CORPORATE SOCIAL RESONSIBILITY

JAYANT K. OKE
MANAGEMENT CONSULTANT

PUNE

CORPORATE SOCIAL RESPONSIBILITY

WHAT IS RIGHT IS RIGHT, EVEN IF NOBODY IS DOING IT, WHAT IS WRONG IS WRONG, EVEN IF EVERYBODY IS DOING IT ANNONYMOUS

CORPORATE SOCIAL RESPONSIBILITY

A NO HOLDS BARRED BUSINESS MODEL, UNDER THE PRETEXT OF LPG NEW ECONOMY ENTERPRISE WITH A WHOLE NEW ENTREPRENEURIAL CULT EXCESSIVE PRESSURE TO PERFORM CONSISTENTLY ON A DOUBLE DIGIT SCALE

CORPORATE SOCIAL RESPONSIBILITY

DELIVERING WHAT THE MARKET DEMANDED & JUSTIFYING IT HIGHER PROFITS & UNREASONABLY HIGHER RETURNS FOR THE INVESTORS EMPHASIS ON SHORT TERM RESULTS

CORPORATE SOCIAL RESPONSIBILITY

RELENTLESS & RUTHLESS EXPLOITATION OF THE LOOPHOLES IN LAW & ACCOUNTING PRACTICES ABUSING THE VULNERABILITY OF LEGAL SYSTEM & ACCOUNTING PRACTICES WILLFUL CROSSING OF THE GOVERNANCE BORDERS

CORPORATE SOCIAL RESPONSIBILITY

THE FLY BY NIGHT OPERATORS THE DWARFS & FRAUDS PRETENDING TO BE VISIONARIES & DOYENS

CORPORATE SOCIAL RESPONSIBILITY

TYPICAL FEATURES OF A TYPICAL ERA & TYPICAL CORPORATES, BEFORE THEY GO UNDER, TAKING ALONGWITH THEM THE GULLIBLE INVESTORS

AND WHAT DO WE GET ?

INDEED, WHAT ELSE COULD WE GET BUT A SERIES OF SCAMS & SCANDALS.. WORLDWIDE, TRANSGRESSING NATIONAL BOUNDARIES, UNDERMINING & UNDERCUTTING THE VERY ROOTS OF INTEGRITY,CREDIBILITY & TRUST SO ASSIDUOUSLY BUILT BY PEOPLE WHO CARED, SHARED & NURTURED

WHAT WE GET

YOU HAVE YOUR HARSHAD MEHTAS, KETAN PAREKHS, CRBs, SACHDEVAs, AND OF COURSE, ENRON, TYCO, ADELPHIA, AOL, TIME WARNER, PARAMAT. THE LIST IS ENDLESS

CORPORATE SOCIAL RESPONSIBILITY

WE HAVE ALL BEEN WITNESSING THESE HAPPENINGS AROUND US THESE HAPPENINGS CAN, IN THE VERY LEAST, BE TERMED AS CORPORATE IRRESPONSIBILITY

CORPORATE SOCIAL RESPONSIBILITY

INDEED THE KPMG ORGANISATIONAL INTEGRITY SURVEY, 2000, INDICATED THAT NEARLY HALF OF ITS SAMPLE SIZE REPORTED ILLEGAL, UNETHICAL AND IRRESPONSIBLE CONDUCT OF A SERIOUS NATURE

CORPORATE SOCIAL RESPONSIBILITY

THE MOST COMMON BREACHES BEING DECEPTIVE SALES PRACTICES, UNSAFE WORKING CONDITIONS, MANIPULATING ACCOUNTS, & MISHANDLING OF CONFIDENTIAL OR PROPRIETORY INFORMATION

CORPORATE SOCIAL RESPONSIBILITY

WHEN ABUSES LIKE THESE BEGIN TO SURFACE IN THE CORPORATE WORLD, IT IS TIME TO AFFIRM THE BASIC PRINCIPLES & RULES THAT MAKE THE CORPORATES WORK: TRUTHFUL BOOKS, HONEST PEOPLE, & WELL-ENFORCED LAWS AGAINST FRAUDS, & UNHEALTHY COMPETITION

