CU_SEM_III_MCOM-CSR-Second draft-converted

2. Value creation to be judged through (a) Portfolio management (b) Choice between strategic options (c) Assessment of impact of business plans (d) Target-setting and bench-marking 3. Analyzing resource sourcing. Prioritizing and allocating resources conscientiously 4. Appraisal of business performance and analyzing organizational image 5. Focus on business and operational strategies and opportunities that maximize value in everyday management 6. Learn the skill to enhance delegation as well as to increase responsibility and accountability 7. Move from subsidiary level to the corporate level by breaking down plans into key objectives and prioritizing them. This would ensure value throughout the organization 8. Provide undiluted support for difficult but essential long-term initiatives to tackle stakeholder issues 9. Invest in research and development to increase invention and innovation 10. Be transparent about the risks and benefits of technology and be open to disruptive innovation, even if it means short term disturbances to existing business but ensures long-run universal benefit Macro-Level Integration As the name suggests, this level refers to national and international level of policies that impact business. When policymakers in government adhere to accountable and responsible behaviour while formulating economic policies then CSR becomes easy to achieve. The immediate areas of implementation 1. Draw up long-term unambiguous policy framework of targets regulations. 2. Establish mandatory minimum standards for public Participate supported by improved incentives and performance appraisals 3. Systematically incorporate public welfare in decision-making at each stage of the firm's project/policy cycles. 4. Improve the transparency of its governance and operations, particularly for project-affected people.

5. Expand and protect political space for democratic and participatory decision-making at the national level. 6. Find new and attractive ways to co-finance social initiatives related to sustainable growth of all stakeholders. 7. Accountability of global international organizations like the World Bank, ILO, UNICEF, and other agencies. Integration of CSR at the Operation and Process level This strategy would ensure that a poor substitute for collective agreements is not made. This would remove the danger of many stakeholders becoming docile and flexible, at the cost of overall profit mongering. The long-term viability would be addressed because at every stage quality would be scrutinized. The potential danger—of companies choosing partners like pseudo. NGOs who suit them by setting aside real partners of growth behind the facade of CSR—would be addressed. If a firm, while pursuing its activities of sourcing raw materials to supplying products to consumers, builds in CSR at every level, it would emerge as a responsible company in the business world. The firm can start by ensuring the following: Resources: These include energy, material, labour, capital, and information, how these are sourced and allocated for the most profitable as well as for the most socially sustainable economic activity should be studied by the business enterprise, so that from the beginning of their production process the social concern is built into the working of the company. Production Processes: Every business firm should review whether production processes that the organization is alert about the satisfaction of internal and external stakeholders. These processes should include conservation of scarce resources, labour welfare, ergonomics, strict, activities legal methods, protection of the environment, and other similar that corporate responsibility is not relinquished. Production of goods: Here again, the specifications about goods play a major role in CSR at both internal and external levels. The understanding should be that when specifications are being met, the selections designs are done responsibly because there should be no danger to h or environment from them in the future. Planning: While planning the selection of machinery and planning based marketing', which analyses the product, basic need, existing and current problem is taken into account, then the focus on this handful variables would help to quickly analyse the ethical impacts.

Organising: Under these decisions regarding processes, plant location layout, routings, line balancing, stores, and record keeping are made. If organization studies the impact of these on the internal and external the concept of CSR would get in-built into the system. Control: Generally, a study is made of the progress according to the process, if an audit is also done of the ethicality followed during the level of CSR would be easily measurable. Operations: This is often brought in to implement strategic plans made marketing, finance, and general management. Therefore, an operations strategy, needs to be formulated. If this vision is integrated with social responsibility, then the entire business strategy would result in a consistent pattern of decision - making, which would give the organization a competitive edge in the concentric levels of business mentioned earlier. Human resources: How the work-force is managed can be measured if the following are studied. Work culture: Are employees empowered, engaged, accountable? Do they 100k forward to coming to work because of good interpersonal relationships? Leadership Are leaders accessible, communicative, and empathetic to intend and external factors influencing corporate success? People: Is work/ life balance valued? Are employees encouraged to take care of themselves and their families? Are flexible policies regarding where, when, and how people work available? Work: Do all employees feel that their work is significant. Are there appraisal/ Wilfork for the difference/contribution they make in the lives of others? Growth and Opportunity: Are training and education valued? Compensation and benefits: Are people paid fairly for the work 'they do? CSR often becomes a difficult issue when the companies build and maintain production facilities in the countries without an appreciation of national culture and history. The basis for the relation of culture and CSR depends on the size and history. as well as on the products and services it offers and markets of the company in which it operates. Companies are confronted with pressing problems that vary from consumerism to poverty, state-run mandatory health facilities to inadequate health care, HIV infected workforce, corruption, child labour, educated unemployed, restrictions on trade, organized and unorganized labour, organized and

unorganized business sectors, poor education systems, as well as the absence or non- implementation of rules on working conditions and environmental protection. Therefore, companies have to be actively committed to a sustainable improvement in the macro-economic situation and introduce measures that go beyond statutory requirements of the countries in which they operate. With globalization and outsourcing as a business model, to enjoy economies of scale and efficient and effective supply chain models, corporations have to be extremely alert about the practices followed by/in their subsidiaries, contractual partners, suppliers, and licence-holders. Statutory Regulations The statutory provisions of any country have to take account of the socioeconomic situation in the countries in question. Hence, very often rigorous implementation of high social responsibility standards may not be immediately possible in developing countries. This is because: (a) the infrastructure to support such implementation may not be available; (b) the implementation may actually reduce the competitive advantage of low cost of production; (c) removal of social evils without proper contingency plans may, rate of crime and substance abuse in the society; and (d) It has been found that formal modern education has led to in vocation-based skills training or pursuance of traditional followed by their forefathers. Hence, there is a decline and, in some cases, disappearance in vocational based skills and indigenous heritage The national-level policy should incorporate the welfare state concept in policies. Instead of a general boycott or piecemeal ameliorating activities, the nation should have a structured policy aimed at reducing tape, corruption, and increasing fair distribution. Achieving the brand of being a quality conscious nation is as important as that of the corporate entities. The nation has to be seen by people as a nation that is safe, peaceful, and friendly. Corruption levels have to be checked and bureaucratic red tape has to be lessened. If a nation is unable to create an investor-friendly environment and brand equity through its transparent business policies and systems, as well as honest and just government and legal institutions, economic growth will remain a mirage.

Danger of Stereotyping To create an environment at the national level that promotes sustainabi1ity very often the mistake of copying systems is committed. Stereotyping relates bracketing problems and solutions under a common frame because theoretically they look similar. The reality is, when we analyse a problem at the practical level and try to implement solutions, the stark differences and challenges are revealed among similar-looking problems and solutions. An excellent example of this dilemma can be seen in the way poverty is viewed. Poverty is usually defined in a limited way in terms of an income-based poverty line. Several forms of human deprivation (which cause poverty) including poor survival chances, unjust employment of children, child prostitution, bonded labour, environmental pollution, domestic violence, and social exclusion arising out of caste and gender discrimination, are not related to income in a predictable manner (UNDP 1997). As explained earlier, poverty includes factors like hygiene, education, nutrition, credit, etc., which cannot be measured through the income parameter alone. Technological changes and global competition are accelerating changes in market demand. This, in turn, is rendering traditional skills redundant, enhancing development-related displacement, harming ecological factors, etc. Businesses would have to proactively handle these concerns related to poverty, if they want long-term sustenance and viability. 'Governments themselves are often a source of shocks to households. This about through the way governments influence the d political settings within which the household is embedded' (Baulch d Hoddinott 2000). The shocks mentioned above result from government that impact everyday life of citizens. For example, in May 2010, the of India decided to increase the price of petroleum products. This naturally increase the price of almost all consumer goods as the cost of transportation would go up. Since the inflation rate is already high, such a policy an added shock for households. These changes in policies creating different issues of poverty not directly related to the income of an individual or community may be due to the demands of liberalization and globalization (Chatterjee 2006). Another interesting example of misinterpretations that can occur due to stereotypical belief is that poverty leads to child labour. For example, it is fascinating to observe that though poverty is rampant both in India (which got independence in 1947) and Georgia (which became independent when the USSR broke up in 1991), Georgia does not have child labour, whereas it is widespread in India. In Georgia, there is no child labour as every child goes to school,

because the communistic past has created the culture of sending children to school by providing state-aided free education. The children there suffer from other factors like war (see section on 'Challenges' in the poti case study). Since industrial development is almost negligible, there is an enormous number of educated unemployed in Georgia. When people are not employed for a long time, skill redundancy occurs and a vicious cycle of poverty continues. Therefore, here the challenge of eradicating poverty is different from the challenge in India. In Georgia, industries need to partner with government to provide skill training and employment to ensure a productive workforce of the future. It is propagated that because of poverty children in India have to seek employment to survive. The Indian government cannot immediately and strictly implement its policy of removal of child labour because contingencies like number of schools and availability of food for all is not yet totally implemented. If under international pressure from businesses or international organizations a ban is strictly imposed on child labour, it may lead to increased street crimes, drug addiction among children, spread of sexually transmitted diseases, and other kinds of child abuse. Therefore, the Indian corporate world has to partner in a proactive manner with the government to tackle and eradicate poverty from a totally different perspective. Initiatives like free and compulsory education, better schools, availability of meals in schools to retain students, availability of free books and uniforms have to be undertaken by the business world, along with the government, to ensure a healthy workforce of tomorrow. Therefore, stereotyping should avoid and answers should per the unique history of each country. Outer Global Ideology The general standards laid down by the United Nations and the Labour Organisation need to be practised. However, certain of that may arise in this are collective bargaining of workers' gender human rights, environment protection, free trade, financial corporate governance, to name a few. To such conflict, in ensuring social responsibility and understanding cultural relativism of economic justice would have to be taken care of. 9.3.3 Key benefits of Good CSR Practices

