CORPORATE SOCIAL

RESPONSIBILITY


Submitted to: Sir Abdullah

Submitted by:

Asma Siddiq

Zaib Mirza

Submitted on: 10
th
- June -2014




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Table of Contents
1. Introduction ........................................................................................................................................................................5
1.1. Evaluation of concept ............................................................................................................................................... 5
1.2. History ........................................................................................................................................................................... 5
2. What is Corporate Social Responsibility ..............................................................................................................6
2.1. Definition ........................................................................................................................................................................ 6
3. Need for Corporate Social Responsibility ...........................................................................................................8
4. Four pillars of CSR ...9
4.1. Focus .............................................................................................................................................................................. 9
4.2. Commitment ............................................................................................................................................................... 9
4.3. Integration ................................................................................................................................................................... 9
4.4 Transparency ................................................................................................................................................................ 9
5 Responsibilities of CSR ................................................................................................................................................ 10
5.1. Economic Responsibility .................................................................................................................................... 10
5.2. Legal responsibility ................................................................................................................................................ 10
5.3. Ethical Responsibility .......................................................................................................................................... 10
5.4. Philanthropic ........................................................................................................................................................... 11
6 CSR and Long-Term Business Success12
6.1. The importance of CSR in a competitive market12
6.2. Business Branding and Winning Customers ............................................................................................... 12
6.3. Recruitment and Human Resources ............................................................................................................... 12
6.4. Risk Management .................................................................................................................................................. 12
6.5. Government Support and Incentives .............................................................................................................. 13
7 Implementing CSR ......................................................................................................................................................... 13
8 How CSR is changing with Globalization ............................................................................................................ 14
8.1. Business Case ............................................................................................................................................................ 14
8.1.1. Improved Financial Performance ................................................................................................................ 14
8.1.2. Slide in Operating Costs 14
8.1.3. Brand Image and Reputation. 15
8.1.4. Growing Sales and Customer loyalty 15
8.1.5. Productivity and Quality Enhancement.. 15
8.1.6. Employee Retention ... 15
8.1.7. Less Scrutiny by Regulatory Bodies ............................................................................................................ 15
9. HOW DOES CSR FIGURE IN THE PAKISTAN CONTEXT ............................................................................... 16
9.1 CSR Practices in Pakistan . 16
10. Survey 17-18
11. Data Analysis ......... 19
12. Methodology 20
13. Conclusion . 20
14. RECOMMENDATION FOR CSR STRATEGY.. 21
15. References . 22
16. Appendix . 23

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Letter of Memo


Topic: Corporate Social Responsibility
Conclusion:
Corporate Social Responsibility is a difficult and elusive topic for companies to deal
with. It can often be very costly and yield benefits that are hard to quantify.
Perhaps this is one reason why companies, according to the survey, have put so much
focus on the internal improvements that can be made, such as improving corporate
governance and transparency. This could also explain why the most important
stakeholders, after customers, are the traditionally important employees and shareholders.
Recommendation:
There exists a dire need to improve the quality and quantity of corporate social
responsibility. A wide-ranging and multi -tiered awareness campaign needs to be
organized in order to make the various stakeholders and businesses understand the
necessity and advantages of CSR and remove any misconceptions related to it.
Authorization:
We would like to confer our heartiest thanks to our coordinator of Business
Communication Sir Abdullah for giving us the opportunity to expel and work in the field
of Business Communication. While preparing our term paper we got to have an in depth
knowledge of practical applications and definitely the things which we have learned will
undoubtedly help us in future, to analyze many processes going on in our economy.

We would also like to thank all those people who directly or indirectly helped us in
accomplishing this project.

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Literature Review


Competitiveness of corporate sector is a very broad multi-dimensional concept that
embraces numerous aspects such as price, quality, productivity, efficiency and
macro-economic environment as well as the ethical behavior and the social
responsiveness of a company. There are numerous studies on Corporate Social
Responsibility published by industry associations, consultancy organizations,
research bodies and peer-reviewed journals. In many countries the businessman
has been under incessant attack both by the government and the public. Many
reports such as Ambreen Waheeds report on RBI (responsive business initiatives)
(2005), the P. C. Mahalanobis Committee Report on the Distribution of Income
and Levels of Living (1964); K. C. Dasgupta Report on Monopolies (1965), Prof.
Hazaris Report on the Industrial
Licensing System (1966) and the Dutta Committee Report on Industrial Licensing
Policy (1969) are very critical of the unethical role of the Businessman today. In
this section, various studies on the Corporate Social Responsibility are reviewed,
under different heads pertaining to ethical behavior, namely, importance and need
for CSR, implementation.
















