Corporate Social Responsibility Formatted Final Copy

8/4/2019 Corporate Social Responsibility Formatted Final Copy

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CORPORATE SOCIAL RESPONSIBILITY

Chapter 1: Introduction to Corporate Social Responsibility

Meaning of CSR:

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

corporate citizenship, social performance, or sustainable responsible business

is a form ofcorporate self-regulation integrated into a business model. CSR policy

functions as a built-in, self-regulating mechanism whereby business monitors and

ensures its active compliance with the spirit of the law, ethical standards, and

international norms. The goal of CSR is to embrace responsibility for the

company's actions and encourage a positive impact through its activities on the

environment, consumers, employees, communities, stakeholders and all other

members of the public sphere. Furthermore, CSR-focused businesses would

proactively promote the public interest (PI) by encouraging community growth and

development, and voluntarily eliminating practices that harm the public sphere,

regardless of legality. ISO 26000 is the recognized international standard for CSR

(currently a Draft International Standard). It is widely accepted that CSR adheres

to similar principles but with no formal act of legislation.

CSR is a concept that organizations have an obligation to consider the interests of

customers, employees, shareholders, communities, and ecological considerations in

all aspects of their operations. CSR is closely linked with the principles ofSustainable Development, which argues that enterprises should make decisions

based not only on financial factors such as profits or dividends, but also based on

the immediate and long term social and environmental consequences of their

activities , especially taking into consideration the needs of future generations. It is
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an integrated combination of policies, programs, education and practices which

extend throughout a corporations operations and into the communities in which

they operate, about how companies voluntarily manage the business processes to

produce an overall positive impact on society.

CSR can mean different things to different people:

For an employee it can mean fair wages, good working conditions etc.For a shareholder it can mean making transparent decisions.For suppliers it can mean receiving payment on time.For customers it can mean good quality products, delivery on time.For local communities it can mean taking measures to protect the

environment from pollution.

For NGOs it can mean disclosing business practices and performance onissues such as global warming, human rights etc.

For a company however CSR can simply be seen as responding to the needsand concerns of people who can influence the success of the company or

whom the company can impact through its business activities, processes and

products.

Definition:

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

Corporate Social Responsibility is achieving commercial success in ways that

honour ethical values and respect people, communities, and the natural

environment.


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Need for CSR:

CSR is pursued by businesses to balance their economic, environmental and social

objectives while at the same time addressing stakeholder expectations and

enhancing shareholder value. Over the past decade, CSR has risen in global

prominence and importance. More companies than ever before are engaged in

serious efforts to define and integrate CSR into all aspects of their business, with

their experiences being strengthened by a growing body of evidence that CSR has

a positive impact on business economic performance.

New voluntary CSR standards and performance measurement tools continue to

grow amidst the ongoing debate about whether and how to formalize legal CSR

requirements for companies. Stakeholders including shareholders, analysts,

regulators, activists, labour unions, employees, community organizations and the

news media, are asking companies to be accountable not only for their own

performance but for the performance of their entire supply chain. This is taking

place at the backdrop of a complex global economy with continuing economic,

social and environmental imbalance. Corporate governance scandals have

profoundly affected major capital markets worldwide and placed issues such as

ethics, accountability, and transparency firmly on the business, regulation and

policy agenda. Additionally, issues such as peace, sustainable development,

security, poverty alleviation, environmental quality and human rights are having a

profound effect on businesses and the business environment. While CSR does not

have a universal definition, many see it as a way of integrating the economic,social, and environmental necessity of business activities. Social issues with which

business corporations have been concerned since the 1960s may be divided into

three categories:


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(a)Social problems external to the corporation that were not caused by anydirect business action like poverty, drug abuse, decay of the cities and so on.

(b)The external impact of regular economic activities. For example pollutioncaused by production, the quality, safety, reliability of goods and services,

deception in marketing practices, the social impact of plant closures and

plant location belong to this category.

(c)Issues within the firm and tied up with regular economic activities, likeequal employment opportunity, occupational health and safety, the quality of

work life and industrial democracy.

The second and third categories are of increasing importance and are tied up

with the regular economic operations of business. Improved social performance

demands changes in these operations.

Corporate social responsibility ensures that corporations promote corporate

citizenship as part of their culture. Corporate social responsibility is about

businesses transforming their role from merely selling products and services

with a view to making profits and increasing their revenue to the development

of a society through their abilities of generating capital and investing it for

social empowerment.

Importance of Corporate Social Responsibility:

CSR is the commitment of businesses to behave ethically and to contribute to

sustainable economic development by working with all relevant stakeholders to

improve their lives in ways that are good for business, the sustainable development

agenda, and society at large. Social responsibility becomes an integral part of the

wealth creation process which if managed properly should enhance the

competitiveness of business and maximize the value of wealth creation to society.


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There is a growing body of data, quantitative and qualitative, that demonstrates

many benefits of socially responsible corporate performance which are explained

below:

1. The Iron Law of ResponsibilityThe institution of business exists only because it performs invaluable

services for society. Society gives business its license to exist and this can be

amended or revoked at any time if it fails to live up to societys expectations.

Therefore, if a business intends to retain its existing social role and power, it

must respond to societys needs constructively. This is known as the Iron

Law of Responsibility. In the long- run those who do not use power in a

manner that society considers responsible, will tend to lose it.

2. Achievement of long term objectivesBusinesses have been delegated economic power and have access to

productive resources of a community. They are obliged to use those

resources for the common good of society which delegated these to them to

generate more wealth for its betterment. Technical and creative resources ofa business if applied to social problems can help in resolving them. A

business organization, sensitive to community needs would, in its own self

interest, like to have a better community in which to conduct its business. To

achieve that, it would implement special programmes for social welfare. The

resulting benefits would be:

Decrease in crime, easier labour recruitment, reduced employee turnover and

absenteeism etc

A better society would produce a better environment in which the business

may gain long-term profit maximization.


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3. Enhanced brand image and reputationCustomers are drawn to brands and companies with good reputation. A

company considered socially responsible can benefit both from 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. Proactive CSR practices would lead to a favourable public image

resulting in various positive outcomes like consumer and retailer loyalty,

easier acceptance of new products and services, market access and

preferential allocation of investment funds.

