Assignment for Corporate Social Responsibility

(Semester 1)
Question Number 1
Voluntary codes are practises or arrangements that influence, shape, control or set
appropriate behaviour for organisations in the marketplace. They are used to
motivate or force organisations for conducting in a way that will benefit both the
organisation and the community. They also sometimes assure the customers that
product or services offered by the organisation will meet a certain established
standards.
Need for Voluntary code
The organisations in different sectors put emphasis on different aspects of CSR
which they feel are most affected due to them. Different organisation may also give
different importance to the various social issues prevailing n the society. Due to the
vast aspect of CSR ad difference in thinking of the organisations, the activities of
CSR cannot be standardised and regulated. Voluntary codes help the organisations
to define and reflect their CER activities efficiently. Voluntary codes define the areas
that can be considered by the organisations for defining their activities for the
betterment in these areas.
Features of Voluntary Code

Voluntary codes can be initiated, developed or adhered by individual firms or

industries associations, governments or other groups.

The scope of voluntary code can vary from a single store or company, several
organisations or an entire sector.

The reasons for development of these codes are generally competitive

pressures, threat of a new law or regulation or trade sanctions.

These codes are voluntarily followed by an organisation but they operate

within a legal environment that includes consumer, competition, health and
safety, labour and environmental regulations.

Voluntary codes are flexible in nature and have to be improved and refined
over time. This improvement is required due to change in market and change
in societys needs.

Benefits of Voluntary Code

1. For public, employees and consumers

Encourage and discourage certain behaviours or activities.

Stimulation of public involvement in development and improvement of

codes in important areas.

Promote more informed and less costly interactions for public with the
code signatories. These interactions can be about product
manufacturing, development or delivery.

Address consumers concerns like quality, price, privacy, health, safety,

labour standards, advertising and public standards of decency.

2. For firms and organisations

Stimulation of more effective and efficient operations to minimize

negative social. Environmental and economic impacts.

Puts the organisation in a favourable position with the public,

customers and government.

Help maintain and improve the market share.

Help to attract and retain highly qualified persons by improving the

public image.

Help diffuse new technologies and best management practises within

an industry.

Provides feedback on consumer preferences and market trends.

Improve relations with government agencies and regulatory bodies.

3. For government

Complement or expand traditional regulatory regimes.

Fulfil public policy objectives through non-regulatory means.

Avoid jurisdictional and constructional obstacles.

Establishment of the appropriate legal standard of care for an activity.

Set and adjust standards more quickly and less expensively than laws
and regulations.

Potential Drawback of Voluntary Code

The intended audience can be frustrated or mislead if the codes are not
developed or implemented properly.

Poor design and implementation of codes can bring negative publicity and
loss of trust or business.

Codes that do not deliver as they are expected to can cause people or
government to mobilize against the organisation.

Voluntary codes cannot be used in a way that reduces competition, prevents

firms from entering the market, affect customers by raising prices or limited
product choice.

Voluntary codes can attract the attention of national or international trade

authorities if it creates barriers for entry or exit in the trade.

The design and implementation of voluntary codes may not be transparent

and offers less opportunity for public participation.

Voluntary codes are not self sufficient when the consequences of noncompliance are serious.

They can sometimes attract scepticism and negative attention.

Classification of Voluntary Codes

Company codes Adopted by companies and relate to a companys head

office operations.

Trade Association codes Adopted by associations of firms based in

developing countries.

Multi Stakeholder codes Adopted as a result of negotiations between

several stakeholders including firm representatives, trade unions and NGOs.

Model codes Provide benchmark of what a particular organisation regards

as a good practise and act as a guide for companies that are contemplating
adopting voluntary measures.

Intergovernmental codes Negotiated at an international level by national

governments.

Voluntary Codes for Organisation

1. ISO 9000 and ISO 14000

The ISO 9000 family addresses the quality management and best known
standards. It issues guidelines and tools for organisations that want their
products and services to meet the customers requirements.

ISO 14000 family addresses the aspects of environmental management. It is

helpful for organisations that look for identifying and controlling their
environmental impact and improve their environmental performance.

2. SA8000

It was launched by Social Accountability International for labour and

workspace conditions. It is the worlds first auditable social standard for
decent workplaces. The major nine elements of SA8000 standard are:

Child Labour

Forced and compulsory Labour

Health and Safety

Freedom of Association and right to collective bargaining

Discrimination

Disciplinary Practices

Working Hours

Remuneration and management systems

3. GRI

Global Reporting Initiative set a globally applicable framework to report the

social, environmental and economic dimension of an organisations products
and services. It is a de facto standard for sustainability reporting. The
elements of GRIs framework are:

Multi stakeholder input

A record of use and endorsement

Governmental references and activities

Independence

Shared development costs

Bridge Building

4. FTSE4GOOD

The index series created by FTSE to measure the performance of companies

that need globally recognised corporate responsibility standards. The indices
are used for the purpose of:

Investment Analysis

Performance Management

Asset allocation

Portfolio hedging

Creating index tracking funds.

