CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility, often abbreviated "CSR," is a corporation's initiatives to assess

and take responsibility for the company's effects on environmental and social wellbeing. The
term generally applies to efforts that go beyond what may be required by regulators or
environmental protection groups. Corporate social responsibility is a key issue for any
organisation aiming for long term sustainability. Whilst it is a mostly voluntary concept, there is
increasing pressure on organisations to make a positive contribution to society, or at the least,
reduce their negative impact. Internationally, governments are also moving towards the
enforcement of certain elements of corporate social responsibility, particularly in regards to the
protection of the environment.

Responsible businesses may not necessarily be able to measure the positive impact their
behaviour has on their performance, however, irresponsible businesses are likely to notice the
negative impact their decisions have on their bottom line. Business sustainability now and in the
future depends on organisations taking into account the social and environmental consequences
of their decisions and actions.

In the past, many businesses and managers were primarily concerned with increasing
shareholders' value. Shareholders are the people who own part of a business and share in its
profits. For a small business, this may be a single business owner. In a large corporation, this
could include thousands of people who hold shares in the company and receive dividends.

Traditionally, managers were focused on short to medium term profits and driving the share
price up. However, there has been a developing trend that goes away from simply increasing the
return for shareholders and instead focuses on increasing the value of the business in terms of the
stakeholders. Stakeholders are the people who are affected by the actions and performance of the
business, and include both internal and external parties. Business stakeholders include people
such as consumers, shareholders, associates, employees and business owners. Businesses that are
socially responsible aim to make decisions that are in the best interests of their various
stakeholders.

Developing your understanding of corporate social responsibility and implementing it into your
business now may help you to get a step ahead of your competitors. You can use it to gain a
competitive edge and it provides you with the opportunity to provide benefits to a wider range of
business stakeholders.

CONSUMER PERSPECTIVES

Most consumers agree that while achieving business targets, companies should do CSR at the
same time. Most consumers believe companies doing charity will receive a positive response.
Somerville also found that consumers are loyal and willing to spend more on retailers that
support charity. Consumers also believe that retailers selling local products will gain loyalty.
Smith (2013) shares the belief that marketing local products will gain consumer trust. However,
environmental efforts are receiving negative views given the belief that this would affect
customer service. Oppewal et al. (2006) found that not all CSR activities are attractive to
consumers. They recommended that retailers focus on one activity. Becker-Olsen (2006) found
that if the social initiative done by the company is not aligned with other company goals it will
have a negative impact. Mohr et al. (2001) and Groza et al. (2011) also emphasise the
importance of reaching the consumer.

APPROACHES

Some commentators have identified a difference between the Canadian (Montreal school of
CSR), the Continental European and the Anglo-Saxon approaches to CSR. It is said that for
Chinese consumers, a socially responsible company makes safe, high-quality products; for
Germans it provides secure employment; in South Africa it makes a positive contribution to
social needs such as health care and education. And even within Europe the discussion about
CSR is very heterogeneous.
A more common approach to CSR is corporate philanthropy. This includes monetary donations
and aid given to nonprofit organizations and communities. Donations are made in areas such as
the arts, education, housing, health, social welfare and the environment, among others, but
excluding political contributions and commercial event sponsorship.

Another approach to CSR is to incorporate the CSR strategy directly into operations. For
instance, procurement of Fair Trade tea and coffee.

Creating Shared Value, or CSV is based on the idea that corporate success and social welfare are
interdependent. A business needs a healthy, educated workforce, sustainable resources and adept
government to compete effectively. For society to thrive, profitable and competitive businesses
must be developed and supported to create income, wealth, tax revenues and philanthropy. The
Harvard Business Review article Strategy & Society: The Link between Competitive Advantage
and Corporate Social Responsibility provided examples of companies that have developed deep
linkages between their business strategies and CSR. CSV acknowledges trade-offs between
short-term profitability and social or environmental goals, but emphasizes the opportunities for
competitive advantage from building a social value proposition into corporate strategy. CSV
gives the impression that only two stakeholders are important - shareholders and consumers.

