Who Says there is No Money in CSR?

Structured Assignment Reference No. CSR0061-2 This structured assignment was written by Raghava Krishna Neti under the direction of Saradhi K. Gonela, Icfai Business School Case Development Centre. Copyright 2009, Icfai Business School Case Development Centre No part of this publication may be copied, reproduced or distributed, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or medium electronic, mechanical, photocopying, recording, or otherwise without the permission of Icfai Business School Case Development Centre.

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Who Says there is No Money in CSR?

STRUCTURED ASSIGNMENT (SA)

SA has a set of logically sequenced questions based on a specific case study. These questions are meant to enhance the logical and analytical skills of the students. Students are advised to attempt a SA only after they have acquired a reasonable conceptual understanding as indicated below. PREREQUISITE CONCEPTUAL UNDERSTANDING
(a) (b) (c) (d) (e) (f) To understand the expectations of consumers and other stakeholders from the business organizations, Bonini Sheila M. J., What Consumers expect from Companies, The McKinsey Quarterly, 2007. To understand a companies role in the society, Ian Davis, What is the business of business, The McKinsey Quarterly, 2005. To understand the responsibilities of multinational corporations, Oppenheim Jeremy, Corporations as Global Citizens, The McKinsey Quarterly, 2004. To understand how the social issues become strategic for organisations sustainability, Bonini Sheila M. J., When social issues become strategic, The McKinsey Quarterly, 2006. To understand the calculation of returns from resources employed on corporate responsibility, Margin Roger L, The Virtue Matrix: Calculating the Return on Corporate Responsibility, Harvard Business Review, March 2002, To understand how the companies achieve competitive advantage by incorporating corporate philanthropy in its business policy, Porter Michael E and Kramer Mark R, The Competitive Advantage of Corporate Philanthropy, Harvard Business Review, December 2002 To understand why companies tend to incorporate CSR in business policy strategically and its relationship with the society, Porter Michael E and Kramer Mark R, Strategy and Society: The Link between Competitive Advantage and Corporate Social Responsibility, Harvard Business Review, December 2006 To understand how corporate philanthropy adds value to the organisational goals especially to the bottom-line, new business model and competitive advantage, Porter Michael E and Kramer Mark R, Philanthropys New Agenda: Creating value, Harvard Business Review, NovemberDecember 1999.

(g)

(h)

Structure of the Structured Assignment Section

I II III IV V VI

Title of the Section

Circumstances that forced organisations to adopt CSR as a business policy Initiatives by organisations to adhere to the demands of ethical consumers Wal-Mart Initiatives Hindustan Unilever Limited (HUL) Initiatives Nestle India Limited Initiatives Business Sustainability and Social Marketing: Improving bottom-line

Number of Questions
4 5 4 3 3 3

Who Says there is No Money in CSR?

INSTRUCTIONS TO THE STUDENTS

This assignment should accompany the case on Who Says there is No Money in CSR? developed by Icfai Business School Case Development Centre. The learning from this SA can be enriching if it is attempted after having a prerequisite understanding of concepts outlined in the previous page Start working on this assignment after carefully going through the case and grasping the significant aspects of the case, including the central dilemma Refer to the case as often as needed, when you are working on this assignment. This is an open book assignment Write your answers in as much detail as possible. Do not write cryptic or too brief answers in telegraphic language Attempt to answer all questions in all sections For a few questions, there may neither be one answer nor a correct answer. Therefore, give your analysis and logic wherever required. Develop your answers in an integrated manner drawing from your complete understanding of the case Use extra sheets, if necessary The time limit for completing the assignment and the weightages assigned to each section in this SA for the purpose of grading will be announced by the instructor.

For Use by the Student Name of the Student Enrolment Number Programme Course Name of the Instructor To be Submitted on Signature of the Student Date : : : : : : : : For Use by the Instructor Grade Awarded/Marks Awarded Remarks Signature Date : : : :
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Who Says there is No Money in CSR?

Circumstances that forced organisations to adopt CSR as a business policy

1. Ethical consumers adopted the policy of positive buying and boycotting or avoiding (page 2, para 1 of the case study). Why did ethical consumerism evolve? Explain its principles and substantiate its role in compelling the companies to adhere to business ethics.

Who Says there is No Money in CSR?

2.

In 1971, ethical consumer groups in California have targeted Adidas (page 2, para 3 of the case study). Why did they targeted Adidas? Do you feel ethical consumers role is authenticated in campaigning against a companys policies and practices?

Who Says there is No Money in CSR?

3.

Governments of North East sea nations banned on future dumping of steel-built oil installations (page 4, para 1 of the case study). Analyse the circumstances that lead to this decision by the governments. Who has influenced the governments for this decision?

Who Says there is No Money in CSR?

4.

Ethical consumerism forced organisations to rethink their business policies (page 5, para 3 of the case study). Sketch the affects of ethical consumerism over the practices of companies. How are companies reacting to the ethical consumers demands?

Who Says there is No Money in CSR?