4. Checks Government Regulation/ ControlsRegulation and control are costly to business, both in terms of energy and

money and restrict its flexibility of decision-making as failure of

businessmen to assume social responsibilities invites government to

intervene and regulate or control their activities. Businessmen have learnt

that once a government control is established, it is seldom removed even

though the warranting conditions change. If these are the facts, then the

prudent course for business is to understand the limit of its power and to use

that power responsibly, giving government no opportunity to intervene. By

their own socially responsible behavior, they can prevent government

intervention.

5. Helps minimize ecological damageThe effluents of many businesses damage the surrounding environment. By

their own socially responsible behavior, they can prevent government

intervention if they are proactive in recognizing their ecological

responsibility towards society. Companies recognize that a strategy for

corporate responsibility can play a valuable role not only in meeting the


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challenges of globalization by mitigating risks domestically and

internationally, but also in providing benefits beyond risk management.

6. Improved financial performanceBusiness and investment communities have long debated whether there is a

real connection between socially responsible business practices and positive

financial performance. In the last decade an increasing number of studies

have been conducted to examine this link.

7. Reduced operating costsSome CSR initiatives can reduce operating costs dramatically. For example,

many initiatives aimed at improving environmental performance, such as

reducing emissions of gases that contribute to global climate change or

reducing use of agrochemicals also lower costs. Many recycling initiatives

cut waste-disposal costs and generate income by selling recycled materials.

In human resources arena, concepts such as flexible scheduling that result in

reduced absenteeism and increased retention of employees often save costs

through increased productivity and reduction of hiring and training costs.

8. Increased sales and customer loyaltyA 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, availability, safety and convenience, studies also show a

growing desire to buy because of other value based criteria such as

environment friendly products.

9. Increased productivity and quality of work lifeEfforts to improve working conditions lessen environmental impacts or

increase employees involvement in decision making often lead to increased

productivity and reduced error rate in a company. For example, companies


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that improve working conditions and labour practices among their suppliers

often experience a decrease in merchandise that is defective or cant be sold.

10.Increased ability to attract and retain employeesCompanies perceived to have strong CSR commitments often find it easier

to recruit and retain employees, resulting in a reduction in turnover and

associated recruitment and training costs. Even in difficult labour markets,

potential employees evaluate a companys CSR performance to determine

whether it the right fit.

CSR Mechanism:

Some companies have established committees that are specifically responsible for

identifying and addressing social or environmental issues or have broadened the

scope of more traditional standing committees to include responsibility for CSR,

while others have strategically appointed directors on the board based on the

unique expertise and experience they bring on specific issues, who then serve as

advisors to others on the board.

Companies implement CSR by putting in place internal management systems that

generally promote:

Adherence to labour standards by them as well as their businesspartners.

Respect for human rights

Protection of the local and global environment Reducing negative impacts of operating in conflict zones Avoiding bribery and corruption and Consumers protection


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Each company differs in how it implements CSR. The distinction depends on

factors such as the companys size, sector, culture and the commitment of its

leadership. Some companies focus on a single area- the environment, for example

or community economic development while others aim to integrate CSR vision

into all aspects of their operations.

Below are some key strategies companies can use while implementing CSR

policies and practices:

Mission, vision and values statements:

If CSR is to be regarded as an integral part of business decision making, it merits a

prominent place in a companys core mission, vision and value documents. These

are simple but important statements that succinctly state a companys goals and

aspirations. They also provide insight into a companys values, culture and

strategies for achieving its aims. The mission or vision of a socially responsible

business frequently refers to a purpose beyond making a profit or being the

best, and specifies that it will engage in ethical and responsible business practices,

and seek to make decisions that balance the needs of key stakeholders, including

shareholders/owners, employees, customers, suppliers and the natural environment.

Cultural values:

Many companies now understand that CSR cannot flourish in an environment

where innovation and independent thinking are not welcome, In a similar vein,

there must also be a commitment to close the gap between what the company says

it stands for and the reality of its actual performance. Goals and aspirations should

be ambitious, but care should be exercised so that the company says what it means

and means what it says.


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Management structures:

The goal of a CSR management system is to integrate corporate responsibility

concerns into a companys values, culture, operations and business decisions at all

levels of the organizations. Although there is no single universally accepted

method for designing CSR management structure, many companies have taken

steps to create such a system by assigning responsibility to a committee of the

Board, an executive level committee or a single executive or group of executives

who can identify key CSR issues and evaluate and develop a structure for long

term integration of social values throughout the organization. It is vital to design a

structure that aligns the companys mission, size, sector, culture, business

structure, geographic locations, risk areas and level of CSR commitment.

Strategic planning:

A number of companies are beginning to incorporate CSR into their long term

planning processes, identifying specific goals and measures of progress or

requiring CSR impact statements for any major company proposals.

General accountability

In some companies, in addition to the efforts to establish corporate and divisional

social responsibility goals, there are attempts to address these issues in the job

description and performance objectives of employees. This helps everyone

understand how each person can contribute to the companys overall efforts to be

socially responsible.

Employee Recognition and Rewards:

Most companies understand that employees tend to engage in behaviour that is

recognized and rewarded and avoid behaviour that is penalized. The system of


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recruiting, hiring, promoting, compensating and publicly honouring employees can

be designed to promote CSR.

Communications, Education and Training:

Many companies now recognize that employees cannot be held accountable for

irresponsible behaviour if they are not aware of its importance and provided with

the information and tools they need to act appropriately in carrying out their job

requirements. These companies are emphasizing the importance of CSR internally,

have a code of conduct, provide managers and employees with adequate decision

making processes that help them achieve responsible outcomes.

CSR Reporting:

Many companies have come to understand the value of assessing their social and

environmental performance on a regular basis. Annual CSR reports can build trust

among stakeholders and encourage internal efforts to comply with a companys

CSR goals. The best reports demonstrate CEO and senior leadership support,

provide verified performance data for social, environmental and economic

performance indicators, share good and bad news, set goals for improvement,

include stakeholder feedback, and many times are verified by outside auditors.


