2 Corporate Social Responsibility

Corporate Social Responsibility, CSR amendments under the Companies (Amendment) Act, 2019, Benefits of CSR, Management of Socially Responsible Business, Pyramid of CSR, Economic Responsibility, Legal Responsibility
Ethical Responsibility, Philanthropic Responsibility, discretionary responsibility, Section 135 and Schedule VII of Companies Act, Entries in Schedule VII, Types of CSR activities under Schedule VII of the Companies Act 2013, Business Ethics, CSR of Business Towards Stake Holders, Social Responsibilities of Business Towards Different Stakeholders-SHAREHOLDERS, GOVERNMENT, CUSTOMERS, EMPLOYEES, SOCIETY, Reasons for Businesses to Engage in CSR, Social Responsibility ----
Arguments for/ in favour of Social Responsibility of Business, Social Responsibility ----
Arguments Against Social Responsibility of Business, CSR Activities of Companies

2. Corporate Social Responsibility
➢CorporateSocialResponsibility,oftenabbreviated"CSR,"isacorporation's
initiativestoassessandtakeresponsibilityforthecompany'seffectson
environmentalandsocialwellbeing.
➢CSRmayalsobereferredtoas"corporatecitizenship"andcaninvolve
incurringshort-termcoststhatdonotprovideanimmediatefinancial
benefittothecompany,butinsteadpromotepositivesocialand
environmentalchange
➢CSRistheprocedureofassessinganorganization’simpactonsocietyand
evaluatingtheirresponsibilities.
➢ThemosteffectiveCSRplansensurethatwhileorganizationscomplywith
legislation,theirinvestmentsalsorespectthegrowthanddevelopmentof
marginalizedcommunitiesandtheenvironment.

3. Corporate Social Responsibility -Definitions
➢“CorporateSocialResponsibilityreferstotheobligationsofbusinessmento
pursuethosepolicies,tomakethosedecisions,ortofollowthoselinesof
actionwhicharedesirableintermsoftheobjectivesandvaluesofsociety.”
(Bowen,1953citedinCarroll,2008,p.25)
➢Carroll(1979,p.500)definesCSRas“Thesocialresponsibilityofbusiness
encompassestheeconomic,legal,ethical,anddiscretionaryexpectations
thatsocietyhasoforganizationsatagivenpointintime.”
➢TheASEANCSRNetworkdefinesCSRasfollows“CSRisnotabouthow
moneyisspentbutmoreabouthowmoneyismade.Itisbeyondcharity
andphilanthropy.”(ASEANCSRNetwork,2015).

4. Corporate Social Responsibility -Definitions
TheInternationalOrganizationforStandardization’sGuidanceStandardon
SocialResponsibility,ISO26000,describesCSRas:
“Socialresponsibilityistheresponsibilityofanorganizationfortheimpactsof
itsdecisionsandactivitiesonsocietyandtheenvironment,through
transparentandethicalbehaviorthat:
•contributestosustainabledevelopment,includingthehealthandthe
welfareofsociety
•takesintoaccounttheexpectationsofstakeholders
•isincompliancewithapplicablelawandconsistentwithinternational
normsofbehavior,and
•isintegratedthroughouttheorganizationandpracticedinitsrelationships.”
(InternationalOrganizationforStandardization,2010).

5. Corporate Social Responsibility
➢ThecoreconceptofCSR,thatacompanyhasresponsibilitiestosociety
besidesmakingmaximumprofits,goesbacktothelate19thcentury.
(CenterforEthicalBusinessCultures,2005).
➢BritishconfectionerycompanyCadburywasapioneerattakinginto
accountitsemployees’welfare.In1879,thecompanybuiltanewfactory
withhousesforitsemployeesandagardenandsportsfacilitiesto
encourageitsemployeesandtheirfamiliestodosportsactivities.
➢Thecompanyalsoheldmorningprayersandnegotiatedspecialtrainfares
foritsemployees,whodidn’tlivenearthefactory.(Cadbury,2015).

6. Corporate Social Responsibility
➢PriortoCompaniesAct2013,CSRinIndiahastraditionallybeenseenasa
philanthropicactivity.AndinkeepingwiththeIndiantradition,itwas
believedthateverycompanyhasamoralresponsibilitytoplayanactive
roleindischargingthesocialobligations,subjecttothefinancialhealthof
thecompany.
➢Intheearly90’sMahatmaGandhiintroducedtheconceptoftrusteeship
helpingsocio-economicgrowth.CSRwasinfluencedbyfamilyvalues,
traditions,cultureandreligion.
➢Dr.BhaskarChatterjee,popularlyknowninIndiaasthe'fatherofCSR',
addressedtheUnitedNations'(UN)2016ForumonBusinessandHuman
Rights,sharinginsightsintoIndia'suniquelawonCorporateSocial
Responsibility(CSR)

7. Corporate Social Responsibility
➢Overtheyears,Chatterjeehasspokenandlecturedatanumberof
internationalmeetingsastheprimaryforceforbringinganewparadigmto
therealmofCSR.Hewasinstrumentalinframingandissuingtheguidelines
forthisnewlaw.
➢AttheUN,Chatterjeejoinedapaneltitled,‘Stateregulatoryapproaches:
thepracticeinemergingmarkets’totalkabouttherelevanceofCSR
legislationforadevelopingcountry.ThisUNForumistheworld'slargest
annualgatheringonbusinessandhumanrights,with2,300participants
fromgovernment,business,otherUNbodies,communitygroups,law
firms,tradeunions,academiaandthemedia.