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1. Introduction
1.1 Evolution of the concept
The phrase Corporate Social Responsibility was
coined in 1953
with the publication of Bowen's 'Social Responsibility
of Businessmen', which posed the question 'what
responsibilities to society can business people be
reasonably expected to assume? Writing on the
subject in the 1960s expanded the definition,
suggesting that beyond legal obligations companies
had certain responsibilities to society. In 1984, the celebrated management consultant
Peter Drucker wrote about the imperative to turn social problems into economic
opportunities.
Throughout the 70s and 80s academic discussion of the concept of CSR grew, but the
first company to actually publish a social report was Ben and Jerry's in 1989, and the first
major company was Shell in 1998.
1.2 History
The CSR concept evolution started with the concerns related to the damage created by
business on environment and society at large by way of activities linked to their business
operation. Businesses are expected to clean up the mess they have generated to the
environment. Until the 1980s CSR was considered same as corporate philanthropy. The
current CSR concept started formulating in early 80s. In 1980s and 1990s events like
Shell spoiling the environment and violating the human rights in Nigeria started a new
wave of criticism which triggered a completely different thinking on CSR and hence
many CSR definitions emerged during this period. Customer expectations and demand
for clean and green companies have led to a number of benchmarks and guidelines,
such as the Sullivan Principles, the UN Global Compact etc. Hence, CSR has continued
to evolve rapidly over the last thirty years and companies now all over the world are
expected to engage in CSR activities to be recognized as a socially responsible company
that not only looks after the interests of itself but also after the interests of the society

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2. What is CSR?
CSR is a concept that frequently overlaps with similar
approaches such as corporate sustainability, corporate
sustainable development, corporate responsibility, and
corporate citizenship. While CSR does not have a
universal definition, many see it as the private sector's
way of integrating the economic, social, and
environmental imperatives of their activities. As such,
CSR closely resembles the business pursuit of
sustainable development and the triple bottom line. In
addition to integration into corporate structures and
processes, CSR also frequently involves creating innovative and proactive solutions to
societal and environmental challenges, as well as collaborating with both internal and
external stakeholders to improve CSR performance.
2.1Definition

According to the guidelines on Corporate Social Responsibility (CSR) designed by the
National Empowerment Foundation (NEF), Corporate Social Responsibility (CSR) is the
concept whereby companies act to balance their own economic growth with the
sustainable social and environmental development of their areas of operation. A company
performing highly in CSR is one that goes beyond compliance with the legal framework
to actively pursue positive impacts on local communities and its environmental footprint.
The companies argument for social responsibility is influence by different factors those
are:
Changed public expectations of business
Public image
Avoidance of government regulation
Business has the resources
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Prevention is better than cure






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3. Need for Corporate Social Responsibility

There are many situations where social responsibility of a business becomes necessary.
Few of these situations which show the need for Corporate Social Responsibility are
discussed below.

1. A societal approach to business is the contemporary business philosophy, which
demands business organizations to be responsive to the social problems.

2. As a result of globalization of business, global companies and MNCs operate in a big
way in their host countries. In order to establish a good corporate image, they include
social responsibility as a corporate objective.
Indigenous companies are forced to follow suit for maintaining their corporate identity.

3. In the terms and conditions of collaborations agreements, very often, social welfare
terms are included which necessitates the collaborating company to take up social
responsibility of business.

4. On the basis of legal provisions, companies have to concentrate on social problems.
For example an industrial organization in one country must obtain a certification from
Pollution Control Board.

5. Corporate donations of social welfare projects of approved NGOs are exempted from
income tax.

6. An organizations commitment to social responsibility creates a good corporate image,
and there by a better business environment.

7. Social responsibility of business enables the organization to improve its product
positioning and thereby improve its market share.

