Corporate Social Responsibility – 2

Globalisation and Society Unmet Challenges:

1. Business & Global Problems….. Impact of business’ on policy….. Using Resources in alternative ways…

2. More Accountability- Initiatives & Agreements are voluntary and not regulatory. Mutually reinforcing .. Synergetic ways are required.

3. Focus on narrow self-interest – Thinking of issues – those they think.. Will affect reputation of business … and not considering depth of issues … impact of operations on society.

CSR as a response to Globalisation

Primary Driver: Reaping the benefits of globalisation without taking responsibility for its negative consequences.

1992- Rio Summit- Codes of Labour Practice, Environmental agenda

Slavery, deforestation, Child-labour was there before globalisation.. BUT globalizations exaggerates and makes things quicker, larger and visible.

CSR is making the benefits of globalsiation accessible to more people for human development.

Global Governance increased..nature of working… quality of work life, .. Better products.. Eco-friendly products n processes.., International agreements,.. Energy rating.. Certifications.. Standardisation of practices.. Sharing industry practices… etc.

Business

Civil Society

3- Sector World

Government

Responsibilities of Businesses

Economic Responsibility

Legal Responsibility

Ethical Responsibility

Discretionary Responsibility

Definitions of CSR World Business Council for Sustainable Development:

The continuing commitment of business to behave ethically and contribute to economic development while improving quality of life of their workforce and their families as well as the local community, and society at large..

Sethi ( 1975) –CSR can be defined as bringing corporate behaviour up to a level where it is congruent with the prevailing norms, values and expectations of performance.

Companies are required to define its values and principles it stands for, its “ magnetic north” that help the company to steadfast on their ethical journey.

Keith Davis ( 1960) – The mere consideration of social issues/ wants/ needs by organisational decision makers is sufficient to be considered as corporate social responsibility

Archie Carroll: ( four stages) Beyond economic and legal responsibilities lie ethical responsibilities, which are additional behaviours and activities that are not necessarily codified into law but nevertheless are expected of business by society members. Carroll introduced a model where economic, ethical, legal and discretionary goals are integrated. And introduced ‘corporate social performance’ concept.

Simon Zadek’s view: ( Three Generations)

1. Companies can be responsible in a way that do not interfere with commercial success. It include strategic approach to philanthropy, expansion of geographic focus of corporations.

2. Focusing on CSR as an integral part of business strategy.

3. Third generation of CSR is expected to make significant contribution to address issues such as poverty, environmental degradation, education, etc. Also partnership with civil society and changes in public policy.

Hopkins ( 1998)

CSR is concerned with treating the stakeholders of the firm ethically or in a socially responsible manner. The aim of social responsibility is to create higher standard s of living, while preserving the profitability of the corporation .

Four Broad aspects of CSR

Responsibility , Accountability, Sustainability & Social Contract.

Clarkson ( 1995) differentiated between, CSR, CSP and CSR2 ( corporate social responsiveness). CSP can be more effectively analysed by using a framework based on the management of a corporations relationship with its stakeholders ( than using CSR models)

Ethically accepted corporate activity and profit-making are not mutually exclusive. Sustainable growth and success demands ethicality in the process of dealing with stakeholders.

Accountability ( CED 1971 reports ) :

Inner circle : Basic responsibility for efficient execution of econommic function- product, jobs, and growth.

Intermediate circle: Responsibility to exercise this economic function with sensitive awarenss of social values and priorities. ( employees, customers expectations)

Outer Circle: More broader involvement in actively improving the social environment. ( impact on public policy ).

Sustainability :

Extended set of expectations. Consideration of diverse issues and social system. Improvement is required not only in techniques and operations of the organisation but in the way they think and act are required. Consideration of Social , economic, environmental and political changes in decision making and expanding operations.

Social Contract:

Social contract between business and society in which it operates. Going beyond philanthropy.