8. Corporate Social Responsibility
➢Indiaisthefirstcountryintheworldtomakecorporatesocial
responsibility(CSR)mandatory,followinganamendmenttoTheCompany
Act,2013inApril2014.
➢Businessescaninvesttheirprofitsinareassuchaseducation,poverty,
genderequality,andhungeraspartofanyCSRcompliance
➢AmidtheCOVID-19(coronavirus)outbreak,theMinistryofCorporate
Affairshasnotifiedthatcompanies’expendituretofightthepandemicwill
beconsideredvalidunderCSRactivities.Fundsmaybespentonvarious
activitiesrelatedtoCOVID-19suchaspromotionofhealthcareincluding
preventivehealthcareandsanitation,anddisastermanagement.

9. Corporate Social Responsibility
➢CorporateAffairsMinisterNirmalaSitharamantweetedthecircular.
"Inviewofthespreadofnovel#CoronaVirusinIndia,itsdeclarationas
pandemicbytheWHO,anddecisionofGovernmentofIndiatotreatthisas
notifieddisaster,itisherebyclarifiedthatspendingofCSRfundsforCOVID-
19iseligibleCSRactivity...,"shetweetedinMarch2020.
➢ConsultancyCorporateProfessionalsGroupFounderPavanKumarVijay
saidtheministry'sclarificationonCSRwasawelcomestep.
"Forthepurpose,itissuggestedthatthegovernmentmayimmediately
createaportalonwhichspecificrequirementsbywayofequipment,
medicines,etc.maybepostedandthecorporatesmaybepermittedto
contributeincashorkindtowardsthosespecificrequirements.Thiswill
ensurecoordinatedeffortsandavoidduplication,"hesaid.

11. ➢TheamendmentnotifiedintheCompaniesAct,2013requirescompanies
withanetworthofINR5billion(US$70million)ormore,oranannual
turnoverofINR10billion(US$140million)ormore,ornetprofitofINR50
million(US$699,125)ormore,tospend2percentoftheiraveragenet
profitsofthreeyearsonCSR,Itisknownasthe‘2PercentLaw’inIndiaand
hasdrawnworldwideinterest.
➢Priortothat,theCSRclausewasvoluntaryforcompanies,thoughitwas
mandatorytodisclosetheirCSRspendingtoshareholders
➢CSRincludesbutisnotlimitedtothefollowing:
•ProjectsrelatedtoactivitiesspecifiedintheCompaniesAct;or
•Projectsrelatedtoactivitiestakenbythecompanyboardasrecommended
bytheCSRCommittee,providedthoseactivitiescoveritemslistedinthe
CompaniesAct.

12. CSR amendments under the Companies (Amendment) Act, 2019
➢Untilnow,ifacompanywasunabletofullyspenditsCSRfundsinagiven
year,itcouldcarrytheamountforwardandspenditinthenextyear,in
additiontothemoneyallottedforthatyear.
➢TheCSRamendmentsintroducedundertheActnowrequirecompaniesto
deposittheunspentCSRfundsintoafundprescribedunderScheduleVIIof
theAct(suchasthePrimeMinisterReliefFund)withinsixmonthsofthe
endofthefinancialyearanddisclosethereasonsfornon-spendingintheir
annualreport.
➢Thisamountmustbeutilizedwithinthreeyearsfromthedateoftransfer,
failingwhichthefundmustbedepositedintooneofthespecifiedfunds.

13. CSR amendments under the Companies (Amendment) Act, 2019
➢Thenewlawprescribesforamonetarypenaltyaswellasimprisonmentin
caseofnon-compliance.ThepenaltyrangesfromINR50,000(US$700)to
INR2.5million(US$35,000)whereasthedefaultingofficerofthecompany
maybeliabletoimprisonmentforuptothreeyears,orafineuptoINR
500,000(US$7,023),orboth.
➢Thegovernment,however,isreviewingtheserulesaftertheindustry
objectedtothestrictprovisions,especiallywithrespecttothejailterms
forCSRviolations,andisyettooperationalizethem.