In an era of social media and instant news, reputations can be irreparably damaged in seconds. But CSR isn’t just about risk management and deflecting negative scrutiny. There’s enormous value in doing good, especially when it enables you to differentiate yourself. 1. Stronger brand image: Operating responsibly wins points, gains recognition and solidifies your reputation. Focusing on the right CSR issues can contribute up to 30% of your company’s brand value. 2. Increased customer loyalty and sales: Today’s conscientious consumers have more personal relationships with the products and services they buy, looking for companies that are responsible and support worthwhile causes. A study by the Reputation Institute revealed that 42% of how a person feels about a company is based on their CSR approach. 3. Operational cost savings: Lessening your environmental impact often leads to innovative ways to reduce your operating costs, which improves your bottom line. 4. Employee recruitment and retention: Employees become more committed and have longer tenures with companies that maintain good CSR practices. A recent Deloitte study found that when millennials were asked about the primary purpose of business, 63% more chose “improving society” over “generating profit.” 5. Access to funding and financing: Your corporate reputation can affect your ability to obtain venture capital, insurance, loans and financing. 6. Improve relations with regulatory bodies: Most businesses are regulated in some way, so having a good name can help ease and reduce your company’s administrative burden. 9.3.4 Tips to build your own CSR Strategy When it comes to CSR, you not only have to do good, but you have to be seen as doing good, and will always be challenged to do better. Develop a CSR strategy early, before a problem arises, as well as mechanisms for handling potential issues. Build your strategy around your company’s core competencies. There are many worthy causes companies can choose to support, but without focus and alignment around what your business already does well, your CSR efforts may be less effective. If a company has developed strengths, research, and knowledge in a specific area, supporting a cause that aligns with that expertise can be both a win for community partners

and for the company with new customer visibility and revenue streams. “CSR can be both a risk mitigation strategy and an opportunity-seeking strategy, and leaders should look for the ‘sweet spot’ within their organizations—that is, the intersection between business and social/environmental returns,” Recognize issues that matter to your customers. It’s no secret that corporate citizenship efforts can promote a positive brand association for companies, but do customers really care? The answer is a resounding “yes.” According to a Cone Communications CSR Study, 87% of consumers would purchase a product based on a company supporting a social or environmental issue the consumer cares about. Consumers are rewarding socially responsible companies through brand loyalty, making donations to charities companies support, and purchasing products that provide a social benefit. As recent corporate scandals in the news demonstrate, consumers also aren’t afraid to use their buying power to punish companies who have acted irresponsibly or harmfully, through boycotts and negative social media campaigns. • Develop CSR initiatives that make your employees proud. Strategic companies are also using CSR programs to protect and grow their biggest asset— their employees. Seventy-six percent of millennials consider a company’s social and environmental commitments when deciding where to work and 64% would not take a job if a potential employer didn’t have strong corporate social responsibility practices in place. “Being a good employer has always served companies well in terms of recruitment and retention, now those practices can also yield broader positive business benefits,” said Alison DaSilva, former Executive VP of CSR Strategy at Cone Communications. In addition, engaged employees are more likely to stay with a company longer, reducing attrition cost. Eighty-eight percent of millennials say their job is more fulfilling when they are provided opportunities to make a positive impact on social and environmental issues. These initiatives can range from paid time off for volunteering to company-wide days of service to skills-based virtual volunteering opportunities.

Measure the ROI of your CSR efforts for the C-suite and your investors. Evaluating CSR programs can be overwhelming, especially when initiatives can span many different departments such as human resources, marketing, sustainability and compliance. However, developing an organized framework for reporting that links efforts back to strategic priorities for the business will inform your C-suite and investors if your CSR efforts are affecting your company’s performance. Seek to quantify socially conscious efforts that are directly tied to the company’s bottom line—for example, activities that drive cost savings, new customer acquisition, and brand awareness. Expand your company’s definition of CSR. Traditionally, good corporate citizenship was defined by annual giving programs, cause marketing campaigns, and efforts aimed at reducing environmental resources. And while those efforts are valuable, consumers and companies alike have become more innovative in how they define a responsible company. According to a Cone Communications CSR Study, consumers prioritize the following business actions as important: being a good employer, operating in a way that protects and benefits society and the environment, creating products and services that ensure individual wellbeing, investing in causes in local communities and around the globe, and standing up for important social justice issues. For a summary of this article, check out our infographic, “The Keys to Strategic Corporate Giving.” Be prepared for rapid response to current events and social movements. Even the best laid plans for CSR may require changing. To be sustainable, your CSR work needs to be flexible. This could include modifying budgets, redirecting investments of time, and quickly identifying trusted non-profit partners to launch new programs or adjust existing ones. In response to the COVID-19 pandemic and the police killing of George Floyd, many companies pivoted in their social impact work. By being adaptive with your CSR, your program will remain relevant and timely. CSR programs have the potential to bring value to business and society, but only if done well. By aligning corporate citizenship efforts with revenue-generating activities, you can ensure your CSR program is strategic and sustainable

9.4 SUMMARY • Managers of business organizations have four social responsibilities: economic, legal, ethical, and discretionary. While formulating and executing strategies, organizations are responsible to their stakeholders who affect, or get affected by, their business activities. • Corporate social responsibility (CSR) is a new idea, one in which the corporate sector incorporates social and environmental concerns in its strategies and plays a more responsible role in the world. Corporate social responsibility can be integrated seamlessly into the goals of almost all organizations • In order to consider corporate social responsibility as a fundamental part of business decision making, it should be blended with company’s core vision and mission and values. • Although the objective of a corporation is commonly described as making profits for shareholders, no profit can be earned without providing some economic good—which is to say, some product or service. • If we are looking for a better community life in the world that is shared by both human and non-humans, then we have to broaden our vision and limit our greed. This, in fact, will provide a strong foundation for environmental protection. The thinking process with respect to how to achieve this goal and drive the philosophical support to lay the foundation has to change in order to incorporate nature into moral framework. • An organization's vision and mission act as guiding principle for strategy formulation. A well-conceived vision has two main mechanisms: core ideology and envisioned future. A well-drafted vision should be pragmatic, convincing, attractive, and future-oriented. • A mission statement describes the product, the market, and the technological areas of importance for the business, and forms its overriding raison d'être, that is, ‘reason for existence'. The vision and mission statements together provide the expansion directions for the organization and organize the allotment of resources. • Corporate social responsibility is a concept that is tightly connected to the underlying values of the organization. As such, it should be reflected in both the vision statement as well as the more detailed mission statements of the organization. In this manner, one can assure that, at the least, the aspirations and guiding values that are tied to the CSR concept are maintained.

• Corporate social responsibility programs try to bridge the gap between what laws are in place and enforced, and basic fundamentals of good business practice, such as obedience to local laws, avoidance of exploitative practices, and complete transparency. • Social responsibility is not solely the government's job, corporate social responsibility is not the task of the senior executive alone. Project managers are instrumental in achieving strategic goals, as they hold the path to execution. In this way, they can play a pivotal role in corporate social responsibility. • Project managers can influence their companies toward socially responsible behavior at the local level in areas such as human rights, employee rights, environmental protection, and supplier relations. Projects that involve partnerships with the local community can create enduring relationships of respect, goodwill, and mutual benefit. • It is clear that CSR requires an in-depth understanding of the history and culture of the country and also a committed integration into the strategy of an organization for it to succeed. • The framework for implementation has to be integrated through three stages: the inner corporate level, the intermediate national level, and the outer universal level. • CSR isn’t just about risk management and deflecting negative scrutiny. There’s enormous value in doing good, especially when it enables you to differentiate yourself. • When it comes to CSR, you not only have to do good, but you have to be seen as doing good, and will always be challenged to do better. • Develop a CSR strategy early, before a problem arises, as well as mechanisms for handling potential issues 9.5 KEYWORDS / ABBREVIATIONS 1. Benchmarking: The comparison of similar processes across organizations and industries to measure progress, identify best practices, and set improvement targets. Results may serve as potential targets for key performance indicators. 2. Critical Success factor (CSF): A CSF is a business event, dependency, product, or other factor that, if not attained, would seriously impair the likelihood of achieving a business objective. This term is always included in a glossary of strategic terms

