Corporate Social Responsibility of reliance

8/12/2019 Corporate Social Responsibility of reliance

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CORPORATE SOCIAL RESPONSIBILITY

ABLE OF CON ENCHAPTER I:

1. INTRODUCTION

4

What is Corporate Social Responsibility (CSR)?

The Pillars of CSR

CSR A e! Para"i#$

History of CSR

%ision of CSR

Tools Ten &ri'ers of CSR

Ar#$ents for CSR

Ar#$ents a#ainst CSR

Achie'in# balance

So$e internationally reco#nie" #i"elines for CSR

*arriers to CSR

I$portance of Ethics

ee" for partnership

Conte$plation o'er the peoples approach to #oo" #o'ernance

So$e e+a$ples of corporate citienship

,e'era#e Corporate CSR -pportnities

Corporate International I$perati'es.

I/I co$parati'e a"'anta#es

CSR 0 I/I pri'ate sector strate#ies

Challen#e to I/Is in preparation for the Worl" S$$it on

Sstainable &e'elop$ent1 2332:

2.OBJECTIVE 30

CHAPTER II:

THEORETICAL PERSPECTIVE 32

INDIAN INSTITUE OF FINANCE 1


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Corporate Social Responsibility

I"entification an" characteristics of corporate social

Responsibility

Theoretical *asis of CSR

A Sta4ehol"er Theory of the 5o"ern Corporation /on"ation principles of corporate social responsibility

%ie!s of 5ilton /rie"$an

Ethics

Ethics of Corporate Social Responsibility

A &ebate on corporate social responsibility

Corporate Social Responsibility as Reptation Insrance

The nee" for accontability

Econo$ics of Corporate Social Responsibility

The pros an" cons of corporate social responsibility

Ar#$ents for CSR

Ar#$ents a#ainst CSR

The Anti6CSR Ar#$ent

/i#$ent of the i$a#ination

7Can a Corporation Ha'e a Conscience?8

5oti'es for corporate social responsibility

I$plications for the relationship bet!een CSR an" C/P

To!ar"s a 'alation of CSR as Insrance

CHAPTER III:

COMPANYS BACKGROUND 122

Ho! Reliance ,ife Insrance ca$e into e+istence?

Abot San$ar life insrance

Abot the co$pany

Corporate profile

Pro"ct of the co$pany



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CSR Policy in Reliance ,ife Insrance

CHAPTER I%:

METHODOLOGY 143

&esi#nin# of 9estionnaire

Calclation $etho"

CHAPTER %

DATA 149

-bser'ation of Reliance ,ife Insrance

Co$parati'e "ata of three co$panies.

CHAPTER %I

ANALYSIS OF THE DATA 1!

Interpretation of reliance life insrance

Co$parison bet!een a!ar" !inners in area of corporate social

responsibility

CHAPTER %II:

FINDINGS 1"2

CHAPTER %III:CONCLUSION 194

CHAPTER I:



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SUGGES IONS19"

*I*,I-;RAPH6 *ercent an( cor*orate# 16

to 1 *ercent/ %"t no8 cor*orate *rofit# get 1 *ercent an( a%o"r no8 get#

3 *ercent= Thi# 3 *ercent i# 'a(e "* of a e'*o&ee co'*en#ation/

inc"(ing 8age#/ an( the *ercentage of *a&ro ta?e# *ai( %& e'*o&er#=

E!en atho"gh a%o"r *ro("cti!it& gain# ha!e 8i(e& %een ac+no8e(ge(/

8or+er# are not co'*en#ate(= e a#+# 8hat ha# ha**ene( to the %"+ of

gain# if the& (i( not go to the 8or+er# %"t in#tea( "#e( to %oo#t *rofit#/

o8er *rice#/ or increa#e CEO co'*en#ation= Stan(ar(# nee( to %e #et %& the

EIB to 'ea#"re thi# an( to en#"re that *roKect# f"n(e( (o not *er*et"ate the

inco'e (i!i(e= ain# nee( to %e #hare( o"t 'ore e"ita%& a# #"#taina%iit&

i# the +e&=

i# re*ort conc"(e# that that the a'o"nt of inco'e gro8th (e!o"re( %&

cor*orate *rofit# i# hi#torica& "n*rece(ente(- a# i# the o8e#t #hare

accr"ing to the nation# 8or+er# in the for' of co'*en#ation #ince the 1;6=

In So"th Africa accor(ing to Unite( Nation# De!eo*'ent Re*ort/ 22

'iion *eo*e i!e on e## that 2 (a&= That i# haf the *o*"ation=

B"t 8e +no8 Ko%# are contin"a& %een o#t an( that 8e ha!e re#tr"ct"ring

that ea(# ca*ita inten#i!e *ro("ction an( that CEO# a8ar( the'#e!e# h"ge

#aarie# an( %on"#e#/ %"t at the e?*en#e of other inco'e earning gro"*#=

Thi# r"#h for *rofit# at an& e?*en#e an( 8hether it i# Ko%# or 'ore onero"#

8or+ing con(ition# or en!iron'enta (egra(ation cannot %e #"#taina%e an(

nee(# to %e at the to* of the go!ernance agen(a=



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It i# ea#& to *a& i* #er!ice to (i!er#it& an( recognition of (ifferent intere#t#

gro"*# an( (o nothing a%o"t it i# a# refecte( in the econo'ic choice# that

are 'a(e= Cor*oration# %eca"#e of their "ni'ite( *o8er an( inf"ence/ are

often 'ore i'*ortant than go!ern'ent# an( 8e in ci!i #ociet& are going to

ca'*aign for re"i#ite re#*on#i%&= e are not intere#te( in han(o"t# or

8or+ of *hianthro*& %"t in 'eaningf" engage'ent/ engage'ent that goe#

to the heart of (eci#ion 'a+ing=

e 8ant acco"nta%iit&@ 8e 8ant to +no8 ho8 an( 8h& certain (eci#ion#

are 'a(e= e 8ant to en#"re that 8hen (eci#ion# are 'a(e that a the

(ifferent #ta+eho(er gro"*# are con#i(ere( an( that in *eo*e are *"t %efore

*rofit=

oo( go!ernance i# a%o"t 'a+ing (eci#ion# that are in the intere#t# of a

#ta+eho(er gro"*#= Too '"ch i# %a'e( on 'ar+et force# 8herea# it i#

*eo*e 8ho 'a+e (eci#ion an( #o'e of the#e (eci#ion# are #hort#ighte( an(

%a#e( on gree(=

oo( go!ernance i# a%o"t con#i(ering the i'*act of %"#ine## (eci#ion# on

the 8i(er co''"nit&= It i# a%o"t re#*on#i%e %"#ine## *ractice# an( a%o"t

#etting #tan(ar(# a# 'ea#"re( again#t #ocieta e?*ectation#= oo(

go!ernance i# a%o"t the 'ora c"#to(ian#hi* o!er the intere#t# of not on&

#hareo8ner# %"t a #ta+eho(er gro"*#= It i# a%o"t en#"ring ong9ter'

#"#taina%iit& an( not #hort9ter' *rofit#= It:# a%o"t 'a+ing *rofit in a

re#*on#i%e 'anner %& not e?c"(ing certain gro"*# for the %enefit of other

gro"*#=



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It i# *a"#i%e that one (a& h"'anit& 8i oo+ %ac+ on the #ocia *ro("ction

of to(a& in a%horrent ter'#/ a# the 8or#t e!i e!er *er*et"ate( %&

h"'an+in(=

Cor*oration# ha!e a ot of rethin+ing to (o/ 'in( fa'e# nee( to change an(

8e nee( to 'o!e a8a& fro' the hoar( 'entait& to one of e"it& an( fair9

*a&= Cor*oration# o*erate 8ithin the con#traint# of the *re!aiing *oitica/

#ocio9c"t"ra an( econo'ic *ara(ig' an( the#e nee(# to %e "e#tione(===

e nee( reg"ation an( acco"nta%iit&= oo( go!ernance i# not K"#t a%o"t

the co'*o#ition of %oar(#/ %"t rather a%o"t the #ocia an( econo'ic

8e%eing of a=

A# 8e 'o!e for8ar( into the 21#t cent"r&/ et "# %e a8are that the r"e# that

go!ern cor*oration# are "n(er attac+ an( that cor*oration# that #tart to

change ho8 the& o*erate 8i in a i+eihoo( %e the 8inner# of to'orro8=

B"t for thi# to ha**en/ 8e nee( #tronger roe# for go!ern'ent# in reg"ating

an( ho(ing cor*oration# acco"nta%e to %roa(er #ocieta an( (e!eo*'ent

o%Kecti!e#= Let "# ho*e that ci!i #ociet&:# !oice i# not K"#t a !oice in the

8i(erne##=

A# 8e: #ee/ the conce*t"aiation of corporate social responsibilityoffere(

in &o"r te?tGthat a cor*oration #ho"( %e he( acco"nta%e for an& of it#

action# that affect *eo*e/ their co''"nitie#/ an( their en!iron'entG'a&

%e a %it too %roa( .%"t not too '"ch #o0=

Re'e'%er that an& #ocia in#tit"tion that fai# to "#e it# *o8er in a #ocia&9

re#*on#i%e 8a& i# i+e& to o#e it= .The fi* #i(e i# that in#tit"tion# #een to



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%e *o8erf" 8i face (e'an(# to "#e their *o8er in #ocia&9re#*on#i%e