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Chapter 2 : Corporate social responsibilityits evolution:

The concept of CSR in india is not a new concept though the term may be .the

process has being followed since ancient times albeit informally. Philosophers like

Kautilya and pre- Christians era philosophers in the west preached and promoted

ethical principles for doing business. The concept of helping the poor and

disadvantaged was sited in much of the ancient literature.

The idea is also supported by several religions whose text have intertwined it with

religious laws.Zakaat,followed by muslims, is a donations from ones earnings ,

which is specifically given to poor and the disadvantaged. Similarly hindus

followed the principles ofDharmada and Sikhs theDaashaant.

In the global context , the history of the concept can be traced back to 18th

century

when in the 1790s England witness 1st

large scale consumer boycott over the issue

of slave harvested sugar , which finally forced importers to have free labour

sourcing.

In india ,in the pr- independence era , the business which pioneered

industrialization along with fighting for independence also followed the same idea.

They put the idea into action by setting up charitable foundations , educational and

health care institutions and trust for community development . the donations either

monetary or in kind were sporadic activities of charities or philanthropy that

were taken out of personal savings which neither belongs to the shareholders nor

did it constitute an integral part of business.

The term CSR itself came in to common use in the early 1970s although it was

seldom abbreviated . by the late 1990s, the concept was fully recognized ; people

and institutions across all sections of society started supporting it . this can be


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corroborated by the fact that while in 1977 less than half of the Fortune 500 firms

even mention CSR in their annual report , by the end of 1990s approximately 90

percent Fortune 500 firms embraced CSR as an essential element in their

organizational goals and actively promoted their CSR activities in annual reports.

Concept of CSR:

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 .

The rise of the CSR industry:

The 1990s saw CSR become an established industry with major companies such as

PricewaterhouseCoopers, KPMG and BursonMarsteller entering the CSR service

provision market. New consultancies, such as SustainAbility (1989), Business for

Social Responsibility (1992) and CSR Europe(1996), also sprang up over this

period, all promising to protect industry from protest. Specialist university research

centres and the CSR conferencing circuit also emerged in the late 90s. Similarly

CSR evolved beyond simple codes of conduct and reporting to include more

extensive dialogue with stakeholders, NGO engagement and 'multistakeholder

initiatives' such as the Ethical Trading Initiative (1993) and the Forest Stewardship


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Council (1998), bringing together companies, NGOs and in some cases

governments. Similarly trade unions began negotiating and signing global

framework agreements.


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Chapter 3 : Arguments against Corporate Social

Responsibility

3(a) Arguments in favour corporate social responsibility:

Improved financial performance:There is known to be a positive correlation between socially responsible

business practices and financial performance. It has been found that

stakeholders balanced company perform 4 times growth rate and 8 times

employment growth compared to companies that are shareholder focused . (

Harvard university study)

Reduced operating costs:Some initiative like the environmentally and workplace oriented initiative

can reduce dramatically cutting waste and inefficiency and improving

productivity. For example, many initiative aimed at reducing emission of

gases that contribute to global climate change also increase energy

efficiency reducing utility bill. In Human resource area , worklife programs

result in reduced absenteeism and higher retention of employees , saves

costs through increased productivity and reduction in the hiring and training

costs.

Enhanced brand image and reputation:Customers are drawn to brands and companies that have good reputation.

Companies that are considered socially responsible will benefit from its

enhanced reputation in the public as well as reputation within the business

community thereby attracting capital and trading partners.


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Increased sales and customer loyalty:Studies suggest that there are large and growing market of customers for the

products and services of companies that are perceived as socially

responsible. Though the business 1st

caters to satisfy customers buying

criteria (prices, quality, appearance, test , availability ). There is also a

growing desire to buy based on other values like sweet shop free , child

labour free , etc.

Increased productivity and quality:Companies effort that result in improved working conditions or a few

environmental impacts or increased employee involvement in decision

making, etc . often lead to increased productivity and reduced error rate.

Increase ability to attract and retain employees:Companies that perceived to have strong commitment find it easier to recruit

employees especially during tight labour market. These companies show

high retention rates resulting in a reduction in turnover and associated cost

of training and recruitment.

Reduced regulatory oversight:Companies that engage in legal practices and satisfy the regulatory

compliance are given less scrutiny and considerable freedom by regulatory

authority,

Access capital:Companies that address the legal, ethical and environment have easy access

to capital. Financial institutions and banks readily provide the funds when

required. These companies also enjoy good standing in the market to obtain

funds at reasonable rates.


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3(b) Arguments against corporate social responsibility:

Lower economic efficiency and profits:According to one argument , any time a business uses some of its resources

for social purposes, it risk lowering its efficiency. For example , if a firm

decides to keep a unproductive factory open because it wants to avoid the

negative social effects that a plant closing would have on the local

community and its workers, its overall financial performance ,may suffer.

The firms costs may be higher than necessary , resulting in lower profits.

Stockholders may receive a lower return on their investment, making it more

difficult for the firm to acquire additional capital for future growth . in the

long run , the firms efforts to be socially responsible by keeping the factory

open may backfire.

Business managers and economists that the business of business is business.

Business are told to concentrate on producing goods and services and selling

them at the lowest competitive price. When these economic tasks are done ,

the most efficient firms survive. Even though CSR is well intended , such

social activities lower business efficiency , thereby depriving society of

higher levels of economic productions needed to maintain everyones

standard of living .

Imposes unequal costs among competitors :Another argument against social responsibility is that it imposes greater

costs on more responsible companies, putting them at a competitive

disadvantage. Consider the following scenario

A manufacture operating in multiple countries wishes to be more socially

responsible worldwide and decides to protect its employees by installing

more safety equipement at its plants than local law requires. Other


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manufacturer in competition with this company do not take similar steps,

choosing to install only as much safety equipment as required by law . as a

result their costs is lower and their profits higher. In this case , the socially

responsible firm penalizes itself and even runs the risk of going out of

business, especially in a high competitive market.