Many companies employ benchmarking to assess their CSR policy, implementation and
effectiveness. Benchmarking involves reviewing competitor initiatives, as well as measuring and
evaluating the impact that those policies have on society and the environment, and how others
perceive competitor CSR strategy.

COST BENEFIT ANALYSIS

In competitive markets cost-benefit analysis of CSR initiatives, can be examined using a

resource-based view (RBV). According to Barney (1990) "formulation of the RBV, sustainable
competitive advantage requires that resources be valuable (V), rare (R), inimitable (I) and non-
substitutable (S)." A firm introducing a CSR-based strategy might only sustain high returns on
their investment if their CSR-based strategy could not be copied (I). However, should
competitors imitate such a strategy, that might increase overall social benefits. Firms that choose
CSR for strategic financial gain are also acting responsibly.

RBV presumes that firms are bundles of heterogeneous resources and capabilities that are
imperfectly mobile across firms. This imperfect mobility can produce competitive advantages for
firms that acquire immobile resources. McWilliams and Siegel (2001) examined CSR activities
and attributes as a differentiation strategy. They concluded that managers can determine the
appropriate level of investment in CSR by conducting cost benefit analysis in the same way that
they analyze other investments.

Reinhardt (1998) found that a firm engaging in a CSR-based strategy could only sustain an
abnormal return if it could prevent competitors from imitating its strategy.
TOP 10 CORPORATE SOCIAL RESPONSIBILITY INITATIVES

Corporate conscience is about giving back to the communities that keep your business afloat,
maybe even ones beyond your reach. Having a social good culture lets your employees know
they are working for something that is bigger than themselves; their business is not one
dimensional and more importantly, it cares about people. I am firm believer that what you put
into the world is exactly what youre going to get out of it. People want to do things that matter,
companies that encourage employees to participate in volunteerism and giving back are creating
fulfilling environments to work in.

Businesses have unique opportunities to give back to communities in a way that amplifies the
intentions of their employees and company mission.

These 10 socially responsible companies know how to make an impact beyond their
headquarters:

1. Toms One for one motto is a well-known phrase. Theyve recently upped the ante by
donating a portion of their sunglass sales to vision care for children in need. But its not just
consumers that are involved in Toms social good, its employees as well. Toms employees
participate in an annual Shoe Drop where they travel and donate a variety of goods to children.
Their careers page specifically calls for employees that want to change lives and be a part of a
movement.

2. LinkedIn. One Friday each month LinkedIns employees participate InDay. InDays
purpose is to give back to the community through employee volunteerism and resources. Each
InDay has a different theme allowing diverse departments to come together for a common cause.
InDay activities range from guest speakers discussing global justice, to initiating global learning
programs, and volunteering in local communities.

3. PG&E does its part to serve the communities of California. On Earth Day employees help
clean and restore 18 state parks. They are exemplary members of Habitat for Humanity and
volunteer by providing solar panels on new Habitat homes. Employee volunteerism hits inside
the home as well by participating in various food programs providing those struggling to make
ends meet with care packages and thousands of pounds of groceries. The employees clearly care
about their Coast.

4. Zappos is a company creating a social impact with a shoebox. Zappos is known for a
company culture that focuses on the well-being of their employees and they are on a mission to
make the world a better place, for everyone. They also donate huge amounts of Zappos goods to
tons of charitable organizations. Their employees are paid for time off if they are volunteering,
because Zappos knows 9-5 isnt the only work that matters.
 5. General Electrics employees volunteer over 1 million hours per year! Donations from the
GE foundation have supported senior centers, children with autism, literacy programs, and
neglected urban spaces among many other programs. On Global Community Days, GE
coordinates company-wide to address urgent projects around the world. GE knows that a helping
hand starts in your backyard extends across the world.