8a=0

The (e%ate a%o"t cor*orate #ocia re#*on#i%iit& .CSR0 %egan in the ear&

2


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Corporate Citienship

Dofa#co .cont=0

Dofa#co i# i#te( on the Do8 Mone# S"#taina%iit& or( In(e?/ one of

on& 13 Cana(ian Co'*anie#= ,S"#taina%iit&9(ri!en co'*anie#

achie!e their %"#ine## goa# %& integrating econo'ic/ en!iron'enta/

an( #ocia gro8th o**ort"nitie# into their #trategie#=

Dofa#co ha# %een recognie( a# a to* 6< e'*o&er in Cana(a=

Recei!e( the Nationa "ait& In#tit"te eath& or+*ace A8ar( in

2


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A8a *ace #afet& %efore co''ercia gain

Stri!e for contin"o"# i'*ro!e'ent in #afet& a8arene## an(

*erfor'ance

;ro!in# Spport

hie the achie!e'ent# of the *re!io"# organiation# are "ni"e to each of

the' the& are not o*erating in i#oation= 5an& factor# an( force# are

8or+ing to he* %"#ine##e# to a##"'e greater CSR=

e! corporate $o"els: Qirt"e 5atri? cor*orate 'o(e

e! International Stan"ar"s: ISO 2>


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,ea"ership i$perati'e of corporate social responsibility

,e'era#e Corporate CSR -pportnities

=n"erstan" the footprint yor or#aniation lea'es in the !orl" aron"

yo the follo!in# fra$e!or4:

o!ernance an( 'anage'ent *ractice#

"'an re#o"rce# 'anage'ent

En!iron'ent/ heath an( #afet&

Co''"nit& in!e#t'ent an( in!o!e'ent/ an(

"'an right#

INDIAN INSTITUE OF FINANCE 2>


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=n"erstan" yor options

Fig"re o"t 8hat &o" can (o %etter= Con("ct a co#t $ %enefit anai# of (oing

thing# %etter !er#"# K"#t #ta&ing the co"r#e an( %"i( a #trategic *an=

State yor intentions

Create a #ocia re#*on#i%iit& *oic& or a(a*t e?i#ting !i#ion/ 'i##ion an(

!a"e #tate'ent# to refect &o"r organiationa co''it'ent= In!o!e &o"r

%e#t *eo*e in the *roce## an( (e'on#trate to*9e!e co''it'ent

Set E+pectations

Shift organiationa effort# fro' achie!ing to e?cee(ing the 'ini'"'

#tan(ar(# #et %& reg"ator& agencie#= I(entif&/ e#ta%i#h an( 8or+ to8ar(#

'ore a'%itio"# cor*orate #tan(ar(# of *erfor'ance

Create yor o!n $ar4ets

Sti'"ate co''erce an( (e!eo*'ent at the %otto' of the or(:#

econo'ic *&ra'i( ) the *o#ition of 'o#t 8or+er# in (e!eo*ing co"ntrie#

The Worl" Pyra$i"



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Corporate International I$perati'es.

,or+ i# an in(i#*en#a%e %a#i# of #ociet&/ an( f"rther'ore the *roce## of

8or+ #ho"( %e o*ti'ie( %& g"aranteeing (ecent 8or+ing con(ition# for

a=-

The goa of the go%a co''"nit& #ho"( %e to g"arantee a "ni!er#a

'ini'"' e!e in 8or+ing con(ition# an( in occ"*ationa #afet& an( heath

for a 8or+ing *eo*e 8ith the he* of go%a #trategie#= The goa #ho"( %e

e#*ecia&/ to *rotect the 'o#t !"nera%e gro"*#/ #"ch a# chi(ren/ 'igrant

8or+er#/ (i#a%e( *eo*e/ aging 8or+er#/ 8o'en an( iiterate 8or+er#=-

Tra"itional ,e#al



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The ega& (efine( 'an(ate of to(a&:# cor*oration i# to *"r#"e reente##&

an( 8itho"t e?ce*tion/ it# o8n #ef intere#t/ regar(e## of the often har'f"

con#e"ence# it 'ight ca"#e to other#=

C"rrent&/ the 'o#t 8i(e&9"#e( 'o(e in %"#ine## i# the #toc+ho(er 'o(e/

cha'*ione( %& /%lton 0!%e#&an +*o sa%# t*e bus%ness o) bus%ness %s

bus%ness$( Ba#ica&/ *rofit# are e!er&thing=

The o%#tace to 'a+ing an& #ignificant/ %roa(9%a#e( *rogre## in i'*ro!ing

factor& heath an( #afet& con(ition#/ not to 'ention 8age#/ ho"r#/

hara##'ent an( (i#cri'ination in the go%a econo'&/ i# not a ac+ of

g"i(eine# or 'anage'ent CSR co''an(9an(9contro #te'#/ or

certification #che'e#=

The real obstacles are:

Lac+ of *oitica 8i %& cor*oration# to refrain fro' ta+ing a(!antage

of !"nera%e co"ntrie# an( (e#*erate 8or+er#=

Lac+ of *oitica 8i an( *erha*# ac+ of gen"ine o*tion#/ on the *art

of go!ern'ent# in the (e!eo*ing 8or( to enforce reg"ation# an(

e#ta%i#h ne8 one#=

Lac+ of re#o"rce# .financia/ infor'ationa an( *oitica0 of #8eat#ho*

8or+er# ) to +no8 8hat their right# are/ to +no8 ho8 to *rotect

the'#e!e# on the Ko%/ an( to %e a%e to ,o*erationaie- #"ch

+no8e(ge=

INDIAN INSTITUE OF FINANCE 2;


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The "*ta+e of CSR %& IFI# can cata&e *ri!ate #ector o*eration# to 'eet

%oth the ,%otto' ine- an( the #"#taina%e en!iron'enta an( #ocia

(e!eo*'ent nee(# of (e!eo*ing econo'ie#=

I/I co$parati'e a"'anta#es

5DB#/ IFI# ha!e reati!e& 'ore e?*erience on *"%ic con#"tation/

info (i#co#"re/ en!iron'enta ("e (iigence

IFI# can %e *ro'ote #*ecific *roKect# or #ector# I=e= RENEABLE

ENERY

Pro!i(e technica a##i#tance on CSR to (o'e#tic S5E#/ in("#tr&

aggar(#

CSR 0 I/I pri'ate sector strate#ies

En!iron'ent/ a%or/ h"'an right# #tan(ar(# #ho"( %e *art of a

co'*an&:# %"#ine## 'o(e to gain acce## to IFI financing

'echani#'# Re*orting of infor'ation .o%a Re*orting Initiati!e099 Cient

,confi(entiait&- not an e?c"#e=

Challen#e to I/Is in preparation for the Worl" S$$it on

Sstainable &e'elop$ent1 2332:

Integrate CSR e?*ectation# into *ri!ate #ector #trategie#

or+ 8ith *ri!ate #ector to finance co''ercia9%a#i# rene8a%e

energ& *roKect#

Con!ene #trategic (iaog"e# a'ong cor*orate cient# an( NO# to

(i#c"## har( i##"e# 7 (ie''a#=



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i(eoogie# of 5iton Frie('an ho(# tr"e for reiance or act"a&

o**o#e hi# *oint of !ie8=

= 5& o%Kecti!e i# to con("ct '& #t"(& on e'*o&ee# on ten factor#

8hich are their

or+=

Interaction 8ith #"*erior/

Their co8or+er#

Ethica *oice#=

Pro'otion#

Incenti!e#

Pa&

"'an right#

eath an( #afet&=

The re#"t ai'# to fin( o"t ho8 '"ch #ta+eho(er# are ta+en care of

#*ecifica& of e'*o&ee 8or+ing in the organiation=

Thi# #t"(& ai'# to (ra8 a co'*arati!e #t"(& of cor*orate #ocia

re#*on#i%iit& in Reiance Life In#"rance an( #o'e other IT giant# i+e

Sat&a' Co'*"ter#/ Tata Con#"tanc&=



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CHAPTER II:

THE-RETICA, PERSPECTI%E -/ C-RP-RATE

S-CIA, RESP-SI*I,T


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/on"ation principles of corporate social responsibility

Charity Principle Ste!ar"ship Principle

Definition B"#ine## #ho"( gi!e

!o"ntar& ai( to #ociet&:#

nee(& *er#on# an(

gro"*#

B"#ine##/ acting a# a

*"%ic tr"#tee/ #ho"(

con#i(er the intere#t# of

a 8ho are affecte( %&

%"#ine## (eci#ion# an(

*oicie#

B"#ine##/ acting a# a*"%ic tr"#tee/ #ho"(

con#i(er the intere#t# of

a 8ho are affecte( %&

%"#ine## (eci#ion# an(

*oicie

99Cor*orate *hianthro*&99Qo"ntar& action# to

*ro'ote the #ocia goo(

99Ac+no8e(ging%"#ine## an( #ociet&

inter(e*en(ence

99Baancing the intere#t#

an( nee(# of 'an&

(i!er#e gro"*# in #ociet&

E?a'*e# 99Cor*orate *hianthro*ic

fo"n(ation#

99Pri!ate initiati!e# to

#o!e #ocia *ro%e'#

99Socia *artner#hi*#

8ith nee(& gro"*#

99Enightene( #ef9

intere#t

995eeting ega

re"ire'ent#

99Sta+eho(er a**roach

to cor*orate #trategic

*anning

%ie!s of 5ilton /rie"$an

INDIAN INSTITUE OF FINANCE


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The Social Responsibility of *siness Is to Increase Its ProfitsF

