CORPORATE SOCIAL

RESPONSIBILITY
&
BUSINESS ETHICS

Snigdha Dash
 Corporate Social Responsibility: The serious
consideration of the impact of the company’s
actions on society.
 Corporate social Responsiveness: The ability of a
corporation to relate its operations and policies to
the social environment in ways that are mutually
beneficial to the company and to the society.
Meaning:

 Corporate social responsibility is a gesture of showing the

company’s concern & commitment towards society’s

sustainability & development.

 CSR is the ethical behaviour of a company towards society.

 WBCSD (World Business Council for
Sustainable Development)

“The continuing commitment by business to behave

ethically and contribute to sustainable economic
development while improving the quality of life of the
workforce and their families as well as of the local
community and society.”
 Basic Constituents of CSR

Contribute Make Improvement Towards

towards a desirable Business
of social
sustainable social
economic environment & Society
changes
development
Types of Social Responsibility
Responsibility towards Society
 Carrying on business with moral& ethical standards.
 Prevention of environmental pollution.
 Minimizing ecological imbalance.
 Contributing towards the development of social health,
education
 Making use of appropriate technology.
 Overall development of locality.
Responsibility towards
Government
 Obey rules & regulations.
 Regular payment of taxes.
 Cooperating with the Govt to
promote social values.
 Not to take advantage of loopholes
in business laws.
 Cooperating with the Govt for
economic growth & development.
Responsibility towards Shareholders
 To ensure a reasonable rate of
return over time.
 To work for the survival & the
growth of the concern.
 To build reputation & goodwill of
the company.
 To remain transparent &
accountable.
 Responsibility towards Employee
 To provide a healthy working environment.
 To grant regular & fair wages.
 To provide welfare services.
 To provide training & promotion facilities.
 To provide reasonable working standard & norms.
 To provide efficient mechanism to redress
worker’s grievances.
 Proper recognition of efficiency & hard work.
Responsibility towards consumers
 Supplying socially harmless
products.
 Supplying the quality, standards, as
promised.
 Adopt fair pricing.
 Provide after sales services.
 Resisting black-marketing &
profiteering.
 Maintaining consumer’s grievances
cell.
 Fair competition.
Nature of social responsibility
 CSR is normative in nature.
 CSR is a relative concept.
 CSR may be started as a proactive or reactive.
 All firms do not follow the same patterns of CSR.
 Legal & socially responsible.
 Legal but socially irresponsible.
 Illegal but socially responsible.
 Illegal & socially irresponsible.
CSR Principles & Strategies.
 Respect for human rights.
 Respect for the differences of views.
 Diversity & non-discrimination should be the guiding
principle.
 Make some social contribution.
 Enter into e dialogue
 Self-realization & creativity.
 Fair dealings & collaboration.
 Feedback from the community.
 Positive value- added
 Long term economic & social development.
 Best Practices of CSR
 To set a feasible, Viable & measureable goal.
 Build a long lasting relationship with the community.
 Retain the community core values.
 The impact of the CSR needs to be assessed.
 Reporting the impact.
 Create community awareness.
Need for Corporate Social Responsibility

 To reduce the social cost.

 To enhance the performance of employees.
 It a type of investment.
 It leads to industrial peace.
 It improves the public image.
 Can generate more profit.
 To provide moral justification.
 It satisfies the stakeholders.
 Helps to avoid government regulations & control.
 Enhance the health by non polluting measures.
Arguments for & against the CSR

 Corporate should have some moral & social obligations to

undertake for the welfare of the society.
 Proper use of resources, capability & competence.
 The expenditure on CSR is a sort of investment.
 Company can avoid many legal complications.
 It create a better impression.
 Corporate should return a part of wealth.
Arguments against the CSR

 Fundamental principles of business gets violated.