14. Benefits of CSR

15. Management of Socially Responsible Business
➢Theterm“corporatesocialresponsibility”cameintocommonuseinthe
late1960sandearly1970saftermanymultinationalcorporationsformed
thetermstakeholders,meaningthoseonwhomorganizationactivities
haveanimpact.
➢Corporatesocialresponsibility(CSR)referstobusinesspractices
involvinginitiativesthatbenefitsociety.
➢Abusiness'sCSRcanencompassawidevarietyoftactics,fromgivingaway
aportionofacompany'sproceedstocharity,toimplementing
"greener"businessoperationsetc.
➢TheconceptofCSRrestsontheideologyofgiveandtake.Companies
takeresourcesintheformofrawmaterials,humanresourcesetc.from
thesociety.ByperformingthetaskofCSRactivities,thecompanies
aregivingsomethingbacktothesociety(CompaniesAct2013).

16. Management of Socially Responsible Business
➢CSRpolicyfunctionsasabuilt-in,self-regulatingmechanismwhereby
businessmonitorsandensuresitsactivecompliancewiththespiritof
thelaw,ethicalstandards,andinternationalnorms.
➢Socialresponsibilityisanethicalframeworkandsuggeststhatanentity,be
itanorganizationorindividual,hasanobligationtoactforthebenefitof
societyatlarge.
➢Socialresponsibilityisadutyeveryindividualhastoperformsoasto
maintainabalancebetweentheeconomyandtheecosystems.
➢Socialresponsibilitycanbepassive,byavoidingengaginginsocially
harmfulacts,oractive,byperformingactivitiesthatdirectlyadvancesocial
goals

17. Management of Socially Responsible Business
➢ThefirstcompanyofgoodcorporategovernanceistheIndianITindustry
bellwether,Infosys.Infact,Infosysisoneofthecompaniesthathasset
benchmarksforothercompaniesnotonlyinIndiabutallovertheworldin
thewaycorporategovernanceandsocialresponsibilityarehandledand
projectedtotheoutsideworld.
➢Anothercompanythathasdoneanexceptionaljobofportrayingitselfasa
goodcorporatecitizenistheTATAgroupinIndia

18. Pyramid of CSR
➢Inhis1991articleThePyramidofCorporateSocialResponsibility,Dr.Archie
B.Carroll,abusinessmanagementauthorandprofessorattheUniversity
ofGeorgia,outlinedthefourareashebelievedwereessentialina
company’scorporatesocialresponsibility.
➢Theseelementswereorganizedinorder
ofimportanceandpresentedvisuallyinwhat
isnowknownasthePyramidofCorporate
SocialResponsibility.

19. Pyramid of CSR
ArchieCarrollsuggeststhatcorporatehastofulfilresponsibilityatfourlevels
–Economic,Legal,EthicalandPhilanthropic.
•TheEconomicResponsibilitytobeprofitable.
•TheLegalResponsibilitytoobeythelawssetforthbysociety.
•TheEthicalResponsibility,todowhatisrightevenwhenbusinessisnot
compelledtodosobylaw.
•The Philanthropic Responsibility (also called
thediscretionaryresponsibility),bestdescribedbytheresources
contributedbycorporationstowardsocial,educational,recreationaland/or
culturalpurposes.

20. Pyramid of CSR
➢Economic:Thefirstandmostvitallevelofthepyramidisacompany’s
economicresponsibilities.Asafundamentalconditionforitsexistence,a
companymustbeprofitable.Ifthisrequirementisnotmet,thebusiness
cannotsurvive,andasaresult,thecompanywillnotbeabletomoveonto
theotherlevelsofthepyramid.
➢Legal:Aftersatisfyingitseconomicresponsibilities,companiesmustensure
thattheirbusinessoperationsarewithintheconfinesofthelaw.Atthis
level,organizationsmustfulfilltheirlegalrequirements.Liketheeconomic
requirements,iflegalrequirementsarenotmetthecompany’ssurvival
maybeatstake,preventingthemfrommovingontootherlevelsofthe
pyramid.Theselegalrequirementsinclude,butarenotlimitedto,
employment,competition,andhealthandsafetylaws.

21. Pyramid of CSR
➢Ethical:Thenextlevelofthepyramidisthecompany’sethical
responsibilities.Inthisstage,thecompanygoesbeyondlegalrequirements
byactingmorallyandethically.Inotherwords,thecompanymakesa
consciousdecisionto“dotherightthing.”Forexample,inanattemptto
reducewaste,somecoffeeshopshavestartedofferingdiscountsto
customerswhobringtheirownreusablecups.
➢Philanthropic:Oncetheeconomic,legal,andethicalfoundationsofthe
pyramidhavebeenbuilt,thecompanycanmoveontothefinallevelofthe
pyramid—philanthropicresponsibilities.Atthislevel,thecompanygoes
beyonditsethicresponsibilitiesbyactivelygivingbackandmakinga
positiveimpactonsociety.
Afteralmostthreedecadessinceitsintroduction,thePyramidofCorporate
SocialResponsibilityremainshighlyrelevant.

