Assignment on CSR

DEEPAK.T MBA(BU) 3rd sem

Definition
The World Business Council for Sustainable Development (WBCSD): "Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large"

Meaning
Corporate social responsibility (CSR, also called corporate conscience, corporate

citizenship, social performance, or sustainable responsible business/ Responsible Business) is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. The goal of CSR is to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees,

communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders. The term "corporate social responsibility" came into common use in the late 1960s and early 1970s after many multinational corporations formed the term stakeholder, meaning those on whom an organization's activities have an impact. It was used to describe corporate owners beyond shareholders as a result of an influential book by Freeman, Strategic management: a stakeholder approach in 1984. Proponents argue that corporations make more long term profits by operating with a perspective, while critics argue that CSR distracts from the economic role of businesses. Others argue CSR is merely window-dressing, or an attempt to pre-empt the role of governments as a watchdog over powerful multinationals corporates.

CSR is titled to aid an organization's mission as well as a guide to what the company stands for and will uphold to its consumers. Development business ethics is one of the forms of applied ethics that examines ethical principles and moral or ethical problems that can arise in a business environment. ISO 26000 is the recognized international standard for CSR.

Functions of CSR
The function of corporate social responsibility is for corporations to hold themselves accountable for the ethical, legal, societal and ecological impacts of their business practices. Corporate social responsibility practices are self-monitoring, meaning there aren't laws requiring corporations to behave in a socially responsible manner. Rules regarding corporate responsibility practices are generally written into the corporate bylaws, mission statements andemployeehandbooks.

1. Ethical Function
Ethics are one of the most important aspects in corporate governance and therefore have an important function in corporate social responsibility. A company must have internal controls regarding the expected ethical behavior and consequences of unethical business practices of its top executives and employees. Behaving ethically makes the company as a whole accountable to its investors, shareholders and consumers. The ethical function of corporate social responsibility helps to prevent conflicts of interest between earning corporate profits and maintaining the integrity of the company and the goods and services it produces.

2. Legal Function
The legal function of corporate social responsibility is to encourage transparency in a company's business practices and financial reporting. Maintaining high levels

of legal business practices, such as adhering to Occupational Safety and Health Administration, or OSHA, regulations promotes goodwill toward employees. Maintaining high levels of legal financial practices maintains good will among investors, stakeholders and government financial-reporting regulatory agencies such as the Securities and Exchange Commission, or SEC.

3. Societal Function
The societal function of corporate social responsibility is to respect and invest in the communities in which the company operates. Companies are aware of how the production of their products affects the local community. These companies take necessary actions to diminish the negative impacts of factors such as increased traffic, noise and pollution for the communities in which they operate. The societal function of corporate social responsibility also includes companies reinvesting in the communities in which they operate, such as donating money to local charities.

4. Ecological Function
The ecological function of corporate social responsibility is to not only respect the immediate environment in which the company operates but also to respect the company's effect on the global environment. Companies are aware of the environmental impact the production of their products have on their local communities. In corporate social responsibility, these companies adhere to strict standards in an effort to diminish the negative impact of the environmental byproducts such as air and water pollution from the production of their products. Having such standards impacts both the local and global environments.

Benefits of CSR activities Carefully implemented CSR policies can help an organization:

Win new business Increase customer retention Develop and enhance relationships with customers, suppliers and networks Attract, retain and maintain a happy workforce and be an Employer of Choice Save money on energy and operating costs and manage risk Differentiate yourself from your competitors Generate innovation and learning and enhance your influence Improve your business reputation and standing Provide access to investment and funding opportunities Generate positive publicity and media opportunities due to media interest in ethical business activities

Soft befits Positive public image Retaining staff, enhancing employee morale Higher productivity, reduction in costs and increase in Profitability Positive engagement with government Fiscal benefits

In-house CSR activities treated as a business expense Contributions to registered Non Profit Organizations eligible for benefits under Indian Income tax laws (Sections 80G, 35AC)

Contributions to NGOs:

100% deduction if NGO promotes social and economic welfare

125% deduction if NGO engaged in research Sciences/social sciences and statistical research