3. Key Outcome Indicator (KOI): Often used in the public sector to describe key performance indicators, those metrics most critical to gauging progress toward objectives. KOIs are metrics that are: tied to an objective; have at least one defined time-sensitive target value; and have explicit thresholds which grade the gap between the actual value and the target. 4. Mission: Concise statement that describes, in motivating and memorable terms, the current top-level strategic goal of the organization. A mission provides both an internal rallying cry and external validity. Usually financial-, process-, or customer service-oriented, with a mid- term (three to five years) horizon, an effective mission is inspiring as well as easily understood and communicated. 5. Strategy: Strategy is the way an organization seeks to achieve its vision and mission. It is a forward-looking statement about an organization’s planned use of resources and deployment capabilities. Strategy becomes real when it is associated with: 1) a concrete set of goals and objectives; and 2) a method involving people, resources and processes. 9.6 LEARNING ACTIVITY Select any CSR project of a corporate of your choices and find out how closely the project is aligned to local community needs ________________________________________________________________ ________________________________________________________________ 9.7 UNIT END QUESTIONS A. Descriptive questions (Long Answers) 1. Vision and Mission act as a guideline for company’s strategy formation. Do you agree. Give reasons for your answers. 2. Why companies should engage in some form of effort aimed primarily at social welfare? Give some compelling reasons. 3. What are different levels of Corporate Social Responsibility? 4. How do company benefit from good CSR practices? 5. Give few tips on developing a good CSR Strategy

6. How can an organization build the concept of CSR into its strategy? 7. To design a corporate strategy that would include CSR as an integral concept, what aspects would you take into account. Descriptive questions (Short Answers) 1. Explain the concept of Vision of a company 2. Give few tips on developing a good CSR Strategy 3. Define Mission 4. What are 4 levels of CSR? 5. What is CSR Pyramid? B. Multiple Choice Questions 1. What is meant by the phrase ‘teleololical ethics’? a) Is used to judge is an action is right, fair and honest. b) An action can only be judged by its consequences. c) Developing the individual personal characteristics. d)The key purpose of ethics is to increase freedom 2. What does Milton Friedman believe to be the sole responsibility of business? a) The only social responsibility of business is to its shareholders. b) Managers should act in \"ays that balance the interest of society andshareholders. c) The primary responsibility organizations have is to its employees. d) The primary responsibility organizations have is to its stakeholders. 3. Why, according to stakeholder theory, is it in companies' best interests to pay attention to their stakeholders? a) If firms only act in their own self-interest employees may feel exploited. b) If firms only act in their own self-interest government might put more regulation on them.

c) If firms only act in their own self-interest customers might not like the image that the company portray d) If firms only act in their own self-interest and inflict harm on stakeholders then society might withdraw its support. 4. What is the enlightened self-interest model of CSR? a) That it is in an organization's own best interest to put itself first rather than its ethics. b) That it is in an organization's best interest to consider what a shareholder would want. c) That it is in an organization's own best interest to act in an ethical way. d) That it is in an organization's own best interest to follow the legislation and abide by the law. 5. A ________ _________ sets out the purpose and general direction for the organisation? a) Mission statement b) Purpose statement c) Vision d) Profit statement 6. Which of the following would most effectively act as the primary objective of a business organisation? a) To make a profit b) To procure resources c) To communicate with shareholders d) To mediate between the organisation and the environment Answers: 1-b, 2-a, 3-d, 4-c, 5-a, 6-d

9.8 REFERENCES Reference books • Davis, I. (2005). What is the business of business? The McKinsey Quarterly, 3, 105–113. • Davis, I. (2005, May 26). The biggest contract: business and society. The Economist [Electronic Version]. Retrieved January 22, 2008 from http://www.economist.com/displaystory.cfm?story_id=4008642 • Dejean, F., & Gond, J. P. (2004). La Responsabilité Sociétale des Entreprises: Enjeux Stratégiques et Méthodologies de Recherche. Finance Contrôle Stratégie, 7(1), 5 – 31. • Doane, D. (2005, Fall). The myth of CSR. Stanford Social Innovation Review [Electronic Version]. Retrieved January 22, 2008, from http://www.ssireview.org/articles/entry/the_myth_of_csr/ Textbooks 1. Business Ethics and Corporate Social Responsibility by Michael Vas and Aurora Vaz. 2. Corporate Social Responsibility by Madhumita Chatterjee.

UNIT – 10 : THE STRATEGIC IMPORTANCE OF CSR Structure Learning Objectives 10.0. Introduction 10.1. Embedding CSR into Corporate Strategy 10.2. The strategic CSR Model 10.3. The business level CSR Threshold 10.4. CSR as competitive Advantage 10.5. Summary 10.6. Keywords/Abbreviations 10.7. Learning Activity 10.8. Unit End Questions 10.9. References 10.10. 10.0 LEARNING OBJECTIVES After studying this unit, the students will: • Understand the compelling reasons why companies should engage in some form of effort aimed primarily at social welfare • CSR as continuing commitment to behave ethically while driving economic development. • Corporate Social Responsibility (CSR) is an inescapable priority for business management 10.1 INTRODUCTION Corporate Social Responsibility (CSR) is an organization’s obligation to consider the interests of their customers, employees, shareholders, communities, and the ecology and to consider the social and environmental consequences of their business activities. By integrating CSR

into core business processes and stakeholder management, organizations can achieve the ultimate goal of creating both social value and corporate value. As of late, CSR has gained notoriety as businesses have responded to two major changes in the last 5-10 years: the increase of public concern over the environment and the free flow of information afforded by the internet. In the last several years, movies like An Inconvenient Truth and events such as Live Aid and Earth Day have brought climate change and protection of the Earth’s environment into the forefront of people’s minds. As stakeholders in any organization’s strategic plan, the public represents shareholders, customers, employees, suppliers- everyone. Whatever issues that the public sees as important, organizations should take notice of. An organization seen as harmful to the environment is very likely to be seen as socially irresponsible, and therefore risks the relationship with all of its stakeholders. Another trend increasing the importance of CSR is the increased use of the internet to access and trade information. Whereas in the past, the details of a company’s actions may have been restricted to newspaper clippings from the business section or academic discussions in the classrooms of business schools, these days any company seen being socially irresponsible may show up in mass emailing’s, Facebook postings or even myspace bulletins- seen by tens or even hundreds of thousands of people in a day. Today, more than ever, companies are under the watchful eye of their stakeholders. So, what is Strategic Corporate Social Responsibility? By taking a strategic approach, companies can determine what activities they have the resources to devote to being socially responsible and can choose that which will strengthen their competitive advantage. By planning out CSR as part of a company’s overall plan, organizations can ensure that profits and increasing shareholder value don’t overshadow the need to behave ethically to their stakeholders. Strategic CSR provides companies with solutions for: • Balancing the creating of economic value with that of societal value • How to manage their stakeholder relationships (especially those with competing values) • Identifying and responding to threats and opportunities facing their stakeholders • Developing sustainable business practices • Deciding the organization’s capacity for philanthropic activities

10.2 EMBEDDING CSR INTO CORPORATE STRATEGY Companies once viewed corporate social responsibility (CSR) programs with general scepticism and even contempt. In 1970, the economist and Nobel laureate Milton Friedman published an article in The New York Times Magazine titled, “The Social Responsibility of Business is to Increase its Profits”. In the article, he referred to CSR programs as “hypocritical window-dressing” However, today, business firms around the world, spurred by consumers as well as a rising generation of more socially conscious leaders, are making CSR a priority, integrating it into their operations and using it to attract customers and to attract and keep talent. In the first decade of 21st century (2000-2010), for instance, only about a dozen Fortune 500 companies issued a CSR or sustainability report. Now the majority of the Fortune 500 companies issue CSR and sustainability report. More than 8000 corporates around the world have signed the UN Global Compact pledging to show good global citizenship in the areas of human rights, labour standards and environmental protection. Today many companies are instead trying to integrate CSR into their business operations. Some blue-chip companies are creating new markets in the developing world by closely aligning social causes with their overarching corporate strategies. Others have made ambitious commitments to environmental sustainability. Mr Eric Orts, professor of legal studies and business ethics at Wharton says “For companies to take CSR seriously, it has to be integrated into the DNA of the enterprise. Companies needs to say: “We want to make money, sure, but we also care about our effect on society and environment. And that comes through in the kinds of jobs we provide, the kind of products we make and the way in which we use resources” Today, business firms are likely to face significant business risks by ignoring CSR. Consumers and other stakeholders are likely to shun firms that develop unethical reputations. Also, companies that don’t pay attention to their unethical responsibilities are more likely to stumble into legal troubles for mass corruption or accounting fraud scandals. 10.2.1 Initiatives for Integrating CSR into Business: Some of the initiatives taken by corporates to integrate CSR into Business Operations are as follows:

1. Focus on Triple Bottom Line (TBL): Nowadays, some of the leading corporations in the world are focusing on TBL approach. Such corporation aim at balancing the three main elements of TBL: a) People – relates to fair and beneficial business practices towards employees, customers and other stakeholders. The main purpose of fair practices is to create social value. b) Planet – refers to sustainable environmental practices. Companies focus on eco- friendly initiatives such as conservation of natural resources and recycling of waste, using renewable energy sources, undertaking green campaigns, production of eco-friendly goods, etc. The main purpose is create environmental value. c) Profit – refers to the economic value created by the organization by undertaking effective production and marketing of goods and services. 2. CSR and Human Resources: A CSR program can be an aid to recruitment and retention. Especially in advanced countries, potential recruits or employees often ask about a firm’s CSR policy during an interview, and having a comprehensive policy can give an advantage. CSR can also improve the perception of a company among its staff, particularly when staff get involved through payroll giving, fundraising activities or community volunteering. 3. CSR and Marketing Practices: Companies that ethically market to consumers are placing a higher value on their customers and giving them utmost respect. They market ethical products as per the standards. They fix the right price and do not engage in unfair trade practices. They do not try to manipulate or falsely advertise to potential consumers. This is important for companies that want to be viewed as ethical. 4. Community Involvement: This can include raising money for local charities, supporting community volunteerism, sponsoring local events, employing people from a community, supporting a community’s economic growth, engaging in fair trade practices, providing training to weaker sections of the society, etc.

