Globalization & CSR

Business has a responsibility to give back to the community

Globalization & CSR

Introduction
CSR is seen as a constant source of debate in the research of company laws and has attracted wide attention from scholars. It is at the forefront of strategic outlook of contemporary organizations of all kinds. It is associated with the conduct of corporations and whether corporations are being obligated a duty to stakeholders other than shareholders has been debated at various times. The CSR concept itself is not a new one and the social responsibilities of business in a market society has been discussed for decades, long before globalization became a catchword. However, globalization has been seen as a new phenomenon that affects our everyday life and the business life. New social networks with mutual dependences are created, thus leading to emerging new responsibilities. Community, work and capital are losing their home and locus and we are confronted with different cultures and life styles, whereas society is pluralized with common traditions, cultural values and social certainties emerge into a melting pot of various values and life styles. Furthermore, the CSR debate has largely revolved around the conduct of multinational corporations (MNCs) and other large private companies which have the ability to inuence domestic and international policy and the communities in which they operate. Proponents of CSR argue that the efficient functioning of global markets depends on socially responsible business conduct. According to the literatures, the solution to globalization problems is not just a matter of degree of engagement in CSR. It is rather suggested that a paradigm shift is necessary in the debate of CSR in the context of globalization. It is assumed that responsible rms operate within a more or less properly working politically framework of rules and regulations, dened by governmental authorities. However, it is argued that with globalization, the rules of the global framework have become fragile and incomplete; business firms have therefore an additional political responsibility to contribute to the development and proper working of global governance.

Globalization & CSR

Introduction of Globalization
Globalization has changed us into a company that searches the world, not just to sell or to source, but to find intellectual capital - the world's best talents and greatest ideas.
Jack Welch

Globalization is one of the most debated issues of the day. It is everywhere on TV, on websites, learning journals, labour meeting rooms and in organization's boardrooms. Remarkably, for so widely a used term, there does not appear to have a precisely agreed definition. One of the frequently used definitions is that globalization refers to the growing integration of societies across the world, it has taken many forms and it is difficult to discuss it in a general way. However most of the times the term is used to refer to the economic integration of the world markets through uninhibited trade and financial flows, as also through mutual exchange of technology and knowledge. Ideally, it also contains free inter-country movement of labour. Globalization has many meanings depending on the context and on the person who is talking about. Though the precise definition of globalization is still unavailable a few definitions are worth viewing:

Guy Brainbant says that: the process of globalization not only includes opening up of world trade, development of advanced means of communication, internationalization of financial markets, growing importance of MNCs, population migrations and more generally increased mobility of persons, goods, capital, data and ideas but also infections, diseases and pollution.

Globalization & CSR

Globalization is a process which entails the free movement of capital, goods, service s and labor around the world. Globalization is the massive control of the worlds economy by big business; this control transcends the boundaries of state and country. This transcendence across countries makes the subunits of the economy decompose and depend on the larger companies with a controlling interest in most of the capital within a given economy.

Another perspective of Globalization

The companies then form global constituents; they then have a control of a large volume of capital within many countries. This global control of capital comes through the deindustrialization of larger economic superpowers to third world countries for economic gains of these companies. Seeking lower wages and a large unskilled labor force, companies find it in third world countries. These are concrete examples of global companies seeking wage reductions on an international scale. This migration causes a deindustrialization for the larger countries and a industrialization in these developing countries. In a curious fashion they tend to confirm the collective view, long thought out of fashion, that the working classes would be kept at subsistence level. Reebok Shoes, and other footwear giants, are forever shifting their manufacturing base to lands of lower wage scales. (This is more easily done in that industry than would be possible in steel or automobile manufacturing.) From New England to the American South and on to the American colony of Puerto Rico, thence the Philippines, Taiwan, Korea and Thailand -- until the annual wages of the factory are less than the remuneration paid to the basketball star paid to advertise the final product. No, globalization does not mean workers of the world unite. Joan E. Spero, Under Secretary of State for Economic, Business and Agricultural Affairs stated the issue at hand was one of an alarming size, Capital now moves with surprising speed around the world. Each day over $1 trillion is traded in a global foreign exchange market that never closes. Technological advances in computers and telecommunications are paving the way for a new information-based economy. The capital within this globalized economy is not situated as one might have first assumed. The capital is concentrated within the upper management and within the boundaries of the company itself. The growth of the American economy in particular is in no way a direct reflection on the wages and standard of living for most American workers. Large companies set up manufacture of products in developing countries, exploiting the economic need that is present there.

