Download - 25 business i environment i society mba 2016
CSR
Evolution of CSR in India
• The refers to changes over time in India of the cultural norms of corporations' engagement of corporate social responsibility (CSR).
Shared value
• Creating economic value in ways that also create value for society.
Assigning CSR activities has 3 theatre/ window
PhilanthropyWindow 1
operational effectiveness through Sustainable InitiativeWindow 2
Transforming into modelWindow 3
Theatre / window one
• Focusing on philanthropy.• Programs in this theatre are not designed to
produce profits or directly improve business performance.
• Examples: include donations of money or equipment to civic organizations, engagement with community initiatives.
• Tata in India, Bimbo in Mexico
Theatre two / window 2
• Improving operational effectiveness.• Programs in this theatre function within
existing business models to deliver social or environmental benefits in ways that support a company’s operations across the value chain, often improving efficiency and effectiveness.
Window 2• Examples include sustainability initiatives
that reduce resource use, waste, or emissions, which may in turn reduce costs; and investments in employee working conditions, health care, or education, which may enhance productivity, retention, and company reputation.
Initiative for recycling waste sand from sand casting mold
• Panasonic appliances refrigerators devices Singapore manufacture cast components for compressors.
• The casting procedure including pouring melted iron between a mold made of sand and a sand core that is used to create a hollow space, and removing the component after is has cooled.
• The core become unnecessary after the casting complete and the company conventionally carried it by crushing into sand and sending the sand to landfill.
Panasonic example
• Now it has started recycling this waste sand. Now breaking down the cast core and additionally treating and sorting it as core sand, it is reused in the production process.
• Effective use of resources has enabled a significant reduction in the amount of waste and material procurement cost, waste sand disposal costs.
Panasonic's solar lanterns being used in evening classes in villages without electricity in
Cambodia
Example of window 2 sustainability initiatives • Blue Bag Project
• In line with our global sustainability approach, IKEA Indonesia offer the environmentally friendly IKEA Blue Bag to customers in place of plastic bags.
People – planet - profitCSR urges corporate giants to work according to the triple bottom line.
That means that company's must be concerned with their profits but at
the same time they should also keep in consideration how they impact
the people around them and whether their activities affect the planet
in a harmful way or not.
The triple bottom-line is a wide set of economic, environmental and
social parameters used to encourage and then observe how valuable a
firm is as a corporate citizen. The concept basically gives us a
mechanism to measure what value businesses add to the world
around them.
Window 3• Transforming the business model:
• This theatre create new forms of business specifically to address social or environmental challenges.
• Improved business performance—a requirement of initiatives in this window —is predicated on achieving social or environmental results.
Hindustan Unilever’s Project Shakti (“empowerment”)
• earlier business model followed by HUL customary wholesaler-to-retailer distribution model .
• to reach remote villages, the company recruits village women, provides them with access to microfinance loans, and trains them in selling soaps, detergents door-to-door. ( home care, health care and hygiene care)
• More than 65,000 women entrepreneurs now participate, nearly doubling their household incomes, on average, while increasing rural access to hygiene products and thus contributing to public health.
Project Shakti
Project Shakti
• These social gains have been met by business gains for the
company: As of 2012 Project Shakti had achieved more than
$100 million in sales.
• As Project Shakti demonstrates, window three programs need
not be comprehensive. Most are narrow initiatives
undertaken with a focused market segment or product line in
mind, but with significant potential to alter the company’s
social or environmental impact and financial performance.
The Four Phases of CSR Development in India• The First Phase
• In the first phase charity and philanthropy were the main
drivers of CSR.
• Culture, religion, family values and tradition and
industrialization had an influential effect on CSR.
• In the pre-industrialization period, which lasted till 1850,
wealthy merchants shared a part of their wealth with the
wider society by way of setting up temples for a religious
cause
•
The First Phase
• With the arrival of colonial rule in India from the 1850s onwards, the approach towards CSR changed. The industrial families of the 19th century such as Tata, Godrej, Bajaj, Modi, Birla, Singhania were strongly inclined towards economic as well as social considerations.
The Second Phase
• In the second phase, during the independence movement, there was increased stress on Indian Industrialists to demonstrate their dedication towards the progress of the society.
• This was when Mahatma Gandhi introduced the notion of "trusteeship", according to which the industry leaders had to manage their wealth so as to benefit the common man.
The Third Phase• The third phase of CSR (1960–80) had its relation to the element of "mixed economy", emergence of Public Sector Undertakings (PSUs) and laws relating labour and environmental standards.
The Fourth Phase
• In the fourth phase (1980 - 2013) Indian companies started abandoning their traditional engagement with CSR and integrated it into a sustainable business strategy.
Current State of CSR in India
• The basic objective of CSR in these days :1. to maximize the company's overall impact on the society and stakeholders.
2. Integrate CSR policies, practices and programs with business practices.
3. important for protecting the goodwill and reputation
4. defending attacks and increasing business competitiveness.[
comprehensive method of development is adopted by some corporations
• Bharat Petroleum Corporation Limited, • Maruti Suzuki India Limited. 1. Provision of improved medical and sanitation facilities,
2. building schools and houses3. empowering the villagers and in process making them more self-reliant by providing vocational training
Five Dimensions of Corporate Social Responsibility
• Traditionally, companies have had one responsibility: to make a profit. But the concept of corporate social responsibility holds that companies should be responsible to more than just their owners. Corporate social responsibility holds that there are multiple dimensions that should affect a company's actions. Understand these dimensions when planning your own company's corporate social responsibility efforts.
• Environmental• The environmental dimension of corporate social responsibility refers to your business's impact on the environment. The goal, as
a socially responsible company, is to engage in business practices that benefit the environment. For example, you might choose to use recycled materials in your packaging or ad renewable energy sources like solar power to your factory.
• Social• The social dimension of corporate responsibility involves the relationship between your business and society as a whole. When
addressing the social dimension, you should aim to use your business to benefit society as a whole. This could involve sourcing fair trade products, for example, or agreeing to pay your employees a livable wage. It could also involve taking on endeavors that benefit society, for instance using your resources to organize charitable fundraisers.
• Economic• The economic dimension refers to the effect that corporate social responsibility has on the finances of your company. In an ideal
world, where corporate social responsibility had no costs, there would be no reason to limit it. But in the real world it is important to recognize the financial impact that these actions have and to balance being a good corporate citizen with making a profit.
• Stakeholder• The stakeholders are all of the people affected by your company's actions. These include employees, suppliers and members of
the public. When considering the stakeholder dimension of corporate social responsibility, consider how your business decisions affect these groups. For example, you might be able to increase your output by having employees work more, but you should consider the impact it will have on them, not just your bottom line.
• Voluntariness• Actions that fall into the voluntariness dimension are those that you are not required to do. These actions are based in what your
company believes is the correct thing to do. They may be based in specific ethical values that your company holds. For example, you may believe that using organic products is the right thing to do even if you are not required to do so.