to provide agriculture-related information through IT, wasteland management and livestock development. ITC provides infrastructure facilities to select government schools under its “Project Classmate”. Its environment initiatives focus on renewable energy, watershed project and energy conservation. The company has received several awards such as the Golden Peacock Award for ‘Corporate Social Responsibility (Asia)’ in 2007, award for ‘CSR in Emerging Economies 2005’, and the inaugural ‘World Business Award’, instituted by the UNDP. Wipro – Wipro’s CSR focus is on education and it invested Rs. 3 crore on education programs in 2002. Wipro’s initiative- ‘Applying thought in schools’ is aimed at wholesome development of school children. ‘Wipro Cares’ is another endeavor aimed to rehabilitate calamity-affected people and provide education to underprivileged children. Wipro’s Chairman Azim Premji has launched his own Foundation – Azim Premji Foundation – with a focus on universalization of education. In 2003, Wiprom received a certificate of honor from the Business World FICCI-SEDF Corporate Social Responsibility Award for its contributions in the field of CSR. Infosys – The key areas of Infosys Foundation’s CSR drive are healthcare, social rehabilitation and rural upliftment; learning and education; art and culture. Other initiatives include construction of orphanages, vocational training centers for women, libraries for rural schools and donation of aid equipment to the physically challenged. Infosys also has programs for paper/water conservation and waste management. Infosys was declared the ‘Best Company to Work for In India 2005’.

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4.9.1 Reason for choosing Tata as benchmark Tata Group The Tata group is known for aggressively pursuing several CSR initiatives in India. It has adopted social responsibility as one of its integral values and has made concerted efforts to link it with its overall strategy for achieving business excellence. The group has always laid great importance on CSR and is evident from its mission as stated by JRD Tata, “No success or achievement in material terms is worthwhile unless it serves the needs or interests of the country and its people.” The group’s strong resolve regarding CSR shows as some of its companies such as Tata Steel, do not buy from or sell to companies that do not measure up to its social responsibility standards. Institutionalizing the Concept The Tata group has integrated its CSR initiatives through its trusts and group companies. To institutionalize the concept, it has drawn up the CSR charter that has been inserted into the group’s ‘Code of Conduct.’ All the group companies are signatories to this code under which they have to actively assist in improving the quality of life in the communities in which they operate. Since inception, the Tata group has placed equal importance on maximizing financial returns as on fulfilling its social and environmental responsibilities-Triple Bottom Line (TBL). After decades of corporate philanthropy, the efforts of the group in recent years have been directed towards synchronization of the TBL. Through this, the group has aimed at harmonizing environmental factors by reducing the negative impact of its commercial activities and initiating drives, which encourage environment-friendly practices. In order to build social capital in the community, the group has encouraged its employees to share their skills with others and work with communitybased organizations.

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Setting Benchmark The group has been actively involved in facilitating the development of this concept in India by setting standards and benchmarks. The group companies have shown the way by establishing a Tata Council for Community Initiatives to provide benchmarks for the enterprises of the group, which help to quantify their efforts. Financial Outlay The group has played an active role in nation building and socio-economic development since the early 1900s. A survey conducted by the website www.indianngos.com revealed that Tatas spent Rs. 1.5 billion on community development and social services during the fiscal 2001-02 – the highest by any corporate house in India. Despite adverse economic conditions e.g. in the late 1990s, the financial commitment of the group towards social activities kept on increasing, from Rs 670 million in 1997-98 to Rs 1.36 billion in 19992000. Recognition The dedicated CSR efforts by various Tata group companies have been globally recognized. The different group companies have received several awards for their fulfillment of social responsibility. The Tata Group case study shows how it is integrating CSR with its business processes in the organization’s journey towards business excellence, translated into vision into action.

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4.10 OBSERVATIONS 4.10.1 SUMMARY OF STUDENTS QUESTIONAIRE RESULTS

Question 1: What are the parameters on which you would choose a company for employment ? Company's Location and benefits they provide

Parameter of choosing company

Company's products or services Company's support of the community and environment Company's values Image of company (Brand name in the market ) Job Description Learning and Development opportunities Profitability Salary

0

20

40

60

Number of responses

Figure 4.2

55

80

Question 2: How would you define CSR?

