Corporate Social Responsibility Ch. 1 ,2, 3, 4 & 5

promote shared prosperity

foster income growth of the bottom 40% of the population in every country

primary social stakeholders

have direct stake in organisation shareholders, investors, employees, managers, customers, local communities, suppliers etc

general system theory

highlights that all organisations are open to and interact with their external environment. Emphasises the ways in which organised systems respond in an adaptive way to cope with significant changes in their external environments

third generation

makes significant contribution to addressing poverty, exclusion and environmental degradation involves leadership companies and organisations

drivers that compelled integration of CSR into business strategy

meeting changing expectations of stakeholders shrinking role of government increased customer interest more competitive labour markets increasing supply chain responsibility growing investor pressure demands for increased disclosure new and emerging issues

end extreme poverty

% of people living with less than $1.25 a day to fall to no more than 3% globally by 2030

triple bottom line approach

3 Ps to measure the success of the firm people (social bottom line) planet (environmental bottom line) profit (economic bottom line) consider firm's sustainability in social community, environment and business makes business decisions and actions more transparent and allows people to gain a thorough understanding of a business' level of corporate social responsibility. Helps manager to assess and compare their performance across all 3 criteria against business objectives and long term goals

second generation

CSR as an integral part of long-term business strategy. the organisation tries to align business goals and social goals to maintain its profitability

systems theory models

emphasise their interaction with outside actors and organisations and concentrate on identifying the particular elements in environment of group or organisation that significantly affect the outcomes of its decision making

world bank group goals by 2030

end extreme poverty at global level within a generation promote "shared prosperity": sustainable increase in well-being of poorer segments of society

CSR activities include

eradicating hunger & poverty promoting education promoting gender equaity reducing child mortality combating human infections and viruses ensuring environmental sustainability promoting employment promoting social business projects

secondary social stakeholders

extremely influential, affecting public standing and reputation government, civic institutions, pressure groups, media

india and world bank group partnership strategy

focus on areas: environmental sustainability and gender equality integration: improving infrastructure needs both through public and private investments transformation: rural-urban transformation inclusion: focus on human development and on policies for growth.

social justice theory

focuses on fairness and distributive justice- society goods (wealth, power etc) are distributed amongst the members of society

4 stages of CSR assessment

assemble a CSR leadership team develop a working definition of CSR review corporate documents, processes, and activities identify and engage key stakeholders

key challenges in stakeholder engagement

assessing who the key stakeholders are designing an effective engagement program on strategy and operations having a mechanism to properly collect and respond to stakeholder views providing information on real performance developing and communicating the organisation's values restoring and enhancing reputation/trust finding a cost effective approach to monitor and report performance ensuring data is reliable developing a relationship with strategic stakeholders

steps for developing a CSR strategy

build support with senior management and employees research what other businessed are doing prepare a matrix of proposed CSR actions develop options for proceeding and the business case decide on direction, approach and focus areas CSR strategy is likely to succeed when it is based on a clear understanding of the organisation's values.

corporate sustainability

business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental and social developments

arguments against CSR

businesses are owned by their shareholders- thus any money they spend of social responsibility is theft from shareholders. But if CSR as a business process manages relationships with influential stakeholders who can have real influence of business operations, the business case becomes immediately apparent CSR is the responsibility of politicians, not the role of corporations. But if it helps meet both social and business goals. Then CSR is a strategy to manage the risks and reputation in the market

how to engage employees in CSR

clearly define the ultimate goal understand what employees can relate to give feedback and recognition build trust

business case for CSR

commercial benefits of CSR in quantifiable terms which convince 'non-believers' of the business benefits of CSR positive CSR experiences build confidence and goodwill with stakeholders is a strategic branding and management approach

The companies act 2013

companies having: net worth of Rs. 500 crore + turnover of Rs. 1000 crore + net profit of Rs. 5 crore + have to spend atleast 2% of its average net profit on CSR force companies to be conscious of their social responsibilities level the playing field and give companies the desire to engage in CSR

rights theory

concerned with the meaning of rights, including basic human rights and property rights property rights should not override human rights shareholders of a corporation have certain property rights - this does not give them license to override the basic human rights of employees, local community members, and other stakeholders

how CSR helps enhance business operations and achieve sustainable outcomes

create shareholder value increased revenue base strategic branding operations efficiency increased productivity and quality access to new markets better access to capital human and intellectual capital lower business risk

analyzing stakeholder engagement processes

creating and implementing policy checklists quantitative and qualitative research methods asset mapping stakeholder analyses gender analyses partnerships institutional analyses

deontological theory

deals with the belief that everyone (including corporate managers) has a moral duty to treat everyone else with respect, including listening and considering their needs- Golden rule

decide on direction, approach and focus for CSR

direction: main area aimed to address approach: how to move in the direction identifies focus areas: business objective and immediate priorities

environmental impacts(globalisation)

ecological imbalances and climate change have occured because of the following factors increase in trade larger corporations with centralised distribution poor pollution control mechanisms of MNCs in foreign markets extractive industries using natural resources non-judiciously

