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CORPORATE SOCIAL RESPONSIBILITY

A CASE STUDY OF JAIPUR RUGS

9/17/2013

Rita Kedawat & Prof. (Dr.) Trilok Kumar Jain

TABLE OF CONTENTS

Page no.

Chapter 1 Introduction of CSR 1

Background 1

Introduction 2

What is CSR 4

Meaning & Definition 6

Need for CSR 9

Characteristics 12

Approach 13

Importance 17

CSR & Small Business 19

Companies Bill passed on CSR 25

CSR is not charity 28

Measures 30

Relationship between CSR & Law 33

Reporting Framework 34

Recent News on CSR 37

Chapter2 Introduction of Jaipur Rugs 42

Background 42

Introduction 43

Jaipur Socio Economic Business Model 45

Chronicle of the founder 47

Awards 59

Certifications 68

Word says by Jeremy Higgs 72

Philosophy 73

Chapter3 Introduction of Jaipur Rugs Foundation 78

An overview 78

Objectives 80

Basic Approach 81

Integration with Business Strategy 82

Partnership & Collaboration 83

Founder‘s Message 84

Chapter4 CSR activities in Jaipur Rugs 89

Social Mobilization in JRF 90

Education in JRF 93

Alternative Education Programme 96

Health Camps 97

Programmes conducted by JRF 98

Skill Training Programmes 110

Community Mobilization 120

Chapter5 What JRF achieved through CSR 122

Conclusion 124

Research Findings 127

Introduction of CSR

Although the subject ―Corporate Social Responsibility‖ in its present form and

content has gained popular attention only in recent years, its origin can be traced

back to the evolution of the concept of a welfare state. As the pace of

industrialization quickened employers became more and more concerned with the

loss of productivity efficiency due to avoidable sickness or accidents or stoppage

of work due to bad personal relationships. This gave rise to the idea of a welfare

state, which was further strengthened by the growth of democracy and of respect to

human dignity during the last 150 years. The frame work of a welfare state and

with it the concept of social responsibility have thus come to stay in many

countries of the world. The changing image of business in the recent years has lent

further support to the idea of social responsibility. Some public opinion polls in the

1960‘s and 1970‘s in United States have left businessman disenchanted.

These polls have revealed that the businessman is viewed as an individual who

does not cares for others, who ignored social problems, who preys upon the

population, who exploits labor, and who is a selfish money grabber. On the other

hand, until these opinions were unveiled, the businessman in America believed that

others viewed him as he viewed himself, as a practical, down-to-earth,

hardworking, broadminded, progressive, interesting and a competitive free

enterpriser. He believed that the society looked up at him as a self sacrificing

community leader, pillar of society, generous to a fault, great supporter of

education, patron of the arts, in short, the salt of the earth. Indeed, the businessman

in the pre-poll days thought of himself as a happy mix of Plato, Gandhi, and

Churchill.

What Is Corporate Social Responsibility?

Corporate social responsibility (CSR) is a form of business self-regulation to

incorporate social and environmental concerns. It represents a business model that

adheres to laws, ethical standards, and international norms. As part of the business

model, businesses have to take into account the impact of their activities on the

environment, employees, communities, stakeholders, and other members of the

public. In short, CSR represents the deliberate inclusion of the public‘s interest in a

business‘ decision making to ensure a triple bottom line that considers the planet,

people, and profits. In general, CSR involves some kind of standardized reporting

that allows the business to collect information on how it is making progress on

various fronts.

4

Businesses that engage in CSR typically focus on some or all of the following:

Environment: This requires a look at the environmental impacts of

products and services, as well as what the business does outside the

company to improve the environment. Employees: It‘s important to ensure

that all employees are cared for adequately. Businesses usually focus on

workplace conditions, benefits, living wages, and training.

Communities: Engaging the surrounding communities is an important part

of not just creating good human capital that can serve the business, but also

securing a reputation that can further establish the business. Regulations:

Respecting regulations to the fullest and often exceeding them is part of

being socially responsible. Crisis Preparedness: Being ready to address

business crises and ensure safety for employees and surrounding

communities is critical. Having plans ready and tried are important in

ensuring minimal losses during times of crises.

5

Meaning and Definition of CSR

CSR is about how companies manage the business processes to produce an overall

positive impact on society. Take the following illustration:

Companies need to answer to two aspects of their operations.

1. The quality of their management - both in terms of people and processes (the

inner circle).

2. The nature and quantity of their impact on society in the various areas.

Outside stakeholders are taking an increasing interest in the activity of the

company. Most look to the outer circle - what the company has actually

done, good or bad, in terms of its products and services, in terms of its

impact on the environment and on local communities, or in how it treats and

develops its workforce. Out of the various stakeholders, it is financial

analysts who are predominantly focused - as well as past

6

Financial performance- on quality of management as an indicator of likely future

performance.

Other definitions The World Business Council for Sustainable Development in its

publication "Making Good Business Sense" by Lord Holmes and Richard Watts

used the following 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" The same report gave some

evidence of the different perceptions of what this should mean from a number of

different societies across the world.

Definitions as different as "CSR is about capacity building for sustainable

livelihoods. It respects cultural differences and finds the business opportunities in

building the skills of employees, the community and the government" from Ghana,

through to "CSR is about business giving back to society" from the Philippines.

7

On the other hand, the European Commission hedges its bets with two definitions

wrapped into one: "A concept whereby companies decide voluntarily to contribute

to a better society and a cleaner environment. A concept whereby companies

integrate social and environmental concerns in their business operations and in

their interaction with their stakeholders on a voluntary basis".

8

Need for Corporate Social Responsibility

“The brands that will be big in the future will be those that tap into the social

changes that are taking place.” - Sir Michael Perry, Chairman of Centrica PLC

There are many situations where social responsibility of a business becomes

necessary. Few of these situations which show the need for Corporate Social

Responsibility are discussed below:

1. A societal approach to business is the contemporary business philosophy,

which demands business organizations to be responsive to the social

problems.

9

2. As a result of globalization of business, global companies and MNCs

operate in a big way in their host countries. In order to establish a good

corporate image, they include social responsibility as a corporate objective.

Indigenous companies are forced to follow suit for maintaining their

corporate identity.

3. In the terms and conditions of collaborations agreements, very often, social

welfare terms are included which necessitates the collaborating company to

take up social responsibility of business.

4. On the basis of legal provisions, companies have to concentrate on social

problems. For example an industrial organization in India must obtain a

certification from Pollution Control Board.

5. Corporate donations of social welfare projects of approved NGO‘s are

exempted from income tax in India.

6. An organizations commitment to social responsibility creates a good

corporate image, and there by a better business environment.

10

7. Social responsibility of business enables the organization to improve its

product positioning and thereby improve its market share.

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

For example, gas leak at the Union Carbide plant in Bhopal, wherein the

company had to monetarily compensate through medical treatment.

11

12

Approach to CSR

Triple Bottom Line Concept (TBL)

Triple Bottom Line Concept (TBL) was introduced by Ellington in 1999. Triple

bottom line is a unique approach to community development that integrates

environmental stewardship, sustainable development and social justice. The triple

bottom line is made up of "social, economic and environmental" the "people,

planet, profit" phrase was coined for shell by sustainability.

13

Triple Bottom Line efforts are as varied as the organizations and communities in

our state wide network. This approach is flexible and innovative, creating new

economies that protect, enhance and restore natural, cultural, historic and

community resources.

The Triple Bottom Line standards for:

Economic – (Profit).

Social – (People).

Environment – (Planet).

Economic (Profit):

This is more about making a honest profit than raking a profit at any cost - it must

be made in harmony with the other two principles of People and Planet. While

many major corporations used to sneer at the idea of a Triple Bottom Line

reporting system. With a positive flow on effect to their suppliers. because supply

chains are also accountable to the overall impact of a company.

A narrow concept of economic sustainability focuses on the economic

performance of the corporation itself: the responsibility of management is develop,

produce and market those products that secure long-term economic performance

for the company. This includes a focus on strategies that lead to a long term rise in

share price, revenues and market share rather than short term explosions of profits

at the expense of long term viability.

Social (People) :

This is also known as Human Capital. It really just means treating your employees

right, but furthermore also the community where your business operates. In this

part of the Triple Bottom Line model, business not only ensures a fair day's work

for a fair day's pay; but also plods back some of its gains into the surrounding

community through sponsorships, donation or projects that go towards the

common good.

14

The key issue in the social perspective of sustainability is that of social justice

.Despite the impressive advances in standards of living that many of us have

enjoyed; there are growing disparities of income and wealth within many

countries. In a more just an equitable world, living standards will lead to more

economic prosperity.

15

Environment (Planet):

This is Natural Capital. A business will strive to minimize its ecological impact in

all areas - from sourcing raw materials, to production processes, to shipping and

administration. It's a "cradle to grave" approach and in some cases "cradle to

cradle" i.e. taking some responsibility for goods after they've been sold - for

example, offering a recycling or take back program.

The importance of Triple Bottom Line reports are:

Economic gains: Jobs created, Small businesses started or expanded,

environmentally responsible industries engaged, Poverty reduced or

alleviated.