Globalization & CSR

Then these companies take this product from this country and bring it back to places like the United States to be marketed. The economic benefits are then reaped by the company. The product was manufactured in this third world country where they were paid small wages and in horrible working conditions. Then the product is taken to the United States where is sold to the American public who played no role in the manufacture of the product thus their purchase in no way supports the circulation of capital within the United States economy and is given specifically to the company. The company then takes the capital and reinvests the money into the company and in foreign industry and the money is not recirculated within the economy that created it. This theory of capital flight is what produces the economic growth of the economy as a whole but the workers and middle class of that economy do not see that growth. The middle class is becoming less and less necessary within the globalized economy. The skilled worker is not necessary due to technological advancements and the movement of industry from the United States to developing countries. The developing countries are used for their large and willing unskilled worker population. The need for specific talent and training is becoming more and more necessary within countries such as the United States. This creates an international division of labor within the global economic market system.

Globalization & CSR

Globalization and its mechanism: Globalization is often defined as a combination of four major trends, including the expansion of: international trade financial flows (with FDI as the most important component of these flows) global communications (including transport) movements of people (immigration) The same four factors have been present in the so-called first wave of globalization of 1870-1945, as they were in the post World War II period through the 1970s and in the most recent wave, starting in the 1980s and consolidating in the decade of the 1990s. The causes and determinants of the globalization waves, their impact on the countries affected by them, and in the countries left in the margins of the process, have been studied from different perspectives, but the interactions among the different components have often been neglected. For example, in the exploding literature about the ongoing trends, most of the attention has been devoted to the international trade part of the process, and to the links between increased trade and growth, with countries being defined as globalizers depending on their share of world trade. But the four major trends in the globalization process have worked differently among different countries: financial flows and particularly FDI show a different regional and country pattern from that of international trade: some globalizing countries have increased their share of trade with little FDI (e.g. India) while others received much higher FDI (e.g. China). Also, some countries have received high levels of FDI in the 1990s as a share of GDP and shown little or no economic growth (e.g. Angola, Ecuador) The best way to deal with globalization is to be honest about it. Globalization brings opportunities but it also brings risks, even when poverty falling overall there can be regional increases about which society needs to be concerned. Especially for the developing countries, with their potential lack of recourses for up to date legislation, it is important to remember that not everything that is legal is right. Legality is often only the ethical minimum. Therefore where national standards are inadequate, the company would need to enforce their own higher standards and not take advantage of them. Business is part of our society and ethics has place in business as in any other part of social life

Globalization & CSR

History of Globalization:
Early History of Globalization: According to most scholars and researchers, it is the modern age which led to the origin of globalization. In this age, wide spread development took place in the field of infrastructure and connectivity. This led to more interaction between the nations and sharing of ideas, culture and tradition took place. All these put a direct impact on the process of globalization. In the economic scenario, more trade links started taking place between countries on a global scale which influenced global as well as domestic economies to a great extent. However, there are some scholars who point out that the origins of the history of globalization can be traced back to the ancient civilizations. Scholars who advocate this theory say that the example of the earliest forms of globalization is the trade links between the Sumerian civilization and the Indus Valley Civilization in third millennium B.C. In fact, after this age, there are numerous instances where trade links were established between various countries like India, Egypt, Greece, and Roman Empire and so on. There were regular business links between the Parthian Empire, Roman Empire and Han Dynasty. The popularity of the trade relations led to the development of various trade routes like Silk Road and so on. Globalization in the Middle ages: The Islamic period in the middle age era is an important period in the history of globalization. This was when the Jewish and the Muslim traders started going to various parts of the world to sell various items. This led to a blend of ideas, traditions and customs. In China, the first postal service was introduced and paper was invented. This led to better knowledge sharing. As more and more people started traveling to various countries across the world, it led to more communication between people and intermingling of languages. Explorers like Columbus and Vasco Da Gama sailed through the oceans in search of new countries and establish trade links with them or to make other countries their colonies. All these factors were a major cause for the development of the preglobalization era. The middle age period was the age of discovery. It was in this period that Africa and Eurasia engaged in cultural and economic exchange between them. Gradually, this led to the growth of colonies in various parts of Africa, Asia and Latin America. As a result, there was constant blend of the ideas, languages, rituals and customs between the natives and the foreign inhabitants. In fact, this

Globalization & CSR

system of colonization put a deep impact on agriculture, trade, ecology and culture on a global scale.