Carroll's pyramid of social responsibility

economic- be profitable legal- obey the law ethical- follow ethics philanthrophic - be good corporate citizen simultaneous fulfilment of 4 responsibilities

globalisation and its impact

narrowing of gap between economic growth rates of developed and developing countries liberalisation and expansion of international trade has led to increase in Foreign Direct Investment (FDI) revolution in information and communications technology and declining transportation costs integration of economies by means of rapid advances in ICT (information, communication and entertainment) sectors

corporate philanthrophy

need to bring tangible results brings good name to the company as well as to the country Seeing economic and social benefits as distinct and competing. The companies should focus on creating social benefits that create a corresponding economic benefit for the company advantages: improves a company's long term business prospects can improve the level of education can improve local quality of life helps in expanding the local market helps to reduce corruption in the local business environment

CSR assessment should provide understanding of the following

organisation's value and ethics internal and external drivers motivating the organisation key CSR issues affecting the organisation key stakeholders current corporate decision making structure human resources and budgetary implications existing CSR related initiatives

to engage stakeholders effective businesses need to fulfil requirements

policy formulation policy execution information and communication recognise the stakes verification- transparency and credibiltiy

how to build a business case for CSR

possible leverage points areas to gain competitive advantage areas where stakeholders might have influence short and long term goals cost of implementing anticipating benefits opportunities for cost reduction implication of each action

gandhiji's trusteeship theory "trusteeship formula"

provides a means of transforming the present capitalist order into an egalitarian one does not recognize any right of private ownership of property does not exclude legislation of the ownership and use of wealth an individual will not be free to hold or use his wealth for selfish satisfaction the character of production will be determined by social necessity and not by personal greed

social impacts (globalisation)

relative poverty has increased in majority of the countries as an effect of globalisation. Migration has increased. Fall in transportation costs and growth of mass tourism has made smuggling of people and drugs difficult to detect and punish

CSR strategy

road map for moving ahead on CSR issues sets the organisation's direction and scope over the long terms with regard to CSR

companies act 2013

section 135: net worth of Rs. 500 crore/ turnover of Rs. 1000 crore/ net profit of Rs. 5 crore shall constitute a CSR committee committee should have 3 or more directors, atleast 1 independent director role of committee: monitor and approve CSR policy recommend and ensure expenditure on CSR plan and monitor CSR activities company shall give preference to local areas where it operates

statist theory

seeks to emphasise on the necessity of public sector institutions in taking the economy to commanding heights proposes the active participation of government run economic institutions in economic development need to regulate and control corporate behaviour by means of restrictive licensing and permit mechanism Private sector institutions are required to comply with the regulations and recommendations of government in order to stay active in business

main stakeholders in a company

shareholders management, employees, customers, suppliers, banks, government, trade unions, pressure groups, local community

first generation of CSR ( 3 generations of csr)

showed companies can be responsible in ways that do not detract from and may contribute to commercial success prominent changes: adoption of strategic approach expansion of geographic focus of corporate giving to reflect the needs and expectations of a global workforce development of measurement tools for evaluating the impact of charitable contribution create long-term relationships with non-profit organisations and communities and organise their philanthropic programmes

social contract theory

society consists of series of explicit and implicit contracts between individuals, organisations and institutions. Purpose- exchanges could be made between parties in environment of trust and harmony organisations enter into these contracts with other members of society and receive resources, goods, and societal approval to operate in exchange for good behaviour principle- social responsibilities of businessmen arise from the amount of social power that they have

CSR policy by CSR committee should include

specify projects and programmes list of projects integrating business models with social and environmental processes surplus arising out of the CSR activity 2 % of average net profit would be spent of CSR

stakeholder theory

strategic management concept to help corporations strengthen relationships with external groups in order to develop a competitive advantage

role of business in sustainable development

strike a balance between the corporate goals of efficiency and social goals of effectiveness the ability of corporations to create value for its customers, investors and employees is intertwined with its developmental role

sustainable development

striking a fair trade off between economic outcomes in the present and those in future when tied to corporate social responsibility seeks to achieve an inter-temporal balance in the judicious use of resources for economic gain

friedman's theory/ fundamental theory

there us one and only one social responsibility of business- to use its resources and angage in activities designed to increase its profits so long as it stays within the rules of the game, engages in open and free competition without deception and fraud characterized as fundamentalism

world bank group goals 2030

two goals end extreme poverty- % of people living with less than $1.25 a day to fall to no more than 3% globally by 2030 promote shared prosperity- foster income growth of the bottom 40% of the population in every country