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Quistion 1

Why the company should have a CSR (theory) and what is the purpose of CSR.

CSR initially arose caused by companies that are only concerned with profit only. But they fail to respond to such social responsibilities, conduct environmental destruction, not considering the surrounding environment. And do the oppression of workers. In short, the company stands diametrically with social life. In fact, basically, the founding company is inseparable of the role of community and social.

In essence, CSR is a social responsibility and concern of companies on the environment around them. This can be done in various fields such as education, economic, social, environmental concerns can even be done in the field of culture.

According to the World Bank, Corporate social responsibility consists of several main components: environmental protection, job security, human rights, and interaction with the communities, standards of business, market, economic and enterprise development, health protection, leadership and education, assistance humanitarian disaster.

The International Organization of Employers (the "IOE") defines CSR as "initiatives by companies voluntarily integrating social and environmental concerns in their business operations and in their interaction with their stakeholders, this definition recognizes:

First, that CSR is voluntary cooperate action and goes beyond simple legal compliance with domestic laws. Second, the definition views CSR as being a core aspect of business activities throughout a company and recognizes CSR as

a means of engagement with stakeholders in the various markets in which a company operates.CSR includes: (i) compliance with domestic laws, even if those laws are poorly enforced; (ii) adherence to international standards; and (iii) adoption of voluntary codes of conduct (library.findlaw.com).

Corporate social responsibility (CSR) promotes a vision of business accountability to a wide range of stakeholders, besides shareholders and investors. Key areas of concern are environmental protection and the wellbeing of employees, the community and civil society in general, both now and in the future.

The concept of CSR is underpinned by the idea that corporations can no longer act as isolated economic entities operating in detachment from broader society. Traditional views about competitiveness, survival and profitability are being swept away.

Some of the drivers pushing business towards CSR include:

1. The shrinking role of government

In the past, governments have relied on legislation and regulation to deliver social and environmental objectives in the business sector. Shrinking

government resources, coupled with a distrust of regulations, has led to the exploration of voluntary and non-regulatory initiatives instead.

2. Demands for greater disclosure

There is a growing demand for corporate disclosure from stakeholders, including customers, suppliers, employees, communities, investors, and activist organizations.

3. Increased customer interest

There is evidence that the ethical conduct of companies exerts a growing influence on the purchasing decisions of customers.

4. Growing investor pressure

Investors are changing the way they assess companies' performance, and are making decisions based on criteria that include ethical concerns.

5. Competitive labour markets

Employees are increasingly looking beyond paychecks and benefits, and seeking out employers whose philosophies and operating practices match their own principles. In order to hire and retain skilled employees, companies are being forced to improve working conditions.

6. Supplier relations

As stakeholders are becoming increasingly interested in business affairs, many companies are taking steps to ensure that their partners conduct themselves in a socially responsible manner. Some are introducing codes of conduct for their suppliers, to ensure that other companies' policies or practices do not tarnish their reputation.

In Indonesia there are regulations related to CSR, such as described in Article 74, Law on limited Company (PT) in years 2007, as follows:

1. The Company is conducting its business in the field and / or related to natural resources required to implement the Social and Environmental Responsibility. 2. Social and Environmental Responsibility as referred by verse (1) an obligation of the Company is budgeted and accounted for as expenses of the Company that implementation is done with due regard to propriety and fairness. 3. The Company is not carrying out the obligations referred to in verse (1) be sanctioned in accordance with the provisions of the legislation. 4. Further provisions on the Social and Environmental Responsibility regulated by Government Regulation

In addition, every company that wants to enter the global industry will automatically be bound by ISO 26000, which explains that social responsibility is part of the responsibility of the organization, as the impact of corporate decisions related to society, and environment.

ISO 26000 also mentions that there are 7 (seven) basic issues concerning social and environmental responsibility are:

Community Empowerment (Community Development) Customer Service Practice activities sound institutions Environment Employment Human Rights Organizational Governance

Question 2 2 company that companies that implement CSR programs. 1. BNI

As a sharing partner in Indonesian society, the Bank recognizes and responds to social needs, sponsoring worthwhile religious, community and educational projects, while working with local people to build their standard of living and financial security.