Globalization between the pre modern periods to modern periods

The industrial revolution in the 19th century was one of the major periods in the history of globalization. Due to the industrial revolution, there was a significant increase in the quantity and quality of the products. This led to higher exports and better trade and business relations. Due to better products and colonization, lots of countries across the world became the consumers of the European market. The phase of pre globalization perhaps came to an end after the First World War was fought. The war put a significant adverse effect on the economic scenario and it led to the Great Depression and gold standard crisis in the later part of the 1920s and early 1930s. Globalization in the modern era Globalization, in the modern sense of the term, came into existence after the Second World War. One of the main factors for this was the plan by the world leaders to break down the borders for fostering trade relations between nations. It was also in this period that major countries like India, Sri Lanka, Indonesia and some countries in South America gained independence. As a result, these countries too started having their own economic systems and made established trade relations with the rest of the world. The establishment of the United Nations Organization (UNO) was also a major step in this regard. Gradually, the economic scenario of the world strengthened and it led to better trade relations and communication. Some other factors which have put a positive impact on globalization are: Promotion of free commerce and trade Abolition of various double taxes, tariffs, and capital controls Reduction of transport cost and development of infrastructure Creation of global corporations Blend of culture and tradition across the countrAnother milestone in the history of globalization is the creation of the World Trade Organization which led to the growth of a uniform platform to settle trade and commercial disputes. According to economic surveys, the world exports improved significantly from 8.5% to around 16.2% due to globalization.

Globalization & CSR

Advantages of Globalization
The gains from globalization can be cited in the context of economic globalization: Trade in Goods and Services - From the theoretical aspect, international trade ensures allocating different resources and that has to be consistent. This specialization in the processes leads to better productivity. We all know from the economic perspective that restrictive trade barriers in emerging economies only impede growth. Emerging economies can reap the benefits of international trade if only all the resources are utilized in full potential. This is where the importance of reducing the tariff and non-tariff barriers crop up. Movement of Capital - The production base of a developing economy gets enhanced due to capital flows across countries. It was very much true in the 19th and 20th centuries. The mobility of capital only enabled savings for the entire globe and exhibited high investment potential. A country's economic growth doesn't, however, get barred by domestic savings. Foreign capital inflow does play an important role in the development of an economy. To be specific, capital flows either can take the form of foreign direct investment or portfolio investment. Developing countries would definitely prefer foreign direct investment because portfolio investment doesn't have a direct impact on the productive capacity expansion. Financial Flows - The capital market development is one of the major features of the process of globalization. We all know that the growth in capital and mobility of the foreign exchange markets enabled better transfer of resources cross borders and by large the global foreign exchange markets improved. It is mandatory to go in for the expansion of foreign exchange markets and thus facilitate international transfer of capital. The major example of such international transfer of funds led to the financial crisis - which has by now become a worrying phenomenon. Thus, globalization has the fair and rough share of its impacts and thus we can surely hope for more advancement in the global economy due to this process.

Globalization & CSR

Introduction of Corporate Social Responsibility

We have to choose between a global market driven only by calculations of short-term profit, and one which has human face. Between a world which condemns a quarter of the human race to starvation and squalor, and one which offers everyone at least a chance of prosperity, in a healthy environment. Between a selfish free-for-all in which we ignore the fate of the losers, and a future in which the strong and successful accept their responsibilities, showing global vision and leadership. Kofi Annan, UN Secretary-General January 1999

Corporate social responsibility is not a new concept in business. However, what is new is the shift in focus from making profits to meeting societal challenges. Giving a universal definition of corporate social responsibility is bit difficult as there is no common definition as such. However, there are few common threads that connect all the perspectives of CSR with each other; the dedication to serve the society being most important of them. Most ideal definition of corporate social responsibility (CSR) has been given by world business council for Sustained Development which says,

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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.

Thus, the meaning of CSR is twofold. On one hand, it exhibits the ethical behavior that an organization exhibits towards its internal and external stakeholders (customers as well as employees). On the other hand, it denotes the responsibility of an organization towards the environment and society in which it operates. CSR is also referred to as: corporate or business responsibility corporate or business citizenship community relations social responsibility.

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Globalization & CSR

History of CSR
The phrase Corporate Social Responsibility was coined in 1953 with the publication of Bowen's Social Responsibility of Businessmen (Corporate watch report, 2006). The evolution of CSR is as old as trade and business for any of corporation. Industrialization and impact of business on the society led to completely new vision. By 80s and 90s academic CSR was taken into discussion. The first company to implement CSR was Shell in 1998. (Corporate watch report, 2006) With well informed and educated general people it has become threat to the corporate and CSR is the solution to it. 1990 was CSR as a standard industry with companies like Price Warterhouse Copper and KPMG. CSR evolved beyond code of conduct and reporting it started taking initiative in NGOs, multi stakeholder, ethical trading. (Corporate watch report, 2006).