Social improvements: people of collar or low-wealth engaged; educational

systems improved; racism dismantled; power shared.

Environmental stewardship: land/water resources protected; working lands

locally-owned; water quality improved; native plants and herbs propagated.

16

Importance of CSR

17

CSR is an important business strategy because, wherever possible, consumers want

to buy products from companies they trust; suppliers want to form business

partnerships with companies they can rely on; employees want to work for

companies they respect; and NGOs, increasingly, want to work together with

companies seeking feasible solutions and innovations in areas of common concern.

Satisfying each of these stakeholder groups allows companies to maximize their

commitment to another important stakeholder group — their investors, who benefit

most when the needs of these other stakeholder groups are being met: I honestly

believe that the winning companies of this century will be those who prove with

their actions that they can be profitable and increase social value—companies that

both do well and do good….Increasingly, shareowners, customers, partners and

employees are going to vote with their feet—rewarding those companies that fuel

social change through business. This is simply the new reality of business—one

that we should and must embrace. Carly Fiorina Chairman and Chief Executive

Officer Hewlett Packard Company

The businesses most likely to succeed in the globalizing world will be those best

able to combine the often conflicting interests of its multiple stakeholders, and

incorporate a wider spectrum of opinions and values within the decision-making

process and objectives of the organization. Lifestyle brand firms, in particular,

need to live the ideals they convey to their consumers:

CSR is increasingly crucial to maintaining success in business—by providing a

corporate strategy around which the company can rally, but also by giving meaning

and direction to day to day operations.

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CSR and Small Business

Practical CSR initiatives for Small Business

Drawing on experiences of small businesses implementing CSR, here is a list of 36

practical CSR activities a small business can do. These initiatives are likely to be

of interest to personnel in larger firms as well.

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Improving the environment

Reduce consumption of energy, water and other natural resources, and

emissions of hazardous substances.

Use or produce recycled and recyclable materials; increase the durability of

products and minimize packaging through effective design (reduce, reuse

and recycle).

Train staff so that they look for additional ways to reduce the firm's

environmental footprint.

Offset carbon emissions with equivalent carbon-fixing initiatives, such as

tree planting.

Join or start a local green business club that can help local firms access

conservation grants and expertise for reducing waste, water use and energy.

Consider using video-conferencing to meet a potential supplier or customer

rather than always physically travelling to meetings.

Establish an environmental management system with objectives and

procedures for evaluating progress, minimizing negative impacts and

transferring good practices.

20

Improving human resource management practices

Establish policies to ensure the health and safety of all employees and make

the policies known to employees. Involve employees in business decisions

that affect them and will improve the work environment.

Consult employees on how to handle a downturn in business (e.g. offer the

option of all staff taking pay cuts or reduced hours instead of layoffs).

When layoffs or closures are unavoidable, offer outplacement services,

retraining and severance benefits.

Provide training opportunities and mentoring to maximize promotion from

within the organization.

21

Extend training to life management, retirement planning and care of

dependents.

Be open to job splitting, flextime and other work-life balance policies.

Share training and human resources programs with other local small

businesses.

Consider supporting daycare for children or elderly dependants.

Encourage a healthy workplace (e.g. implement a smoking ban or drug and

alcohol abuse support program).

Provide exercise facilities or offer subsidized membership at a local gym.

Promoting diversity and human rights

Make sure that all staff know that there are explicit policies against

discrimination in hiring, salary, promotion, training or termination of any

employee on the basis of gender, race, age, ethnicity, disability, sexual

orientation or religion.

Do not tolerate jokes or behavior in the workplace that insult employees on

the basis of gender, race, age, ethnicity, disability, sexual orientation or

religion.

When hiring, think creatively about where to advertise the job and whether

there are any local employability schemes (e.g. run by a local council or

employer) to help find work for people who are homeless or disabled.

Pay comparable wages for comparable work.

Support organizations that promote fair trade and human rights compliance.

Check where products are manufactured and look into any associated human

rights concerns.

22

Helping the community

Encourage employee volunteering in the community and with financial

contributions and help in kind.

Make some of the business's product or services available free or at cost to

charities and community groups.

Look for opportunities to make surplus product and redundant equipment

available to local schools, charities and community groups.

Buy from local suppliers and strive to hire locally.

Offer quality work experience for students (job shadowing).

Collaborate with local teachers to make the business the subject of a school

project.

Use the business's experience to help a local school, charity or community

group become more efficient and entrepreneurial.

Use some of the marketing budget to associate the business or brand with a

social cause.

23

In general

Develop new environmental and social products and services; innovation

brings competitive advantage.

Share CSR lessons learned with business customers, business neighbors and

fellow members of a trade association or business organization.

Explain the environmental, social and economic performance of the business

to stakeholders and consider their ideas and views as the business develops.

Commit to an external code or standard or a set of business principles that

provides a framework to measure progress on environmental, and social and

community issues.

24

Companies Bill passed with mandate on CSR

spending

Fri Feb 22 2013,

Lok Sabha on Tuesday voted to replace India's 56-year-old omnibus Companies

Act with the Companies Bill, 2011, that brings the management of the corporate

sector in line with global norms. It introduces concepts like responsible self-

regulation with adequate disclosure and accountability, ushers in enhanced

shareholders' participation and provides for a single forum to approve mergers and

acquisitions.

25

The Bill, which will now travel to the Rajya Sabha, has said companies must

"ensure" they spend at least 2 per cent of their net profit towards corporate social

responsibility (CSR) activities, a move that has drawn both criticism and

appreciation from the stakeholders but one that promises to change the way CSR

has been perceived so far. Corporate affairs minister Sachin Pilot said

CSR would be mandatory for companies like their tax liabilities. "Severity of law

is not deterrent, it is surety which is deterrent," he said, adding the companies may

engage in promoting education, reducing child mortality and any other matter they

feel can contribute for social welfare.

The Bill has gone through several versions since 2008 when it was first introduced.

It includes learnings from the Satyam fiasco in its investor protection clauses. The

government has also introduced the concept of class action suit wherein depositors

or a unit of shareholders can collectively sue the company committing fraud. The

Bill will also provide the serious fraud investigation office (SFIO) with powers to

conduct searches and seizures on the premise of a fraudulent company. While

steering the Bill, Pilot said when Companies Act, 1956, was promulgated there

were only 30,000 companies in the country while in 2012, there are 8,50,000 firms

in India.

Apart from introducing concepts like one Person Company and making

independent directors and company auditors more accountable, the Bill also seeks

to keep a tab on remunerations for the board of directors and other executives of

the companies to protect the interest of shareholders and workmen. Disapproving

of "vulgar display of wealth", Pilot said the law provides that remuneration of a

director of a company should not be more than 5 per cent of the net profit.

The new legislation, which is a much shorter than the earlier one has also

harmonized the company law framework with sect oral regulations. It has 480

sections compared to over 600 sections in the 1956 Act.

26

In line with global norms

The Bill, which will now travel to the Rajya Sabha, says companies must "ensure"

they spend at least 2 per cent of their net profit towards CSR activities

Corporate affairs minister Sachin Pilot said CSR would be mandatory for

companies like their tax liabilities

The government has introduced the concept of class action suit wherein depositors

or a unit of shareholders can sue the firm committing fraud.

27

Corporate social responsibility isn't charity

but survival issue: CEC

CEC S Y Qureshi came down heavily on corporate India regarding CSR, saying

that "CSR is not charity but a question of your very survival".

The author has posted comments on this article PTI | Jun 13, 2011, 09.25PM IST

28

MUMBAI: Chief Election Commissioner SY Qureshi came down heavily on

corporate India regarding corporate social responsibility (CSR), saying that "CSR

is not charity but a question of your very survival".

"We need a Warren Buffet and Bill and Melinda Gates to teach our corporate on

the need for CSR. What you do is not CSR but corporate social compulsion,"

Qureshi told a meet on CSR organized by BOMBAY CHAMBER OF

COMMERCE & INDUSTRY. "When it comes to charity, you corporate do not

follow its basic principle ('the left hand should not know what the right hand is

doing'). On the contrary, you want huge publicity even if you build a public toilet,"

the CEC said.

29

Measure for applying Corporate Social

Responsibility

Sustainability reporting it is recommended that every company should publish a

separate Corporate Sustainability Report (as per the Global Reporting Initiative

(GRI) framework) along with their Annual Report. At the very least, every

company must include a Corporate Sustainability section in its Annual Report

(similar to the mandatory section on Conservation of Energy, Technology

Absorption and Foreign Exchange Earnings and Outgo).

CSR philosophy to be defined and articulated Every company must clearly define

its own CSR philosophy and objectives, stating which issues it intends working on

or contributing to. It is recommended that a company first takes up areas that

directly concern its business processes, and thereafter any other related or

unrelated issues. These can also yield strategic benefits to the company.

Minimum annual CSR expenditure Every company must spend a minimum of

0.2% of its annual income on CSR activities. The CSR spending of a company

should not be linked to the profit made by the company because this would vary

from year to year and the CSR activities would thus not be consistently

maintained. The scale of operations of a company and its impact is connected with

its sales, and not with its profits. The larger the company, the greater is the damage

it is doing to the environment.