Education and Training BNI CSR activities in education and training programs include scholarships for elementary school, junior high and high school in all provinces, renovation of schools in all provinces, school painting programs, infrastructure to support education, such as a library, books, and a mobile library. BNI allocated a total of Rp 8.87 billion for education and training in 2007, up from the previous years figure of Rp 7.85 billion. Notable activities supported in education and training are: Education infrastructure in: Darunnaim Pontianak, West Kalimantan, Palu, Central Sulawesi, Jakarta (SMA N 8), West Java (YPI Attaqwa) and Yogyakarta (Madrasah muhammadiyah) Support for renovation of educational infrastructure in Maumere, East Nusa Tenggara & Bali, Garut, West Java (TK Al Quran Margacinta), West Java

(TK BKO W Purwaasih & PUSDA I Tasikmalaya), East Java (TK Muslimat IV Nidhomiyah Jombang), Jakarta (Kampus Al Azhar) Public Health care BNI played an active role in cooperating with institutions in the health sector aiming to raise public health and hygiene standards, while supporting a healthy and clean environment. BNI Support for health programmes in 2007 totalled Rp 6.32 billion, considerably higher than the 2006 figure of Rp 4.86 billion. Some notable BNI CSR activities in the Public Health are: Construction of a Posyandu (Integrated Health Services Post) in Pinrang Makassar, South Sulawesi Blood Donor Programs all over Indonesia Public Facilities and Infrastructure Public prosperity flourishes on a base of sound pre-Infrastructure and Infrastructure. BNI support included building general facilities: planning, implementing and supporting the development where needed, with a total of Rp 14.44 billion disbursed by BNI toward this sector Religious Affairs BNI sustained support for religious events, education and infrastructure, both directly and indirectly, as an aspect of quality of life. In implementation of Social Responsibility, religions are accorded a special place as determining factors in the future of humanity, based on the belief that all religions share the same basic principles of giving, bringing down peace and inspiring social justice.

Disaster Relief BNI always put top priority to helping disaster reflected community all across Indonesia. 2. PERTAMINA

Csr program implementation is a commitment from one of Pertamina as a national asset that has a role in community development. Pertamina CSR activities tailored to the needs of the community around the area of operations Pertamina. MISSION CSR implement a corporate commitment on Social and Environmental Responsibility (TJSL) that will provide added value to all stakeholders to support the company's growth. Implement corporate responsibility and social awareness for a sustainable community development. Objectives of pertamina CSR: In External is helping the Indonesian government to improve the Human Development Index (HDI) of Indonesia, through the implementation of programs that help achieve the millennium development targets or Millennium Development Goals (MDGs). In Internal is to build harmonious and conducive relationships with all stakeholders (stakeholders) to support achievement of corporate objectives particularly in building corporate reputation.

CSR programs implemented by Pertamina: 1. Pertamina and Education Pertamina CSR field of Education implemented a series of programs, among others, include: College Level Science Olympiad (OSN-PTI) 2010

OSN-PTI is the program that has the potential and contribution in improving the quality of higher education in Indonesia. The program is to encourage students explore the field of math, physics, chemistry and biology to be more serious and competent in their field. OSN-PTI 2010, initiated by Pertamina is one form of concern to the educational enterprise in Indonesia through a program of corporate social responsibility (CSR) Pertamina Scholarship (Scholarship).

1450 Awarded to Students in Greater Jakarta, 300 diploma students in Padang, Palembang, and Solo, Scholarship S-2 for 25 non-civil servants Lecturers, and 25 employees MEMR, 10 Student Scholarship best to pursue higher education at ITB, S2 Foreign Affairs, and Scholarships to 100 Students of Madrasah. Pertamina Competition.

Scientific competition program as a vehicle to hone and improve the quality of students actualize to science and research. The program is implemented through the National Science Olympiad - High school premises (OSN-PTI), which took place in 33 provinces throughout the country. OSN-PTI Pertamina is

intended to give birth to generations of smart and competitive, both on domestic and international scale. Pertamina and Health

CSR Pertamina for Public Health encompasses two main pillars: Improving Quality and Increasing Access to Health Services Public Health at the Health Service. In 2009, Pertamina CSR Health implemented a number of programs: Bright with Pertamina.