 It vey expensive for business houses.
 CSR projects will not be successful.
 There are not the special areas of any business.
 CSR is to induce them to steal away the shareholders money.
Indian Perspective.
 The Sachar committee was appointed in 1978 to look into
corporate social responsibility issues concerning Indian
companies .
 The company must behave & function as a responsible
member of society.
 Committee suggests openness in corporate affairs & behaviour.
 Some business houses have established social institutions like
Schools, colleges, charitable hospitals etc.
 Corporate sectors have not made significant contributions.
(Polluting Environment).
CSR EXAMPLES
 IBM UK - Reinventing Education Partnership programme
Interactions and sharing of knowledge through a web-based
technology - the “Learning Village” software. Culture of
openness and sharing of good practice

 AVON - a partnership with Breakthrough Breast Cancer, and

its Breast Cancer Crusade has raised over 10 million pounds
since its launch 12 years ago

 TOI’s Lead India campaign, campaign for contribution

towards educating the poor
Companies in trouble
 Dasani mineral water (part of Coca-Cola).

 Coke’s sale was banned as the result of tests, including those

by the Indian government, which found high concentrations of
pesticides.

 Communities in India , around Coca-Cola's bottling operations

are facing severe shortages of water as a result of the cola
major sucking huge amounts of water from the common
groundwater source.
Issues at NIKE
 Nike Inc producer of footwear, clothing, equipment and accessory
products for the sports and athletic market.
 Selling to approximately 19,000 retail accounts in the US, and
approximately 140 countries around the world.
 Manufactures in China, Taiwan, Korea, Indonesia , Mexico as well as in
the US and in Italy.
 People working - 58% young adults between 20 and 24 years old, 83% -
women.
 Few have work-related skills when they arrive at the factory.
 Issue- unhealthy work environment – debates heated arguments, verbal
abuse , 7.8% of workers reported receiving unwelcome sexual comments,
and 3.3% reported being physically abused. In addition, sexual trade
practices in recruitment and promotion were reported
Ethics in Managing:
 Ethics : It is defined as “the discipline dealing with
what is good and bad and with moral duty and
obligation.”
 Business ethics : It is concerned with truth and justice
and has a variety of aspects, such as the expectations
of society, fair competition, advertising, public
relations, social responsibility, consumer autonomy,
and corporate behaviour in the home country as well
as abroad.
Ethical theories
 Utilitarian theory: Plans and actions should be
evaluated by their consequences.
 Theory based on rights: All people have basic
rights.
 Theory of justice: Decision makers must be guided
by fairness and equity, as well as impartiality
Institutionalizing Ethics
The most common way to institutionalize ethics is to
establish a code of ethics.
A code is a statement of policies, principles, or rules
that guide behavior.
 Whistle – Blowing – Making known to outside agencies unethical
company practices.
 Whistle Blower – “ an employee who refuses to engage in and/or
reports illegal or wrongful activities of his employer or fellow
employees”
 There is presence of:
 Whistle blower website which discusses different issues, and legal
matter and protection.
 Whistle blowing centre is a non profit organization that helps enforce
environmental laws and works for accountability of business and
government organizations.
 Whistle blowing policy and act
Example:
  Satyendra Dubey (1973–2003):- He was an Indian Engineering Service (IES)
officer posted as Project Director in the National Highways Authority of India
(N.H.A.I) at Koderma. Indian Government led by Atal Bihari Vajpayee started
ambitious Golden Quadrilateral project to connect all major cities of India via
four and six lane highways. At this time he was responsible for the expansion
of Aurangabad-Barachatti section of National Highway 2. He discovered that
Larsen and Toubro had taken contract from Indian government and passed it to
smaller contract mafias who were incapable of handling such a large scale
project. Apart from this, he noticed that proper procedure and quality was not
maintained while constructing the roads. He wrote to his senior officials
in N.H.A.I and when he didn’t get proper response he wrote directly to Prime
Minister Atal Bihari Vajpayee. He requested that his identity to be kept secret
but the letter along with his bio-data was forwarded to Ministry of Road
Transport and Highways. While returning from a wedding in Varanasi he was
murdered in Gaya, Bihar on 27 November 2003.