A PROJECT ON

CORPORATE SOCIAL RESPONSIBILITY

IN THE SUBJECT
STRATEGIC MANAGEMENT
SUBMITTED BY

KHAIRE JYOTI UDAY

Roll No. 22

MCOM PART1 ACCOUNTANCY

UNDER THE GUIDANCE OF

MR. MANDAR KHANDEKAR

UNIVERSITY OF MUMBAI
FOR
MASTER OF COMMERCE PROGRAMME

SEMESTER II
In
ACCOUNTANCY

YEAR: 2015-16

SESS
L.S. RAHEJA COLLEGE OF ARTS & COMMERCE
JUHU ROAD, SANTACRUZ WEST,
MUMBAI 400054.

1
e-mail :lsraheja.mcom@gmail.com Tel. : 26609320 Website :
www.lsraheja.org.in

SADHANA EDUCATION SOCIETYS

L. S. RAHEJA COLLEGE OF ARTS AND COMMERCE
RE-ACCREDITED BY NAAC WITH A GRADE

Juhu Road, Santacruz (West), Mumbai 400 054.

DECLARATION BY THE STUDENT

I, KHAIRE JYOTI UDAY student of M Com Part-I Roll Number 22 hereby declare that the project for

the Paper STRATEGIC MANAGEMENT

CORPORATE SOCIAL RESPONSIBILITY submitted by me for Semester II during the Academic

Year 2015-16, is based on actual work carried out by me under the guidance and supervision of MR.

MANDAR KHANDEKAR.
I further state that this work is original and not submitted anywhere else for any examination.

Signature of Student

EVALUATION CERTIFICATE

This is to certify that the undersigned have assessed and evaluated the project on CORPORATE SOCIAL

RESPONSIBILITY submitted by KHAIRE JYOTI UDAY Student of M Com Part-I.

This project is original to the best of our knowledge and has been accepted for Internal Assessment.

Internal Examiner External Examiner Principal

2
 L. S. RAHEJA COLLEGE OF ARTS & COMMERCE
Internal Assessment: Project 40 Marks

Name of the Student Class Division Roll

Number.
First name : JYOTI
M COM A/C 22
Fathers Name: UDAY
PART I
Surname : KHAIRE

Subject: STRATEGIC MANAGEMENT

Topic for the Project: CORPORATE SOCIAL RESPONSIBILITY

Marks Awarded Signature

DOCUMENTATION
Internal Examiner
(Out of 10 Marks)
External Examiner
(Out of 10 Marks)

Presentation
(Out of 10 Marks)

Viva and Interaction

(Out of 10 Marks)

TOTAL MARKS (Out of 40)

3
 ACKNOWLEDGEMENTS

It is great pleasure for me to acknowledge the kind help and guideline received to me during the project
work. I was fortunate enough to get support from a large number of people to whom I shall always remain
grateful.

I would like to express my sincere gratitude to MR. MANDAR KHANDEKAR

For giving me this opportunity to undergo this lucrative project for her great guidance and advice on this
project, without which I will not be able to complete this project.

Signature

4
 INDEX
Sr. no. TITLE Pg. no.
Chapter 1
1 Introduction 1
2 Meaning 3
3 Characteristics 4
4 Advantage 6
5 Dis-advantages 8

Chapter 2
6 CSR: conceptual and theoretical framework 11
7 CSR: pyramid 13
8 CSR: dimensions 15
9 CSR: fundamental principles 16

Chapter 3
Toyota corporation
10 CSR: principles and policies 26
11 CSR: committee 29
12 CSR: policy position 30
13 CSR: organisation and structure 31
14 Summary 33
15 Conclusion 34
16 Bibliography 35

5
 INTRODUCTION

There seems to be an infinite number of definitions of CSR, ranging from the

simplistic to the complex, and a range of associated terms and ideas (some used

interchangeably), including corporate sustainability, corporate citizenship, corporate social

investment, the triple bottom line, socially responsible investment, business sustainability and

corporate governance (Prime Minister's Community Business Partnership). It has been

suggested that someresearchersdistort the definition of corporate social responsibility or

performance so much that the concept becomes morally vacuous, conceptually meaningless,

and utterly unrecognizable (Orlitzky 2005); or CSR may be regarded as the panacea which

will solve the global poverty gap, social exclusion and environmental degradation (Van

Marrewijk 2003).