5. Women Empowerment: In several countries, especially in developing countries, there is gender inequality. Leading corporations in the world are undertaking measures to empower women. For instance, the Coca-Cola Company started a program to empower young women entrepreneurs. The 5 X 20 program aim to bring 5 million women in the developing world into its business by 2020 as local bottlers and distributors of Coca-Cola products. Research suggests that such an investment in women can have a multiplier effect that leads not only to increased revenues and more workers for businesses, but also to have better educated, healthier families and eventually more prosperous communities. 6. Financial Inclusion: Corporations and financial institutions are working towards financial inclusion. Financial inclusions means bring weaker sections in the main stream of organized banking or organized financial activities. For instance, Visa has built alliances with local governments and non-profit organizations focused on financial inclusion. These alliances are already transforming the economic architecture in parts of the developing world by giving financially weaker sections a way to pay, get paid and save money, sometimes through electronic and mobile payment systems. Research by the Gates Foundation and others has shown that the usage of these kinds of services enables poor people to better withstand blows to their personal finances, build assets and connect into the wider economy. 7. CSR and Production: Business firms are making efforts to integrate CSR into production activities. It is mentioned earlier that professional business firms are making efforts to achieve environmental sustainability. Firms are making efforts to use eco-friendly materials for production. The professional firms are making good efforts to produce and market eco-friendly products. Firm spend a lot of money on R&D to reduce fuel emissions, to conserve natural resources, to develop substitutes for natural resources. A good number of firms have adopted green technologies, and also adopted waste management strategies.

8. CSR and Finance: Finance department are also integrating CSR into financial activities. Professional business firms in India ethical follow Section 135 of Companies Act 2013. The finance managers of such firms allocate at least 2% of their average net profits during the preceding three years towards CSR activities. Some Guiding Principles of Strategic CSR The guiding principles of strategic CSR are that there is an inter dependence between business and society and that, as a result, there are opportunities for mutual benefit. The search for opportunities in this realm of mutually beneficial interdependence must be approached like any other business problem. As Porter and Kramer express the point, \"To put these broad principles into practice, a company must integrate a social perspective into the core frameworks it already uses to understand competition and guide its business strategy. \"62 A survey of corporations with successful CSR programs that produce genuine social benefits while serving corporate interests yields some valuable guidance about the selection and implementation process. First, one important aspect of CSR is the management of reputation risk. Companies, especially those with strong brand names, need to identify the activities that could be the target of moral criticism. An analysis of these reputation risks should focus specifically on business activities that have impacts on such ethically sensitive matters as human rights, the environment, and public health. Many reputation-threatening issues are easily anticipated, such as the environmental risk of mining, but others are emerging issues that companies fail to anticipate in a timely manner. For example, Nike was slow to accept responsibility for the treatment of workers in its contract factories abroad. McDonald's anticipated environmental concerns about food packaging and addressed the subject effectively, but the company was caught off guard by two emerging issues, the alleged destruction of Amazon rain forests from cattle raising and the company's use of trans fats in its products. Even spurious issues are better handled if they are anticipated and addressed quickly. For example, Coca-Cola denies charges that its operations in India have damaged underground water supplies, but its response to this issue has taken considerable effort and has not allowed all criticism. Second, CSR activities that are closely linked to a company's employment needs or product sales yield easily identifiable and measurable benefits. For example, both

McDonald's and Marriott, which have a great need for large numbers of entry-level workers, conduct extensive training programs that help workers who have never held a job to learn valuable work skills and attitudes. Many companies in the computer industry, including Microsoft, IBM, and Intel, have supported projects in computer literacy and science education among students throughout the world. Such efforts are clearly linked to these companies' interest in the spread of computer usage and the development technology. In a similar manner, Home Depot, whose sales depend on home improvements and repairs, offers many programs to support local communities, including Home Impact Grants to non-profit organizations that promote affordable housing. Third, the most successful CSR programs make use of a company's mission and core competencies. United Parcel Service, with its extensive expertise in logistics, is committed to transporting relief supplies to war-torn and disaster-stricken areas. This valuable service not only fits with the company's core competency in shipping goods but also improves the company’s capabilities. Coca-Cola, which is Africa's largest employer, announced in 2001 that it would help combat AIDS on that continent by using its expertise in advertising and distribution to educate people about the disease and deliver literature, condoms, and testing kits where needed. In this effort, Coca-Cola is making use of its formidable marketing ability, which is capable of rolling out a new advertising campaign in 50 countries at once, and its extensive distribution system, which operates in every African country except for two and which supplies soft drinks to even remote villages. The company is not acting alone in fighting AIDS but is partnering with existing organizations, including Unaids, a United Nations agency. A Coca-Cola spokesperson observed, \"We don't intend to create programs, but we'll help existing ones.\" He added, \"We don't kid ourselves—we're a beverage company”. Fourth, truly strategic CSR identifies opportunities that fit with a company's strategy. Only a few companies can develop a comprehensive strategy around social value. Fifth, successful CSR programs incorporate stake holder engagement or dialogue. Outside groups can be a resource not only in expanding a company's capability—as witness Coca- Cola's decision to partner with other organizations in Africa to fight AIDS—but also in

understanding the needs and outlooks of others and engaging them in the pursuit of mutual benefit. 10.3 THE STRATEGIC CSR MODELS It's hard to miss the conversation in the business media about responsibility. While some concept of corporate social responsibility has been around since the 1950s, businesses have seen both an evolving conversation and a growing interest in this area of management. Increasingly, corporations both large and small are using commitments to social responsibility to promote their products. The following are the contemporary CSR Models: 1. Ripple Effect Model: This model was proposed by C. Marsden and J. Andriof in 1998. This model expands on the concept of Triple Bottom Line by adding ethical and human resource practices to t e three goals of economic, social and environmental health. However, many of these areas are not separated by strict boundaries. 'Environmental' concerns can be addressed through internal measures such as energy and waste policies and external concerns such as product lifecycle, emissions and overall sustainable development. Again, the model does not explore in detail 'what to do' and 'how to understand' the process of green technology towards environment preservation. 2. Model of Sustainable Development This model was introduced by G. Aras and D. Crowther in 2009. This model states that to achieve sustainable development it is necessary to achieve sustainability and this can be achieved by four actions: • Maintaining economic activity as this is the raison d'etre (most important reason of existence) of the company - as stated by Milton Friedman in 1970 in his book Capitalism and Freedom. • Conserving the environment as this is essential for the maintenance of future generations; • Ensuring social justice which includes elimination of poverty and ensuring of human rights; and

• Developing spiritual and cultural values, where the corporate a societal value are a Igned within the individual. However, the 'Model of Sustainable Development' also brings a broad view of CSR practices without pointing out specifically 'what to be done' to ensure the environmental protection and sustainability. 3. CSR 2.0 Model: In 2010, Wayne Visser proposed CSR 2.0 model. model is concerned with the designing and adopting an Thiserently sustainable and responsible business model, supported by a reformed financial and economic systems. Clearly, he was most concerned with profit motive to ensure viability of the model rather than environmental conservation as the main priority. 4. Kanji-Chopra CSR Model: In 2010, GK. Kanji and P.K. Chopra 4. developed corporate social responsibility model (KCCSRM) which states that the organisational strategic planning systems provide the foundation for social accountability and investment, environment protection and sustainability, corporate governance and economic responsibility and ethics and human resources. The central objective of the model is to support company's financial performance precisely on profit motive. Again, environmental sustainability is only a part of the elements towards business sustainability. 5. CSR Model with Best Goodness-of-fit: In 2011, C. H. Chen presented a procedure for identifying a CSR model with best goodness- of-fit. He constructed a model of which CSR is mainly influenced by four components: • Accountability, • Transparency, • Competitiveness and • Responsibility. He also suggested qualitative approach to complement his findings and additional insights. However, the study did not include environmental perspective as one of the components.