Key themes emergin Improve company’s i Make shareholders ha Score political points Payback to society Demonstrating conce Not causing harm soc Welfare of the comm Being sensitive to the Playing its part in soc Improve the condition All round economic d Moral responsibility Ensuring sustainabili Social responsibility Silver lining for comp society Helping the less fortu Enhance their goodw Responsibility to stak Mutual relationship – Parameter for judging Helps increase aware Employee facilities a Improving education Using influence and r programmes for social and environme Gain feel good factor Take into considerati Not profit making – ‘ capable, well-off section of society Beyond legal obligati Well-measured appro Instilling motivation Doing good, and aim Table 4.2

Question 3: What do you think are the benefits (Tangible/ intangible) of practicing CSR ?

Aiming to become a world player Corporate reputation Doing good!

Benefits of doings CSR

Improved financial performance Increased ability to attract and retain employees Increased sales and customer loyalty Increasing accountability Management of risk Reduced operating costs Reduced regulatory oversight Satisfying growing investor pressure Satisfying Stake holders

056

20

40

60

Number of Responses

80

57

Figure 4.3

Question 4: Do you think in the Indian context CSR is a part of basic business framew ork of the com panies ?

No answ er/ not sure 3% Yes 29%

No 68%

Figure 4.4

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COMMENTS: (content analysis) YES – HOW? Number of Mentions 1 1 1 1 1

Comments Customer retention Increasing profits Enhancing performance Rural development Don’t know NO – WHY?

Number of Mentions 10 1 11 1 1 1 3 2 1 2 2

Comments Companies only look at profits Fad to attract foreign Investment Not many companies involved yet Doesn’t include all aspects of CSR Not legally binding Lack of CSR knowledge Not seen as important Size/type of companies in India For show – cosmetic only Early stages of development Don’t know Table 4.3 Question 5: Would a high CSRinvolvment of a companyinfluence your decision to join the company?

Not applicable/ no answer 5% NO 40%

Yes 55%

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Figure 4.5 COMMENTS: (content analysis) YES – HOW? Comments Respect, brand value, Satisfaction Stronghold/future Catch attention Beneficial to society Essential NO – WHY? Comments Money matters Not inculcated in CSR way Too selfish CSR is cosmetic/for profits Decision depends on parameters in Q1 Table 4.4

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Number of Mentions 2 2 1 1 1 Number of Mentions 1 1 1 3 1

Question 6: Would you prefer to join a high ranked CSR involved Company ? Not Applicable 6% No 27% 67% Yes

Figure 4.6 COMMENTS: (content analysis) YES – HOW? Number of Mentions

Comments Good reputation = good profits Better satisfaction Preference Perception that good to society means good to employees/salaries Learn integration of corporate work with social responsibility Reflects on company values/culture Duty to help in holistic development of the economy Brings public support Accountable to social good of society (more than profits) NO – WHY?

2 4 2 3 1 3 1 1 3 Number of Mentions

Comments Not priority for me Profile of work (job description and salary)more important Doesn’t make a good company/ no difference Table 4.5

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1 2 2

50 40 30 20 10 IT C U ni te ch W ip ro

H U L H ut ch In fo sy s

od re j H on da H er o

G

D LF

Ba ja j BS N L D ab ur

el An sa ls

0 Ai rt

Number of Mentions

Question 7: In your view which is the most "responsible" company/companies in India? (Figures based on numbers of mentions rather than ranking figures)

Company

Figure 4.7

OTHER COMPANIES MENTIONED

Company Name Tata Proctor and Gamble Reliance Birlas Table 4.6

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Number of Mentions 14 1 1 1

Question8: W hatarethetopofmindissues thatcorporateIndianeeds to takecareof?