CORPORATE SOCIAL RESPONSIBILITY

TODAY, AS THE CORPORATES & CAPITALISM STAND AT THE CROSSROADS OF EVOLUTION, THERE EXISTS AN OPPORTUNITY, MORE SO THAN EVER BEFORE, TO ADDRESS THE GAPS IN THE SYSTEM & BUILD STEADFASTLY ON THE STRENGTHS THAT REMAIN

CSR: A PEEP INTO THE PAST

POST-INDUSTRIAL REVOLUTION, THE INDUSTRIAL & BUSINESS PROCESSES HAVE ADDED VALUE TO NATURAL RESOURCES, TRANSFORMING THEM FROM RAW GIFTS OF NATURE INTO USEFUL PRODUCTS

CSR: A PEEP INTO THE PAST

THE CORPORATES, IN DUE COURSE, HAVE EMERGED & REMAINED THE WORLDS FOREMOST GENERATORS / CREATORS OF WEALTH, EMPLOYMENT , TRADE & TECHNOLOGY, CONTROLLING & DEPLOYING TREMENDOUS AMOUNT OF HUMAN & FINANCIAL RESOURCES FOR ECONOMIC VALUE ADDITION

THE CSR PERSPECTIVE..

IN TODAYS LPG ERA, THE CORPORATES HAVE DEVELOPED INTO NATIONAL / GLOBAL GIANTS WIELDING GREAT POWER FOR INFLUENCING PRACTICALLY EVERY SITUATION, IN EVERY WALK OF LIFE

THE CSR PERSPECTIVE..

INDEED, IT IS INCREASINGLY BELIEVED THAT THE POWER OF THESE CORPORATES IS GROWING BEYOND THE CONTROL OF NATIONAL GOVERNMENTS & THAT THESE CORPORATES ARE SEEN BECOMING TOO POWERFUL & ALL TOO INFLUENTIAL, OPERATING WITHOUT RESPONSIBILITY & ACCOUNTABILITY TO THE NATIONS, SOCIETY & TO THE WORLD AT LARGE

THE CSR PERSPECTIVE..

THE CORPORATES, IT IS FELT,SEEM TO HAVE LOST TOUCH WITH THE HUMAN VALUES SO NECESSARY TO SUSTAIN & PRESERVE LIFE FORMS HUMAN, ANIMAL & BIOLOGICAL THE CORPORATES ARE BEING PERCEIVED AS CYNICS: THOSE WHO KNOW THE PRICE OF EVERYTHING, BUT VALUE OF NOTHING!!!

THE CSR PERSPECTIVE..

HOWEVER, AS THE NUMBER OF LIVES & FACETS THAT THE CORPORATES ENCOMPASSED GREW, IT WAS REALISED & CAME TO BE ACCEPTED THAT THE CORPORATES ARE NOT AN ISLAND BY THEMSELVES,& , HENCE, CANNOT SURVIVE IN A VACUUM

THE CSR PERSPECTIVE..

THE CORPORATES HAVE TO LIVE IN SOCIETY & EACH OF THEIR ACTIVITIES IS CONNECTED, IN ONE WAY OR THE OTHER, WITH THE SOCIETY THEY EXIST IN THE SOCIETY/ COMMUNITY HAS ALSO REALISED THAT IT IS A MAJOR STAKEHOLDER IN THE BUSINESS OF CORPORATES AS IT IS THE SOCIETY THAT GIVES CORPORATES THEIR BUSINESS

THE CSR PERSPECTIVE..

THE SOCIETY CANNOT BE TAKEN FOR GRANTED OR TAKEN FOR A RIDE AS JUST A SUPPLIER OF THE WORK-FORCE AND A CAPTIVE MARKET THE SOCIETY , THEREFORE,HAS NOW BEGUN TO ASK QUESTIONS & THIS IN TURN HAS FORCED THE CORPORATES TO EXAMINE THEMSELVES & SEE WHAT THEY ARE DOING FOR THE SOCIETY

THE CSR PERSPECTIVE..