6. CR - Model: In 2008, T. Ketola (2008) built a CR-mode1 by integrating utilitarian/ egoistic, duty/rights/justice and virtue ethical values with increased consciousness of psychological defences in corporate discourses, in order to achieve responsible environmental, social and economic corporate actions. The CR-model can be tested in companies and executed through corporate strategic and operational management. She also added that corporate responsibility (CIR) has become so critical to the well-being of humans and nature that it needs to be closely scrutinized. However, the model does not integrate the element of green practice to sustain the present business. 7. Analytical Model: In 2009, J. R. P. Daza developed an analytical model to appraise and measure corporate social responsibility (CSR). The utility function, which is the basis for company’s economic dimension, is analyzed in its philosophical and ethical setting. The resulting approach permits an analytical explanation of the behaviour of a company and its owners when incorporating both economic rationality and social responsibility. However, this quantitative study did not consider an environmental element as part of CSR contribution to society. 8. 3CSR Model: In 2006, Meehan and Richard developed a model that bridges the gap between CSR definitions and strategy and offers guidance to managers on how to connect socially committed organisations with the growing numbers of ethically aware consumers to simultaneously achieve economic and social objectives. This study offers a critical evaluation of the theoretical foundations of corporate responsibility (CIR) and proposes a new strategic approach to CIR, which seeks to overcome the limitations of normative definitions. To address this issue, the authors proposed a new \"processual model of CR\", which they referred to as the 3CSR model. However, the study did not integrate the environmental objectives into the organization's activities. 9. Reference Model:

In 2011, I. Delai and S. Takahashi developed a model to measure corporate sustainability (economic, social and environment) that can be used by organizations to integrate sustainability measures into their current performance measurement system, helping them to embed sustainability into daily activities and to forge a sustainability culture. The research found that there was no single initiative that tackles all sustainability issues and no consensus around what should be measured and how. Academics will find the model useful in their research efforts since it presents a broad review of sustainability concepts as well as an analysis of the strengths and shortcomings of each sustainability initiative focused especially in the environmental perspective. 10. PEARL Model: In 2009, M. Bilgin formulated institutional virtues according to sustainable development criteria to come with a paradigmatic set of corporate principles. His model up aims to answer how a corporation might obtain competitive advantage by combining \"going ethical\" with \"going green.' The PEARL model may be implemented as a proactive positioning to gain competitive advantage because transformation of this model into corporate strategy does not only respond to \"stakeholder\" claims, but also meets the changing characteristic of ‘societal demands\" His findings challenged the conventional belief that social and environmental responsibilities mostly create costs and do not contribute to the corporations' benefit at desirable levels. PEARL responds to shareholder concerns, public demands, and academic standards by offering a framework for concerned activities including environment, locality, social responsibility, governance, cultural freedom, and perception friendliness. 11. 4Es and 4 Poles Model: Agyekum, Mensah and others (2012) proposed a 4Es (project management model) and 4 Poles (poles or factors of sustainability) model as a holistic approach to achieving sustainable construction. In addition, they proposed an extension to the definition of Sustainable construction or development, as the existing definitions seem to be vague. The proposed model is new within project management and the environment. It also promotes technology as a core factor in achieving sustainable development.

12. CSR Universal Model: In 2014, N, Ai Nalband and Kelabi revisited Carroll's CSR Pyramid Model (1991) b including generic elements of beliefs, values and assumption. The model signifies legal responsibility as the main responsibility. This is in contrast to Carroll's CSR pyramid Model who argued that a company is primarily profit-oriented. Nalband and Al Kelabi's model postulates that the majority and/or an influential group in a company have the 'final say' as to what the key responsibility of the company is when conflict occurs in choosing among various responsibilities to fulfil. In this case the model does not specifically address how to tackle an 'environmental issue' despite the addition of the new elements (i.e., beliefs, values and assumptions). Observations of the Above Models: It can be observed from the above models as follows: • Majority of CSR models put emphasis on the economic motive as the primary priority of a business. • The elements of profit motive, social ethics, safety and health governance, cultural freedom, accountability, transparency, and competitiveness have been proposed with overlapping functions without focusing solely on specific elements such as environment protection; • Most of the models are concerned with philanthropic objectives. • Most of the findings used surveys among managers or owners of a business to identify the elements that should be included in the CSR model without considering how CSR activities can be integrated as part of a green process; and • The latest Universal CSR model by Nalband and Al Kelabi views legal responsibility as the basic responsibility. General Models: Apart from specific models by researchers, there are general models of CSR which are as follows:

1. Stakeholder Model: Nowadays, there is growing interdependence of business and society. Business firms undertake business and earn profits due to the support of various stakeholders. Therefore, business firms are expected to adhere to the Triple Bottom Line Concept: a. People - social responsibility towards customers, employees and society. b. Planet - environmental responsibility c. Profit - economic responsibility towards shareholders. 2. Philanthropic Model : This model of CSR places emphasis on philanthropic activities of a business firm. Business firms need to earn profits for survival and expansion. Also, a part of profits to be used for philanthropic activities such as donations to health, education, eradication of poverty, training to unemployed, etc. In India, under Sec 135 of Companies Act 2013, it is mandatory for certain companies to contribute at least 2% of the average net profits of the preceding three years, towards CSR activities. 3. Ethical Model: It refers to voluntary commitment of the company towards the welfare of the society. Society expects that business firms should contribute voluntarily to social welfare activities on ethical grounds. Business firms consider themselves as the trustees of the wealth which is to be used for the benefit of not just the shareholders, but also for the benefit of other stakeholders as well. This model of CSR existed even before CA 2013. It is based on Gandhiji’s principle of trusteeship. Gandhiji's trusteeship principle prompted various Indian companies to play active roles in nation building and promoting socio-economic development during the 20th century and currently in the 21stcentury. Several business groups such as that of TATA A, V. Birla Group, Wipro, Infosys, etc., have set up trusts to provide essential services such as schools, colleges, hospitals etc. 4. Liberal Model :

This model is of the view that free market would take care of CSR. It is based on Milton Friedman views - the social responsibility of a business is to increase the wealth of the shareholders. The company should not directly contribute to CSR activities, but it is for the individual shareholders to decide to part away a part of their wealth/ profit towards social activities. However, Friedman is of the view that when a business earns more profit, it can be directed towards the social welfare by offering quality goods at cheaper prices. This means a part of the profits can be utilised for R&D, training and development, technology upgradation, etc., so as to improve quality and efficiency. 5. Statist Model: This model of CSR emerged in India after independence in 1947, when India adopted the socialist and mixed economy framework, with a large number of state-owned companies along with private sector. The state-owned-enterprises contributed towards social welfare activities directly or by contributing a share of profits to state or central governments, and also increase Government revenue taxes and donations. The state or central governments were then expected to undertake welfare activities like housing, health, education, etc. This state sponsored corporate philosophy still operates in the numerous public sector companies that have survived the wave of privatization of the early 1990s. 10.4 THE BUSINESS-LEVEL CSR THRESHOLD An organization’s CSR Threshold is the point at which they concentrate their attention towards social objective that is, following CSR strategies. This tipping point occurs due to many factors, such as style of management, ecological sustainability, position of a company in industry, and the surrounding cultural forces. The CSR threshold varies with business as the factors are different. In some companies, the stakeholders may have individual intrinsic preference to carry out business with a sense of corporate opportunity toward social responsibility. This business would, most likely, build offensive CSR policies out of management’s high moral and social awareness. On the other hand, management may react defensively to the consumer demands with respect to CSR initiatives if not led by morally active management and may want to avoid negative media attention for increasing sales. Hence there are certain forces that influence the growth of CSR activities in India and other countries. Some of them are as follows:

1. Companies Act 2013: The CA 2013 has made it compulsory for companies to undertake CSR activities. According to Section 135 of CA 2013, companies having turnover of Rs 1000 crores, net worth of Rs 500 crore and profit of Rs 5 crore annually must spend at least 2% of average net profits to the preceding three years. On account of the mandatory requirements, several Indian companies have resorted to CSR activities since 2014. 2. Increased Affluence CSR becomes more pertinent for growing and stabilizing economies. Therefore, CSR has greatest attention in developed countries. Steady work and security provide the luxury of choice and socially responsible activism. Such luxury doesn’t exist if basic needs are in question. 3. Ecological Sustainability Perhaps the most apparent and most spoken about of the drivers, concerns over pollution, waste, natural resource depletion, climate change and like continue to stimulate discussions of CSR and intensify probability for proactive corporate action. After all, it is the best importance of firms to safeguard sustainable future, the availability of the resources for long- term on which they depend. 4. The Power of Brand Today the centre point of any company for its success is the opinion of the public and thus the success of any company depends upon the perception of the company in the market. Reputation thus is one of the focal elements. The companies these days are concentrating on an honest CSR to safeguard the reputation or brand of the company. Many firms have introduced cause-related marketing. 5. Corporate Image Nowadays, corporations aim at maintaining and enhancing corporate image in the minds of stakeholders-customers, dealers, employees, financial institutions, government agencies, suppliers, shareholders, media etc. therefore, a good number of corporates are focusing their attention towards CSR and therefore, they spend a good amount of money on CSR activities, which benefits not only the society but also the corporates.

6. Influence of Top International Philanthropists: Top international philanthropists such as bill gates, Warren Buffet, Asim Premji etc influence business leaders in several countries to donate generously towards CSR. Therefore, business leaders get influenced and contribute towards CSR. National Drivers include: 1. Cultural Tradition: deep rooted home-grown intellectual customs of philanthropy, business ethics and community embedded-ness 2. Political Reforms: Drives business towards amalgamating ethical and social issues. 3. Socio-economic priorities 4. Governance gaps 5. Crisis response 6. Market access International Drivers include: 1. International standardization: CSR codes, guidelines and standards are key drivers for companies who wish to function as global players. 2. Investment incentives : CSR is given an encouragement by the tendency of socially responsible investment, where funds are distributed on ethical, social and environmental criteria. 3. Stakeholder activism: CSR is boosted through the activism of stakeholder or pressure groups, often acting to deal with the perceived collapse of the market and government policy. 4. Supply chain: CSR activities among small and medium-sized companies are encourages by needs forced by MNCS on their supply chains. 10.5 CSR AS COMPETITIVE ADVANTAGE In mature efficient markets, it is very difficult for companies, especially those producing basic commodities, to gain a significant, long-term competitive advantage. Any difference that will enhance a company's products in a crowded, noisy market is a valuable corporate asset. Although competitive advantage has many sources, a strategy that incorporates social