5. UN Global Impact

It is a framework for business that are aligned with ten universally accepted
principles derived from Universal declaration of human rights, ILOs
Declaration of Fundamental principles and rights at work. RCOs declaration
of environment and development and UN convention against corruption. The
global impact advises the companies to embrace and support the core values
like human rights, labour standards and environment and anti corruption.

Question Number 2
Triple Bottom line Approach is based on the assumption that an organisation is a
member of a moral community and has its social responsibilities. This approach
focuses on sustainability and on weighing the organisations actions into three
scales: Economic sustainability, social sustainability and environmental sustainability.
1. Economic Sustainability

It focuses o the long term actions because this is a persistent nature of an

organisation. A decision that creates a short term economic boon can cause
long term harm and can reduce the bottom line to an extent that cant be
recovered.
Economic sustainability can be measured using variables that deal with the
flow of money and the bottom line. The economic variables look at income
and expenditures, taxes, employment and diversity factors. Specific economic
variables are:

Personal Income

Cost of underemployment

Job growth

Establishment churn and sizes

Percentage of firms in each sector

Employee distribution by sector

Revenue by sector contributing to gross product

2. Social Sustainability

In social sustainability, the competition of business is encouraged but

maximising the bottom line socially requires the organisation to grow in an
environment where all can succeed. It is better for the society to thrive and
grow as one. Social sustainability allows the organisation to exist and
maintain a good will between the organisation and the society.
Social sustainability is measured by social variables which refer to social
dimensions and include measurement of educational level, equality and
access to social resources, health, quality o life and social capital. The
possible social variables can be:

Unemployment rate

Female labour force participation rate

Relative poverty

Percentage of population with a post secondary degree.

Median household income

Violent crimes per capita

Health adjusted life expectancy

Average commute time

3. Environmental Sustainability

It focuses o the fact that the resources of the environment are not infinite. If
these resources are degraded too much, it will worsen the lives of many
people. The organisation should not cause undue harm to the people in the
society should utilize the resources wisely by limiting the resource wastage.
The organisation should also make efforts to renew some of the resources
which have been exploited in the past and no further harm should be caused.

Environmental sustainability is measured by variables that represent the

measurements of natural resources and reflect its potential viability. It
generally includes air and water quality, energy consumption, natural
resources, solid and toxic waste and land cover. The environmental variables
are:

Sulphur dioxide concentration.

Nitrogen oxide concentration

Excessive nutrients

Consumption of fossil fuels and electricity

Solid and hazardous waste management

Change in land cover

The significance of triple bottom line approach is it helps the organisation to take
actions which can benefit both the community and the organisation. It helps the
organisation to calculate and analyse their gains and losses in a proper and defined
manner. The approach makes it much easier to see the impact of decisions taken by
the organisation and also judges the fittingness of that decision.
Corporate Social Responsibility by ITC
ITC aims at the growth and focuses on the needs of three stakeholders:

Rural communities in the companys operational area.

The communities residing in the areas which are in close proximity of the
production units.

The central and state governments

The major objectives of ITC are:

Promotion of rural development by broad basing farms and off-farm

livelihoods. It helps to strength the production and provides alternate sources
of income for the farmers.

Generate higher incomes and help in lowering the poverty standards by

developing social capital to create more playing fields for skill related
vocations and meet the competitive demands.

Pursuing excellence in sustainability and perseverance of Indias unique

culture by exploring the wide canvas of social initiatives.

The major CSR activities of ITC are:

Soil and moisture conservation

Bio diversity

Sustainable agriculture

Women empowerment

Education

Skilling and vocational training

Solid waste management

Corporate Social Responsibility by HCL

HCL activities are planned to have impact on the society and distribution of wealth to
its stakeholders. The objectives of HCLs CSR activities are:

Read with companys rules and CSR guidelines issued by Department of

Public Enterprises from time and indicate the CSR plans that HCL will
undertake.

Create value for stakeholders and the community linked with HCLs business
through their sustainable development.

Fostering goodwill among stakeholders and enhancing their life quality.

Carrying out of the developmental initiatives to meet the needs of the present
without compromising the ability to meet the needs of the future.

The scope of HCLs CSR activities is:

Eradication of hunger, poverty and malnutrition.

Promotion of education and special education initiative

Protection of flora and fauna, ecological balance and environmental

sustainability.

Protection of national heritage, art and culture, restoration of buildings of

historical importance.

Activities for upliftment of armed forces veterans and war widows.

Corporate Social Responsibility by Tata Group

Tata Group takes initiative for implementing CSR activities in the below mentioned
areas:

Self help groups Over 500 self help groups are working for poverty
alleviation programs aiming at women empowerment and income generation
plans.

Supports social Welfare Organisations Tata group has various welfare

organisations like Tribal cultural society, Shishu Niketan School of hope,
Indian red cross society, National association for the blind and many more.