EARLIER, BUSINESS WAS CONSIDERED AS BEING A COMPLEX OF GAINFUL HUMAN

ACTIVITIES, WITH THE MAIN OBJECTIVE TO CREATE , EXCHANGE & POSSESS WEALTH IN THE FORM OF PHYSICAL GOODS / SERVICES OR AS AN ECONOMIC ENTITY ENGAGED IN PRODUCTION / DISTRIBUTION OF GOODS / SERVICES IN ORDER TO EARN PROFITS & CREATE / GENERATE / ACQUIRE WEALTH

THE CSR PERSPECTIVE..

THE ROLE OF THE CORPORATES IS NOW NO MORE CONFINED TO ONLY BEING AN ECONOMIC ENTITY. RATHER, TTHEY ARE NOW SEEN AS SOCIO-ECONOMIC INSTITUTIONS & LIVING MEMBERS (ORGANS) OF THE SOCIETY

THE CSR PERSPECTIVE..

IT HAS NOW COME TO BE ACCEPTED THAT CONTEMPORARY CORPORATES HAVE RESPONSIBILITY TOWARDS THE SOCIETY & THE VARIOUS STAKEHOLDERS THIS VIEW IS NOW KNOWN AS CSR:
CORPORATE SOCIAL RESPONSIBILITY

THE CSR CONCEPT

MAHATMA GANDHI, A LONG TIME AGO,IN HIS TYPICAL STYLE, HAD EMPHASISED THE CONCEPT OF TRUSTEESHIP & SHARING OF WEALTH BY THE OWNERS OF CAPITAL / WEALTH, WITH OTHERS IN SOCIETY, FOR THE WELL-BEING OF EVERYONE IN THE SOCIETY

THE CSR CONCEPT

THE CONCEPT OF SOCIAL RESPONSIBILITY STARTED GAINING CURRENCY / RECOGNITION DURING THE 1970s IT CAN BE BASICALLY VIEWED AS THE MORAL / ETHICAL ATTITUDE & ETIQUETTE OF BUSINESS TOWARDS THE SOCIETY

THE CSR CONCEPT

IT WAS ALSO ACCEPTED THAT A BUSINESS ORGANISATION CAN BE SAID TO HAVE TWO ASPECTS: INDIVIDUAL ASPECT, WHICH DEALS WITH PROFIT MOTIVE, & SOCIAL ASPECT WHICH DEALS WITH SOCIAL OBLIGATION

THE CSR CONCEPT

LEVEL I:
BUSINESS HAS THE RESPONSIBILITY TO EARN PROFIT WHILE DEALING FAIRLY & HONESTLY

LEVEL II:
BUSINESS HAS A RESPONSIBILITY TO SOCIETY WITH RESPECT TO ITS EMPLOYEES/PRODUCTS, RESPONSIBILITY TO MIRROR THE IDEALS & VALUES OF SOCIETY WITHIN ITS OWN MICROCOSM

THE CSR CONCEPT

LEVEL III:
IT IS A PRIMARY OBLIGATION OF BUSINESS TO USE ITS POWER TO PROMOTE SOCIAL ENDS PERCEIVED AS MORAL

THE CSR CONCEPT

IT IS AN INTELLIGENT & OBJECTIVE

CONCERN FOR THE WELFARE OF SOCIETY,

THAT LIMITS OR PREVENTS INDIVIDUALS OR CORPORATES FROM ULTIMATELY DESTRUCTIVE ACTIVITIES, NO MATTER HOW IMMEDIATELY PROFITABLE, & LEADS
IN THE DIRECTION OF POSITIVE CONTRIBUTION WHEREVER POSSIBLE TO

