Business Ethics

1. Corporate
Social
Responsibility
Prepared by:
Hamdoon Hussain
B.Sc (Economics), MBA HRM.
Karachi University Business
School (K.U.B.S)

2. What we will discuss
– What is CSR (Corporate social responsibility)
– Why should a company invest in CSR
– Old business approach
– ISO 26000
– Driving forces for CSR
– What can a company do
– How to implement
– Perks of doing CSR
– Stakeholders Responsibilities
– Examples of some leading companies CSR

3. DEFINITION OF CSR
– “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 workplace and their families as well as of the local community
and society at large”.
– "Corporate social responsibility (CSR) is a type of international private business
self-regulation that aims to contribute to societal goals of a philanthropic, activist,
or charitable nature by engaging in or supporting volunteering or ethically-
oriented practices."
– “It takes 20 years to build a reputation and only 5minutes to ruin it.”
– (Warren Buffet).

4. Scope of CSR
Three levels of social responsibility can be identified: -
• Market forces • Mandated actions • Voluntary actions
CSR addresses the following issues:
– Community, assistance in solving community problems.
– Health and welfare.
– Education.
– Human rights.
– Natural environment.
– Culture

5. WHY SHOULD A COMPANY INVEST IN
CARPORATE SOCIAL RESPONSIBILITY
– Companies are increasingly ramping up their focus on social
responsibility, whether its championing women’s rights, protecting the
environment, or attempting to obliterate poverty, on local, national, or
global levels. From an optics perspective, socially responsible companies
project more attractive images to both consumers and shareholders alike,
which serves to positively affect their bottom lines.
– •Being a socially responsible company can bolster a company's image
and build its brand.
– •Social responsibility empowers employees to leverage the corporate
resources at their disposal to do good.
– •Formal corporate social responsibility programs can boost employee
morale and lead to greater productivity in the workforce.

6. CLASSIFICATIONS:
– CSR may be classified into:-
• Classical economic model
• Socioeconomic model
CLASSICAL ECONOMIC MODEL:
• Adam Smith, father of the classical economic model, believed that an
‘invisible hand’ promoted the public welfare Smith believed that the public
interest was served best by individuals pursuing their own self-interests.

7. CLASSIFICATIONS:
– SOCIOECONOMIC MODEL:
• Business is seen as one sub-system among many in a highly
interdependent society.
• Recognizes that companies have stakeholders other than their
stockholders
• A stakeholder audit allows companies to systematically identify all parties
that could possibly be impacted by the company’s performance.
• Business has an obligation to respond to the needs of all stakeholders
while pursuing its profit

8. Basic Principles Of CSR
– Evaluation of CSR activity 3 basic principles: -
• Sustainability
• Accountability
• Transparency

9. ACCOUNTABILITY TO SOCIETY:
– • In a democratic society, any kind of enterprise exists for the sake of
society.
– • Industries are allowed to exist because they are perceived by the public
to be useful in the attainment of the personal, social, and material goals
of the people.
– • Corporations exist for the sake the public, they are accountable to the
public and have a social responsibility.

10. THEORETICAL JUSTIFICATION FOR
CSR:
– The Trustee Ship Model :
This Model points out that the company is an independent entity different from
its members and has its assets, rights, duties will & capacity to act; & managers
& higher management should act as trustee whose fiduciary duty is to uphold
the firm’s asset comprising the share holder wealth.
– Social entity Theory :
Social entity theory oppose the inherent property rights theory because it does
not view a firm is a private association united by individual right but as a public
association formed through political & legal process & social entity for perusing
collective goals with public obligations.

11. THEORETICAL JUSTIFICATION FOR
CSR:
– Pluralistic Model :
It holds that corporate governance should not move away from ownership
rights but such rights should not be solely claimed by stake holders; It
should be claimed by other stake holder especially the employees. The
pluralistic model insists every stake holder has ownership right.