22. Section 135 and Schedule VII of Companies Act

23. CSR in India

24. Entries in Schedule VII
i.Eradicatinghunger,povertyandmalnutrition,promotinghealthcare,
includingpreventivehealthcareandsanitation,includingcontributionto
theSwachchBharatKoshset-upbytheCentralGovernmentforthe
promotionofsanitationandmakingavailablesafedrinkingwater.
ii.Promotionofeducation,includingspecialeducationandemployment
enhancingvocationskillsespeciallyamongchildren,woman,elderlyand
thedifferentlyabledandlivelihoodenhancementprojects
iii.Promotinggenderequality,empoweringwomen,settinguphomesand
hostelsforwomenandorphans,settingupoldagehomes,daycare
centers,andsuchotherfacilitiesforseniorcitizensandmeasuresfor
reducinginequalitiesfacedbysociallyandeconomicallybackwardgroups

25. Entries in Schedule VII
iv.Ensuringenvironmentalsustainability,ecologicalbalance,protectionof
floraandfauna,animalwelfare,agroforestry,conservationofnatural
resourcesandmaintainingqualityofsoil,airandwaterincluding
contributiontotheCleanGangaFundset-upbytheCentralGovernment
forrejuvenationofriverGanga
v.Protectionofnationalheritage,artandcultureincludingrestorationof
buildingsandsitesofhistoricalimportanceandworksofart;settingupof
publiclibraries,promotionanddevelopmentoftraditionalartsand
handicrafts
vi.Measuresforthebenefitofarmedforcesveterans,warwidowsandtheir
dependents
vii.Trainingtopromoteruralsports,nationallyrecognizedsports,Paralympic
sportsandOlympicsports

26. Entries in Schedule VII
viii.ContributiontothePrimeMinister'sNationalReliefFundoranyother
fundsetupbytheCentralGovernmentforsocio-economicdevelopment
andreliefandwelfareoftheScheduledCastes,theScheduledTribes,
otherbackwardclasses,minoritiesandwomen.
ix.Contributionsorfundsprovidedtotechnologyincubatorslocatedwithin
academicinstitutionswhichareapprovedbytheCentralGovernment
x.Ruraldevelopmentprojects
xi.Slumareadevelopment(‘slumarea’shallmeananyareadeclaredassuch
bytheCentralGovernmentoranyStateGovernmentoranyother
competentauthorityunderanylawforthetimebeinginforce)

27. Types of CSR activities under Schedule VII of the Companies Act 2013
➢Eradicatinghunger,povertyandmalnutrition
➢Promotingeducation
➢Promotinggenderequality
➢CSRinitiativesrelatedtotheenvironment
➢Protectionofnationalheritage,artandculture
➢Measurescanbetakentowardsthebenefitandsupportofarmedforces
veterans,warwidowsandfamilies
➢ContributionstothePrimeMinister’sNationalReliefFundoranyother
fundsetupbythecentralgovernment,forwelfare,developmentandrelief
oftheschedulecaste,tribes,otherbackwardclasses,womenand
minorities.

28. Types of CSR activities under Schedule VII of the Companies Act 2013
➢Contributionsorfundsprovidedtothedevelopmentoftechnologylocated
withinthecentralgovernmentapprovedacademicinstitutions.
➢Contributionscanbemadetowardsruraldevelopmentprojectsandslum
areadevelopment.

29. Business Ethics
➢Ethicsrefertoasystemofmoralprinciples–asenseofrightandwrongand
goodnessandbadnessofactionsandtheirmotivesandconsequences.
➢Itisasetofconceptsandprinciplesthatguideusindeterminingwhat
behaviorhelpsorharmsothersinthesociety.
➢BusinessEthicsorCorporateEthicsrefertotheapplicationofethicsto
business.Itisthestudyofgoodandevil,rightandwrongandjustand
unjustactionsofbusinessmen.
➢Theyarebasicallythemoralprinciplesthatguidethewayabusinessman
behaves.
➢Itappliestoallaspectsofbusinessconductandisrelevanttotheconduct
ofindividualsandentireorganizations.

30. Business Ethics
➢Long-termGrowth:Sustainabilitycomesfromanethicallong-termvision
whichtakesintoaccountallstakeholders.Organizationsshouldaimfor
smallerbutsustainableprofitsinthelong-term.
➢PublicImage:Anorganizationsenvironmentalpolicy,thewaytheytreat
theiremployeesandthewaytheytreatthecommunitiesareallpartof
theiroverallbehaviorandthisinturnistheprinciplefactorindetermining
theirpublicimage.
➢CostandRiskReduction:Companieswhichrecognizetheimportanceof
businessethicswillneedtospendlessinordertoprotectthemselvesfrom
internalandexternalbehavioralrisksastheyaresupportedbysound
governancesystems.