6. Ciscos initiatives cover every aspect of daily life. Global projects provide
education, healthcare, economic empowerment, and disaster relief to areas in need. Cisco
employees log more than 160,000 volunteer hours around the world in a year. Teams of Cisco
employees called Civic Councils get involved in their local communities by organizing events
and donation projects. Cisco asks their employees to, be a part of the equation. You +
Networks= Impact Multiplied.

7. Deloitte employees both have the opportunity to lead and attend conferences that provide
training on volunteerism and non-profit organization. What is that saying about teaching a man
to fish? Deloitte has a keen awareness that training employees on skills based volunteer
programs and running functional non-profits has the ability to have long term effects rather than
simply taking an employee volunteer trip.

8. Verizon is proud to support the generosity of their employees. The Verizon Matching
Gifts program matches employee financial donations 1:1 to qualified organizations. The spirit of
giving doesnt stop there. They also encourage employees to volunteer. If employees log more
than 50 hours with an organization they can apply for a $750 grant awarded to the organization
from Verizon.

9. Dell supports over 4,615 charities around the world. Dell YouthConnect provides technology
and educational facilities in 11 countries. The Dell Social Innovation Challenge provides funding
and mentorship to college students to further projects that help solve social
problems. Dells disaster relief program provides holistic assistance to communities affected by
natural disaster around the world. Dells employees are a social good force to be reckoned with.

10. IBM believes in Corporate Citizenship. Their social good projects extend across societal
issues. Employees volunteer in environmental efforts, community economic development,
education, health, literacy, language and culture. Their year long volunteer initiative,
Celebration of Service, logged over 3,00,000 hours of service. IBM has also established, On
Demand Community, enabling employees and retirees to find volunteer opportunities, through
trainings and placement.

Social good initiatives are one of the ways that you can show a job candidate what it is like to
work at your company. Candidates want to know they work for a company whose values are
aligned with their own. These 10 companies are proof that corporate social responsibility isnt
just a buzz word.
BREAKING DOWN 'Corporate Social Responsibility'
Large companies are immensely powerful entities, to the point that they have frequently trumped
the interests of sovereign nations. American businessmen deposed the queen of Hawai'i in 1893
because they were incensed with her tariff policies. The formerly independent country became an
American territory a few years later. Corporate interests frequently harm local communities, as
in 1928 when the Colombian army massacred an unknown number of striking United Fruit
Company workers. The U.S. had threatened a military invasion of Colombia to protect the
company's interests.

Corporations can have enormously detrimental effects on the environment. Oil spills are some of
the most conspicuous examples, but industries as varied as chemical manufacturing, mining,
agriculture and fishing can do permanent damage to local ecosystems. Climate change can also
be attributed in large part to corporations. While their responsibility is hard to untangle from that
of the consumers who demand electricity and transportation, it is difficult to deny that many
corporations have profited from the deterioration of the global environment.

In many cases, harm to the environment and harm to vulnerable communities go hand-in-hand:
indigenous groups in the Amazon rainforest, for example, have been decimated and even wiped
out, both intentionally and unintentionally, in order to make room for logging, cattle ranching,
gold mining, oil and gas drilling and hydroelectric power generation.

In light of this often dark legacy, some areas of corporate culture have begun to embrace a
philosophy that balances the pursuit of profit with a commitment to ethical conduct. Google Inc's
(GOOG) slogan sums up the idea of corporate social responsibility nicely: "Don't be evil."

The same money and influence that enable large companies to inflict damage on people and the
environment allows them to effect positive change. At its simplest, a corporation can give money
to charity. Companies can also use their influence to pressure governments and other companies
to treat people and resources more ethically. When Martin Luther King, Jr. won the Nobel Peace
Prize in 1964, Atlanta's business leaders initially refused to attend a dinner celebrating the
Atlanta native's achievement. Coca Cola Co.'s (KO) CEO, recognizing the damage such a
display of segregationist attitudes could do to the firm's international brand, threatened to move
Coke out of the city, causing an immediate change of heart in the local business elite.