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.

The study aims to detail the various corporate social responsibilities undertaken by Dr.

Reddys lab for the welfare of public. The concept of social license is an abstract one, the

interpretation of which varies. This is understandable in a corporate world grappling with

varying degrees of success with a range of concepts such as CSR, triple bottom line, and

6
socially responsible investment. However, it is critical that corporations understand and

embrace this relationship with the broader society in which they operate.

A popular explanation of the term CSR is the continuing commitment by businesses 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.

Over the last years an increasing number of companies worldwide started promoting their

business through Corporate Social Responsibility strategies because the customers, the public

and the investors expect them to act sustainable as well as responsible. In some cases, CSR is

a result of a variety of social, environmental and economic pressures while some other cases

many large corporations, it is primarily a strategy to divert attention away from the negative

social and environmental impacts of their lives. It enables the company to leverage its

products, employee strength, networks and profits and up to some extent to create a

sustainable change for marginalized communities

7
 MEANING

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

assess and take responsibility for the company's effects on environmental and social

wellbeing. The term generally applies to efforts that go beyond what may be required by

regulators or environmental protection groups.

CSR may also be referred to as "corporate citizenship" and can involve incurring short-

term costs that do not provide an immediate financial benefit to the company, but instead

promote positive social and environmental change.

8
 CHARACTERISTICS OF CORPORATE SOCIAL

RESPONSIBILITY

THE PUBLIC

CSR argues that corporations bear responsibility for the effect they have on other sectors of

society. The activities of corporations have an impact on individuals who don't work for them

and don't buy their products, though, for example, secondary economic impacts and

degradation of the natural environment. CSR acknowledges this, and attempts to make the

interactions between corporations and society positive and productive. This can be done by

9
consulting with neighbors and citizens who are affected by corporate activities and by

striving for transparency in corporate pursuits so that the public knows what is going on.

The Environment

Increased knowledge on the part of the public about declining resources, toxic waste and

global warming is compelling companies to make more efforts to be more environmentally

benign. The traditional view that the natural world is merely a source of materials and an

equally convenient dump for waste is being challenged from many quarters, and CSR is an

attempt by corporations to respond to these concerns. The sincerity of changes being made on

the part of corporations includes some serious efforts to achieve sustainability and other

efforts that are essentially "greenwashing," activities in which corporations put more effort

into appearing green than into actually being green.

Clients

CSR challenges the traditional wisdom that the interests and needs of the clients of a

corporation will be adequately protected by the market itself. Because the free market has

been severely compromised by a combination of government subsidies and manipulative

marketing practices, CSR attempts to remedy this situation by installing practices into

corporate life that will monitor the interaction between corporations and their clients in an

attempt to ensure that nobody is being exploited or cheated. Consumer protection can be

enforced by the government or voluntarily pursued by companies, the latter course has clear

advantages for the public relations of the company.

10
 Staf

Staff and employees of corporations have a right to expect fair pay, safe working conditions

and meaningful work. CSR is one aspect of a transformation in the corporate world that

attempts to overcome archaic views of workers as mere means to an end on the part of

shareholders. Particularly in less developed countries that are often the sites of intensive

resource extraction, the treatment of labor is frequently substandard. CSR is intended to

promote the rights of all workers and to ensure that corporations respect these rights and

make whatever changes are required to prevent the exploitation and mistreatment of labor.

ADVANTAGE OF CSR

Improved financial performance: A recent longitudinal Harvard University

study has found that stakeholder balanced companies showed four times

the growth rate and eight times employment growth when compared to

companies that focused only on shareholders and profit maximization.

Enhanced brand image & reputation: A company considered socially

responsible can benefit -both by its enhanced reputation with the public, as

well as its reputation within the business community, increasing a companys

ability to attract capital and trading partners. For example, a 1997 study by

two Boston College management professors found that excellent employee,

customer and community relations are more important than strong

11
 shareholder returns in earning corporations a place a Fortune magazines

annual Most Admired Companies list.

Increased sales and customer loyalty: A number of studies have suggested

a large and growing market for the products and services of companies

perceived to be socially responsible. While businesses must first satisfy

customers key buying criteria such as price, quality, appearance, taste,

availability, safety and convenience. Studies also show a growing desire to

buy based on other value-based criteria, such as sweatshop-free and child

labor-free clothing, products with smaller environmental impact, and

absence of genetically modified materials or ingredients.