1= 1;> No%e Prie inner in Econo'ic#

2= One of the 'o#t effecti!e a(!ocate# of econo'ic free(o'# an(

free enter*ri#e

3= An a(!ocate of i'ite( go!ern'ent

= i# theor& a##ert# a cor*oration# *ri'ar& an( *erha*# #oe

*"r*o#e i# to 'a?i'ie *rofit# for the #toc+ho(er=

T!o $ain spportin# ar#$ents:

Stoc+ho(er# are the o8ner# of the cor*oration/ an( hence

cor*orate *rofit# %eong to the'=

Cor*orate e?ec"ti!e# are the #toc+ho(er# agent# an( '"#t

o*erate in the intere#t# of their *rinci*e .#toc+ho(er#0=

Thi# (oe# not ao8 (onation# to charit& %& the cor*oration .cor*orate

e?ec"ti!e#0 %eca"#e the inco'e %eong# to the #toc+ho(er#/ not thecor*orate e?ec"ti!e#=

In(i!i("a *ro*rietor# are (ifferent in that if the& choo#e to #*en( the inco'e

generate( %& their %"#ine## the& are #*en(ing their o8n 'one&/ not the

'one& of other *eo*e=

Stoc+ho(er# are entite( to their *rofit# a# a re#"t of a contract a'ong the

cor*orate #ta+eho(er#

So$e rele'ant facts re#ar"in# this theory

INDIAN INSTITUE OF FINANCE


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A #ta+eho(er in thi# conte?t refer# to e'*o&ee#/ 'anager#/ c"#to'er#/

#"**ier#/ the oca co''"nit&/ an( the #toc+ho(er#=

Each #ta+eho(er gro"* ha# a contract"a reation#hi* 8ith the fir'/ #ince

the& recei!e the re'"neration the& free& agree( to in a *re9e#ta%i#he(

agree'ent .contract0=

The ethical "ty of bsiness people is to $a+i$ie profit

) G!ithin the la!.

So they shol" st"y bsiness 0 $aybe la!.

) Gnot ethics=

*siness people are not 9alifie" to "o anythin# bt $a+i$ie profit.

) ,ea'e social policy to #o'ern$ent1 etc.

obo"y is as4in# bsiness people to $a4e social policy.

) -nly to ta4e responsibility for their co$pany8s i$pact.

) What "oes this entail? St"y bsiness ethics to fin" ot

B"#ine## *eo*e ha!e no right to (o an&thing other than 'a?i'ie *rofit=

) It:# other *eo*e:# 'one& .#toc+ho(er#0=

4 J"ne## one i# a #oe *ro*rietor=

4 Cor*orate officer# are hire( to 'a?i'ie ret"rn on

in!e#t'ent=

INDIAN INSTITUE OF FINANCE ;


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On& eecte( re*re#entati!e# ha!e the right to #*en( other *eo*e:# 'one& on

#ocia 8efare *roKect#=

%ut the stockholders would have social responsibilities if they ran their own

business)

) #or e*ample don+t price gouge)

The& (on:t #he( the#e o%igation# %& hiring agent# to r"n the %"#ine## for

the'=

) A 'afia %o## (oe#n:t a!oi( re#*on#i%iit& for '"r(er %& hiring

a hit 'an=

) B"#ine##9reate( ethica ("tie# tran#fer to cor*orate officer# 7

(irector#=

B"t %"#ine##9reate( ("tie# re("ce to *rofit 'a?i'iation=

E!er&one i# %etter off if %"#ine## 'a?i'ie# *rofit .or#hareho(er !a"e0=

An&thing e#e g"'# "* the 8or+#=

5ilton /rie"$an Was Ri#ht )

Cor*orate #ocia re#*on#i%iit& i# %"n+=

5iton Frie('an fa'o"#& (ecare( that the #oe %"#ine## of the 'anager#of a *"%ic& he( cor*oration 8a# to 'a?i'ie the !a"e of it# o"t#tan(ing

#hare#= An& effort to "#e cor*orate re#o"rce# for *"re& atr"i#tic *"r*o#e# he

e"ate( to #ociai#'= e *ro*o#e( that cor*oration a8 #ho"( *re!ent



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'anager# fro' #tra&ing off the re#er!ation to Koin the atr"i#t#/ a *o8er no8

a'o#t "ni!er#a& grante( the' %& #tate egi#ation=

Since it 8a# (iffic"t or i'*o##i%e to (i#ting"i#h a *rofit 'oti!e fro' a

charita%e 'oti!e in an& *artic"ar cor*orate action/ a #trong r"e again#t

cor*orate atr"i#'/ a# Frie('an 8a# a(!ocating/ 8o"( in!ite K"(ge# to

e?a'ine the *ro*riet& of a #ignificant #et of 'anageria (eci#ion#=

There i# ina%iit& of 'an& co''entator# to (i#ting"i#h %et8een *ri!ate an(

*"%ic *ro*ert&99in other 8or(#/ %et8een a free enter*ri#e #te' an(

#ociai#'= So'eho8 arge9#cae %"#ine## #"cce##/ "#"a& re#"ting in a*"%ic& he( co'*an&/ #ee'# 'terio"#& to tran#for' the nat"re of

n"'ero"# in(i!i("a# *ri!ate in!e#t'ent# into a##et# affecte( 8ith a *"%ic

intere#t= An( once the#e cor*orate %ehe'oth# are affecte( 8ith a *"%ic

intere#t/ the& '"#t either %e reg"ate( %& the #tate or the& '"#t act a#

tho"gh the& are o8ne( %& the *"%ic/ an( are therefore inferentia& a *art of

the #tate= Thi# attit"(e i# refecte( not 'ere& %& cor*orate acti!i#t#/ %"t %&

'an& 'o(ern cor*orate 'anager#=

An integra *art of the o(er notion of *"%ic "tiit& reg"ation re"ire( that

the enter*ri#e %e/ or act i+e/ a 'ono*o& .8hether nat"ra or not0/ in or(er

to %e affecte( 8ith a *"%ic intere#t= B"t in to(a conf"#ion/ there i# no

#"ch re"ire'ent= No arg"'ent#/ 8ea+ a# the& are/ a%o"t nat"ra 'ono*o&/

'ar+et fai"re/ go!ern'ent creation of cor*oration# or the aege(go!ern'ent gift# of i'ite( ia%iit& an( *er*et"a e?i#tence/ are re"ire( to

K"#tif& the (e'an(# no8 reg"ar& *ace( on %"#ine## entitie#= An& arge

enter*ri#e/ no 'atter ho8 co'*etiti!e it# in("#tr& an( no 'atter ho8

#"cce##f"& it i# f"fiing the *"%ic# (e#ire#/ ha# a #ocia re#*on#i%iit&99a



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ter' that 'a+e# 'oc+er& of the i(ea of in(i!i("a re#*on#i%iit&99to "#e *art

of it# re#o"rce# for *"%ic en(ea!or#=

To(a fa!orite ca"#e# are en!iron'enta *rotection/ e'*o&ee heath/

#ae# of goo(# at %eo89'ar+et *rice#/ 8eather 'o(ification/ co''"nit&

(e!eo*'ent/ *ri!ate enforce'ent of .not 'ere& a%i(ing %&0 go!ern'ent

reg"ation# an( #"**ort of c"t"ra/ e("cationa an( 'e(ica faciitie#=

o8 (i( thi# tran#*o#ition fro' *ri!ate to *"%ic re#*on#i%iit& co'e a%o"tH

After a/ e!en the arge#t cor*oration #tarte( #i'*& a# an i(ea in #o'eone#

hea(= At fir#t thi# *er#on hire# e'*o&ee#/ %orro8# ca*ita or #e# e"it&/*ro("ce# goo(# or #er!ice an( 'ar+et# a *ro("ct= Nothing a%o"t an& of the#e

*"re& *ri!ate an( %enign arrange'ent# #"gge#t# a *"%ic intere#t in the

o"tco'e= B"t then the %"#ine## %egin# to gro8/ fa'i& #toc+ ho(ing#

%eco'e 'ore (iff"#e(/ a((itiona ca*ita i# re"ire( an(/ voil,/ another

*"%ic& he( cor*oration= In other 8or(#/ another A'erican #"cce## #tor&=

B"t 8hat ha# ha**ene( to i'*icate *"%ic in!o!e'ent in the 'anage'ent

or go!ernance of the#e enter*ri#e# a# the& gre8 fro' a 'ere i(eaH Nothing=

An( if that nothing %e '"ti*ie( %& ten# or h"n(re(# or tho"#an(#/ the

*ro("ct i# #ti ero= So 8here aong the ine to enor'o"# #ie an( financia

heft ha# the *"%ic9*ri!ate ne?"# nece##ari& change(H Tr"e/ there are no8 a

arge n"'%er of co'*e? an( #*eciaie( *ri!ate contract#/ %"t e!er& #inge

one of the#e tran#action# i# %a#e( on *ri!ate *ro*ert&/ free(o' of contract/an( in(i!i("a ri#+ an( re8ar(= If one a**e i# a fr"it/ e!en a %iion a**e#

