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& Sustainability
Dr. Mousumi Sengupta
Term II
Corporate Social Responsibility (CSR)
• CSR is the duty of a corporation to create wealth in ways that avoid harm to,
protect, or enhance societal assets.
• The obligations of businessmen to pursue those policies, to make those decisions
or to follow those lines of actions which are desirable in terms of the objectives
and the value our society
• Is the ethical behaviour towards society
• Is the continuing commitment by business to behave ethically and contribute to
economic development while improving the quality f life of the workforce and
their families as well as the local community and society at large.
• Is understood as the obligation of decision makers to take actions which protect
and improve the welfare of society as a whole along with their own interests.
• Private business functions by public consent and its basic purpose is to serve
constructively the needs of society to the satisfaction of he society.
• Micro perspective – it is the responsibility of one business unit or
company
• Macro perspective – CSR encompasses the whole gamut of CSR
activities where entire corporate sector is engaged (including the
government).
Basic constituents of CSR
Ethical responsibility
Legal responsibility
Economic responsibility
Communitarian responsibility
Humanitarian responsibility
Models of CSR
• Friedman Model – a businessman has no duty other than developing his business.
If he performs that duty, he takes care of social and moral duty.
• Ackerman Model – There are four stages of CSR. In the first stage, the project will
be identified for social delivery. The top managers get to know the most common
social problem and express willingness to take part in a particular project. In the
second stage, experts are hired for suggestions to make the projects operational. In
the third stage, project are made public and implemented. In the fourth stage,
societal issues are considered and addressed in details.
• Carroll Model – four levels of social responsibility are identified : philanthropic
(donations, gifts etc.), economic (ROI), legal (compliance), and, ethical (moral
standards and values).
• Environmental integrity and Community Health Model – CSR will provide greater
opportunity to do business in a healthier community.
• Corporate Citizenship Model –a firm has to satisfy four conditions : sustainable
economic performance, ethical actions and behaviour, legal compliance, and
voluntary social actions.
• Stakeholder Model – Economic and social stakeholders’ interest to be protected.
Need for CSR
• CSR can reduce social cost
• CSR can enhance employees’ performance
• CSR can lead to industrial peace.
• CSR improves public image.
• CSR provides moral justification.
• CSR can generate more profit
• CSR helps in achieving compliance.
Arguments against CSR
• Ethical rooting strong + Financial capability poor : CSR not undertaken (-)