CSR Concept-2 2

Corporate Social
Responsibility
Social Responsibility...
 An organization’s obligation to maximize

its positive impact on stakeholders and to
minimize its negative impact
 Includes legal, ethical, economic, and
philanthropic dimensions
Legal Dimension...
 Refers to obeying governmental laws and
regulations
 Civil law: rights & duties of individuals and
organizations
 Criminal law: prohibits specific actions and
imposes fines and/or imprisonment as
punishment for breaking the law
Ethical Dimension...
 Behaviors and activities that are expected or
prohibited by organizational members, the
community, and society (not codified into
law)
 Standards, norms, or expectations that
reflect the concern of major stakeholders
Economic Responsibilities...
 How resources for the production of goods

and services are distributed within the
social system
 Consumers favor socially responsible
companies not companies that maximize
profits.
Philanthropic Dimension...
 Business’s contributions to society
 Strategic philanthropy
Other Dimensions...
 Social obligation
 Social reaction
 Social responsiveness
Foundation principles of
corporate social responsibility
Charity Principle Stewardship
Principle
Definition • Businessshould give • Business,acting asa public
voluntary aid to trustee,should considerthe
society’sneedy persons interestsofallw ho are
and groups affected by business
decisionsand policies
Type of • Corporate philanthropy • A cknow ledging business
• V oluntary actionsto and society interdependence
activity prom ote the socialgood • Balancing the interestsand
needsofm any diverse
groupsin society
Exam ples • Corporate philanthropic • Enlightened self-interest
foundations • M eeting legalrequirem ents
• Private initiativesto • Stakeholderapproach to
solve socialproblem s corporate strategic planning
• Socialpartnershipsw ith
needy groups
The pros and cons of corporate
social responsibility
Arguments for corporate Arguments against corporate
social responsibility social responsibility
Balances corporate power Lowers economic
with responsibility. efficiency and profit.
Discourages government Imposes unequal costs
regulation. among competitors.
Promotes long-term profits Imposes hidden costs passed on
for business. to stakeholders.
Responds to changing Requires social skills business
stakeholders’ demands. may lack.
Corrects social problems Places responsibility on business
caused by business. rather than individuals.
The multiple responsibilities of business
Economic Legal
Responsibility Responsibility
Social
Responsibility
Two views of corporate social
responsibility
The shareholder view
• The only social responsibility of business is to create shareholder
wealth.
• Corporate management cannot decide what is in the social
interest.
• The costs of social responsibility which do not increase the value
of stock, will be passed on to consumers.
The multiple stakeholders view

• All customers and employees are treated with dignity.
• Relationships with suppliers must be based on mutual trust.
• Belief in fair economic competition.
• Business can contribute to social reform and honor human rights.
Contrast between corporate social
responsibility, corporate social
responsiveness, and corporate citizenship
Corporate social Corporate social Corporate citizenship
responsibility responsiveness
Origin 1920s 1960s 1990s

Principles of Demands made by Building collaborative
Basis charity and numerous social partnerships with
stewardship stakeholder groups stakeholder groups
Moral Practical responses by Discovering business
Focus obligations to businesses to opportunities through
society at large corporate partnerships
stakeholders
Philanthropy, Managing corporate
Action trustee of the Social programs social and financial
public’s performance
interests
Principles of corporate citizenship
Good corporate citizens strive to conduct all business dealings in an ethical
manner, make a concerned effort to balance the needs of all stakeholders,
while working to protect the environment.
1) Engages in fair and honest business practices in its relationship with

stakeholders.
2) Sets high standards of behavior for all employees.
3) Exercises ethical oversight of the executive and board levels.
4) Strives to manage the company for the benefit of all stakeholders.
5) Initiates and engages in genuine dialogue with stakeholders.
6) Values and implements dialogue.
7) Fosters a reciprocal relationship between the corporation and community.
8) Invests in the communities in which corporation operates.
9) Respects the rights of consumers.
Principles of corporate citizenship
10) Offers quality products and services.
11) Provides information that is truthful and useful.
12) Provides a family-friendly work environment.
13) Engages in responsible human-resource management.
14) Provides an equitable reward and wage system for employees.
15) Engages in open and flexible communication with employees.
16) Invests in employee development.
17) Strives for a competitive return on investment.
18) Engages in fair trading practices with suppliers.
19) Demonstrates a commitment to the environment.
20) Demonstrates a commitment to sustainable development.
Social responsibility of TISCO (as per
Mission)
1. Shareholders
i. By protecting and safeguarding their investment; and
ii. By ensuring to them fair return
2. Employees
i. By a realistic and general understanding and acceptance of
their needs and rights and enlightened awareness of the social
responsibilities of industry;
ii. By providing adequate wages, good working conditions, job
security, effective machinery for speedy redressal of
grievances, and suitable opportunities for promotion and self-
development;
iii. By promoting feelings of trust and loyalty through a human
and purposeful awareness of their needs and aspiration; and
iv. By creating a sense of belongingness and team-spirit through
their closer association with management at various levels.
Social responsibility of TISCO contd…
3. Customers
i. By products of proven quality at a fair price;
ii. By fulfilling its commitments impartially and courteously in
accordance with sound and straightforward business principles; and
iii. By bearing their counting confidence in its productive ability and its
technical competence to keep improving the quality of its products.
4. Community
i. By respecting the dignity of the individual and acting according to the
ideas of social justice;
ii. By encouraging talent and promoting civic sense among members of
the community;
iii. By availing of opportunities to develop the democratic qualities
involved in collective work undertaken in the interest of the
community
iv. By assuming its proper share of social responsibilities in the
community in which the company operates

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Corporate Social

 An organization’s obligation to maximize

 How resources for the production of goods

 Business’s contributions to society

The multiple stakeholders view

Origin 1920s 1960s 1990s

1) Engages in fair and honest business practices in its relationship with

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