The program is intended to overcome vision problems and improving the health of the public eye. Implemented through the Programme eye examination and cataract surgery and the distribution of eyeglasses to thousands of elementary and junior high school students in the country. In the year 2009, Bright Program with Pertamina has distributed 11,000 reading glasses to students in need, to support education and eye health. Distribution of spectacles covers an area of Medan, Palembang, Plaju, Prabumulih, Bekasi, Indramayu, Cilacap, Surabaya, Malang, Makasar and Tomohon. While cataract surgery performed in Bekasi, Makasar, Balikpapan, Jakarta, Cilacap and Surabaya. Pertamina one accord for the health of mother and child. 2. Pertamina and Society Remodeling the Toilet

Pertamina's role in Helping the community through the development / Renovation of facilities and infrastructure the which the public is Also significant in the year 2008 it cans be seen from the Toilet renovasian in Cibubur BUPERTA as much as 46 units. This activity is cooperation with Pertamina and KOSTRAD

(Commando Forces Strategy) as a tribute to the community. In Addition to the KOSTRAD, Pertamina Also cooperate renovate 16 units in the Toilet Cibubur with PT.Waskita Karya (WIKA) as a form of State Owned Enterprises. 3. Pertamina and Environtment Pertamina's CSR programs in the field of Environmental Management is intended as a commitment within the framework of corporate responsibility towards the environment and nature conservation. CSR Program Environmental Affairs in 2009 includes a number of programs including: Green Planet.

Program tree planting and conservation of mangrove planting is carried out through direct action, the distribution of tree seedlings to residents in a number of community activities and environmental campaigns. In the year 2009 has distributed about 100,000 trees, in Jakarta and Pertamina's operation areas in Indonesia. Pertamina to plant trees in various areas, including critical land and urban areas. The species vary from productive trees such as mango, rambutan, star fruit, also mangroove and shade trees such as acacia and teak. Biopori.

In 2009, Pertamina also provide 12,300 units Biopori Bor, in Jakarta, Central Java, Yogyakarta, and Tangerang. Biopori drill is a tool for making holes biopori, which is useful to help speed water absorption and penginvestasian water in the soil. By making a hole biopori in each home, the ground water reserves will increase because of extensive water catchment reproduced. Biopori hole is also useful for organic landfill thus helping the process of soil enrichment.

Question 3 What is the benefit and looses if company Doing CSR program. According to Wikipedia at least 4 benefits to company which doing CSR program: Brand differentiation In increasingly competitive market competitiveness, CSR can provide a distinctive corporate image; good and ethical in the public eye on earnest turn create customer loyalty. The Body Shop and BP (with flag Beyond petroleum), Often regarded as having a unique image-related issues in environment. Human resources CSR programs cans help in recruiting new employees, especially those with high Qualifications. At the interview, prospective employees have WHO higher education and experience are Often asked about CSR and business ethics company, before They Decide to accept the offer. For a long staff, CSR also cans increase is the perception, reputation and Dedication in work. License to operate The company that runs the CSR can encourage government and the public to give permission to run a business, because they have meet the standards of operation and concern for the environment, and general public. Risk management Risk management is a central issue for every company. The company's reputation was built many years could collapse in an instant by Scandals

corruption, personal injury, or damage to the environment. Build culture of doing the right thing useful for companies to manage risks Business. Improve ability to attract and retain employees. The implementation of CSR programs that provide positive contribution to the welfare of the community will be able to build a sense of pride and ownership of the community in general and employees in particular.As a result, the company will be easier in a withdrawal of new employees and provide a sense of home for its employees. Although CSR program has many benefits for consumers, but for special case this program can be detrimental to the company. Basically, the program will not harm CSR for the company, but the company will incur a loss if it does not run properly CSR, CSR will be detrimental for companies that do not have a clear direction of the CSR program. CSR for the company is basically a cost. so if the CSR conducted without a clear program, it would only add cost to the company without giving more value to the company. Question 4 Competitive advantage obtained by the company after running the CSR program.