8. Very often situations demand due to natural calamities, accidents and so on.




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4. Four Pillars of Corporate Service Responsibility

4.1 Focus a companys CSR programs should properly address a specific concern
among the shareholders and the community. Pointing out the exact issue to be addressed
and the best plan of action to solve this problem will lead to better distribution of
resources and faster viewing of results. Objectives must be properly defined to facilitate
better resource allocation and avoid unwanted wavering of attention.
4.2 Commitment- long-term support for the companys CSR programs is required in
order to succeed in delivering the intended service. A business should prioritize its CSR
even in times of crisis and financial challenges. Making CSR a central part of a
companys business plan will build a culture of commitment and loyalty to the
stakeholders inside the firm and out to the community.
4.3 Integration- CSR should be embedded and integrated into the business system
and not treated as a bolt-on activity employed only when the need arises. A culture of
doing the right and ethical thing should be learned and practiced not only inside the
realm of the business but outside its four corners as well.
4.4 Transparency- a company should have a transparent, open and balanced
communication with its stakeholders. Allowing the community to know about the
ongoing activities, current plans and future endeavors of the company is necessary to
build a strong relationship with people. Building trust is very important in any business
and transparency forms a stronger trust coming from the employees, the customers and
the community.






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5.The Responsibilities of Corporate Social Responsibility

For CSR to be accepted by a conscientious business person, it should be framed in such a
way that the entire range of business responsibilities is embraced. It is suggested here that
four kinds of social responsibilities constitute total CSR: economic, legal, ethical, and
philanthropic. Furthermore, these four categories or components of CSR might be
depicted as a pyramid. To be sure, all of these kinds of responsibilities have always
existed to some extent. But it has only been in recent years that ethical and philanthropic
functions have taken a significant place. Each of these four categories deserves closer
consideration.
5.1 Economic Responsibilities
Historically, business organizations were created as economic entities designed to
provide goods and services to societal members. The profit motive was established as the
primary incentive for entrepreneurship. Before it was anything else, business organization
was the basic economic unit in our society. As such, its principal role was to produce
goods and services that consumers needed and wanted and to make an acceptable profit
in the process. At some point the idea of the profit motive got transformed into a notion
of maximum profits, and this has been an enduring value ever since. All other business
responsibilities are predicated upon the economic responsibility of the firm, because
without it the others become moot considerations.

5.2 Legal Responsibilities
Society has not only sanctioned business to operate according to the profit motive; at the
same time business is expected to comply with the laws and regulations promulgated by
governments as the ground rules under which business must operate. As a partial
fulfillment of the "social contract" between business and society firms are expected to
pursue their economic missions within the framework of the law. Legal responsibilities
reflect a view of codified ethics" in the sense that they embody basic notions of fair
operations as established by our lawmakers. They are depicted as the next layer on the
pyramid to portray their historical development, but they are appropriately seen as
coexisting with economic responsibilities as fundamental precepts of the free enterprise
system.

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5.3 Ethical Responsibilities
Although economic and legal responsibilities embody ethical norms about fairness and
justice, ethical responsibilities embrace those activities and practices that are expected or
prohibited by societal members even though they are not codified into law. Ethical
responsibilities embody those standards, norms, or expectations that reflect a concern for
what consumers, employees, shareholders, and the community regard as fair, just, or in
keeping with the respect or protection of stakeholders' moral rights.

5.4 Philanthropic Responsibilities
Philanthropy encompasses those corporate actions that are in response to societys
expectation that businesses be good corporate citizens. This includes actively engaging in
acts or programs to promote human welfare or goodwill. Examples of philanthropy
include business contributions to financial resources or executive time, such as
contributions to the arts, education, or the community. A loaned-executive program that
provides leadership for a communitys United Way campaign is one illustration of
philanthropy.