(o not %eco'e 'eat=



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The origin# of thi# tran#for'ation ie in the 'in(# of *eo*e 8ho (o not i+e

or a**reciate the geni"# of ca*itai#t #"cce## #torie#/ inc"(ing a8a

*oitician#/ 8ho 8i genera& 'a+e an& arg"'ent in or(er to contro 'ore

*ri!ate 8eath= Of co"r#e/ the #ocia re#*on#i%iit& of cor*oration# i# a8a

tie( to the *ro*onent# o8n !ie8# of co'*a##ion or K"#tice or a!oi(ance of a

catac'= B"t the ogic of their o8n arg"'ent# re"ire# that e##entia&

*ri!ate cor*oration# %e !ie8e( a# #o'eho8 *"%ic in nat"re= That i#/ the

*"%ic/ or the *referre( *art of it/ often ter'e( #ta+eho(er# .another

#ha'ef" #e'antic *a&/ thi# ti'e on the 8or( #hareho(er#0/ ha# a *#e"(o9

o8ner#hi* intere#t in e!er& arge cor*oration= itho"t that (i'en#ion in

their arg"'ent/ free 'ar+et ogic 8o"( *re!ai=

The i"#ion of great an( threatening *o8er/ the #"*erficia attracti!ene## of

the notion/ an( the fre"ent re*etition of the 'antra of cor*orate #ocia

re#*on#i%iit& ha!e 'a(e thi# faac& a *art of the 'o(ern cor*orate

eitgei#t= Li+e the citien# 8ho 8ere afrai( to te the e'*eror that he 8a#

na+e(/ no re#*on#i%e %"#ine## officia 8o"( (are contra(ict the notion

*"%ic& for fear of financia r"in/ e!en tho"gh the *ractice contin"e# to co#t

#hareho(er# an( #ociet& enor'o"# a'o"nt#= Thi# i# e#*ecia& #o in arge9

#cae retai %"#ine##e# i+e a95art or Coca9Coa or BP that are high&

!"nera%e to organie( *"%ic critici#'= O"r a8# again#t e?tortion (o not

f"nction effecti!e& 8hen it co'e# to cor*oration#= An( #o to #o'e e?tent

the#e *ri!ate entitie# ha!e in(ee(/ !ia the #ocia re#*on#i%iit& notion/ %een

con!erte( into cr&*to9*"%ic enter*ri#e# that are the e##ence of #ociai#'=

5iton Frie('an 8a# right again=



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Ethics

The co(e of 'ora *rinci*e# an( !a"e# that go!ern the %eha!ior# of a

*er#on or gro"* 8ith re#*ect to 8hat i# right or 8rong=

Ethical &ile$$a

4 A #it"ation that ari#e# 8hen a aternati!e choice# or %eha!ior# ha!e

%een (ee'e( "n(e#ira%e=

4 Potentia& negati!e ethica con#e"ence#/ 'a+ing it (iffic"t to

(i#ting"i#h right fro' 8rong=

Criteria for Ethical &ecision 5a4in#

5o#t ethica (ie''a# in!o!e

A confict %et8een nee(# of the *art 7 8hoe=

The in(i!i("a !er#"# the organiation=

The organiation !er#"# #ociet& a# a 8hoe=

Fo"r Con#i(eration# in Ethica Deci#ion 5a+ing

Utiitarian A**roach

In(i!i("ai#' A**roach

5ora9Right# A**roach

M"#tice A**roach



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>5oral Ri#htsF Consi"erations

The right to *ri!ac&

The right of free(o' of con#cience

The right of free con#ent

The right of free #*eech

The right to ("e *roce##

The right to ife 7 #afet&

stice Approach

5ora Deci#ion# '"#t %e %a#e( on #tan(ar(# of e"it&/ fairne##/ an(

i'*artiait&=

Treat'ent of in(i!i("a# #ho"( not %e %a#e( on ar%itrar&

characteri#tic#=

Co#et thin+ing to co(ifie( a8=

,e'els of 5oral &e'elop$ent

INDIAN INSTITUE OF FINANCE 6>


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Cltral I$pact estions

1= I(entif& the organiation# heroe#=

2= hat are #o'e i'*ortant organiationa rit"a#H

3= hat are the ethica 'e##age# #ent to ne8 entrant# into the

organiation/ '"#t the& o%e& a"thorit& at a co#t#H

= Doe# anai# of organiationa #torie# an( '&th# re!ea in(i!i("a#

8ho #tan( "* for 8hat i# right/ or i# confor'it& the !a"e(

characteri#ticH

6= Doe# ang"age e?i#t for (i#c"##ing ethica concern#H

>= hat infor'a #ociaiation *roce## e?i#t#H

Social Responsibility



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Organiation:# o%igation to 'a+e choice# an( ta+e action# that

8i contri%"te to the 8efare an( intere#t# of #ociet& an(

organiation=

Di#ting"i#hing right fro' 8rong=

Being a goo( cor*orate citien=

5an& #ocia re#*on#i%iitie# i##"e# are a'%ig"o"# 8ith re#*ect

to right an( 8rong=

Sha"es of Corporate ;reen

Acti!i#t A**roach9Acti!e& con#er!e the en!iron'ent

Sta+eho(er A**roach 9A((re## '"ti*e #ta+eho(er concern#

5ar+et A**roach 9Re#*on( to c"#to'er#

Lega A**roach9Sati#f& ega re"ire'ent# regar(ing en!iron'entacon#er!ation

Tota Cor*orate Socia Re#*on#i%iit&



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Three Pillars of an Ethical -r#aniation

INDIAN INSTITUE OF FINANCE 6;


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Enightene( Co'*anie#

Reaie the i'*ortance of

integrit&

tr"#t

Ethics of Corporate Social Responsibility

INDIAN INSTITUE OF FINANCE >


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The ethica a**roach to CSR arg"e# (efect# of 'ora& in(ifferent %"#ine##

con("ct an( #ocia a(!antage# of 'ora&9#en#iti!e #ta+eho(er 'anage'ent

*ractice# an( e?*an#i!e *"%ic *oic&= Atho"gh (ra8ing on a co'*o#ite of

!ario"# 'ora fra'e8or+# .e=g= ant/ Ra8#/ #ta+eho(er right#0 other than

"tiitariani#'/ethica CSR "#e# a %a#ic #hare( *rinci*e of i'*artia 'ora

refection on toerating e?*an#i!e *"%ic *oic& an( *racticing %roa( #ef9

re#traint an( atr"i#'=

Atr"i#' i# !o"ntar& contri%"tion to #ociet& an( #ta+eho(er# %a#e( on other

regar(ing attit"(e#= Atr"i#' 'a& in!o!e "nco'*en#ate( or co#t&

contri%"tion# to #ta+eho(er# or genera 8efare= Phianthro*& i#

(i#cretionar& 8eath tran#fer of net inco'e to #ta+eho(er#= Sef9re#traint i#

'ora an($or *oitica choice to a!oi( e?*oiting 'ar+et o**ort"nitie# eft

ega& "nreg"ate(= Tracing the (e!eo*'enta hi#tor& of the ong9

e#ta%i#he( CSR ter'inoog& an( conce*t"aiation thro"gh +e& 8or+#

i"'inate# e!o"tion an( content of the ethica *er#*ecti!e= E!en in the

i(e( Age of ega& an( 'ora& "ncon#traine( ro%%er %aron#: there 8a#

(i#agree'ent %et8een the *"%ic %e (a'ne(: an( in("#triai#t *hianthro*&

!ie8# .Carnegie/ 1;


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Carro .1;;10 co'*ete( (ifferentiation of Bo8en:# %a#ic CSR notion into a

#ti canonica #et of (efine( c"'"ati!e re#*on#i%iitie#/ not tra(eoff#/

(e*icte( ca##ica& a# a #"%(i!i(e( *&ra'i(: cro##98a+e( to #ta+eho(er

categorie#= The *&ra'i( i# a !ertica triange 8ith fo"r interna #"%(i!i#ion#

for econo'ic/ ega/ ethica/ an( *hianthro*ic re#*on#i%iitie# in that or(er

fro' fo"n(ation to a*e?= A fo"r re#*on#i%iit& (i'en#ion# are 'ora&

inf"#e( .Carro/ 1;;60 a 'ora 'anager %eha!e# (ifferent& in e!er&

(i'en#ion= Thi# *&ra'i(a con#tr"ct e'%e(# a *ro*o#e( theoretica

#&nthe#i# of econo'ic# an( ethic#=

Both econo'ic an( ega re#*on#i%iitie# are 'an(ator&= Broa( econo'ic

re#*on#i%iitie# .for *ro("cing goo(# an( #er!ice# &ie(ing Ko%# an( *rofit#0

are the *&ra'i(:# fo"n(ation a egiti'ate fir' o"t of %"#ine## cannot

a((re## an& re#*on#i%iitie#=

Econo'ic/ citien#hi*/ an( ethica *er#*ecti!e# ogica& can conc"r on

the econo'ic (i'en#ion #o ong a# cor*orate #ocia *erfor'ance .CSP0

#ati#fie# #hare( con(ition# .e=g= f" e'*o&'ent/ ecoogica #"#taina%iit&/

an( no #ignificant negati!e e?ternaitie#0 e'*irica& "ni+e& a# a go%a #et=

The three *er#*ecti!e# a#o conc"r of *ractica nece##it& on ega co'*iance

a# a 'eaninge## a%#traction= The three *er#*ecti!e# *rofo"n(& (i#agree

ho8e!er on #co*e an( content of cri'ina an( reg"ator& a8/ an( on

8hether to itigate or #ette ci!i a8#"it# %a#e( on their 'erit#=

The a*e? of the *&ra'i( i# !o"ntar& cor*orate *hianthro*& !ie8e( a#

(e#ira%e %& #ociet& an( #o'e #ta+eho(er#= The econo'ic *er#*ecti!e treat#

INDIAN INSTITUE OF FINANCE >2


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*hianthro*& a# either (i#cretionar& atr"i#' %& "n(i#ci*ine( 'anager#