responsibility is one. Even for companies that are responding to outside pressures in the market for virtue, competitive advantage can be gained if a CSR program is also integrated into the company’s strategy so as to confer a competitive advantage. Strategic CSR: As Michael E. Porter and Mark R. Kramer observe, “A firm that views CSR \"A firm that views CSR as a way to placate pressure groups often finds that its approach devolves into a series of short-term defensive reactions—a never-ending public relations palliative with minimal value to society and no strategic benefit for the business.\" The alternative is to be strategic about CSR and to find ways to gain a corporate benefit along with a public good. CSR can provide a win-win opportunity, in which a company and society can create shared value. This can be done, Porter and Kramer claim, if companies bring to CSR the same analytical tools they bring to the rest of their operations. They write, The truth is, the established and current approaches to CSR are so uneven and so detached from business and strategy as to incomprehensible many of the greatest occasion for companies to provide any advantage to society. If, instead, companies were to analyze their predict for social responsibility using the same frameworks that guide their core business choices, they would determine that CSR is not only restricted to a cost, a constraint, or a charitable deed—it can be a source of opportunity, innovation, and competitive advantage. The importance of CSR as a source of competitive advantage is all the more important given the difficulty in the present-day global economy of finding any means to differentiate a company and its products from competitors. As traditional sources of competitive advantage such as financial capital, technology, and location become less significant, David Hess, Nikolai Rogovsky, and Thomas Dunfee observe that in response, \"senior management is searching for new, hard-to-imitate, less-tangible sources of competitive advantage.\" These \"soft sources,\" they note, \"may include the benefits achieved through the successful implementation of corporate social initiatives. 10.6 SUMMARY • Amalgamation of CSR into main business activities and stakeholder management, companies can acquire the ultimate goal of creating both social value and corporate value.

• Increase in the use of internet and access to information related to trade has led to increasing trend of importance of CSR. • The companies can take strategic approach and determine for which activities they have the resources to dedicate to being socially responsible and can choose that which will strengthen their competitive advantage • Today, business firms around the world, spurred by consumers as well as a rising generation of more socially conscious leaders, are making CSR a priority, integrating it into their operations and using it to attract customers and to attract and keep talent. • Some of the initiatives taken by corporates to integrate CSR into Business Operations are Triple Bottom Line, integration of CSR into various departments human resources, production and finance departments, marketing practices, raising money for local charities etc. • The guiding principles of strategic CSR are that there is an inter dependence between business and society and that, as a result, there are opportunities for mutual benefit • One important aspect of CSR is the management of reputation risk. Companies, especially those with strong brand names, need to identify the activities that could be the target of moral criticism. • CSR activities that are closely linked to a company's employment needs or product sales yield easily identifiable and measurable benefits. • The most successful CSR programs make use of a company's mission and core competencies • Truly strategic CSR identifies opportunities that fit with a company's strategy. Only a few companies can develop a comprehensive strategy around social values. • There are certain forces that influence the growth of CSR activities in India and other countries like companies Act, increased influence, international drivers like CSR codes and standardizations, ecological sustainability etc • CSR can provide a win-win opportunity, in which a company and society can create shared value. 10.7 KEYWORDS / ABBREVIATIONS • Sustainability : A condition in which the economy does not utilize more resources from the natural environment than can be replenished by the normal reproductive capacity of the environment, and does not expel more pollution into the environment than can be

absorbed without ongoing deterioration in environmental quality. Only a sustainable economy can function long into the future without encountering natural or environmental limits. • Profit: The surplus that is left after a company pays off all the costs of production (including labour costs, raw materials, and a proportional share of its capital equipment) from the sales revenue (selling its output for a price). Formula is: Revenue – cost = profit • Investment: The charges that are charged by lender as the cost of lending money (or some other asset) to a borrower is called as interest. It is typically charged as a particular percentage of the loan’s value, as per specified time period (e.g. percent per year). • Environment: The natural environment is an essential aspect of the economy, whose influence is felt in several different ways. Everyone relies on the direct ecological benefits that come from nature: fresh air, clean water, space, and climate. And every industry depends on natural resources. These are uses required inputs to production (land, minerals, forestry and agriculture, energy, and other materials). Finally (and unfortunately), most economic activities involve the creation of some waste and pollution which is expelled back into the environment. • Economic growth: Economic growth is the expansion of total output produced in the economy. It is usually measured by the expansion of real GDP. 10.8 LEARNING ACTIVITY If you were heading a business or company, would you implement CSR? Justify your answer. ________________________________________________________________ ________________________________________________________________ 10.9 UNIT-END QUESTIONS A. Descriptive Questions (Long answers) 1. How does CSR integrate into business strategy? 2. How CSR strategies assist in building corporate brand?

3. How well is CSR implanted in Business Strategy? 4. Why Every Company Needs a CSR Strategy and How to Build It? 5. What are the models of CSR? 6. Why is CSR embedment so difficult? Descriptive Questions (Short answers) 1. What is a conflict model of CSR? 2. What do you mean by value added model 3. Distinguish between value added model and multiple goals model? 4. Is CSR a competitive advantage? 5. What are advantages of embedding CSR into business strategy? B. Multiple Choice Questions 1. The foundation for corporate culture are laid by _______________ a. Corporate members b. Competitors c. Founders d. Industry standard 2. An organization’s ______________ embraces the behavior, rituals and shared meaning held by employees that distinguishes the organization from all others. a. External environment b. Culture c. Dominant culture d. Ethics 3. Components of corporate culture comprise ____________ a. Vision and values b. Practices and people c. Narrative and place

d. All of these 4. Commitment, competence and consistency are three distinct characteristics that result in ______________ a. Culture building b. Values c. Organizational socialization d. Attitudes 5. Types of corporate culture are ____________ a. Clan culture and Adhocracy culture b. Market culture and hierarchy culture c. Both (a) & (b) d. None of these 6. The practices of a company for which it is accountable in relation to other parties is called ____________ a. Social responsibility b. Code of Ethics c. Values d. Culture 7. Culture needs to be kept alive by ____________ a. Workers b. Salesman c. Top managers d. Human resource managers Answers: 1- (c), 2- (b), 3- (d), 4- (a), 5 - (c), 6 – (a), 7 – (c)

10.10 REFERENCES Reference Books 1. Sanjay Agarwal K., Corporate Social Responsibility in India, Response Books, 2008 2. Hawkins David, E, (2006), “Corporate Social Responsibility: Balancing tomorrow’s sustainability and today’s profitability.”, Palgrave McMillan, ISBN 978-1-895536-97-3. Textbooks 1. Business Ethics and Corporate Social Responsibility by Michael Vas and Aurora Vaz. 2. Corporate Social Responsibility by Madhumita Chatterjee.

UNIT – 11 : CSR ACTIVITIES OF CORPORATE INDIA Structure 11.0 Learning Objectives 11.1 Introduction 11.2 Preparation of CSR Policy and Process of Policy Formulation 11.3 CSR Models 11.4 Monitoring and Evaluation OF CSR activities 11. 5 CSR Compliance & Reporting procedure 11.6 Summary 11.7 Keywords/Abbreviations 11.8 Learning Activity 11.9 Unit End Questions 11.10 References 11.0 LEARNING OBJECTIVES After studying this unit, you will be able to understand: • Understand a brief historical perspective of economic development of India • Challenges that corporate faces in implementing CSR • Overview of Government of India’s initiatives to promote CSR • Create a framework for CSR by understanding present practices 11.1 INTRODUCTION Nature and well-developed economic information of financial systems institutions existed in early India. The basic elements of land, labour, capital, and organization—is visible in • Land as the foundation of production of wealth. • Slavery as the chief source and supply of labour.

• Trade, commerce, and production and distribution of goods, which were usually controlled by the state. State also intervened and acquired monopoly over certain items of trade, mostly luxury items. • State expenditure on public works and welfare activities, which is also recorded. The backbone of the ancient Indian economy was agriculture. Therefore, the social pattern was also based on the ownership of land. Almost all ancient societies show traces of some kind of social division, similar to the caste system in India. Priests, warriors, and landowners have been the revered groups in most of ese societies, be it among the Aztecs of Mexico, the Europeans, e Japanese societies, or the African agricultural communities. Stories relating to the respect given to samurais or knights armour and to the clergy and rich land barons bear out this social division. Early Indian history reveals that the king met his expenses primarily through incomes from royal holdings and from bounty and donations. The three most important sources of taxation for the king were land revenue, tax on traders, and tax on artisans. The guild system was a very important economic development of ancient Indian economic structure. In early times, currency and exchange was usually based on barter. There is also mention of Niska, probably a form of gold coin used as a medium of exchange. It is interesting to note that in that era also the concept of social responsibility was well-established, as can be seen from a quote in Mahabharata. A realm is like a cow; it must not be over milked.' Buying and selling were carried out in open markets transparently and secret bargains were not encouraged. Cost of production and normal profits were taken into account while fixing the price of products Thus, the theory of producers' surplus was a practice followed even in ancient India. This shows that profit was considered a proactive part of business and not a sin. Examples of professional tax and income tax are also available in ancient India, showing that the seeds of modern economy were sown as early as Vedic times. The idea of a welfare state germinated in ancient India when it was Pronounced that justice was the first duty of the king and that he should be dedicated to duty. Family burden was shared by the state, in the form of providing welfare measures like assistance to neglected or orphaned people, protecting minors and abandoned wives and children, and providing medical relief and employment to the unemployed. The state actively participated in building roads, highways and rest houses. During natural calamities, the state machinery ensured relief. The gift system as an