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6. CSR and Long-Term Business Success

6.1The importance of CSR in a competitive
market
Increasing pressures from the recent global financial
crisis and from several governments taking measures to
protect its environment and people have led to the
sudden rise of CSR. Because of the drastic fall in the
finance market and the increased competition between
companies, avant- garde businesses implemented CSR
to veer away from their competitors. Consumers value honesty, charity and competency
and often use it as a guide in looking for a business to support. And in a steadily
increasing competition between companies and global brands, embedding CSR in the
business model of a company produces positive results not only for the company and but
for the shareholders as well.
6.2 Business Branding and Winning Customers
In a competitive marketplace, companies look for ways to separate themselves from the
rest of the competition. By adopting CSR, building a unique brand and image in the
minds of the customers is further improved. Several major brands such as McDonalds
and Adidas spend not only years but decades to build a certain image in the eyes of
consumers. By practicing CSR through supporting sports events, headlining feeding
campaigns, creating charities and developing output-based community projects, both
McDonalds and Adidas in directly say to the stakeholders that for every hundred
dollars you give, we give ten dollars back. This mentality leads the customers to
consciously take part in the companys advocacy by supporting not only its products but
its CSR endeavors as well
6.3 Risk Management
A companys image takes years, sometimes even decades, to develop and market
effectively. Managing risks is an important corporate strategy employed by top-level
companies to avoid the possible damage to its brand and reputation. Sometimes, incidents
such as allegations of corruption, scandals, environmental accidents and intellectual
dishonesty can instantly ruin the customers trust. Creating diversion and maintaining a
good track record by adopting CSR can neutralize or reduce the damaged one by these
incidents.
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6.4 Recruitment and Human Resources
By gaining the trust of the community and the customers, a company with an embedded
CSR plan inside its business model attracts potential employees. A company that
proposes a clear and definite CSR plan to its employees and staff can also gain the
respect and dedication needed for a healthy workforce. CSR provides a unique brand of
service and identity in stilled in the culture of the business. Involving the workforce in
cause-oriented activities such as tree planting, fund raising, charity work and socially-
relevant activities can change the perception of the workforce regarding the company.
This direct involvement leads to loyalty and a sense of belongingness within the
companys work group.
6.5 Government Support and Incentives
Companies are keen to avoid any interference from the government in their businesses.
By doing voluntary steps and actions to promote environmental concern, better employer-
to- employee relations, equal opportunity and support to charity, companies gain not
only the support but also the trust of the government and the customers. Potential
customers can be transformed into loyal buyers if they know that the business is doing its
part in protecting the environment and helping people. Governments can also offer
incentives such as tax reduction and flexible working terms for companies maintaining a
good CSR implementation.


7. Implementing CSR
CSR is about common sense policies that represent a
means of integrating a complete social perspective into
all aspects of operations. The goal is to maximize true
value and benefit for an organization, while protecting the
huge investments corporations make today in their brands.
Key steps on the road to integrating CSR within all aspects of operations include:
Ensure the commitment of top management, and particularly the CEO, is
communicated throughout the organization
Appoint a CSR position at the strategic decision-making level to manage the
development of policy and its implementation
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Develop relationships with all stakeholder groups and interests (particular
relevant NGOs)
Incorporate a Social or CSR Audit within the companys annual report
Ensure the compensation system within the organization reinforces the CSR
policies that have been created, rather than merely the bottom-line
Any anonymous feedback/whistle-blower process, ideally overseen by an
external ombudsperson, will allow the CSR Officer to operate more effectively


8. How Is CSR Changing With Globalization


8.1 Business Case
Our research also focuses on different definitions and benchmarks being used globally in
major regions and at how business is being impacted in terms of their profitability and
productivity by implemented CSR practices.
The challenge is to create companies that have the vision and capacities to create socially
and environmentally responsible business models that can outperform competitors who
do not accept this challenge. Some of the proven benefits to business are discussed
below:

8.1.1 Improved Financial Performance
Several academic studies have shown the connection between socially responsible
business practices and positive financial performance. Its found out that unethical
corporate behavior directly affects the stock prices.

8.1.2 Slide in Operating Costs
Environmental stewardship and workplace safety initiatives help improve work place
practices, and processes, reduce wastes, and resource consumption. Thus they improve
productivity and reduce costs. Enhancement of social standards and benefits result in
employee retention which saves hiring and training cost and increase profit by improved
productivity through stable work force.

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8.1.3 Brand Image and Reputation
Companies or brands with good image and clearly defined strategy on corporate social
responsibility attract a large number of customers. A socially responsible organization
can benefit from its good reputation amongst its customers and is also recognized as a
respectful entity in their business community. Increasing their ability to attract investment
and trading partners. Saves revenue on advertising to restore brand image and increase
financial viability through increase share prices.