!ioating #hort9ter' fi("ciar& re#*on#i%iit& or at %e#t a *r"(ent atr"i#'

'arching 8ith ong9ter' fi("ciar& re#*on#i%iit& in %eing inten(e(

#trategica& to 'ini'ie intr"#i!e *"%ic *oic& .Frie('an/ 1;


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T8o ea(ing in#tance# of 'ora con("ct %& e?ec"ti!e# in *ri!ate& o8ne( or

co#e& (o'inate( fir'# 'a& %e co''en(e( an( co'*are( to recent

cor*orate #can(a# at Enron/ T&co/ or or(Co'= Ben 7Merr&:#/ an ice

crea' co'*an&/ *ractice( *hianthro*& an( ecoogica a8arene## "nti #o(

to a *"%ic& tra(e( fir'= A fire (e#tro&e( the 5a(en 5i# faciit&= O8ner

Aaron Fe"er#tein +e*t non9*ro("cing e'*o&ee# on *a&ro@ an( a##"'e(

(e%t for re%"i(ing the faciit&= There foo8e( a #tr"gge for contro 8ith

en(er# #ee+ing to 'a+e Fe"er#tein a fi("ciar& agent= The 'o(ern o"tco'e#9

oriente( cor*orate #ocia *erfor'ance .CSP0 fra'e8or+ .oo(/ 1;;10

*ro*o#e# 'ea#"re'ent of a cor*orate i'*act# on genera 8efare=

An "nre#o!e( i##"e i# 8hether *o#iti!e cor*orate contri%"tion in one

(i'en#ion can off#et negati!e cor*orate i'*act in another= The fra'e8or+

e'%e(# Carro:# .1;;10 '"ti(i'en#iona conce*tion of re#*on#i%iitie#=

The fra'e8or+ a#o e'%e(# Da!i#:# .1;>


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that #"%#tanti!e content of %"#ine## (eci#ion# '"#t %e a((re##e( ca#e %&

ca#e= Fra'e8or+# for ethica CSR are '"ti*e9(i#ci*inar& an( co'*o#ite

rather than inter(i#ci*inar& an( integrate(= There i# no con#en#"# in ethica

CSR iterat"re on co''on *re#cri*tion# for *ri!ate 'anage'ent or *"%ic

*oic& or #*ecific #ocia an( #ta+eho(er i##"e#= B"t there i# a contin"ing

threa( of i'*artia 'ora refection on ("tie#/ right#/ an( o"tco'e#=

A 'anager "n(er#tan(a%& 8ant# to +no8 8hat to 'a+e of an( 8hat to (o

a%o"t *"%ic *oic&/ #ocia/ an( #ta+eho(er i##"e# in *ractica ter'#

affecting cor*orate re#o"rce aocation (eci#ion#= Concrete (efinition/

'ea#"re'ent/ an( *re(iction are arg"a%& critica to effecti!e 'anage'ent

of '"ti*e acti!itie# an( i##"e# . Men#en/ 26


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*oic&0/ (enigrate# 'ora refection an( treat# cor*orate 'orait& a# a #ocia

%a(=

Recent cor*orate #can(a# #igna 8here "nreg"ate( econo'ic CSR an(

in#tr"'enta citien#hi* can ea( ) to !ioation of e!en fi("ciar&

re#*on#i%iit& '"ch e## c"#to'ar& %"#ine## ethic#=

Ethica CSR a**ear# a'%ig"o"# on& if !ie8e( a# a rigi( r"e .8hich

econo'ic CSR i#0 8hen it i# nece##ari& (iff"#e/ an( th"# ac+ing in ogica

rigor 8hen it i# *ro*er& a genera #tance or *rinci*e= There i# a !ita

(ifference %et8een a *rinci*e an( a r"e= Princi*e#/ genera& %roa( or e!en

!ag"e/ '"#t %e or(ere( hierarchica& %& reati!e 8eight#@ r"e#/ genera&

narro8 an( concrete/ are #i'*& f"nctiona=

The %a#ic notion of CSR i# #traightfor8ar(= A narro8& econo'ic or

in#tr"'entai#t conce*tion i# in#"fficient/ an( co"nter*ro("cti!e for #ociet&

an( fir'= A 'ora *er#on refect# "*on #ef9re#traint/ atr"i#'/ an( genera

8efare= There are circ"'#tance# in 8hich 'ora concern# are #"*erior to

ega& *er'itte( fi("ciar& re#*on#i%iit&= No 'ora *er#on can rigi(&

foo8 a f"nctiona r"e 8itho"t refecting in *rinci*e( fa#hion on origin#

an( effect# of the r"e=

Ethica CSR a(!ice to in#tr"'entai#t 'anager# can on& %e #it"ationa=

A(!ice can %e #t&ie( into fo"r t&*ica #it"ation# (efine( 8ithin a t8o9%&9

t8o 'atri? of reation#hi*# %et8een change in financia *erfor'ance an(

change in cor*orate #ocia *erfor'ance= Both financia *erfor'ance an(

#ocia *erfor'ance ri#e# or (ecine# fro' a #tat"# "o= Fro' an& #tat"# "o

INDIAN INSTITUE OF FINANCE >>


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#it"ation/ a change in fir' acti!it& or e?terna con(ition# re#"t# in one of

fo"r genera o"tco'e#

1= If financia *erfor'ance an( #ocia *erfor'ance ri#e Koint&/ the

o"tco'e i# a 8in)8in efficienc& gain 8itho"t go!ern'enta

inter!ention or 'ora refection= Strategic in!e#t'ent in 'ar+et

con(ition# "n(er the g"i#e of citien#hi* %eha!ior fa# into thi#

categor&= Thi# o"tco'e corre#*on(# to A(a' S'ith:# e?*ectation

a%o"t a reati!e& free 'ar+et econo'&= If financia *erfor'ance ri#e#

8hie #ocia *erfor'ance #ta con#tant ) a Pareto efficient gain/ thi#

circ"'#tance %or(er# (angero"#& on %"#ine## incenti!e a8a to

ignore #ocia *erfor'ance=

2= If %oth financia *erfor'ance an( #ocia *erfor'ance (ecine/ the

o"tco'e i# a o#e)o#e inefficienc& o##= o!ern'enta inter!ention i#

i+e& to %e (e#ira%e/ %eca"#e cor*orate #ef9re#traint an( atr"i#'

ha!e *ro!en ina(e"ate=

3= In the ca#e of a ri#e in financia *erfor'ance an( a (ecine in #ocia

*erfor'ance/ there i# a confict %et8een fi("ciar& re#*on#i%iit& an(

#ocia re#*on#i%iit&= The confict i# a 8efare tran#fer fro' #ociet& to

the fir'/ a# occ"r# 8ith negati!e e?ternaitie#= Thi# tran#fer i# an

a%#"r( ta? on #ociet& in A(a' S'ith:# #en#e .The Wealth of -ations/

1>/ Boo+ One/ Ch= 11/ Conc"#ion0=An in!i#i%e han( ca#e

K"#tif&ing #trict fi("ciar& re#*on#i%iit& 8o"( %e that in the onger r"n

#ocia *erfor'ance 8i %e higher than in the #hort r"n=

INDIAN INSTITUE OF FINANCE >


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= In the ca#e of a (ecine in financia *erfor'ance an( a ri#e in #ocia

*erfor'ance/ a#o a confict %et8een fi("ciar& an( #ocia

re#*on#i%iitie#/ there i# a 8efare tran#fer fro' the fir' to #ociet&=

Frie('an .1;


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5ilton /rie"$an an" the Social Responsibility of *siness

The 'o#t *ro!ocati!e #tate'ent of the *a#t haf9cent"r& on the roe of

%"#ine## in #ociet& ca'e in an e##a& in the -ew .ork Times/ 8ritten %& afeo8 na'e( Frie('an= That i#/ acting re#*on#i%& ri#+# re("cing *rofit#

or forgoing re!en"e in the na'e of #ocia goo(=

hat (oe# it 'ean to #a& that the cor*orate e?ec"ti!e ha# a #ocia

re#*on#i%iit& in hi# ca*acit& a# %"#ine##'anH a#+e( Frie('an in hi# 1;/ Boo+ One/ Ch= 1