Conversely, the greater is the company's ability to do well. Protection and

restoration of the environment Every company must be engaged in CSR activities

that minimize its harm to the environment, and which help restore damage done to

the environment because of the company. For example, all companies should use

energy-efficient technologies for their factories and offices, and adopt rainwater

harvesting irrespective of the production process they are engaged in.

30

Employment for marginalized groups every company should provide inclusive

employment opportunities and include the physically-challenged and marginalized

groups in their workforce. The number of employment opportunities offered to

such groups should be stated in the Annual Reports as is done by Public Sector

Undertakings.

Local community development It is recommended that a company first undertakes

projects in the places where it functions, and helps those local communities and

environments that are affected by its work. Use of core competence every company

should use its core competence to benefit its stakeholders and society.

For instance, banks can use their expertise to identify and counsel debtors who are

likely to run into financial trouble Extending profile and area of businesses A

company should attempt to stretch its business beyond its existing profile and into

areas where it does not normally work so as to reach out to under-served groups

and populations. While this may sometimes mean smaller profit margins or

marginal losses for the company, it will invariably result in valuable business

learning's as well as effective CSR for the company.

Developing internal CSR implementation systems A company may choose to

develop an in-house CSR team or division that undertakes the CSR activities for

the company. This is desirable as it leads to greater sensitization and awareness

within the company about it's processes, responsibilities, role, etc. and leads to the

internalization of the company's CSR philosophy. Instead of contributing to the

trust of the CEO or the promoter family, a company should set up its own

trust/foundation as a matter of proper business ethics.

31

It is recommended that a company set up a committee that includes an external

Director, an NGO and local stakeholders for selecting, monitoring and evaluating

its CSR activities.

Focused CSR activities for greater impact it is recommended that a company

identifies a few issues for its CSR activities and works on these areas for a

sustained period of time so that measurable results and improvements can be

achieved, rather than undertaking or supporting several small initiatives across

several areas thereby reducing effective impact.

32

What is the relationship between CSR and

the law?

There is a close relationship between CSR and the law. The main instrument

governments use to address a firm's social, environmental and economic impacts is

the law. For example, in Canada there is a wide range of laws at the federal,

provincial, territorial and local levels of government pertaining to consumers,

workers, health and safety, human rights and environmental protection, bribery and

corruption, corporate governance and taxation. A firm's corporate social

responsibility approach should ensure compliance with the social, environmental

and economic laws already in place. The CSR activities of firms can be seen as a

proactive method of addressing potentially problematic conduct before it attracts

legal attention.

33

CSR Reporting Frameworks

Some of the reporting guidelines or standard for social accounting, auditing and

reporting are:

ISO 26000

Purpose- ISO 26000 provides guidance on how businesses and organizations

can operate in a socially responsible way. This means acting in an ethical and

transparent way that contributes to the health and welfare of society.

34

The AA1000 Standards

Developed by- The Institute of Social and Ethical Accountability.

Purpose- Accountability‘s AA1000 series are principles-based standards to

help organizations become more accountable, responsible and sustainable. They

address issues affecting governance, business models and organizational strategy,

as well as providing operational guidance on sustainability assurance and

stakeholder engagement. The AA1000 standards are designed for the integrated

thinking required by the low carbon and green economy, and support integrated

reporting and assurance. This is based on John Ellington‘s Triple Bottom Line

(3BL) reporting.

35

Social Accountability SA 8000

Initiated by- Council on Economic priority Accreditation Agency (CEPAA)

Purpose- It measures the performance of companies in eight areas important

to social accountability in the workplace: child labor, forced labor, health and

safety, free association and collective bargaining, discrimination, disciplinary

practices, working hours and compensation.

The Good Corporation

Developed by- The Institute of Business ethics.

Purpose- this covers fairness to employees, suppliers, customers and

providers of finance contribution to the community; and protection to the

environment.

The United Nations Global Compact

Purpose- This requires companies to communicate on their progress and to

describe the company‘s implementation of the compact‘s ten Universal principles.

Global Reporting initiative

Formed by- United States based non-profits organization and TELUS

Institute, with the support of the United Nations Environment Programme (UNEP)

Purpose- this report is an organizational report that gives information about

economic, environmental, social and governance performance.

36

Recent news on CSR

March 27, 2013:

After the passing of the Companies Bill 2012, it has become mandatory for

corporate to adopt Corporate Social Responsibility (CSR). What was once

voluntary has become law.

A company with a net worth of Rs 500 crore or more, a turnover of Rs 1,000 crore

or more or a net profit of Rs 5 crore or more in a financial year shall constitute a

corporate social responsibility (CSR) committee of the board, consisting of three or

more directors, of which at least one shall be an independent director.

Before the Companies Bill was passed, CSR was in the nature of voluntary actions

that businesses could take. It was like going the extra mile. But the provisions of

the Bill, particularly Section 135, read with Schedule VII, show that the

Government has adopted an inclusive growth strategy to implement CSR through

corporate.

37

While mandating CSR spends for the corporate, the Government has also ensured

that such spending is monitored in the form of reporting and disclosure.

Business Responsibility

The Minister of State for Corporate Affairs, Sachin Pilot, who pushed the issue in

Parliament after the Bill was finalized by the Cabinet and approved way back in

2009, has said that the provisions of corporate governance and CSR in the

Companies Bill are based on UN principles and cover human rights, labor

standards, environment and even corruption.

The intention of the Bill is to eradicate extreme hunger and poverty, promote

education, enhance vocational skills and empower women.

Improved bottom-line

38

The new Bill says larger corporate should contribute to society, especially the

communities in which they operate, by setting aside 2 per cent of their net profit

towards CSR. Since CSR spending will be tax-free, there is an opportunity for

Indian corporate to embrace a few large consensual projects that could make social

commitments visible to all.

The need for CSR has its roots in the fundamental moral thought — ―what and

how much has been given back over and above what you have taken from society.‖

CSR is often referred to as ―business responsibility‖ — in other words, an

organization‘s action on environmental, ethical, social and economic issues. It was

soon realized that promoting a responsible way of doing business actually

improved the bottom-line. Now, demonstrating a wider sense of responsibility has

come to be expected when bidding for major contracts.

Section 135 of the Companies Bill provides that ―the functions of the CSR

committee shall be to formulate and recommend a CSR Policy which shall indicate

the activities to be undertaken by the company as specified in Schedule VII of the

Bill.

The CSR committee shall also deliberate on the amount to be incurred on activities

mentioned in the CSR Policy. It shall also monitor the CSR Policy from time to

time.

The company‘s board, after receiving the panel‘s recommendations, will adopt a

CSR Policy and ensure that the activities it mandates are undertaken.

The board must ensure that the company should spend for CSR, every financial

year, at least 2 per cent of the firm‘s average net profits recorded in the three

immediately preceding financial years. The company is expected to give

preference to the areas around which it operates in spending the amount earmarked

for CSR activities.

39

If the company fails to spend such an amount, the Board shall, in its report specify

the reasons for not doing so.

The company shall not select a project that earns profit for the company, but rather

take on work that benefits society.

The new company law has made it mandatory for all companies, listed or unlisted,

to have independent directors forming one-third of the board.

INDEPENDENT DIRECTORS

These independent, or non-executive, directors are those who have no material or

pecuniary relationship with the company or related persons, except for sitting fees.

In the US, independent directors make up 66 per cent of all boards. In India .the

expression ‗independent directors‘ means directors who, apart from receiving

director's remuneration, have no other material pecuniary relationship or

transactions with the company, its promoters, its management or its subsidiaries,

which in the judgment of the board, may affect the independent judgment of the

directors.

A large number of people working in NGOs or running an NGO will be benefited

when these companies appoint them as independent directors to run their CSR

initiatives.

Socially responsible business houses, such as the Tata‘s and Birla‘s have, for

decades, contributed immensely through their various charitable and welfare

Trusts.

Such Trusts have been the guiding lights for smaller entrepreneurs who fund

various small social causes in their areas of operation or in their home towns and

villages.

40

For some, the interface between CSR and the law might seem like a contradiction.

Compliance could seem forced, as if the expenditure is an additional cost of being

in business. Yet, there is an opportunity for responsible and concerned boards to

improve relationship, enhance a reputation and build a corporate brand. A synergy

between CSR and the law will eventually help.

Business social responsibility should not be coerced; it is a voluntary decision

that the entrepreneurial leadership of every company must make on its own.

John Mackey

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JAIPUR RUGS PROFILE

JAIPUR RUGS is India's largest manufacturer and exporter of hand knotted rugs,

known globally as a leader in hand-woven rugs category. The artistic designs,

tantalizing color combinations and the comfort feel of our products make

JAIPUR's rugs the first choice around the world.

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Over the years, JAIPUR has continued to carry forward the rich heritage of designs

into homes in more than 40 countries around the world.

They produce an exclusive product range of rugs, pillows and poufs in numerous

fabrics with atheist colors and sophisticated textures. With diversity in its

collection and categories JAIPUR facilitates its customers with explicit selection of

traditional to transitional tranquil surfaces expressed in leveled piles and flat

weaves.