31. CSR of Business Towards Stake Holders

32. Social Responsibilities of Business Towards Different Stakeholders-
SHAREHOLDERS
(1)Toensuresafetyofinvestment.
(2)Toensurefairandregularreturnoninvestment.
(3)Togivecompleteinformationregardingthefinancialpositionofthe
business.
(4)Togivethemopportunitiestoparticipateindecisionmaking.
(5)Toensureappreciationofinvestmentbyproperutilizationofresources.
(6)Tomakeproperuseoffundsofshareholders.
(7)TotakeR&Dactivitiesfordiversificationofproductlineandalsofor
facingmarketcompetitioneffectively.
(8)Toimprovetheprestigeofthecompanythoughgrowthandexpansion
andtogivesafetytotheinvestmentsofshareholders

33. SocialResponsibilitiesofBusinessTowardsDifferentStakeholders-
GOVERNMENT
(1)Paymentofregulartaxestothegovernment.
(2)Tofollowtherelevantlaws,rulesandregulationsrelatingtolicensing,
pollutioncontrol.
(3)Toavoidtheuseofcorruptandunethicalmeanstoseekfavoursfrom
governmentandpoliticians.
(4)Toavoidinfluencingpoliticalleadershipforpersonalgainsthroughbribes
andimmoralpractices.
(5)Tofollowfairtradepracticesandraisesocialwelfare.
(6)Toavoidtaxevasionandavoidtaxevasionatallthelevels.
(7)Torepayloanstakenfrompublicsectorbanksandfinancialinstitutions
(8)Tomaintainfinancialtransparencybydisclosingalltheimportantfinancial
details.

34. Social Responsibilities of Business Towards Different Stakeholders-
CUSTOMERS
(1)Toprovidequalitygoodsandservicesatreasonablepricetothe
customers.
(2)Toavoidartificialscarcityofproductsandensureequitabledistribution.
(3)Toconductasurveyorresearchtoensurethecustomersarehappywith
theproductsandservicesofthebank.
(4)Toallowforfreeandfairbusinesscompetitionandavoidtheexploitation
oftheconsumers.
(5)Tomaintainacloselinkwithlinkwiththeconsumersthroughconsumer
cellsinordertosolvetheircomplaintsandsuggestions.
(6)Tohonourandprotecttherightsoftheconsumers.

35. Social Responsibilities of Business Towards Different Stakeholders-
EMPLOYEES
(1)Toprovideopportunitiesformeaningfulworkintheenterprisesandto
createasenseofloyaltytowardstheenterprise.
(2)Tocreatetheconditionsinwhichemployeesareabletoputforwardtheir
besteffortsforachievingtheobjectivesofenterprise.
(3)Tointroducecodeofconductforworkersandpropermachineryfor
maintaincordialrelations.
(4)Toprovidesecurityofemploymentsoastoraisethemoraleandloyaltyto
theorganization.
(5)Toprovidefairandjustwagesandallowances,welfarefacilitiesand
introducefairworkstandards.
(6)Tointroduceschemesofparticipativemanagement.
(7)Tointroduceimpartialpromotionandtransferpoliciesfortheemployee
force.

36. Social Responsibilities of Business Towards Different Stakeholders-
SOCIETY
(1)Toensureprotectionofenvironmentandthattheamenitiesofthelocal
communityarenordamaged.
(2)Toprovidebetterlivingconditionslikehousing,transport,canteen,
crèchesetc.
(3)Tointroducesocialauditbytheprofessionals.
(4)Toprovideopportunityforbettercareerprospectsandrehabilitationof
populationaffectedbyanyoperationofthebusiness.
(4)ToensureRegularsupplyofgoodsandservicesatreasonableprice.
(5)Toframepoliciesforconservationofnaturalresourcesandwildlife.
(6)Tocontributetosocialcauseslikeeducationandruraldevelopment.
(7)Toprovidefinancialsupporttoculturalactivitiesandtherebyrepaythe
socialdebt.
(8)Tocontributetowardseconomic,andnationalgrowthandstability.

38. Reasons for Businesses to Engage in CSR
BusinessengageinCSRmainlybecause:
➢Altruism–beingagoodcitizen
➢WindowDressing–toappeasestakeholders
➢ContractingBenefits–Helpsrecruitandretainemployees
➢GainCustomers–Attractcustomers,helpsbrandandproductpositioning
➢ReducesProductionCosts–intermsofpackaging,consumptionofenergy
➢RiskManagement–Addresspotentiallegalorregulatoryaction
➢BetterAccesstoCapital–Investmentandfundsavailable

39. Social Responsibility ----
Arguments for/ in favourof Social Responsibility of
Business

40. ARGUMENTS FOR SOCIAL RESPONSIBILITY OF BUSINESS
➢ChangedPublicExpectationsofBusiness:Socialexpectationsofbusiness
haveincreaseddramaticallysincethe1960s.Ifbusinesswishestoremain
viableinthelongrun,itmustrespondtosociety’sneedsandgivesociety
whatitwants.
➢LongRunProfits:Sociallyresponsiblebusinessestendtohavemoreand
securelongrunprofits.Thisispossibleasaresultofthebettercommunity
relationsandimprovedbusinessimage.
➢EthicalObligation:Abusinessfirmcanandshouldhaveaconscience.
Businessshouldbesociallyresponsiblebecauseresponsibleactionsare
rightfortheirownsake.