Benefits of corporate social responsibility

Corporate social responsibility offers manifold benefits both internally and externally to the companies involved in various projects. Externally, it creates a positive image amongst the people for its company and earns a special respect amongst its peers. It creates short term employment opportunities by taking various projects like construction of parks, schools, etc. Working with keeping in view the interests of local community bring a wide range of business benefits. For example, for many businesses, local customers are an important source of sales. By improving the reputation, one may find it easier to recruit employees and retain them. Businesses have a wider impact on the environment also. Plantation and cultivation activities taken up by Intel India are a step towards the same. Recycling used products also acts as a step towards minimizing wastes. Internally, it cultivates a sense of loyalty and trust amongst the employees in the organizational ethics. It improves operational efficiency of the company and is often accompanied by increases in quality and productivity. More importantly, it serves as a soothing diversion from the routine workplace practices and gives a feeling of satisfaction and a meaning to their lives. Employees feel more motivated and thus, are more productive. Apart from this, CSR helps ensure that the organization comply with regulatory requirements.

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CSR importance and its relevance today

The brands that will be big in the future will be those that tap into the social changes that are taking place. - Sir Michael Perry, Chairman of Centrica PLC

The amount of information available to customer about the company, product, brand globally through easy accessible and available mode of information; internet, communication, customer wants to buy product from trusted brand, employee want to work for the company who respect them, NGOs want to work with company who work with the same vision for the benefit of the people. As said by Peter Duker The 21st century will be the century of the social sector organization. The more economy, money, and information become global, the more community will matter. According to strategic corporate social responsibility by William B. Werther, David Chandler there is three trends which are going to have importance in future are: Increasing Affluence: Customer from elite level can afford to buy and pay more for premium brand but the poor customer might not be willing to pay so much for brand, instead they would prefer to spend their money on business which can take their business to much better level. Changing social expectation: Its natural that customer expect more from the company whose product they buy but with recent controversy and scandal of company has reduced the trust and confidence in the regulatory body and organization which manage the corporate.

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Globalization and free flow of Information: With growing trend of media and easy access to information through mobile, TV even the minor mistake of the company is brought in public in no time, this sometime fuels the activist group and likeminded people to spread message which can lead to situation like boycott of the product. There can be few key steps to implement CSR successfully: Better communication between top management and organization Appoint for CSR position. Good relationship with customer, supplier, stakeholder. Annual CSR audit. Feedback process

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CSR and Globalization

Corporate social responsibility is at least in its name and formal recognition a relatively recent phenomenon. Yet, owners and managers of firms have engaged in activities that we would now consider CSR almost from the beginning of the industrial revolution (Davis, Whitman and Zald, 2006). Until the 1990s, CSR was generally limited to corporate contribution. It is from the early 1990s that enlarged concepts and practices of CSR have come to the fore. What drove these radical changes in the conception and implementation of CSR? Scherer and Palazzo (2007) claim that, in a globalized world, it is necessary a shift toward a new politically enlarged concept of CSR. In fact, globalization is weakening the power of (national) political authorities to regulate the activities of corporations that globally expand their operations: for instance, globalization forces national governments into a race to the bottom in order to win the competition with other countries for attracting corporate investments. Thus, they reason that corporations should be understood as both economic and political actors. Davis, Whitman and Zald (2006) claim that, in addition to weak national boundaries that separate domestic from foreign companies, another crucial difference of the global competitive environment of the 21 st century is the weak distinction between activities and transactions occurring inside as opposed to outside a corporate entity: while companies are moving part of their operations from the status of in-house activities to purchased goods and services, they are at the same time forming a variety of close relationships with suppliers and partners. CSR largely arose out of commitments by companies to their employees and to communities where they were located, now corporations are led accountable for their supply chain. For example, after facing a consumer boycott following the news that its suppliers were exploiting child labour in several developing countries , Nike had to make substantial investments to promote improvements in the working conditions of its suppliers factories (Locke, 2006). Along this line, Amaeshi, Osuji and Nnodim (2006) argue that, even if a corporation is recognized as a legal person and the supply chain is a different entity so that the purchasing firm should not bear legally any responsibilities for the