THE BETTERMENT OF HUMAN RESOURCES IN DIFFERENT WAYS AS DESIRED BY THE SOCIETY

CSR & THE STAKEHOLDERS

RESPONSIBILITY TO THE SHAREHOLDERS /INVESTORS RESPONSIBILITY TO THE CREDITORS RESPONSIBILITY TO THE SUPPLIERS RESPONSIBILITY TO THE EMPLOYEES RESPONSIBILITY TO THE CONSUMERS RESPONSIBILITY TO THE LOCAL COMMUNITY RESPONSIBILITY TO THE GOVERNMENT RESPONSIBILITY TO THE SOCIETY RESPONSIBILITY TO THE ENVIRONMENT

CSR: THE SCHOOLS OF THOUGHT

HISTORICALLY, THE PHILOSOPHICAL / THEORETICAL DEBATE OVER THE ROLE OF BUSINESS IN SOCIETY HAS EVOLVED INTO FOUR SCHOOLS OF THOUGHT BASED ON RESPONSES TO TWO QUESTIONS: WHOSE INTERESTS SHOULD THE CORPORATE SERVE? TO WHOM SHOULD THE CORPORATE BE RESPONSIVE/RESPONSIBLE IN ORDER TO BEST SERVE THAT INTEREST ?

CSR: THE SCHOOLS OF THOUGHT

THERE ARE ONLY TWO ANSWERS TO THE QUESTIONS RAISED EARLIER viz. SHAREHOLDERS ONLY OR THE SOCIETY AT LARGE THE COMBINATIONS OF THE ANSWERS DEFINE THE PARTICULAR SCHOOL OF THOUGHT

CSR: THE SCHOOLS OF THOUGHT

THERE ARE FOUR SCHOOLS OF THOUGHT IN THIS REGARDS:

THE INHERENCE SCHOOL OF THOUGHT THE INVISIBLE HAND SCHOOL OF THOUGHT THE ENLIGHTENED SELF-INTEREST SCHOOL OF THOUGHT THE SOCIAL RESPONSIBILITY SCHOOL OF THOUGHT

THE INHERENCE SCHOOL OF THOUGHT

IT BELIEVES THAT THE MANAGERS ARE ANSWERABLE TO THE SHAREHOLDERS AND SHOULD ACT ONLY WITH SHAREHOLDERS INTERESTS IN MIND (MILTON FRIEDMAN)

THE INVISIBLE HAND SCHOOL OF THOUGHT

THE CORPORATES SHOULD FOLLOW THE NORMS / STANDARDS LAID DOWN BY THE GOVERNMENT & TRY TO MAXIMISE THE SHAREHOLDER BENEFITS

ENLIGHTENED SELF-INTEREST SCHOOL OF THOUGHT

THE MANAGER IS RESPONSIBLE FOR THE SHAREHOLDERS BUT SERVES THE BEST INTERESTS OF THE SHAREHOLDERS BY BEING RESPONSIBLE TO THE LARGER SOCIETY, AS, IN THE LONG RUN, THE BUSINESS VALUE IS ENHANCED IF THE BUSINESS IS RESPONSIBLE TO THE SOCIETY

SOCIAL RESPONSIBILITY SCHOOL OF THOUGHT

THE ROLE OF BUSINESS IS TO SERVE THE LARGER SOCIETY & THAT IS BEST ACCOMPLISHED BY BEING RESPONSIVE TO THE LARGER SOCIETY THE BUSINESS PROFITS BY BEING RESPONSIVE TO SOCIETY & ITS NEEDS

CSR: CHARACTERISTICS

INITIALLY FOUNDED BY FAR-SIGHTED PEOPLE WHO VISIBLY SET THE FIRMS MORAL TONE STRUCK TO THE BASICS & PRODUCED ONLY HIGH QUALITY GOODS & SERVICES FOR SPECIFIC / NICHE MARKETS FIRMLY PRACTICED THE DUAL PRINCIPLES OF SELF-MANAGEMENT & DECENTRALISATION