41. ARGUMENTS FOR SOCIAL RESPONSIBILITY OF BUSINESS
➢PublicImage:Firmsseektoenhancetheirpublicimagetogainmore
customers,betteremployees,accesstomoneymarkets,andother
benefits.Sincethepublicconsiderssocialgoalstobeimportant,business
cancreateafavorablepublicimagebypursuingsocialgoals.
➢BetterEnvironmentforBusiness:Thefirmwhichismostresponsivetothe
improvementofthecommunity'squalityoflifewillasaresulthavea
bettercommunityinwhichtoconductitsbusiness.Itwillbeabletoattract
andholdskilledemployees.Turnoverandabsenteeismwillbereduced.
➢AvoidanceofGovernmentRegulations:Governmentseekstoregulate
businessinthepublicinterest.Theregulationsmayaddtotheeconomic
costsanddenyfreedomtomanagersindecisionmaking.

42. ARGUMENTS FOR SOCIAL RESPONSIBILITY OF BUSINESS
➢BalanceofResponsibilityandPower:Businesshasalargeamountof
powerinsociety.Anequallylargeamountofresponsibilityisrequiredto
balanceit.Whenpowerissignificantlygreaterthanresponsibility,the
imbalanceencouragesirresponsiblebehaviorthatworksagainstthepublic
good.
➢StockholderInterests:Socialresponsibilitywillimprovethepriceofa
business’sstockinthelongrun.Thestockmarketwillviewthesocially
responsiblecompanyaslessrisky.Therefore,itwillawarditsstockahigher
priceearningsratio.
➢PossessionofResources:Businesshasthefinancialresources,technical
experts,andmanagerialtalenttoprovidesupporttopublicandcharitable
projectsthatneedassistance.

43. ARGUMENTS FOR SOCIAL RESPONSIBILITY OF BUSINESS
➢PreventionisbetterthanCure:Socialproblemshavetobehandledbythe
managementatsomepointoftimeortheother.Problemswithlabour
unionsshouldbehandledinadiplomaticway,sothattheywillnotdevelop
intoserioussocialbreakdownthatconsumesmostofthemanagement's
time

44. Social Responsibility ----
Arguments Against Social Responsibility of Business

45. ARGUMENTS AGAINST SOCIAL RESPONSIBILITY OF BUSINESS
➢ProfitMaximizationistheUltimateGoal:Businessunitsareaccusedof
havingprofitmaximizationastheirgoal.Sincebusinessoperatesinaworld
ofpovertyandhunger,theeconomicefficiencyofbusinessisamatterof
priorityandshouldbethesolemissionofbusiness.
➢DilutionofPurpose:Thepursuitofsocialgoalsdilutesbusiness’sprimary
purpose:economicproductivity.Societymaysufferasbotheconomicand
socialgoalsarepoorlyaccomplished.
➢SocietyhastoPaytheCost:Thecostsofsocialresponsibilitywillbepassed
ontothesocietyandthequestioniscanthesocietybeartheseadditional
costs?
➢TooMuchPower:Businessisalreadyoneofthemostpowerfulinstitutions
inoursociety.Ifitpursuedsocialgoals,itwouldhaveevenmorepower.

46. ARGUMENTS AGAINST SOCIAL RESPONSIBILITY OF BUSINESS
➢LackofSkills:Theoutlookandabilitiesofbusinessleadersareoriented
primarilytowardeconomies.Businesspeoplearepoorlyqualifiedtocope
withsocialissues.
➢LackofAccountability:Politicalrepresentativespursuesocialgoalsandare
heldaccountablefortheiractions.Suchisnotthecasewithbusiness
leaders.Therearenodirectlinesofsocialaccountabilityfromthebusiness
sectortothepublic.
➢LackofBroadSupport:Businessinvolvementinsocialgoalslacksupport
fromallgroupsinsociety.Thereisnobroadmandatefromsocietyfor
businesstobecomeinvolvedinsocialissues.

47. Assignment (10 marks)
Corporateshavegenerallyarguedthatsincetheessentialpurposeofbusiness
ismakingprofits,forcingthemtochannelizetheirenergyandresourcesfor
undertakingprojectsunderCorporateSocialResponsibilityisunfair.
Whatisyourconsideredviewonthis?Pleasediscuss.

