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CORPORATE SOCIAL RESPONSIBILITY IN INDIA

What is Corporate Social Responsibility?


Also known as: Corporate Conscience, Corporate Citizenship, Corporate Social Performance, or Sustainable Responsible Business

What is Corporate Social Responsibility?


It : is submission of social and ecological responsibility of companies, functions as a built-in, self-regulating mechanism, it ensures active compliance of companies with the spirit of law, ethical standards, national and international norms.

What is CSR?
In a Developed Country, CSR includes: Governance, Business ethics, Human Rights, and Environment In a Developing Country, CSR includes: Nation Building, Socio-economic development, Employment, Education, Health Care, and Community Support.

CSR Definition
Prince of Wales International Business Leaders Forum define CSR on basis of four issues:

Corporate governance to include reputation, transparency, accountability and anti-corruption, Safety and Environment which comprises product/service safety, worker health and safety local environment quality, Access/development that includes initiatives in education, health-HIV/AIDS, digital divide, enterprise development, and; Human Rights that include labour standards, security and indigenous people.

Carrolls Four Part Definition


Ethical Responsibilities
Social Responsibilities
Legal Responsibilities
Economic Responsibilities

Carrolls Four Part Definition

Understanding the Four Components


Responsibility Societal Expectation Examples

Economic

Required

Be profitable. Maximize sales, minimize costs, etc.

Legal Ethical Discretionary (Philanthropic)

Required Expected Desired/ Expected

Obey laws and regulations. Do what is right, fair and just.

Be a good corporate citizen.

CSR Philosphies in India


MODEL ETHICAL FOCUS Voluntary commitment by companies to public welfare. Corporate Responsibilities limited to private owners (shareholders). LEADERS M K Gandhi

LIBERAL

Milton Friedman

STAKEHOLDER

Companies respond to the needs of stakeholderscustomers, employees, communities, etc.

R Edward Freeman

CSR Paradigm in India

SUSTAINABLE BUSINESS CORPORATE COMMUNITY INVESTMENT

COMMUNITY AFFAIRS

PHILANTHROPY

POFIT FOCUS

CSR-Understanding

CSR as Value Creation. CSR as Risk Management. CSR as Philanthropy.

CSR-Understanding

CSR Mandate-Company Bill 2013

Clause 135 (CSR clause) of the Company Bill requires qualifying corporations to spend on CSR at least 2 per cent of its average net profit made in the preceding 3 financial years.
Net Worth = Rs.500 Crore

ELIGIBLE COMPANIES

Net Profit = Rs.5 Crore

Turnover = Rs. 1000 Crore

Myths surrounding CSR


CSR is not for small businesses

It is too complicated and technical

It is too expensive

Myths

It is a market gimmick

It is a separate corporate initiative

What accounts as CSR ?

Eradicating Hunger, Promotion of Education, Gender Equality & Empowering Women, Reducing child mortality & improving maternal health, Combating HIV virus, other diseases, Ensuring Environmental Sustainability, Employment Enhancing Vocational Skills, Contribution to the Prime Ministers National Relief Fund, and Other such matters.

PROCEDURE TO COMPANY
Create CSR Committee Develop Corporate Social Responsibility Policy

Report CSR Initiatives to be Reported Allocate Two percent of net profit

Examples

HULS Lifebuoy SWASTHYA CHETNA-a health & hygiene education program, educates people about health related precautions to 200 people million in rural and urban areas.

Tata Teas communication and is positioning itself as a catalyst for social awakening through JAAGO RE campaign.
Colgate Palmolive- SPREADING SMILES AT PRATHAM (NGO), in association with IDA organizes free dental checkups camps, supports free surgery of children and young adults suffering from cleft lips.

Examples

Marico Industrys brand Saffola organises FREE HEART CARE CAMPS on World Heart Day every year. ITC- every 4 notebook that is bought re. 1 goes for EDUCATION OF UNDER PRIVILEGED CHILDREN, & e-Choupal.

Examples

Idea Cellular Infrastructure Development Of Mumbai Police

Cannon India i-CARE


P&G SIKSHA TOI Lead India

Examples

Where Indian Companies Stand?


Company
Indian Oil

Revenue
442,459

Avg PAT
7,783

Actual Spent on CSR


83

2% of PAT
156

RIL
Tata Steel

368,571
135,978

21,138
3,895

288
146

423
278

TCS
Cairn India

48,894
11,861

8,935
5,108

51
NA

179
102

HDFC
Infosys

27,606
33,734

4,108
7,128

NA
26

82
143

INDIAS TOP 100 COMPANIES

2% of PAT- 5611 Crores Actual Spent 1765 Crores

Challenges

Non-availability of Clear Guidelines

Lack of Consensus on implementing CSR issues


Visibility Factor Narrow perceptions towards CSR initiatives.

Conclusion

Increasing social issues impacts the entire society in general & business in particular because to a large extent business is dependent on the society for its growth & prosperity. Both public & Private efforts must be extended to solve the social problems identified. CSR can thus be expressed in terms of three principles: legitimacy, public responsibility & managerial discretion. Need of the hour is to create innovative strategies & methodologies which creates win-win situation for all & communicate to others how consultative & collaborative model of change is profitable for all concerned.

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