This kind of problem becomes acute when viewed from global perspective,

where laws and regulations differ from one country to the next. If one nation

requires higher and more costly pollution control standards, or stricter job

satisfactory rules, or more stringent premarket testing of prescription drugs

than other nations, it imposes higher cost than on business. This cost

disadvantage means that completion cannot be equal. Foreign competitors

who are the least socially responsible will actually be rewarded because they

will be able to capture a bigger share of the market.

Imposes hidden costs passed on a stakeholders:Many social proposals undertaken by business do not pay their own way in a

economic sense; therefore , someone may pay for them .ultimately , society

pays all the costs. Some people may believe that social benefits are costless,

but socially responsible business will try to recover all of their cost in some

way.

For example, if a company chooses to install expensive pollutionabetment

equipment , the air may be cleaner , but ultimately someone will have to pay.

Stockholders may receive lower dividend , employees may be paid less , or

consumers may be charged higher prices. If the public knew that it would

eventually have to pay these costs , and if it knew how high the true costs

were , it might not be so insistent that companies act in socially responsible

ways. The same might be true of government regulations intended to

produce socially desirable business behavior. By driving up business costs,


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these regulations often increase prices and lower productivity , in addition to

making the nations tax bill higher.

Requires skill business may lack:Business people are not primarily trained to solve social problems. They

may know about production, marketing , accounting , finance, information

technology and personnel work, but what do they know about inner- city

issues or world poverty or violence in schools ? putting business people in

charge of solving social problems may lead to unnecessarily expensive and

poorly conceived approaches. In a global survey on social responsibility , it

was found that only 11% ( of the companies who have developed a CSR

strategy) have made significant progress in implementing the strategy in

their organization, thus one might question the effectiveness and efficiency

of businesspeople seeking to address social responsibility problems.

Business analyst might be tempted to believe that methods that succeed in

normal business will also be applicable to complex social issues, even

though different approaches may work better in the social arena. A related

idea is that public officials who are duly elected by citizens in a democratic

society should address societal issue. Business leaders are not elected by the

public therefore do not have a mandate to solve problems . in short ,

businesspeople do not have the expertise or the popular support required to

address what are essentially issues of public policy.

Places responsibility on business rather than individuals:The entire idea of corporate responsibility is misguided according to some

critics . only individuals persons can be responsible for their actions. People

make decisions ; organization do not. An entire company cannot be held

liable for its actions , only those individuals who are involved in promoting

or carrying out a policy. Therefore , it is wrong to talk about social


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responsibility of business when it is social responsibility of individuals

businesspersons that are involved . if individual business managers want to

contribute their own personal money to a social cause , let them do so; but it

is wrong for them to contribute their companys funds in the name of CSR.

Together the above arguments claim that the attempt to exercise corporate

social responsibility places added burdens on both business and society

without producing the intended effect of social improvement or produces it

at excessive cost.


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Chapter 4 : Model of CSR

CSR is not a new concept in india. If we see the history than it can be divided into

four models.

Ethical model :The origin of the first ethical model of corporate responsibility lie in the pioneering

efforts of 19th

century corporate philanthropists such as the Cadbury brothers in

England and the Tata family in India. The pressure on Indian industrialists to

demonstrate their commitment to social development increased during theindependence movement, when Mahatma Gandhi developed the notion of

trusteeship, whereby the owners of property would voluntarily manage their

wealth on behalf of the people.

Gandhis influence prompted various Indian companies to play active roles in

nation building and promoting socio-economic development during the 20th

century. The history of Indian corporate philanthropy has encompassed cash or

kind donations, community investment in trusts and provision of essential services

such as schools, libraries, hospitals, etc. Many firms, particularly family -run

businesses, continue to support such philanthropic initiatives.

Statist model :

A second model of CSR emerged in India after independence in 1947, when Indiaadopted the socialist and mixed economy framework, with a large public sector

and state-owned companies. The boundaries between the state and society were

clearly defined for the state enterprises. Elements of corporate responsibility,

especially those relating to community and worker relationships, were enshrined in


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labour laws and management principles. This state sponsored corporate philosophy

still operates in the numerous public sector companies that have survived the wave

of privatization of the early 1990s.

Liberal Model:Indeed, the worldwide trend towards privatization and deregulation can be said to

be underpinned by a third model of corporate responsibility that companies are

solely responsible to their owners. This approach was encapsulated by the

American economist Milton Fried-man, who in 1958 challenged the very notion of

corporate responsibility for anything other than the economic bottom line.

Many in the corporate world and elsewhere would agree with this concept, arguing

that it is sufficient for business to obey the law and generate wealth, which through

taxation and private charitable choices can be directed to social ends.

Stakeholder Model :The rise of globalisation has brought with it a growing consensus that with

increasing economic rights, business also has a growing range of social

obligations. Citizen campaigns against irresponsible corporate behaviour along

with consumer action and increasing shareholder pressure have given rise to the

stakeholder model of corporate responsibility. This view is often associated with R.

Edward Freeman, whose seminal analysis of the stakeholder approach to strategic

management in 1984 brought stake holding into the mainstream of management

literature (Freeman, 1984). Ac-cording to Freeman, a stakeholder in an

organisation is any group or individual who can affect or is affected by the

achievement of the organisations objectives.


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Chapter 5 : Corporate Social Responsibility in India

In India, most of the corporate do not have a clear policy on social responsibility.

While developed countries like England have separate ministries to look after theissue of corporate social responsibility, in India, the government does not have a

clear policy on the issue. Out of very few companies who contribute to the social

development, the basic intention was not to ensure the good of the nation, rather a

business policy to stay away from the tax net.

The corporate and the government should try to build up a relationship between the

business and the society. The concept of corporate social responsibility (CSR) has

so far failed to take deep root in India because the nomenclature is not properly

defined. The CSR is in a nascent stage. Much needs to be done to bring changes in

attitude towards CSR and bring awareness among the corporate about their social

responsibilities. The corporate should be made aware about the changing nature of

business due to globalization, transformation of market environment and

deepening of competition. The market economy has paved the way for enterprise-led development and a new cultural perspective is taking place in Indian business

environment that has a strong bearing on social responsibilities.