institution flourished in ancient India, probably denoting a redistribution of wealth in the macro level by inculcating a sense of social awareness among individuals. As time passed, the economy opened up and the private sector became important. As old ruling dynasties were overthrown, previously existing social equations and hierarchies were also challenged and modified. India experienced the usual socio-economic challenges of foreign invasion and rule under the Muslim hegemony and British colonial structure. During periods of urban expansion and accelerating trade, opportunities for social mobility, particularly horizontal mobility, opened up for the artisan classes, and mercantile classes enjoyed special benefits. The fortunes of India swayed between moderate advantages to the common population and severe economic exploitation. Differential access to modern education and other amenities increased the distance between the haves and the have-nots. Post Independence India Amid the commotion of having experienced colonial anguish and the agony of a very painful partition, the post-independence Indian government decided to establish a democratic and secular structure to tackle the issues pertaining to its society, economy, security, foreign relations, and overall development to emerge as a respectable nation in the world. To deal with its unique problems of diversity—the gap between the haves and have-nots in society—and to set up the basic industries and build the infrastructure, various models were chosen. 11.2 PREPARATION OF CSR POLICY AND PROCESS OF POLICY Ministry of Corporate Affairs published the Guidelines 2009 for the formulation of CSR policy for the corporates. The details of the same are provided below: Voluntary Guideline Fundamental Principle Every business enterprise should devise a CSR strategy to direct its tactical planning and provide a roadmap for its CSR initiatives, which should be an essential part of the overall business policy and aligned with its business goals. The policy should be framed with the participation of various level executives and should be approved by the Board. The CSR policy should normally cover the following core elements.

Core Elements 1. Care for all Stakeholders The companies should admire the interests of, and be receptive towards all stakeholders, including shareholders, employees, customers, suppliers, projectaffected people, society at large, etc., and create value for all of them. They should develop a mechanism to actively engage with all stakeholders, inform them of inherent risks, and mitigate them where they occur. 2. Moral functioning Their governance system should be underpinned by principles, transparency and answerability. They should not employ in business practices that are rude, unjust, dishonest or anti-competitive. 3. Value for workers’ rights and welfare Companies should offer a work environment which is harmless, clean and caring, and which maintains the dignity of people working with those organizations. They should provide all employees with right to training and development of necessary skills for career advancement, on an equal and non-discriminatory basis. They should uphold the freedom of association and effective recognition of the right to collective bargaining of labour, have an effective grievance Redressal system, should not employ child or forced labour, and provide and maintain equality of prospects without any bias on any basis in staffing and during service. 4. Respect for human rights: Companies should respect human rights for all and evade involvement with human rights neglect by them or by a third party. 5. Respect for environment Companies should take measures to control pollution, reuse, administer and cut waste, should administer natural resources in a sustainable method and make sure best use of resources like land and water and should proactively respond to the challenges of climate change by adopting cleaner production methods, promoting efficient use of energy, and environment- friendly technologies. 6. Activities for social and inclusive development

Based on their core competency and business interest, companies should assume activities for financial and social progress of communities and geographical areas, particularly in the neighbourhood of their workings. These could include: education, skill-building for living of people, health, cultural and social welfare, etc., particularly the deprived sections of society. Implementation direction 1. The CSR policy of the company should offer for an execution strategy, which should consist recognition of projects/activities, setting quantifiable physical targets with timelines, organizational means and tasks, time agenda, and monitoring. Companies may associate with local authorities, business associations, and civil society / non- government organizations. They may persuade the supply chain for activities of CSR proposal and stimulate employees for self driven effort for social growth. They may develop a scheme of need evaluation and impact evaluation while undertaking CSR activities in a particular area. Self-governing assessment should also be undertaken for selected projects or activities from time to time. Companies should apportion explicit sum in their budgets for CSR activities. 2. This amount may be related to Profits after tax, cost of Planned CSR activities 3. To share knowledge and associate with other companies, the company should connect with entrenched and documented programmes / platforms, which support responsible business practices and CSR activities. This encourages and assists the companies to progress or develop their CSR strategies and efficiently show the image of being socially responsible. 4. The companies should broadcast information on CSR policy, actions, and advancement in a planned manner to all their stakeholders and the public at large using the medium of their websites, annual reports, and other communication media. 11.3 CSR MODELS CHOSEN TO REVIVE THE ECONOMY India emerged out of its colonial status with a destroyed economy, and the major challenge before the leaders was to reconstruct the country's economy. India started with the 'license- permit raj', which was intended to protect the nascent Indian industries against competition from the mature industries of the developed world. Unfortunately, the Indian industry failed to

take advantage and the regulatory processes bred nepotism and bureaucratic corruption. The, mixed economy' model, based on public ownership of all necessary and infrastructural amenities and private ownership of the other sectors, was chosen as the economic structure. Both the innovations did not deliver the required results and India suffered from major fiscal imbalance, inflationary pressure, and also balance of payment crisis. It was in 1991, when the government decided to open up the economy, that India entered an era of liberalization, privatization, and globalization (LPG). Emergence of the private sector State intervention and control over economic activities have reduced markedly and this has given a boost to the private sector in India. The services sector has recorded maximum benefit from this liberal face of economic reforms. Information technology (IT) and information technology enabled services (ITES), communication, and banking and insurance have reaped enormous profits. GDP has increased from a meagre 1.4 per cent for the period after independence till 1991, when the economy liberalized, to almost 7.5—8 per cent at present. However, this growth has not been an inclusive growth and the disparity in the socio- economic sphere is still glaring. The infrastructure sector is a major impediment to investment. The restrictive labour- and product-related laws hamper the proper utilization of the strength of our economy. India has a sizeable population of well-educated youth who can actually add to the economic growth process but they need to be employed efficiently and effectively. The public sector in India has been administered on a socialistic pattern to ensure sharing of wealth. However, the regulatory and governance processes have led to their stagnation and they have become symbols of loss and misappropriation of public money. In contrast, the private sector has emerged as a better-governed entity using resources well. Reforms and Their Impacts The tax structure of India also needs to be reviewed to attract foreign direct investment (FDI). Finding the fine balance between the capitalist model versus the socialist model is the only way to the expected economic prosperity.

Obviously, this needs a sound base of regulation related to governance issues. The government of India has tried to address this issue through de-regulation of the market. India has consciously moved to towards a market economy. Direct taxes have been reduced and the financial markets have been revived with major growth-oriented changes in the banking sector. As explained in the section on corporate governance in Chapter 2. this the time when bodies like the Securities and Exchange Board of India (SEIII) the Confederation of Indian Industry (CID, and the company Law provided the necessary impetus to better supervision and regulation. Entry barriers of foreign investments were reduced and there were also currency reforms, which encouraged economic growth. According to the OECD all these reforms led to a rise 01 24 percent in exports and imports in the GDP. Inflows of FDI increased to 2 per cent of GDP from loss than 0.1 per cent of GDP in 1990. There was a massive increase in output, with the potential growth rate of the economy estimated to be around 8.5 per cent per year in 2006. GDP per capita is now rising by 7.5 per cent annually in spite of the worldwide economic recession. India is today recognized as the third largest economy in the world (after the US and China, and just ahead of Japan) The current expansion, which started in 2003, has not led to an imbalance between supply and demand, despite annual GDP growth reaching 9 per cent in 2006 (Organization for Economic Co-operation and Development, policy Brief, Economic Survey of India, 2007). The sectors that have contributed to India's economic development have been manufacturing, communications, trade, agriculture, and construction. In the period 2003—04 to 2007—08, the annual growth rate of agriculture was more than 4 per cent. India became self-sufficient in food because of the record increase in food grain production. In fact, the production of food grains increased by about 10 million tonnes each year to reach an all-time high of over 230 million tonnes in 2007—08. Even manufacturing registered a growth of 9.5 per cent at the rate of 27 per cent and 13.5 per cent per annum, respectively, in the period 2004—05 to 2007—08. The manufacturing sector experienced an increase in investment growth of around 30 per cent per annum. Exponential growth in capital stock and efficiency measured by the capital output ratio in construction, manufacturing, and in trade, hotels and restaurants can be gauged from the fact that it increased one-and-a-half times more from 2002—03 to 2007—08. All this was a result of free competition and technological up gradations. Per annum GDP growth rate moved from 5.6 per cent to 8.9 per cent between 2001 and 2008. Almost all the

states recorded growth. The key factors behind this growth have been the liberalization policy, supported by a robust banking system and a large domestic market. GRIM REALITY In spite of the optimistic projections, the reality is quite grim. Growth and development need to be more inclusive. Corporates have to play a proactive part to achieve this inclusive growth by ensuring the prosperity of the poorer section of the population. Government reforms have to be complemented with corporate social responsibility activities. Businesses have to ensure more simplicity and responsibility in their activities, which have to encompass their core business as well as community development projects. More lives have to receive the healing touch through sharing the fruits of growth. The scenario is like this because in any society, social stratification decides how power status and resources are distributed. It does not need much imagination to understand that the distribution of wealth and opportunities in any society is skewed by the power and status enjoyed by the different groups and their levels in society. This skewed distribution often gets manifest in not only lack of resources but also lack of basic human necessities. Another important result of this differentiation in society is the psychological impact that it has on individuals belonging to the 'un-included' group in society. Therefore, efforts at them need an understanding of the different levels of interaction—individual inter-personal, inter-group, and socio-cultural. There is a time lapse between the individual acquiring self-esteem and self-efficacy from ascribed identities of caste, creed, class, and family. Developing community activism needs patience and tenacity expressed through long-term sustainable intervention. This is area the corporate world is not very committed to because it requires long-term investment of capital and human resource investment, which may not generate quick returns. 11.4 MONITORING AND EVALUATION OF CSR ACTIVITIES A great way to calculate the impact of CSR funding which works as a signaling aspect for stakeholders to re-evaluate their financial and economic commitment to business world and also helps the business world to correct its processes is by setting up a 'Monitoring Committee'. The appointed committee would certain that everything is perfect,

