Team 3: Harleen, Fiza, Gaurav, Manu

Is profit-making the only goal of a business?

Should an unbridled market mechanism drive
corporate enterprise?
These are some of the questions that have
engaged specialist economists, business barons,
corporate heads and management experts for
decades. Corporate practices cannot bypass the
fundamental demands of ethical behaviour, and
that businesses must be sensitive to the
community and environment within which they
are established.
 It refers to the obligations of businessmen
to pursue those policies, to make those
decisions, or to follow those lines of action
which are desirable in terms of the
objectives and values of our society
Associate Cement Company (ACC) defines
Corporate Social Responsibility as the way a
company balances its economic, social and
environmental objectives while addressing
stakeholder expectations and enhancing
shareholder value.
 The evolution of the CSR begins in the 1950s
which marks the modern era of CSR.
Howard R. Bowen (1953) landmark bookSocial
Responsibilities of the Businessman is
argued to mark the beginnings of the modern
period of literature on this subject.
Keith Davis and Robert Blomstrom (1966)
defined social responsibility:
Business apply social responsibility when they
consider the needs and interest of others who
may be affected by business actions. In doing
so, they lookbeyond their firms narrow
economic and technical interests.
In1980, Thomas M. Jones said
Corporate social responsibility is the notion that
corporations have an obligation to constituent
groups in society other than stockholders and
beyond that prescribed by law and union contract.
Two facets of this definition are critical. First, the
obligation must be voluntarily adopted Second,
the obligation is a broad one, extending beyond
the traditional duty to shareholders to other
societal groups such as customers, employees,
suppliers, and neighboring communities.
All other business responsibilities of an
organisation are predicated upon the economic
responsibility of the firm. The profit motive is
established as the primary incentive for
entrepreneurship. As such, its principal role was
to produce goods and services that consumers
needed and wanted and to make an acceptable
profit in the process. The major components of
economic responsibility includes the following:
It is important to perform in a manner consistent
with maximizing earnings per share
It is important to be committed to being as
profitable as possible.
 It is important to maintain a strong
competitive position.
It is important to maintain a high level of
operating efficiency.
It is important that a successful firm be
defined as one that is consistently profitable.
 Society has not only sanctioned business to
operate according to the profit motive; at the
same time business is expected to comply
with the laws and regulations promulgated
by federal, state, and local governments as
the ground rules under which business must
operate.
It is important to be a law-abiding corporate
citizen.
It is important to provide goods and services
that at least meet minimal legal
requirements.
 Although economic and legal responsibilities
embody ethical norms about fairness and
justice, ethical responsibilities embrace those
activities and practices that are expected or
prohibited by societal members even though
they are not codified into law.
Ethical responsibilities embody those
standards, norms, or expectations that reflect a
concern for what consumers, employees,
shareholders, and the community regard as fair,
just, or in keeping with the respect or protection
of stakeholders' moral rights.
 Ethical values precede the establishment of
law. They become the driving force behind
the very creation of laws or regulations.
The business ethics movement of the past
decade has firmly established an ethical
responsibility as a legitimate CSR
component.
It is constantly pushing the legal
responsibility category to broaden while at
the same time placing ever higher
expectations on businesspersons to operate
at levels above that required by law.
 Philanthropy encompasses those corporate
actions that are in response to societys
expectation that businesses be good
corporate citizens.
This includes actively engaging in acts or
programs to promote human welfare or
goodwill.
The distinguishing feature between
philanthropy and ethical responsibilities is
that the former are not expected in an
ethical or moral sense. And are voluntary.
 Communities desire firms to contribute their
money, facilities, and employee time to
humanitarian programs or purposes.
 A newly released study on
Reputation and Corporate Social Responsibili
ty
by Reputation Institute suggest that there
is actually a strong business case when it
comes to CSR.
Seventy-three percent of consumers across
the 15 largest markets in the world are
willing to recommend companies that are
perceived to be delivering on Corporate
Social Responsibility.
The problem is that only 5% of companies
are seen as delivering on these promises.
 The biggest challenge is to integrate CSR
practices into the strategy of the companies
and not treat it as an add-on.
CSR can and should infiltrate every
department from supply chain,
procurement, innovation, manufacturing, HR,
all the way to disposal.
This RepTrak study shows that for every 5
points you improve your CSR perception on a
100 point scale, recommendation will go up
9%
 Robert Ackerman was among the first to suggest
that responsiveness, not responsibility should be
the goal of corporate social endeavors
Ackerman pointed out that corporate response
to social issues has a life cycle
-recognition of the problem,
-study of the problem and
-consideration of ways to deal with it,
-concluding with implementing of a solution
 It takes two basic approaches:
- On one hand it deals with how individual
companies respond to social issues.
- On the other hand, the theory deals with
the forces that determine the social issues in
which businesses should respond.
 Combining the philosophical ideas of social responsibility
and social responsiveness, a single theory of corporate
social action called corporate social performance can be
embarked up on.