Social responsibility encompasses the sectors like health, education, employment,

income and quality of life. It should be binding on the corporate sector to work on

the above aspects, which are thought to be primary social indicators. They have

enough money to serve the nation on the above segments of the society. They

should not forget that if general health of the mass were good, they would have

better bying capacity.


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Significance of CSR for India is the ideal corporate citizenship that has ethical and

philosophical dimension, particularly in India.Here wide gap exists between people

in terms of income and living standards as well as social status.


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Chapter 6: A CSR Practice in Goa- A case study on

SESA GOA LTD.

SESAs approach to Community Development is holistic and long-term. Their

stakeholder engagement and consultation process, coupled with base line studies,

need-assessments and periodic social audits help them develop and shape our

programs for a 3-5 year period. Public Private Partnerships (PPP) and community

consultation are the core drivers of their work with communities. They

strategically partner with like-minded organizations, including government

agencies, NGOs, local communities, and Panchayats in most of our projects.

They work responsibly and contribute positively to the communities where they

operate. Their community work is based on the three channels developed by them:

Sesa Community Development Foundation Need-based interventions Mineral Foundation of Goa, an NGO formed by the Goan Mining Industry

SESAs activities are as follows:

Farming


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Agriculture is considered to be the backbone of the Indian Economy. But today it

is suffering due to various reasons, such as high input costs, low returns, shortage

of skilled manpower, lack of interest in farming and inclination towards white -

collar jobs. Agriculture in the state of Goa too is passing through the same turmoil.

In the vicinity of SESA Goa's mining operations as well, lots of paddy fields were

left barren for years and villagers were discouraged from farming.

SESA's CSR group came up with a program called 'Back to Farming'. The main

purpose was to assist the farming community in all possible manners, enabling

them to resort back to their traditional means of livelihood (i.e. agriculture) and to

promote sustainable agricultural livelihood. This project was launched in Wagona

a hamlet of Kirlapal-DabalPanchayat in the year 2005-06. Awareness programs

and meetings of farmers and village panchayat members were organized. Officers

of Zonal Agriculture Departments provided guidance on the best agricultural

practices, improved technologies, hybrid seeds, proper application of fertilizers etc.

Necessary farming materials like paddy seeds, organic manure, chemical

fertilizers, irrigation facilities, fencing of fields etc. were distributed to farmers free

of cost. The program helped farmers with getting Government subsidies for

ploughing their fields by tractors and SESA contributed the remaining cost. The

initiative also took care of the repairing of sluice gates, bandharas, bundhs etc.

About 9ha of agricultural land was revived through this program, benefitting about

70 farmer families. The sown seeds have grown to give a lush green look owing to

the efforts of the farmers and the assistance of SESA. This was a great

achievement for the company as well as for the farmers of Wagona village, setting

an example for other villages. Getting inspired by this, the farmers Associations of

Cudnem&Navelim villages too approached SESA for similar assistance. The fields


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of these farmers were in a similar situation; hence SESA replicated the 'back to

farming' program to benefit these villages as well.

Cancer awareness campaign

The awareness, detection and treatment of possibly fatal diseases in areas around

SESA's mining operations, is of paramount importance to SESA's CSR

Philosophy. The people must be provided with accurate information to tackle

dangerous non-communicable diseases like Hypertension, Diabetes and Cancer,

which have dire consequences if left unchecked.

In association with 'Muskan', an NGO actively involved in cancer awareness and

patient relations, the company conducted the first cancer awareness campaign at

KirlapaleDabal Village panchayat. On the 14th of November a congregation of 62

women and 10 men was addressed by Dr. SharmilaSardessai and given vital

information about Oral, Cervical, Prostrate and Breast Cancer. Stressing mainly on

breast cancer, the people were educated about its causes, detection and available

treatments. The people were then asked to fill out detailed questionnaires which

helped with registration and information gathering. Three such awareness

campaigns were held. All the questionnaires were collected and studied to identify

possible patients.


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On the 6th of December 2009 a final camp was organized. Here, cancer surgeons

and experts in their respective fields were made available to the people shortlisted

from the questionnaires. Specialized tests like Mammography, PEP smears etc.

were also conducted. Fortunately, no one tested positive.

Through Muskan, the company has trained a few SHG members and an

Anganwadi worker to spread awareness and collect grass root information on the

subject of breast cancer. Together with the help of local panchayats, schools,

SHGs, Anganwadis and churches, SESA proposes to continue such awareness

campaigns and effectively widen the reach of this initiative.

GRAM NIRMAN-1

The best kind of social progress and developments is achieved through dialogue,

debate and discussion with the people that are directly affected. Hence, bringing

social intervention into the fray of planning, prioritizing and implementation of

Alternative Sustainable Livelihood Development activities provides greater scope

for effective change.

'Gram Nirman' aims at doing so by virtue of being an ideal collaboration of SESA

Goa, the Government of Goa- NGO 'Mineral Foundation of Goa' (MFG) and the

community members themselves. Elected laymen from each ward of the
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panchayat, form the 'Ward Development Committee' (WDC) represented by a

Panch. Other elected members of the community like School Headmasters, Sr.

citizens, representatives of the Diary and Agriculture sectors along with one

member of the WDC (other than the panch) form the 'Village Development

Committee' (VDC) that is in turn represented by a Sarpanch.

All necessary Government permissions like NOCs and other land documentation

are more easily facilitated due to this collaboration. Development Projects are

firstly identified by the WDC, secondly they are reviewed by the VDC and lastly a

resolution is passed for their approval. SESA Goa provides the funds and the

Projects are then implemented.

. For the initial phase of 'Gram Nirman', developmental works amounting to around

Rs. 2 crore have been budgeted and around Rs 70 lac has already been spent. So

far around 13 projects of the first phase have been completed. Projects like a

specially designed Anganwadi Building at Santona village and Village Resource

Centre at Gaval (Bhandol) for the ladies Self Help Group were inaugurated on the

19th of Nov 2008. Various projects in the pipeline are in the fields of agriculture,

education as well as soil and water conservation.

When the ultimate beneficiaries of development projects are included in the space

of formulation of such projects, they are not only spared from manipulation but

also empowered to effect real progress.