Increased ability to attract and retain employees : Companies perceived to

have strong CSR commitments often find it easier to recruit employees,

particularly in tight labor markets. Retention levels may be higher too,

resulting in a reduction in turnover and associated recruitment and training

costs. Tight labor markets as well the trend toward multiple jobs for shorter

periods of time are challenging companies to develop ways to generate a

return on the consideration resources invested in recruiting, hiring, and

training.

Reduced regulatory oversight: Companies that demonstrate that they are

engaging in practices that satisfy and go beyond regulatory compliance

requirements are being given less scrutiny and freer region by both national

12
 and local government entities. In many cases, such companies are subject to

fewer inspections and paperwork, and may be given preference or fast-

track treatment when applying for operating permits, zoning variances or

other forms of governmental permission.

Easier access to capital: The Social Investment Forum reports that, in the

U.S. in 1999, there is more than $2 trillion in assets under management in

portfolios that use screens linked to ethics, the environment, and corporate

social responsibility. It is clear that companies addressing ethical, social, and

environmental responsibilities have rapidly growing access to capital that

might not otherwise have been available.

DISADVANTAGES OF CSR

Corporate Social Responsibility calls for organizations to consider the companys impact on

society and the environment as they conduct business. Though noble in principle and

profitable in some industries, CSR has a number of detractors who point out the

disadvantages of implementing socially responsible practices.

Shareholder Interests

Corporate social responsibility often requires changes to a number of processes, as well as

increased reporting. In many cases, businesses hire additional personnel to manage CSR

initiatives. These actions come at a cost, and opponents point out that the money spent on
13
CSR comes directly from shareholders pockets. Former investment banker and current

Tulane University professor Elaine Sternberg, one of the most vocal opponents of the effects

of CSR on shareholder profits, points out that CSR initiatives incur great cost with little

measurable return.

Corporate Reputation

While many businesses undertake CSR initiatives with the intent of bolstering their public

images, these initiatives can sometimes require a company to release information that has an

opposite effect. In 2003, for example, Coca-Cola released a damaging report about chemicals

found in its products as part of its CSR initiative. This report had an immediate short-term

negative effects on the company's revenue, according to a peer-reviewed article published in

the Utrecht Law Review, with sales dropping 40 percent in the two-week period following the

report.

Customer Cynicism

Some businesses recognize that socially responsible behaviour has a positive effect on their

customers opinions of the organization. After years of hearing how their favourite businesses

care about society and the environment, but seeing little obvious involvement from these

organizations, many customers have grown cynical of CSR reports. According to business

watchdog agency CorporateWatch.org, consumers often see CSR announcements as little

more than PR initiatives. For this reason, businesses often face a considerable obstacle

convincing their customers that their actions match their stated intentions.

14
 Competitive Disadvantages

Corporate social responsibility projects and initiatives require a shift in thinking for many

businesses, and some CSR processes can make the business more cumbersome to operate.

Wal-Mart subjects its suppliers to strict regulations on product quality and employee working

conditions, for example, which add production time and increase overhead for the suppliers.

Their competitors, meanwhile, can operate at lower costs and turn out products more quickly.

15
 Chapter2

CSR: CONCEPTUAL AND THEORETICAL FRAMEWORK

More recently CSR has become focused on corporate behavior and policies and values. CSR

activities are influenced and based on different elements.

Corporate social responsibility of any company is based on the five elements. From the

above figure a company should be good in innovation, means introducing new

products and services from time to time in the market to service the customers which

leads to competitive advantage in market.

Value creation is one of the primary targets for any company, because to create trust

worthiness in the market and in the minds of the shareholders, customers and investors

every company needs to generate the value from its operations.

16
 Today companies are not working for profit motive. To survive in the competitive

market every company need to focus in service rather than profit. That is profit through

service motive.
Community sense is, a company should be liable to the community and respects the

community needs and requirements and provides some good in terms of economic,

societal and educational issues.

Every company has to run on corporate governance, corporate governance is the frame

work of all the set of principles and procedures to protect the company from frauds and

other issues. For this the company need to abide the rules, laws and regulations framed

by the government.
Business is a process, its not a contract, and if it wants to survive in the market it

should consider the needs and wants of the various interest groups.