85/206


acti!i#t #ta+eho(er# .Baron/ 2


86/206


4 5ini'ai#t *"%ic *oicie# reg"ate right# an( ("tie# of a *artici*ant#=

4 The CEO retain# #ignificant (i#cretion of action ("e to #e*aration of

o8ner#hi* an( contro .e'%e((ing infor'ation a#&''etr&0/ an( a#o %oth

i'*reci#ion of a8# an( ega o"tco'e# an( agging of a8# %ehin(

co''ercia *ractice#=

4 The %oar( of (irector# retain# #ignificant (i#cretion of action an( in#"ation

again#t ia%iit& to the #hareo8ner# "n(er the oo#e& (efine( %"#ine##

K"(g'ent r"e=

4 A CEO can han(e on& one o%Kecti!e at a ti'e .Men#en/ 2


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"n(er the %"#ine## K"(g'ent r"e/ the a('onition i# *"re& 'ora=0

4 The #hareo8ner# #ho"( not engage in (i#cretionar& CSR action/

"n(er#too( a# cor*orate atr"i#'/ thro"gh the agenc& of the fir'= .S'ith

(enigrate# %egging@ The Wealth of -ations/ 1>/ Boo+ One/ Ch= 2=0

Di#cretionar& CSR ero(e# the (i#tinction %et8een *"%ic an( *ri!ate action

.Frie('an/ 1;


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other #ta+eho(er# an( nat"re to the (egree that #"ch #enti'ent# affect

e'*o&ee 'orae an( hence *ro("cti!it& . Men#en/ 2/ Boo+ Fo"r/ Ch= ;0= Fi("ciar& re#*on#i%iit& i# not

an a%#o"te #tan(ar( .*ractica rea?ation# inc"(e the %"#ine## K"(g'ent

r"e0 %"t rather ta+e# an in#tr"'enta an( ong9ter' (efinition . Men#en/

2


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ang"age #ee'# technica an( e## rea than that of co''on ife= B"t in tr"th

it i# 'ore rea/ %eca"#e it i# 'ore caref" an( ta+e# 'ore acco"nt of

(ifference# an( (iffic"tie#:=

Ethica CSR gra**e# 8ith co'*e?it&@ econo'ic CSR *ar#i'onio"#&

a%#tract# a8a& fro' it= E!en 8ithin a *"re& econo'ic ogic/ "nco'*en#ate(

negati!e e?ternaitie# #"ffice to *ro("ce a theor& of *"%ic *oic& %e&on(

%a#ic #ec"rit& an( c"#to'ar& K"#tice= B& e?ten#ion thi# theor& #igna#

(e#ira%iit& of 'ora refection on CSR in the a%#ence of #trong *"%ic

*oic&=

A negati!e e?ternait& i'*acting a #ta+eho(er or #ociet& con#tit"te# rea

co#t= Negati!e e?ternaitie# can (i#tort *ro("ction an($or con#"'*tion to the

(etri'ent of genera 8efare= S"ch %"r(en '"#t %e a((re##e( %& the affecte(

*art& thro"gh co'*aint or a8#"it or change in *"%ic *oic&= In the a%#ence

of *"%ic *oic& or 'ora con#traint in #o'e for'/ the fir' o*erating "n(er

the #trict fi("ciar& re#*on#i%iit& r"e #ho"( not internaie the e?ternait&=

Internaiing co#t (irect& re("ce# *rofit *erfor'ance= ith negati!e

e?ternaitie#/ *"%ic *oic& an( 'ora refection %eco'e #ocia& (e#ira%e/

an( th"# a *ro*er o%Kect of #t"(& %& 'anager# an( (irector#= Econo'ic# an(

in#tr"'entai#' re("ce *"%ic *oic& for'"ation to a 'ar+et*ace/ one not

i+e& e'*irica& to %e !er& co'*etiti!e=

INDIAN INSTITUTE OF FINANCE ;


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The pros an" cons of corporate social responsibility

Ar#$ents for Corporate Social Responsibility

Baance# cor*orate *o8er 8ith re#*on#i%iit&=

Di#co"rage# go!ern'ent reg"ation=

Pro'ote# ong9ter' *rofit# for %"#ine##=

I'*ro!e# %"#ine## !a"e an( re*"tation=

Correct# #ocia *ro%e'# ca"#e( %& %"#ine##=

Ar#$ents a#ainst Corporate Social Responsibility

Lo8er# econo'ic efficienc& an( *rofit=

I'*o#e# "ne"a co#t# a'ong co'*etitor#=

I'*o#e# hi((en co#t# *a##e( on to #ta+eho(er#=

Re"ire# #ocia #+i# %"#ine## 'a& ac+=

Pace# re#*on#i%iit& on %"#ine## rather than in(i!i("a#=

The $ltiple responsibilities of bsiness

INDIAN INSTITUTE OF FINANCE ;


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energ& 'anage'ent/ *a*er "#age/ 8a#te re("ction an( rec&cing/ an(

co''"nication#@

'anage o"r %"i(ing# an( faciitie# %& integrating 'ea#"ra%e/

'onitore( en!iron'enta action# into o"r %"#ine## *an#=

(e!eo* h"'an re#o"rce# *oicie# 8hich 8i rai#e a8arene##/

enco"rage an( ena%e #taff to 'a+e an effecti!e contri%"tion to

en!iron'enta i'*ro!e'ent/ %oth in 8or+ an( 8ithin the oca

co''"nit&@

*ro'ote en!iron'enta %e#t *ractice a'ong#t o"r cient# an( the

%roa(er co''"nit&/ a# a**ro*riate@

*artici*ate in e?terna initiati!e# (e#igne( to i'*ro!e en!iron'enta

a8arene## an( *erfor'ance=

e 8i *erio(ica& re!ie8 o"r *erfor'ance to en#"re that 8e are

'eeting o"r *oic& goa# an( 8e 8i *"%i#h re*ort# reg"ar&=

Reiance Life In#"rance Co'*an& Li'ite( f"& recogni#e that each ha!eo"r *art to *a& in contri%"ting to en!iron'enta i'*ro!e'ent= The& rea(i&

acce*t cor*orate co''it'ent# an( 8i contin"o"#& 8or+ to (e'on#trate

re#*on#i%iit& in a en!iron'enta/ #ocia an( co''"nit& i##"e#=

INDIAN INSTITUTE OF FINANCE 13


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H$an ri#hts policy

Reiance Life In#"rance Co'*an& Li'ite( re#*ect# a f"n(a'enta h"'an

right# an( 8i %e g"i(e( in the con("ct of it# %"#ine## %& the *ro!i#ion# of

the Unite( Nation# Uni!er#a Decaration of "'an Right# .UNUDR0 an(

the Internationa La%o"r Organi#ation .ILO0 core a%o"r #tan(ar(#=

P"r*o#e

The *"r*o#e of thi# *oic& i# to #et o"t the f"n(a'enta *rinci*e# on "'an

Right#/ 8hich Reiance Life In#"rance Co'*an& Li'ite( 8i #"**ort an(

%e g"i(e( %& in the con("ct of it# %"#ine##= It (eter'ine# the re#*on#i%iitie#

of gro"* f"nction# an( %"#ine## "nit# in #"**orting tho#e *rinci*e#=

Sco*e

Thi# *oic& a**ie# to a 'e'%er# of the Reiance Life In#"rance Co'*an&

Li'ite(=F"rther/ it 8i #ee+ to (ea 8ith %"#ine## *artner# 8ho a#o o%#er!e

the *ro!i#ion# of the UNUDR an( ILO core a%o"r #tan(ar(#=

Cor*orate o%Kecti!e#

To en#"re that a %"#ine## "nit# 'anage an( con("ct their %"#ine## in ine

8ith f"n(a'enta h"'an right# *rinci*e# an(/ 8ithin the #co*e of the

co'*an inf"ence/ to enco"rage it# %"#ine## *artner# to (o the #a'e=

Cor*orate *rinci*e# an( *ractice

A %"#ine## "nit# 8i (eter'ine ho8 the *rinci*e# of the UNUDR an(

ILO core a%o"r #tan(ar(# i'*act on their o*eration#= B"#ine## "nit hea(#

8i infor' the gro"*# (irector of cor*orate #ocia re#*on#i%iit& of 'ateria



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i##"e# concerning h"'an right# an( 8i re*ort on *erfor'ance again#t thi#