Companies can invest in local communities in order to offset the negative impact their operations
might have. A natural resources firm that begins to operate in a poor community might build a
school, offer medical services or improve irrigation and sanitation equipment. Similarly, a
company might invest in research and development in sustainable technologies, even though the
project might not immediately lead to increased profitability.

In order to account for the importance of social and ecological considerations in doing business,
some organizations advocate the concept of the "triple bottom line": social, environmental and
economic or "people, planet, profit."
In recent years, supply chains have emerged as a central focus of corporate social responsibility.
Company X's management might make extraordinary efforts to hire, foster and empower a
diverse workforce. They might offer generous paid maternity and paternity leave. They might
sponsor after-school programs in crime-affected neighborhoods, fund the clean-up of local river
systems and put pressure on elected officials to consider the needs of all citizens rather than
simply seeking political expediency. None of that would change the fact that they source their
raw materials, albeit indirectly, from outfits that use slave labor.

The diamond industry, for example, has come under fire for benefiting from injustices along its
supply chain. "Blood diamonds" or "conflict diamonds" are diamonds which have been sourced
from war zones, where rebel groups will often fund their campaigns through mining, frequently
using forcedoften childlabor. Such situations have arisen in Angola, Liberia, Ivory Coast,
Mozambique, Zimbabwe, the Democratic Republic of the Congo and Congo-Brazzaville.
International consumer and NGO pressure has caused diamond companies to scrutinize their
supply chain, and has reduced the number of diamonds reaching the market from conflict zones.

Today, a shift has occurred in the way people conceptualize corporate social responsibility. For
decades, corporate business models have been assumed to be necessarily harmful to certain
communities and resources. The intention was therefore to mitigate or reverse the damage
inherent in doing business. Now many entrepreneurs consider profit and social-environmental
benefit to be inextricable. Few tech startups pitch their ideas without describing how they will
change the world for the better. Social media platforms believe they will facilitate democracy
and the free exchange of information; renewable energy companies believe they will make
money by selling sustainable solutions; sharing economy apps believe they will cut down on the
waste and inefficiency of a post-war economy myopically geared toward the individual
consumer.

To be sure, some companies may engage in greenwashing, or feigning interest in corporate

responsibility. Companies may tout window-dressing contributions to "the greater good" while
engaging in morally questionable or inherently unsustainable conduct in the background.
Google's "don't be evil" slogan can seem hypocritical when viewed in terms of the company's
collaboration with repressive regimes, not to mention the questionable practice of compiling
reams of personal data on every customer.

Some think corporate social responsibility is an oxymoron. Others see corporate social
responsibility as a distraction of a different sort, that is, from the lawful pursuit of profits. To
them, a corporation's sole responsibility is to generate returns for its shareholders, not to try to
save the world or to fret over its own impact. Laws and regulations must be followed in all
jurisdictions in which the company operates, but management should not go beyond that, as that
could hurt its bottom line and violate its duties to the owners. Some counter that this concerned is
misplaced, since responsible initiatives can increase brand loyalty and therefore profits. This may
become increasingly true as ethical consumer culture gains wider acceptance.

A few cynical executives will inevitably try to portray themselves as responsible when they are
decidedly not. And for some critics, nothing short of a massive overhaul of the world system will
suffice. The truth is that many large corporations are devoting real time and money to
environmental sustainability programs and various social welfare initiatives. These activities
should be encouraged, but at the same time, continually questioned and reassessed.

In 2010, the International Organization for Standardization released ISO 26000, a set of
voluntary standards meant to help companies implement corporate social responsibility.

Name: AISHWARYA RAJ

Roll No.: BE/15164/12

Branch: ECE (7th sem)

Serial No.: 42