48. CSR Activities of Companies

50. Mahindra & Mahindra Ltd.
➢Mahindra&MahindraspentINR93.50croresonCSRinitiativesduringthe
financialyear2018-19,accordingtotheannualreportpublishedbythe
company.
➢ThecompanyspentINR8.36croreonProjectNanhiKaliwhichprovides
educationalsupporttounderprivilegedgirlsinIndiathroughanafterschool
supportprogramme.
➢M&MalsosupportedapilotprojectforProjectNanhiKali2.0whichwillhelp
aspiringgirlstocompletetheirgraduationaswellasachieveproficiencyin
spokenEnglishanddigitalliteracy.
➢M&Msponsoredits20thLifelineExpress(hospitalonatrain)inArrahBihar,
throughwhichmedicalcare,treatment,andsurgicalinterventionwasprovided
to11,119individuals.ThroughMahindraHariyali0.95milliontreeswereplanted
whichcontributedtoimprovinggreencoverandprotectingbio-diversityinthe
country.Ofthese,0.83milliontreeswereplantedintheArakuvalley,which
besidesgreeningtheenvironmentalsoprovidedlivelihoodsupporttotribal
farmersgrowingcoffeeinthisregion.

51. Tata Group
➢TheTataGroupconglomerateinIndiacarriesoutvariousCSRprojects,
mostofwhicharecommunityimprovementandpovertyalleviation
programs.Throughself-helpgroups,itisengagedinwomenempowerment
activities,incomegeneration,ruralcommunitydevelopment,andother
socialwelfareprograms.Inthefieldofeducation,theTataGroupprovides
scholarshipsandendowmentsfornumerousinstitutions.
➢Thegroupalsoengagesinhealthcareprojectssuchasfacilitationofchild
education,immunizationandcreationofawarenessofAIDS.Otherareas
includeeconomicempowermentthroughagricultureprograms,
environmentprotection,providingsportscholarships,andinfrastructure
developmentsuchashospitals,researchcenters,educationalinstitutions,
sportsacademy,andculturalcenters.

52. Café Coffee Day
CafeCoffeeDay,employs50speechandhearingimpairedpeopleattheir
variousoutletsasstaff.TheydothisasapartoftheirCSRactivityasamove
towardsequalemployment.Theycalledthemthe‘SilentBrew-masters’.CCD
alsohastie-upswithNGOEnableIndiatoempowerdifferently-abledpeople.
TheirbiggestCSRinitiativeistheSVGHVocationalTrainingCollegein
Chikmagalur,Karnataka.

53. ITC Group
ITCGroup,aconglomeratewithbusinessinterestsacrosshotels,FMCG,
agriculture,IT,andpackagingsectorshasbeenfocusingoncreating
sustainablelivelihoodandenvironmentprotectionprograms.Thecompany
hasbeenabletogeneratesustainablelivelihoodopportunitiesforsix
millionpeoplethroughitsCSRactivities.
Theire-choupalprogram,whichaimstoconnectruralfarmersthroughthe
internetforprocuringagricultureproducts,covers40,000villagesandover
fourmillionfarmers.Itssocialandfarmforestryprogramassistsfarmersin
convertingwastelandtopulpwoodplantations.Socialempowerment
programsthroughmicro-enterprisesorloanshavecreatedsustainable
livelihoodsforover40,000ruralwomen.

55. Dabur India Ltd.
“Whatisthatlifeworthwhichcannotbringcomforttoothers”
-Dr.SKBurman,Founder,DaburIndiaLtd.
Daburtooktheonusofbringingtoiletsclosertoruralhouseholdswiththe
‘700Se7Kadam’initiative,whichwaslaunchedjustaheadofthe
governmentannouncingtheSwachhBharatMission.
60and70-year-oldwomencomplementedDaburforbringingabouta
revolutionintheirlivesbygivingthemhouseholdtoilets,somethingwhich
theirhusbandsfailedtoprovidedespitedecadesofmarriage.

56. Dabur India Ltd. -Sustainabilityof the Project
AsperDabur’sstrategy,thehouseholdswereinvolvedaspartnersinthe
entireexercisewiththefamiliescontributingfinanciallytowardsconstruction
oftheirowntoilets.
Daburprovidedonlypartialfinancialsupport.Around69%ofthesample
householdshaveinvestedamaximumofuptoRs.30,000forconstructing
theirtoilets.Over81%havebeeninvestinguptoRs.900amonthinrecurring
maintenancecosts.
Thisfinancialcontributionandactiveparticipationbyhouseholdsinthe
constructionandmaintenanceoftoiletsincreasestheirownershiptowards
theinfrastructureandwillpositivelycontributetosustainability.
Also,existenceofthewomenSelf-HelpGroups(SHGs)ineachvillage,coupled
withtheirinterestandinvolvementinensuringtoiletsineachhousehold,and
providingcreditsupportforconstructionofthetoiletswhereverneeded,is
anotherpositivefactorfortheprogramssustainability.