Number of Responses

Education Environm ent Health Related ( canc er, HIV) Chi ldren and Woman Health a nd Education Human Rights Community Upliftment

0

10

20

30

40

Top of Mind Issues

Figure 4.8

63

50

60

70

Question 9: What are the top of mind CSR Programmes that you can recall?

Company / Programme Aashirwaad atta – water Birlas – educational institutions GE HUL Shakti – primary education to rural kids under rural development Infosys – for education ITC e-choupal Lifebuoy Swasthya Chetna Lupin – in Rajasthan Microsoft anti-AIDS Programme Navneel – good to society by saving paper None – no examples given/Don’t know Pepsi’s water harvesting activity Project Shailesh SI electronics – taking up are around the company for maintenance Standard Chartered AIDS Awareness Programme TATA projects TERI TISS WIPRO Table 4.7

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Number of Mention 1 1 1 12 2 38 2 1 1 1 46 1 1 1 2 4 1 1 1

CHAPTER 5 RECOMMENDATIONS AND LIMITATIONS 5.1 RECOMMENDATIONS •

CSR is a combined concept which covers social, ecological and economic issues.

•

Profit earning should not be the core purpose of businesses; instead businesses must render services to the society.

•

The traditional expectations are being replaced by new ones and companies are expected to act responsibly, be accountable and beneficial to the society.

•

Practicing CSR is not wastage of money and resources but it adds to the goodwill, prestige and credibility of a company.

•

Potential employees of a country are not only influenced by the salary but are also influenced by the CSR policies followed by a company.

5.2 LIMITATIONS Although the study and the subsequent statistical analysis were done with careful proofing, yet there are always some limitations to any research work done, and this one is no exception. Some of the limitations of this work are as follows: •

The sample collected for primary research was a random one which may include some non serious respondents ultimately decreasing the true essence of the research.

•

The sample size was limited to 80 people out of which 9 respondents declined to fill the questionnaire. A sample of over 100 would have given better and more dependable results.

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•

The questions included in the questionnaire were limited to cover all the issues related to CSR. More questions would have made the questionnaire boring and time consuming for the respondents.

•

Time constraint was a barrier in getting the most genuine responses from the respondents.

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APPENDIX 1 QUESTIONAIRE

Question 1: What are the parameters on which you would choose a company for employment? Salary Profitability Learning and Development opportunities Job Descript ion Image of company (Brand name in the market) Company’s values Company’s support of the community and environment Company’s product s or services Company location and benefits they provide

Question 2: How would you define CSR?

Question 3: What do you think are the benefits (tangible and intangible) of doing CSR? Satisfying stakeholders Satisfying growing investor pressure

Reduced regulatory oversight Reduced operating costs Management of risk Increasing accountability Increased sales and customer loyalty Increased ability to attract and retain employees Improved financial performance Doing good! Corporate reputation Aiming to become a world player

Question 4: Do you think that in the Indian context CSR is a part of the basic business framework of companies? Yes No No Answer/ Not Sure Question 5: Would a high CSR involvement of the company influence your decision to join the company? Yes No No Answer/ Not Applicable Question 6: Would you prefer to join a high ranked CSR involved company? Yes No No Answer/ Not Applicable

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Question 7: In your view which is the most “responsible” company/companies in India? (Figures based on numbers of mentions rather than ranking figures.)

Airtel Ansals Bajaj BSNL Dabur DLF Godrej Hero Honda HUL Hutch Infosys ITC Unitech Wipro

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Question 8: What are the top of mind issues that corporate India needs to take care of? Environment Health Related (cancer, HIV) Children/Women Health and Education Human Rights Community Upliftment Education Question 9: What are the top of mind CSR programmes that you can recall?

Name

:

Age

:

Name of College

:

Course

:

Signature

:

Years.

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BIBLIOGRAPHY 1

Dinkar Pagare, “Business Management”

2

C.B.Gupta, “Business Studies”

3

Sanjay Kumar Panda, “Corporate Social Responsibility in India : Past, Present And Future”

4

Andrew Kakabadse, Nada Kakabadse. “CSR in Practice: Delving Deep”

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