The arena of social responsibility is shaped by economic,

legal and ethical principles.

At individual companies, managers try to implement the

principles of the social contract in their decision making
processes and in their company policies
 Corporate social performance is an important
consideration for many investors, who believe
that an organizations good social performance
is not only socially responsible but leads to good
financial performance.
More than dozen social conscience mutual
funds exist that choose securities for investment
purposes according to the companies records in
social responsibility that is, in protecting the
environment, helping the community
Corporate Social
Performance Model
 Total Revenue Minus Expenses
Loss" if negative
Profit" if positive.

Profit is always shown as the very "bottom

line" on a statement of revenue and
expenses.
 Coined in 1994 by John Elkington, the
founder of a British consultancy called
Sustainability.
 Also called TBL or 3 BL
Adds two more "bottom lines
Social (People)
Environmental concerns (Planet).
 Focus on the people working
Dos of TBL company
Fair and Beneficial practices toward labor,
community and region
Fair salaries
Safe work environment
Don'ts of TBL
Child labor
Exploit community or its labor
 Focus on sustainable environmental
practices.
Dos of TBL company
Carefully Manages its consumption of Energy and
non renewable resources
Minimizes Manufacturing waste
Proper disposal of waste
Don'ts of TBL
Produce harmful products
Produce destructive products
 Economic value created by the organization
after deducting the cost of all inputs,
including the cost of the capital tied up.

Profit = Revenues Expenses.

 No common unit of Measurement
Profit Dollars
Social ??
Environmental??
 Variables that deal with the bottom line and
the flow of money.
Some measures are:
Income
Expenditures
Taxes
Business climate factors
Employment
Business diversity factors.
 Environmental variables should represent
measurements of natural resources and
reflect potential influences to its viability.

It could incorporate air and water quality,

energy consumption, natural resources,
solid and toxic waste, and land use/land
cover.
 Sulfur dioxide concentration
Concentration of nitrogen oxides
Selected priority pollutants
Excessive nutrients
Electricity consumption
Fossil fuel consumption
Solid waste management
Hazardous waste management
Change in land use/land cover
 Social variables refer to social dimensions of
a community or region.
It could include measurements of education,
equity and access to social resources,
health and well-being, quality of life and
social capital.
 Unemployment rate
Female labor force participation rate
Median household income
Relative poverty
Percentage of population with a post-
secondary degree or certificate
Violent crimes per capita
Health-adjusted life expectancy
Cost
Efficiency.
Relevance.
Scope.
Complexity.
There are four phases of evolution of
CSR in India-
1st phase-charity & philanthropy.
2nd phase-during the independence
movement.
3rd phase-elements of mixed
economy.
4th-globalization & economic
liberalization.
 Protectingthe goodwill and
reputation of the company.
To maximize the companys overall
impact on the society and
stakeholders.
To have effective and lasting
solutions to the social woes.
Bharat petroleum corp ltd.,maruti suzuki india
ltd,hindustan unilever ltd,p&g,birla
group,glaxo smith kline pharmaceuticals etc..
Project by hindustan unilever.
The project benefits HUL by enhancing its
direct rural reach and also creates livelihood
opportunities for underprivileged rural
women.
 Target: Performance
We will increase 45,000
the number of entrepreneurs
Shakti (Shakti ammas)
entrepreneurs that were selling
we recruit, train products to over 3
and employ from million households
45,000 in 2010 to in 100,000 Indian
75,000 in 2015. villages in 2011.
 Its aim was to get to really small villages not
reached by their distribution network.
India is the second largest country in terms of
population size after China and over 70% of its
more than one billion people live in rural areas.
It aimed to assist rural entrepreneurs to start
businesses and improve living conditions in
their regions.
The business objective was to extend our direct
reach into untapped markets and to build
brands through local influencers.
The social objective was to provide sustainable
livelihood opportunities for underprivileged
rural women.
 A social initiative that improves the
standard of life in rural India by providing
quality products. What makes Shakti
scalable and sustainable is the fact that it
contributes not only to our business, but
also to the community it is a part of. In
most Shakti markets we are dominant and
enjoy a market share which is qualitatively
better as compared to non-Shakti markets.
 The project is being customized and adapted in
several South-East Asian, African and Latin
American markets like Bangladesh, Sri Lanka and
Vietnam. In Bangladesh and Sri Lanka, it is being
promoted as project Joyeeta and Saubaghya
respectively.

Project shaktimaan in India.

