Transcript CSR

Oasis
Foundation
Corporate Social
Responsibility
(CSR)
Preface
• It was Adam Smith who in his Classical Economic
Model of Business expressed that free market
did not always perform perfectly and stated that
marketplace participants must act honestly and
justly towards each other if the ideals of the
free market is to be achieved. The viewpoint
expressed by Adam Smith was 200 years ago still
forms the basis for free – market economies in
the 21st century.
• The radical change caused by the Industrial
Revolution popularized the notion “Survival of
the fittest”, but still many great tycoons of
the late 19th century were greatest individual
benevolent of all the times.
• The 20th century corporate were criticized
as being too powerful and for practicing
antisocial and anticompetitive practices. As a
result new laws and labour movement got
momentum. Between 1900 and 1960 the
business world gradually began to accept
additional responsibilities other than making a
profit and obeying the law.
• In the 1960s & 1970s the civil right movement,
consumerism & environmentalism affected
society’s expectations of business. Based on the
general idea that those with great power have
great responsibility, many called for the business
world to be more pro active in ceasing to cause
societal problems and starting to participate in
solving societal problem. This was based on the
view that corporation should go beyond their
economic & legal responsibilities and accept
responsibilities related to the betterment of
society. This view of Corporate Social
Responsibility is the prevailing view in much of
the world today.
• Thus the concept of CSR is relatively new which
is a phenomenon of 1960s.
What is CSR
CSR is a strategic tactic to gain public
support for their presence in global
markets, helping them sustain a
competitive advantage by using their social
contributions to provide a subconscious
level of advertising. It is due to the global
competition that corporate/ companies
have to examine not only their own labour
practices, but those of their entire supply
chain, from a specific perspective.
Why CSR
Ethical consumerism
Limited natural resources resulted high
consumer demand. Consumers are
becoming more aware of the
environmental and social implications of
the product which influence their
purchasing decisions.
Globalization and market forces
A corporate pursue growth through
globalization, and have to face various
obstacles in this process which resulted in
limiting their growth and potential profit.
Social awareness and education
Shareholders and investors, put pressure
on corporate to behave responsibly spread
awareness & education in the intervening area.
Ethics training
The rise of ethics training inside
corporate, some of it required by
government regulation, is another driver
credited with changing the behaviour and
culture of corporate. The aim of such
training is to help employees make ethical
decisions when the answers are unclear.
Organizations also see secondary benefit
in increasing employee loyalty and pride in
the organization.
Legal issues
Another driver of CSR is the role of
independent mediators, particularly the
government, in ensuring that corporate are
prevented from harming the broader social
good, including people and the environment.
The issues surrounding government
regulation pose several problems.
Regulation in itself is unable to cover
every aspect in detail of a corporate
operations. This leads to burdensome legal
processes , interpretations of the law and
debatable grey areas .
How CSR woRk & it’S
Stakeholder
• CSR requires organizations to adopt a
broader view of its responsibilities that
includes employees, suppliers, customers,
the local community, local state
governments, environmental groups, and
other special interest groups. Collectively,
the various groups affected by the actions
of an organization are called
"stakeholders."
There are two kind of
stakeholders
• Primary Stakeholders
• Secondary Stakeholders
Primary Stakeholders
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Shareholders (Owners)
Employees
Customers
Business Partners
Communities
Future Generations
Nature
Environment
Secondary Stakeholders
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Local, State & central Govt.
Regulatory Bodies
Civil institutions & Groups
Special interest Groups
Trade & Industry Group
Media
Competitors
CSR Deals with
• Environmental Issues
Pollution
Global warming
Waste disposal
Deforestation
Acid rain
Land degradation
Global Issues
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Living standard of Labour
Child Labour
Workstation’s Condition
Safety Norms
Technological Issues
• The growing technological change
posing great threat as it restrict
human independence and importance.
Internet put a question mark on
individual privacy & security.
Biotechnology facing serious
allegation for genetic engineering &
cloning.
Arguments for CSR
• The rise of modern corporate created and
continues to create many social problems.
Therefore, the corporate world should assume
responsibility for addressing these problems.
• In the long run, it is in corporate best interest to
assume social responsibilities. It will increase the
changes that they will have a future and reduce
the chances of increased Govt. regulation.
• Large corporate have huge reserves of human &
financial capital. They should devote at least some
of their resources to addressing social issues.
Arguments against CSR
• Working on social & moral issue is not
economically feasible.
• Corporate should focus on earning a profit for
their shareholders and leave social issues to
others.
• Assuming social responsibilities places those
corporate at a competitive disadvantage
situation relative to those who do not.
• Those who are most capable should deal with
social issues. In this age of professionalism
corporate world are not equipped to deal with
such issues.
Conclusion
• Research suggests that those
corporate that develop a reputation
as being socially responsive and
ethical enjoy higher levels of
performance. However, the ultimate
motivation for corporate to practice
social responsibility should not be a
financial motivation, but a moral and
ethical one
Thank You