CSR and Globalization (1).pptx

Corporate social responsibility

1. GLOBALIZATION AND CSR

2. CONTENTS WHAT IS CSR AND LEGAL GROUNDS OF CSR IN INDIA PROS OF CSR WHAT IS GLOBALISATION AND LEGAL GROUNDS OF GLOBALISATION IN INDIA IMAPACT OF GLOBALIZATION ON CSR PROS AND CONS OF GLOBALISATION ON CSR THREE CASE STUDIES

3. India became the first country to legally mandate CSR. The new rules in Section 135 of India’s Companies Act make it mandatory for companies of a certain turnover and profitability to spend two percent of their average net profit for the past three years on CSR. Corporate Social Responsibility can be defined as the “ethical behavior of a company towards society”. It is a concept which suggests that commercial corporations must fulfil their duty of providing care to the society. Corporate Social Responsibility Rules under Section 135 of the Companies Act, 2013, the Chairman of the CSR Committee mentioned the Guiding Principle as follows: “CSR is the process by which an organization thinks about and evolves its relationships with stakeholders for the common good, and demonstrates its commitment in this regard by adoption of appropriate business processes and strategies. Thus CSR is not charity or mere donations. CSR is a way of conducting business, by which corporate entities visibly contribute to the social good. Socially responsible companies do not limit themselves to using resources to engage in activities that increase only their profits. They use CSR to integrate economic, environmental and social objectives with the company's operations and growth” .

4. WHAT IS CSR? Corporate Social Responsibility is a broad concept that can take many forms depending on the organization. Through, CSR programs philanthropy, and volunteer efforts businesses can benefit society while boosting their brands. As important as CSR is for the community, it is equally valuable for a company. CSR activities can help forge a stronger bond between employees and corporation, boost morale and help both employees and employers feels more connected with the world around them.

5. FOR WHOM IT IS APPLICABLE? The companies having Net worth of INR 500 crore or more; or Turnover of INR 1000 crore or more; or Net Profit of INR 5 crore or more during any financial year shall be required to constitute a Corporate Social Responsibility Committee of the Board "hereinafter CSR Committee" with effect from 1st April, 2014. WHAT TO DO WHEN CSR IS APPLICABLE? The companies covered under the Sub section 1 of Section 135 shall be required to do the following activities: As provided under Section 135(1) itself, the companies shall be required to Constitute Corporate Social Responsibility Committee of the Board "hereinafter CSR Committee". The CSR Committee shall be comprised of 3 or more directors, out of which at least one director shall be an independent director. The Board's report shall disclose the compositions of the CSR Committee. All such companies shall spend, in every financial year, at least two per cent of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy.

6. WHY IS THERE SO MUCH TALK ABOUT CSR TODAY?

7. PROS OF CSR Corporate social responsibility (CSR)  has many advantages that can apply to any business, regardless of its size or sector. The potential benefits of CSR to companies include: 1. Better brand recognition C companies with good social responsibility policies get more and better media coverage, so that is already one way to advertise their company . 2. Positive business reputation G getting good press through doing good works is considered by businesses to be one of the best ways to advertise the company increased sales and customer loyalty . 3. Operational costs savings Operational efficiencies can be achieved through streamlining, sustainability and energy saving. Ec o-efficiencies can produce both environmental and economic benefits through reductions in energy consumption, implementation of new cost-neutral building maintenance methodologies, and decreasing the cost of workspaces

8. 4. Better financial performance CSR, according to stakeholders and agency theory, exerts a positive influence on financial performance. .social responsibility was found to enhance shareholder value by increasing Tobin’s Q is the ratio between a physical asset's market value and its replacement  ) , while firms having minimal CSR reduced shareholder value by increasing the risk. 5. Greater ability to attract talent and retain staff Incorporating a CSR strategy and improving culture helps attract and retain top talent, improve employee engagement and morale, give your business a positive brand image and reputation, increase sales, and improve client retention and customer loyalty. 6. Organisational growth 7. Easier access to capital Inv estors are more likely to back a reputable business 8. Attract positive media attention   E g when taking part in community activities 9. Reduce regulatory burden   G ood relationships with local authorities can often make doing business easier 10. Identify new business opportunities   E g for the development of new products or services

9. Globalization It is the process of rapid integration of countries and happenings through greater foreign trade and foreign investment. It is the process of international integration arising from the interchange of world views, products, ideas and other aspects of culture and material. According to WHO , globalization can be defined as “the increased interconnectedness and interdependence of peoples and countries. It is generally understood to include two inter-related elements: the opening of international borders to increasingly fast flows of goods, services, finance, people and ideas; and the changes in institutions and policies at national and international levels that facilitate or promote such flows.”

10. Influence of Globalization

11. Legal Grounds of Globalization in India Structural changes and economic reforms in 1991. New Economic Policies (NEP) and New Industrial Policy (NIP). Creation of local domestic structures and implementing policies at the local level. Active participation of both centre and state. Promoting multilateral system.

12. Degeneration of the economy. Reduced trade cost. Reduced transportation cost. Transformation from a ‘laissez-faire’ economy to a Welfare State economy. FDI policies to attract investment. Neo-liberalism process by inviting privatization.

13. Impact Of Globalisation For multinational corporates, globalisation not only brings more opportunities and benefits for multinational corporates, but also makes multinational corporates adapt to the changing environment and accept the unprecedented challenges in the global level, industrial level and other levels. Corporate social responsibility is considered as one of the most significant aspects facing firms employing international business.