CSR: PYRAMID

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 Economic responsibilities

Business organizations are formed as economic entitys to provide quality goods and better

services to societal members. The profit motive was established as primary incentive for

entrepreneurship. Business organizations were treated as the basic economic unit in our

society. Thus its major 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 motive of getting

profits are transformed into a notion of maximum profits, and it 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 controversial considerations.

Legal responsibilities

Business should not be only for profit motive while serving the society. At the same time

business is expected to comply and should abide with the laws and regulations promulgated
18
by federal, state and local governments as the ground rules under which business must

operate. As partial fulfilment of the social contract between business and society, firms are

expected to pursue their economic missions with the framework of law. Legal responsivities

made businesses are having codified ethics and they co-exist with economic responsibilities

as fundamental precepts of the free enterprise system.

Ethical responsibilities

Al though the economic and legal responsibilities have ethical base about fair practice and

justice, ethical responsibilities embrace those activities and practices that are prohibited by

members of the society even though they are not codified in to law. Ethical responsibilities

frame 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. In other sense, ethical responsibilities rare viewed

as newly emerging values and norms society expects business to meet, even though such

values and norms may reflect a higher standard of performance than that currently required

by law.

Philanthropic responsibilities

Philanthropy encompasses those corporate actions that are in response to the society

expectation that businesses to be good corporate citizens. That is actively engaged in various

activities or programs to promote human welfare or goodwill. Examples of philanthropy

include business contribution of financial resources or executive time, such as contribution to

19
the arts, education, or the community. Therefore, philanthropy is more discretionary on the

businesses part even though there is always the societal expectation that businesses provide it.

The CSR of business entails the fulfilment of the firms economic, legal ethical and

philanthropic responsibilities. The CSR firm should strive to make a profitable value, obey

the law, and be ethical and good corporate citizen.

CSR: DIMENSIONS

Owners and shareholder s is the key people for success of any business organization, they are

the one who invest for an organization so it is essential to work together for the benefit of an

organization. Employees are the one who works for an organization so, maintaining a sound

environment in an organization is very much essential therefore they can work hard for the

benefit of their clients. Consumers are the key people for the success of any business

organization; organization should take some necessary feedback from them. It would help

them in the future for better performance. Organization cannot go beyond the rule of the

government so they should cooperate with government to follow the rules and perform their

activities.

Corporate social responsibility plays an important role to enhance the brand image and

reputation of the business firm. It (CSR) helps to improve sales and customer loyalty. It also

enables to attract and retain employees. The corporate social responsibility is deliberate to

provide each business with a far greater ability to create sustainable development. Corporate
20
social responsibility is linked with sustainability. The attraction towards corporate social

responsibility for many businesses is that it can help to increase sustainability without

creating any negative effects. In the present era corporate social responsibility has occupied

very important place in the plans and strategies of the business organizations.

CSR: FUNDAMENTAL PRINCIPLE

Each business entity should formulate a CSR policy to guide its strategic planning and

provide a roadmap for its CSR initiatives, which should be an integral part of overall

business policy and aligned with its business goals. The policy should be framed with the

participation of various level executives and should be approved by the Board.

Core Elements:

The CSR Policy should normally cover following core elements:

1. Care for all Stakeholders:

The companies should respect the interests of, and be responsive towards all

stakeholders, including shareholders, employees, customers, suppliers, project affected

people, society at large etc. and create value for all of them. They should develop

mechanism to actively engage with all stakeholders, inform them of inherent risks and

mitigate them where they occur.

21
2. Ethical functioning:

Their governance systems should be underpinned by Ethics, Transparency and

Accountability. They should not engage in business practices that are abusive, unfair, corrupt

or anti-competitive.

3. Respect for Workers' Rights and Welfare:

Companies should provide a workplace environment that is safe, hygienic and humane and

which upholds the dignity of employees. They should provide all employees with access to

training and development of necessary skills for career advancement, on an equal and non-

discriminatory basis. They should uphold the freedom of association and the effective

recognition of the right to collective bargaining of labour, have an effective grievance

redressal system, should not employ child or forced labour and provide and maintain equality

of opportunities without any discrimination on any grounds in recruitment and during

employment.

4. Respect for Human Rights:

Companies should respect human rights for all and avoid complicity with human rights

abuses by them or by third party.