*oic& ann"a&=

H$an Ri#hts policy

Reiance Life In#"rance Co'*an& Li'ite( re#*ect# a f"n(a'enta

*rinci*e# on h"'an right#/ %oth in the con("ct of it# o8n %"#ine## an(

thro"gh it# %"#ine## *artner#=

"'an Right# *oicie# in arge co'*anie# are at a !er& ear& #tage of

(e!eo*'ent= The& 8i ho8e!er contin"e to (e!eo* a# ti'e goe# %&= 8e

contin"e to 'onitor an( aign o"r *oic& accor(ing to internationa&

recogni#e( h"'an right# *rinci*e#= e are g"i(e( %& the *ro!i#ion# of the

Unite( Nation# Uni!er#a Decaration of "'an Right# .UNUDR0 an( the

Internationa La%o"r Organi#ation .ILO0 core a%o"r *rinci*e#= e are a#o

a #ignator& of the Unite( Nation# o%a Co'*act/ 8hich in!o!e#

"n(erta+ing# on the en!iron'ent/ h"'an right# an( a%o"r reation# an(

8hich ai'# to *ro!i(e g"i(ance on ho8 the#e "n(erta+ing# #ho"( %e

f"fie(=

Reiance Life In#"rance Co'*an& Li'ite( a#o ha# inf"ence 9 !ia it# f"n(

'anage'ent or *"rcha#ing acti!itie# .#ee ro"* P"rcha#ing *oic&0 9 o!er

other co'*anie# an( their a**roach to h"'an right# in the 8a& the& con("ct

their %"#ine## %oth interna& an( 8ith their #"**ier#= Thi# inf"ence #ho"(

%e i(entifie( an( a**ie( con#i#tent& aro"n( the gro"*=

=

INDIAN INSTITUTE OF FINANCE 13;


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141/206


2= To 'eet/ a# a 'ini'"'/ oca heath an( #afet& egi#ation/ or

e?cee( it a# re"ire( in or(er to achie!e the ro"*# heath an(

#afet& cor*orate o%Kecti!e#=

3= To en#"re that the re*"tation of the ro"* i# not (a'age( %&

fai"re# in heath an( Safet& *ractice an( that the 'anage'ent

of heath an( #afet& ro"*8i(e contri%"te# to effecti!e

cor*orate go!ernance=

Cor*orate Princi*e# an( Practice

The ro"* i# co''itte( to e#ta%i#hing an( 'aintaining an effecti!e heath

an( #afet& regi'e thro"gho"t it# %"#ine## o*eration# =A %"#ine## "nit# 8i

e#ta%i#h a**ro*riate re#*on#i%iitie#/ organi#ation# an( *roce##e# to ena%e

co'*iance 8ith thi# *oic&=

Csto$er policy

Reiance Life In#"rance Co'*an& Li'ite( a'%ition i# to %e the 'o#t

tr"#te( #a!ing#/ in!e#t'ent# an( in#"rance *ro!i(er= e #ee+ to earn

the tr"#t of o"r c"#to'er# %& i#tening/ "n(er#tan(ing an( *ro!i(ing

for their nee(#=

Reiance Life In#"rance Co'*an& Li'ite( co''it'ent to c"#to'er#

goe# %e&on( oca ega an( reg"ator& re"ire'ent#= It i# a%o"t

%enefiting f"& fro' the co'*etiti!e a(!antage that co'e# fro'

*"tting the c"#to'er at the heart of the %"#ine##=

Reiance Life In#"rance Co'*an& Li'ite( recogni#e# the i'*ortant

roe of a(!i#er# an( (i#tri%"tor# in the reation#hi* 8e ha!e 8ith 'an&

of o"r c"#to'er#=



142/206


143/206


e?a'*e/ it i# not #"fficient to thin+ that the #ae#*er#on or ca centre

o*erator i# re#*on#i%e for c"#to'er #er!ice= Thi# nee(# to *er'eate a

that 8e (o@ inc"(ing ho8 8e (e#ign o"r *roce##e#/ (e#ign an( *rice o"r

*ro("ct#/ an( recr"it an( re8ar( o"r *eo*e=

Cor*orate o%Kecti!e#

To achie!e o"r #tate( a'%ition %& #trengthening the tr"#t of o"r

c"#to'er# =

To ha!e in *ace a cear fra'e8or+ 8hich #"**ort#co''it'ent to a**&ing high #tan(ar(# acro## it# %"#ine##e#

an( o"r co''it'ent Princi*e# for B"#ine##= To ha!e in *ace

*roce##e# to 'onitor an( re*ort on *rogre## again#t the a%o!e=

Cor*orate *rinci*e# an( *ractice

It 8i en#"re that o"r c"#to'er# are at the core of the 8a& in 8hich 8e r"n

o"r %"#ine## %&

(e!eo*ing an( *ro'oting *ro("ct# an( #er!ice# 8hich 'eet

the nee(# of o"r c"#to'er#

*ro!i(ing c"#to'er# 8ith cear infor'ation an( goo( #er!ice

8hen the& %"& o"r *ro("ct#

'aintaining a**ro*riate an( effecti!e reation#hi*# 8ith o"r

c"#to'er# an( *ro!i(ing the' 8ith goo( #er!ice after the&

ha!e %o"ght a *ro("ct=



144/206


The& recogni#e the i'*ortant roe of a(!i#er# an( (i#tri%"tor#

in the reation#hi* 8e ha!e 8ith 'an& of o"r c"#to'er# an(

8e 8i oo+ for 8a to '"t"a& %enefit fro' c"#to'er

in#ight#= In a((ition 8e 8i 'anage confict# of intere#t fair&

8here 8e ha!e an intere#t in an a(!i#or=

It i# recogni#e( that %"#ine## "nit# are %e#t *ace( to

"n(er#tan( an( re#*on( to the *artic"ar ega/ co'*etiti!e an(

c"t"ra en!iron'ent# in 8hich the& o*erate= Accor(ing&

%"#ine## "nit# ha!e the (i#cretion to (eter'ine ho8 %e#t to

inter*ret the o!era fra'e8or+ an( a**& the *rinci*e# an(

*ractice# to c"#to'er #trategie# a**ro*riate to their oca

'ar+et#= The ro"* %ran( (e!eo*'ent (irector 8i *ro!i(e

#"**ort 'ateria# an( goo( *ractice g"i(e# to a##i#t %"#ine##e#/

faciitating the #haring of +no8e(ge an( e?*erti#e acro## the

gro"*=

8i a(o*t a co''on 'ea#"re for re*orting *rogre##=

Uti'ate&/ thi# 8i %e %a#e( on c"#to'er a(!ocac&=

o8e!er/ gi!en that 'o#t %"#ine##e# c"rrent& 'ea#"re either

#ati#faction or a 'i? of #ati#faction an( a(!ocac&/ initia&

%oth 'ea#"re# 8i %e 'onitore( an( re*orte(= The #*ecific

'ea#"re# 8i carr& thro"gh to Re'"neration Co''ittee 8ho

8i a##e## *erfor'ance again#t interna an( e?terna

co'*arator#= or+ 8i %e "n(erta+en to (e!eo* an e?terna

%ench'ar+ a'ong o"r +e& co'*etitor#=



145/206


B"#ine## Unit# 8i (eter'ine an( 'onitor a**ro*riate 'ea#"re# #itting

%eneath the o!erarching 'ea#"re/ (e*en(ing on their oca nee(#= It i#

recogni#e( that retention 8i %e a +e& %"#ine## 'ea#"re=



146/206


CHAPTER I%:

5ETH-&-,-;


147/206


ai'# to fin( o"t ho8 '"ch #ta+eho(er# are ta+en care of #*ecifica& of

e'*o&ee 8or+ing in the organiation=ith that ai'

"e#tionnaire i# a# (e#igne(

SURVEY ON CORPORATE SOCIAL RESPONSIBILITY

in"ly $ar4 on fi'e6point scale as yo feel is appropriate an" relate" to

yor Oob. (Circle the n$ber) .There is no ri#ht or !ron# ans!er.

5< W-RSI5PLE CO5PLE

6 3 2 1

CREATIQE ROUTINE

6 3 2 1

USEFUL ORTLESS

6 3 2 1

UNPLEASANT PLEASANT

1 2 3 6

IQE SENSE OF ACCO5PLIS5ENT ENDLESS

6 3 2 1

5< S=PER%IS-R

CO5PETENT INCO5PETENT 6 3 2 1

TACTFUL I5POLITE 6 3 2 1



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PRAISE OOD OR ARD TO PLEASE 6 3 2 1

IQES 5E NO FREEDBAC TELLS 5E ERE I STAND1 2 3 6

5< C-W-RERS

BORIN STI5ULATIN 1 2 3 6

RESPECT 5Y PRIQACY IQES NO PRIQACY 6 3 2 1

FRIENDLY ARD TO 5EET6 3 2 1

RESPONSIBLE IRRESPONSIBLE 6 3 2 1

5< PA>

0

5

10

15

20

SCORES

(IERARC(Y

mean

mean 17.2 13.4 17.8

1 2 3


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Sae# 5anager Le!e 1=

Since #econ( categor& of ##' #ho8e( 'a?i'"' (i##ati#faction/ their h"'an

right# con(ition# are 8or#t a'ong a three/ #o the& nee( 'a##i!e

i'*ro!e'ent an( a *ro*er re!ie8 of h"'an right *oicie# %"t #' an( ag'

e!e #ho8e( content'ent %"t that #core can a#o %e enhance( %& #ati#f&ing

the' 8ith i'*ro!e( con(ition# an( 'a+ing the' the en!iron'ent 'ore

h"'ane an( a**ro*riate=

W-RI; E%IR-5ET

hie ana&ing CSR in reiance ife in#"rance foo8ing *oint# are re"ire(

to %e +e*t in 'in(=

Para'eter "n(er con#i(eration ORIN ENQIRON5ENT

5a?i'"' 'ar+# 26

"e#tion# a#+e( co!ere( that 8hether faciitie# nece##ar& for 8or+ are

a**ro*riate or not =the "e#tion in!o!e( in!e#tigate their f"rnit"re:#

co'*"ter an( other 8or+ ena%ing too#/ ho"r# of 8or+/ 8or+ing

en!iron'ent/ *a*er rec&cing=

The o%#er!e( (ata regar(ing thi# *ara'eter #ignifie# foo8ing *oint#

Agenc& (e!eo*'ent 'anager e!e 16

INDIAN INSTITUTE OF FINANCE 1>

12.5

13

13.5

14

14.5

15

SCORES

(IERARC(Y

mean

mean 15 13.4 13.6

1 2 3


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Senior Sae# 5anager Le!e 13=

