CHAPTER 1

CORPORATE SOCIAL RESPONSIBILITY Definitions of social responsibility Corporate social responsibility (CSR) is:

An obligation, beyond that required by the law and economics, for a firm to pursue long term goals that are good for society The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as that of the local community and society at large

About how a company manages its business process to produce an overall positive impact on society

Corporate social responsibility means:

Conducting business in an ethical way and in the interests of the wider community Responding expectations positively to emerging societal priorities and

A willingness to act ahead of regulatory confrontation Balancing shareholder interests against the interests of the wider community Being a good citizen in the community

Is CSR the same as business ethics?

There is clearly an overlap between CSR and business ethics Both concepts concern values, objectives and decision based on something than the pursuit of profits

And socially responsible firms must act ethically

The difference is that ethics concern individual actions which can be assessed as right or wrong by reference to moral principles. CSR is about the organizations obligations to all stakeholders and not just shareholders. There are four dimensions of corporate responsibility

Economic - responsibility to earn profit for owners Legal - responsibility to comply with the law (societys codification of right and wrong) Ethical - not acting just for profit but doing what is right, just and fair Voluntary and philanthropic - promoting human welfare and goodwill Being a good corporate citizen contributing to the community and the quality of life

Corporate Social Responsibility Business as it is said, is a product of environment. The nature of business, location, the product to be manufactured, the size, volume of operation, etc is determined by the environment in which it operates. Similarly it has an impact on the environment in which it exists. The business decisions in an organization completely depend upon the environment and their impact. The environment can be divided into: Internal Environment External Environment Internal Environmen t Business Decision External Environment

Social Responsibility of business refers to what business does over and above the statutory requirement for the benefit of the society. The word responsibility emphasizes that the business has some moral obligations towards the society. The term corporate citizenship is also commonly used to refer to the moral obligations of the business towards the society. It implies that like individuals, corporates are also the part of the society and their behavior shall be guided by the social norms. Social Responsibility has been defined by Davis as follows: Social responsibilities refer to businessmans decision and actions taken to reason at least partially beyond the firms direct economic or technical interest. Still broader view has been suggested by Andrews when he says that: By social responsibility, we mean the intelligent and objective concern for the welfare of the society that restrains immediately defined. There has been a growing acceptance of the plea that business should be socially responsible i.e. it integral part. H. S. Singhania classifies CSR into two categories: The manner in which a business carries out its own business activity. The welfare activity that it takes upon itself as an additional function. should discharge its duties and responsibilities in enhancing the welfare of the society of which it is an profitable, and leads in the individual of and corporate behavior from ultimately destructive activities, no mater how direction positive contributions to human betterment, variously as the latter may be