5. Respect for Environment:

22
 Companies should take measures to check and prevent pollution; recycle, manage and

reduce waste, should manage natural resources in a sustainable manner and ensure optimal

use of resources like land and water, should proactively respond to the challenges of climate

change by adopting cleaner production methods, promoting efficient use of energy and

environment friendly technologies.

6. Activities for Social and Inclusive Development:

Depending upon their core competency and business interest, companies should

undertake activities for economic and social development of communities and

geographical areas, particularly in the vicinity of their operations. These could include:

education, skill building for livelihood of people, health, cultural and social welfare etc.,

particularly targeting at disadvantaged sections of society.

23
Implementation

Guidance:

Guidelines on CSR for Public

Enterprises

The Department of Public Enterprises had issued Guidelines on

Corporate Social

Responsibility (CSR) for CPSEs in April, 2010 which have been issued

formally to the Ministries/Departments for compliance in the Central Public

Sector Enterprises (CPSEs) under their administrative control. Following are

the salient features of guidelines on CSR & Sustainability:

(i) Corporate Social Responsibility and Sustainability is a companys

commitment to its stakeholders to conduct business in an economically,

socially and environmentally sustainable manner that is transparent and

ethical.

(ii) In the revised guidelines, CSR and Sustainability agenda is perceived to

be equally applicable to external and internal stakeholders, including the

employees of a company, and a companys corporate social responsibility is

expected to cover even its routine business operations and activities. CPSEs

are expected to formulate their policies with a balanced emphasis on all

aspects of CSR and Sustainability - equally with regard to their internal

operations, activities and processes, as well as in their response to

externalities.

(iii) In the revised guidelines CSR and Sustainable Development have been

clubbed

together in one set of guidelines for CSR and Sustainability because of

close linkage between the two concepts.

(iv) Public Sector enterprises are required to have a CSR and

Sustainability policy

approved by their respective Boards of Directors. The CSR and

Sustainability

activities undertaken by them under such a policy should also have the

approval/ratification of their Boards. Within the ambit of these

guidelines, it is the discretion of the Board of Directors of CPSEs to

decide on the CSR and Sustainability activities to be undertaken.

(v) The financial component/budgetary spend on CSR and Sustainability will

be based on the profitability of the company and shall be determined by the

Profit After Tax (PAT) on the company in the previous year.

All CPSEs shall strive to maximize their spending on CSR and Sustainability

activities and move towards the higher end of their slabs of budget

allocation.

(vi) Loss making companies are not mandated to earmark specific funding for

CSR and Sustainability activities. However, they must pursue CSR and

Sustainability policies by integrating them with their business plans, strategies

and processes, which do not involve any financial expenditure. They may also

collaborate with the profit making CPSEs and assist them in ingenious ways

without financial support in CSR and Sustainability activities.

(vii) Mandatory compliance with legal requirement/rules/regulations/laws in

letter and in spirit will be covered under CSR and Sustainability activity.

However, expenditure on such activities would not be covered by CSRs

financial component and would be considered as mainstream business spend.

(viii) The unutilized budget for CSR activities planned for a year will not

lapse and will, instead, be carried forward to the next year. However, the

CPSEs will have to disclose the reasons for not fully utilizing the budget

allocated for CSR and Sustainability activities planned for each year. The

unspent amount will have to be spend within the next two financial years,

failing which, it would be transferred to a Sustainability Fund to be created

 separately for CSR and Sustainability activities.

(ix) From amongst these beneficiaries of CSR and Sustainability spend

(financial

component) of a company, the stakeholders directly impacted by its operations

and activities can rightfully stake a claim for attention before others. Such

stakeholders are generally located in the periphery of commercial operations of

a company. The corporate social responsibility of a company towards these

stakeholders extends beyond its legal obligation to compensate for, and

ameliorate the impact of its commercial activities. For this reason, CPSEs must

accord priority to these

stakeholders and undertake CSR and Sustainability projects in the periphery of

its commercial operations on priority.

(x) CPSEs are expected to take initiative to promote welfare of employees and

labour

by addressing their concerns of safety, security, professional enrichment and

healthy working conditions, whether mandated or otherwise. However,

expenditure on mandated activities cannot qualify for CSRs financial

components.