SESA Technical School


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As part of SESA Goa's 'post-mine closure plans', SESA Technical School (STS)

was established in 1994 on an old iron ore mine in Sankhali. STS aims at providing

the local youth in and around SESA Goa's mining operations with technical skill

and knowledge so they can go on to get good jobs and earn their livelihood.

Presently, more than 100 students are learning to become a Machinist, Fitter,

Electrician or Instrument Electrician, respectively.

After their education at STS, it is generally noted that the students are quickly

recruited by various Multi-national Companies (MNCs) through campus

interviews. For example, Mr. ShirishKalangutkar worked for Hindustan Lever for

five years after being recruited by them through a campus interview. He now

works as Assistant Manager for Leela Ventures and fondly remembers his

education saying "STS has carved out a man form the boy."

Another example is Mr. Gawas, who had joined 'Guala Closures' as a trainee

worker in 1996. He was then sent to Italy for one year for further training. Today,

he is working as a Senior Engineer in 'Guala Closures'. Companies like Guana

Closures have been regularly employing STS students over the years, citing their

hard work, honesty, discipline, skill and dedication. Speaking at the Annual Day

celebrations of STS he summarized the general emotion felt by the students who

study here when he said "I feel proud that I studied in Sesa Technical School."

School Health Campaign


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Nutritional deficiencies occur when a person's nutrient intake consistently falls

below the recommended level. According to the World Health Organization, about

1,200 million or 19% of adolescents in the world suffer from mal-nutrition, which

harms their development and growth.

It is a well known fact that, in India most of the rural children in the age group of

3-10 years suffer from mal-nutrition. In view of this a campaign was launched in

collaboration with ICDS-Anganwadicenters to improve the nutritional and health

status of children below 6 years of age in the areas of SESA Goa's mining

operations.

A baseline survey was conducted by CSR staff, wherein 457 Anganwadi children's

family history, age, height, weight and nutritional status were recorded by their

teacher on monthly basis. Medical check-up was done by a company doctor.

Parents were sensitized on Nutritional intake both for mothers and children. Initial

medication was provided to 230 (50.32%) undernourished children along with de-

worming tablets. The treatment was offered free of cost through company CMCs

till the end of the child's schooling from the village. Also, Primary and High

School children were examined and necessary supplements and medication were

administered. A mid-day meal was provided to all SSC students on a sharing basis

of 75% and 25% between the company and Parent Teacher Association

respectively. All the children were checked on monthly basis for their weight,

especially Anganwadi children. Those found under weight were supplemented

with Alprovit (a protein supplement) for a period of 6 months. A record was

maintained of all the children.

A total of 54o school children benefited from this program and 62 Anganwadi

children had improved nutrition levels. Registration Numbers were provided to all


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the Anganwadis as well as the schools, to track the children's health performance at

any given time through the CMCs.

In accordance with this desire the company has already provided plant material to

various households to grow in their backyards. Plants like Papaya, Brinjal and

Basella have been planted and the people have been taught new growing methods

like grafting so as to increase the value of the plants

PAVITRA VANHA

The villages around SESA Goa's mining operations lack adequate medical

facilities and infrastructure. Along with this, the villagers' low income makes it

difficult for them to meet their medical needs.

SESA Goa working in tandem with The University of Agricultural Sciences

(Dharwad) devised the ingenious "PavitraVanha" Project. Through this project a

medicinal plant garden would be set up in the local schoolyards. The school

children would be taught all the essential values of these plants and the

responsibility to grow the plants successfully would be passed on to them. Having

learnt about the medicinal properties and growing methods of these plants, the

students would in turn become the teachers to the other members of their families,

providing them with this vital education. It is important to note that the ultimate


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aim of this initiative is to take these medicinal gardens from village schoolyards to

home backyards.

A total of 30 different perennial as well as annual medicinal plants have been

introduced in these gardens. Some of medicinal plants cultivated are Lemongrass,

White Hibiscus, Stevia, Bajeberu and Whitex, all of whom have useful medicinal

value. For example, Stevia's powdered form is used as a sugar replacement for

diabetics and Bajeberu's roots are used to improve memory, ease pregnancy, treat

paralysis and cure digestive disorders. Commonly found ailments like fever, joint

pains, skin diseases etc. can be treated with these natural medicines.

The project is aimed at initially providing education to the people about these

plants and then moving on to the actual use of their medicinal potential. A total of

4 PavitraVanhas have been developed in village schoolyards so far. There is

already a growing interest and demand from the adults of the villages for these

healthful plants. They want grow the same in their backyards and reap the benefits

of their natural medicinal properties.

In accordance with this desire the company has already provided plant material to

various households to grow in their backyards. Plants like Papaya, Brinjal and

Basella have been planted and the people have been taught new growing methods

like grafting so as to increase the value of the plants.

Women Entrepreneurial Program


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Almost all the women from the villages around SESA Goa's mining operations are

housewives and the only work they have is to sometimes help their men with farm

work during the cultivation season. When asked what they usually do with their

time, almost all women replied in unison, "nothing." Noticing that these families

live in rather poor conditions and that able bodied women had so much time on

their hands, there was certainly scope for the productive use of their time and

thereby bringing about an upliftment to their economic status and welfare.

SESA Goa along with The University of Agricultural Sciences, (Dharwad) began a

project called 'Micro Enterprises Promotion' for these women. 7 women at a time

from the already formed 'Self Help Groups' (SHGs), were taken to the University

at Dharwad and trained in either the making of vermicelli, notebooks/files or Chili

pulverizing/masala making. Each group chose one enterprise that interested them.

19 SHG members were provided with Skill Development Training while

Entrepreneurship Development Training was given to 63 SHG members.

Once trained, these women in turn trained the other women of their villages.

Buying the equipment for production from Government sources ensured not only

low prices but also subsidies and benefits. SESA paid 60% of the cost, the

Government covered 30% and the beneficiaries paid the remaining 10%. However,

25% of the beneficiary's contribution was deposited in a bank account, to be used

only for repairs and unforeseen expenses that may arise in time. Doing this built in

the women, a sense of ownership and responsibility towards their own business

and at the same time reduced the disappointment that comes with hidden expenses

later on. The women groups would be later helped by SESA, with packaging,

marketing and selling their product to retailers.