An expression to the visions of its founder, Mr. NK Chaudhary, JAIPUR Rugs is a

product of love and humble being, which is produced by its extended family of

thousands of artisans spread in different states of India. Empowering the grass

roots, by providing them with sustainable livelihoods by introducing them to the

carpet value chain, has not just given value to the business of Jaipur Rugs but has

also extended its horizon of developing the society all together.

It has a network of around 40,000 skilled artisans in rural India. They have linked

the grassroots to the most elite and luxurious icons of the world. The business

model of JAIPUR RUGS has woven happiness and smile into the life of rural

artisans by providing them sustainable livelihood. With its base of operations in

Jaipur city, also known as Pink City of India, the brand takes the artistic

craftsmanship of hand-woven rugs to North America through its unit in Atlanta,

Georgia (USA) and representatives across USA and Canada.

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Jaipur Socio-Economic Business Model

Fast Facts

40,000 home-based artisans spread across 700 villages in 7 states of India

80% of its artisans are women.

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7,000 looms create more than 100,000 rugs per year.

3,000 wool spinners before working for JAIPUR, most of them lived below

the poverty line. JAIPUR is committed to bettering the lives of artisans and

their families.

80% of JAIPUR artisans are women and live in disadvantaged communities

of rural India

Customers in 40 countries across the world.

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Chronicle from the founder

I arrived late to the journey and was thrown right into our field visit to Jaipur Rugs,

the largest exporter in India of hand-knotted rugs. On the 2-hour journey to one of

the villages that Jaipur Rugs works in, we were given an introduction to the work

of Jaipur Rugs, and then had the unique opportunity to hear from the founder, NK

Chaudhary, about his 30-year journey of building the organization. It all started

with his realization that carpet weavers were being exploited by the traditional

system.

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Year-1978

In 1978 Mr. Nand Kishore Chaudhary stated his carpet business with just 2 looms

and 9 weavers in Rajasthan. It was a very small set up. With constituted efforts,

determined hard work and dedication led to expansion of his business from 2 to 10

looms within three years.

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1986 – Direct export began

Mr. N K Chaudhary started exporting carpets on his own. Now he did not had to

depend on other exporters in getting work orders and supplying finished carpets to

them.

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1989 – Production base set up in Gujarat State

In the joint business with his brother, Chaudhary expanded production from

Rajasthan to Gujarat. In this new place he faced many challenges while working

with Tribal, SC/ ST and other backward classes. People abused him and made fun

of him for working with the untouchables, yet he continued working amidst all

challenges. Chaudhary stayed and ate with the tribal people, understood them and

their lifestyle and brought their traditional designs on the carpet.

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1999 – Independent firm- ‗Jaipur Carpets‘

An independent firm- ―Jaipur Carpets‖ was established in Rajasthan, India.

Alongside, another firm with the name of ―Jaipur Rugs Incorporated‖ (JRI) was

setup in USA, for global distribution of rugs. The core purpose of JRI was only

sales, targeting the US market, selling out the production done in India by Jaipur

Carpets. Though the initial years, didn‘t come easy as Chaudhary was rooted at the

grassroots with the weavers and had minimum knowledge of the business

practices.

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Year-2000

Artisans network crosses 10000- Jaipur Carpets expanded its business and along

with it grew the chain of its weavers working in small villages of Rajasthan and the

tribal area of Gujarat.

2001- Asha Chaudhary joined as CEO

Mr. Chaudhary‘s eldest daughter Asha Chaudhary joined the business after

completing her graduation from Emory University, Atlanta, USA. She leant and

understood the business, and brought about the necessary changes in its

functioning according to the market. Her in-depth knowledge about marketing and

sales and leadership gave a new boost to the business of Jaipur Rugs. Few years

later, she moved to USA to head JRI, as its CEO, and started taking care of all US

Sales and other operations.

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2004 – Jaipur Rugs Foundation (JRF) established

Jaipur Rugs Foundation (JRF) is a non-profit-organization established under the

Rajasthan Public Trust Act. JRF was setup to value artisans involved with carpet

value chain, to ensure their functional skill up-gradation as well as to train new

people in carpet weaving skill , thus providing them with a sustainable livelihood

option. This same year, Archana Chaudhary, (Mr. Chaudhary‘s second daughter)

joined the business as COO and today works along with Ms. Asha Chaudhary,

taking care of the business operations at Jaipur Rugs Incorporated.

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Year-2006 Yogesh Chaudhary & Kavita Chaudhary joined the business

Major Additions took place- Jaipur Carpets was renamed as Jaipur Rugs Company

Private Limited (JRCPL). And Chaudhary‘s eldest son, Yogesh Chaudhary and

youngest daughter, Kavita Chaudhary joined the business. Yogesh Chaudhary

today is the director of JRCPL. He takes care of the direct sales and marketing of

JRCPL. He has added a whole new IT infrastructure to meet the international

standards. The cutting edge technology introduced by him has elevated the work

culture of the company altogether.

Kavita Chaudhary heads the Design Department of JRCPL. With her entry, she has

added a whole new catalog of designs and colors to the palate of JAIPUR. Her

innovative ideas and design sense has instilled a new spirit into the design of the

carpets. Her research and experiments with the needs of customers has colored the

carpets of Jaipur to stand as pioneer in the carpet industry.

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2007 – 1 million square feet production of hand knotted carpets

With time, the business grew and so did the network and production, hitting over 1

million square feet! It was a moment of big achievement and celebration for the

company, having grown to many states of India, majorly covering Rajasthan,

Gujarat and Uttar Pradesh, yielding quality products in varied qualities, textures

and expressive colors.

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2008- Boom in JAIPUR family as network growth hits to over 40 thousand

artisans

Continuous learning resulted in steady growth, extending the Jaipur Rugs family to

a number of over 40000 artisans, majority of which are women. We are reaching

out to the remote areas with focus on the needy and helping those who are

struggling within the vicious cycle of poverty.

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2009 – JAIPUR case study appears in C. K. Prahalad‘s (Padma Bhushan

Award winner) 5th edition of ―The Fortune at the Bottom of the Pyramid‖

‗Excellence Award‘ by the Institute of Economic Studies

'Best SME for CSR ' by Business Today & Yes Bank Year 2009,

added valuable recognition to the company, moreover because of the case-study

done by Mr. Chaudhary on Jaipur Rugs, which was published in his book ―The

Fortune at the Bottom of the Pyramid.‖ His study brought great appreciation to the

company, to Mr. Chaudhary and his business Model. Mr. C.K. Prahalad recognizes

Jaipur Rugs as one which is able to develop the grassroots and further connect the

rural poor to the markets of the rich, like the USA. Other than this, there were other

added recognitions and awards majorly the ‗Excellence Award‘ by the Institute of

Economic Studies for the business functioning and growth as well as the 'Best

SME for CSR ' by Business Today & Yes Bank, for the benefit gained by the poor

through this business.

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Awards

1994 - Carpet Export Promotion Council of India gave the ‗Gold Trophy

Award‘ to Mr. N K Chaudhary

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2003 - ‗State Award for Export Excellence‘ by the Government of Rajasthan

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2009 - ‗American Graphic Design Award‘ by the Graphic design USA

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2010 - Ernst & Young Entrepreneur of the Year Award 2010-Start Up' by

Ernst & Young, India

‗Indian Achievers Award For Business Excellence‘ by Indian Achievers forum.

With growing recognition came a series of awards. Mr. NKChaudhary was

acknowledged with the global business award of Ernst & Young Entrepreneur of

the Year-Start Up 2010. This award commemorates and encourages the most

resilient of Indian entrepreneurs. NKC‘s innovative thinking and entrepreneurial

success became synonymous of his victory. Jaipur Rugs attained the ―Indian

Achievers Award for Business Excellence‖, bestowed by Indian Achievers Forum

for corporate social responsibilities.

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2011- ‗Villgro Social Enterprise Award 2011' by Villgro Innovations

Foundation India

As recognition of path breaking work in the rural sector in India, JAIPUR received

the Villgro Social Enterprise Award 2011, during the social entrepreneurship Un-

convention conference, for creating a global supply chain that integrates more than

40,000 carpet artisans from 600 remote villages in India. This was to recognize and

felicitate outstanding individuals, enterprises and institutions in the Innovation &

Social Entrepreneurship eco-system, for their contribution in facilitating a

sustainable change in society.

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2011 - India Pride Award

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2012 - ‗Karmaveer Puraskaar 2012‘ by the The CtrlS - iCONGO

Bestowed upon Mr. N.K Chaudhary as Real Wealth Creator for the communities,

he was awarded with the prestigious ‗Karmaveer Puraskaar 2012‘. As a fruit of all

efforts, he has been named as ―Gandhi of carpet industry‖ since many artisans in

the villages are weaving carpet with their hands on looms while sitting in their own

homes. This is what Gandhi had dreamt and Chaudhary made it come true.