(xi) Although CPSEs may select their CSR and Sustainability projects from a

vast range
of available options, priority should be accorded to activities pertaining to (i)

inclusive growth of society, with special attention to the development of

weaker sections of society and the backward districts of the country, and (ii)

environment sustainability. CSR and Sustainability initiatives should focus on

capacity building, skill development and infrastructural development for the

benefit of the marginalized and under privileged sections of the local

communities and also in the backward regions so that avenues are created for

their employment and income generation, and they also experience

empowerment and inclusion in the economic mainstream. Weaker sections

would include SC, ST, OBC, minorities, women and children, BPL families, old

and aged, physically challenged, etc.

(xii) It is mandatory for CPSEs to take up at least one major project for

development of a backward district as identified by the Planning Commission

for its Backward Region Grand Fund (BRGF) Scheme, and one major project

for environment sustainability. For Maharatna CPSEs, it is mandatory to take

up one more major project in either of the two categories.

(xiii) A Board level committee headed by either the Chairman and / or

Managing Director, on an Independent Director would assist the Board of

Directors to formulate CSR and Sustainability policies and oversee the

implementation of CSR and Sustainability projects/activities by the CPSE.

(xiv) There is emphasis on internalizing the philosophy and spirit of CSR and

Sustainability within the organizational culture and ethos. The philosophy and

spirit of corporate social responsibility and sustainability should get embedded in

the core values of all the CPSEs, be imbibed by the employees at all levels and

it should permeate into all the activities, processes, operations and transactions

of the enterprise. Corporate enterprises professing to behave responsibly are

expected to produce goods and services that are safe and healthy for the

consumers and the environment, with reduced cost to the company in the long

run.

(xv) 5 per cent of the annual budget for CSR and Sustainability activities has

to be earmarked for Emergency needs, which would include relief work

undertaken during natural calamities/disasters, and contributions towards

Prime Ministers / Chief Ministers Relief Funds.

(xvi) Ethical conduct of business lies at the core of responsible business. To

promote organizational integrity it is essential that premium is placed on

individual probity of employees; transparency in all activities, dealing and

transactions is encouraged; unethical, corrupt and anti-competition practices

are discouraged temptation of quick returns and marginal gains in business

through questionable means is resisted; and, position and situations that give

rise to possible conflict of interest are avoided.

(xvii) Sustainability reporting and disclosure of all CSR and Sustainability

activities undertaken by a CPSE is mandatory. By reporting transparently

and with accountability, public sector companies can gain and reinforce the

thrust of the stakeholders. This, in turn, would provide a powerful stimulus to

their CSR and Sustainability policies and agenda, and motivate them to pursue

them with greater vigor.

As per the above guidelines on CSR issued by the Department of

Public

Enterprises (DPE) in April, 2010, all profit making Central Public Sector

Enterprises (CPSEs), including Maharatna CPSEs are required to select CSR

activities which are aligned with their Business strategy and to undertake them

in a project mode. CPSEs are mandated to spend their funds on CSR projects

selected by them with the approval of their respective Boards. All profit making

CPSEs are required to allocate budget mandatorily through a Board Resolution

as percentage of net profit (previous year).

Loss making CPSEs are not mandated to earmark specific funding

for CSR activities. CSR Budget is fixed for each financial year and this fund

does not lapse. It is transferred to a CSR funds in which it accumulates.

Implementation of CSR activities of CPSEs is monitored by the administrative

Ministries/Departments of concerned CPSEs. States/UT/PSU-wise information

of CSR work undertaken by the CPSEs, including Maharatna CPSEs and the
number of persons benefited therefrom, is not maintained centrally in the

Department of Public Enterprises. Information furnished by Maharatna and

Navratna CPSEs on total funds allocated for CSR and the funds utilized for the

year 2010- 11 and 2011-12 is given in the Annexure-II. CPSEs are free to take

up CSR Projects for upliftment of weaker sections and backward districts.

 Chapter 3

TOYOTA CORPORATION

CSR PRINCIPLES & POLICIES: TOYOTA CORPORATION

Toyota Company was founded in the year 1867 to create automobiles, head

quartered in Aichi, Japan. The company is famous for its quality and customer

satisfaction.

CSR policy towards sustainable development

Toyota Motor Corporation take initiative to contribute to harmonious and

sustainable development of society and the earth through all business

activities that we carry out in each country and region based on our

guiding principles.
Toyota comply with local, national and international laws and regulations

as well as the spirit there of and the company conducts its business

operations with honesty and integrity.