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practices of its suppliers, there should be limits to responsibility. They argue that firms in a controlling position have the deontological duty to use power responsibly and influence the weaker parties by setting codes of conduct and standards. For example, Marks and Spencer decided to invest 200 million for social and environmental responsibility through collaboration with NGOs and suppliers (Stafford, 2007). Globalization has changed corporate social responsibility: the blurring of the boundaries between domestic and foreign companies as well as between in-house and outsourced activities has led to the view of the corporation as both an economic and political actor; as a consequence, multinational companies are being held responsible for their suppliers CSR practice by an increasingly politically awarded society. Moreover, there is a mutual influence between CSR and globalization: on one side, multinational companies have taken the role of the state and thus they should behave responsibly; on the other side, a corporate socially responsible behavior is necessary to protect this new role. Some questions remain unanswered. For example, are all multinationals converging to CSR? Or is responsible behavior just a differentiation strategy? The latter view could explain why companies, like WalMart, are still successful despite widespread charge of their irresponsible practices: by charging a lower price, these companies may simply compete differently. Moreover, there is no single commonly accepted definition of corporate social responsibility since CSR has local meanings. The clash over different local definitions can have practical consequences and it needs further investigation. For example, Nike Corporation was involved in a major scandal by paying workers in its Southeast Asian plants wages that were quite low but still in accordance with the local customs there. Elsewhere Nike paid substantially higher wages but again, wages that were in accordance with the local customs there. Thus, a scandal erupted that Nike was operating according to a double standard (Campbell, 2007). Further research remains necessary and this review hopes it can give suggestions about its directions. Globalization has changed corporate social responsibility, the boundaries between domestic and foreign industry and between in-house and out-houses activities which had led corporate to view from both political and economic view. On one side multinational company have taken the role of state and thus they should behave responsibly and on the other hand they need to have corporate social behavior in order to protect their image.

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Example: Wal-mart which sells it product at remarkable low price and at the same time its brand image is also protected. 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. In a recent survey by Environics International, more than one in five consumers reported having either rewarded or punished companies based on their perceived social performance. 4. Growing investor pressure Investors are changing the way they assess companies' performance, and are making decisions based on criteria that include ethical concerns. The Social Investment Forum reports that in the US in 1999, there was more than $2 trillion worth of assets invested in portfolios that used screens linked to the environment and social responsibility. A separate survey by Environics International revealed that more than a quarter of share-owning Americans took into account ethical considerations when buying and selling stocks.

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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. Some of the positive outcomes that can arise when businesses adopt a policy of social responsibility include: i. Company benefits:

Improved financial performance; Lower operating costs; Enhanced brand image and reputation; Increased sales and customer loyalty; Greater productivity and quality; More ability to attract and retain employees; Reduced regulatory oversight; Access to capital; Workforce diversity; Product safety and decreased liability. Benefits to the community and the general public: Charitable contributions; Employee volunteer programmes; Corporate involvement in community education, employment and homelessness programmes; Product safety and quality.

ii.

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iii.

Environmental benefits: Greater material recyclability; Better product durability and functionality; Greater use of renewable resources; Integration of environmental management tools into business plans, including life-cycle assessment and costing, environmental management standards, and eco-labeling.

Nevertheless, many companies continue to overlook CSR in the supply chain - for example by importing and retailing timber that has been illegally harvested. While governments can impose embargos and penalties on offending companies, the organizations themselves can make a commitment to sustainability by being more discerning in their choice of suppliers. The concept of corporate social responsibility is now firmly rooted on the global business agenda. But in order to move from theory to concrete action, many obstacles need to be overcome. A key challenge facing business is the need for more reliable indicators of progress in the field of CSR, along with the dissemination of CSR strategies. Transparency and dialogue can help to make a business appear more trustworthy, and push up the standards of other organizations at the same time.

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CSR Today
The concept of corporate social responsibility is now firmly rooted on the global business agenda. But in order to move from theory to concrete action, many obstacles need to be overcome. A key challenge facing business is the need for more reliable indicators of progress in the field of CSR, along with the dissemination of CSR strategies. Transparency and dialogue can help to make a business appear more trustworthy, and push up the standards of other organizations at the same time. The Global Reporting Initiative is an international, multi-stakeholder effort to create a common framework for voluntary reporting of the economic, environmental, and social impact of organization-level activity. Its mission is to improve the comparability and credibility of sustainability reporting worldwide. There is increasing recognition of the importance of public-private partnerships in CSR. Private enterprise is beginning to reach out to other members of civil society such as non-governmental organizations, the United Nations, and national and regional governments. An example of such a partnership is the 'Global Compact'. Launched in 1999 by the United Nations, the Global Compact is a coalition of large businesses, trade unions and environmental and human rights groups, brought together to share a dialogue on corporate social responsibility. The 'Working with NGOs' section offers some insights into the way businesses and lobby groups are working together to mutual benefit. Management training plays an important role in implementation of CSR strategies, and there is a growing number of conferences and courses available on the subject. Organizations that provide such training include Global Responsibility, Business for Social Responsibility and the Corporate Social Responsibility Forum.