CSR: CHARACTERISTICS

DEVELOPED A PUBLIC IMAGE THAT EMPHASISED THEIR COMMITMENT TO QUALITY AND OFTEN USED NONTRADITIONAL MEANS TO PROMOTE IT BROUGHT IN OUTSIDE PEOPLE TO PROVIDE NEEDED TALENT & ADDITIONAL PERSPECTIVE ENCOURAGED ALL EMPLOYEES TO BECOME PART OF THE SHARED MISSION THROUGH FULL WORKER PARTICIPATION

CSR: CHARACTERISTICS

PAID FAIRLY AND USUALLY OFFERED BENEFIT PACKAGES EXCEEDINGTHE COMPETITORS EMPHASISED A DEMOCRATIC PEOPLEORIENTATION AND DID WITHOUT EXECUTIVE PERKS CONSTANTLY SOLICITED CUSTOMER FEEDBACK ON ALL SUBJECTS FROM PRODUCT DIRECTIONS TO CORPORATE DONATIONS

CSR: CHARACTERISTICS

TOP MANAGERS POSSESSED AN EXTENSIVE KNOWLEDGE OF CURRENT EVENTS AND TOOK WIDE-RANGING INTEREST IN AFFAIRS OUTSIDE THEIR BUSINESS OFFERED DONATIONS IN CASH OR SERVICES TO PEOPLE IN NEED OF HELP

CSR: CHARACTERISTICS

TOOK AN ACTIVE ROLE IN THE ACTIVITIES OF THEIR LOCAL COMMUNITIES DEAL WITH LIKE-MINDED BUSINESS AND ENCOURAGE THEIR EMPLOYEES TO DO THE SAME CONSTANTLY LOOK TO THE FUTURE BUT ALWAYS PAY ATTENTION TO THE PAST / PRESENT

THE EPILOGUE

IT IS NOW BEING REALISED THAT THE ROLE OF CORPORATES HAS TO CHANGE & CHANGE FAST, FROMNEGATIVETO POSITIVE FROM SHORT TERM TO LONG TERM FROM COMPLIANCE TOCOMMITMENT

THE EPILOGUE

THE CORPORATES ARE FACING UP TO THESE CHALLENGES & CONCERNS DUE PROCESSES REGARDING TRANSPARENCY,INTEGRITY, HONESTY, TRUST, CORPORATE GOVERNANCE, ENVIRONMENTAL OBLIGATIONS & SOCIAL RESPONSIBILITY IS BEING EVOLVED & IMPLEMENTED

THE EPILOGUE

CSR IS NOW BEING VIEWED AS THE GIVE & THE GLUE THAT BINDS THE FOUNDATION STONES OF CORPORATE GOVERNANCE, REPUTATION & COMPETITIVE CREDIBILITY TOGETHER, WITHOUT WHICH THE VERY EXISTENCE WOULD BE ENDANGERED

THE EPILOGUE

THE CSR MUST BECOME AN INTERNAL & INTEGRATED COMPONENT OF THE CORPORATE CULTURE MANAGERS MUST WALK THE TALK AND REALISE THAT THEY WOULD DO WELL (FINANCIALLY) IF THEY DO GOOD (SOCIALLY)

THE EPILOGUE

THERE MUST NOT BE ANY GAP BETWEEN STATED VALUES & DAILY PRACTICES AS OTHERWISE THE SOCIAL RESPONSIBILITY WOULD BECOME EITHER A FASHION STATEMENT OR MERE RHETORIC THAN REALITY & WOULD ONLY BE SELF-DEFEATING

THE EPILOGUE

LET US REMEMBER WHAT

LATE J.R.D. TATA, THE LEGENDARY, SOCIALLY SENSITIVE / RESPONSIBLE DOYEN OF INDIA INC. HAD ONCE SAID:

THERE IS NEED TO REKINDLE OLD PRINCIPLES & ETHICAL VALUES WHICH, ALAS, HAVE TOO OFTEN BEEN IGNORED & NEGLECTED DURING RECENT YEARS, IN THE BELIEF THAT QUICKER PROFITS & GREATER ACCUMULATION OF WEALTH WILL BE THE RESULT

THANK YOU
JAYANT K. OKE MANAGEMENT CONSULTANT, PUNE