In order to contribute to sustainable development, the company believe

that management interacting with its stakeholders as described below is

of considerable importance, and the company will endeavor to build and

maintain sound relationships with its stakeholders through open and fair

communication. Toyota expects its business partners to support this

initiative and act in accordance with it.

CSR policy towards customers
 Based on the company philosophy of customer first, it develops and

provide innovative, safe and outstanding high quality product and

services that meet a wide variety of customers demands to enrich the

lives of people around the world.

Company endeavors to protect the personal information of customers and

everyone else where the company is engaged in business with, in

accordance with the letter and spirit of each countrys privacy laws.
CSR policy towards employees
Company respects its employees and believe that the success of its

business is led by each individual creativity and good teamwork. The

company stimulates the personal growth of its employees.

Company supports equal employment opportunities, diversity and

inclusion for all employees and do not discriminate against them.

Company strive to provide fair working conditions and to maintain a safe

and healthy working environment for all the employees.

Company respect and honor the human rights of people involved in

business and in particular, do not use or tolerate any form of forced or

child labour.
Through communication and dialogue with employees, the company

build and share the value mutual trust and mutual responsibility and

work together for the success of employees and the company. Company

allows employees right to freely associate, or not to associate, complain

with the laws of the countries in which it operate.

Management of each company takes leadership in fostering a corporate

culture, and implementing policies, that promote ethical behavior

CSR policy towards business partners
 Company respect its business partners such as suppliers and dealers and

work with them through long term relationships to realize mutual growth

based on mutual trust.

Whenever company seek a new business partner, it is open to any and all

candidates, regardless of nationality or size, and evaluates them based on

their overall strength.

Company practice and maintains fair and free competition in accordance

with the letter and spirit of each countries competition laws.

CSR policy towards shareholders
Company strive to enhance corporate value while achieving a stable and

long term growth for the benefit of our shareholders.

Company provide its shareholders and investors with timely and fair

disclosure of information on operating results and financial conditions.

CSR policy towards global society and local communities
Environment- Company aim for growth that is in harmony with the

environment by seeking to minimize the environmental impact of

business operations, such as by working to reduce the effect of its

vehicles and operations on climate change and bio diversity. Toyota

strives to develop, establish and promote technologies enabling the

environment and economy to co exists harmoniously, and to build close

and cooperative relationships with a wide spectrum of individuals and

organizations involved in environmental preservation.

Community- company implements its philosophy of respect for people

by honoring the culture, customs, history and laws of each country and it

constantly search for safer, cleaner and superior technology that satisfy

the evolving needs of society for sustainable mobility and company do

 not tolerate bribery of or by any business partner, government agency or

public authority and maintain honest and fair relationships with

government agencies and public authorities.

Social contribution- Toyota actively promote and engage, both

individually and with partners, in social contribution activities that help

strengthen communities and contribute to the enrichment of society.

CSR COMMITTEE IN TOYOTA

Company has established 4 committees as sub committees under the main CSR

committee, which deliberates and handle important issues. Those committees

are

Corporate ethics committee: internal governance, observation of regulation,

constructing sound corporate culture

Product environment committee: progress with product development that

reliably addresses environmental regulations

Production environment committee: progress for production technology

development for reducing CO2 and fulfilling the enforcement of production

environment policy

Social contribution committee: fulfil social responsibility to the communities

or our employees and progress with social contribution activities.

The committee is deliberating and issuing reports on the issues listed below:

Planning global CSR policies and activities

Corporate Ethics, legal complaints.
 Significant issues concerning, risk management
Significant issues concerning, social contribution issues and new

environmental issues.

CSR POLICY POSITIONING: TOYOTA

BASIC PRINCIPLES (CSR DIRECTION)

TOYOTA AUTO BODY 2020

ACTION
GROUPACTION

VISION
CORPORATION
TOYOTACORPORATION

BODYGROUP

MID TERM MANAGEMENT

PLAN
POLICY
POLICY
AUTOBODY

COMPANY POLICY, FISCAL

TOYOTA

TOYOTAAUTO

YEAR POLICY,
DEPARTMENTAL POLICY
TOYOTA

DAILY BUSINESS

BASIC MAP
CSR department to promote Toyota CSR initiatives

In June 2010, the risk management committee was formed under the CSR

committee in response to quality issues, and will be chaired by a CSR

committee member responsible for risk management at vice president level.