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Case Study:

Kingfisher

Kingfisher is Europe's largest home improvement retailer, with 1,300 stores and 9,000 employees in 16 countries. Its operating companies include BCC (The Netherlands), Promarkt (Germany), Vanden Borre (Belgium), Darty (France), Comet (UK), B&Q (UK), Kotas (Turkey) and Rno-Dpt (Canada). In 2001 the group achieved a turnover of 12.1 billion ($17.5 billion) and a pre-tax profit of 606 million ($878 million). At the end of 2001, Kingfisher unveiled a group-wide initiative to monitor, improve and report on corporate social responsibility issues at the level of individual companies. The group has identified six ways in which it believes CSR can help its business: 1. Being ready for the future: identifying and managing issues which have the potential to affect the bottom line, either positively or negatively; 2. Respect for people: making Kingfisher companies attractive places to work, and thereby retaining skilled staff; 3. Stores that communities welcome: maximizing customer loyalty and improving morale among the workforce;

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4. Product innovation: identifying 'green' products that consumers will want to buy; 5. Saving costs: recognizing that many CSR initiatives are largely good housekeeping, such as reducing waste and retaining staff more effectively; 6. Brand: using innovation and excellence within individual operating companies to enhance the reputation of the group as a whole. Kingfisher has devised a 'ladder' model to simplify the assessment of CSR within operating companies. The ladder has four rungs. The bottom rung is 'Managing the risk', and the next rung up is 'Managing the issues', followed by 'Creating an opportunity' and finally 'Leadership' at the top. Company managers will have to decide where their businesses currently stand on each of 12 separate 'ladders', each representing a key issue such as waste, climate change or community relations (see below). They are also asked to identify where they would like eventually to be on the ladder, and to propose a realistic timescale. These action plans are due for completion by the end of April 2002, and a groupwide CSR report will be published in the spring of 2003. The CSR initiative will be co-ordinated by a nine-person 'social responsibility committee', which now includes include six members of the main board of directors as well as Kingfisher's head of social responsibility, Dr Alan Knight. A' social responsibility team', working closely with the committee, will provide coaching and advice to managers within individual operating companies, and will also be responsible for reporting progress both internally and to the outside world. One of the challenges for Kingfisher is to develop a strategy that is flexible enough to accommodate the differences between individual businesses yet strong enough to reflect a common vision. Kingfisher's definition of social responsibility entails 'making sure that in helping our customers improve their quality of life we do not destroy someone else's'. It adds: 'That might mean improving the working conditions in the factories that make the products we sell, using renewable energy sources, or making sure our equal opportunities policies are robust.' Group chief executive Sir Geoff Mulcahy says several of Kingfisher's subsidiaries have been active in CSR for some years already, particularly in terms of environmental stewardship. 'We believe it is now time to co-ordinate these activities more rigorously, at group level.'

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The 12 key issues identified by Kingfisher

1. The way we treat all our people is becoming more important than ever 2. Every product will soon be telling a story - and they will all need to be good 3. Communities will reject businesses who are not good neighbors 4. Our suppliers need to be cleaner and greener too 5. We are selling more wood, but it is becoming harder to find 6. Chemicals are causing increasing concern and controversy 7. We need to plan what happens when our customers want to dispose of the products they bought from us 8. Packaging waste will become a bigger financial waste 9. We will be judged by the way the people who make our products are treated 10. 11. Moving more stock is good - more traffic congestion is bad Climate change equals changes to homes - appliances will

change too 12. When we throw rubbish away it takes our profits with it

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Conclusion It can be concluded that in todays informative world where information are readily available to general public CSR has been an important part of any organization to be successful. Organization in present world cannot be successful without taking into account the social responsibility. CSR has been a vital component for any organization to have perpetual success and to create brand.

References:

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Final Assignment of GAF

Globalization & CSR

Presented to: Worthy Sir Sarwar Azhar Presented by: Ambreen Zaineb Ph.D 1st Semester Reg.No: 12003051012

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