Initiatives by organisations to adhere to the demands of ethical consumers

5. Shell started eco-friendly program in 1997 (page 6, para 3 of the case study). What has made Shell to initiate the eco-friendly policies? Do you think Shell could benefit from the eco-friendly policies? If yes, how? If no, why not and what other policies would you suggest for Shell?

Who Says there is No Money in CSR?

6.

Levi-Strauss started an ambitious project Eureka in 1999 (page 7, para 3 of the case study). What is Eureka? Did Levi-Strauss initiate Eureka for the benefit of the society? If yes, what kind of CSR activity is that? If not, what were the perceived benefits of project Eureka?

Who Says there is No Money in CSR?

7.

Microsofts initiative has solved the problem of shortage of IT manpower and created a talented pool for recruiters (page 14, para 2 of the case study). Did Microsoft initiate this only for society benefit? If the company has also got benefited, explain how? If not, how would you justify the expenses of Microsoft on this initiative?

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Who Says there is No Money in CSR?

8.

Bhopal incident has proved how a critical incident can change the destiny of a company (page 6, para 1 of the case study). Briefly sketch the incident and its consequences, both on the society and the company.

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Who Says there is No Money in CSR?

9.

In all the above examples the companies involved have merely reciprocated to a companys problem and painted it with CSR or the initiatives were adopted as a part of their brand building activities. Can you cite some companies that have taken CSR initiatives as novel policies and tried to stand benefited by fulfilling responsibilities towards the society?

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Who Says there is No Money in CSR?

Wal-Mart Initiatives
10. Lee Scott, president and CEO unveiled the vision and commitment in his 21st Century Leadership Speech (page 8, para 4 of the case study). Explain in brief the vision and commitment. What has made the company to take up that commitment?

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Who Says there is No Money in CSR?

11.

Wal-Mart has formulated sustainability criteria for its suppliers on packaging (page 9, para 1 of the case study). What did this initiative mean for suppliers? Did this initiative fetch any results for Wal-Mart? If yes, how? If no, why not?

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Who Says there is No Money in CSR?

12.

Wal-Mart launched an action plan spending $500 million a year to improve the efficiency of its fleet (page 9, para 2 of the case study). Has this initiative resulted in savings for Wal-Mart?

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Who Says there is No Money in CSR?

13.

Has Wal-Mart achieved the expected objectives by implementing such policies and practices? Were these policies restricted to just fulfilling the initial objectives? Has the company been able to extract other benefits also? If yes what were they? If no what do you suggest the company to get better results with same financial commitments?

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Who Says there is No Money in CSR?

Hindustan Unilever Limited (HUL) Initiatives

14. HUL has prioritized on the initiatives which are sustainable and have long-term benefits for business and society (page 10, para 2 of the case study). What does sustainable and long-term benefits mean in this context? Briefly explain the initiative and analyse how the said initiatives could help the company achieve its goals.

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Who Says there is No Money in CSR?

15.

Under project Shakti Rural women will be taking HUL stocks on Cash and Carry model and the required finance will be provided by local self help groups and micro finance institutions (page 10, para 2 of the case study). How will you categorise this as a social initiative? Can you term Project Shakti as a social marketing? Analyse how rural women would be benefited by this initiative.

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Who Says there is No Money in CSR?

16.

Project Shakti reached a break-even point on operational expenses in 2004 (page 10, para 3 of the case study). Did Project Shakti deliver any results for HUL apart from financial yields?

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Who Says there is No Money in CSR?

Nestle India Limited Initiatives

17. Nestle understood the lack of basic infrastructure resulting in hindrances of establishing local sources of milk and focuses on improving the infrastructure in Moga (page 12, para 4 of the case study). How did Nestle start its operations in Moga in 1962? Analyse the factors that have contributed for Nestles success in Moga.

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Who Says there is No Money in CSR?

18.

Nestles initiative resulted in sustainable supply of high commodity sources (page 12, para 5 of the case study). How did Nestles success help local farmers? Also analyse the indirect benefits that the company has enjoyed in Moga district.

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Who Says there is No Money in CSR?

19.

How Moga experience would be beneficial to global company like Nestle? Do you think the company could leverage these learning for higher revenue and better margins?

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Who Says there is No Money in CSR?

Business Sustainability and Social Marketing: Improving bottom-line

20. How do you differentiate between Social Marketing and CSR?

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Who Says there is No Money in CSR?

21.

Companies understood CSR can minimize negative effects of the ethical consumerism and contribute in a positive manner to the development of its workforce and community and ensures long-term sustainability (page 5, para 2 of the case study). Analyse the relationship between CSR and sustainability. Explain how incorporation of CSR in business policy helps the company in long-term sustainability.

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Who Says there is No Money in CSR?

22.

What information do Exhibit I, Exhibit II and Exhibit III convey? Do they have any relationship with the initiatives taken by the companies? Examine how implementation of CSR improves the bottom-line, innovation process, creation of new business models and ensuring competitive advantage for the companies.

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