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2013- TOI Social Impact Awards under the Livelihood- Corporate Category

Jaipur Rugs was awarded with the ‗TOI Social Impact Awards‘ under the

Livelihood- Corporate Category, for providing livelihood opportunities for people

living in remote distant areas mostly under the poverty belt. The Times of India-

Social Impact Awards are an attempt to honor and publish the activities of those

who are making constant efforts to bring about a change in the society on large

scale, by providing the essential aids like education, healthcare and decent

livelihoods.

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Certifications

STAR EXPORT HOUSE

Jaipur Rugs Company Private Limited was conferred with STAR EXPORT

HOUSE. This is recognition by the Director General Foreign Trade, Ministry of

Commerce, Government of India for stupendous export performance over the

years, its continual growth in turnover and earnings from export of goods. The star

export house recognition is given to organizations for continual growth and

stability in the export performance over the years in efficient management system.

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ISO 14001: 2004

ISO 14001 is an internationally accepted standard that sets out how you can go

about putting in place an effective Environmental Management System (EMS).

The standard is designed to address the delicate balance between maintaining

profitability and reducing the negative environmental impact. This award is to

ensure compliance with environmental legislation and reduces the risk of penalties

and possible litigation.

D&B

Jaipur Rugs Company private limited received the DUN & BRADSTREET

certification.

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ISO 9001:2008

ISO 9001:2008 certifies quality and Jaipur rugs is a certified company for its

quality production standards. The reason of our progressive growth is our range of

quality products which are accepted globally. A quality management team to

supervise the quality checkups by the time of production and before shipment of

the products. We always strive to provide our clients quality products and get the

maximum customer satisfaction by providing world class customer service.

SA 8000: 2008

SA 8000: 2008 Jaipur Rugs is the first company in India with ―Design,

Development, Manufacturing and Export of Handmade Carpets and Floor

Coverings‖ scope and 11th carpet company to receive SA 8000 certification in

India. This certification is given as recognition of its functioning with 40000

people from the remote distant areas, who are working well within governmental

norms and in an efficient management system.

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SA 8000 is an internationally recognized standard based on International Labor

Organization (ILO) conventions and the United Nations' Universal Declaration of

Human Rights and the Convention on Rights of the child.

RUGMARK

Jaipur Rugs Company, as a socially responsible company, strictly ensures that no

child labor is involved in any process of our carpet manufacturing. As a Child-

Labor-Free Rug Mark Licensee, Jaipur Rugs binds itself to the contract with Rug

Mark Foundation to produce rugs without involvement of child labor, to register all

looms with the Rug Mark Foundation, and to allow access to looms for

unannounced inspectors.

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Achieving Scale While Retaining Your Value

System—Jeremy Higgs on Jaipur Rugs

December 05th 2012 13:12

One of the leading manufacturers of handmade carpets, Jaipur Rugs is changing

the carpeting industry from one that‘s exploitative to one that improves the lives of

its weavers. All this while providing the highest quality products.

Jeremy Higgs is Executive Officer at the Network of Organizations Working for

People with Disabilities, Pakistan (NOWPDP). Her experience spans from

renewable energy to serving as President of the Pakistan chapter of AIESEC.

“We take leaders on transformational journeys to meet the pioneers who are

changing our world.”

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Philosophy

―Coming together is a beginning. Keeping together is progress. Working

together is success.‖

JAIPUR is a creation of love, dreams, aspirations, courage and one vision.

Growing with the society in ways that we could give back, it has evolved over the

years with compassion running into its essence. A foundation was established to

promote overall well fare of the artisans and their families. As a responsible

company, we work in a way that the community at large is at benefit.

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Largely, living the thoughts of its Founder, Mr. NK Chaudhary ―finding yourself,

through loosing yourself‖, a way to look at life where your acts represent you.

JAIPUR believes in giving in your soul to all that you do, you shall find out a new

being in you with your giving in to your work… a complete true involvement

resulting into smiles of many - many artisans. Chosen the way to function its

business around the talents of the rural India- adding value to one such minute

handcraft- carpet weaving- JAIPUR is a continuous effort to build the skills of

such artisans and give recognition for them.

Embracing purity in its essence, from its roots to body, it‘s a family of pure people,

filled with passion and empathy. With transparency running in its system, it values

commitment which is set to come from a disciplined momentum of life gained

from freedom of mind. JAIPUR strongly believes in giving love to its people,

society and its esteemed customers.

Vision : We look upon business not merely as a source of income or profit, but as

a way of life, as a medium for putting our talents to good use, while at the same

time exploring an opportunity to promote holistic community development.

Mission: "Service to the community" is our motto. Our company strives towards

this to make the society grow hand in hand with our own growth and prosperity.

We ensure that the skills of our weavers are matched by the needs of our

customers.

Organization: India (Jaipur Rugs Company Pvt. Ltd.), USA (Jaipur Rugs Inc.)

China (Jaipur Rugs Company)

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Infrastructure: Jaipur Rugs has the best of the infrastructures to match the

requirements to operate at the global level, to compete with the products and

support systems that are one of the best in the industry. Jaipur Rugs has been

regular in updating the infrastructure needs of its business at the most efficient

levels.

Jaipur Rugs Company Private Limited (JRCPL) encompasses a staff of 300

personnel's servicing 14 different departments. The head-office incorporates

professionals, both technical and non-technical for various field and office based

operations, like the IT executives, ERP supervisors, Operations and Human

Resource officials, the store managers and basic employees for finishing processes

of carpet. The company is equipped with latest software and hardware used in

various processes.

From 1978 to now they have grown from just 2 looms and 9 artisans to 40,000

artisans servicing over 7,000 looms. Majority of these artisans are illiterate women

from the most backward classes like the SC/ST/OBC/minority communities who

are residing in the remote villages in India. This network of weavers is maintained

closely by their branch offices in different states.

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Jaipur Rugs has its roots grounded in 5 different states being- Rajasthan, Gujarat,

Uttar Pradesh, Bihar and Madhya Pradesh. The weavers collectively give an annual

production of approximately 5 thousand million square feet, constituting of all

kinds of rugs namely, hand knotted, hand-tufted, hand-loom, punja weaves and flat

weaves. Ranging in various collections and categories, with a variety of textures

primarily silk, wool, polyester, nylon, cotton etc. the products undergo numerous

processes and manual labor. Alongside, two recent additional states being

Maharashtra and Jharkhand, where training processes have begun and will soon

start contributing to the actual production.

Jaipur Rugs have its carpets in the elite homes of over 40 different countries across

the worldwide. The USA is the major market of rugs where about 65% of its sales

are done. This is followed by Turkey, Canada, Mexico, Germany, Australia,

Russia, Spain, Italy, Romania etc, where its products are sold.

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Jaipur Rugs has an in-house team of Designers and developers working on creating

new designs as well as further facilitating the existing designs. Restructuring the

created designs in new sizes, or different colors at times even with different

materials, this kind of processing is done by experienced and talented professionals

with assistance of latest technologies of software and hardware. Printing of maps,

their instruction base as well as laminations along with many more functioning is

done at its design and development department.

JRCPL has a functioning team of IT executives, ERP supervisors and Internet

Marketing officials. These professionals carry out various operations. The ERP

Navigation software is functioning to enable a systematic functioning throughout

the manufacturing process. With this system, individuals can know about the exact

state and condition of one particular carpet, under process by which weaver of a

particular village. IT and internet marketing professionals take care of smooth

running of processes with an in-house team of developers servicing the website

and clients, at different stages with the catalog and other issues.

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Jaipur Rugs Foudation

―Jaipur Rugs Foundation works on the principle of constantly improving the

lives of marginalized people.‖

An Overview

Jaipur Rugs Foundation (JRF) was established under the Rajasthan Public Trust

Act in the year 2004 by Mr. Nand Kishore Chaudhary, Founder of the JAIPUR

group. JRF is a non-profit organization that catalyzes sustainable livelihoods for

people engaged in the entire carpet value chain by empowering them to establish

collective enterprises through enhancing their artisanal and business skills. The

overall work mandate of JRF is to reach out to remote rural areas and establish

bonds with the undeserved communities, especially women, enabling them to start

weaving not just rugs but also their own lives.

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Its core focus of JRF is to provide skill building and skill up-gradation training to

those artisans who are associated with carpet weaving and thereby substantially

increase their income. Since most of the artisans involved are women, increased

income will make meaningful contributions in alleviating poverty. It facilitate

income generating opportunities at the door steps of artisans residing in the

remotest of the locations and forward & backward linkages with the aid of its

strategic partners.

Vision

The vision of JRF is to create a society where equality, justice and peace prevail

through socio-economic development opportunities for all.

Mission

The mission of JRF is to serve as a social innovator promoting the cause of artisans

by providing them with decent work opportunities and lead them towards their

socio-economic well-being.

Geographic Presence

With its head office in Jaipur, Rajasthan, India, Jaipur Rugs Foundation has its

operational presence in rural locations of five states of India: Gujarat, Rajasthan,

Uttar Pradesh, Bihar and Jharkhand. And functional planning involves spreading

its wings to Madhya Pradesh as well.

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Objectives

To enhance economic returns for artisans through global market linkages.