14. Pros of globalization in CSR As more money is poured into developing countries, there is a greater chance for the people in those countries to economically succeed and increased their standard of living. Global competition encourages creativity and innovation and keep prices for commodities/services in check. Developing countries are able to reap the benefits of current technology without undergoing many of the growing pain associated with development of these technologies. Government are able to better work together towards common goal now that there is advantage in cooperation, an improved ability to interact and coordinate ,and a global awareness of issue. There is a greater access to foreign culture in the form of movies, music, food , clothing and more. In short, the world has many choices.

15. Cons of Globalization in CSR Globalization no doubt creates the opportunity for bigger companies in terms of turnover, market capitalization, and amount of assets But the process of globalisation also leads to emergence of the global problems and negative consequences, such as global warming and climate change, the increasing unequal distribution of income and welfare, the abuse and invasion of human rights and others.  Bigger and better markets causes imperfect competition with other small and medium size companies which is a major threat for them. And as a result there is increasing competition between the company and the market. Managers tend to become much more ambitious than before in their behaviour and status in the globalized world.

16. And adding to that is due to increasing competition it is not always possible to control behaviour and corporate activity with regulations, rules and norms which leads to destruction of fair business and all principles and norms which hold the ethics of CSR activities. This is why it is said that CSR is not only related to firms but also related to all society. So changing the role of corporate responsibility shifts the focus from the real problem that we as a society need to address. Therefore the the challenge of CSR in a globalizing world is to engage in a process of political deliberation which aims at setting and resetting the standards of global business behaviour. In conclusion, Globalisation has a multidimensional effect relating to socially responsible behaviour. Good and bad behaviour are easily visible around the world and all company stakeholders will be aware of it. A company can use this opportunity both ways, which is that good behaviour affects the company positively but unethical behaviour will undoubtedly have negative effects for them.

17. Cases of Violation of CSR principles in India

18. The plant at Plachimada was alleged to have exploited the ground water resources leading to drying up of wells and other natural water resources in the area. The entire region, which was a thriving agricultural land, had to rely on water supplied by tankers. Coca Cola was drawing 1.5 million liters/day from the common groundwater resource. However due to inherent water scarcity the company is able to extract only 800,000 liters from the bore wells. The company drew water from the nearby villages to compensate for the lack of availability causing parched lands of more than 2000 people residing within 1.2 miles of the factory (Jayaraman, 2002) The Coca Cola Company had to deal with protests from the local community and supporting environmental conservation groups . Adding to the water exploitation, Coca Cola was accused of supplying poisonous waste as fertilizer to the local farmers.

19. Tests done by an independent agency on the behalf of BBC showed that the sludge contained high levels of Lead and Cadmium (Srivastava, 2004). The sludge, which was disposed off in open ground, ran along with rainwater to the natural water resources. The contamination caused by the sludge has allegedly caused allergic symptoms and perpetual headache to the local population. Tests also show that the water available in the wells is contaminated and unsuitable for consumption ( Iype , 2003). The company had to face similar accusations from various parts of the country. In Varanasi, the local community protested against Coca Cola for exploiting water resources and spilling waste into the sacred Ganges . Added to these were the findings from the Centre for Science and Environment that twelve large soft-drink brands manufactured by Coca-Cola and its rival Pepsi, sold in and around Delhi, contained a cocktail of pesticide residues, including chemicals which can cause cancer, damage the nervous and reproductive systems and reduce bone mineral density .

20. The protests from the local community have led to worldwide reaction and have even led to open campaigns for boycott of products of Coca Cola. The government of Kerala also ordered the stopping of operations of the plant at Plachimada to safeguard the interests of the local community. There were campaigns for international boycott of Coca Colas products (Atlanta IMC, 2003). In India the protests were also directed against MNCs in general, as there were demands for irresponsible MNCs to leave the country . Coca Cola responded to these by litigations in the court and applying pressures through its power centers in US. Public Relations agencies were hired to neutralize the situation. The company also issued releases which mentions about its socially responsible behavior and good corporate citizenship. The case clearly shows that emerging markets can respond and protest against irresponsible behaviors of MNCs and that emerging markets might have loose laws, which do not protect the interests of the local population, or laws that are not implemented properly.

21. The Social Dilemma A Case Study of Social Media and CSR Facebook | Google | YouTube | Instagram

22. Google, LLC is an American multinational technology company that specializes in Internet-related services and products, which include online advertising technologies, a search engine, cloud computing, software, and hardware. CEO: Sundar Pichai (2 Oct 2015–) Founded: 4 September 1998, Menlo Park, California, United States Parent organization: Alphabet Inc. (2015–) Subsidiaries: YouTube, Google.org, Firebase, Dialogflow , etc. Facebook, Inc. is an American social media conglomerate corporation based in Menlo Park, California. Wikipedia Founded: February 2004, Cambridge, Massachusetts, United States CEO: Mark Zuckerberg (4 Feb 2004–) Subsidiaries: Onavo , WhatsApp, LiveRail , Oculus VR, PrivateCore , etc.

23. It has been ranked as one of the best places to work It is also known for its philanthropic activities From education to employment and more areas, it is devoting its resources to make lives better for people in America and overseas. Education and learning for the underprivileged and underrepresented is one of the primary focus areas in the CSR strategy of Google. Google is also investing in projects and non-profit institutions that work to improve the condition of employment . For example it has donated around $1.5 millions to Code For America which is a project with its primary focus being job matching. Another important social issue that Google is trying to address with funds and resources is racial discrimination .

24. Facebook, the leading social network of the world has more than 2 billion members. It is the most popular social networking site. Zuckerberg is also known for his charitable activities. He and his wife Priscilla Chan founded the Chan Zuckerberg Initiative in 2015. The focus of the initiative is upon science, education, justice and economic opportunity.

25. Impact of the Globalization of Social Media

26. Does CSR only comprise of primarily the economic and legal aspects? What about the responsibility of the society at large?

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