Healthcare Projects the healthcare programmes of Tata group is working

from the past 100 years for childcare, awareness of AIDS, child education and
the other healthcare areas.

Pollution Control Tata motors manufactures emission control engines for

controlling the pollution due to emission of pollutants from the Samaj Vikas
Kendra and Jan Parivar Kalyan Santan for rural development and rural
healthcare.

Human Capital Many scholarship programs are introduced by Tata group for
higher education of children and also upgrading technical institutes across the
country.

Question Number 3a
CSR activities for Workers and Employees
CSR activities are important for workplace as the employees should feel pride and
belongingness in the company. The relation with its employee also affects all the
other relationships of the company. A company is represented by the people
associated with it.
CSR activities make the employees motivated to work for the company and this
increases the productivity. The major areas for these activities are:
1. HR Policies

The human resource policies of an organisation should focus on the

involvement of bottom and middle level employees in the decision making
process. The employees other than the top management should also have
some say in the decisions being taken in the organisation.
2. Remuneration

All the employees working in the organisation should have fair wages. The
wages of the employees should be fixed based on some legal compliance.
The minimum wages should always be sufficient for the basic living of the
employees.
3. Work life balance

The employees should be provided an option of working in the flexible work

timings according to their convenience. The organisation should not enforce
strict work hours. Flexible work hours, telecommuting, time and stress
management skills are important for maintaining a balance in the lives of the
employees and impact their productivity.
4. Health and safety

Health and safety of employees at workplace is an important responsibility of

the organisation. The work environment should be created in such a way that
it ensures health and safety of all the employees.
5. Age of employees

Organisation should have a defined minimum and maximum age for working
in an organisation. Child labour and employment of senior citizens should be
avoided.
6. Downsizing

During the time of crisis, the organisation should try and look for workarounds
rather than downsizing the employees at a large extent. If at all downsizing is
required, it should be done on the basis of skills and efficiency of the
employees.
7. Diversity in work culture

All the employees of an organisation should be valued and treated equally. No

discrimination should be done on the basis of colour, gender, age, caste and
any other factors.
The following steps should be taken while implementing CSR activities for
employees at the workplace:

Current human resource policies should be reviewed and analysed.

A survey should be conducted in the organisation for identifying the

improvement areas in the workplace by the employees. These improvement
areas can be related to better work life balance, working environment, wages
or any other issues.

After analysing the survey and identifying the improvement areas suggested
by the employees, the organisation must carefully analyse the cost that will be
required for implementing the CSR activities. Each CSR activity should be
measured for its strengths and weaknesses.

The approvals from managements should be taken after deciding upon the
selected CSR activities.

Managers should be provided proper training so that they can understand the
methods of implementation correctly.

Announcements should be made for formally commencing the new policies.

All the information regarding the policies should be made available to the
staff.

Once the policies are in place and implemented, organisation should monitor
the effectiveness of these policies on a timely basis.

Question Number 3b
CSR activities for Society

Destruction of Livelihoods Organisations consume a large part of natural

resources of the environment. This not only depletes the natural resources but
also affects the livelihoods of the people dependent on those natural
resources. These resources can be water, electricity, area, etc.

Unsafe Practises Industries follow certain practices that are essential for
them for having higher productivity and for improving the quality of the
products. Some of these practises can gave harmful effects on the
environment and the people living in the surrounding areas. These affects can
be immediate or are realized in the long-run.

Industrial Accidents While manufacturing products in the industries,

sometimes accidents can take place. These industrial accidents have
hazardous effects on the people working in the industry as well as on the
people residing in the nearby areas. Industries also tend to release harmful
chemicals and radioactive materials which affect the health of the individuals
in the society.

Human rights violation Some organisations hire local people and ill treat
these employees or pay them less for their services. Such activities violate the
basic rights of the employees. Violation of human rights has diverse effects on
the society as a whole.

Pollution and waste accumulation Manufacturing process release a lot of

pollution ad waste material. Industries use local villages and grounds for
disposing the waste material. This accumulation of waste affects the health of
the people living in these villages.

CSR activities for Customers

Ensuring consistent quality The organisations should always provide the

services and products that meet the quality standards. The quality of the
products reaching to the customers should be consistent and should comply
with the defined quality process.

Providing easy to use products The products delivered by the organisations

to their customers should be easy to use, handle and maintain. Customers
from different backgrounds should be able to use the product easily without
any complications.

Responding to product related issues it is the responsibility of the

organisation to provide accurate and quick response to the product related
queries raised by the customers. A quick response goes a long way in
retaining the customer for the organisation.

Increasing customer satisfaction Organisation should take continuous

efforts for increasing the customer satisfaction. Customers can be satisfied by
providing good quality products and enhancing the after sales services for
support.

Providing safe products The end products of the organisation should be

safe for the customers who are using it. The safety standards should be
defined and must be ensured by the organisation.