To connect artisans with the end customers, thus building relationships and

infusing human touch to the carpet value chain.

To link artisans with the initiatives undertaken by government, business and

civil society to promote socio-economic well-being of artisans.

To serve as a forum for artisans and enable them to put forward their cause

and fulfill their aspirations.

To innovate and develop equipments and process for easing out the working

of artisans.

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The basic approach taken by the foundation is

Identifying the rural areas by conducting several meetings by the mobilizes

to understand the area.

After identifying, then research is done to understand the livelihood

activities undertaken by the people of the area and identifying the

households that are willing to take the carpet weaving as their livelihood.

Identifying the talent and the potential of members by forming various self-

help groups by conducting meetings and surveys.

Selection of the people who are capable

Training of the members is done to improve their carpet weaving skills, and induce

more sets by providing technological inputs by the company. Also, various welfare

activities in health, education, sanitation, and leadership and entrepreneurship

training are also provided.

At last, it provides global market linkages through Jaipur Rugs Inc. by providing

them competitive price.

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Integration with Business Strategy

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Partnerships and Collaboration with NGOs

and Government and International

Organization

JRF has had a number of collaboration in the past for various interventions. Some

of the valued collaborations with JRF are:

The World Bank

Jaipur Rugs Company Private Ltd (JRCPL)

Punjab National Bank (PNB)

Rajasthan Other Backward Classes Finance & Development Corporation

Development Commissioner- Handicrafts Ministry of Textiles, Government of India

Tribal Development Department, Government of Gujarat

District Poverty Initiatives Program (DPIP), Government of Rajasthan

NABARD (National Bank for Agriculture and Rural Corporation)

NRDC (National Research Development Corporation)

Confederation of Indian Industry (CII)

Ministry of Panchayati Raj, Government of India

Small Industries Bank of India (SIDBI)

Department of Industries, (DIC) Government of Rajasthan

National and regional level handloom organizations

Weaver‘s service centers

Regional level handloom weavers‘ cooperative societies

Primary handloom weaver‘s cooperative societies

National level training institutes for imparting managerial skills

Cooperative training institutes

Self-help groups in the Handlooms and related sector

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Founder‘s Message

During more than 30 years of experience in an industry generally perceived as

exploitative, I have always worked to inspire and form a team that shares the same

passion: to make the life of poor in underprivileged communities in rural India

worth living.

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When we started laying the groundwork of Jaipur Rugs Foundation in 2004, we all

had the same dream: to take each rug crafting artisan by hand and prove them that

they can sustain a dignifying life. The team is now putting at work each day an

ancient principle that says Give a man a fish; feed him for a day. Teach a man to

fish; feed him for a lifetime. With one exception: we teach the women, mostly.

I believe that happiness comes from simplicity and dignity in life and that all

human beings have potential and desire to grow and develop themselves.

I learned that efforts to develop skills create poverty reducing synergies, provide

the artisans with the sense of dignity and increase their confidence in their own

potential.

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Still, the challenge of the world is to find sustainable ways to better the lives of

people living in extreme poverty. Our key is empowerment not charity: we offer

opportunities for artisans themselves to find a way out of poverty and bring

prosperity to their homes.

At Jaipur Rugs Foundation, we are a team of people that works to support rug

crafting artisans to gain a greater sense of ownership and become small

entrepreneurs.

My vision is to link our grassroots with the global buyers and create shared value

for both sides. JRF is the outcome of my long cherished goal of fostering socio

economic development of rural poor through collective action by multiple

stakeholders. It is our consistent endeavor to transform the core values like love,

empathy, commitment and conscience into our systems, processes and people so

that we always remain close to the weavers and the customers.

NK Chaudhry

(Founder)

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CSR Activities in Jaipur Rugs

Jaipur Rugs Foundation works on the principle of constantly improving the lives of marginalized people.

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SOCIAL MOBILISATION IN JAIPUR

RUGS FOUNDATION

Jaipur Rugs Foundation, a corporate social responsibility of Jaipur Rugs Company

Private Limited aims to uplift the underprivileged and deprived communities

through carpet weaving was founded in 1999, with a mission to encourage

grassroots mobilization of weavers and to improve the welfare of the company‘s

weavers and their families. They connect them by making a global supply chain,

focusing on development of human skill sets and providing stable source of

incomes for rural men and women, and connecting them to international markets.

The company not only uses traditional weavers, but also teaches the people, who

do not have this skill. Raw materials are sourced from around the world, and

processed into rugs with traditional and new designs. Jaipur Rugs Foundation

establishes a profitable commercial connection between poor and rich. Jaipur Rugs

Foundation is driven by social values, by its commitment to provide competitive

wages to its workers, investment in their skill development training, access to

healthcare and education, giving loans to the contractors who are aspiring

entrepreneurs.

The foundation is based on the concept of 3E‘s- employment for the unemployed,

employability for the artisans and developing them as entrepreneurs. Jaipur Rugs

Foundation collaborates with the Panchayati Raj and local government bodies to

motivate the artisans to develop their capacity building, technical knowledge,

quality control and provide them with credit facilities.

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How social mobilization is designed and practiced:

There is a special post for mobilizer that conducts meetings with the villagers, to

mobilize and motivate them and is specially positioned for community

mobilization and formation of SHG. SHG is the main empowering tool at rural

level, to encourage, empower and sustaining them. To form a SHG, motivational

seminars and follow-up seminars are required. Motivational seminars help people

to interact with each other and also allow them to live in peace during training

period. It also inculcates enthusiasm and introduces and orients people towards the

art. It helps the weavers to jell with each other well and creation of awareness

about their specific roles. In motivational seminars, following points of discussion

are there:

Source of incomes

Per day earning

Existing issues

Introduction to SHG

Benefits of SHG

Benefits of carpet weaving

Awareness about health and education of its members

In mobilization phase, the artisans are mobilized in carpet enterprise groups. Each

group will collect savings and do inter- loaning also. They also meet once a month

to discuss their progress and also what they plan for the future. These activities

create a sense of belonging between them and also create a spirit of togetherness.

After some time, these groups can be registered as a producer company also.

After mobilized phase, the capacity building is carried out to enhance the skill set

of people, by focusing on carpet- weaving skills and technological up gradation.

The groups are trained through a series of skill training programs in design

development and improve production and productivity to increase earnings.

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After capacity building, the focus is on providing adequate infrastructure as there is

no regular place for giving trainings to the artisans; management and control of

various processes, and storage, collection and distribution of produce in the area.

Hence not all the material can be stored and checked at the place itself. the

transportation expenses are borne by the artisans and the products arrive at the

companies without quality check. Thus there is a requirement to establish a

common facility center (CFC) in the cluster area comprising of production

collection & distribution center, cluster office, training center, library and primary

quality checking office from where various types of services can be delivered as

per requirements.

Artisans are not alert about the quality desired in the market; there is no

appropriate system of quality checking and quality control. Artisans are also not

interested in self checking, the advantages of quality management and fatalities of

quality unawareness. The Middlemen are not accountable for monitoring; they just

gather the product and deliver it to the next link in chain. If there are any losses

due to the lack of quality the amount will be deducted from the artisan‘s wage. To

remove the concept of ‗Thekedaar‘ (contractor/middleman), first, there is cluster

activity in which every artisan is the owner of the Cluster work. Then, a team of

supervisors is formed through enterprise management training. This team will

guarantee the quality control and supervision in a systematic way. After the

products are guaranteed to be of higher quality, they are then exported by

providing market linkages with the export company, Jaipur Rugs Company.

Once the income will start through continued job work then the artist start to

understand the idea of supply cluster and producer‘s company structure creation.

The base of the company will be an enterprise group governed by elected members

and all members of the cluster will put in a share in the company. Capacity

Building of the governing body will be JRF‘s duty. Registration of the company

will be done during the course. The cluster will be managed by JRF at first, but the

management will be transferred gradually to professionals chosen by artisans or the

artisans themselves.

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Education in JRF

Jaipur Rugs Foundation also organizes campaigns to create awareness about

education among rural weavers. Various motivational seminars are conducted by

Jaipur Rugs Foundation to motivate the rural weavers and their children to

participate in Pravesh Utsav, a programme conducted by the government

department during July in all government schools to enroll all children who are

eligible in school.

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JRF is a firm believer of educating the mass on the whole. Literacy is necessity,

and JRF functions towards spreading awareness and providing knowledge. Other

than teaching the weavers about numerical and literal alphabetic knowledge, the

foundation draws attention upon other fundamental aspects of day to day life.

Concentrating mainly towards educating the females, continued sessions are taken

to teach the women how to read and write; at par letting them perform signatures

rather than thumb prints. Mobilizing them to be able to be able to use cell phones/

mobiles!

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Along with this, bringing consciousness about health issues, aspects of hygiene and

family living, about cleanliness and environment shaping. Talking upon issues like

family planning, monetary keepings, and life skills are another agenda upon the

JRF teachings.