right from the preparing of the proposal to its maintenance. Regular and occasional visits to the project site and periodic reviews would eradicate any flaws or issues. The monitoring and evaluation of Corporate Social Responsibility activities requires careful attention to how issues are changing in order to be ready to quickly adapt. Digital media monitoring can assist companies involved in socially responsible practices to formulate these changes helpful for strategy. The brand image of certain corporates is also important for certain companies. By building a positive image of a brand the company can make name of its own as being socially conscious. In today’s socially alert environment, employees and customers are looking for businesses that prioritize corporate social responsibility (CSR). CSR is a budding business activity that integrate sustainable development into an organization’s business model. It has a positive bearing on social, economic, and environmental factors affecting the company. CSR makes use of the positive impact of the business by recuperating company picture, building the brand, and motivating the entrepreneur as a business owner. Consumers, employees, and stakeholders have started to prioritize CSR before they choose a brand or company. In order to recognize how crucial socially responsible efforts are to their stakeholders, many corporates now centre few broad CSR categories: • Environmental efforts: Main focus of corporate social responsibility is the environment. The company should ensure a reduced amount of consumption of plastic, fuel etc. • Philanthropy: Companies can observe social responsibility by donating money, products, or services to social causes and nonprofits. Big companies inclined to have a lot of resources that can benefit charities and local community programs • Ethical labor practices: By treating employees moderately and morally, companies can exhibit their social responsibility. • Volunteering: Attending volunteer events says a lot about a company’s sincerity. By doing good deeds without expecting any favors in return, companies can articulate their concern for specific issues and commitment to certain organizations.

The general public or employees often don’t really see or understand what’s going on behind the scenes at a company. Guarantying that they understand what you are doing holistically with your CSR efforts is key to growing as a brand. Transparency and full disclosure are key to creating a stronger, more efficient social business. And thanks to social media culture, companies identify the need for a stronger and more public social responsibility scheme. The social media spotlight new business for companies that show a sustainable lifestyle. How can you monitor your strategy and that of competitors through Digital Consumer Intelligence techniques? The constitution of keywords and search terms for observing should noticeably include the names of any CSR initiatives, sector events etc. But it is important to monitor the problems that led to the development of a CSR strategy. • Keep an eye on for changes in people opinions of your CSR issue. Subject and people opinion can change over time, and measuring for changes in attitudes can help corporates either amends its CSR programs or its messaging to keep up with these changes. • Check for changes in the science that upholds your issues. Science often changes. Each new study that comes out can shift understanding, and it is better to be ahead of that curve than behind it. • Monitor for attention and response on social media. Are companies CSR issues being given the attention they deserve to get? If not, examine on a broader perspective at large and see how the issue is being talked about. In order to get more attention for the efforts that the company is putting might require modulating the tone of voice it is using to talk about them. • Scrutinize celebrities and influencers who are supporter of the company’s issues. Celebrities seek consideration, and it’s significant to be acquainted with what they are saying on the topics important to your company. Positive or negative—what one might say could have an impact on your issues. • Monitor for budding issues. This can be tricky because it can feel a little bit like trying to predict the future, but it’s still worth developing a monitoring strategy around it. The capability to observe new trends, and map for them, plays into CSR efforts and react to consumer demand. Corporate Social Responsibility (CSR) suggests that the responsibility of the for-profits operating within society is to also contribute towards its economic, social and environmental development and well-being. The main objective of implementing a CSR authorization is that corporations do not accomplish anything in segregation, especially when society at large fails

to flourish. The Companies Act, 2013 is therefore, a milestone legislation that made India the first country to authorize and compute CSR expenditure. This step was an effort by the government to associate with industry houses on the national expansion agenda. 11.5 CSR COMPLIANCE AND REPORTING PROCEDURE Corporate social responsibility has value only if it actually has the social benefits that companies claim and out groups want. The demand for some measurement performance has given rise to a movement that is variously described as social and ethical auditing, accounting, and reporting (SEAAR) and triple-bottom accounting (3BL). The impetus for this movement from several sources. 1. First, companies themselves, which are accustomed to measuring all aspects of their performance, seek to evaluate the benefits of their CSR programs. They do this not only to ensure that projects are properly selected and implemented but also to demonstrate the value of CSR activities to shareholders and public. 2. Second, there are several influential rating organizations that rank companies on social performance. The most prominent rankings are the Dow Jones Sustainability Index, FTSE4Good Index, and the MSCI KLD 400 Index. Although these indexes are intended primarily for use by investment managers, they are also widely followed by the public. 3. Third, socially responsible investment funds usually apply their respective strategies to company performance in accumulation to using the rankings of rating organizations 4. Fourth, there is an immense research which is academic dedicated to calculating corporate social performance and comparing it with financial performance. In general, these studies, which use various measurement systems, have found a small but statistically significant optimistic association between societal and economic performance. These studies raise issues of method and interpretation, however, especially about the direction of causation. That is, does greater social performance lead to greater profitability, or are more profitable companies better able to afford more social performance? Regardless of why CSR is measured, the results are only as reliable as the data and their interpretation. The information used for measuring social and environmental performance is very diverse in kind and comes from a variety of sources. Not only may differently attempts to measure performance use different data, but also the data may be given different weights and interpretations. As a result, companies are able to select data and interpret them in ways that yield virtually any desired result and prevent meaningful comparison between companies.

The root of the problem is that unlike financial data, which are recorded, reported, and verified according to uniform accounting and auditing standards, information about social and environmental performance is not easily subjected to the same kind of precise treatment. Several organizations have attempted to make social reporting more like financial reporting. In particular, the Global Reporting Initiative (GRI) and the Institute of Social and Ethical Accountability (ISEA) have developed complex and specific guidelines for measuring social and environmental performance. ISEA also offers a certification, the AA 1000, that is similar in concept to awards for quality control, such as the ISO 9000. Despite the problems with SEAAR and 3BL, corporations annually publish glossy documents that detail their good works, and the various indexes and rankings continue to be produced with great fanfare. Although the amount and reliability of data are increasing and methods of accounting and are growing more sophisticated, social or ethical reporting will never be as meaningful as financial reporting. In particular, the idea of social bottom line that is comparable to a financial bottom line is unattainable in principle simply because there is no common unit of measurements for social benefit that corresponds to the dollars and cents of financial accounting. Moreover, a financial bottom line tracts expenses from revenues to yield net income whereas a social bottom line consists mainly of a number of beneficial activities that represent a sum good done by a company. Thus, the idea of 3BL probably be nothing more than a clever turn of phrase. Even if social or ethical reporting cannot be full comparable to financial reporting, the recent by companies and the public in gathering information about CSR and publishing the results is probably all a worthwhile development. Although some companies might be hypocritical in their use of SEAAR or 3BL, most appear to be genuine in their commitment. Such reporting is likely to encourage greater corporate social performance and also to increase the transparency of CSR activities, which permits closer scrutiny of companies' social performance Government Steps Towards Compliance Things are looking up. The Ministry of Corporate Affairs has also stepped up its effort to encourage corporates to comply with the CSR provisions by setting up: ● National CSR Data Portal –The National Corporate Social Responsibility Data Portal is an initiative by the Ministry of Corporate Affairs, Government of India to establish a platform to

disseminate Corporate Social Responsibility related data and information filed by the companies registered with it (https://csr.gov.in) ● National CSR award – The Ministry of Corporate Affairs has instituted National CSR Award (NCSRA) to recognise CSR for inclusive growth and sustainable development. This Award seeks to recognise the companies that have made a transformative impact on society. Along with the initiatives mentioned above, the ministry has also taken a few steps to increase compliance by: ● Reconstitution of a high-level committee on Corporate Social Responsibility 2018 (HLC- 2018) under the Chairmanship of Secretary, Ministry of Corporate Affairs (MCA) to reconsider the active structure and direct and invent the roadmap for a coherent policy on Corporate Social Responsibility. ● Centralised Scrutiny and Prosecution Mechanism (CSPM) to promote enforcement of CSR provisions. CSPM has been tasked to start with examination of records of the top 1,000 companies mandated to spend on CSR. The CSPM team of inspectors are issuing show cause notices and trial dealings against non-compliant companies. In the latest round, trial actions against 284 companies and show cause notices against 5,382 companies have already been issued. CSR reporting procedure A CSR, corporate conscience or sustainability report is a regular or periodical (usually annual) report published by companies with the aim of ensuring their corporate social responsibility deeds and results. The report synthesizes and makes public the information organizations decide to communicate regarding their commitments and actions in social and environmental areas. By doing so, organizations let stakeholders (i.e., all parties interested in their activities) aware of how they are integrating the principles of sustainable development into their everyday operations. The main intention of a CSR or sustainability report is to improve the transparency of organizations’ activities. The goal is twofold: • On one hand, CSR reports intend to allow organizations to gauge the impact of their functioning on the environment, on society and on the economy (triple-bottom-line). In