12. ISO 26000 Guideness on
– ISO 26000 is defined as the
international standard developed
to help organizations effectively
assess and address social
responsibilities that are relevant
and significant to their mission
and vision; operations and
processes; customers,
employees, communities, and
other stakeholders; and
environmental impact.
The ISO 26000 standard provides
guidance on:
– Recognizing social responsibility and
engaging stakeholders
– Ways to integrate socially responsible
behavior into the organization

13. ISO 26000
The seven key underlying principles of
Social responsibility
– Accountability
– Transparency
– Ethical behavior
– Respect for stakeholder interests
– Respect for the rule of law
– Respect for international norms of behavior
– Respect for human rights
The seven core subjects and issues pertaining to
social responsibility:
– Organizational governance
– Human rights
– Labor practices
– The environment
– Fair operating practices
– Consumer issues
– Community involvement and development

14. Driving forces of CSR
– Increased Affluence : Concerns and expectations from citizens stable work and security.
– Envoirmenal sustainability : Concerns about the impact of economic activity on the
environment.
– The power of the brand : Brands are today the focal point of corporate success and much of
the health of the brand depends on public perception of the corporation.
– Free Flow Of information : Increased transparency of business activities because of the
development in IT.
– Globalization : Globalization has had considerable impact on CSR.cultural differences have
added to the complexity of CSR as expectations of acceptable behavior vary regionally.
With increased power comes increased responsibility
– Govt and law : Govt and Law required company to invest some in public development
projects

15. What are corporations expected to do
under CSR Program?
• Developed infrastructure.
• Peace and tranquility in the workplace.
• A trained workforce.
• Maintenance of law and order.
• Mass media through which they reach their customers.
• Create employment opportunities for the disadvantaged persons by directly setting up
ancillaries,
• Provide financial resources,
• Make available marketing support by purchasing from disadvantaged communities,
• Donate.
Above all, consumers of products, without whom they have no reason for existence, are all
drawn from the society.

16. IMPLEMENTATON OF CSR
– The systematic implementation
of CSR means:
– Adoption of strong
organizational values and
norms depicting behaviors that
are appropriate towards a
variety of stakeholders.
– The continuous generation of
intelligence about stakeholders
issues, along with positive
responses to these issues.
Implementation process
1. Define your messaging.
2. Involve your customers.
3. Create a scorecard.
4. Use social media.
5. Partner with a third party.
6. Seek publicity.
7. Repurpose your CSR reports.

17. Benefits of CSR:
• Improved financial performance
• Enhanced brand image and reputation
• Increased sales and customer loyalty
• Increased ability to attract and retain
employees
• Reduced regulatory oversight
• Innovation and learning
• Risk management
• Easier access to capital
• Reduced operating costs

18. Corporate social responsibilities to different group
of stakeholders:
 To consumers and community
• Quality
• Reasonable prices
• After-sales services
• Free competition
• Ethical advertising policy
• Support for educational, charitable and other programs
• Honest trade policies
• Impartiality towards political affairs
• Social accountability
• Progressive outlook

19. Corporate social responsibilities to different
group of stakeholders:
– To Employees :
• Promote espirit de corps.
• Pay fair wages
• Provide reasonable work conditions
• Help development of proper
leadership
• Guarantee religious, social and
political freedom to workers to take
part in civic activities.

20. PIA - an icon of Corporate
Social Responsibility (CSR)
PIA is driven by the highest standards of corporate governance and social
responsibility. As a public sector organization and a business leader, PIA believes in
building strong relationships with customers, partners, employees, and the
communities in which it operates.
– PIA Scouts Association
– Al Shifa trust (PIA is a flagship supporter )
– Education & Training
– PIA Horticulture
– PIA Employees health and medical services
– Collaboration with Make-A-Wish Foundation
– Support for needy people Of Thar
– Corporate Safety
Special child become honorary pi
for one day (Make a Wish)

21. PepsiCo CSR
PepsiCo Do a lot of CSR work globally,
Some examples for Pakistan are given
below
– PespsiCo support Dar us sakoon
Pakistan
– Sports promotion in regional as well as
national level
– Supports Indus Hospital
– PepsiCo encourages

22. HBL CSR
HBL as a Corporate Citizen is committed to fulfilling its
role to Serve society in areas such as:
– Health,
– Education, Organization for Educational Change
– Low cost housing,
– Disaster mitigation,
– Environment protection,
– Preservation of craft,
– Culture and heritage, Arts,
– Poverty alleviation,
– Empowerment of women,
– Rural/socio economic development,
– Entrepreneurial development,
– Strengthening of civil society.
– Ssponsoring of Sports and Adventure activities
Renowned Mountaineer Samina Baig

23. ThankYou