8.1.4 Growing Sales and Customer loyalty
The common concerns of the customers include price, quality, appearance, taste,
availability safety and convenience. CSR has created potential incentives for
entrepreneurs who can now cater a growing market segment of ethically motivated
consumers who are inclined to value based criteria. A good example from Pakistan is
Saga Sports, whose investments in community infrastructure and socially responsible
manufacturing made it the worlds largest soccer-ball manufacturing company despite a
business environment fraught with child labor allegations

8.1.5 Productivity and Quality Enhancement
Companies that invest in the working conditions and environmental friendly atmosphere
and also involve the employees in decision making tend to have an increase in
productivity.
Employee loyalty and dedication results in effective man hour utilization and hence
increase in quality.

8.1.6 Employee Retention
Companies perceived to have strong CSR commitments often find it easier to recruit
employees, particularly during tight labor markets. Retention levels may be higher, too,
resulting in a reduction in turnover and associated recruitment and training costs.

8.1.7 Less Scrutiny by Regulatory Bodies
Another important advantage observed in case of organizations practicing corporate
social responsibility is that they are less scrutinized by the regulatory authorities and are
given prompt treatments and extra benefits.


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9. HOW DOES CSR FIGURE IN THE PAKISTAN CONTEXT?

In the West CSR have become a touchstone of corporate trust and a predictor of business
longevity. In Pakistan, CSR is still a buzzword for most of the organizations and
individuals. Businesses are in a process of attaining the internationally accepted norms of
corporate social responsibility often either misunderstanding the true philosophy of CSR
or ignoring it. The multinationals in Pakistan are ahead of this wave, due to their
international linkages and are actually adopting the standards followed in their head-
offices in the developed countries. The birth of several NGOs working for CSR related
issues have expedited the awareness process. The pressure raised by their voice has
actually instigated the government and the businesses to develop strategies complying
with the international standards. Still there is a need to involve civil society and the
academia to make a powerful CSR strategy for Pakistan that can be implemented in
addition to a strong national body that can enforce the regulations.

9.1 CSR Practices in Pakistan

State of CSR in Pakistan is still in its infancy. Only few companies have an existing CSR
strategy and mostly they are the multinationals who follow their own CSR policies and
standards. Unfortunately, the local industry is either unaware of the benefits brought by
CSR or they feel that even if they do not adopt such policies, they are not in any state of
danger. The apathy of the local business sector was highlighted in the 1996 by the
breakdown of the local carpet industry and the threat of damage to Sialkots sports
industry. Labor exploitation, child labor, inadequate employee benefits and unsuitable
working environment were few areas pinpointed by the international eye. Though taking
the reactive measures, the joint effort of the industrialists saved the greater damage
foreseen, but not much has been done to take more proactive measures.

In 2003 a multi stakeholder forum Pakistan Compliance initiative was launched with
support from international buyers, the textile sector, and the Ministry of Commerce. A
draft national standard was developed for use as compliance standard approved by
Government to replace many International social and environment compliance standards
and buyers code of conduct. The result of this effort was inclusion of social compliance
in the trade policy and initiation of a project proposal by Ministry of Science and
Technology to European Union for encouraging SA800 implementation by subsidizing
consulting and implementation cost.
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In Pakistan CSR is frequently equated with corporate philanthropy, the terms being often
mistakenly used synonymously. Some consider CSR to be a simple compliance with law.
This creates a difficulty because top management is still uncertain about the true
meanings of CSR. This indicates the need for a mass awareness campaign supported by
the government, targeting businessmen, entrepreneurs and customers so that they are able
to appreciate CSR and also the general perils of non-compliance in todays environment.
Frequent and open discussion defining and understanding CSR, detailing its nature and
promoting and developing methodologies on how local businesses adopt and manage
their CSR obligations would be a useful first step.

Survey and Findings
Q: 1 Do you know what the term Corporate Social Responsibility means?







Q: 2 If knows, CSR means what does it mean?





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Q: 3 During the past years did any company ask you about CSR?








Q: 4 In the next year do you plan to spend more, less or the same amount on
products and services from socially responsible companies?










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Q: 5 Does your workplace employ any corporate responsibility practice?