Other than these necessities, JRF also touches upon building communication skills

and managerial aspects of the weavers, as the motto of Jaipur Rugs Foundation is

‗each artisan an entrepreneur.‘

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Alternative Education Program

The 'Alternative Education Program' (AEP) is meant to provide functional literacy

to illiterate artisans and the village community members. The initiative is a live

example of how buyers and customers can get connected to the artisans beyond

rugs. The ambit of this 'alternative education' is basic literacy and numeracy skills,

and developing an understanding of health, hygiene, family life education and the

environment. The program aims towards confidence building of women so that

they become more self-reliant and are able to contribute effectively towards their

family and community.

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Health Camps

The Health Camps are organized in villages so as to enable the poorest of the poor

to avail expert check-up and treatment along with free of cost medicines. These

camps are useful in treating the general ailments and the severe health issues are

referred to hospitals for complete treatment. These camps help in not only treating

the patients but also in identifying potential health disorders which if otherwise

unattended may eventually develop into a serious ailment. These are taken up in

partnerships with local healthcare providers.

These camps are useful in treating the general ailments whereas the severe health

issues are diagnosed and are referred to hospitals for proper care. These camps

help in not only treating the patients but also in identifying potential health

disorders which if otherwise unattended may eventually raise their healthcare

burden. These generally include ENT, Eye checkup, Orthopedic services, Dental

services, Gynecological services, Pediatric cases, Pathology facilities and Medicine

support. As per the need, transportation facility is also provided to those who have

limited mobility.

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PROGRAMMES CONDUCTED BY JRF TO

MOBILIZE PEOPLE

In this the leadership also has a very important role to play. Right from mobilizing

people to formation of SHG‘s to training and marketing their products, the leaders

should ensure that they infuse confidence in the people, and also foster cooperative

behaviour. Also developing leaders is a crucial aspect of this organisation, as they

try to develop entrepreneurship skill amongst the rural weavers, to bridge the gap

between customers and weavers, and providing opportunity to establish them and

contribute to the industry. This allows the weavers to understand the customers

better and also customers can see the emotions and feelings attached with the

weavers work. Rural weavers are basically structured and made as self- employed

and self- sufficient so that they can enjoy their work and also contribute to the

society.

PROGRAMME TO ERADICATE CHILD LABOUR

Jaipur Rugs Foundation also tries to make efforts to make carpet industry free of

child labor. They encourage the weavers to provide proper care, nourishment and

education to their children. For achieving this, they take the initiatives like:

Creating awareness among the consumers to buy the products that are not

made by children

Creating educational opportunities for child workers.

Motivating the children to continue their education

Providing sustainable livelihood to weavers so that they are not forced to

send their children to work.

While taking motivation seminars and mobilizing people, contagion theory

is widely applicable, as it states the temporary transformation of people

under group influence. Convergence theory, which is based on convergence

of people who share the same predisposition, is also applicable in some

cases, where people were self- motivated to learn the art and craft, and earn

their living.

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WOMEN EMPOWERMENT :( political, social, economic)

As carpet weaving is primarily a home based occupation, many women are

also likely to adopt it. Since there are many restrictions on women, in the

area, and women are not allowed even to move out of their homes, so

through carpet weaving women can generate income without moving out of

their homes and also without neglecting their domestic work. JRF works on

reflected movement for women empowerment. It reduces the economic

dependency of women and also increases their economic value in the society

through self-employment. It also results in increased social and political

decision making. While implementing various projects across several

villages in India, JRF worked with women artisans and that they were more

enthusiastic and practical about learning carpet weaving to uplift their social

status and earning. Males on the other hand, were cynical and less concerned

to understand their family needs. Through various efforts and collaboration,

JRF was able to control injustices existing against women. Carpet weaving

has helped many rural women artisans to continue an enhanced livelihood.

In the direction of encouraging women artisans to live a better life through

stable employment, Jaipur Rugs Foundation discovered that women in many

villages were willfully adopting carpet weaving as an occupation. Many of

them have been abused, harassed at some point of time, starved and

exploited due to numerous reasons. By encouragement and regular

counseling, these women have seen a ray of hope now.

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SGSY Special Project

The 'Swarnjayanti Gram Swarozgar Yojana' (SGSY) Special Project is under the

overall ambit of National Rural Livelihoods Mission by the Ministry of Rural

Development, Government of India. JRF has been chosen as an agency to train

4000 rural youth living below poverty line (BPL) and transform them into skilled

artisans in carpet weaving. The project is being implemented in Uttar Pradesh and

Gujarat state of India.

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Thanagazi Carpet Cluster Development Project (2007-2010)

The Thanagazi Carpet Cluster Development Project is a joint development

initiative between JRF and the Department of Industries of the Government of

Rajasthan. The project was initiated with the purpose to provide support to the

underprivileged members of the society, providing them livelihood opportunities,

improving their artisanal skills through skill and design trainings, skill up-

gradation trainings, group formations, and market linkages. The project initiated in

2007 and aimed on- building entrepreneurial skills in weavers empowering them

and making them self-reliant, up gradation of technology, and creation of exquisite

designs that suit the needs of the customers in recent times. The project was

accomplished in the financial year 2010-11, benefitting around 3000 rural artisans,

enhancing their earning capacities and entrepreneurial skills.

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AMBEDKAR HAATSHIP VIKAS YOJANA

This programme was started to promote carpet weaving as a sustainable livelihood

option and also to increase the earnings of artisans from Rs.40-50 per day to Rs.80-

120 per day, so as to relieve them form the exploitation of middlemen and

agricultural landholders. Other objective was to provide consistent employment

and training programmes and to bring the BPL/SC/ST women and other

underprivileged families above the poverty line. Also, it provides a self- sufficient,

reliant production and marketing structure.

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Poverty alleviation and skill development programme

Rug weaving carries a lot of significance in poverty alleviation and skill

development landscape as it provides livelihood opportunities to illiterate and poor

people (especially women) inhabiting remote rural locations. It does not require

massive infrastructure establishment. It enables the poor to acquire traditional

skills at their doorstep while also getting avenues for sustainable livelihood at their

doorstep, thus doing away with the compulsion of migrating out in search for life

bread. Furthermore, flexible working hours and output based wages enhance

livelihood options of rural poor as per their needs.

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Encourage Artisans to be creative

Artisans don‘t just weave but also fabricate their own designer pieces!!!

Jaipur Rugs Foundation also encourage artisans to be creative not only with what

they are doing but also with their imaginations. Few of artisans have weaved their

own designs and those pieces have turned out to be magnificent! These rugs are

not only exclusive designer pieces today but also carry the complete route planning

of it in their minds. Yes! I mean weaved out completely through imagination and

no maps!

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Artisan Cards

The Artisan Cards are issued to the artisans by Development Commissioner

Handicrafts and the local nodal entities are district industries center. But due to

lack of awareness and low levels of accessibility, the artisans are unable to get their

cards made. JRF acts as a link and bridges this gap by assisting the illiterate

artisans in getting their card by doing all the paper work involved in the process.

These artisan cards let the artisan take up a credit facility worth thousands of

rupees from the government.

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Artisans ID Card & Credit Card Camp

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Jaipur Rugs Foundation also designs some

skill training programmes

Skill Development Training

Once location mapping has been conducted, localities are selected to conduct the

field level functionaries of the organization. Once the community members get

convinced about the work, they are divided into different batches and their skill

development trainings are organized in their own villages. JRF conducts skill

development trainings in such areas, where the artisans are taught the basics of

weaving, the techniques, usage of tool, efficient manners of working, reading the

design maps etc. this whole process goes on from 2-3 months. JRF installs weaving

looms in the villages and lets the trainers teach the art of weaving to the unskilled

community members and transform them into skilled artisans.

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On successful completion of the training, the skilled artisans are given job work in

their own localities, either at the same loom that was utilized for training or on a

nearby loom located at a walking distance from their households. Thus, both the

trainings as well as livelihoods are provided to the village community in their local

settings and they are not required to out migrate from their rural habitations in

search for sustainable livelihoods.

It focuses on providing carpet-weaving skills and technological upgradation to the

weavers. It also trains them in design development and loom operations and also

enhance the skill set of weavers.

Skill and design development training: under this programme, training is provided

to individuals, not skilled at carpet weaving.

Skill upgradation training

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India is filled with talent and rug weaving is not a new technique for many. Hence,

JRF conducts Skill Upgradation Trainings for those weavers who are already

acquainted with the art of weaving. This kind of training involves teaching them to

meet the new standards as per the demand, to be set to work upon the Jaipur Rugs

standards, teach them the latest technique or using of some new tool.

These upgradation training are essential both in terms of meeting the market

standards and for continual motivation of the workers. They uplift the psyche of

the artisans and help put forward better and efficient results.

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Entrepreneur skill training

Under this programme, specific tools and techniques are used to enhance the

managerial skills of weavers.

These training programmes help in increasing output and increase in income based

on quality.

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Blood Donation Camp : July 2010

Jaipur Rugs Foundation (JRF) organized a blood donation camp on July 17, 2010

in the JRF campus. It took place in collaboration with Santkoba Durlabhji

Memorial Hospital. It drew an enthusiastic participation from the employees of

both JRF and Jaipur Rugs Company, a leading carpet manufacturing and exporting

firm. A total of 50 employees registered for the camp and each person donated

around 450 ml of blood. The camp was matched with an awareness program for

the employees regarding better food and health habits. All the blood donors were

provided with refreshment and souvenirs.