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Women were not only eager and willing to participate but also extremely excited at

the prospect of making a living by working themselves. Women in these project

areas lack not only entrepreneurial acumen but also general awareness of modern

day business options. Insight into self-owned enterprise possibilities and a helping

hand in terms of inculcating know-how and getting started, goes a long way in the

empowerment of women in terms as well as in giving their families alternative

livelihood opportunities.

WATER

Water is vital for sustaining life. Our main focus on the water management is

towards reducing fresh water consumption, increasing the use of harvested rain

water and increasing recycling and reuse of treated effluent.

We have a robust system to undertake and monitor our water conservation targets

every quarter. Water conservation targets of 5-10% are part of our business plan

every year, and accordingly our water managers located at each of our site identify

water conservation projects in consultation with the operating team.Our entire water used in the process is recycled and reused and only the

evaporation losses are made up with the fresh water. The rain water accumulated in

mine pits is used for beneficiation and spraying. The tailings generated during

beneficiation are treated and then recycled back. For instance, the water


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requirement of the pig iron and met coke plants is met from rainwater harvested in

the exhausted Sanquelim mine pit and partly through government supply.

Best practices in water conservation are shared and implemented across all

Vedanta locations; we continue to follow the concept of zero discharge. In our

operations, the treated effluent and sewage is used for horticultural activities and

spraying. The parameters of the discharged treated water are kept within the

statutory limits causing minimum harm to the receiving body.

We realise the importance of water as an important natural resource; we being a

responsible corporate have adopted recycling practices, reuses water, reduce

specific consumption, harvesting rain water, wherever possible, and optimises

water consumption at all our facilities.

In case of Karnataka operations, ground water is used to meet dust suppression

requirements. This is supplemented by rainwater harvesting in ponds during the

monsoon, and used for the nursery plantations as well.

Figures 18, 19 and 20 indicate the trend of total water consumption in KL and the

specific water consumption in KL/ton for all the three units for last three years.

Corporate Social Responsibility - an ASSOCHAM white-paper

Corporate Social Responsibility has become a worldwide concept whereby

organisations consider the interests of society by taking responsibility for the

impact of their activities on customers, employees, shareholders, communities and

the environment in all aspects of their operations. It is one of the most important

global issues with serious challenges and implications on almost all sectors.

As India rides the wave of economic boom and commercial success, corporate

social responsibility is presenting itself both as an opportunity and an important


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requirement for corporates to be engaged in. This will help corporates in their

brand building and also contribute towards faster and more balanced growth of our

society.

This white paper provides a comprehensive understanding of how corporate social

responsibility has evolved as a concept and the reasons that encourage companies

in India to be socially responsible.

The case studies presented in the compendium should create awareness on

successful implementation of CSR practices and acknowledge the efforts of

corporates leading socially responsible initiatives.

AWARDS AND RECOGNITION

Sesa Goa has won Overall first prize award for Corporate SocialResponsibility (CSR) during the 7th National conference on Occupational

Safety, Health and Environment, organized by Inspectorate of Factories and

Boilers, Govt. of Goa - Feb,10..

SesaIndustires has won first prize award for Corporate Social Responsibility(CSR) in environment category during the 7th National conference on

Occupational Safety, Health and Environment, organized by Inspectorate of

Factories and Boilers , Govt. of Goa - Feb,10..


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Chapter 7: A Corporate Social Responsibility Practice in

India - A case study on AMWAY.

Amway is one of the worlds largestdirect sales organisations with over 3 million

Independent Business Owners (IBOs) in over 80 markets and territories

worldwide. It is a family-owned business with a strong emphasis on family values.

Its IBOs are often couples. Many of these are raising families. They therefore have

a strong bond with children. These families are more than happy to partner with

Amway, who, as part of its Corporate Social Responsibility strategy, works with

UNICEF, the United Nations Childrens Fund.

As a family company, Amway is committed to playing a part in improving the

lives of children in need across the globe. In this way, the company is able to show

its commitment to the support of global causes.

Amway defines a global cause as a social issue affecting many people around the

world engaged in a struggle or plight that warrants a charitable response.

This case study shows how Amway is a business that does more than provide

customers with good quality products. It shows the practical realities of Amways

global commitment and how it plays a key role in the communities in which it

operates.

Growth and responsibility

An understanding of how Amway operates as an organisation gives a clearer

picture of the contribution it can make to help children in need across the globe.

Amways vision is to help people live better lives. It does this every day by

providing a low-cost low-risk business opportunity based on selling quality

products.
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What does Amway do?

Amway distributes a range of branded products. These products are sold to IBOs

worldwide. The IBOs are Amways links with consumers and the communities in

which they operate. The IBOs are self-employed and are highly motivated. They

work within the guidelines of Amways Rules of Conduct and Code of Ethics,

which are about being honest and responsible in trading. IBOs sell to people that

they know or meet. They can introduce others to the Amway business.

Typical products that IBOs sell include:

personal carefragrances, body care skin care and cosmetics

durables such as cookware and water treatment systems

nutrition and wellness products such as food supplements, food and drinks.

IBOs play a key part in helping Amway to deliver its Global Cause Programme.

Amway programmes

In order to give many of the worlds children a chance to live a bett er life, Amway

launched the global One by One campaign for children in 2003. The One by One

programme:

helps Amway to bring its vision to life

declares what the company stands for

builds trust and respect in Amway brands
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establishes Corporate Social Responsibility at a high level.

Amway encourages staff and IBOs to support its One by One campaign for

children.

Since 2001, Amway Europe has been an official partner of UNICEF and has been

able to contribute over 2 million (about 1.4 million). The focus is on supporting

the worldwide Immunisation Plus programme.

This involves, for example, providing measles vaccines to children across the

globe. The Plus is about using the vehicle of immunisation to deliver other life-

saving services for children. It is about making health systems stronger and

promoting activities that help communities and families to improve child-care

practices. For example the Plus could include providing vitamin A supplements

in countries where there is vitamin A deficiency.