Sae# 5anager Le!e 13=>

Since a categor& #ho8e( #a'e #ati#faction e!e/ 8hich i# !er& e## #o

reiance '"#t #ee that %& chec+ing the *ro%e'# of e'*o&ee# the& co"(

increa#e the efficienc& an( *rofita%iit& #ince 8or+ ena%ing too#/

f"rnit"re:# on 8hich e'*o&ee# #it are (irect& reate( in increa#ing the

o"t*"t of the co'*an&/ #o the& '"#t a#+ the e'*o&ee#/ fin( o"t their

*ro%e'# an( #ort o"t the' an( i'*e'ent %etter cor*orate #ocia

re#*on#i%iit&=

-* E%A,=ATI-

Tenth *ara'eter 8a# reate( to Ko% e!a"ation an( "e#tion# a#+e( 8ere

8hether their *erfor'ance 8a# %a#e( on n"'%er of c"#to'er# or "ait& of

c"#to'er/ are the& traine( 8e for their Ko% or not/can the& K"#tif& their roe

in the co'*an& or not /8a# Ko% (e#cri*tion gi!en 8e or not /an( fina& i#

the en!iron'ent of cor*orate office a%e to 'oti!ate the' to *erfor' %etter

or not=

The o"tco'e# 8ere a'o#t #a'e of *eo*e at the #a'e e!e= The#e are a#

foo8#

Peo*e at #' e!e an( ##' #ai( that n"'%er of c"#to'er# an( "ait&

of c"#to'er/ %oth are i'*ortant for their Ko% a**rai#a=

6


169/206


There 8a# co''on con#en#"# that the co'*an& i'*art# a(e"ate

training to e"i* it# e'*o&ee# 8ith #+i# nece##ar& to *erfor' a Ko%=

Regar(ing Ko% (e#cri*tion a#o *eo*e 8ere at co''on con#en#"# that

Ko% (e#cri*tion 8a# gi!en 8e an( the& +no8 8e 8hat ha# to %e

(one an( 8hat i# e?*ecte( o"t of the'=

A the *eo*e 8ere a%e to K"#tif& their *re#ence in the organiation

an( it #ee'# are ha**& 8ith their Ko% *rofie=

There 8a# a#o co''on con#en#"# that en!iron'ent of reiance ife

in#"rance 8a# a%e to 'oti!ate the' 8e to *erfor' %etter/ 8hich i# a

great #&'%o=

The o"t*"t 8hich 8e (eri!e( on the Ko% e!a"ation *ara'eter i# that

co'*an& ha# goo( *erfor'ance in thi# re#*ecti!e area= The e'*o&ee# #ee'

to %e #ati#fie( regar(ing the#e con(ition#=

INDIAN INSTITUTE OF FINANCE 1>;


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Co$parison bet!een a!ar" !inners in area of corporate social

responsibilityA brief intro"ction of co$panies co$pare":

Abot Tata Consltancy Ser'ices

Tata Con#"tanc& Ser!ice# .TCS0/ a (i!i#ion of Tata Son# Li'ite(/ i# one of

the 8or(:# arge#t go%a #oft8are #o"tion# an( con#"ting #er!ice#

enter*ri#e an( In(ia:# fir#t go%a %iion9(oar IT organiation=

One of the to* 26 IT con#"ting organiation# in the 8or(/ TCS e'*o

o!er 2/


171/206


TCS in# A#ian Cor*orate Socia Re#*on#i%iit& A8ar( for A("t Literac&

Progra' for it# co''"nit& 8or+ to #"**ort the i'*ro!e'ent of e("cation

an( rai#e the iterac& of In(ian# in In(ia=

TCS recei!e# ac+no8e(ge'ent in S"**ort an( I'*ro!e'ent of E("cation

categor& Singa*ore/ 2 Se*te'%er 2


172/206


o**ort"nitie# for #"cce## an( *ro#*erit&/ an( there%&/ tran#for' i!e# of the

e## *ri!iege(=

In'estin# in the Society

Sat&a' ren(er# #*ecific #er!ice# thro"gh !ario"# (e!eo*'ent *roKect#

(ei!ere( %& it# Cor*orate Socia Re#*on#i%iit& .CSR0 ar'/ Sat&a'

Fo"n(ation= Sat&a' Fo"n(ation i# co''itte( to tran#for'ing the i!e# of

the "n(er*ri!iege( in "r%an area#=In a((ition/ Sat&a' a#o reache# o"t to

the #ociet& thro"gh it# Cor*orate Socia Re#*on#i%iit& *artner#=

Sat&a' %ag# CSR a8ar(The Teegra*h/ 5arch / 2


173/206


O%Kecti!e Trac+ *ractice# 7 c"rrent attit"(e# of %"#ine##'en to8ar(#

their roe in #ocia 7 co''"nit& (e!eo*'ent

Fin(ing 1


174/206


Thi# ethica #tan(*oint/ (eri!e( fro' the !i#ion of o"r fo"n(er/ ie# at

the heart of the CSR *hio#o*h& of the Reiance ) ADA ro"*=

#trong& %eie!e that o"r *ri'ar& o%igation or ("t& a# cor*orateentitie# i# to o"r #hareho(er# ) 8e are K"#t a# 'in(f" of the fact that

thi# i'*erati!e (oe# not e?i#t in i#oation@ it i# *art of a '"ch arger

co'*act 8hich 8e ha!e 8ith o"r entire %o(& of #ta+eho(er# Fro'

e'*o&ee#/ c"#to'er# an( !en(or# to %"#ine## *artner#/ eco9#te'/

oca co''"nitie#/ an( #ociet& at arge= E!a"ate an( a##e## each critica %"#ine## (eci#ion or choice fro' the

*oint of !ie8 of (i!er#e #ta+eho(er intere#t/ (ri!en %& the nee( to

'ini'ie ri#+ an( to *ro9acti!e& a((re## ong9ter' #ocia/ econo'ic

an( en!iron'enta co#t# an( concern#=

C-5PARATI%E AA,


175/206


Co'*arati!e #t"(& of CSR in RELIANCE LIFE INSURANCE/ TCS/

SATYA5 re"ire# foo8ing *oint#

Para'eter "n(er con#i(eration ORIN ENQIRON5ENT

5a?i'"' 'ar+# 26

hie co'*aring the three to* notch co'*anie# +no8n for their

re#*on#i!ene## to8ar(# #ta+eho(er# I ha!e (i#co!ere( foo8ing *oint#=

ighe#t #core i# of #at&a'/ 8hich 'ean# their e'*o&ee# are '"ch ha**ier

8ith their 8or+ing en!iron'ent an( the& contri%"te to a !er& high e?tent in

the *erfor'ance of their co'*an&= Co'*an& i# a%e to "tiie the 'a?i'"'

*otentia of it# e'*o&ee#= 5ini'"' i# of TC# an( fro' thi# +in( of #core

8e can cear& infer# (i#content'ent 8hich #ho8# inefficient/ ina(e"ate

#te' an( *oicie# 8hich (e9'oti!ate the e'*o&ee# an( the& (o not

*erfor' "* to the 'a?i'"' *otentia=

RLI ha# a#o a #core 8hich co"( %e f"rther enhance(= e can ho*e a higher

#core if co'*anie# i(entifie# the *ro%e'atic area# an( ca"#e# an( tr& to

"*root the *ro%e' rather than 8ee(ing the' fro' #"rface=

5< S=PER%IS-R


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5a?i'"' 'ar+# 16

hie co'*aring the three to* notch co'*anie# +no8n for their

re#*on#i!ene## to8ar(# #ta+eho(er# I ha!e (i#co!ere( foo8ing *oint#

ighe#t #core i# of SATYA5 8hich 'ean# their e'*o&ee# are '"ch

#ati#fie( 8ith their *a& an( the& contri%"te to a !er& high e?tent to

gro8th of the %eca"#e *a& i# #trong 'oti!ating force

5ini'"' i# of RLI an( fro' thi# +in( of #core 8e can cear& infer#

(i#content'ent 8hich #ho8# *a& i# not honora%e 8hich (e9'oti!ate#

the e'*o&ee#=

TCS a#o a *oor #core an( #ho"( %e f"rther i'*ro!e(/ #ince

e'*o&ee# are not K"#tifie( 8ith the *a& that i# gi!en to the'/ #o 8hatco'*an& '"#t (o i# K"#tif& the *eo*e 8ith #aarie# or thin+ of

re!i!ing the *a& #tr"ct"re #o that gro8th of co'*an& i# not ha'*ere(

5< PR-5-TI-


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MEAN

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