10. Data Analysis
Ongoing debate on how countries are gaining competitive advantage using CSR as a
management tool reflects the importance this approach has for companies continuously
seeking the next formula for success. There is evidence that national strategies are being
developed to facilitate corporations overcome impediments that prevent them fulfilling
their corporate social responsibilities.
If CSR is to be regarded as an integral part of business decisionmaking, it merits a place
in a companys core mission, vision and value statements, succinctly related to its
business goals.
From the findings of this research what appears to be a priority is a clear and realistic
appreciation of the business case for CSR and the systemic advantages it bestows on the
day to day running of a company. SECPs recent efforts indicate that it may be best
placed to provide the leadership for achieving consensus on a National CSR Strategy
developed through a consultative process and the active involvement of the corporate and
citizens sectors, and the 0.patronage of government ministries directly working for trade
promotion.


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11. Methodology
Based on available data on internet, a universe of companies was identified, stratified and
randomized. Different articles were analyzed. Secondary data was collected from
different websites. Results of different surveys were identified and analyzed. A survey
instrument was designed in keeping with the data requirements reference to current
international CSR trends and issues and benchmarks.
This research is specific to the current state of corporate social responsibility that is being
practiced in different countries.
A detailed literature review was conducted to inform the context and the approaches
currently being followed and the type of organizational best practices relevant to
Pakistan.
In -depth qualitative analysis. Recommendations were prepared for taking action toward
a National CSR Strategy. The research findings and recommendations were presented for
validation to the leaders of the participating companies and other major stakeholders
through.
12. Conclusion

Corporate Social Responsibility is a difficult and elusive topic for companies to deal
with. It can often be very costly and yield benefits that are hard to quantify. Perhaps this
is one reason why companies, according to the survey, have put so much focus on the
internal improvements that can be made, such as improving corporate governance and
transparency. This could also explain why the most important stakeholders, after
customers, are the traditionally important employees and shareholders.
Theres also the issue of just what standard of corporate social responsibility should
companies use and how far companies should go to perform their responsibilities beyond
what the laws call for. The issue of what is the responsibility of a corporation is far
from being settled, and there is an unresolved argument over what corporate social
responsibility means. Companies face a plethora of options among the various standards,
guidelines, benchmarks and other proposed measures of corporate social responsibility.
One point that all can agree on is that corporate social responsibility is not a neutral topic.
There is a persistent debate about whether the corporate social responsibility movement
represents an unjustified intrusion into corporate affairs, and whether companies should
invest profits in their own corporate social responsibility
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13. RECOMMENDATION FOR CSR STRATEGY

There exists a dire need to improve the quality and quantity of corporate social
responsibility. A wide-ranging and multi -tiered awareness campaign needs to be
organized in order to make the various stakeholders and businesses understand the
necessity and advantages of CSR and remove any misconceptions related to it.

An effective regulatory authority is key to this strategic thrust, having the requisite
capacity to implement guidelines and monitor progress

Below are the areas of what this research has highlighted as areas for immediate
attention within the context of a CSR strategy. Each of these areas has the potential to
becoming a distinct hub of programmed activity or project:

1. Build Strong Conceptual Knowledge
2. Link CSR to Competitive Advantage
3. Enhance Effective Stakeholder Involvement
4. Harmonize and Standardize CSR Performance
5. Define and Promote Clear Incentives
6. Promote a Shared Strategic Vision
7. Promote Business Thinking for CSR Projects












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References
http://www.corporatewatch.org.uk/?q=node/2682%3F
http://infochangeindia.org/corporate-responsibility/backgrounder/corporate-social-
responsibility-background-a-perspective.html
http://www.slideshare.net/tiwrsaurabh/csr-ppt-10418775`
http://en.wikipedia.org/wiki/Corporate_social_responsibility
http://www.scribd.com/doc/19415805/Corporate-Social-Responsibility



























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Appendix

Q: 1 Do you know what the term corporate Social Responsibility means?

a. Yes
b. No
c. Dont Know

Q: 2 If knows, means what does it mean?

a.
b.
c.
d.

Q: 3 during past years did any company ask you about CSR?

a. Yes
b. No
c. Dont know


Q: 4 In the next year do you plan to buy less, more or the same amount on the products or
services of socially responsible company?

a. Spend more
b. Spend the same
c. Spend less
d. Dont know

Q: 5 Does your workplace employ any social responsibility practices?

a. Yes
b. No
c. Dont know