Companies will find it difficult if still using the old paradigm, which is chasing big profits without regard to conditions of people around, because it will trigger social envy of surrounding communities. Though the company may

explore the potential of local communities to become the company's social capital in order growing their business. Consumption of a product usually influenced by the bad image or product that received negative press coverage. Plus if there is protest from stakeholders. With the CSR actually benefit because the companies could create a good social environment and can foster a positive image of the company, surely this can improve the business climate for companies. Already many instances, companies that lose money and get a negative stamp of maysarakat for causing such harm and Buyat Lapindo case. But there are also companies in Indonesia that was already implemented CSR as Indofood with partnership programs, telecom with partnership and community development programs as well as Indonesia Power to the development of partnership and scholarship program. Company is not losing even a relatively large income generated. Continuous CSR program, it can be a competitive advantage and helps the Company in penetrating new markets to increase its market share. Continuous CSR programs can improve company image and reputation. Implement CSR programs are good and right will increase the company's image and reputation in the community, and this is very important for increasing business success. A good corporate reputation in society will automatically create a relationship between companies and society. Which in future will strengthen the company's position in fierce competition. one of the companies which have created a competitive advantage is Bentoel Malang. Bentoel ever managing the club Arema Malang. In addition, to managing Arema, Bentoel also been involved

in various community development efforts in the city that became his Headquarter of Malang. Very broad scope of activities ranging from helping the development of infrastructure, services clinic, managing the public attractions, support local government programs, and others. And interestingly, Bentoel see people of Malang and East Java are widely as one of its main stakeholders. Because it is a major stakeholder, Bentoel, have full responsibility to satisfy it through various community development activities. According to potter CSR activities can fix what he calls competitive context, which is the quality of business environment in which firms operate. In the case of Bentoel, it is clear that the efforts of corporate responsibility focus this company aimed to obtain the support of government and society of Malang and East Java, which became one of its main stakeholders. It's true philanthropy Bentoel broad social benefit, but keep in mind the economic-commercial benefits are also not small. These economic benefits from local government and community support to this company's business activities; increased

competitiveness resulting from the availability of qualified workers; easy it is to do a partnership, especially with local suppliers; a harmonious labor relationship without turbulence, also of course a good corporate image as a company that not only economic animal, but companies that have a heart. Companys that success in implementing CSR programs also will create a company a competitive advantage in attracting investors to invest. as we all know, one of the investment world trend today is the current investors would only invest in companies that care about the environment. so, if the CSR program related to

the environment goes well, it seemed to portray that the companies are environmentally friendly, And will further facilitate in attracting investors.

Question 5 The reason why companies are still running dishonest advertising In the business world, advertising is a force that can be used to attract consumers as much as possible. The main emphasis of the ad is to access information and promotions from the producer to the consumer. As a media, whether visual or oral form, ad type had a tendency to affect the general public to achieve the profit target. Every day we are inundated by ads that served the mass media, both print and electronic. As a result as if the effort to meet the needs of daily life for most of it is conditioned by advertising. Indeed, this is the actual role performed by the ad, namely as economic and social forces that inform consumers about the products of goods and services that can be used as satisfying the needs. Ad (advertising) is derived from the Greek, which means it is lead people to the idea. Advertising is a message or news that aims to inform the general public and the mob crowded about the products and or services owned by the company and ready to move right through the process of buying and selling. In etiquette and Advertising Procedures in Indonesia, the ad is any message about a product that is delivered through a media and financed by the initiators are known and addressed to some or all of society.

According Lotfon (2004) says that the ads are not only warm but also to be clear. For that needed special attention day after day to be able to provide the latest ad serving and in accordance with the context of people's attention in accordance with the target ad. In etiquette and advertising Indonesia Procedures drawn up and approved in 1978,there are etiquette of advertising, namely: Ads must be truthful, responsible, and not contrary to applicable law. Ads should not be offensive or degrading treatment and religion, customs, culture, ethnicity and class. Ads must be animated by the principle of fair competition. But many companies in Indonesia do not heed the case of advertising ethics described above. Companies in Indonesia at this time we can see sudaj bayank once run ads that are not ethical. This data we see from the ads that aired on television. As advertising undertaken by the telecommunication provider in Indonesia, they advertise their product as the best and brightest. And their ads if we examine in detail only provide false information to consumers Practices unethical advertising is still only done by companies in Indonesia can be caused by some thing. Including: They want to continue to build their brand image. We know that one purpose of advertising is to build brand image. Examples of this case as ad XL. They want to assert that their telephone tariff is the cheapest. Though the words "Cheapest" which used XL has already violated the Act (Act) No. 8 of 1999 on three main things that are general principle