 HUL has built alliances with competing
industries like telecom & banking.
HUL has partnered with a leading public
sector bank in India for enabling banking
services to rural consumers and low
income people in Shakti villages.
HUL has also entered into a partnership on
telecom distribution with a leading telecom
company to sell its products and services
across rural India.
This initiative will help Shakti
entrepreneurs increase their income by
selling telecom products and services to
retailers and consumers.
 Project by ITC.
ITC's Agri Business Division, one of India's
largest exporters of agricultural
commodities, has conceived e-Choupal as
a more efficient supply chain aimed at
delivering value to its customers around
the world on a sustainable basis.
The e-Choupal model has been specifically
designed to tackle the challenges posed by
the unique features of Indian agriculture,
characterised by fragmented farms, weak
infrastructure and the involvement of
numerous intermediaries, among others.
 With a judicious blend of click & mortar capabilities, village
internet kiosks managed by farmers - called sanchalaks.
enable the agricultural community access ready information
in their local language on the weather & market prices.
It helped the farmers-
-enable the agricultural community access ready information
in their local language on the weather & market prices.
-disseminate knowledge on scientific farm practices & risk
management, facilitate the sale of farm inputs.
-enhance the ability of farmers to take decisions and align
their farm output with market demand .
-'e-Choupal' eliminates wasteful intermediation and multiple
handling. Thereby it significantly reduces transaction costs.
-'e-Choupal' ensures world-class quality in delivering all these
goods & services .
 Before ITC introduced us to e-
Choupal, we were restricted to selling
our produce in the local mandi. We
had to go through middlemen and
prices were low. ITC trained me to
manage the Internet kiosk and I
became the e-Choupal Sanchalak in
my village. Today we are a
community of e-farmers with access
to daily prices of a variety of crops in
India and abroad - this helps us to get
the best price. We can also find out
about many other important things - ABHISHEK JAINSoya Farmer,
weather forecasts, the latest farming & e-Choupal
techniques, crop insurance, etc. e- Sanchalak Dahod Village,
Choupal has not only changed the Raisen District Madhya
quality of our lives, but our entire Pradesh.
outlook.
e-Choupal
States covered 10
No. of e-Choupals 6500

Villages covered 40,000

Farmers e-empowered 4 million

 United Nations Industrial Development
Organisation (UNIDO) Awardat the international
conference onSharing Innovative Agribusiness
Solutions 2008at Cairo for ITC's exemplary
initiatives in agri business through thee-Choupal.

TheAshoka - Changemakers 'Health For

All'Award 2006 for the Rural Health Services model
for delivery of health services through the e-
Choupals.

TheStockholm Challenge 2006. This award is for

using information technology for the economic
development of rural communities.
Shikshais an integral part of our global philanthropy
program - Live, Learn & Thrive.
underprivileged children access their right to education.
Shikshawas launched in 2005 to enable consumers to
contribute towards the cause of education of under-privileged
children through simple brand choices.

Since its inception,Shikshahas made a cumulative donation

of over Rs. 22 crores towards helping children on the path to
better education.
crores towards helping children on the path to better
education. This is a result of the support from our consumers
who participated in theShikshamovement by buying P&G
brands for one quarter of the year, thus enabling P&G to
contribute a part of the sales towards the cause.
P&GsShikshais focused on empowering the
girl child with quality education. In this
picture, girl students head towards their
school - The Govt High School Lodi Majra,
supported by the neighbouring P&G plant in
Baddi, Himachal Pradesh.
Shiksha Sadhana Schoolin Pune.
 Shikshahas evolved into
the national consumer
movement that it is today,
with the invaluable support
of our stakeholders
amongst the media,
influencers, employees and
customer partners. Over
the years, the program has
received generous support
from many thought leaders
& celebrities such as actors
Anupam Kher, Sushmita
Sen, Saif Ali Khan, Sharmila
Tagore, R Madhvan, Abhay
Deol, Konkona Sen, Tabu
and Soha Ali Khan; social
activist Dr. Kiran Bedi; artist
Jatin Das and many more.
India has braved several natural disasters in the recent past, such
as the Tsunami in South India, floods in Bihar or earthquakes in
J&K and Gujarat. P&G has stepped forward in each of these
calamities and helped communities get back on their feet. Most
recently we helped rebuild the Army School in Ladakh, located
in one of the most challenging Himalayan Terrains, which was
wrecked by the Flash Floods in 2010.

Shikshacame to the aid of the Ladakh Scouts Childrens School,

by supporting the education of children orphaned by the tragedy
and helping reinstate essential infrastructure.
 P&GsParivartan(Transformation) Program has been
protecting millions of adolescent girls in India from getting
trapped in traditional practices of using unhygienic cloth for
sanitary protection, by providing timely menstrual
education.
The program has been improving the lives of over 2
Million girls annually across 15,000 schools in India.
 The objective of the program is to help
adolescent girls embrace womanhood
positively and enable them to adopt the
right feminine hygiene practices to stay
healthy and stay in school.
Parivartanensures that adolescent girls do
not miss school on account of periods and
initiates a series of cascading effects.
THANK YOU