Originally organised under the CSR and environmental affairs division, the CSR

office was transferred to the corporate planning division to achieve deeper

Companywide expansion of CSR initiatives.

TOYOTAS CSR ORGANIZATION AND STRUCTURES

Toyota established the Corporate Planning Meeting and Corporate Governance

Meeting as the bodies responsible for raising corporate value, and implements

activities from a long-term, company-wide perspective.

Corporate Planning Meeting and Corporate Governance Meeting

In October 2007, Toyota established the CSR (Corporate Social Responsibility)

Committee to coordinate and promote CSR activities. Through the CSR

Committee, we have ensured legal compliance, conducted social contribution

activities and promoted initiatives for environmental issues.

Since April 2015, organizational changes were made intended to incorporate

CSR into management and to raise corporate value. Discussions previously held

by the CSR Committee have been transferred to the Corporate Planning

Meeting and Corporate Governance Meeting. With oversight of the Board of

Directors, the Corporate Planning Meeting discusses growth strategies that

incorporate the value that Toyota provides with regard to a variety of social

issues, and promotes companywide CSR and corporate value enhancements

integrated with management. The Corporate Governance Meeting assesses

governance structures for realizing those strategies and supervises business

operations. Through these initiatives, we are working to sustainably raise

corporate value.

Corporate Planning Meeting

Basic corporate policies for contributing to the sustainable development

of society and the earth

Global CSR policies and activities

Sustainable growth strategies for corporate value enhancement

Social contribution, environmental issues and other social issues

Corporate Governance Meeting

Corporate ethics, compliance, and corporate governance

Significant issues concerning risk management

Toyota's CSR Structure (Corporate Value Enhancement)

SUMMARY

Corporate social responsibility is todays trending topic in corporate world.

Since business and society have been interdependent. This relationship between

business and society is appreciated like: corporate should work like a

honeybee, which take the nectar of a flower without the flower being losing its

shape and fragrance and provides honey for the wellbeing of the society. The

business history is replete with evidences to believe that business grows and

develops only where society thrives. On the contrary, business dies when the

society condemns and rejects it. No business can survive without societal

approval and sanction.

This report mainly focuses on CSR in perspective of TOYOTA Corporation

which is having its operations across the globe. The companys mission
statement is to sustain profitable growth by providing the best customer
experience and dealer support.

Business can help by defining itself by explaining what it is and what it isnt.
From this stand point:
The boundaries to corporate social responsibility are conceptual. A
companys primary responsibility is to its shareholders, to its owners.
The boundaries are ideological. A company is not a government. It is not
elected. It has no popular mandate. It mustnt confuse its role with the
role of others.
The boundaries are practical. A company has limited resources, limited
expertise and limited reach. A company is not a panacea, a cure at all.

The boundaries are influenced by self-interest. Business thrives if the society in

which it operates thrives. To neglect this is to put at risk the interests of

shareholders of the company.

Conclusion
Corporate social responsibility is todays trending topic in corporate world.

Since business and society have been interdependent. This relationship between

business and society is appreciated like: corporate should work like a

honeybee, which take the nectar of a flower without the flower being losing its

shape and fragrance and provides honey for the wellbeing of the society. The

business history is replete with evidences to believe that business grows and

develops only where society thrives. On the contrary, business dies when the

society condemns and rejects it. No business can survive without societal

approval and sanction.

Toyota clearly understands that the future of any organization is based on three

sub systems of complex global system nature, socio political and global

economy for their development and sustainability. Its global warming

prevention initiative which reduces co2 emission and prevents global warming

is highly prioritized, by restricting energy consumption in all areas of business

activities, in all stages of vehicle development and in design, production,

logistics, and more. The concept of eco driving is an environmentally

considered way of driving that reduces the amount of co2 emissions. The

company is taking care of all parties like shareholders by providing them value,

for employees by providing them healthy and safe work environment and

economic benefits, for society by providing quality and innovative products for

government by abiding the rules and regulations. Because of its CSR activities

Toyota has been selected as a constituent of the Dow Jones Sustainability

Indexes (DJSI) Asia pacific. And Toyota placed in global 100 most sustainable

corporations in the world.

Bibliography

www.toyota-global.com
One4allcsr.com
Business ethics and corporate social responsibility.

http://www.enterweb.org/ethics.htm
Scribd.com
Strategic management-manan prakashan