Since 2001, Amway and its IBOs across Europe have been supporting UNICEFs

child survival programme. The need is great. One out of ten children in Kenya

does not live to see its fifth birthday, largely through preventable diseases. Malaria

is the biggest killer with 93 deaths per day. Only 58% of children under two are

fully immunised.

The work of the One by One programme is illustrated by a field trip undertaken by

Amway IBOs to Kenya. The IBOs travelled to Kilifi in 2006 to meet children and

to find out what the problems are in various communities. They act as champions

spreading the message throughout their groups. In Kilifi, the focus is on trying to

reach the most vulnerable children and pregnant mothers. The aim is to increase

immunisation from 40% to 70%. Other elements of the programme involve

seeking to prevent the transmission of HIV/AIDS to infants.

As the Amway organisation grows and prospers, it is able through CSR actions to

help communities to grow and prosper too.
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Developing a strategy

A strategy is an organisational plan. Implementing a strategy involves putting that

plan into action. In other words a strategy shows how a business will achieve its

goals. The strategy thus enables an organisation to turn its values into action.

Values are what a company stands for. An important value for Amway is being a

caring company. Amway believes in demonstrating this caring approach and this is

why it has partnered with UNICEF.

All Directors design strategies for the whole of an organisation. Effective strategies

involve discussion and communication with others. The views of IBOs are

influential in creating strategies for Amway. Amways strategies for corporate

social responsibility are cascaded through the organisation as shown below.

Amways Global Cause strategy involves creating responsible plans that make a

difference. However, the strategy is flexible. In shaping the strategy, research was

carried out to find out which global causes IBOs support. The results showed that

many favoured a cause that helped children. There was a clear fit between

Amways aims to help children and UNICEFs Immunisation Plus programme

for children.

Objectives

From the outset, Amway set out some clear objectives for its strategy. These were

to:

build loyalty and pride among IBOs and employees

enhance Amways reputation as a caring organisation

make a real difference to human lives.
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Child mortality is particularly high in developing countries because of infectious

diseases. Many children could still be alive if they had been vaccinated.

For under 12 a child can be vaccinated against these diseases and has a fighting

chance to reach adulthood. UNICEFs world child Immunisation Plus

programme is a fitting focus for the activities of Amway UK and its IBOs.

The UK initiative is part of a European-wide fundraising campaign for children. It

recognises the importance of building good working relationships with UNICEF in

each market in order to launch fundraising programmes through Amways IBOs

and their customers. The objective is to raise 500,000 (about 350,000) every

year until 2010 across Amway Europe.

In 2005 Amway UKs partnership was deepened through becoming an official

Corporate Partner of UNICEF UK. The Corporate Partnership is a closer longer-

term relationship which benefits both partners. Working together the two parties

raise money for UNICEF.

Identifying stakeholders

Amways Corporate Social Responsibilitystrategy has been developed with the

interests of the following stakeholders in mind:

Communicating the strategy

Good, clear communication is essential in making sure that the CSR strategy

relates directly to the company business objectives. Communication also helps in

putting the strategy into practice.

A number of communications media are used:

1. Face-to-face communication: Regular meetings take place between UNICEF,

Amway and its IBOs. Through meetings with UNICEF staff, Amway is able to
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discuss the vision and objectives. It then passes the message on by meeting with

IBOs. In 2005 the two organisations arranged a joint briefing day for IBO Leaders.

They were able to hear firsthand experiences from UNICEF staff about their roles

and UNICEFs work as well as where the money goes.

2. Printed material: Amway produces a monthly magazine for all IBOs called

Amagram.

3. Public relations materials are also important, particularly at launch events for

the initiative (e.g. in Milton Keynes in 2006).

4. Email communication: Email is very important in the company it plays a

significant part in keeping IBOs up-to-date.

5. Online activities: There is a micro-site dedicated to the Amway UK/UNICEF

partnership on the UNICEF UK website.

Fundraising

Amway Europe provides support for fundraising to the extent of 500,000 (about

350,000) per year through selling items such as:

greetings cards

multi-cultural gifts and cards

stationery and wrapping paper

toys for children.

However, Amway UKs support goes well beyond these activities. In addition, it

involves staff fundraising events and raffles organised by the IBOs. UNICEF

attends IBO major events (usually supported by 1,000 or more IBOs) where
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requested. A UNICEF stand outlines the work with speakers, literature and

merchandise.

Conclusion

Amway is a family business with family values. Its IBOs are people who want to

make a difference to the communities in which they operate and to the wider world

community. This is Corporate Social Responsibility (CSR) in action.

The clue to Amways success is the careful planning of its strategy and its

involvement with many stakeholders in getting the strategy right. Of course, it is

early days in the latest chapter of a strong relationship between Amway and

UNICEF. Evaluation is taking place to measure the success of the initiative in

terms of meeting fundraising goals. Customer research is carried out to test

customers views on the relationship and to find out how aware the general public

is about what Amway is doing in the field of CSR.
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Chapter 8: ISO 26000 AND SOCIAL RESPONSIBILITY

ISO has launched the development of the future ISO 26000 standards providing

voluntary guidance on social responsibility. ISO 26000 will be for organizations of

all type in both in private and public sectors, in

developing and developed countries.

ISO 26000 will add value to existing social

responsibility work by:

Developing an international consensus onwhat SR means and SR issues that

organizations need to address,

Providing guidance on translating principles into effective actions, and Refining best practices that have already evolved and disseminating the

information worldwide for the good of the international community.

ISO 26000 will add value to existing initiative for social responsibility byproviding harmonized, globally relevant guidance based on international consensus

among expert representatives of the main stakeholders groups and so encourage the

implementation of best practice in social responsibility worldwide.

What is ISO 26000?

ISO 26000 is the designation of the future international standard giving guide on

social responsibility. It is intended for use by organizations of all types, in both

private and public sectors, in developed and developing countries. It will assist

them in their efforts to operate in socially responsible manner that society

increasingly demands.


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ISO 26000 contains guidance, not requirements, and therefore will not be use for

as certification standards like ISO 9001:2000 and ISO 14001:2004.

Why is ISO 26000 important ?

Sustainable business for organizations means not only providing goods and

services that satisfy

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