Consumer Protection. If you have any proof cheapest XL, should be preached mathematically or using an independent agency to evaluate it. Another reason why companies are still running ads that tend to be unethical of them this is still not there strict rules about sanctions that will be given to those who are still stubborn display ads is unethical. Product-oriented company always creates ads that focus is specialty their products. they seemed to want show to consumers that their product is far better than competitors by making ads that show that their product is best, and criticizing other competitors products, these cases are also often carried out by telecommunications service providers in making an advertising

Question 6 The benefit and weaknesses if company shows unethical advertising

Actually there is no long-term benefits that will be received by the company if the display ads that are not ethical, perhaps in the short term and excessive advertising is unethical to provide benefits to the company. Some benefits may be obtained by companies such as : Increase in the number of sales

. Excessive advertising as practiced by companies such as that conducted by Indonesian telecommunications provider may be able to rapidly increase the number of buyers. Consumers who see these ads definitely have interest in using the product of these companies.

Can Guiding consumers to buy products.

In psychologically ad will influence consumers purchase an item. In Indonesia ads usually show and indicate to consumers that their product is the best product. This is of course to invite interested consumers to use the product. can introduce their products

Although ad that showing is unethical advertising, but for this company is still also has some benefits such as to introduce their newest product benefits to consumers, despite the fact that the product was not like in broadcast. Advertising that display by dishonestly have a lot of weakness and will incur losses. Some of the losses are: Creating a negative image of the ad

Ad which showing with excessive and unethical will create a negative image of advertising and consumer product in mind. unethical advertising will make the company a bad image in society. difficulties in marketing the products

Advertising is one form of communication, so that the target is to make people accept the message that we mean, either to just know or in relation to the formation of positive image. Will However, in another point of view ad is also a marketing tool so the main task is to market the product. For message ,sent successfully reach a population that much (the target auidience), then use the channel that became the community liaison using a variety of media possible. but if in case the delivery of consumer product manufacturers have lied to this tomatically caused difficulties for companies in marketing products to consumers.

Question 7 Why consumers in Indonesia still purchase products that broadcast dishonest advertising Related to the the influence of advertising on consumer behavior, has SurveyOne conduct a survey on the influence of advertising / promo to the decision consumers in buying brand / product. The survey involving 1800 respondent was an effect of advertising on the decision consumers in buying brand / product. As many as 37.6% of respondents states, the influence of advertising on purchase behavior is a large and highly large. Consumers still buy products from ads served dishonestly caused by several things including: Limited options products.

Consumers are also using the advertised product honestly is the limited variant of which is marketed product. This can be found on the user's prepaid card. when all providers in Indonesia perform dishonest practices in their advertising, consumers seemed to have no option, this resulted in consumers continue to use the product even though it was proven a lie in their advertising. ad has a considerable influence in consumer purchase decisions. Influence by other

Therefore typically use a person who is the idol of the community to become their advertising icons; this is very influential on adolescents product. Because teenagers Indonesia deeply affected by their idol. They do not care if the ad is ethical or not, they still buy the product.

References

Holy K. M. Kalangit, SH Konsep Corporate Social Responsibility, Pengaturan dan Pelaksanaannya di Indonesia. 2009 Suharto edi,corporate social responsibility: what is the benefit for corporate. SR2008/suharto@policy.hu Suyono Arif,MORALITAS IKLAN: MENGHINDARKAN KETERJEBAKAN PRODUSEN DARI PRAKTEK PERIKLANAN YANG KONTRA PRODUKTIF, Universitas Islam Indonesia http://www.iisd.org/business/issues/sr.aspx http://www.environicsinternational.com/ http://www.duniaesai.com/index.php/direktori/esai/50-lain-lain/389-csr-bukansekadar-promosi.html http://lama.tabloid-ponsel.com/review www.dunia essay.com www.csrindo.com www. BNI.co.id www.pertamina.co.id

CSR AND UNETHICAL ADVERTISING

PAPER

BY EDDO NANDA OKTARICI NIM. 84867

MANAGEMENT DUAL DEGREE FACULTY OF ECONOMIC

STATE UNIVERSITY OF PADANG 2011

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