Van Mahotsav Celebration : July 2010

Jaipur Rugs Foundation celebrated Van Mohatsav in Thanagazi block of Alwar

District, Rajasthan during the first week of July 2010. The main objectives of this

initiative were to:

• Create awareness among the community about the importance of plantation,

nuances of deforestation in the present context of reduced rainfall in the area,

depleting ground water, problem of soil erosion increasing, agricultural land

getting converted into deserts, etc.

• Sensitize people towards environment protection through collective action.

Native plants viz. Shisham, Bel Patra and Gulmohar were selected for distribution

and plantation. A total of 500 saplings were planted in 9 villages covering 43

SHGs on the occasion.

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Direct Linkage – Increased Income

The carpet value chain at the grassroots is normally considered to be of an

exploitative nature. The rug sellers, instead of directly engaging with the artisans,

operate through contractors and subcontractors. In such process, a significant

amount of money that could have been earned by the artisans gets absorbed by

these intermediaries.

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Jaipur Rugs, by setting up its own offices in the production areas, has innovated in

establishing direct linkages with the artisans and it has ensured that the artisans

enjoy enhanced earnings through such supply chain linkage. The transport is also

taken care of for sending the raw material to the artisans and bringing back weaved

products, thus relieving the artisans of the burden of spending their own time and

resources for doing so.

Inspiring artisans

In our visit we gained exposure to the amazing work of the organization. This

included meeting artisans and quality supervisors that have been able to refine their

craft and increase and stabilize their income.

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Two key takeaways

What struck me about the organization were two things.

Firstly, despite being primarily a for-profit organization (with an India-based for-

profit, US-based for-profit and an India-based non-profit), Jaipur Rugs has focused

on providing better opportunities, income, and work for carpet weavers, using a

business approach. Coming from a development sector perspective, it's inspiring to

see businesses that so effectively merge social impact with their work, and do so at

massive scale.

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Secondly, the organization, as it has grown, has faced challenges in instilling the

founder's values into employees, as well as finding new, passionate staff to meet its

growing needs. It was clear that in a small organization, where each employee is

able to interact with the founder and visionary, this is relatively easy. When an

organization reaches the size of Jaipur Rugs (350 people), and is looking at

succession planning, this becomes more difficult.

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Community Mobilization

JRF reaches out to the rural communities and spreads awareness about carpet

weaving as a vocation and their potential gateway for sustainable livelihoods. The

thrust is on locating and training the target populace to transform them into skilled

artisans and alongside, exploring how their collective strengths may be developed

further so as to enable them become life entrepreneurs.

Such awareness generation also takes the form of exposure visits of the unskilled

populace to those sites where skilled artisans are engaged in carpet weaving with

the support of JRF.

The main objectives of such exposure visits are: to enable the unskilled persons to

take a firsthand look at how skilled carpet artisans work in the looms; to facilitate

interactions between the potential skill development trainees and the previously

trained artisans; and to acquaint the unskilled persons with the different steps

involved in carpet manufacturing, especially weaving processes.

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This enables the people who are interested in enrolling for skill development

training to take informed and well thought decision over taking up carpet weaving

as a vocation and star considering it as a sustainable source of livelihood.

The recent JRF efforts towards community mobilization have been in the rural

locations of Bihar and Jharkhand. In Bihar, such work was carried out in the

villages of Madhubani and Darbanga. In Jharkhand, the district under focus had

been Deoghar. The field operations were started in the previous years and so far

the focus of the interventions is primarily on enterprise development, especially

skill development and upgradation in carpet weaving.

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What Jaipur Rugs Achieved Through CSR

Bringing people together for a common cause

We were able to bring people together for a common cause, the cause being

wellbeing of all. We were blessed with committed staff who also took the initiative

to work for their own good. Employees also sustained their enthusiasm and

motivation throughout which added to our strength.

Trust

Employees do have the trust in whatever the department does. The

department has helped them help themselves in such a way that it has left a long

lasting effect on their minds. This trust made it obvious for them to keep

participating actively in all the activities.

Transparency

The department has been totally transparent regarding all its activities. Employees

were made equal partners in conducting any activity. Because of this there was no

point where employees felt left out.

Need based activities

We at BPCL have never arranged activities for the sake of doing it. We have

conducted activities as and when people demanded, may it be our own

employees or people from the communities. Thus we have indirectly

given onus to the people to decide when, why and which activity they

need.

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Non-biased attitude

May it be a worker or an engineer or a driver or any administration staff, we give

equal treatment to all. Never do employees feel that some are favored and others

are not.

Involvement of all

We have been successful involving people of all cadres at the refinery level, right

from the managers to the workers, and from the various departments to the

different unions. This helped us to get the opinions and contributions of all.

At the community level, all the people are involved right from the planning level.

People take decisions along with us.

Human stories of revival helped

We had many success stories of our employees which constantly motivated us to

work consistently. The recovered addicts are our strength. They help us to help the

others who are in similar problem.

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Conclusion

CSR does not come free. It involves a real commitment of resources, management

time and energy. Single money invested in the health of female employees can

yield more than lot of money in business benefits. In addition, the improvements in

human well-being are incomparable.

It‘s clear that India is an emerging country with immense opportunities and that it

can take in all the CSR activities that are there for the grab. But from the evidences

provided above, it's clear that CSR failed when companies tried to put an act of

their own for their own good.

JAIPUR RUGS immensely helped the Indian society with their CSR initiatives,

can afford to do it as they are Indian companies with a great common man

bonding.

JAIPUR RUGS is making progress in taking on wider responsibilities and devising

relevant projects that work on the ground. It has done this with help from NGOs

and organizations. Its approach with is not purely about business benefits, but

focused on making a difference to the lives of its supplier workers.

JAIPUR RUGS‘s ongoing involvement with the women workers in rural area and

other supplier will help to provide it with a sustainable and ethical business model.

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“Acting ethically involves making the right choices – doing the right thing.‖

JAIPUR RUGS‘s seeks to adhere to its values by taking care of its employees,

maintaining ethical relationships and respecting human rights. By engaging with its

many stakeholders, including factory owners and workers in countries rural area in

the production of Rugs, Pillows, Poufs it ensures that everybody gains from the

business process and everyone is treated fairly.

So, we can conclude that Jaipur Rugs Foundation is also involved in mobilizing

people, so as to increase the villager‘s participation in carpet weaving programme,

through their motivational seminars and follow up seminars, through PRA and

rapport building exercises with the villagers.

They do so, by meeting with the villagers, and also follow up meetings with them

to ensure that those willing and passionate enough and also are motivated are not

left out. They have specially created a post of mobilizers to carry out this job.

Panchayat representative, village headmen or the gram pradhan were always

informed about how the project is going on, and they regularly visited the centre to

infuse enthusiasm in the employees, to motivate them and also increase their

participation in the activities.

After mobilization phase, only other stages like capacity building, training, quality

checking and providing market linkages are followed. Through their various

programmes, they are also providing sustainable and continuous incomes to the

women; by mobilizing them through meetings and follow-up meetings they are

also helping in their skill development and employment generation activities.

Also, as in mobilization phase in ideology the emphasis is on mass appeal, centers

on issues of deprivation and collective participation; the ideology of the

organization is to increase the participation of more and more employees by

emphasizing on mass appeal and stress on issues of deprivation and collective

participation.

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In institutionalization phase in ideology, the movement ideology is translated into

specific programmes, and the major stress is on implementation of programmes;

same in case of this organization in which in institutionalization phase, the

mobilized people are then trained, and are further educated for producing effective

output.

Also, collective entrepreneurship is promoted, to provide opportunity and

incentives to individuals to share various technical and market information So,

finally, it is the mobilization that is helping the organization to bring more people

to the craft of learning carpet weaving, and also, trying to increase their

participation in achieving organization‘s objectives.

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Research Findings

1. It was found that Jaipur Rugs have adopted CSR mechanism. Jaipur Rugs

have stated in their vision & mission in such a way which would help to

fulfill the CSR also. 2. Jaipur Rugs is doing innovation to find out some creative ways which may

use lesser amount of resources to produce the same quantity of the products.

3. It was also found that Jaipur Rugs don‘t want to earn profit at the stake of

society. Jaipur Rugs is fully aware about their responsibility towards society

at large.

4. Study has also shown that when company is performing its social obligation

in well manner, it creates good image in the mind of general people. It

becomes trustworthy organization. So, without even advertisement and

promotions Jaipur Rugs become popular.

5. Now customers are also smart enough, they know who is doing what and

they also understand the importance of Corporate Social Responsibility.

Hence, they don‘t mind to spend extra penny to make a contribution towards

safety of the environment on their own part. So, they become loyal to

particular organization if the organization is doing good for the society.

6. Employees are also engaged with this kind of organization which reduces

the employee turnover.

7. With the help of above study we can say that CSR plays a vital role in

overall development…….!

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