59. Reliance Industries Ltd.
Project Drishti
❑Drive to bring light into the lives of visually challenged.
❑To cover the underprivileged segment of society.
❑Undertaken over 5,000 keroptoplasty(cornea) surgeries.
❑Providing campaign at free of cost

60. Wipro Ltd.
AzimPremjiFoundation,Wiprocommit₹1,125croretotacklecoronavirus
crisis
WiproLtd,WiproEnterprisesLtdandAzimPremjiFoundation,havetogether
committed₹1125croretowardstacklingtheunprecedentedhealthand
humanitariancrisisarisingfromtheCOVID-19pandemicoutbreak.Ofthe
₹1,125crore,WiproLtd’scommitmentis₹100crore,WiproEnterprisesLtd’s
is₹25crore,andthatoftheAzimPremjiFoundationis₹1000crore.

61. Walmart Case Study
Walmartisdesigningnewstoresandretrofittingolderstorestobemore
energy-efficient.Thesestoresareamongthe“greenest”intheworld.The
threemaindesignobjectivesforthesestoresareto:
(1)reducetheamountofenergyandnaturalresourcesrequiredtooperate
andmaintainastore,
(2)reducetheamountofrawmaterialsneededtoconstructafacility,and
(3)use,whenappropriate,renewablematerialstoconstructandmaintaina
facility.Althoughmanyofthedesignfeaturesreducethestores’impacton
theenvironment,thesestoresareexpensivetobuild,andsomeoftheir
elementsmakeeconomicsenseonlyifenergycostssignificantlyincrease.
Initialprojectionscallfortheenergyusedatthesestorestobe30to
50percentlessthanattheolderstoresthathavenotbeenretrofitted,
reducingastore’senergycostsby$500,000annually.

62. Walmart Case Study
Someofthesustainablefeaturesareasfollows:
➢Awindturbineontopofastoreproducesenoughenergytoreducea
store’selectricityconsumptionby5percent.
➢Arainwaterharvestingandtreatmentsystemprovides95percentofthe
waterneededforon-siteirrigationandreducesdemandonthelocalstorm-
watersystem.
➢Storesarelowerinheightthatmeansfewerbuildingmaterialsareneeded,
plusitreducesheatingandcoolingneeds.
➢Insteadoffluorescentlighting,refrigeratedcasesusedLEDs.Alsothelights
stayoffuntilthecustomeropensthecase
➢Heatgeneratedbythebuilding’srefrigerationsystemiscapturedand
redirectedtoheatthewaterusedintherestroomsinks

63. Walmart Case Study
➢Cookingoilfromthefryersandwasteengineoilareburnedinabiofuel
boilertogenerateheatthatisdirectedintotheheating,ventilation,and
radiantfloor-heatingsystems,conservingenergy.

64. Assignment
Udaypurisavillageinthevicinityofagarmentfactoryinwhichyouarethe
ManagerinchargeofCorporateSocialResponsibility(CSR).Villagersare
generallyagitatedbecausethechemicaldyeingarmentfactoryhasspoiltthe
groundwaterandtheycomplainthatthewaterisnotpotableandsome
childrenhavefallenill.UnderCSRbudget,youhavebeenprovidedRs25
lakhstoinitiatestepstoundertakesuchactivitiesthatwillnotonlyhelpthe
villagersbutalsoassuageandbuildamicablerelationshipwiththefactory
management.
Pleaseprepareadraftprojectplan(10Marks)

65. References
➢SharmaJ.P‘CorporateGovernance,businessethicsandCSR,AnneBooks
PvtLtd,NewDelhi.
➢SanjayKAgarwal:CorporateSocialResponsibilityinIndia.
➢Mitra,Nayan,Schmidpeter,René(Eds.):CorporateSocialResponsibilityin
India:CasesandDevelopmentsAftertheLegalMandate.
➢Crane.A.Etal;(2008):TheOxfordhandbookofCorporateSocial
Responsibility,NewYork;OxfordUniversityPressInc.
➢J.W.MckieSocialResponsibilityandthebusinessPredicament.
➢C.V.Baxi,AjitPrasadCorporateSocialResponsibility:ConceptsandCases:
TheIndianExperience.

66. Reference Books:
➢Down to Earth –A magazine on environmental issues by Center for Science
and Environment
➢Movie –An Inconvenient Truth –A documentary film by Al Gore.
Internet References:
➢www.cse-india.org
➢www.unfccc.de
➢www.greenpeace.org
➢www.teriin.org

67. THANK YOU
Dr. Parveen Nagpal
www.linkedin.com/in/dr-parveen-kaur-nagpal-82965b15